'Fast Money' Recap: The Rally Peters Out

The trade panel discussed the reasons for the end of the rally.
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Wall Street returned to its losing ways Tuesday as it gave up a good portion of the gains from the previous two days.

The

Dow Jones Industrial Average

lost 242.85, or 2.7%, to 869.33. The

S&P 500

dipped below the 900, falling 23.03, or 2.03%, to 888.67. And the

Nasdaq

surrendered 24.4, or 1.6%, to 1547.34.

Dylan Ratigan, the host of

CNBC's

"Fast Money" TV show, asked the trading panel to comment on the pullback.

Pete Najarian said the profit-taking was normal after some sizable gains in recent days. He said it was normal for investors take some profits off

IBM

(IBM) - Get Report

and

HP

(HPQ) - Get Report

because the two have been "on an absolute tear" the past few days.

Ratigan noted that three-month Treasury bills turned negative today and wondered who would be "crazy enough" to buy them. He thought it strange for the banks that received U.S. taxpayer money from TARP to turn around and put it back into Treasurys.

Jeff Macke said that "was pretty much the catalyst for not buying stocks today."

Ratigan asked Karen Finerman to comment on a congressional bill that would allow the government to put themselves ahead of creditors in a bailout of the automakers. Finerman said it might be a violation of contract law if it happens and speculated that might the reason why

Ford

(F) - Get Report

doesn't want to participate in the first tranche of the bailout.

Jeff Macke was upset at the "constant changing of the rules" and how the federal government is "throwing money away through the TARP program."

Ratigan shifted the discussion to the release of an oversight panel report on Wednesday that is critical of the TARP program.

Tim Seymour said he did not expect the report to say anything new. Macke was critical of the Treasury Department's handling of the program by "doing things on the fly."

But Najarian said it's easy to second guess Treasury's actions when the crisis unfolded. He said he likes what TARP has done so far and believes people will be returning to equities next year.

Asked to make a case for being bullish on stocks, Finerman maintained there are a lot of stocks not affected by TARP that are doing fine. She cited

McDonalds

(MCD) - Get Report

as a company that is continuing to carry on its business and "deliver a value to the customer."

Ratigan, though, was disturbed by the conduct of the CEO's of the companies that have received bailout money and how they have gone unpunished after running their companies to the ground. "They should give back the money they've received," he said.

He wondered how it was possible for these companies to do well for 28 consecutive quarters and then tank all of a sudden.

Macke was incensed over how taxpayer money is being "thrown away" in such a way that "the market doesn't operate freely."

The panel then turned their attention to

Walmart

(WMT) - Get Report

, which announced the suspension of its stock repurchase program. Both Macke and Finerman said it made perfect sense for the company to do that to preserve capital in these difficult times.

Ratigan then asked Gene Munster, an analyst with Piper Jaffray, to comment on a report that Walmart could be selling iPhones. Munster said he believes it's "85% true," with the announcement coming next month.

Munster said the move makes sense for

Apple

(AAPL) - Get Report

because it gives them a major channel to sell their popular smartphones to the masses. He said the move won't diminish the brand. He said Walmart has been selling iPods in its stores without the brand being adversely affected.

Munster said the real engine growth for Apple, which he rates a buy, remains the MacBooks, which are selling very well in the December quarter and figures to easily exceed analysts growth estimates.

Apple, he said, has weather the economic storm quite well.

Ratigan shifted the discussion to President-elect Barack Obama's infrastructure spending program and noted how it has broaden to include technology.

Najarian said the buzz over Obama's plan has benefited

Cisco

(CSCO) - Get Report

, which is up 8% since the president-elect's announcement,

Juniper Networks

(JNPR) - Get Report

and

Ciena

(CIEN) - Get Report

. Seymour added

EMC

(EMC)

to the list of beneficiaries.

Carter Worth, chief market technician for Oppenheimer, said drug companies like

Bristol Myer Squibb

(BMY) - Get Report

are about to do a bearish-to-bullish reversal after being down for some time. Najarian agreed and liked

Merck

's

(MRK) - Get Report

prospects in this regard.

Ratigan asked Dennis Gartman for his outlook for oil for 2009. Gartman said there is so much excess oil that they are putting it in tankers, driving tanker and storage rates up in the process.

He said his best bet for 2009 is to own natural gas. Seymour agreed, noting it will be challenging for oil next year as demand continues to drop.

Gartman said Iran and Saudia Arabia are having a difficult time in particular. He said the two countries are pumping a lot of oil to raise money to purchase the consumer goods they have promised for their people.

Want more Cramer? See "'Fast Money' Portfolios of the Week"Thursdays: Last week's edition: http://www.stockpickr.com/problog/1209/

This article was written by a staff member of TheStreet.com.