Dell Rescues Tech - Fast Money Recap (5/30/08)

Recap of CNBC's Fast Money, Friday May 30.

Is Oil Spoiled? Baker Hughes (BHI), Transocean (RIG)

Oil fell nearly 4% last week to $127. The group wondered if oil’s rally is finally over and if the commodity could drop to $120 in the coming week. Guy Adami thinks next week will be the biggest week for commodities in years and expects a significant drop in crude and gold. However, he doesn’t think stocks will necessarily rise on oil’s fall. Macke doesn’t believe oil will necessarily go lower, but action in the commodity will be significant. He adds he is a seller of the S&P with a tight stop above 1410. Najarian says oil service stocks are not dependent on price, since more oil needs to be produced. He is bullish on BHI and RIG. He notes solar stocks are rallying because the Germans are not cutting aid to solar as much as expected.

Saved by the Dell (DELL), Intel (INTC), Cisco (CSCO)

Dell brought up the tech sector with its better-than expected earnings. Macke would sell into strength, while Najarian notes Dell finally gave a strong report after lackluster earnings the two previous quarters. He thinks Dell may go higher. Macke would look at INTC and CSCO and thinks tech is leading the market right now.

Retail Rebound: Tiffany (TIF), Costco (COST), J. Crew (JCG)

In spite of consumer confidence reaching a 28 year low, TIF and COST beat earnings. Finerman prefers higher-end retail, particularly TIF which attracts foreign customers and benefits from the weak dollar. One high-end retailer, JCG, is hurting and tumbled 20% after it cut earning estimates. Finerman says she may be interested in the stock when it drops to $35. Adami doesn’t think J. Crew will fall to the $35 level, and but would recommend buying now. Macke would stay out of retail.

Think Big: Citigroup (C), J.P Morgan (JPM), Financial Select Sector SPDR (XLF)

Regional banks continued to tumble on Wednesday’s news that KeyCorp failed to gauge its exposure to bad loans accurately. Finerman would avoid regional banks and would buy C or XLF. Macke agrees that bigger banks are safer than regional and Adami recommends taking look at JPM. Najarian would buy puts when investing in the sector, given the risk.

$8.50 is Affordable: Ford (F)

Billionaire investor Kirk Kerkorian increased his tender offer for Ford even though the company has been struggling. Finerman emphasized Kerkorian is not buying the entire company, but just a portion and his involvement will put pressure on the remaining stock. Adami says he is not a Kerkorian fan.

Off the Cliff: Cleveland Cliffs (CLF), Exxon Mobil (XOM), Sandridge (SD)

Harbinger Capital has increased its stake in CLF and now owns over 15% of the company, and Adami commented on CLF’s pricing power. Najarian noted insider selling at XOM and prefers SD which has strong insider buying.

Healthy Stocks: ImClone (IMCL), Bristol Myers Squibb (BMY), Merck (MRK), Amylin (AMLN)

Kris Jenner, lead portfolio manager of the T. Rowe Price Health Sciences Fund, discussed how to trade the upcoming Cancer conference. He thinks the focus will be on how well Erbitux, a joint project shared by IMCL, BMY and MRK, treats lung cancer. Jenner thinks the news will be good for the companies particularly IMCL, although this stock may face some short-term volatility. He is bullish on MRK which he predicts will be strong for the next year to two years. Najarian likes AMLN for its drug Byetta.

Stay-at-Home Consumer: Home Depot (HD)

Home Depot’s stock has been punished recently, and is down 30% for the year after reporting a 66% decline in quarterly profits. However, chairman and CEO Frank Blake is hopeful that the company will rebound as residential housing reverses its slowdown. The retailer will also benefit as Americans decide it is not worth paying at the pump and opt to stay home. Adami says sales due to stimulus checks will be in this quarter’s earnings and HD has some aggressive insider buying. Finerman respects the management because it is straightforward about the headwinds. Najarian, Adami and Macke think the stock is cheap and would consider buying before next week’s HD analysts meeting.

Loser Conference: Boyd Gaming (BYD), Mariott (MAR)

Goldman Sachs’ lodging, gaming, restaurant and leisure conference should be hosting its fair share of losers as the U.S. consumer is skittish about discretionary spending. Najarian noted Morgan Stanley’s downgrade of MAR, but thinks one discretionary stock he would consider buying is BYD, which he feels is oversold and may get some attention from Carl Icahn.

On the Rails: Robert Crandall former CEO of AMR (AMR)

The average American uses 500 gallons of gas annually, triple the amount of the average European, who relies on a developed rail system. Robert Crandall outlined several ways to conserve energy, including a limit on the number of flights, repairing the rails between Boston and New York to cut down on short flights, fixing the country’s bridges and preventing further consolidation in the airline industry. Adami would buy infrastructure stocks on the reforms, but Macke thinks the status quo will rule.

Surprise Guest: Netflix (NFLX) CEO Reed Hastings

NFLX stock was up after a downgrade by an analyst citing worries over competition with Blockbuster. Hastings is confident NFLX will snatch market share from Blocbuster by introducing instant streaming which will enable customers to watch videos instantly on their PCs and TVs. “That gives us an advantage in retention and great word of mouth.”

Picks that Paid: Valero (VLO), American Superconductor (AMSC), Activision (ATVI), AMR (AMR)

Guy Adami made a bold call on May 21st to bottom pick the airlines, and AMI has been up ever since. AMSC have risen 16% since Najarian’s recommendation on May 19. ATVI jumped 22% since Macke’s May 8th comments. Although VLO has inched just 5% since Finerman’s March recommendation, June $45 calls have jumped 77%.

Fast Money Misfires: Kohl’s (KSS), Dryships (DRYS), Golar LNG (GLNG), Quicksilver (ZQK) Macke thought expectations in retail were significantly low to bring KSS up, but the stock dropped 10%. However, he still thinks investors can buy the dip. DRYS fell 11% after Najarian’s recommendation. He says this particular stock is volatile, but he likes the sector. Finerman is not disappointed by GLNG’s decline, since she believes it will split its business and she would buy on the dip. Guy was less optimistic about his ZQK pick, which fell 12%; “That was a bad pick and I should have kept my mouth shut.”

Final Trade: Macke: Costco, Adami: Nucor (NUE), Finerman: Maguire Properties (MGP), Synthetic Energy Systems (SYMX),

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