The markets tanked Thursday on a miserable jobless report. The Dow Jones Industrial Average slid 223.32, or 2.63%, to 8,280.24, while the S&P 500 lost 26.91, or 2.91%, to 896.42. The Nasdaq fell 49.20, or 2.67%, to 1,796.52.
Tim Seymour said on CNBC's "Fast Money" TV show that the market never recovered from the bad data in the morning. He said it was not only the severe job losses but also the fact hourly wages were down year over year, a shorter work week and the sense that the consumer is not recovering. Guy Adami, who has been pessimistic about the market recently, again predicted that the S&P will trade down to 870. He said the energy and commodities trade is not boosting this market anymore, and there are indications that tech is losing traction.. Joe Terranova said flatly that reflation trade is over and that the catalysts for next week's market will be the earnings in the tech and financial sectors. Seymour said he doesn't think the situation is that dire yet. He say he is encouraged by a pickup in auto production and the Institute for Supply Management numbers earlier in the week. Melissa Lee, the moderator of the show, asked the panel for their thoughts about the earnings for the oil companies with crude declining. Najarian sounded the alarm on Hess ( HES), which was down 3.76% today. He said Hess has "broken down" and was the target of massive put buying today.
Adami said he wouldn't be surprised to see Exxon ( XOM) head down a lot faster if its earnings aren't good. Lee noted retailers were hit hard today. Seymour said the sector is heading down from here. Adami recommended getting into JC Penney ( JCP), with an entry point at $25. Najarian said he likes Visa ( V), adding it's well positioned if consumers come back. Terranova said it looks as if a second stimulus package will be needed to help consumers. With financials weak across the board today, Adami said the best way to play them for the past month is from the short side. He said he's been particularly disappointed with JPMorgan Chase ( JPM), which has been bumping against its secondary offering price of $35 without making much headway. Terranova said tech stocks, despite being down today, might be best positioned for this entire credit crisis because tech companies went through the bubble in 2001 and have prepared the inventories properly. Seymour called J&J's investment in Elan ( ELN) a "revolutionary deal" because it managed to buy a small piece of the company and then created a company to own the prized Alzheimer's disease drugs. With the jobless rate now the highest it's been in 26 years, Chris Thornberg, of Beacon Economics, said the market today got a nasty realization that the recovery is going to be a little further into the future than people expected. He said one bright spot is real disposal income, which is 2.6% higher than a year ago.
Looking ahead to next week's earnings from Alcoa ( AA), David Silver, an analyst with Wall Street Strategies, expects less of a decline in revenues in the second quarter than in prior months and forecasts an estimated 38 cents a share in earnings. He sees the stock heading down because Alcoa faces the specter of rising costs and horrendous end markets, with the automakers and airline manufactures like Boeing struggling. With the U.S. markets struggling, Mike Gurka, a global asset strategist with Empowerglobal Funds, said Canada looks like a good bet, with technology showing strength, small caps very attractive, no bank failures and cheap base metals. For the "Stock of the Day," Lee turned to Sanderson Farms ( SAFM). Lee asked CEO Joe Sanderson to comment on reports of a ban on chicken imports to China. Sanderson said the country's ministry of trade has denied there is a ban, but he's heard on the street that there is a ban. Sanderson said his company imports chicken paws and wing tips. He acknowledged a ban would a blow to the bottom line in the short run. For the this week's "Trade in America" series, Najarian touted Ford ( F), which is up 150% in 2009. He said the automaker has turned things around without government cash. He said Ford's hybrid sales were up 115% in April and its pipeline is strong. Adami sees the stock heading to $7, if not higher. Jared Levy, a senior derivatives for Peak6 Investments, advised investors to tread cautiously with Direxion Financial Bear 3X ( FAZ). He said the ETF's announcement of a 10-1 reverse split makes a very risky play. He said he would would short this name on a day trading basis. In the final trades, Seymour was for Intrepid Potash ( IPI), Adami for Evergreen Solar ( ESLR), Teranova for Tyson ( TSN), and Najarian for Visa ( V). "Check out "'Fast Money' Portfolios of the Week" on Stockpickr every Thursday.