'Fast Money' Recap: Egypt Trades

NEW YORK ( TheStreet) -- The turbulent protests in Egypt dealt a blow to the markets Friday.

The Dow Jones Industrial Average sank 166.13, or 1.39%, to 11,823.70. The S&P 500 dropped 23.20, or 1.79%, to 1,276.34. The Nasdaq skidded 68.39, or 2.48%, to 2,686.89.

Joe Terranova said on CNBC's "Fast Money" TV show that today's big bump in oil prices was based on a market perception that there may be supply disruptions from the possible closure of the Suez Canal.

Melissa Lee, the moderator of the show, that the canal handled 1.8 million barrels a day in 2009 and possibly more in 2010.

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

Tim Seymour said the turmoil in Egypt is not a one-day event but something that has been playing out for some time in the region in countries such as Tunisia and Yemen. Before the threat of supply disruptions, oil prices had been going higher for fundamental reasons as economies around the globe get stronger, he said.

Guy Adami said he was surprised that oil didn't go higher. He sensed the beginning of something, as the S&P showed signs of turning bearish.

Jon Najarian downplayed the threat of a closure of the Suez Canal, saying the protesters didn't look like they had Stinger missiles. He said only the use of those weapons and a government overthrow could lead to an explosion to the upside in oil.

Terranova said the Saudis might use the situation to raise their output of oil and ask OPEC to do likewise. He said he expects the refining stocks to trade higher and advised looking north to Canada for some picks, including Suncorp Energy ( SU), Canadian Natural Resources ( CNQ) and Cenovus Energy ( CVE).

Seymour said the Egyptian protests could put into question the Egypt-Israel peace pact. He said those fears probably accounted for the decline in the Israeli shekel and Teva Pharmaceutical ( TEVA). He advised buying Teva on weakness, saying the company has the potential to double revenues by 2015.

In the search for derivative trades, Lee mentioned the shippers. Brian Kelly noted the pop in Frontline ( FRO). He also liked Dryships ( DRYS) as countries rush to stockpile grains.

Jon Najarian told viewers to check out the "monster" moves in three coal stocks in the last two hours of trading. He said institutional traders were making big moves in Arch Coal ( ACI), Alpha Natural Resources ( ANR) and Massey Energy ( MEE).

Gold rose today, but Doug Kass, president of Seabreeze Partners Management, said it was more of an anxiety trade. He said he would sell into the rally because he believes gold will resume its decline when the tension eases in the Middle East.

He said today's gold rally will not derail the consensus view of a moderate economic expansion.

Lee brought up the point of food inflation brought on by stockpiling. John Stephenson, author of a book on commodity investing, said he expects higher prices for corn, soybean and wheat, no matter how the situation plays out in Egypt. He said he would get into nitrogen-based stocks like Agrium ( AGU) that have huge inputs into corn and wheat.

Lee noted that Egyptian President Mubarak had gone on television in attempt to calm the situation. Terranova said he will be watching the oil and Treasuries markets on Monday after what he expects will be a tense weekend. Seymour said he will continue to buy Treasuries and gold.

There were no final trades.

--Written by David Tong in San Francisco.

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