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'Fast Money' Recap: Retail Rally

The trading panel discusses the retail rally after the weekend's snow storm.

NEW YORK (TheStreet) -- The markets were higher on Monday, after analysts upgraded bellwether stocks Alcoa (AA) - Get Report and Intel (INTC) - Get Report, and President Obama's health care bill made new strides.

The

Dow Jones Industrial Average

increased 0.8% to 10,414.14, while the

S&P 500

added 1.1% to 1,114.05. The

Nasdaq

gained 1.2% to 2,237.66.

Melissa Lee, moderator of "Fast Money" on

CNBC

, started the discussion with the rally of

Amazon

(AMZN) - Get Report

and the rest of the retail sector on the heels of the snow storm that blanketed most of the Northeast this weekend.

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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It was a great day across the board in retail, from the high-end names like

Tiffany

(TIF) - Get Report

and

Coach

(COH)

, to discounters like

Wal-Mart

(WMT) - Get Report

and

Target

(TGT) - Get Report

, Karen Finerman said. The only stock she didn't see do well was

Family Dollar Store

(FDO)

.

Guy Adami picks

Home Depot

(HD) - Get Report

as his favorite retail name.

Online retailers saw sales surge 28% over the weekend, Lee said.

This is expected to have been a boost to Amazon, guest Internet analyst Mark Mahaney said. To value the stock, Mahaney said to look at the conversion of earnings into free cash flow, which is generally overlooked.

But be careful, "you don't want to trade in and out of the quarter," Mahaney said.

Tim Seymour says if you are a value investor, Amazon is a tough play. He would buy Target instead on its online sales momentum. "The stock looks like it is starting to break out today."

Joe Terranova said a better play on the snow storm is

CVS Caremark

(CVS) - Get Report

. They sell holiday trinkets and since stores are local, consumers don't have to travel to shop.

"You would think

UPS

(UPS) - Get Report

and

FedEx

(FDX) - Get Report

would also benefit" from the retail rally, Lee said. But FedEx was a letdown after it lowered fourth-quarter guidance last week.

Guest Carter Worth of Oppenheimer, said he would sell FedEx since its PE ratio is at one of its highest points ever.

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But if you think the economy is improving, Seymour said FedEx is a good play.

Apple

(AAPL) - Get Report

is another name being highly talked about.

Guest Gene Munster, analyst at Piper Jaffray, said demand for Apple products are strong and the 5th Avenue store in New York City looks like a "locker room."

And there is still room to grow, since only 40% of people in the U.S. have a smart phone and just 18% globally.

Investors remain nervous, however, about the introduction of the new smart phone from

Google

(GOOG) - Get Report

.

But Munster said Apple is in a great spot and there is a 70% chance Verizon will get the phone by the middle of next year.

The Apple Tablet is expected to launch in 2010, most likely in the first quarter, Munster said. At the end of next year, the device will make up 3% of Apple's revenue. "This is another upside not built into the Street's numbers."

One of the biggest news events of the day was the upgrade of Alcoa. As a result, the stock hit its highest level since October 2008.

Adami suggests taking some money off the table after the volumes seen today.

Other upgrades included

Potash

(POT)

and Intel.

Adami says at this point investors are late to the Potash trade.

After Senate this weekend got closer to national health care, HMO names ended the day more than 4% higher, Lee said.

While names like

UnitedHealth

(UNH) - Get Report

were good buys on negative rhetoric, "you don't want to be a part of the herd; want to buy before these things happen," Adami said.

"Now that you have some certainty, you step to the sidelines," Terranova said.

A better play on health care is in medical devices like

BR Bard

and

Medtronic

(MDT) - Get Report

.

Take-Two Interactive Software

(TTWO) - Get Report

is moving sharply in aftermarket trading after it lowered its forecast for the current quarter. Adami says he thinks there is more to the selloff and there could be a buying opportunity tomorrow.

In final trades, Adami likes

News Corp.

(NWS) - Get Report

, Terranova would be a buyer of

Buckle

(BKE) - Get Report

, Seymour liked Potash and Finerman is long

Nasdaq

(NADQ)

.

-- Written by Jeanine Poggi in New York

To watch replays of Cramer's video segments, visit the Mad Money page onCNBC

.

"Check out

"'Fast Money'Portfolios of the Week" on Stockpickr every Thursday.

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