'Fast Money' Recap: Powerful Rally?

NEW YORK ( TheStreet) -- The markets rallied Thursday on encouraging news from Europe.

The Dow Jones Industrial Average jumped 183.38, or 1.68%, to 11,123.33. The S&P 500 added 20.94, or 1.83%, to 1164.97. The Nasdaq rose 46.31, or 1.88%, to 2506.82.

Pete Najarian said on CNBC's "Fast Money" TV show said the market was driven by material names, including Freeport McMoRan ( FCX) and Walter Energy ( WLT), and financial stocks such as JPMorgan Chase ( JPM).

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

He said the combination of the participation of the financials and global growth stocks helped trigger the rally. He said the VIX fell back to 36.

Tim Seymour commented on the rebound in commodity stocks and emerging market names. He said the trade will continue to work even with a so-so jobs number on Friday.

Guy Adami said it's looks as if Freeport McMoRan has put in a sustainable bottom and that Fedex ( FDX) might be interesting on valuation.

Karen Finerman, who used today's today's rally to take some money off the table, said the fate of the market will come down to what happens in the eurozone. "None of this other stuff matters."

Melissa Lee, the moderator of the show, said several Wall Street firms see a powerful rally ahead with the S&P moving above 1300. Mike Khouw said the optimism is evident in the options market with heavy call buying.

Lee said the financials rallied today on Treasury Secretary Tim Geithner's comments that the eurozone crisis won't bring down U.S. banks. Adami said he didn't agree with the comments, saying it's very possible that someone could have "tremendous exposure to Europe."

Finerman expressed surprise that the rally in the financials had nothing to do with fundamentals. She said the market didn't take into consideration an alarming Fitch report on the prime mortgage market.

Lee brought in Doug Kass, a RealMoney Silver contributor at RealMoney.com, to comment on a trade before Friday's job report. He said he would sell into the report, which he characterized as "basically irrelevant."

He said he expects the current rally will wind up giving back some of its gains as did five previous rallies since Aug. 15 that saw a 75-point move up.

He cited these keys to a bull market: market stability; less divisiness in Washington; shock and awe in Europe; and a need for the plunge in consumer sentiment not to affect economic data.

Kass said his largest exposure is in non-bank financials. He said he liked Etrade Financial ( ETFC).

Lee noted that Citigroup had lower the price targets on seven Internet stocks, including Google ( GOOG). Adami said Google is trading at the lower end of the range and would get in if it falls below $475. Seymour said Intel ( INTC) looks vulnerable because it's been so defensive. Najarian praised Cisco ( CSCO) for breaking out of its long-term downtrend.

James Altucher, managing director of Formula Capital, was enthusiastic about Apple's ( AAPL) outlook.

He said Apple still has a superb design and management team. He said the stock is cheap, trading at 12 times forward earnings with $80 billion in cash and 120% earnings growth year over year. He said there is no reason why it can't reach a market cap of $1 trillion.

Seymour, though, said Apple faces stiff competition from Samsung and LG. Finerman found it difficult to believe Apple could reach Altucher's high multiple for Apple.

Commenting on today's oil refiners rally, Paul Sankey, an oil analyst for Deutsche Bank said it was a relief rally for stocks that had been taken out to the wood shed for the past month and a half. He said oil demand in the U.S. doesn't reflect an economic recession. He also said he expects merger activity in this sector.

Sankey said he favors Occidental Petroleum ( OXY), which he expects to do fine in earnings and show above-average growth.

Shifting to the materials space, where materials were on a tear. Dan Dicker, senior contributor for TheStreet, discussed Alcoa, a slow-money trade that's he's been in for quite awhile.

According to Dicker, the Alcoa trade makes sense because of the incredible amount of substitution going from copper to aluminum and steel to aluminum in the aerospace and auto sectors. He said the trade will take awhile to develop.

Aloca also has drawn interest because of Street chatter that Pershing Square's Bill Ackman has taken a stake in the company.

Lee brought in Rob Cox, U.S. Editor for Reuters Breakingviews, who has authored a book about the decline of Goldman Sachs under the helm of Lloyd Blankfein for the past five years.

He said it's remarkable how the stock is now trading at 70% of book value, not far off from where JP Morgan is trading. He said the company has been hurt by regulatory changes and new capital standards. He said Blankfein might lose his job if Goldman continues to lose money.

In the final moves, Seymour liked Aluminum Corp of China ( ACH). Adami liked CSX ( CSX). Finerman was a seller of calls in ( CMI). Najarian said to keep an eye on Sprint ( S)

-- Written by David Tong in San Francisco.

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