NEW YORK ( TheStreet) -- The markets sagged Thursday over persistent concerns about the European debt crisis. The Dow Jones Industrial Average fell 113.96, or 1.05%, to 10,782.95, and the S&P 500 dropped 14.24, or 1.22%, to 1,157.43. The Nasdaq sank 30.66, or 1.26%, to 2,394.36. Gary Kaminsky on CNBC's "Fast Money" TV show that Wall Street smells a global settlement of the banks that have been suspected of misleading investors about mortgage-backed bond deals. "There will be one settlement and it will be over." Guy Adami said it's possible to make the argument that the market uncertainty extends beyond the financials to the economic uncertainty in China, Cisco's ( CSCO) earnings and troublesome retail earnings. For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."
Tim Seymour said another cloud of uncertainty over the banks is the Dodd's financial reform bill and its vague language. Technically speaking, Adami said the market has done poorly testing the S&P resistence level of 1,172 and looks as if it is going to roll over again. Kaminsky said Cisco's cautious outlook about Europe had an impact on the market today. Seymour said the comments of John Chamber, Cisco's CEO, could be taken both ways. He said the market is taking a negative view of the comments and heading lower. Chris Whalen, of Institutional Risk Analytics, said the chances of a global settlement in the mortgage-backed securities controversy is a long way off. He said the politicians love this, having finally found an issue that has traction with voters. He said the doesn't think Moody's ( MCO) will lose in court, but said the rating agency should be worried about the impact of the financial reform overhaul on its business. He said there are some "righteous" banks that will come out of this episode, including US Bancorp ( USB), Bank of Hawaii ( BOH) and BB&T ( MSDXP). With the euro falling again, Brian Kelly told viewers to watch the euro-yen cross rate as an early indicator of where the S&P is going. Seymour said it's a bad sign that the euro is declining when there were so many positive signs coming from Europe today.
3 Stocks I Saw on TV
Kelly said he would stick with U.S. companies such as Jack In the Box ( JACK) that "buy things in dollars and sell to people with dollars." Lee shifted the discussion to the arrival of circuit breaker rules for the markets. CNBC reporter Bob Pisani said they could come early next week, but may take as long as 60 days to implement because of the difficulties in getting the necessary software. He said the SEC's new rules certainly will provide for a central audit trail and provide careful surveillance of "everyone," including high-frequency traders. Kaminsky said it's another sign of a weak market, when $5.5 billion worth of IPOs were withdrawn. "The capital markets are sloppy," he said. Despite gold giving up some gains today, John Roque, an analyst with WJB Capital Group, advised buying the precious metal on any pullback. He said gold is just 1.4 times the S&P, relatively low by historical standards. He said gold is under-owned, with institutional investors not big on it. Brian Kelly reminded viewers that the gold and silver trades are different, with gold being the currency play and silver the industrial trade. Shifting to the Gulf oil disaster, Robert MacKenzie, an FBR Capital analyst, backed up his upgrade of Halliburton ( HAL), saying the selloff on the stock has been overdone. He expects Halliburton to benefit from the rebuild and new orders. Adami said he sees BP ( BP) heading down. Kaminsky said BP will have to cut its dividend to deal with the issues, but Finerman said the company has enough cash to protect its dividend. Lee asked Finerman for some best-in-breed trades. Finerman said stocks like IBM ( IBM), Johnson & Johnson ( JNJ) and Kraft ( KFT) are interesting plays at their low multiples. Despite the euro's demise, Seymour was high on Germany, which he said is a strong exporter that is profiting from the currency's decline. He particularly liked Seimens ( SI), Daimler ( DAI) and Fresenius Medical Care ( FMS). It was a down day for Nordstrom ( JWN), with its CEO saying the consumer is still challenged. Patty Edwards still liked the stock, saying the pullback was a buying opportunity.
Lee said Sprint Nextel ( symbol) was linking up with Wal-Mart ( WMT) to offer pay-as-you-go phones, which have been a hot item in Europe. Several panelists, including Kelly, thought it was a bad idea because of the compressed margins. Lee noted the late-day selloff and the volatility of the market. Kaminsky, who recommended CBOE Volatility Index on Wednesday, said it's a good time to get into it. He said there will be a tug of the war in the coming weeks between zero interest rates pushing equities up and deteriorating fundamentals pushing equities down. Seymour agreed, saying protection is currently cheap. In the the American Titans segment, the panel agreed that McDonald's ( MCD) was worthy of being the best in the breed. In the final trades, Seymour liked Monsanto ( MON). Adami liked MacDonald's; Finerman favored IBM; and Kaminsky liked the CBOE Volatility Index. -- Written by David Tong in San Francisco To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. "Check out "'Fast Money' Portfolios of the Week" on Stockpickr every Thursday. Follow TheStreet.com on Twitter and become a fan on Facebook.