NEW YORK (
) -- The markets fell Monday over concerns over a possible default in the government's debt.
The Dow Jones Industrial Average
sagged 88.36, or 0.70%, to 12,592.80. The
fell 7.79, or 0.56%, to 1337.43. The
dropped 16.03, or 0.56%, to 2842.80.
Joe Terranova said
's "Fast Money" TV show that the moment may have arrived for short sellers who are seeing
's growth meeting the "ultimate resistance: rising costs."
He said the company's disappointing earnings and outlook is going to put pressure on the stock and force investors to decide whether they to want to remain in the stock, which was down 7.76%.
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 on TV
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Jon Najarian said Netflix has gotten to a point where it's costing it more money to get fewer subscribers.
Tim Seymour said Netflix's fall is the price to be paid for such a high multiple stock. Karen Finerman didn't venture an opinion on how to trade the stock, saying it was far too hard.
Guy Adami said the shorts could be empowered further if the stock falls below $250.
senior stocks commentator, was troubled with the earnings report. He said company's operating income was moving in a roller-coaster fashion, from 45% a year ago to 95% in the first quarter and then to 65% in the second quarter.
He also circled what Netflix said in its guidance of a target of 14% for margins after reporting 65% margin growth in its earnings report. He also found Netflix's comments on its cash flow troubling, including a new accounting category it had created.
Michael Olson, an analyst with Piper Jaffray, said Netflix was put in a tough spot with the pricing change. He said Netflix should wind up with a good fourth quarter that will put it in a position to beat full-year estimates.
Melissa Lee, the moderator of the show, shifted to
, whose guidance came in a little light. Terranova said he was concerned with what the company had to say about weakness in handsets and autos. "I don't think it's the right chip trade now."
Lee noted that
breached $400 on reports that
was preparing its employees for a huge influx of customer traffic in September when the iPhone 5 presumably arrives. That was on top of another report that Apple was hiring more people for its retail outlets.
Najarian said many options traders were rolling over their gains from last week's trades in Apple into the stock again this week.
Adami noted that
was up in afterhours trading off of reports of double-digit revenue growth.
Finerman, who is long Apple, noted that the company was making inroads into the enterprise space. Seymour said he liked Samsung, which he sees taking market share from
Research In Motion
, which announced it was cutting 2,000 jobs and the departure of a COO.
Scott Nations said that options traders were gunning for $20 for Research In Motion as the company begins to sink lower.
, which was up 8.9% after it reported its net income doubled in the second quarter and strong guidance for the current quarter. Seymour said the impressive beat was what he expected from the high-flying Internet search company in China.
Seymour suggested a derivative trade Baidu in in
, an online retailer.
Shifting to the auto sector and
, which is scheduled to report its second-quarter earnings on Tuesday, Terranova praised the automaker's balance sheet and expects its credit to achieve investment grade next year. He also believes Ford will the first U.S. automaker to pay a dividend in 2012.
He acknowledged it faces some headwinds, including an expiring UAW contract and a decline in auto sales.
On the currency trade, Amelia Bordeau, of Westpac Institutional Bank, said currency traders are worried about the U.S. debt talks because they are afraid of a possible rating downgrade if the cuts are not deep enough. She said she was going with a risk-aversion trade that called for shorting the Canadian dollar against the Swiss franc.
Dennis Gartman said the market has done a good job of expecting the stalemate in the debt talks. He said it appears as if the parties are going to "kick the can" down the road and let the 2012 elections decide whether a left- or right-wing government tackle the issue. He said the uncertain outlook in the U.S. and Europe is driving him to invest in gold.
Jack Malvey, chief global markets strategist for BNY Mellon Asset Management, said a default would affect every instrument in the U.S. Treasuries market. He said it was unclear what impact a default would have on the cure period for U.S. debt. He also said a double-A rating would affect not only Treasuries but Treasury-related debt like student loans.
In the final trades on its Web Extra, Seymour liked
. Adami liked
. Finerman liked
and Terranova said to sell
--Written by David Tong in San Francisco.
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