NEW YORK (TheStreet) -- The stock rally, at least in the short term, will likely end if oil prices rebound, Steve Grasso, director of institutional sales at Stuart Frankel, said on CNBC's "Fast Money" Tuesday.
However, because many oil-producing countries refuse to cut production, West Texas Intermediate seems likely to decline toward $55 per barrel in the longer term, he added. In others words, the economy will still do well and he likes automakers and homebuilders.
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The strong U.S. dollar certainly isn't helping oil prices, said Tim Seymour, managing partner of Triogem Asset Management. While it's tempting to buy some of the beaten-down energy stocks, the risk still seems too high.
The Energy Select Sector SPDR ETF (XLE) has traded well the past few days despite the swings in oil prices, according to Jon Najarian, co-founder of optionmonster.com and trademonster.com. That's because many of the stocks in the exchange-traded fund are oversold. Lower gas prices will certainly give a boost to consumer spending, which makes up 70% of U.S. GDP.
Brian Kelly, founder of Brian Kelly Capital, said he covered his short positions in the Energy Select Sector SPDR ETF and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) . He is a buyer of Red Robin Gourmet Burgers (RRGB) because cheaper gas means more people driving out for meals.
Lower oil prices are certainly putting pressure on the Russian economy and energy companies, said Dennis Gartman, editor and publisher of The Gartman Letter. The country's currency, the ruble, continues to slide, now trading at 54 rubles per one U.S. dollar. Just four months ago the currency traded at 36 rubles to the dollar. It's likely to have a negative effect on wheat prices because the country exports more of the commodity, he concluded.
The conversation shifted to biotech, where shares of Biogen Idec (BIIB) climbed 6.4% on its positive Alzheimer's data. Despite the fact that the company's treatment would be several years away from coming to market, it could result in $5 billion to $10 billion in sales.