'Fast Money' Recap: Soft Commodities Simmer

NEW YORK ( TheStreet) -- The markets rallied Wednesday on the Fed's encouraging beige book report.

The Dow Jones Industrial Average jumped 83.56, or 0.72%, to 11,755.44, while the S&P 500 added 11.48, or 0.90%, to 1,285.96. The Nasdaq rose 20.50, or 0.75%, to 2,737.33.

Guy Adami said on CNBC's "Fast Money" TV show that the financials showed leadership today that was aided in part by JPMorgan ( JPM) CEO Jamie Daimon's bullish comments about the sector the day before in an interview with CNBC's Maria Bartiromo.

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

Karen Finerman said she didn't see any reason why both Goldman Sachs ( GS) couldn't do well. JPMorgan caused a stir today when it downgraded Goldman to neutral from overweight.

Joe Terranova said the financials have the potential to do well if they can improve their credit, loan growth and capital return to shareholders. He particularly liked the prospects for Citigroup ( C), which closed above $5 today.

Brian Kelly sounded a word of caution, noting bank stocks have been on quite a run, with Bank of America ( BAC) up 37% since November and JPMorgan, up 21% over the same period.

Kelly said the bank stocks continued to move higher on no real news. He said he would use any strength to lighten up on these stocks.

Melissa Lee, the moderator of the show, said soft commodity prices spiked today from the impact of flood-ravaged Australia. Dennis Gartman said the country's wheat crop is destroyed and corn and soy bean production has been set back at a critical time when global demand for food is growing. He said U.S. farmers surprisingly haven't ramped up production.

Gartman ticked off a number of trades that would work including Market Vectors Agribusiness ETF ( MOO), Deere ( DE), Mosaic ( MOS) and Potash ( POT).

He also said small banks in the Midwest would be a good trade as farmers seek loans to boost production.

With crude oil prices closing at their highest levels since October, 2008, Terranova said the two driving forces behind the rise is the demand recovery and potential supply disruptions. He said there are still tremendous investment opportunities in oil service, refining and integrated oil names.

Adami said he feels Valero ( VLO) is breaking out.

Meanwhile, Kelly advised selling the refiners or taking profits because of the widening spread between Brent Crude Oil and West Texas Intermediate Oil.

With Intel ( INTC) leading chip stocks today ahead of its earnings on Thursday, there was a temptation to pick up some of the stock ahead of its earnings. But that wasn't the cased with Kelly, who said he would rather be buying Qualcomm ( QCOM), which he called " the future of chipmaking."

Josh Brown, vice president for Fusion Analytics, said he liked Marvell ( MRVL) in this space.

Does the split-up of ITT Industries ( ITT) into three publicly traded companies signal the end of conglomerates? ITT announced plans to form three companies that would be geared toward industrial production, defense and information solutions and water technology products.

Finerman said the breakup makes a lot of sense because it allows them to be more efficient from a tax standpoint and put them in a position to be takeover candidates. She said the conglomerate model doesn't work well today.

Brown, though, said some conglomerates like Berkshire Hathaway ( BRK.A) work quite well.

Is the Street Fight segment, Steve Cortes said Fed Chairman Ben Bernanke's QE policy will run into headwinds from a much more belligerent Fed Open Market Committee and a Congress that will be more critical of continuing QE policy. Cortes said if QE2 does end early, Treasury bonds will look attractive.

In the Tweet the Street segment, Kelly said interest peaked on the Beige book report and inflationary pressures, adding he would buy ProShares UltraShort 20+ Year Treasury ETF ( TBT) as a result. He also said it would be a good time to get into the Aussie dollar on the assumption that there will be a big economic push in Australia after the floods.

Commenting on JPMorgan's downgrade of Goldman Sachs, Anthony Scaramucci said he still likes Goldman because of what he called its great management team and deep bench.

Brown said the declining trend in jobless claims augurs well for business loan growth. With the KBW Bank Index about to break through key resistance levels, he said he liked Signature Bank ( SBNY), a high-end bank in New York that registered a earnings beat and gathered a slew of upgrades. He recommended getting into the stock on a pullback.

Jon Najarian noted unusually strong call activity in Micron Technology ( MU).

In the final trades, Kelly liked Claymore/Mac Global ETF ( TAN). Adami liked Illinois Tool Works ( ITW). Finerman said to buy protection puts in the Russell 2000, and Terranova said Phillips-Van Heusen ( PVH) has bottomed.

--Written by David Tong in San Francisco.

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