'Fast Money' Recap: Treasuries and Yield

NEW YORK ( TheStreet) -- The broader market inched slightly higher in a choppy session ahead of Friday's nonfarm payrolls report.

Thursday's big story was the yield in 10-year Treasuries, which hit 3%. On CBNC's "Fast Money" TV show, Dan Nathan said rates are usually correlated with stock prices. However, the move in yields was so violent to the upside it's been negative for stocks, especially those with big dividend yields, such as REITs, utilities and telecoms.

J.C. Parets said that bonds and stocks are usually negatively correlated but have traded together the past couple of months. He added that this trend stopped last week and stocks should benefit if rates continue to go higher.

Karen Finerman said a 3% yield should still be a comfortable rate and we've experienced an environment like this when stocks had much higher valuations. She added that the banks should benefit from higher rates and likes J.P. Morgan ( JPM), Bank Of America ( BAC) and Citigroup ( C).

John Najarian said bond yields seem to be nearing a top and the economy is producing its own organic growth. He added that stocks can go higher, even if rates continue to do so as well.

Lindsey Piegza, chief economist at Sterne Agee, a guest on the show, said that Friday's nonfarm payrolls report for the month of August will be a key indicator to whether or not the Federal Reserve will taper its bond purchases later this month. She doesn't expect it to happen because the economic data have been good but not good enough.

Finerman said she didn't feel inclined to chase Timken ( TKR), which announced that it would be splitting into two separate companies, in a tax-free spinoff.

Parets called the "golden cross" nonsense, which is when the 50-day simple moving average crosses the 200-day simple moving average to the upside. The move occurred on Thursday for Apple ( AAPL).

Najarian added he's long via option spreads and is doing so for the Sept. 10 U.S. event and the Sept. 11 Chinese event.

Groupon ( GRPN) was the featured company on the show's "Street Fight" segment. Najarian defended the stock, saying, revenue are growing at 90%. He added that 50% of the company's business comes from mobile and consumers have downloaded the app more than 50 million times.

Dan Nathan argued the recent earnings pop was nothing but a short squeeze. He added that the company will experience lower margins and lower profitability as it attempts to warehouse products, making companies like Amazon ( AMZN) and Costco Wholesale ( COST) its new competition.

Finerman said she still likes Navios Maritime Holdings ( NM), even though it's up 21% from her recommendation a few weeks ago.

Sahm Andrangi of Kerrisdale Capital was a guest on the show> He wants Morgans Hotel Group ( MHGC) to be sold. His firms own 4% of the outstanding shares and added that it's over-levered and under capitalized for its operations.

Nathan said it seems like it would make sense to follow some of the activist investors into Morgans Hotel Group Properties, albeit with a small position.

First Solar ( FSLR) was the first stock on the show's "Pops & Drops" segment, up 5%. Mike Khouw said he would avoid the solar space all together.

Zillow ( Z) fell 2%. Nathan said the stock is still overvalued and he doesn't like it on the long side.

J.C. Penney ( JCP) jumped 5% and Najarian said the call option buyers were right. He added that there has been strong institutional buying.

Jos. A. Bank Clothiers ( JOSB) popped 6%. Finerman said she's long and still likes it.

Newmont Mining ( NEM) fell 4% and Parets said the stock will likely stay rangebound for a while.

Parets said that he doesn't love Micron ( MU), even though it's been on fire so far this year. He added that he prefers energy stocks.

Netflix ( NFLX) hit multi-year highs and Khouw said he does not like the valuation and would "absolutely avoid it."

LinkedIn ( LNKD) hit all-time highs, even after announcing a secondary offering. Nathan said the company will now have $2 billion in cash and no debt.

For their final trades, Najarian said to buy Discover Financial ( DFS), Nathan was a buyer of AT&T ( T), Finerman was buying Foot Locker ( FL) and Parets said to fade any strength in the S&P 500.

-- Written by Bret Kenwell in Petoskey, Mich.

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Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.