'Fast Money' Recap: Defensive Moves

NEW YORK ( TheStreet) -- The markets caved Wednesday under heavy selling pressure in the last two hours of trading.

The Dow Jones Industrial Average dropped 96.28, or 0.98%, to 9,774.02, while the S&P 500 lost 10.60, or 1.02%, to 1,030.64. The Nasdaq fell 25.94, or 1.21%, to 2,109.24.

Melissa Lee, the moderator of CNBC's "Fast Money" TV show that the Dow ended the quarter down 10%, with a lot of risky situations out there such as China, Europe, financial regulations, and the housing market.

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 said the market started to fall apart in the last hours of trading after losing Goldman Sachs ( GS), Cliffs Natural Resources ( CLF) and Freeport McMoRan ( FCX).

He said the volatility index is a little steep now heading into the long holiday weekend.

Tim Seymour said the market was coasting along today until it was hit by end-of-the-quarter selling. He said it felt like the "machines were running the show."

Joe Terranova said the downside pressures on the market began eight days when China announced it was shifting to a flexible currency policy and have not let up. He said the markets will now be looking closely at Friday's job report and the ISM.

Anthony Scaramucci said it's necessary for investors to step back and focus on valuation. "If you can own a U.S multinational stock with a 5% to 6% earnings yield when the 10-year (Treasury) is hovering at 3%, that seems fairly cheap to me."

But Brian Kelly said he spent the day getting short ahead of the next 48 hours when a lot of data is coming out, including Friday's jobless rate and manufacturing data from China and Europe. He sees the S&P heading down to 940.

Seymour said he thought the markets had already priced in some of that upcoming data.

Lee shifted the discussion to winners and losers in the past quarter. Terranova said energy stocks were a big loser for the quarter, down 13.1%. However, Najarian said he liked the chemical names, especially DuPont ( DD), which he considered trades at a low price-to-earnings multiple.

Seymour liked the performance of food companies like General Mills ( GIS) and Kellogg ( K), adding they stand to do well in this economic environment.

Scaramucci expects the financials to move higher now that it appears the financial overhaul bill will past. Kelly said he favored buying corporate bonds, while Gary Kaminsky said he liked Exxon Mobil ( XOM), which he said has a better yield than the 10-year Treasury.

Terranova was bullish on Goldman Sachs, which Najarian said has reached the price level that attracted Warren Buffett to buy it.

Seymour said Ford ( F) is looking good because it has shown it can generate cash flow and go into the markets to refinance a "lot of very expensive debt." Scaramucci agreed, calling Ford dirty cheap, with a proven management team.

Terranova said not to forget Johnson Controls ( JCI), which has been outperforming. Najarian said he was going to buy puts once options are listed for Tesla Motors ( TSLA), which had a strong IPO debut this week.

Lee brought in Peter Boockvar, equity strategist for Miller Tabak, who was optimistic about the euro, which has fallen 14% for last six months. Focusing his comments on the euro vs. the dollar, he said debt-plagued nations in Europe like Greece and Spain are finally cutting spending and liberalizing their labor markets. "This is the only way to prosperity," he maintained.

He said the results of the November elections will be an important driver for the dollar and equities.

Large-cap tech stocks were down today. Colin Gillis, BGC Financial analyst, said he was taking a selective approach to tech stocks. He said Microsoft ( MSFT) looks good based on the success of Windows 7 and the prospects for Office 2010. He also liked Yahoo! ( YHOO) as a value play based on the company's turnaround efforts.

Google ( GOOG) is high on his list, adding he liked its EPS and cost-cutting effots.

Lee shifted to the financial overhaul bill that is being debated in Congress. Ed Mills, an analyst with FBR Capital Markets, said he expects the House will pass the bill tonight, paving the way for the Senate to consider it in mid-July. With likely passage of the bill, Mills said all eyes will be on heads of the new regulatory agencies.

With the economy heading toward a double dip, Stephen Weiss, author of The Billion Dollar Mistake sees homebuilder stocks heading lower. He said the market is hurt by the lack of buyers and job creation.

Mike Khouw, an options trader for Cantor Fitzgerald, dismissed the bankruptcy talk surrounding BP ( BP). He said the company's cash position is strong after it cancelled its dividend and suspended two others.

In a short segment on cyberterrorism, Paul Confoni, CEO of CACI International ( CACI) said business is strong with demand coming from the financials, utilities, government, Department of Defense and intelligency agencies.

In the final trades, Seymour liked Itau Unibanco ( ITUB). Terranova liked the July 1.35 calls in Goldman Sachs ( GS) for less than $3. Scaramucci liked Citigroup ( CACI) and Najarian favored DuPont.

-- Written by David Tong in San Francisco

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

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