'Fast Money' Recap: Ag Trades Blossom

NEW YORK ( TheStreet) -- The markets rebounded Thursday on improving U.S. trade deficit figures.

The Dow Jones Industrial Average rose 75.42, or 0.63%, to 12,124.36. The S&P 500 added 9.44, or 0.74%, to 1289.00. The Nasdaq gained 9.49, or 0.35%, to 2684.87.

Guy Adami said on CNBC's "Fast Money" TV show said the late day action of today's market wasn't pretty. He said 1275 was a tradable bottom and 1325 a serious point of resistance. He said he would have used the rally in banks to sell.

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

Steve Grasso said he was still looking for the markets to head lower. Joe Terranova said there was a lot favorable economic data to support his belief that the global growth story is intact. Tim Seymour noted that ECB President Jean-Claude Trichet talked about moderate growth with inflation being the chief concern.

Tim Seymour said the weak dollar has been fantastic for U.S. exports, especially commodities and industrials. He said these "great" trades were happening on a day when the dollar was stronger. However, he said the rally occurred today because everybody wanted the market to bounce after seven days of losses. He said he expects the rally to continue for a week before it expires.

Melissa Lee, the moderator of the show, wondered whether it was even appropriate to call today's market action a rally. Grasso said the rally occurred today because everything worked for a day. Terranova said the markets are in a consolidation phase that may last through the summer.

Lee said the grain trade was hot today following the USDA report noting lower corn production. Rich Ilczyszyn, senior market strategist for Lind-Waldock, said corn production has been hampered by a slow start to plantings and rain delays.

He said the situation is setting up for a bullish case for corn and other crops. He said it would take perfect weather conditions to make up for the shortfall in production.

Terranova said the ag trade is all about corn and fertilizers. He said he liked Darling International ( DAR), which makes corn substitutes and is up 35% for the year.

Kelly said he purchased some Monsanto ( MON), which he said is leveraged to corn and cotton seeds, and PowerShares DB Agriculture Fund ( DBA). He also recommended looking into Potash ( POT).

Seymour said he liked Mosaic ( MOS), while Adami favored John Deere ( DE).

Lee referred to a trade in JM Smuckers ( SJM) that Adami touted earlier in the week. Adami said he likes the company's pricing power and exposure to coffee and sees further room to the upside.

Lee shifted to crude, which top $102 a barrel on a drop in inventories and the breakup of the OPEC meeting without any decision on increasing production. Terranova said institutional buying is continuing in this space and reiterated his Wednesday pick of Hornbeck Offshore Services ( HOS).

Seymour said he expects Brent oil to say above $110 a barrel, but he advised viewers not to get caught with some of the oil names on the long side.

Lee brought in Steven Boal, CEO of Coupsons.com, to comment on rumors that it may go public. Boal said his company had no immediate plans for an IPO.

He said the coupon business is doing well as consumers are feeling the pinch from rising commodity costs. He said coupons historically been popular as a away to get consumers to try new products, move products off the shelf and provide savings to consumers.

Lee noted that Texas Instruments ( TI) rebounded today after Wednesday's shortfall. Adami said he wasn't impressed with the stock or the chip space, which he said hasn't performed well. Grasso, though, said he liked Intel ( INTC) on the basis of the global growth story or the rumored talks it's having discussions with Apple ( AAPL) about a partnership.

For the hedge fund pick of the week, Anthony Scaramucci chose HP ( HPQ), which is down 15% this year. Scaramucci said the cheap stock has generated a lot of bearish sentiment. But he said the stock trades 17.5 times its current earnings. He also pointed out that 60% of HP's is coming from the non-PC side of the business and that the company has a $8.7 billion share repurchase program.

Scaramucci said management has been unfairly punished since the departure of its former CEO Mark Hurd. He said any upside surprises could send the stock 2% to 3% higher. He has a price target of $80 for the stock.

CNBC reporter Jon Fortt hashed over the various rumors of acquisition targets for Microsoft, from Netflix ( NFLX) to Nokia ( NOK).

According to Fortt, Microsoft should be going for a company with a market cap of under $20 billion, price to sales of 10 times and healthy software margins.

Fortt suggested some under-the-radar names that could fit that bill: BMC Software ( BMC), Websense ( WBSN); and Adobe ( ADBE).

Is QE3 coming? Howard Lutnick, CEO of BGC Partners, thinks so, and Peter Schiff, head of Euro Pacific Capital, agrees although he believes it's a bad idea. He said the federal government will wind up printing more money and buying bonds to keep the economy from collapsing.

Schiff told the panel that a weak dollar is the consequence of bad monetary and fiscal policies. He said raising the federal debt ceiling is a mistake, and he said he doubted any of the spending cuts debated in Washington were serious enough to make any difference.

Jeff Cox, co-author of a new book called Debt, Deficits and the Demise of the American Economy, warned that Europe's debt problems are coming home to roost and will explode. He said the U.S. doesn't have the political will to do anything about the situation. He said it would take a change in mentality, policy and investment strategy to reverse the situation.

In the final trades, Kelly favored Intrepid Potash ( IPI). Seymour said he liked Deere. Adami liked Greenhill ( GHL) and Grasso liked AK Steel ( AKS) on weakness. Terranova said he liked his pairs trade of going long HP while shorting Dell ( DELL).

--Written by David Tong in San Francisco.

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