'Fast Money' Recap: Overlooking Bad Data

Guy Adami was concerned that investors were overlooking bad data in their rush to buy stocks.

Author:: David Tong
Publish date:: Sep 15, 2009 8:33 PM EDT

NEW YORK (

TheStreet

) -- The rally continued Tuesday as the market hit 11-month highs a year after the fall of Lehman Brothers.

The

Dow Jones Industrial Average

rose 59.61, or 0.59%, to 9683.41, and the

S&P 500

added 3.29, or 0.31%, to 1052.63. The

Nasdaq

was up 10.86, or 0.52%, to 2102.64.

Tim Seymour said on

CNBC

's "Fast Money" TV show, that the market's surge was aided by investors who didn't want to miss the rally. He also said the market was boosted by favorable comments by major figures like

Fed

Chairman Ben Bernanke, who called the end to the recession, and President Obama.

Guy Adami said people are buying stocks and overlooking bad data such as those coming from

JPMorgan Chase

(JPM) - Get Report

, which showed an increase in charge-offs and the first jump in delinquencies since April.

Pete Najarian said it was another huge volume day for options as investors continued to speculate on the upside after buying inexpensive puts for protection.

Melissa Lee, the moderator of the show, said industrial and material names helped lead the market higher, including

General Electric

(GE) - Get Report

, which surged above $16. She said that action would leave one to believe that a global recovery was underway.

For a breakout of some stocks from a recent "Fast Money" TV show,check out Dan Fitzpatrick's "3 Stocks I Saw on TV."


3 Stocks I Saw onTV
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Adami said he was disturbed that

Nucor

(NUE) - Get Report

was up 2% for the day despite the fact that the company cuts its guidance.

Najarian said there seems to be some conflicting information from the companies as to whether real demand was returning.

Seymour said it's important to focus on what's working within the sector. On this note, he said it's the steel-making materials that are working like

Arch Coal

(ACI) - Get Report

that are working.

Karen Finerman attributed the interest in General Electric to the comfort level of smaller retail investors who are attracted to a familiar brand name and who believe that its much maligned GE Capital unit might be worth something.

But Adami warned that the entry of small retailers into the market could signal either the beginning or the end of the rally.

Oil jumped 3% today breaking above $70 a barrel and ending a two-day losing streak. Seymour attributed the rise to an OPEC forecast showing a pickup in demand in 2010 as well as other factors, including the market reaction to retail sales and the move on the dollar following Obama's speech on Monday.

Finerman said the

Oil Services HOLDRs

(OIH) - Get Report

broke through $110 and was up 6.72%. Najarian added that session was marked by stocks breaking through technical levels.

Dot.com stocks moved higher, with

Yahoo!

(YHOO)

up 5% on an upgrade and

eBay

(EBAY) - Get Report

, hitting a 52-week high on a couple of upgrades. Adami liked eBay's balance sheet and believes the stock will move higher.

Seymour told viewers to exercise some caution on

Baidu

(BIDU) - Get Report

, which has been on a tear, closing just below $400 today.

Lee shifted to the financials, which were the laggards today. She asked Richard Dick Bove, a Rochdale Securities analyst, about reports that Treasury may want to sell its 8 billion shares in

Citigroup

Bove said such a sale would be a big negative, forcing many buyers away and result in an overhang on the marget. "One out of every shares is owned by the government. That stake can't be easily absorbed," he said.

Bove expressed concerned about the earnings of banks over the next two quarters. He said the tell that will separate the banks will be those with pretax earnings. He said he liked

Bank of New York

(BK) - Get Report

State Street

(STT) - Get Report

and

Northern Trust

(NTRS) - Get Report

. He also said

Goldman Sachs

(GS) - Get Report

and

Morgan Stanley

(MS) - Get Report

should see significant improvement in earnings.

Lee invited Sean Egan, president of Egan-Jones Ratings, to talk about the flaws of rating agencies. He said the storm has passed. "We don't have to worry about the risks that are already identified," he said.

He said the

Fed

took unprecedented steps to intervene in the market and is standing behind the largest financial institutions.

Egan said the economy will change, noting it will be less of a consumer-based economy. He also said the declines in the housing industry will taper off.

In a segment on long-term plays for the next five to 10 years, Najarian picked

Intel

(INTC) - Get Report

for its global dominance of the chip industry and its moves to position itself in the fast-growing mobile phone and netbook niches. Seymour said he liked Intel because 61% of its sales is in the Asia-Pacific region.

Lee invited Eric Dinallo, former New York State Insurance superintendent, who supervised

AIG

(AIG) - Get Report

Dinallo said he's worried nothing has been done from a regulatory standpoint to avoid a repetition of the derivative crisis that caused the financial meltdown.

He said he's a fan of having a risk regulator who would monitor all companies and their products and markets to determine how well capitalized they are.

In the final trades, Seymour was long

United States Natural Gas

(UNG) - Get Report

. Adami was long

Adobe

(ADBE) - Get Report

, while Finerman was long

Becton Dickinson

(BDX) - Get Report

. Najarian said Yahoo! was a buy.

-- Written by David Tong in San Francisco

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