'Fast Money' Recap: Confusing Market

NEW YORK ( TheStreet) -- The markets closed lower Thursday with swings that confused traders.

The Dow Jones Industrial Average was down 30.72, or 0.29%, to 10,467.16, while the S&P 500 fell 4.60, or 0.42%, to 1,10153. The Nasdaq fell 12.87, or 0.57%, to 2,251.69.

Guy Adami said on CNBC's "Fast Money" TV show that investors are getting "bounced around" until the markets make what he believes will be a decisive move, up or down.

Steve Grasso said he would stay clear of the market because it's "too confusing right now." For Grasso, the bookends on the S&P are 1,081 and 1,113. He said would sell if the S&P reaches 1,090 or lower and buy if it moves above 1,113.

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

Brian Kelly also acknowledged how extremely difficult the market was and said he tried to stay very small during the day.

Karen Finerman said she ventured out to the medical device space. Adami picked up on that point, saying that Becton Dickinson ( BDX) was a historically low multiples and looked interesting.

Melissa Lee, the moderator of the show, commented on the see-saw action in the market. Grasso said it was difficult to lay a short position. In the end, he said it was about getting small and being to "turn on a dime."

Consumer staples like Colgate Palmolive ( CL) and Kellogg ( K) were hit hard after they failed to deliver on earnings.

Finerman said the stocks took a beating after their weak earnings compressed their multiples. Grasso said the downturn of those stocks could spill over to other consumer goods stocks like Procter & Gamble ( PG) . He said he liked the tobacco stocks such as the Altria Group ( MO). Finerman said her preferences were Kraft ( KFT) and Phillip Morris ( PM).

Lee brought in Peter Boockvar, equity strategist with Miller Tabak, to discuss comments by James Bullard, president of the Federal Reserve Bank of St. Louis, who warned about the risk of deflation in this country.

Boockvar said the comments were scary and not the answer to an economy that is trying to deleverage. He said Fed's policy of "printing more money" and "hoping for the best" wasn't the answer.

Lee noted that Amazon.com ( AMZN) announced it is coming out with new versions of the Kindle, one at $189 and another at $139. Gene Munster, an analyst with Piper Jaffray, said the offering is not enough to challenge Apple's ( AAPL) iPad. He said Amazon won't begin to mount a challenge until the price is lowered to $99.

Lee referred to several news reports that said that Google's ( GOOG) Web search availability was blocked in China. Munster said the blockage wouldn't hurt Google because it remains a "world-class" company in search advertising, with its revenues from China just a fraction of its total revenues.

For the hedge fund trade of week, Anthony Scaramucci picked Family Dollar ( FDO), which he said can be counted on for consistently high margins and a 5-year return of capital of 15%. He said the stock is cheap, trading at 13 times its 2011 earnings. He said the stock is a play on a double-dip recession, as companies will turn inventories aggressively if that scenario were to occur.

With nonfinancial companies in the U.S. sitting on $1.34 trillion in cash, Najarian said advertising spending will be a beneficiary, especially with the mid-term elections coming and marketing campaigns by auto companies. Najarian likes the prospects for Omnicom Group ( OMC) and Wausau Paper ( WPP). Others that figure to benefit are General Electric ( GE), CBS ( CBS) and Walt Disney ( DIS).

For a preview of Friday's GDP report, Lee brought in Joe LaVorgna, an economist for Deutsche Bank. LaVorgna is forecasting GDP growth of 3%, which would be slightly above government estimates.

He said the report could be complicated if the government issues revised GDP numbers for prior quarters. He was optimistic about the economy, saying underlying demand capital spending is strong enough to keep the inventory cycle going.

According to the economist, labor will be the key in the second half. If the labor markets improve, employers will restock inventories to meet demand.

In the final trades, Kelly liked Virexx Medical ( REX) Adami liked L3 Communications ( LLL) while Finerman went with Becton Dickinson. Grasso liked the Altria Group ( MO).

-- Written by David Tong in San Francisco

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