'Fast Money' Recap: Standing by Softie

The trading panel is not too worried about Microsoft's tepid guidance.
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Stocks in New York rallied on Thursday as a rally in the financial sector and the U.S. dollar brought out the bulls. The Dow was up 0.7%, the S&P 500 climbed 0.6% and the Nasdaq added 1%.

On

CNBC's

"Fast Money" TV show, the traders discussed

Apple's

(AAPL) - Get Report

positive price action in the wake of earnings and a decline from

Microsoft

(MSFT) - Get Report

after it reported weak sales and offered tepid guidance.

Guy Adami said that fourth-quarter guidance is what is scaring investors. He said he believed the quarter was fine and pointed out that the stock had a "monster run" into earnings and is pulling back. On a valuation, the stock is fine, he said. He predicted a consolidation at $30 and said he still likes Microsoft.

Pete Najarian said that Microsoft shares are up 12% since April. He said the guidance was what posed a problem for shareholders but pointed out that 2009 guidance looks "phenomenal." The stock is a buy, he said. Macke agreed, advising viewers to buy on a pullback.

3 Stocks I Saw on TV

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Karen Finerman said she didn't know what Microsoft's motivations are regarding guidance. It's hard to know whether Microsoft wants its stock up or down from here, she said. She said she would hold Microsoft shares.

Jeff Macke pointed out that unlike

Yahoo!

(YHOO)

, Microsoft doesn't have credibility issues and has no motivation to offer positive guidance if it won't achieve its goals. Yahoo!, on the other hand, has every reason to make its quarter look good.

Najarian said that Microsoft shareholders don't want the company to raise its bid for Yahoo! Macke reminded viewers that Microsoft shares sold off to the levels the stock was at on Tuesday.

Follow the Leaders

Apple and

Merrill Lynch

(MER)

were leaders in the market's recovery today. Adami said Apple is still attractive on a valuation basis. It's setting up for a run to $200, he said.

Macke said good stocks like Apple find reasons to rally. Najarian said he believes Apple shares are very cheap.

Merrill led financials higher today after announcing it would maintain its dividend. Finerman said that she didn't think that was news. She said that there is a lot of money waiting to pile into the financials, and investors will take "any excuse" to go long.

Adami noted that agriculture stocks pulled back. He said investors are rotating out of hot sectors and into financials. He noted positive price action in

Wachovia

(WB) - Get Report

,

USBancorp

(USB) - Get Report

and

Goldman Sachs

(GS) - Get Report

.

Najarian said Punk Ziegel analyst Dick Bove has been right about the financials, and Bove said it's time to buy.

American Express

(AXP) - Get Report

shares went up after hours today.

The Buck Starts Here

The traders discussed a potential comeback by the dollar. Adami said he loves the dollar for the second half of the year. He predicted gold would go lower on the dollar's rally. He recommended commodities that go up with the dollar. He said

Freeport-McMoRan

(FCX) - Get Report

is a good play on copper and advised viewers to buy

U.S. Steel

(X) - Get Report

on a dip.

Finerman said that there is a connection between the dollar and oil prices. She said the rally in the dollar is an excuse to sell

Mosaic

(MOS) - Get Report

and

Potash

(POT)

. She said it's time to rotate out of those ag plays.

Macke said that crowded trades like agriculture are getting unwound. He said Potash shares can pull back $20 without doing anything wrong technically. He said investors are taking profits after nice gains.

Najarian said that Potash and

Bunge

(BG) - Get Report

have made nice runs. He said that forward guidance makes the companies attractive relative to their projected earnings.

Meanwhile, in China

Stocks in China rallied today, marking their biggest move upward in six years. Tim Seymour said that a lot of profits from companies like

China Life

(LFC) - Get Report

come from investments in the Chinese stock market. He said China has more room to fall, and 40% EPS growth is priced into the market.

On the other hand, Seymour said that

Baidu

(BIDU) - Get Report

is a great story, as is

China Mobile

(CHL) - Get Report

. He said

PetroChina

(PTR) - Get Report

faces headwinds and he would sell the stock here. He said the China infrastructure play is still alive, as is the consumer story.

Further Earnings

Ford

(F) - Get Report

reported solid earnings today. Seymour said that, like

GM

(GM) - Get Report

, Ford is spending money around the world trying to right its business. He said that unlike GM, Ford is divesting of foreign brands like Land Rover and Jaguar that lose money. He said both automakers are emerging market plays.

Deckers Outdoor

(DECK) - Get Report

jumped 10% in extended trading. Macke said no one was expecting the company to deliver good earnings. A popular short, the stock is off to the races, he said.

The traders tried to figure out whether

Federal Reserve

Chairman Ben Bernanke is done lowering the fed funds rate. Adami predicted the Fed would cut rates by 25 basis points but should do nothing, because if the Fed doesn't, act the dollar will rally. Finerman agreed, saying that the Fed has helped financial institutions begin lending to one another again.

Macke said the Fed gets "huge points" for creativity. He said it has done a good job so far managing the credit crisis. Finerman said she believes this will be the last rate cut.

Visa

(V) - Get Report

reports earnings Monday. To discuss the newly public company's prospects, Jon Najarian joined the show. He said he believes Visa will go higher, even up 62% since its initial public offering. He said that there's a lot of institutional money in Visa, and banks can't sell their shares yet. He said that good numbers from American Express bode well for Visa.

Adami said he was wrong when he predicted Visa shares would pull back to their IPO price. He recommended staying long

MasterCard

(MA) - Get Report

, which he said is a safer stock.

Macke said that Visa should deliver stellar earnings Monday. Najarian pointed out that Visa controls 55% of the global processing market. He predicted the stock would go higher.

Weak Coffee

Starbucks

(SBUX) - Get Report

shares hit a four-year low today. The traders discussed whether CEO Howard Schultz failed to turn the company around.

Macke said he's disappointed. He contrasted their performance with that of Ford CEO Alan Mulally, who has been much more effective. He said Starbucks needs to gut its operation. Najarian said Schultz has never left the company. He said that

Burger King

(BKC)

and

McDonald's

(MCD) - Get Report

pose competitive threats to Starbucks. Macke disagreed, saying Starbucks is its own biggest problem.

Finerman said she thinks it's possible that Starbucks turn itself around. She said it has presence and a good brand.

Commander Planet vs. Evil Ethanol

Najarian, a.k.a. Commander Planet, waged a takedown of U.S. ethanol policy. He said the fuel source is expensive and has a dubious environmental impact. He recommended

Monsanto

(MON)

,

Eastman Chemical

(EMN) - Get Report

,

Sasol

(SSL) - Get Report

and

Burlington Northern Santa Fe

(BNI)

as plays to make ethanol cheaper or to support alternatives to the biofuel.

Facing a weakened consumer, the traders looked at plays that would benefit from penny-pinching Americans. Macke recommended buying

Wal-Mart

(WMT) - Get Report

and

Costco

(COST) - Get Report

on dips.

Fast Message

A viewer asked whether a strengthening dollar would hurt Ford. Adami said it will create headwinds, but he still likes the stock.

Final Trade

Macke said he'd sell Yahoo! and buy Microsoft. Adami agreed. Finerman chose Microsoft. Najarian selected Sasol.