Fast Money Recap - Much Ado about Yahoo (1/26/09)

Recap of CNBC's Fast Money, Monday January 26.

Yahoo (YHOO) Reports, Microsoft (MSFT), Google (GOOG), Baidu (BIDU)

All eyes are on Yahoo as it reports soon after replacing Jerry Yang with new CEO Carol Bartz. There is speculation that she may sell Yahoo’s search to Microsoft while others thinks she is going to wait and get her bearings before making any radical moves. Yahoo has already decided to set a pay freeze to stabilize costs. Sanford Bernstein analyst Jeff Lindsay would not touch it; “Yahoo has a new CEO and a new team we don’t know what the plan is. Right now it’s a value trap.” He recommends Google instead with a multiple of 15 which may grow to 20. Tim Seymour is partial to Baidu.

Quick Trades: McDonald’s (MCD), Vale (RIO), Rio Tinto (RTP)

A buy and hold strategy doesn’t cut it anymore. Jeff Macke discussed how he trades McDonald’s; he buys when it drifts to the mid-50s and takes profits as soon as it gets to $60. Even though it is a solid company, “it is not going to $70 in a straight line.” Tim Seymour is keeping an eye on Vale and Rio Tinto as plays on the slow demand pull back in iron ore and coal.

Pfizer and Pharma: Johnson&Johnson (JNJ), Merck (MRK), SPDR S&P Biotech ETF (XBI), Genentech (DNA), Amgen (AMGN), Gilead Services (GILD), Celgene (CELG), Genzyme (GENZ), Crucell (CRXL)

After Pfizer announced its $68 billion deal to buy Wyeth at a 20% discount, many predict other M&A action in the Pharma sector. Pete Najarian thinks Johnson&Johsnon or Merck may buy a biotech and instead of picking one, he would buy XBI which contains Genentech, Amgen, Gilead Services, Celgene and Genzyme, all possible takeover candidates. He would also look at Crucell. Macke thinks the acquisition is a mere desperation move for Pfizer.

Yahoo (YHOO) Reports, Microsoft (MSFT), Google (GOOG), Baidu (BIDU)

All eyes are on Yahoo as it reports soon after replacing Jerry Yang with new CEO Carol Bartz. There is speculation that she may sell Yahoo’s search to Microsoft while others thinks she is going to wait and get her bearings before making any radical moves. Yahoo has already decided to set a pay freeze to stabilize costs. Sanford Bernstein analyst Jeff Lindsay would not touch it; “Yahoo has a new CEO and a new team we don’t know what the plan is. Right now it’s a value trap.” He recommends Google instead with a multiple of 15 which may grow to 20. Tim Seymour is partial to Baidu.

Caterpillar (CAT), Joy Global (JOYG), Freeport McMoRan (FCX), Petrobras (PBR)

Caterpillar gave a depressing report on Monday, and indicated it is cutting 20,000 jobs and will see the its first decline in 2009 since 1992. Pete Najarian says options action suggests Joy Global will also go lower. Tim Seymour thinks it could be time to be long materials stocks Freeport and Petrobras.

American Express’ (AXP) Relief Rally

Although American Express reported a 79% decline in profits the stock rose 3% in after-hours rally. Guy Adami explained it was a relief rally, because it wasn’t as big a train wreck as the market expected.

John Thain Apologizes: Bank of America (BAC)

Former Merrill Lynch CEO John Thain defended the acquisition of his brokerage by Bank of America and said Bank of America knew of Merrill’s losses before the deal was concluded. He also said he would return the $1.2 million he spent on renovations of his office, and told CNBC, “It is clear to me in today's world that it was a mistake. I apologize for spending that money on those things and I will make it right, I will reimburse the company for all of those costs.” Dylan Ratigan approved of Thain’s clawback and wondered why the same can’t be done to banks that squandered government funds.

Week of Uncertainty

With earnings season getting started, a Fed meeting and the fourth quarter GDP estimates this week, Pete Najarian would play the uncertainty with gold with calls in Freeport McMoRan. He predicts gold could go to $1,000.

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