On Thursday, the Dow finished down 3 points and the Nasdaq closed down 23 points. Wild rumors hit International Group (AIG) as talk of a major write-down made the rounds on Wall Street. The rumor was later disproved but the market still struggled to make any notable gains. The team at CNBC's "Fast Money" tried to separate fact from fiction for investors.
More RumorsThere are rumors that AT&T ( T) could be looking to buy a satellite TV company. Jeff Macke thinks the play is Echostar ( DISH). Pete Najarian agrees with Macke and he noted that DISH has lots of options activity that suggest to him a deal could happen.
Thoughts from TesoroLynn Westfall, chief economist at Tesoro ( TSO), joined the "Fast Money" crew to discuss the oil markets. Westfall believes oil will go back $60 but we're not at $60 yet because hedge funds are pouring billions of dollars into commodities to try and make quick money. He remarks that the hedge funds drive up prices when they overact to news. With oil at $90, every alternative energy technology comes into play. However, Westfall doesn't believes the major players in the oil markets will let the attention turn to those alternatives. Adami advises investors to be long Tesoro into earnings. Crude oil spiked 4% higher to close at $90.46, a new record. Adami noted that ExxonMobil ( XOM) was weak as oil traded higher. He feels Exxon is probably going lower and will miss earnings. There is no shortage of crude right now in the liquid markets and Najarian wants to lighten up a little on the oil trade.
Fed Rate Cut PlayThe Federal Reserve will meet next week to discuss the direction of interest rates. If the Fed decides to cut, is there a trade for inveators? Adami suggests getting long Citigroup ( C) ahead of the rate cut might be a good idea. Finerman says she won't be surprised if the Fed cuts, but she believes it might be priced into the market already.
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Coast to CoastRiley Asset Management CEO Ned Riley joined the "Fast Money" crew from Fenway Park in Boston. He concedes that the market has been rough, but he is still a bull. Lower rates, anxiety and liquidity mean higher stock prices in the next 6 months. Riley predicts the Fed will cut rates next week and he likes Financial Select Sector SPDR ( XLF) for a trade off the cut.
Tech TalkMicrosoft ( MSFT) stock surged 11% on an 23% increase in profits, handily beating Wall Street estimates. CNBC's Jim Goldman says Windows Vista is growing like gangbusters. Macke points out that deferred revenue was up and that is huge. He would be a buyer of MSFT, but wouldn't chase it after hours. Additionally, he said MSFT is under-owned by money managers. Najarian was very impressed with MSFT's guidance. In his opinion, it's a monster number and he still owns the options on the software giant. Finerman also owns MSFT and maintains that it isn't expensive here. On the other hand, Adami likes Dell ( DELL) off the MSFT strength. EMC ( EMC), Motorola ( MOT) and VMware ( VMW) all traded higher while the chip stocks took it on the chin. Macke is long EMC and Intel ( INTC). According to Macke, the rest of the chip stocks are over extended and he believes the semiconductors will continue to trade lower. He says that Intel is an investment on the PC upgrade cycle. Najarian says he lightened up in EMC today on the strong earnings. Adami says buy EMC on a pullback, which you could see on Friday. MEMC Electronics ( WFR) traded higher after third-quarter profits rose 66%. Najarian likes MEMC Electronics, but he advised traders to take profits. He also advised traders to look at Suntech Power Holdings ( STP), which hit a 52-week high on Thursday. Allstate ( ALL) traded lower as fears mount that insured losses from wildfires could top $1.6 billion. Finerman says that she might become a buyer of Allstate. Adami remarks that $50 has held a couple of times and he believes that down around that level you can buy the stock for a trade. 52-Week High Nokia ( NOK)
Pops & DropsDrops -- WellCare Health Plans ( WCG) crashed 63% after the FBI raided the firm's offices. Adami warns that it's probably going lower and investors should get out. Big Lots ( BIG) plunged 17% after cutting third-quarter estimates. Finerman believes BIG is going lower and she short the stock. Celgene ( CELG) fell 9% after missing revenues. Najarian tells viewers that this is an attractive takeover candidate. NII Holdings ( NIHD) fell 19% on weak subscriber numbers. Najarian states that NIHD deserved to have a drop and China Mobile ( CHL) gets more subscribers per quarter then NIHD gets in a year. IntercontinentalExchange ( ICE) fell 4% despite reporting a 53% rise in profits. Adami declares that it was due for a pullback and investors can own it on the next one. Zimmer Holdings ( ZMH) dropped 15% after profits fell 76%. Macke expects that it won't stay down for long and viewers can look to buy it on the dips. He advised investors to take their time with buying ZMH. Pops - Potash Corp ( POT) traded up 5% hitting an all-time high. Macke reminds people that POT has a monopoly on their products.
Face2FaceFans of the show send in their own questions to be answered. Roger from Florida asks, "Please tell me, who has a better chance of a comeback, Britney Spears or Chico's FAS ( CHS)." Macke says Britney has a better chance because he sees no comeback in specialty retail. Joe from Ohio writes, "I'm being called foul names and my friends question my sanity in shorting oil. I think when the Fed stalls on lowering rates it will be the market killer. My question is with all these job cuts and a stalled Fed is it time I short the Dow with Short Dow30 ProShares ( DOG)?" Finerman says if she had to be long or short oil she, too, would be short. However, with regards to the job cuts and Fed stalling, she didn't agree with Joe. Franklyn from New York wants to know, "Why is Sun Microsystems ( JAVA) not growing? This is a major American technology company that has great products and is trading way below its competitors. Isn't it time for the market to reward good American companies?" Najarian retorts that JAVA isn't a good American company, it's a failure. He would rather own Cisco ( CSCO).
Final TradeThe crew gives their best ideas for the day.
- Macke thinks Microsoft's Xbox strength is bullish for Activision (ATVI).
- Adami recommends Intel (INTC).
- Finerman announces that with all the makeup she buys for the "Fast Money" show, Estee Lauder (EL) is a good choice for investors.
- Najarian prefers Under Armour (UA), which he says is starting to bounce.