Commodity stocks helped to push the market lower on Tuesday with gold and oil dropping to levels last seen in August. The team at CNBC's "Fast Money" kicked off the show discussing this turn of events and which parts of the market were hot.Pete Najarian and Guy Adami both believe the commodity stocks are just seeing profit taking but not rolling over. Adami adds that gold is looking like it's topped out. Guy Adami would take profits in oil names like ExxonMobil ( XOM). Jeff Macke suggests the change is due to dollar strength and when the dollar is strong, oil and commodity stocks will be weak.
What's up?The homebuilding stocks traded higher, shaking off the worst pending home-sales numbers in history. Adami likes KB Home ( KBH) for a trade. He sees the stock going to $29.50, but urges traders to use a stop at $24.50. Finerman advises investors in housing stocks to take some off the table. She comments that many market players believe the housing stocks have hit bottom, but she isn't convinced of that. To Macke, these stocks are trades and not investments, unless your time horizon is five years. ( RealMoney Take: Jim Cramer said recently, "Take KB Home: 73 million shares trading, 20 million shares short." To read more on what Cramer said, click here.) Morgan Stanley ( MS) and Bank of America ( BAC) also traded higher as speculation of a credit crisis ending continues to help the financials. Adami sees a trade opportunity in US Bancorp ( USB), pointing out that Warren Buffett has been adding to his position in USB recently.
Wii Anyone?Nintendo's Wii has been on fire with consumers who love to play video games. Now tennis giant Prince is launching a new mini racket that will be available for use with the Wii. CNBC Sports Business Reporter Darren Rovell joined the crew to discuss the hot new product and Nintendo's future. Rovell told viewers that the racket will cost $14.95 and will be sold at Circuit City. He notes that Wii tennis is the best game going for Nintendo. Macke isn't so sure that the racket will generate a huge amount of revenue for Prince. In Macke's opinion, Activison ( ATVI) and Electronic Arts ( ERTS) make more money off the games for the Wii than games for the Playstation, primarily because they're less complicated for the Wii. He suggests buying Electronic Arts, which he currently owns, as well as Activision and Gamestop ( GME) on pullbacks. Activision just hit a 52-week high. Looking for more computer gaming picks? Check out this portfolio on Stockpickr: Video Game Index
China Continues to Charge AheadiShares FTSE/Xinhau China 25 Index ( FXI) traded higher for the second day in a row even though the Chinese stock market is closed on holiday for the rest of the week. Najarian reminds U.S. investors that they can trade China ETF's and ADR's even when the market in China is closed. Although it has had a monster run, he still believes that Baidu.com ( BIDU) will trade higher. Najarian owns BIDU.
Micron StumblesMicron ( MU) traded lower after hours on a $158 million loss. Najarian believes the run in Micron has already happened. He prefers Sandisk ( SNDK) and Rambus ( RMBS) and feels both have more upside potential. Adami disagrees and believes that Micron will trade higher from current levels.
Pops & DropsPOPS -- Pepsi Bottling Group ( PBG) traded up 2%, hitting an all-time high. Adami likes PBG and thinks this stock is cheaper then Coca-Cola ( KO). PDL BioPharma ( PDLI) traded up 9% as takeover rumors swirl and the CEO has left the company. Najarian believes PDLI is undervalued and he has owned this stock for the last two weeks.
Face2FaceThe team takes questions from the viewers. Bob from New York writes, "We have seen a big run in Las Vegas Sands and Melco Entertainment ( MPEL). Will Macau continue to expand or get oversaturated?" Najarian responds that Wynn Resorts looks better then Las Vegas Sands. ( RealMoney Take: Jim Cramer said recently, "That's right, this secondary will give Wynn money galore to do some more building in Macau or make the casinos look and feel better, something that Steve Wynn has been emphasizing." To read more on what Cramer said, click here.) Dean from New York comments, "I love your show. I feel you haven't focused enough on contrarian opportunities though. There are plenty of fantastic real estate companies and trusts that have unfairly been beaten down since August and, while the rest of the market has recovered, they have lagged. One such company is CB Richard Ellis, ( CBG) which has fallen from $42 and is now trading at $28. Don't you think that as diversified and as global a business should continue to grow at a healthy pace?" Adami concedes that CB Richard is OK for a trade with a stop at $24.
Final TradeThe team signs off with their best trades for the day.
- Macke likes Johnson & Johnson (JNJ).
- Finerman recommends Kohl's (KSS).
- Adami is drawn to the action in Dean Foods (DF). (RealMoney Take: Jim Cramer said recently, "Dean Foods will keep stumbling. They did the dumbest leverage re-cap I have ever seen." To read more on what Cramer said, click here.)
- Najarian prefers PDL BioPharma (PDLI), a stock he owns and thinks could see a takeover.