NEW YORK (TheStreet) -- The Dow Jones Industrial Average is closing in on 18,000 mark following the release of the better-than-expected nonfarm payrolls report on Friday. Josh Brown, CEO and co-founder of Ritholtz Wealth Management, said it's an important level for investors.
Many retail investors watch the Dow, Brown said on CNBC's "Fast Money Halftime" show. As the index continues to go higher, retail investors grow more optimistic and are more likely to spend money and invest in stocks.
Some investors were worried that a strong labor report would send stocks lower, thinking the Federal Reserve would raise interest rates sooner than previously anticipated. Stephen Weiss, founder and managing partner of Short Hills Capital Partners LLC, said Friday's price action gives him confidence that the stock market can continue to move higher in a rising rate environment.
"Buy some protection," cautioned Pete Najarian, co-founder of optionmonster.com and trademonster.com. Investors can do so with put options or by purchasing calls on the volatility index. This gives investors a chance to stay long the market and protect against a correction.
Financial stocks are trading well, said Mike Murphy, founder of Rosecliff Capital. But investors should opt for stocks including Citigroup (C) and Bank of America (BAC) over JPMorgan Chase (JPM) and Wells Fargo (WFC) . He also likes Deutsche Bank (DB) .
Brown added that payment processing companies and online brokerage firms will benefit if short-term rates continue to move higher.
On CNBC's "Cramer's Mad Dash," segment Cramer, the co-manager of the Action Alerts PLUS portfolio, took a look at Bank of America/Merrill Lynch's downgrade of Google (GOOGL) and upgrade of Yahoo! (YHOO) . Najarian said he likes Yahoo! over Google because of Yahoo!'s exposure to Alibaba (BABA) and tax-savings potential.
"I wouldn't be a seller of Google," Brown said. While it has traded poorly, the valuation is too cheap. However, he said investors should consider Facebook (FB) over both Yahoo! and Google.
Investors are already aware of the tax-savings potential for Yahoo! and Alibaba seems to have limited upside, Murphy reasoned. He likes Google and the stock's potential for 2015.
Yahoo! is the single largest individual stock held long for Dan Niles, founding partner at Alpha One Capital. Likewise, Google is his single largest individual stock held short, so he enjoyed the rating change from Bank of America/Merrill Lynch.
Google continues to disappoint investors with its earnings, having missed EPS estimates in each of the past four quarters. It's a "great company with a great future" but Google's growth rate is surely slowing, Niles said.
Yahoo!'s Alibaba stake could be worth $60 per share, if it's handled in a tax-free manner. Yahoo!'s core business, which has been very disappointing over the past several years, seems likely to bottom in the not too distant future. If the core business improves, the stock can go higher, Niles concluded.
Najarian was also bullish on Starbucks, pointing out the company does a great job at managing input costs and expanding margins. Murphy added Starbucks seems likely to go "a lot higher from here."
-- Written by Bret Kenwell