Tech stocks brightened what was an otherwise dreary market on Monday.
Dow Jones Industrial Average
fell 64.11, or 0.80%, to 7,936.75, while the
drop 0.45, or 0.05%, to 823.43. The
added 18.01, or 1.22%, to 1,494.43.
Pete Najarian said on
's "Fast Money" TV show that tech stocks like
Research In Motion
continue to perform well in a difficult environment.
Karen Finerman said tech companies are able to do because they have better balance sheets, and Tim Seymour noted that even semiconductor companies are starting to look good as they may be feeling the bottom of the trough.
Jeff Macke, though, said the tech rally is not sustainable. He said it's merely time for tech stocks in a trader's market.
Pete Najarian said a lot of companies like
are beating lower expectations.
Dylan Ratigan shifted to the banking sector and a discussion on the delay in Washington in formulating a plan for TARP II.
Finerman didn't see anything wrong with the delay. "They don't have to rush to a solution," she said, adding what they are working on is "one of the most sweeping regulatory changes we've ever seen. They should take time to think it through."
She added that equity holders should be put last in any proposed solution arrived at.
Najarian said some companies like
continue to move forward and distance themselves from those that are struggling with toxic assets.
Ratigan asked Finerman to comment on Macy's big announcement to slash its payroll and what it portends for the retail industry in 2009. She said it's going to be a difficult year for retailers, especially for Macys, which has a lot of debt that will put it at a disadvantage in its plans.
Seymour disagreed, saying that Macy's is trying to tackle its problems by buying back its debt and cutting its dividend.
Moving on to the biotech sector, one of the healthier market sectors,
announced a late-stage study that shows that a combination of Avastin and Tarceva can extend survival rates for lung cancer patients.
The news resulted in a spike for OSI and a modest rise for Genentech in after-hours trading. CNBC reporter Mike Huckman said that the slight bump in Genentech's stock may be due to the cost of the drug, which could be very expensive, running to several thousand dollars a month.
Ratigan brought on Doug Cliggot, CIO of Dover Management, to talk about the state of the economy and Washington's attempts to turn things around.
Cliggot said the situation is getting a little more negative. He said any bank bailout policy should encourage consolidation because there are far too many financial institutions, many of which don't have enough capital.
At the same time, he said it would be dangerous to wind up with just a few large institutions, any of which could be able to bring down the economy.
He told the panel that he didn't know when the stimulus might start to have an impact on the economy. He said the average downturn after an average financial crisis plays out to three to four years, and this is worse than the average crisis. He also said the jobless rate could jump to 11.5% during this time.
He said the effectiveness of the stimulus will be limited by an American consumer that is "retrenching aggressively" to the tune of hundreds of billions of dollars.
Asked by Ratigan for trades in this type of economy, he said would be long on biotech and health care, and would stay clear of cyclical companies.
Ratigan brought on Simon Johnson from the Peterson Institute for International Economics to talk about the need for transparency in bailout funds for banks. For starters, Johnson said details of the transactions and valuations should be published.
Johnson said the transparency should extend to the pools of assets that the government is insuring against further losses at the banks. What are in the pools? And at what price is the government paying?
Johnson agreed with Ratigan that the "powerful bankers that got us into the situation have to taken out" if the reforms of the financial industry are to have any significant impact.
Rich Greenfield, a media analyst for Pali Research, came on to the show to talk about upcoming earnings reports in the media industry. Greenfield said the industry has been hit hard by the decline in ad spending, especially local ad spending, which he said has "collapsed."
He said national ad spending has held up a lot better to the benefit of cable companies.
As for trades, he said he liked
, which he called a pure cable network;
, which he calls the "best name" in 2009 because of its quality asset base, $2.40 free cash flow and a trading price of $16.
Ratigan asked Mark Mahaney, a Internet analyst for
, to talk about what analysts are doing now that 30% of the companies have said they are shying away from guidance.
Mahaney said he is switching to a top-down model, in which he looks at three drivers: What is happening to the retail or advertising industry? What percentage of that is going to go online? And how does that translate into market gains and losses for such Internet companies like
In the rising star segment, Seymour touted
, which he called the
of Latin America, which is enjoying a 20% to 30% jump in transactions from last year.
In the final trades, Macke told viewers to cut back on
. Seymour said he liked
. Finerman was for
SPDR S&P Biotech
because of the merger activity in biotech. Najarian liked
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