'Fast Money' Recap: Safe-Haven Trades

The trading panel discussed plays that would work in this market downturn.

Author:
Publish date:: Aug 12, 2010 8:09 PM EDT

NEW YORK (

TheStreet

) -- The selloff continued Thursday with gold posting its biggest gain in eight weeks.

The

Dow Jones Industrial Average

dropped 58.88, or 0.57%, to 10,319.95, while the

S&P 500

fell 5.86, or 0.54%, to 1,083.61. The

Nasdaq

lost 18.36, or 0.83%, to 2,190.27.

Joe Terranova said on

CNBC

's "Fast Money" TV show, that said it's imperative to focus on a defensive strategy that includes gold, fixed income, ultilities and health care.

Guy Adami said

Caterpillar

(CAT) - Get Report

becomes an interesting play on a pullback when it hits $66. He said that would represent a 50% correction off its May 6 high.

Karen Finerman said she was looking at some health care names including

Becton Dickinson

(BDX) - Get Report

, while Jon Najarian said he was selling his puts in

Cisco

(CSCO) - Get Report

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 was opposed to being in gold. Having traded gold for 14 years during a down market, he said he learned how fast gold prices can head down. Terranova said $1,225 an ounce will the critical point for gold if it is to break out and move toward $1,300.

Melissa Lee, the moderator of the show, shifted the discussion to a shareholder suit against the board of

Hewlett-Packard

(HPQ) - Get Report

for failing to inform them of the press release on the resignation of its former CEO Mark Hurd.

Finerman defended the board's action, saying it it performed its fiduciary duty when it investigated the claims. Gary Kaminsky said the larger issue is the loss of the Hurd premium from the board's action.

Adami suggested that

NetApp

(NTAP) - Get Report

, which was down 9% today, was one tech name to look at.

Terranova said the tell from the earnings of

IBM

(IBM) - Get Report

and

Cisco

(CSCO) - Get Report

could be a signal that the corporate spending cycle is coming to an end. Patty Edwards said she picked up some Cisco shares at these levels, saying it's "definitely worth picking up."

For his hedge fund pick of the week, Anthony Scaramucci chose

Lorillard

(LO)

. He said the defensive tobacco play is fundamentally attractive, trading at 18 times earnings, sporting an earnings cash yield of 8.3% and providing a 5.3% dividend yield. "It's the second leading brand in cigarettes in the U.S."

Finerman and Edwards liked the pick but said they would favor the international tobacco plays like

Philip Morris

(PM) - Get Report

Lee noted that

Nordstrom

(JWN) - Get Report

was down 4.83%. Edwards said the retailer's inventories were higher than they should be, in yet another sign of the consumer slowdown.

In the "tomorrow's headlines" segment, Stephen Weiss, a Short Hills Capital partner, advanced the argument that quality dividend yields may be a better play than corporate bonds, citing

Johnson & Johnson

(JNJ) - Get Report

as an example.

David Riedel, president of Riedel Research Group, said he would stick with products that people will buy in Japan. He said companies that sell tobacco and alcohol along with the utilities have been outperforming in Japan's bear market.

Lee noted that John Paulson & Co. had a rough June, with its Advantage Plus Fund down 7%. Finerman said Paulson might take smaller positions in

Bank of America

(BAC) - Get Report

. Adami said it might be a good time to get into BAC when it is trading at tangible book.

Toni Saccognahi, a Sanford Bernstein analyst, criticized

Apple

(AAPL) - Get Report

for sitting on $43 billion in cash and getting a paltry 0.76% return. He said the company should consider paying a dividend or a buyback, two suggestions Finerman roundly endorsed.

Despite the battering in the tech sector, Tom Gillis, an analyst with BGC Partners, said he still likes tech names such as

Apple

(AAPL) - Get Report

and a high yield name like

Microsoft

(MSFT) - Get Report

Lee shifted to Microcity whose stock has fallen 17% since its IPO in June. Lee asked Ryan Wurch, CEO of

Motricity

(MOTR)

, a mobile Internet service provider, if it was vulnerable because 70% of its revenues come from two customers.

Wurch called

AT&T