'Fast Money' Recap: Tech Bounce
NEW YORK (
) -- The markets rose Thursday as tech stocks enjoyed a bounce.
The
Dow Jones Industrial Average
rose 8.10, or 0.07%, to 12,402.76. The
S&P 500
added 5.22, or 0.40%, to 1325.69. The
Nasdaq
gained 21.54, or 0.78%, to 2782.92.
Pete Najarian said on
CNBC
's "Fast Money" TV show that it was nice to see a bounce from tech, which had been beaten up lately. He noted the bounce that
Microsoft
(MSFT) - Get Microsoft Corporation (MSFT) Report
got from David Einhorn's critical comments as well as
Netapp
's
(NTAP) - Get NetApp, Inc. (NTAP) Report
good earnings.
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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Joe Terranova identified some potential tech trades that he liked, including
EMC
(EMC)
for the cloud storage play and
Oracle
(ORCL) - Get Oracle Corporation Report
for its exposure to enterprise software.
Tim Seymour noted that the risk trade was back on with commodities rallying on a weaker dollar. He said he was bullish on where the market was heading into the long Memorial Day weekend.
Karen Finerman said
's
(GOOG) - Get Alphabet Inc. Class C Report
announcement of a digital wallet had been telegraphed for awhile. However, she noted the importance of the development as a evolutionary step toward mobile payments.
Terranova recommended going with
NXP Semiconductors
(NXPI) - Get NXP Semiconductors NV Report
, which makes the chip for the wallet.
Melissa Lee, the moderator of the show, noted that retail got a lift from
Tiffany
's
(TIF) - Get Tiffany & Co. Report
strong earnings. Finerman said Tiffany did well because it didn't face the cost pressures of some other retailers. Terranova attributed the good earnings more to a surprising 7% sales increase in Japan that caught the Street by surprise.
Najarian said both ends of the retail spectrum seem to be doing well, with
Family Dollar
(FDO)
posting good numbers.
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Lee shifted the discussion to Microsoft, the target of some critical comments by David Einhorn, president of Greenlight Capital. Whitney Tilson, of T2 Partners, said Einhorn made two points: first, that the company is so insular and arrogant that it missed all the big new developments like tablets and smartphones and second, that the company has done a poor job of capital allocation, overspending on Skype and massively trying to overpay for
Yahoo!
(YHOO)
Tilson said that Microsoft needs to explore some changes to its strategic directions and that CEO Steve Ballmer may not be the person to lead those initiatives.
Despite in a report today showing a higher-than-expected rise in jobless claims, Joe Lavorgna, an economist for Deutsche Bank, said he believes the second half will be stronger than the first half. He said the equities markets are holding up, commodity prices are coming down and interest rates are declining. He said there should be a pickup in hiring.
Zachary Karabell said that if the economy is growing at 3%, companies will have to hire more people.
Lee brought in Peter Schiff, head of Euro Pacific Capital, to comment on reports that China may buying bailout bonds from debt-burden countries in Europe like Portugal.
Schiff said that China does go down that road, it would do so by selling dollars. He maintained his belief that the path of the dollar is down and that the Fed will find some way to continue quantitative easing after the purported end of QE2 in June.
Lee referred to some footage showing Carl Icahn warning about far too much leverage in the system. He said the investment banks are taking far too much risk with other people's money. He said restoration of the Glass-Steagall act would be a good thing to prevent banks from going into areas that they shouldn't be going into.
Finerman expressed her surprise at how quickly markets have come back. She said leveraged deals that were "unthinkable" 18 months ago are not only getting done but oversubscribed. "Anyone who wants to borrow money can do it."
Lee shifted to a discussion of the cyber security trade. Alex Hamilton, of Earlybird Capital, said government has taken the lead in this area with the establishment of a cyber czar and initiatives in cyber security.
He said the companies in this nascent industry like
CACI International
(CACI) - Get CACI International Inc Class A Report
are fast-growing, have compelling valuation and have tremendous free cash flow. He also said they are potential takeover targets for private equity.
With natural gas tumbling today on an inventory build, Dan Fisher, of MBF Trading, said the strength of the market is in long-term contracts as far out as 2015.
Lee noted that
Starbucks
(SBUX) - Get Starbucks Corporation Report
announced a 17% hike in packaged coffee prices. Nicole Miller Regan, an analyst with Piper Jaffray, attributed the rise in the price of coffee to speculation.
She said Starbucks has done some hedging to offset the higher prices and won't have to buy coffee until the fall.
In the final trades, Seymour liked
Mosaic
(MOS) - Get Mosaic Company (MOS) Report
. Terranova said to keep an eye on
IBM
(IBM) - Get International Business Machines (IBM) Report
. Finerman liked
Flowserve
(FLS) - Get Flowserve Corporation Report
and Najarian liked the robotic surgery business of
Mako Surgical
(MAKO)
--Written by David Tong in San Francisco.
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