'Fast Money' Recap: That Sinking Feeling - TheStreet

'Fast Money' Recap: That Sinking Feeling

Several members of the trading see the markets heading lower next week.
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The markets ended on a sour note Friday as they fell for the fourth consecutive week.

The

Dow Jones Industrial Average

lost 36.65, or 0.45%, to 8,146.52, while the

S&P 500

dropped 3.55, or 0.40%, to 879.13. The

Nasdaq

added 3.48, or 0.20%, to 1,756.03.

Guy Adami said on

CNBC

's "Fast Money" TV show that he was disappointed with today's market action, saying it would make it difficult for the market coming into next week. He said he would have preferred the S&P to have tested 870 and close above 885. "Now we're in no man's land," he said, adding the index appears to heading down to 830.

Tim Seymour agreed, saying some big brokers told him today that 40% of the flows were on the short side. He said the ammunition for taking the market higher is not there.

Joe Terranova said the market was affected by the disappointing consumer confidence numbers today as well as the troublesome unemployment data earlier in the month.

Karen Finerman said she didn't put too much stock in the consumer confidence data because it represents only sentiment and not tangible factors like sales and inventory.

Terranova said the S&P can get back some of its momentum if oil prices stabilize. Crude, which dropped 10% this week, fell today to $59.89 a barrel.

Melissa Lee, the moderator of the show, brought in Jim Goldman, a

CNBC

reporter, for a preview on a slew of tech earnings next week. He said investors should closely watch what

IBM

(IBM) - Get Report

says about its services division because that will be the "key to where it goes."

As for

Intel

(INTC) - Get Report

and

Google

(GOOG) - Get Report

, he says estimates have creeped up for those companies and he wonders whether analysts may be over optimistic.

Adami said

Goldman Sachs

(GS) - Get Report

, which downgraded IBM today, is playing a dangerous game in the stock market. After all, IBM has said it expects $10 to $11 a share for 2009 and has a huge recurring revenue stream, he said.

Shifting to financials, which were hit hard this week, Finerman said

JPMorgan Chase

(JPM) - Get Report

will be more of a bellwether for the sector because of its recurring revenue stream.

What's going to drive this story will be the loan loss provisions and the extent and pace of deterioriation in credit quality, she said.

With the exit of

General Motors

(GM) - Get Report

out of bankruptcy, the auto company faces a number of challenges, including reviving a nonexistent marketing campaign, said Phil LeBeau, a

CNBC

reporter.

Laura Tyson, member of President Obama's economic recovery advisory board, appeared on the show to talk about the possibility of a second stimulus.

She said the stimulus, one quarter of which is spent, is on track against an uncertain economic outlook. She said she thinks it's premature to speculate about a second stimulus. Rather, what is needed is to monitor the economy and the spendout of the stimulus before making a decision whether something more is warranted, she said.

Lee brought in Christopher Zook, CIO of CAZ Investments, to comment on the earnings season. Zook said he is concerned that companies may meet earnings expectations but show no revenue growth. He said this observation applies to the financials as well as to healthcare names and consumer discretionaries, which he says are soft.

In his stagflation scenario, he likes the commodities, including the copper, gold and oil service names.

For an ETF play on China, Lee brought in Christian Magoon, president of Claymore Securities, who said the stimulus is working in that country as evidenced in higher auto sales, improving factory orders and higher home prices. He likes the performance of small cap stocks in this market, noting one way to play it is with

Claymore/Aphashares

(HAO) - Get Report

.

For the stock of the day, Terranova likes the fundamentals of

Transocean

(RIG) - Get Report

, which he called the best deep-water driller in its space. The stock is up 49% for the year.

He said the company is reducing costs, raising cash and entertaining a stock buyback later in the year.

With a preview of options trading next week, Scott Nations, of Nationsshares, took a look at

Intel

(INTC) - Get Report

. He said he sees a 5% move on earnings on that stock.

In the final trades, Seymour was long

Potash

(POT)

. Adami liked

Dell

(DELL) - Get Report

. Finerman liked

Flowserve

(FLS) - Get Report

and Terranova says

Qualcomm

(QCOM) - Get Report

is a buy.

"Check out

"'Fast Money'Portfolios of the Week" on Stockpickr every Thursday.