'Fast Money' Recap: A Resilient Market

NEW YORK ( TheStreet) -- The markets finished higher Wednesday despite some discouraging economic data.

The Dow Jones Industrial Average rose 36.58, or 0.39%, to 9398.19, and the S&P 500 added 6.92, or 0.69%, to 1012.73. The Nasdaq added 10.63, or 0.53%, to to 2001.35.

Melissa Lee, the moderator of CNBC's "Fast Money" TV show, said she didn't understand how the markets ended up higher given today's disappointing foreclosure and retail sales figures.

Tim Seymour said the encouraging GDP numbers coming out of France and Germany might have been a factor.

For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."

3 Stocks I Saw on TV

Pete Najarian reminded viewers that the market is going through a period where buyers are taking the opportunity to step back in whenever there is a selloff.

According to Seymour, the trade is not over yet because there are some positive market trends such as somewhat normalized earnings, some return to an investable marketplace, lower volatility and a weaker dollar.

Lee shifted the discussion to the financials and John Paulson's big stake in Bank of America ( BAC), which surged 7% today.

Najarian noted one analyst at Morgan Stanley ( MS) had picked BofA long before Paulson. He said the analyst picked BofA as her favorite in the group in May 2009 and was "dead right." He said she noted the bank's $40 billion writeoff was not going to happen again and that its earnings are going to be higher next year.

Finerman sees BofA as a long-term play and wouldn't be surprised if the stock reaches the high $20's and $30's a year and a half for now. The stock closed at $17 today.

Lee noted that Credit Suisse had lifted the forecast for aluminum and copper prices. Seymour said the rise in demand for those two commodities should benefit Alcoa ( AA) and Freeport McMoRan ( FCX).

Terranova said the easy-money policies signaled in the latest Federal Open Market Committee report is going to reflate the commodity bubble, driving the dollar lower and commodity and material names higher.

Oil finished slightly higher today, prompting Terranova to say the oil trade is quietly returning. He said he's seeing signs of strength in the oil service names, while Finerman noted that Transocean ( RIG) has signed some contracts.

Lee brought in Michelle Meyer, an economist for Barclays Capital, for her assessment of the economy. She said she sees a cyclical bounce in the second half that will be driven by a a deep inventory cycle that should create some momentum in economy and help the labor markets. She cautioned the recovery will be "modest."

She agreed with the panel that the dollar is going to weaken as long as the Fed keeps the federal funds rate low.

Carter Worth, chief market technican at Oppenheimer Asset Management, said he sees the S&P struggling at current levels after a huge three-day runup in mid-August.

On another point, he sees copper retracing back to its lows of 2008. He said he would take profits in Freeport McMoRan and invest instead in Alpha Natural Resources ( ANR).

Will Paulson's holdings in BofA lead to other "shocking" holdings? That's the question Lee posed to Finerman, who said she would be checking the SEC filings for such information from such names as David Einhorn at Greenlight Capital, Carl Icahn, Leon Cooperman at Omega Advisors, and Seth Klarman at Baupost.

Lee said sugar futures are up 90% year to date as the industry struggles with supply shortages. Seymour said heavy monsoon rains have hurt the crop in India while the ethanol trade is taking up a lot of the sugar in Brazil.

Seymour was high on investing in Cosan ( CZZ), a large Brazilian sugar producer, and Corn Products International ( CPO) , which makes corn sweeners.

Lee invited Dennis Gartman in to talk about what trades he would make on the 40th anniversary of Woodstock music festival. He said he would look at where the baby boomers are heading in this economy. He said his best bets would be banks, sellers of smaller housing units and healthcare stocks. He said he would short the homebuilders and buy Apple ( AAPL).

Lee invited Stacey Gilbert, a financial market strategist for Susquehanna Financial, to discuss a cheap options strategy. Gilbert focused on Priceline.com ( PCLN) which has been on a torrid run, up 100% for the year and 40% this month.

She said she has whittled down put protection on the stock to a net 80 cents with a strategy that calls for buying the Jan. 10 130-strike put for $8.90 and selling the Jan. 10 170-strike call for $8.10.

In the final trades, Seymour liked Suntech Power Holdings ( STP). Terranova said to short KB Homes ( KBH) and Avalon Bay ( AVB) ; Finerman liked Pride International ( PDE); and Najarian said he liked Bucyrus ( BUCY).

-- Written by David Tong in San Francisco

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