Word On The Street
Wall Street experienced some wild volatility on Thursday with the Dow swinging 450 points intraday. The Dow was able to finish in the green up 207 points and the Nasdaq finished up 40 points. Karen Finerman explained that she is very skeptical about this rally and she thinks the action reeks of window dressing. She disclosed she shorted Capital One Financial Corporation (COF) at the close today. In Jeff Macke’s opinion, the market felt like panic buying on Thursday. He advised investors to respect a market that doesn’t sell off when it has every reason to. Guy Adami mentioned that the financial stocks are leading and that is a bullish. Google Inc. (NASDAQ: GOOG) reported fourth-quarter profits that missed Wall Street estimates. The stock fell 7% after hours on the news. Najarian says Google’s revenues and profits were unbelievable but the stock fell because the company doesn’t give guidance on earnings. He thinks Google will rebound and be in positive territory Friday. Adami thinks valuations are reasonable for Google and he would look to buy the stock. Motorola Inc. (MOT) announced that they may spin off their mobile phone division. The stock traded up 12% after hours on the news. Finerman thinks that Carl Icahn will be happy about this. Macke wonders why Motorola would sell their best division. Financial stocks put in a strong performance Thursday after bond insurer MBIA Inc. (MBI) said it will be able to maintain its ‘AAA’ rating. According to Adami, if you want to play financials look at Wachovia Corporation (WB). Najarian says investors should raise their exposure in bank stocks like Financial Select Sector SPDR Fund (XLF), Wells Fargo & Company (WFC) and U.S. Bancorp (USB). Retail stocks like Target Corporation (TGT), The Home Depot Inc. (HD) and Wal-Mart Stores Inc. (WMT) helped lead the The Retail HOLDRS Trust (RTH) up 4%. Macke explained that retail stocks received help from a Deutsche Bank upgrade of the sector. Finerman disclosed she sold a portion of her stakes in retail stocks like Wal-Mart and J.C. Penny Company Inc. (JCP) but she didn’t sell any of her position in Crocs Inc. (CROX). Adami agrees it’s time to take profits in the retail sector, but he still thinks Home Depot will outperform. Transport stocks put in a strong performance Thursday. Adami recommends investors look at early recovery play Frontline Ltd. (FRO). Finerman would like to see lower prices in the railroad sector before she gets interested. MasterCard Incorporated (MA) explodes up 14% after reporting strong quarterly earnings. Adami says don’t chase MA now but look to buy it on dips. Seven Wall Street firms upgraded Alliance Data Systems Corporation (ADS). Finerman thinks it will be hard for ADS to win its lawsuit against The Blackstone Group L.P. (BX). According to Najarian, ADS looks awfully cheap. Najarian noted unusual options activity in Commercial Metals Company (CMC). He explained that the June $30 call options traded over 10,000 contracts before noon all from the buy side.
New Way To Play Commodities
Ashmead Pringle the founder and president of GreenHaven Commodity Services joined the “Fast Money” crew to discus a new way to play commodities. Pringle explained that on Friday a new fund will open under the ticker symbol GCC on the Amex that will track a basket of 17 commodities. The fund will be named the Greenhaven Continuous Commodity Index Fund and the basket will include equally weighted positions in (corn, wheat, soybeans, live cattle, lean hogs, gold, platinum, silver, copper, cocoa, coffee, sugar, cotton, orange juice, crude oil, heating oil and natural gas).
Proxy Fight Trade
According to Finerman, she received a phone call on Thursday and was told that this year could be a very busy proxy season. She spoke to one of the leading proxy advisory firms and she was told that they have already signed up 24 proxy fights. Finerman says that is twice what the firm normally does. She would look to play the proxy season with Broadridge Financial Services (BR), Lazard Ltd. (LAZ), Greenhill & Co. Inc. (GHL) and Goldman Sachs Group Inc. (GS). Adami also likes Lazard. Macke says he is getting interested in Wendy’s International Inc. (WEN).
Simmons & Company International Interview
Mattew Simmons, Chairman of Simmons & Company International, joined the “Fast Money” crew to discuss his take on the energy markets. According to Simmons, Exxon Mobil Corporation (XOM) and Chevron Corp. (CVX) will report first rate profits with oil prices so high. He thinks the bigger story for the oil space is the lack of growth for the top 5 firms and the rise in spending. Simmons thinks the equipment & engineering sectors for the oil space are set to see some big growth, because the large oil firms need to upgrade their infrastructure. Adami thinks the play is to buy Jacobs Engineering Group Inc. (JEC) and Flowserve Corporation (FLS).
Exchange Trade
Volatility and volumes are increasing around the world as liquidity pours into the global markets. What is the trade? Nasdaq Stock Market Inc. (NDAQ) CEO Bob Greifeld joined the “Fast Money” crew to discuss his take on the exchanges. Greifeld explained that the Nasdaq has seen record volumes on multiple days this year and the volatility has been great for his firm. He mentioned that when volumes are high customers flock to his exchange, because it’s known for its high quality. Greifeld says he has four acquisitions he is looking to close soon and he isn’t interested in the NYMEX Holdings Inc. (NMX). Lastly, he explained that even in bear markets he doesn’t see volumes declining.
Face2Face
Scott from Washington writes, “Everyone agrees gold is good right now but you were saying you would favor individual sticks instead of the ETF. Could you give me a couple names that you like?” Najarian says if you like gold go with Newmont Mining Corporation (NEM) and Barrick Gold Corporation (AGX). Mike from Missouri writes, “Cisco Systems Inc. (CSCO) and EMC Corporation (EMC) don’t seem to be doing anything but going down. Is this a buying opportunity to increase my positions or should I be getting out of these stocks?” Adami likes both stocks at these levels.
POPS&DROPS
POPS- Audible Inc. (ADBL) exploded up 22%. Macke explained that Amazon.com bought ADBL for $300 million. CVS Caremark Corporation (CVS) traded up 8%. Adami would trade CVS at your own risk. Starwood Hotels & Resorts Worldwide Inc. (HOT) traded up 5%. Finerman says nice day in a not so nice year for HOT. Mattel Inc. (MAT) traded up 11%. Macke prefers Hasbro Inc. (HAS) over MAT. Raytheon Company (RTN) traded up 3%. Adami says he loves this stock. Pzena Investment Management Inc. (PZN) exploded up 22%. Finerman couldn’t explain why PZN was up so much.
DROPS- Adobe Systems Incorporated (ADBE) traded down 3%. Najarian mentioned that a Jefferies & Co analyst downgraded ADBE. Cadence Design Systems Inc. (CDNS) plunged 33%. Najarian explained that CDNS doesn’t have a lot of orders.
Trader Radar
Amazon.com Inc. (NASDAQ: AMZN) traded five times its average daily volume Thursday.
Final Trade
Macke says buy Google Inc. (NASDAQ: GOOG) between $515-$520 but sell the stock if it drops below $500. Adami thinks MacDonald’s Corporation (MCD) looks very interesting. Finerman recommends Broadridge Financial Solutions (BR). Najarian says buy Alpha Natural Resources Inc. (ANR).