'Fast Money' Recap: S&P Jitters

The trading panel discussed the surge in the S&P to a new high.

Author:: David Tong
Publish date:: Mar 11, 2010 7:54 PM EST

NEW YORK (

TheStreet

) -- The markets finished on the upside Thursday with a late rally.

The

Dow Jones Industrial Average

rose 44.51, or 0.42%, to 10,611.84, while the

S&P 500

moved up 4.63, or 0.40%, to 1,150.24. The

Nasdaq

was up 9.51, or 0.40%, to 2,368.46.

Pete Najarian said on

CNBC

's "Fast Money" TV show said a lot of the action that propelled the markets higher were the result of short squeezes as evidenced in

AIG

(AIG) - Get Report

and many retail names.

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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Joe Terranova said it was encouraging to see the S&P move above 1,150 but he said it would be interesting to see which quality names step up to move the market higher.

Steve Grasso agreed, saying names like

Burger King

(BKC)

are starting to move higher.

Karen Finerman

attributed the melt-up to the pickup in M&A activity and the resurgence of the financials.

Terranova said next month's jobs report will be key, while Grasso said the move toward closure on such issues as health care reforms and tougher financial regulation will have an important bearing on the markets.

Brian Kelly said he was nervous about the market. He said protection is the "name of the game" now, with a market that has "no volume," "potholes around the world," and "currencies blowing up today." "I wouldn't buy the hype today. If this market has a pullback, that's the time you want to buy."

Najarian disagreed, saying investors have a great opportunity to using cheap put protection to pick up some good stocks.

Dan Clifton, head of policy research for Strategas, said there is still uncertainty in the markets over the fate of Obama's health care reforms, which have run into problems, and a financial regulatory reform proposal in the Senate that looks as if it is going to get watered down.

Grasso said the market is a buy if the S&P stays above 1,125.

Melissa Lee, the moderator of the show, noted that

Visa

(V) - Get Report

shares are surging. Grasso said he was long on Visa and sees it moving higher. Najarian liked Visa's growth story but was taking some off the table, unless the company uses some of its cash to repurchase shares.

Shifting to this week's auction,

CNBC

reporter Rick Santelli said it was disingenuous not to include

Freddie Mac

( FRE) and

Fannie Mae

( FNM) in the proposed financial regulatory reforms now being debated in Congress. He said the two should be broken up and put up for auction, privatized or nationalized. He said they should not be allowed to continue to issue debt and guaranteeing mortgages.

Bob Barbera, chief economist for ITG, said the consumer is doing well as evidenced in the strong-than-expected retail earnings this week. He downplayed the bearish talk on the economy, saying the jobs numbers and consumer spending look good.

The biotech space continued to heat up. Najarian noted the huge amount of call activity in

Hologic

(HOLX) - Get Report

Brian Stutland, head of Stutland Equities, said the names he liked in this space were

EMC

(EMC)

NetApp

(NTAP) - Get Report

and

Health Net

(HNT)

Lee brought in Gerard Cassidy, regional bank analyst for RBC Capital Markets, to talk about the deal-making chatter among regional banks. He said the buyers won't be coming in until they are convinced that the credit problems have peaked. He feels they have.

That said, he noted that

SunTrust Banks

(STI) - Get Report

Northern Trust

(NTRS) - Get Report

and

Huntington Bancshares

(HBAN) - Get Report

have been mentioned in the chatter.

He said he was not impressed with

Regions Financial

(RF) - Get Report

because of its exposure to commercial real estate.

Commenting on the reversal in AIG today, Grass said it was a culmination of light volume and a short squeeze. Meanwhile, Najarian noted the huge options activity in

Citigroup

today on higher expectations.

Although the Treasury auctions have been going well this week, Santelli warned about the dangers of a steepening curve and the possibilities of a default by a municipality or state. Barbera, on the other hand, said the debt issuances were necessary to help the markets and economy recover.

Lee brought in John Roque, managing director for WJB Capital, for a chartologist view of the markets. Roque said all the technical signs point to the S&P moving above 1,150. He also said he liked big-cap biotech, less big pharma.

In the final trades, Brian Kelly said he was a short seller of

Alcoa

(AA) - Get Report

. Terranova said he liked

Best Buy

(BBY) - Get Report

. Grasso liked

U.S. Steel

(X) - Get Report

while Finerman liked

SPDR S&P Biotech

(XBI) - Get Report