NEW YORK (TheStreet) -- That selloff didn't last long. The S&P 500 roared back on Tuesday, closing higher by 1.10%.
On CNBC's "Fast Money" TV show, Dan Nathan, co-founder and editor of riskreversal.com, said the momentum stocks of 2013 started to gain traction on Tuesday. He added that large-cap tech looks good and the 10-year Treasury yield fell below 3%.
General Motors (GM - Get Report) announced a 30 cents per share quarterly dividend. Karen Finerman, president of Metropolitan Capital Advisors, said it gives the stock a roughly 3% dividend yield, in line with Ford's (F - Get Report) current yield. She added that GM is her top pick because of its upside.
Kelly said he would take profits in GM at current levels because the dividend was largely expected by shareholders.
Finerman said there was a lot of "noise" in JPMorgan Chase's (JPM - Get Report) earnings report. She said its investment banking business didn't do very well, which could be a warning of what the market could see for Goldman Sachs (GS - Get Report) and Morgan Stanley (MS - Get Report).
Kelly said he would be cautious of the entire financial sector at current levels because of how well it has done over the past year. Adami thought it was "concerning" JPM closed flat on the day after opening near session highs on a pretty good earnings report.
Christopher Danely, managing director at JPMorgan, upgraded shares of Intel (INTC - Get Report). He said that as production increases, he believes it will take market share from Taiwan Semiconductor Manufacturing (TSM - Get Report). He added that margins should not suffer going forward. INTC's success is based on a stabilizing PC market and CEO Brian Krzanich.
At current levels, Kelly like TSM over INTC. Nathan said he would not get into INTC ahead of earnings later this week because the stock made new 52-week highs on Tuesday. Adami said his top pick in the space is Qualcomm (QCOM - Get Report).
Shares of Tesla Motors (TSLA - Get Report) rocketed by 16% on Tuesday when it reported delivering 6,900 units in the fourth quarter, 20% higher than its guidance. CEO Elon Musk said the company will be producing 800 vehicles per week, at a minimum, by the end of the year.
Ben Kallo, senior research analyst at R.W. Baird, upgraded the stock today before the big move. He said sentiment about Tesla stock is once again changing and becoming more optimistic. With a high short interest, the stock could ratchet higher rather quickly as short-sellers begin to cover. Analysts are looking for TSLA to deliver 29,000 vehicles next year. He believes the company could do 30,000 to 33,000. He has a $187 price target.
Kelly complimented Kallo on calling the top in TSLA last year. He agreed that he would be a buyer, even after the huge move higher.
After shares plunged by over 20% this week, Finerman said she has already sold half her position in SodaStream (SODA), and likely plans to sell the rest.
Kelly admitted that December's retail sales were better than expected. However, he pointed out how poorly most retailers are doing when they report earnings. Nathan agreed.
Potash (POT) was the first stock on the show's "Pops & Drops" segment. Adami is a buyer.
Nathan pointed out heavy call buying in the SPDR S&P 500 Trust ETF (SPY - Get Report) and the iShares Russell 2000 ETF (IWM - Get Report). However, those didn't compare to the 242,000 February 40 strike put options that were purchased on the iShares MSCI Emerging Markets ETF (EEM - Get Report).
Bonnie Herzog, senior analyst at Wells Fargo, was a guest on the show. She said the e-cigarette business will cannibalize tobacco sales in the future but can actually increase profitability. She added that 10 years from now e-cigs could surpass tobacco cigarettes. Lorrillard (LO) and Phillip Morris International (PM - Get Report) are her top picks.
Kelly is a buyer of LO because of its dividend and buyback. Adami likedsit for its upside.
Adami said one way he likes to pick his entry point in a stock is when there is a very high amount of volume in a particular stock, relative to its average volume.
-- Written by Bret Kenwell in Petoskey, Mich.