'Fast Money' Recap: Worrying About China

NEW YORK (TheStreet) -- The S&P 500 took a big hit on Thursday, closing 1.20% lower. 

On CNBC's "Fast Money" TV show, Steve Grasso, director of institutional sales at Stuart Frankel, said the selloff seems mostly tied to worries over the Chinese economy. He added that the tension in Ukraine would eventually pass, providing investors a solid buying opportunity. 

Pete Najarian, co-founder of optionmonster.com and trademonster.com, said energy stocks and financial stocks held up well on Thursday. He pointed out the elevated levels in the CBOE Volatility Index (VIX.X), but ultimately agreed with Grasso that the current geopolitical issues will be a buying opportunity for U.S. investors. 

Karen Finerman, president of Metropolitan Capital Advisors, said the selloff seemed very "orderly" and not "panicky," which is good. She is a buyer of United Rentals (URI). 

Guy Adami, managing director of stockmonster.com, said the 10-year Treasury yield could go much lower if it breaks through the 2.6% level, which has acted as support. 

Grasso said investors will look for yield in the stock market if a selloff ensues -- meaning uitilities would hold up well. He is long Southern Co. (SO).  

Adami said the Ukraine issues will likely be resolved, but not before getting worse in the short term. If this is true, it will likely weigh on U.S. stocks. He added that China's growth is likely closer to 6% than 7.5%. 

Najarian is long Pepsico (PEP) and believes activist investor Nelson Peltz is correct in looking to split the company's beverage business and snacks business to create shareholder value. Grasso said shares of Pepsico have been doing well and look more attractive than Coca-Cola (KO), which is down about 8% in 2014. 

Najarian said he wanted to be long NCR Corp. (NCR), but couldn't get his order filled. He pointed out the bullish options activity where the January $40/$45 bull call spread traded 10,000 times. 

Mark Mclaughlin, chairman and CEO of Palo Alto Networks (PANW), was a guest on the show. Regarding another lawsuit with Juniper Networks (JNPR), he said he is confident that his company did not infringe on Juniper's firewall patent. He added that the cyber-security business should continue to do well and so will his business. 


Adami said he is long Intel (INTC) for his cyber-security play because of the company's McAfee business. Najarian said investors should look at F5 Networks (FFIV) for a play on cyber-security because of its relatively low forward valuation. 

Lionsgate Entertainment (LGF) fell on Thursday after it was announced it would pay $7.5 million to the Securities and Exchange Commission for misleading investors. 

Grasso said that's a negative headline for LGF, but it ultimately isn't that bad because, thanks to the fine, investors know the end outcome and the uncertainty has been removed. He said the company has a lot of great content in its pipeline. 

General Motors (GM) sank lower Thursday, falling 2.20%. Finerman said she is staying long as the news on the federal criminal investigation into GM's ignition switch recall will eventually pass. 

Najarian agreed, saying the stock may move lower from here but is at a good level for investors to start buying. Grasso was more hesitant. He said GM stock looks like it could decline to $30. 

Jing Ulrich, vice chairman, Asia-Pacific, at JPMorgan Chase (JPM), said there are definitely concerns about the Chinese financial sector. Lending in the country has skyrocketed in the past several years and will likely decline in the next couple of years. The decline in lending could result in lower economic activity in the region, which could have a major impact on U.S. and global economies. 

Facebook (FB) fell 3% and was the first stock on the show's "Pops & Drops" segment. Adami said that $66 is critical support. If it holds that level, it will likely climb to $75. 

Plug Power (PLUG) soared 18%. Najarian advised investors to research the stock thoroughly because it is very volatile. 

Herbalife (HLF) dropped 5%. Grasso said nobody has an "edge" in the stock and he was avoiding the name. 

Amazon (AMZN) hiked the price of its Prime membership to $99 per year from $79. Gene Munster, managing director and senior analyst at Piper Jaffray,  said Amazon's price increase should add $115 million in profitability over the next 12 months.

He added that many current members will unlikely drop the service due to the price hike, especially since Amazon rarely raises prices. This will be the first price hike for the Prime service in the U.S. He has an overweight rating on the stock with a $420 price target. 


-- 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.

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