Fast Money Recap: Microsoft Has a Pulse (3/25/09)

by: Miriam Metzinger

Recap of CNBC's Fast Money TV Program, Wednesday March 25.


The tech rally on Wednesday was so impressive that even Micrsoft was up 5%. That's a huge accomplishment, given the fact Mister Softee has been down 8% since January. USB analyst Heather Bellini thinks short covering is the reason for Microsoft's bounce: “Investors sold everything hard and I think (Microsoft's) catching a bounce because the shorts are being caught off guard." A fundamental reason to believe in a further upside for Microsoft is stabilization in the PC industry. Bellini says Microsoft is a buy along with Intuit, Oracle and SAP.

Rise and Fall

The Dow rose 110 points on Wednesday on bullish housing and durable goods news and dropped again on a sluggish auction of Treasuries. Although the Volatility Index was over 40, the market closed at a higher level than expected. Jeff Macke was puzzled at the absence of carnage. Pete Najarian said the action was encouraging; "But don't get out the pom-poms just yet," because the volatility index indicates interesting times ahead. Guy Adami was also surprised that the drop wasn't bigger and predicts the S&P 500 goes to 900. Tim Seymour said the auction of Treasuries was slow because Japan in on vacation.

Boeing (NYSE:BA), Industrial SPDR (NYSEARCA:XLI)

Orders in durable goods increased for the first time in seven months, but Jeff Macke cautioned that expectations were terrible. Guy Adami says the main point is that declines are slowing down and remarked on Boeing's positive reaction to the news. Pete Najarian recommended looking at XLI.

IBM (NYSE:IBM), Western Digital (NYSE:WDC), Seagate (NASDAQ:STX), AU Optronics (NYSE:AUO)

IBM announced it was laying off 4% of its work force with cuts mainly in the global services business. Najarian says options actions suggest an upside for Western Digital and Seagate. Tim Seymour would look at AU Optronics on the China trade.

A Housing Bottom? XHB (NYSEARCA:XHB), Bed, Bath & Beyond (NASDAQ:BBBY), Home Depot (NYSE:HD), Sherwin Williams (NYSE:SHW)

Certain statistics seem to indicate that housing might be coming back: new home sales are growing at the fastest pace in ten months, sales of existing homes are growing faster than any other time int he past six years, applications for mortgages are increasing as interest rates drop. Dylan Ratigan is suspicious of talk of a housing rebound, but Guy Adami notes that low prices are too hard to resist. Pete Najarian says the news is good for home buyers and bad for home sellers who have to be content with lower prices. He thinks it is also good news for XHB, an index which has stocks Bed Bath and Beyond, Home Depot and Sherwin Williams.

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