'Fast Money' Recap: Hard Times

NEW YORK ( TheStreet) -- The markets rallied Thursday as central banks moved to ease a liquidity crisis in the eurozone.

The Dow Jones Industrial Average jumped 186.45, or 1.67%, to 11,433.18. The S&P 500 added 20.43, or 1.72%, to 1209.11. The Nasdaq rose 34.52, or 1.34%, to 2607.07.

The trading panel on CNBC's "Fast Money" TV show focused on Research In Motion ( RIMM) whose shares were down as much as 19% in after-hours trading after it reported revenue and profits that fell well short of analyst estimates. The company did expect smartphone shipments to increase in the second quarter.

But Karen Finerman found the guidance disconcerting, saying it illustrated the big disconnect between the Street and management on the company's direction.

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

Joe Terranova said RIM Playbook shipments were especially disappointing. He said the company reported 200,000 Playbook shipments, well short of the 560,000 units analysts expected. He said it would take Apple only three days to sell that many iPads.

Jon Fortt, CNBC reporter on the RIM conference call, said the company was going to rectify the situation with a software update.

Guy Adami cautioned about getting into the stock at this point. He said at $24.50, the stock is in "no man's land" in terms of shorting or going long.

Terranova said RIM needs an activist investor to come in and shake up the company. He said RIM does hold some valuable patents that can be moved.

But Najarian questioned the value of the patents and the value of the company.

Mike Khouw said RIM is in tough position as its competitors have moved to other platforms and can wait for the price of RIM's patents to fall before taking any action.

Terranova said Apple ( AAPL) has gained from RIM's demise. He said it's well positioned to easily hit $450, with the iPhone 5 about to debut, the holiday season nearing, the refresh of the MacBook Pro and the iPad 3 coming out in March, 2012. "There are nothing but catalysts in front of it."

Colin Gillis, an analyst with BGC Partners, who was listening to the RIM conference call, said RIM is basically left out of a horse race dominated by Apple, Google ( GOOG) and Microsoft ( MSFT).

Gillis said RIM is in a tough position because its platform is in transition, its technology is aging and its $15 billion price tag is too high. He said there is more downside in the stock to go.

His prescription? Gillis said RIM needs to get down to basics, reduce the number of phones it sells and maintain its strength in emerging markets.

Melissa Lee, the moderator of the show, said Netflix ( NFLX) was the other major stock disappointment of the day. The stock was down 19.7% after it cut its third-quarter subscriber forecast by 1 million subscribers. The company's shares have been falling since it raised its monthly subscription rate for a joint streaming and DVD rental service by 60%.

Len Brecken, founder of Brecken Capital and a longtime critic of Netflix's business model, said Netflix is in a very tough position where its domestic subscription is flat while it faces a huge 2.4 billion off-balance sheet liability that has to be paid somehow. He said Netflix also faces rising content costs and increased competition.

He said Netflix will be in a real fix if the Hollywood studios decide not to offer content to it.

Shifting to tech and the hot chip space, Najarian said the storage and wireless space is spurring stocks like Intel ( INTC), Texas Instruments ( TXN), SanDisk ( SNDK) and Marvell ( MVL) higher.

J.J. Ninahan said the introduction of many new productions is pushing up chip demand.

For a chartologist view of the markets, Chris Verrone, of Strategas Research Partners, said investors should be cautious about going long the markets in a weakening credit environment that has seen the Labor OIL spread has hit a 52-week high and high investment grade spreads rise. He said he didn't view the risk-reward in the S&P that attractive.

As for gold futures, he said gold is in a consolidation-uptrend phase. He said gold is still only 15% above its 200-day moving average and he would be a buyer at $1650 to $1700 an ounce.

CNBC reporter Mary Thompson said Goldman Sachs was closing ists Global Alpha Hedge Fund and distributing 85% to 90% of its assets. The fund has been it by redemptions and poor performance.

Lee brought in Charles Grom, a managing director for Deutsche Bank, who talked about a number of pair trades in the retail sector. He said the pair trades provide a way to hedge in an outlook where there is uncertainty.

In one pairs trade, he said he would short Wal-Mart ( WMT) and sell Costco ( COST). He said Costco has performed well and has a lot of catalysts, while Wal-Mart has been stymied by a slew of quarters of negative same-store comps and is losing market share.

Lee noted that trading surged 35% in the past month at Charles Schwab ( SCHW). Najarian credited the increase in part to the popularity in options and derivatives trading.

In the final moves, Terranova said he was staying put with his silver put bet. Adami said to watch Yahoo ( YAHOO), noting where there's smoke, there's fire. Najarian said he sees Dollar Tree ( FDO) going higher.

-- Written by David Tong in San Francisco.

>To contact the writer of this article, click here: David Tong.

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