'Fast Money' Recap: Take Some Profits

NEW YORK ( TheStreet) -- The markets staggered Wednesday to a flat closing that was dimmed by an outlook for slower growth in the second half.

The Dow Jones Industrial Average rose 3.7, or 0.04%, to 10,366.72, while the S&P 500 lost 0.17, or 0.02%, to 1,095.17. The Nasdaq added 7.81, or 0.35%, to 2,249.84.

Peter Najarian said on CNBC's "Fast Money" TV show that investors should take advantage of some of the big moves from Intel ( INTC) and Alcoa ( AA) to take some profits.

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 onTV

Joe Terranova said the Federal Open Market Committee is in a box now where it has to start unwinding its steadily growing balance sheet.

Guy Adami said the market might have topped out with Intel, which he said did all that "you wanted it to do." Karen Finerman said this rally might be over, noting the volatility index was up today when the market was slightly up.

Terranova said the valuation of Intel may be rich at 11 times earnings compared to other companies in the chip sector. However, he said he remained impressed with the solid outlook for the chip sector in the second half.

Brian Kelly, who was buying iShares Barclays 20+ ( TLT) today, said the FOMC is worried about deflation.

Terranova and Najarian disagreed with the Treasuries trade, saying there were opportunities for a better return in equities.

Moving to the tech trade in the wake of Intel's strong earnings, Najarian said the programmable chip space has been on fire and liked the names in that space going into the second half. Finerman said she liked Hewlett-Packard ( HPQ), while Terranova liked Apple's ( AAPL) strong fundamentals, and Adami saw signs of life in Qualcomm ( QCOM).

Melissa Lee, the moderator of the show, said financials were biggest weight on market today. However, Najarian said the unsually strong options activity that was heavily slanted to the call side led him to be bullish on JPMorgan Chase's ( JPM) earnings.

Adami expressed concerned with Goldman Sachs' ( GS) earnings next week. Finerman said Goldman was in a tough spot regardless of the numbers it puts up. She said she liked Goldman, calling it a premier name.

Brian Kelly said the weak guidance from ICAP, a larger broker between banks, led him to believe the guidance for the next quarter for Goldman and JPMorgan will not be good.

Lee received a news report that said that BP ( BP) had gotten the OK to proceed with the integrity test for its damaged well in the Gulf. Terranova said he was staying away from BP and looking for trades in the refiners and reentering natural gas. Najarian liked that move and mentioned Valero ( VLO) as a good pick.

Shifting back to the FOMC minutes, Mike Darda, of MKM Partners, agreed with the Fed's sentiments but insisted the markets can go higher. He said the markets have already discounted a double-dip recession and the outlook for profits and labor markets looks good. He said equities are definitely more attractive than corporate debt or Treasuries.

Lee noted that 15% of new 52-week highs in the New York Stock Exchange today were MLPs. Gary Kaminsky said the success of the MLPs demonstrates there are pockets of opportunity in the market. He said investors like the yields from these income-producing securities.

The focus in the "360-degree" segment was on Google ( GOOG). Mark Mahaney, Citigroup analyst, rated it a buy on a second-half play. Carter Worth, a chartist with Oppenheimer, said he was a buyer because Google's chart and the aggressive selloff of the stock have been so bad that the stock looks good. Jon Najarian also was a buyer through a call spread, saying he was impressed with Google's outlook for double-digit revenue and earnings growth in the coming years.

Shifting to China, Richard Kang, CIO for Emerging Global Advisors, said China appears to moving toward a soft landing. He said China needs to focus more on domestic consumption. He said the Chinese government will try to limit the reevaluation of the yuan, but he said market forces will force the yuan up. He liked Aluminum Corp. of China ( ACH) as a pick.

In the "Smash 'Em Up" segment, Dennis Kneale, CNBC media and technology editor, argued that Verizon ( VZ) would be better off spinning off its wireline business, which produces only 10% of its profits while absorbing 58% of its capital expenditures, and keeping its long-haul fiber business. He said the company can use the money from the sale to buy out Vodafone's ( VOD) stake in Verizon.

In the "Under The Radar" segment, the focus was on biotech. Dr. Mark Schoenebaum, an analyst with ISI Group, offered two picks with great catalysts. One was Amylin ( AMLN), whose diabetes drug is expected to be approved in October, and the other was Human Genome ( HGSI), which is working on a lupus drug that is expected to be approved by the end of the year. He said both companies can expect a 10%-to-20% pop from the approval.

He also liked Genzyme ( GENZ) as a turnaround story.

In the final trades, Terranova liked Amazon ( AMZN). Adami liked Human Genome ( HGSI). Finerman liked Hewlett-Packard ( HPQ), while Najarian liked Lowe's ( LOW)

-- Written by David Tong in San Francisco

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