Do Tell, Intel - Fast Money Recap (7/15/08)

Recap of Fast Money, Tuesday July 15.

Dow Down Below 11,000

For the first time in 2 years, the Dow dipped below 11,000 on continued skepticism over the government’s attempts to rescue Fannie Mae and Freddie Mac. Jeff Macke commented; “If you want to feel good buy a puppy and call your Grand Ma’ because there’s nothing but pain in this market.”

 Banks Won't Bottom: Fannie Mae (FNM), Freddie Mac (FRE), Wachovia (WB), Goldman Sachs (GS), Proshares UltraShort Financials ProShs (SKF)

 Fannie and Freddie dropped 25% on fears the government bailout will affect the value of the companies’ shares. Oppenheimer’s Meredith Whitney cited a “bleak” outlook for WB in spite of it s solid capitalization, and shares fell 7%. Macke said he bought Goldman Sachs, and added that $150 was his entry point, but if shares fall to $145, he will sell. Tim Seymour recommended SKF.

 Oil Drops

 Oil saw its biggest drop in 17 years, down $6, but Macke says the oil story is not yet over.

 Intel (INTC), Do Tell

Intel’s shares rose after-hours on a higher quarterly profit, and the chipmaker is profiting from healthy notebook PC sales and the release of its newest chip. Guy Adami thinks Intel is the ideal value stock.

 GM (GM)’s Cuts Costs: Borg Warner (BWA)

 GM is planning a radical cost-cutting program of $10 billion, is suspending its dividend for the common stock and is selling $4 in assets. Tim Seymour praised these moves and would buy the stock as a trade because of GM’s presence in China, Russia and India. Guy Adami likes BWA.

 Sky Telecom (SKM), Sprint-Nextel (S)

 South Korean telecom currently has plans to take over Sprint. Private equity firms are expected to help out with the acquisition.

 VIX Is Not Enough: Ultra Long Financials (UYG), General Motors (GM), Tesoro (TSO)

 The Vix recorded a 3 handle on Tuesday, which the traders said would signal a bottom in the market. However, Pete Najarian says the bottom won’t be in until there is a higher volatility spike, a short covering spike and a 20% decline in oil prices. When the market bottoms, Najarian would buy UYG, GM and TSO.

 Getting Defensive: Research in Motion (RIMM), Evergreen Solar (ESLR), Celgene (CELG), Johnson & Johnson (JNJ)

 Joe Terranova says the current market should be played defensively, and recommended RIMM at $102. Guy Adami says it is time to take profits in ESLR, and added he likes CELG and JNJ.

 Deciphering the Fed : Financial Services Sector (XLF)

 The group interpreted Ben Bernanke’s comments on Tuesday, in the face of a dismal inflation number, to indicate rates are going to remain where they are for a while. CNBC’s Steve Leisman says he is bullish on the dollar, because he expects weakness in Europe. Tim Seymour would also be long the dollar, short the euro and short XLF.

 Need a New Drug: Johnson  & Johnson (JNJ), Schering-Plough (SGP), Genentech (DNA), Biogen (BIIB), Baxter (BAX), Gilead (GILD)

 Healthcare is strong as JNJ soundly beat expectations thanks to its sale of medical devices and consumer products. SGP also rose on bullish remarks from Lehman, and DNA and BIIB are both healthy. While there is new optimism concerning the sector, gains could soon vanish, so it is important to stick with strong names. Kris Jenner recommended GILD for its HIV medication and Baxter as a steady grower.

 Fast and Furious: Delta (DAL), YUM (YUM), Wells Fargo (WFC), Ebay (EBAY)

Joe Terranova says he expects to see a continued selloff in oil. Rising fuel prices threaten to cut into DAL’s profits. Adami says the company needs to show a profit of as little as ten cents a share. YUM is expected to report that its international sales have offset domestic weakness. Macke says YUM is a strong company in a weak environment. Tim Seymour would not buy WFC, which reports earnings. Macke expects disappointment in Ebay’s earnings. Tim Seymour doesn’t think Ben Bernanke is going to make tough remarks about inflation.

 Final Trade: Jeff Macke: Activision Blizzard (ATVID), Guy Adami: Johnson & Johnson,Tim Seymour: Vimpel- Comm (VIP), Joe Terranova: Amazon (AMZN)

 

 

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