The markets rose slightly Tuesday after digesting the first wave of earnings. The Dow Jones Industrial Average rose 27.81, or 0.33%, to 8,359.49, while the S&P 500 added 4.79, or 0.53%, to 905.84. The Nasdaq rose 6.52, or 0.36%, to 1,799.73. Melissa Lee, the moderator of CNBC's "Fast Money" TV show, said Intel ( INTC) was up more than 10 percent in after-hours trading on better-than-expected earnings and bullish guidance. Joe Terranova said Intel's estimated double-digit revenue growth for the third quarter is phenomenal. He said the bellwether stock will take the rest of the market higher. Guy Adami, who is long Intel, said investors should take profits Wednesday on the stock on what he expects will be a high-volume day. He said the stock is a tad expensive at 19 times earnings. Pete Najarian said Intel's "great quarter" is exactly what the market needed to follow up Goldman Sachs. Patrick Wang, an analyst with Wedbush Morgan, agreed with Adami's trading strategy and said he would be checking to see what the company says in its conference call about PC demand and gross margins in the next quarter. Jim Goldman, a CNBC reporter, said Intel's CFO Stacy Smith said that the company expects a "seasonably up" second half. He said that is good news for "broader tech," including the likes of Microsoft ( MSFT) Shifting to Goldman Sachs ( GS), which reported record trading profits, Seymour said the stock's muted performance today was understandable, given the fact that investors were piling into the stock Monday. He said Goldman's significance should be judged on its impact on the rest of the financial sector.
Seymour said one thing he found interesting in Goldman's conference call is its interest in acquiring an asset manager. He said that's important because that's "where the margins are in this business." Terranova said the money isn't going into Goldman but rather into Bank of America ( BAC) and Morgan Stanley ( MS) ahead of their earnings. Retail sales were higher but Seymour said those numbers are deceiving after auto sales are excuded. He said consumers are still having a tough time in this economic downturn. Lee invited Danielle Hughes, CEO of Divine Capital Markets, to give an overview of the earnings season. She said she is looking at companies where industrial capital expenditure is happening, and companies are investing in machinery that will take them to the next level. She liked productivity names and companies benefiting from policy mandates like Diodes ( DIOD), Itron ( ITRI) and Fuel-Tech ( FTEK). Lee invited to Rich Greenfield, an analyst with Pali Capital, to comment on a new DirectTV ( DTV) application for viewing NFL games on iPhones. He said the application demonstrates how interested DirectTV is in providing video on any platform. He said DirectTV is showing technological leadership in an area where cable operators are lagging. He said cable operators still haven't figured out how to program DVRs when a person is using an iPhone or is at his PC. He said the company has enough cash to easily go private or be bought out by AT&T ( T) or Verizon ( VZN) at $35 a share. Lee invited Jeffrey Harte, managing director at Sandler O'Neill, to talk about the significance of Goldman's blowout quarter on its peers. He said the strength in trading in investment banking suggests that most of Goldman's peers will have better-than-expected capital market quarters. However, he said commercial real estate remains a drag for any company with exposure to it.
Among the banks, he said he would stick with Bank of America ( BAC)and JPMorgan Chase ( JPM). Najarian said he noticed huge call volume today in Suntrust Banks ( STI). Lee asked Mike Huckman, CNBC reporter, to comment on Johnson & Johnson ( JNJ), which reported a decline in second-quarter earnings today. Huckman said Johnnson & Johnson is seeing increased competition from the likes of Abbot Labs ( ABT) and Boston Scientific ( BSX). He attributed that competition to a 59% drop in coated stent sales in the second quarter. Lee brought in Michael Golden, CEO of Smith &Wesson ( SWHC) whose stock is up more than 100% this year. Lee wondered whethere the heavy sales were in anticipation of a White House crackdown. Golden said hand gun sales were growing at a double-digit rate six months before the election. He said the sales frenzy slowed down but remains strong. He said the company is making inroads in the law enforcement and military markets with a new pistol and tactical weapons. In the final trade, Seymour was long Mobile Telesystems ( MBT) while Terranova was long Wynn Resorts ( WYNN). Najarian was long Honeywell ( HON). Adami did not have a pick. "Check out "'Fast Money' Portfolios of the Week" on Stockpickr every Thursday.