The markets slid Monday on investor jitters over the financials. The Dow Jones Industrial Average lost 155.88, or 1.82%, to 8.418.77, while the S&P 500 fell 19.99, or 2.15%, to 909.24. The Nasdaq was down 7.76, or 0.45%, to 1,731.24.
Guy Adami said on CNBC's "Fast Money" TV show that today's market action left him skeptical of the rally. He said noted banking analyst Meredith Whitney's negative comments on bank stocks talked down another 60 to 70 points in the Dow. He sees the S&P falling to 875 if the index closes below 900. Jeff Macke called the $4 rise Friday in Wells Fargo ( WB) a unhealthy sign for the markets. He told viewers to pace themselves during this pullback. "You can still be bullish and wait on the sidelines," he said. Seymour agreed, saying the tape is intact. "You don't have to react to this in a major way," he said. Pete Najarian said the slew of bank secondary offering announcements today fared well. He said the worry is when one of these offerings don't and the stock gets "smacked" down. Melissa Lee, the moderator of the show, shifted the discussion to the technology stocks, which were down slightly today. Adami reminded viewers that his technical trade of Intel ( INTC) has been working. If investors had followed his advice and got in when it traded at $15, they would have pocketed the gain when it rose to $15.64 today. "If you caught any of that trade, that's a great trade," he said.
Najarian wondered what was on cash-rich the mind of Microsoft ( MSFT) when it sold a $3.75 billion debt in a three-part bond deal. He said the company needs "to show us some growth" --- whether it is with Yahoo! ( YHOO) or "something else." Lee brought in Douglas Cliggott, of Dover Management, to talk about the impact of the stress tests on bank stocks. He said the tests told us two things: the banks are solvent and that Congress is in no mood to provide any more taxpayer money to the banks. He said the biggest surprise from the tests was the government saying a 4% capital buffer is adequate. Cliggott said he would not be a buyer of bank stocks now. In fact, he said he would be hunting for opportunities to short them. He said he would be looking for market leaders that have pulled back to key levels for an opportunity to trade in them. He particularly like VISA ( V) and IBM ( IBM) in this regard. Lee asked Seymour to comment on the iShares MSCI Emerging Markets Index ( EEM), which is up 25% this year. Seymour said the key thing to remember is not to paint all the emerging markets with the same brush. He said some will not recover such as those countries in Central Europe and in the sub-Sahara in Africa. On the other hand, the economies of China, Turkey and South Africa are robust. Seymour said he likes Petrobras ( PZE) as a play on Brazil, while Najarian said he liked Fluor ( FLR) and McDermott ( MDR).
In the Rising Star segment, Seymour touted Trina Solar ( TSL), which is performing well in a sector that has been having its problems. He said Trina, up 77% year to date, has doubled its production and has a real customer base across Europe. Seymour, who owns the stock, said it trades at 6 times trailing earnings. Najarian had a rising star of his own: Yingli Green Energy ( YGE), in which he has seen a lot of options activity. Lee brought in Diane Irvine, CEO of online diamond and jewelry retailer Blue Nile to talk about the company's stock, which is up 87% this year. Irvine said her company has been able to do well because of lower commodity costs, an improvement in consumer trends in the first quarter, and the effects of selling merchandise 20% to 40% below traditional jewelry store pricing. She said the bridal and engagement end of the business is doing particularly well. Macke said the company should do well despite the jump in the stock price if its cash flow works out. Adami was skeptical, noting the stock is a bit "rich" at 30 times price to book and a 42% short interest. In the final trades, Macke said to take profits in SDS ( SDS) if it gets to $60. Adami liked Johnson & Johnson ( JNJ). Seymour liked Banco Santander-Chile ( SAN), and Najarian liked Advanced Micro Devices ( AMD). "Check out "'Fast Money' Portfolios of the Week" on Stockpickr every Thursday.