'Fast Money' Recap: BP Blues

NEW YORK ( TheStreet) -- The markets retreated late in Wednesday's trading session despite reassuring comments from Fed Chairman Ben Bernanke that the economy was moving in the right direction.

The Dow fell 40.73, or 41%, to 9,899.25, while the S&P 500 lost 6.31, or 0.59%, to 1,055.69. The Nasdaq dropped 11.72, or 0.54%, to 2,158.85.

Melissa Lee, the moderator of CNBC's "Fast Money" TV show, said the market surrendered triple-digit because of weakness in BP ( BP) and other energy stocks.

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

She then shifted to another story in afterhours involving Goldman Sach's decision to cut its six-month outlook for the euro-U.S. dollar to $1.15. Joe Terranova said Goldman cited the political risk in the euro zone and the absence of any growth going forward.

Guy Adami and Steve Grasso said they believe the euro is heading to parity to the dollar.

Terranova said it was interesting to note that Goldman's top trade is in Russian equities.

Adami said there was every reason to expect the market to rip today, adding the fact that it closed the way it did should be a concern for the bulls.

Terranova said it was telling that the troubles plaguing BP and Anadarko ( APC) trumped Bernanke's encouraging comments about the economy.

Lee said the big story in afterhours was BP, which was down 16% today and helped drag down the rest of the energy space and entire market. Adami said he detected some "forced selling" in the market and lamented the loss of the energy space and a rollover in the financials and tech sectors. He said 1,040 in the S&P remains his bogey point.

Najarian said BP's situation reminded him of the downfall of Bearns Sterns and Lehman Brothers. He said it appears as if BP is headed toward liquidation as speculation pushes the stock to the downside.

Gary Kaminsky disagreed with the idea of liquidation. He said it was dangerous for investors to buy the stock for the dividend. He also said it is irresponsible for "closet" index value managers to say it was a cheap stock.

Kaminsky said the stock is enveloped in a lot of uncertainty because no one knows what the value of the company is. "Who knows what will happen when they go out and try to finance themselves?"

He said he heard some talk of possible bankruptcy action. That comment prompted Lee to quickly say there was no basis for the talk about bankruptcy.

Grasso said he sold his BP shares because of the risk of bankruptcy and dividend cut.

Whitney Tilson, managing partner for T2 Partners, said he took advantage of the panic and confusion over BP stock to add to his position, raising his stake in the embattled company from 4% to 5%.

He said the panic and confusion are unfounded. He said BP is one of the most profitable companies on the globe and easily has the financial resources to cover the cleanup costs. For example, he said in the past two months, the company has been saddled with $1 billion in cleanup costs but it has generated $5 billion in pretax profits.

He said only "untold legal judgments" could be a serious problem for BP but that it would take years for those to be resolved.

Terranova expressed his concerns about the negative impact BP is having on the entire energy space. Kelly said he liked natural gas and Chesapeake ( CHK).

Lee noted a Reuters story that said that BP is heading for a showdown with the White House. Rep. Mike Pence (R., Indiana) said he was disturbed to learn that President Obama had not picked up the phone to call BP's CEO in 50 days. He said that the president needs to exercise more leadership in handling the crisis.

Shifting to the falling euro, Dennis Gartman said the euro is heading toward parity with the dollar and that "shouldn't be a surprise to anyone." He was extremely pessimistic about the future of the euro as a currency.

There was some glum about China's economy as well. Najarian said the iShares: FTSE/Xinhua ( FXI) has broken below its 200-day moving average, with "people positioning themselves for more downside."

Lee noted the tech sector did not fare well today. Adami said tech was the last space that started to lose and now it's "losing big." Najarian said that Intel ( INTC) is starting to look cheap and that Akamai ( AKAM) is going higher.

Lee said another tech stock that was doing well was Corning ( GLW).

In the final trades, Terranova liked Teva Pharmaceutical ( TEVA). Adami liked natural gas and Hugoton Royalty Trust ( HGT) while Grasso liked Pepsico ( PEP). Najarian liked Dow Chemical ( DOW).

-- 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.

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