'Fast Money' Recap: Sluggish Market

NEW YORK ( TheStreet) -- The markets sold off Monday as investors cautiously prepared for the start of an earnings season.

The Dow Jones Industrial Average dropped 78.41, or 0.72%, to 10,751.27. The S&P 500 slipped 9.21, or 0.80%, to 1,137.03, while the Nasdaq fell 26.23, or 1.11%, to 2,344.52.

Guy Adami said on CNBC's "Fast Money" TV show that the market will remain intact if the S&P stays above 1,135. However, he said last Thursday's reversal bears watching.

Joe Terranova the market is trading along the path of a weak dollar. Zachary Karabell said the market is running on low volume and has moved in a trading range for the past five months. Karabell said strong earnings and potent cash flow might provide for good entry points into the 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

Jon Najarian said Goldman Sach's downgrade of Microsoft ( MSFT) and the pullback of Baidu ( BIDU) might be good for a market that had been getting ahead of itself.

Lee amplified on Goldman's downgrade of Microsoft, pointing out the report citied Microsoft's weakness in the mobile device market and the threats to its PC business posed by the growth of tablets, especially the iPad.

Zachary said a strategy of dividends and buybacks would be the worst kind of catalyst for Microsoft. Stephen Weiss said Microsoft should make a change at the top, with the removal of Steve Ballmer. Weiss said Microsoft needs to buy growth but acknowledged that might be expensive. Terranova said Microsoft was "dead money" along with Dell ( DELL).

Lee said gold, silver and palladium were slipping today. Terranova characterized it as a modest selloff, adding the trade marches on and advised investors to look at Freeport McMoRan ( FCX).

Najarian offered some words of caution. He said it might be safer to be in SPDR Gold Trust ETF ( GLD) than in Market Vectors Junior Gold Miners ETF ( GDX), which will accelerate two to three times faster to the downside, if gold prices fall.

Marc Chandler, head of currency strategy with Brown Brothers Harriman, sees dollar weakness before the November elections. He said the uncertainty will be lifted after the elections and fiscal policies will be addressed.

Lee referred to a story in the New York Post that Sara Lee ( SLE) had received a bid from KKR but turned it down. Najarian said the company is opening itself for a class action for not disclosing that information and any other information regarding the sale of the company to its shareholders.

With the State Department issuing an alert over the weekend to travelers in Europe about a possible terrorist attack, Najarian briefly listed some stocks that benefit from the security trade. His suggestions included Osis Systems ( OSIS), ICX Technologies ( ICXT). and American Science and Engineering ( ASEI).

Lee referred to a bullish halftime call on Ford ( F) from Morgan Stanley analyst Adam Jonas who based his reasoning in part on a strong increase in U.S. auto sales next year. Karabell was skeptical of the increase, saying it was an aggressive call. He also questioned whether auto purchases would be the best use of consumer spending at this time.

Lee brought in Vance Edelson, Morgan Stanley, to discuss Republic Services ( RSG), which is involved in waste management and garbage collection. He said the company is in a non-cyclical business that benefits from population growth in a situation where disposal facilities are limited. He also expects the company will benefit from a pick up from demolition work in the construction industry.

In the ear to wall segment, Lee broached the idea that Wal-Mart ( WMT) might be next in line after Target ( TGT) to sell the iPad. Najarian said Apple ( AAPL) would love to be in the largest retail footprint in the world, while Karabell said he would love to be in the room with Wal-Mart and Apple executives when they pricing the iPad.

Andrew Heyward, a media consultant, thought highly of the iPad, saying it's where media is heading. Heyward, a principal with Marketplacenext, said the iPad combines content with convenience, while offering consumers the ability to customize the iPad suit their experiences.

In the under the radar segment, Weiss discussed NII Holdings ( NIHD), which hit a 52-week high.

Weiss said the U.S. company gapped higher today on an an award of a wireless spectrum in Mexico. He said that award is significant because it will allow the company build a network with Televisa that will be able to have the iPad on it.

Weiss says the company is "dirt cheap," trading at 4.5 times 2011 earnings and reasonably valued. He said the company is well positioned to get in the on the early part of the cycle in the Latin American market.

In the final trades, Terranova liked American Express ( AXP), saying the selloff was overdone. Adami liked Radware ( RDWR). Karabell liked Atheros ( ATHR). And Najarian liked the prospects for Ford ( F).

--Written by David Tong in San Francisco.

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