Fast Money Recap, Tuesday April 28.
A new rumor is circulating that Apple is working with Verizon to develop a new iPhone; the "media pad" will display digital photos, play music and videos. Additional rumors indicate that Microsoft is also talking to Verizon to develop a new phone. Guy Adami says regardless of whether or not the rumor is true, Verizon is seeing growing demand and he is bullish. Tim Seymour would opt out of the whole drama and go for Qualcomm, which has significant exposure to emerging markets.
After being bearish on the financial sector for 5 years, Fox–Pitt Kelton analyst David Trone has changed his tone, not in spite of the bank stress tests but because of them. The stress tests were causing so many bad rumors to pop up about financial institutions, but when Trone did his research he found that the banks don't need any money, not even Citigroup or Bank of America. However, Trone emphasizes that he is not going from bear to bull; he is going from bear to neutral.
Swine Flu Blues
Stocks declined on Tuesday on worries about swine flu and the state of the financial sector. Guy Adami noted the market is trading sideways and may be stuck in a range. Karen Finerman thinks the fact that stocks are sideways and not down is great news given the dramatic gains of previous weeks. Tim Seymour says swine flu is the last thing fragile markets need right now and Pete Najarian observed that while the Volatility index is off its historic highs, there is still some trepidation in the markets.
Stocks hit hard by the swine flu scare are already recovering, especially those which were attacked on false assumptions. Smithfield foods has jumped substantially as people realize that eating pork won't cause the disease. Tim Seymour recommended Perdigao for similar reasons. Royal Caribbean saw some gains, but Guy Adami emphasized that Marriott remains a sell.
IBM boasted a 10% raise of its dividend and increased share buybacks. Guy Adami thinks IBM is a $120 stock and is bullish. Pete Najarian predicts IBM will make an acquisition soon, given its strong cash flow. He added Baidu is a good trade on the internet and is down on fears of competition from Google.
In spite of a 62% decline in profits, BP rose on news of cost-cutting measures. Pete Najarian thinks expectations may be raised that companies like Exxon, which reports later in the week, will beat expectations. He adds that options activity suggests Shaw might be a buy.
Dendreon's drug Provenge has been shown in studies to increase the life of prostate cancer patients by four months thanks to technology that allows the immune system to treat itself. However, in spite of the news, shares of Dendreon were hammered. The traders could not figure out why, except perhaps the 250% rise before the news was released. Still, since the news was good, the company's shares should have soared higher.
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