Bad news was good news in the stock market Tuesday. Fears of a major writedown at Merrill Lynch ( MER) and a bearish growth outlook from Wal-Mart ( WMT) couldn't stop the Dow from climbing 100 points. The team at CNBC's "Fast Money" analyzed the day's events for investors.

Fears for Financials

Investors continue to be worried about the future of Bear Stearns ( BSC). CNBC reporter Charlie Gasparino cited the following four reasons for concern about Bear Stearns.
  • The 6% stake by Chinese Bank Citic didn't push enough cash into Bear to provide the liquidity investors were looking for.
  • Investors fear a large fourth-quarter writedown.
  • Alleged improper trading at now defunct Bear hedge funds could lead to unfavorable settlements.
  • Questions about the health and future of CEO Jimmy Cayne.

Gasparino also brought up that Merrill Lynch will report bad earnings on Wednesday. However, the market expects the disappointing news. Wall Street seems more concerned to hear what Merrill will say about its fourth-quarter outlook.

Wal-Mart Blunder

Wal-Mart is currently holding an analyst meeting, and Wall Street is buzzing with how poorly the company is responding to analysts' questions. CNBC's Margaret Brennan joined the "Fast Money" crew to discuss Wal-Mart. Brennan explained that the discount retailer cut capital expenditures to $15 billion, but Wall Street was looking for even deeper cuts. She expects CEO Lee Scott to calm investors when he speaks on Wednesday.

Jeff Macke pointed out that sales growth was down 9% on the year and the company cut square-footage growth numbers. Instead of jumping into Wal-Mart shares, Macke says he bought some Coach ( COH) Tuesday as it was trading down and he likes the technical action in the stock.

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Deal Trades

There are three big Wall Street deals that are close to getting done. Deals like the taking private of Cablevision ( CVC), Oracle's ( ORCL) bid for BEA Systems ( BEAS) and the takeover of Washington Group ( WNG) by URS Corp ( URS) are in play.

Karen Finerman maintains that Cablevision needs 50% of non-Dolan family shareholders to vote in favor of the deal for it to be completed. She admits she has been burned by Dolan investments in the past and she holds no position in Cablevision here. However, Finerman does own options and stock in BEA Systems. In her opinion, BEA Systems did the right thing by not being intimidated by Oracle's offer. Finally, Finerman believes URS will have to raise the takeover price on Washington Group to get the deal done. Out of all three deals, Washington Group is the one she would buy for a trade.

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Word on the Street

Amazon.com ( AMZN) fell 8% after hours in spite of reporting a strong quarter. Pete Najarian says while Amazon didn't blow out the earnings this time, it still posted a monster quarter. Macke would love to be a buyer of Amazon, but is waiting for it to go down 10 points.

United Parcel Service ( UPS) reported a rise in third-quarter profits, but the stock finished flat Tuesday. Guy Adami maintains that what is good for Amazon is good for UPS. He thinks the floor on UPS is the mid-$70's.

Research In Motion ( RIMM) exploded 10% higher after announcing plans to sell the BlackBerry device in China. Research In Motion has signed a deal with Alcatel-Lucent ( ALU) in order to do so. With that in mind, Najarian tells investors to wait for the stock to pull back, not to chase it here.

Juniper Networks ( JNPR) fell after hours on earnings that came in short of Wall Street estimates. Adami advises buying Juniper in the mid-$30s.

AT&T ( T) trades up 2% after profits soared 42%. Macke views the iPhone's success as the reason for the strong profits out of AT&T.

EMC Corp ( EMC) and VMware ( VMW) are set to report earnings before the bell Thursday. Adami believes that if EMC doesn't beat earnings, the stock could take a hit. Najarian predicts that VMware will crush the earnings number, and he advised investors to take some profits on EMC. Macke is still holding EMC long into the quarter.

Yahoo! ( YHOO) currently controls a 40% stake in Chinese online play Alibaba.com. Alibaba is set to go public next month and will be the largest Chinese Internet IPO in history. In Najarian's opinion, the trade is to own Yahoo!. Macke is also long Yahoo!.

Burlington Northern Santa Fe ( BNI) profits rose 8% as cost cuts offset soft demand. Wall Street whale Warren Buffett currently holds a stake in BNI. Finerman is looking to buy CSX Corporation ( CSX) and she doesn't want to chase BNI. Adami also believes CSX looks interesting here.

Drug Matches

With slower growth and dry pipelines, big pharmaceuticals might have to make some deals to get investors excited in the stocks. The "Fast Money" crew played match-maker and picked the best potential marriages for some big pharma names.

Adami believes Pfizer ( PFE) should buy Biogen Idec ( BIIB). However, Macke would love to see Pfizer grab Celgene ( CELG). He says if Pfizer doesn't buy someone, it's going to be "blanked"! Najarian points out that 49% of Pfizer's sales will go off patent in four years. Macke remarked that the Street will respond well to anyone Pfizer buys.

Finerman would like to see Roche snag Genentech ( DNA), but she wouldn't be a buyer of DNA's stock. Najarian suggests Bristol-Meyers ( BMY) and ImClone ( IMCL) should get together. He likes the cancer pipeline at ImClone. Lastly, Najarian would look to sell Amgen ( AMGN) at these levels.

Pops & Drops

Pops -- New York Times ( NYT) traded up 10% after ad revenues boosted profits. Macke says the intermediate bottom could be in here after Goldman Sachs ( GS) recently sold its stake in the media giant.

Western Union ( WU) traded up 7% on strong profits in its Mexico operations. Finerman calls it an interesting story.

Apollo ( APOL) traded up 10% on bullish enrollment numbers, but Adami says it's because the company announced a $500 million stock buyback.

Smith International ( SII) traded up 4%. According to Najarian, the oil service sector isn't dead and he owns a position in Smith.

Drops -- Texas Instruments ( TXN) fell 8% after its fourth-quarter outlook disappointed Wall Street. Najarian tells investors to stay away.

Countrywide Financial ( CFC) fell 4% after the lender announced plans to modify up to $16 billion in mortgages. Macke asks why would investors want to be on the front lines of Countrywide's problems?

Tiffany ( TIF) dropped 4% in sympathy with Coach ( COH). Finerman likes the company, but not the current valuation.

Level 3 Communications ( LVLT) plunged 24% on lower revenue. Macke warns viewers to keep away since this company has nothing to believe in.

Face2Face

In this segment, viewers write in with questions they need answered.

Scott from Reno, Nev., writes: "Guy mentioned that he liked Microsoft ( MSFT) going into Thursday's earnings. My question is assuming earnings are good, are you looking at this as a quick trade to sell? Or would you hold Microsoft for the long-term?" Adami answers that $32, which was resistance, will become support and he believes MSFT is a long-term hold.

Andy from Phoenix writes, " Berkshire Hathaway ( BRKA) has recently hit all-time highs. Why isn't it featured on your "Pops and Drops" segment? Talk about a value investment with tremendous return. Karen, you're a value hedge fund manager. Why don't you load up on some Berkshire?" Finerman says she knows a lot of value investors that own Berkshire and she thinks Buffett is a fantastic investor. But she doesn't want exposure to some of his holdings, like his stake in media.

Final Trade

The panel signs off with their best ideas for the day.
  • Macke advises buying Microsoft ahead of earnings.
  • Finerman would buy Washington Group and look for positive takeover-bid news for the trade to work in the next few days.
  • Najarian is a buyer of Cypress Semiconductor (CY) on a dip. Although he sold his position, he will be looking to get back in.
  • Adami findsWal-Mart (WMT) interesting at these levels.
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