Fast Money Recap: 3/10/08: Financial Ruin

Recap of Fast Money, Monday March 10. Click on a stock ticker for more analysis.

Market Overview: JP Morgan (JPM), MidCap SPDR (MDY)

Rumors of a Fed rate cut did nothing to prevent a huge selloff as the Dow dipped 1.3%, the S&P dropped 1.6% and the Nasdaq fell 2%. Tim Seymour blamed problems in the financial sector, and pointed out JPM lowered earnings guidance for 2008. He would invest in emerging markets and is closing out his short positions. Karen Finerman said she is covering her shorts, especially MDY, and Pete Najarian would start scaling in on the long side.

Tech: Texas Instruments (TXN), Intel (INTC), National Semiconductor (NSM), IBM (IBM), Oracle (ORCL), Cisco (CSCO)

Guy Adami noted TXN’s lowered guidance and Intel’s late entry into the selloff and he prefers INTC over TXN. Adami commented on strong performances from IBM and ORCL, and said the latter’s announcement of an earnings date without further information is a sign to buy. He adds Cisco may be bottoming after trading at such a large volume.

Financials: Bear Stearns (BSC), Lehman Brothers (LEH), Washington Mutual (WM)

The group agreed that the bear market was due mainly to troubled financials. There is talk of liquidity problems at BSC and Karen Finerman said the company is too secretive. Adami noted BSC traded at a high volume, which may be a sign of capitulation. Seymour noted margin calls are going out to many banks, and banks with lower leverage might be in trouble. Najarian observed the intense put action in LEH, and people expect WM to fall even further than $10 a share. He doesn’t see a bottom in the sector.

Oil: ConcoPhillips (COP), Baker Hughes (BHI), Applied Materials (AMAT), U.S. Natural Gas (UNG)

As oil rose again to $108 a barrel, Seymour said the rise was a safe haven rally. Najarian noted oil is behaving like a treasury bond and said he likes COP and BHI. Finerman observed the divergence between the price of oil and the cost of oil services. Seymour would buy UNG. Najarian discussed JPM’s raising estimates on AMAT and said it is a solid solar play.

Retail: McDonald’s (MCD), Burger King (BKC)

Adami said MDC’s 8% rise was due to growth in Europe, Asia and the U.S. Najarian would take profits and suggests holding BKC. .

Emerging Markets

Seymour is worried about inflation in China, as well as its huge IPO schedule, increasing imports and accelerating growth. He would rather invest in Brazil, Russia or Turkey.

Spitzer

The big news of the day was New York Governor Spitzer’s involvement in a prostitution ring, and The Street reacted to the former watchdog’s disgrace with some smugness. CNBC reporter Charlie Gasparino told the group that Governor Spitzer faces indictment and is working on a plea deal.

Mike Darda: Chief Economist MKM Partners: Japanese Yen Trust (FXY)

Mike Darda says the Fed is going to put inflation concerns on the back burner and concentrate on more cuts. He said the market has priced in a 100% chance of a 75 basis-point cut. Darda commented the Fed should be more creative and not rely only on fiscal policy. He would buy commodities and FXY.

Healthcare: Amgen (AMGN), Genentech (DNA), Johnson & Johnson (JNJ), WellPoint (WPT), United Health (UNH)

On Amgen’s FDA advisory meeting on Thursday, Najarian said the stock could rise or fall sharply on the outcome and would buy JNJ, which is more diverse than AMGN. Adami would buy DNA into earnings. WPT dropped after cutting its 2008 profit outlook and UNH went tumbling after. Najarian would stay away from this sector because of high costs. Adami would buy DNA into earnings.

Trader Radar: Wal-Mart (WMT) was one of the most actively traded stocks on Monday.

Agriculture: Potash (POT), Monsanto (MON), Materials Select SPDR (XLB), DuPont (DD)

On the subject of rising global food demand, Seymour said to play this trend with caution, because the government might rethink its policy on subsidizing ethanol. However, he would buy MON and POT as short-term plays. Najarian sees a huge number of investors moving from financials to agriculture, and Adami thinks POT and MON are too expensive and instead would buy XLB and DD.

Quint Tatro: Tatro Capital : Procter & Gamble (PG), Chesapeake Energy (CHK), Joy Global (JOYG)

Quint Tatro sees a breakdown in the S&P. Although many investors are taking refuge in recession stocks such as PG, the company is being pressured by higher commodities prices. He noted CHK has a multiyear base and should rise significantly. He is also bulish on JOYG.

Final Trades: iShares MSCI Emerging Markets (EEM) [Seymour], Shaw Group (SGR) [Adami], Altria (MO), [Finerman], Burger King [Najarian]

Seeking Alpha is not affiliated with CNBC, or Fast Money

Comments

[stkmentor]

Excellent summary of TV's most informative and useful show. Looking forward to more daily summaries. I can't take notes fast enough during Fast Money.

[galewhitaker]

You guys are not thinking logically about the situation. Oil prices are going higher and these high prices are going to cause the world economy to tank. The oil companies have not found any new oil fields in 4 years. Alternatives are a stupid joke (it takes more energy to make solar panels than they generate in their lifetime). I think that anyone who is long this market is in for some serious disappointment.