Fast Money Recap: All Eyes on Alcoa (7/7/09)

by: Miriam Metzinger

Recap of CNBC's Fast Money, Tuesday January 7

All Eyes on Alcoa (NYSE:AA)

All eyes are on Alcoa, since its earnings report will be considered to be a "tell" for the materials sector and perhaps the economy in general. David Lipschitz of CLSA thinks earnings will be weak and expects the company to post a third consecutive quarterly loss. Merriman Curhan Ford analyst Dana Guido's advice is to buy steel on a pullback in Alcoa and aluminum. The group discussed the importance of paying attention to how Alcoa's orders are faring, and if orders are up, the economy may be on the road to recovery.

S&P 500 Falls

On news the S&P 500 dropped to its lowest level in ten weeks, Karen Finerman says the market was due for a correction. However, Tim Seymour thinks the decline is a an indication the index could drop further to 830. Guy Adami doesn't think that S&P 500 is necessarily a bad thing and would use the decline to buy good stocks cheap. Joe Terranova would be flat going into earnings but would not be short.

Commodities and Zombie Buyers: Schlumberger (NYSE:SLB) OIH (NYSEARCA:OIH), United States Natural Gas Fund (NYSEARCA:UNG)

Commodities declined on Tuesday, partly on news the Commodity Futures Trading Commission may impose limits on speculative commodity trading.Joe Terranova said the issue is not necessary speculative trading as it is with zombie buyers- or index funds that gather up the paper assets as oil prices march higher. Guy Adami thinks the government should keep its hands off of this problem and would consider buying Schlumberger and OIH. The group discussed UNG's news that it will suspend issuing new shares until its plan to expand the number of its shares is approved.

Insurance's Deal with Obama: United Health (NYSE:UNH), Aetna (NYSE:AET)

Insurers United Health and Aetna performed well on Tuesday on news the White House might work with rather than against insurers in its proposed reforms. Seymour thinks that, in spite of a compromise, the insurers will still face huge margin pressures. Joe Terranova thinks the ever-changing moods toward the sector are making the stocks too volatile to trade. Guy Adami noted the $30 target for UNH set by Goldman Sachs and thinks the stock will reach $27. He added United Health is in the best position of all the insurers.

Intel Fell: Intel (NASDAQ:INTC), Oracle (NYSE:ORCL), Apple (NASDAQ:AAPL), IBM (NYSE:IBM)

Intel's upgrade didn't stop the stock price from falling, and Oracle trailed behind. Guy Adami said Oracle and Intel had been trading at the top of their ranges, and would stay away. Tim Seymour and Joe Terranova both like IBM for the long term, but would wait on the sidelines until the stock drops to $65. Piper Jaffray analyst Gene Munster is still bullish on Apple, and thinks the company should continue to sell more products in the latter half of the year. He said that the much-criticized price cuts for Macook stimulated sales.

Buy Puts

Biran Overby, senior options analyst for Tradeking predicts earnings season will be lackluster and the S&P500 may fall as low as 810 if it first drops to 870. Overby also predicts more volatility and urges investors to buy puts for protection.

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