'Fast Money' Recap: Rally Fading?

Guy Adami said it appears the rally is running out of steam.
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NEW YORK (

TheStreet

) -- The markets gained Thursday on encouraging reports on jobless claims and the trade gap.

The

Dow Jones Industrial Average

added 28.91, or 0.28%, to 10,415.92 while the

S&P 500

gained 5.49, or 0.50%, to 1,104.36. The

Nasdaq

rose 7.33, or 0.33%, to 2,236.20.

Guy Adami said on

CNBC

's "Fast Money" show that the impressive rally for the last week and a half appears to be running out of steam. "I think the game starts on Monday and through next week."

Joe Terranova said today's trade figures looked pretty good and will lead to an adjustment in the GDP to the upside. At this point, he said, it's all about "maintaining field position" on offensive.

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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Tim Seymour said he expects traders will be seeking more protection toward the end of the week. However, he expects a slow drift up in the markets next week. Adami said the current trading activity makes a stock like

Caterpillar

(CAT) - Get Report

, which tested a 52-week high, an attractive one to pick up on a pullback.

With crude inventories 7% higher than a year ago, Terranova said commodities traded well in anticipation of a report from China on inflation and imports.

Melissa Lee, the moderator of the show, said

MacDonald's

(MCD) - Get Report

was down 3.41% on weak sales in Europe. Adami said he would buy the stock on a pullback, calling it "a name you want to own for the long term." Terranova said MacDonald's strength in its non-core businesses isn't a good business model.

Lee noted that

Adobe

(ADBE) - Get Report

had gained nearly 12% on reports that

Apple

(AAPL) - Get Report

had eased its app restructions.

Kelly said he would rather stick with

Google

(GOOG) - Get Report

because of the Android app system and the Droid phone.

In the ear-to-the-wall segment, David Riedel, of Riedel Research, said China's inflation could rise well above the government's target of 3% as bad weather will tax the country's food supplies.

Riedel lauded the Chinese for a great centrally controlled system that can "manufacture" domestic growth through rebates on appliances, government stimulus and rising wages.

Lee noted that

Texas Instruments

(TXN) - Get Report

was down 1% after it narrowed its third-quarter outlook. Terranova said that report along with

Intel

's

(INTC) - Get Report

worrisome guidance for the third quarter has left him concerned about the wireless and consumer PC businesses.

With the growing prospects of a Republican victory in the mid-term elections, Jon Najarian said the political shift could be seismic with the GOP taking 50 seats in the House and having a shot at grabbing majorities in both houses.

Seymour downplayed the information, saying it's been out there for some time. Terranova said money mangers might be wondering whether a Republican victory would lead to a change in monetary policies that would be less accommodating to consumers.

Lee brought in Oleg Mukhamedshin, director for capital markets for United Company RUSAL, a huge aluminum company, who said he expects aluminum prices will be stable for the first half of next year before they head up in the second half.

He said the driving forces for aluminum demand will be China and to some extent, India. He said China needs aluminum for its surging auto production operations and construction.

Shifting to telecom and

Research In Motion

(RIMM)

Lee brought in Colin Gillis, an analyst with BGC Partners, who said he downgraded the stock, which is down 30% year to date. He said RIM is showing the most growth on the consumer side of its business, which he said is risky.

Moving on the airline sector where consolidation is shaking up the industry. Jamie Baker, an analyst with JPMorgan, said he expects the trend to continue after the merger of

United Airlines

(UAUA)

and

Continental

(CAL) - Get Report

.

He said three possible candidates could be

Airtran

(AAI)

,

US Airways

(LCC)

and

Alaska Air

(ALK) - Get Report

.

He said the industry eventually will be dominated by three carriers: United,

American

(AMR)

and

Delta

(DAL) - Get Report

. He said the next big deal will probably occur in 2013 or 2014.

He said the trend is expected to continue as mergers will allow airlines to deploy capital more efficiently. Finerman, though, said that may have been the case in the past but wondered whether that is the case now, with airlines running at capacity.

For the pitch of the day, Finerman chose

Airgas

(ARG)

, which is being pursued by

Air Products

(APD) - Get Report

.

She said it's a high-risk, high-reward play. She said Air Products wants to move up Airgas' annual meeting to January so that it can win three board seats and seek a sale of the company.

The best way to play it? Finerman likes the Airgas October 65 options at $2.60. If Air Products prevails, you will win as the stock rises to the high $60's, but if it loses, you will lose all your money in the options, she said.

Lee noted at the close of the show some breaking news involving

Deutsche Bank

(DB) - Get Report

moving ahead with a 9 billion euro equity offering. Kelly said the offering is tied to the acquisition of another bank and should not be taken as a barometer for the sector.

In the final trades, Seymour said to sell

Las Vegas Sands

(LVS) - Get Report

. Adami liked

Teva Pharmaceutical

(TEVA) - Get Report

. Finerman said to get the calls in Airgas. And Terranova liked

Freeport McMoRan

(FCX) - Get Report

on a pullback.

--Written by David Tong in San Francisco.

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David Tong.

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