'Fast Money' Recap: Bernanke's Gloomy Outlook

NEW YORK ( TheStreet) -- The markets slid Wednesday on discouraging comments from Fed Chairman Ben Bernanke about economic growth.

The Dow Jones Industrial Average fell 109.43, or 1.07%, to 10,120.53, while the S&P 500 lost 13.89, or 1.28%, to 1,069.59. The Nasdaq was down 35.16, or 1.58%, to 2,187.33.

Steve Liesman said on CNBC's "Fast Money" TV show that Bernanke doesn't see a double-dip recession ahead, although he did say the outlook was uncertain. According to Liesman, Bernanke said that if the Fed were to step in, it would keep interest rates low for the long term and maintain lower interest rates on reserves.

Tim Seymour said it seemed as if the markets wanted Bernanke to do something to turn around the economy even though it is widely believed that the Fed has run out of bullets.

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

Guy Adami said he didn't think Bernanke made equity-specific comments that would have accounted for today's huge selloff. He said he was puzzled by the selloff because he thought the market was going to rally today.

Pete Najarian said he thought Bernanke's discouraging comments about unemployment was what sent the markets south.

Seymour said the markets overreacted to comments by Bernanke in an open forum. He said he was heartened earlier in the day about the prospects in the resources and commodity trades.

Brian Kelly said the part of the speech that struck him was the banks taking training lessons in small business lending. He said that is critical because job creation comes from small business growth.

Terranova said the market looks defensive, though there is demand from China, healthy corporate balance sheets and affluent customers. He said the market can move higher if there is a little job stimulation.

Melissa Lee, the moderator of the show, said Starbucks ( SBUX) was down on lower guidance. Seymour said investors were expecting too much and this would be a good time to get in on weakness.

Another stock that was down was Netflix ( NFLX). Adami expressed concerns about a 4% churn and the large short interest in the stock. He said the shorts will lean on the stock if the company starts to miss.

Shifting to Morgan Stanley ( MS), which was up on better trading revenue, Seymour said there is more positive sentiment about the company than any other investment bank.

Terranova said the financials were all over the place today. He said the best way to play the sector might be with an ETF like the Financial Select Sector SPDR ( XLF).

Lee asked Doug Kass, founder and president of Seabreeze Partners Management, for his assessment of the market. He said there's going to be a lot of "boring money" the next couple of months, as the S&P remains range bound between 1,025 and 1,150.

He said the upper range will be capped by the ambiguity of the soft economic patch, high marginal tax rates, costly regulation and the imbalance of state and local governments. He said the lower range will be affected by the low probability of a double-dip.

Overall, he had low expectations for the market and economy.

In afterhours trading, Amazon.com ( AMZN) was moving to downside ahead of earnings. Seymour said the dollar's strength is hurting the company. Adami still couldn't understand why Amazon issued the report earlier this week of strong Kindle sales ahead of its earnings.

Tim Boyd, an analyst with MKM Partners, was also surprised by the timing of Amazon's release on Kindle sales, but he said it should bode well for the company when it releases its earnings.

In a quick 360-degree look at Microsoft ( MSFT), which reports earnings Thursday, all three experts rated it a buy. Brent Thill, UBS analyst, liked the stock's valuation and said its PC and server services strong and its product line is in the best shape in the last five years. Carter Worth, a chartist from Oppenheimer, said the stock should make a run for $27 in response to decent numbers. And Jon Najarian said Microsoft's earnings should be much better because of the coming upgrade cycle.

Lee brought in Michael Odell, CEO of Pep Boys ( PBY) which was taking it on the chin today from disappointing earnings.

Odell said the company is about half way through its turnaround story. He said his company is seeing improvements in its top and bottom lines. In addition to auto parts sales, he said his company is adding service and tire centers.

Looking ahead to companies reporting earnings Thursday, Kelly said he would be watching Caterpillar ( CAT) to get a read on global growth. Najarian said that story should be good, adding he liked Bucyrus ( BUCY). Terranova offered up American Express ( AXP), which he said should get significant contributions from credit on the corporate side and affluent consumers. Seymour said Nokia ( NOK) is heading into earnings with low expectations.

In the final trades, Kelly said he would short CSX ( CSX). Seymour liked Mechel OAO ( MTL) Adami liked Human Genome Science ( MO). Terranova liked Precision Castparts ( PCP), while Najarian liked Starbucks on the dip.

-- Written by David Tong in San Francisco

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