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Spooked by rates? Pro strategies as 10-year nears 3 percent

On Thursday pro investors couldn't help but wonder if a 3 percent yield on the 10-year would kill the rally.

Largely the belief on the Street has been that rapidly rising rates present problems for a wide range of stocks with the resulting ripple potentially pulling down homebuilders as well as the related retail stocks such as Home Depot, Whirlpool and more.

Although the Fast Money traders concede that higher rates could unhinge the market in the short-term, they also believe the rate rise is a sign of economic health and should ignite a rally over the long-term.

And they believe sentiment is shifting rapidly; that is they think more investors are starting to view rising rates positively. Therefore, they suggest buying any S&P sell-off that a rate spike may generate.

"The market has voted," said Josh Brown, author of The Reformed Broker blog, on CNBC's Halftime Report. "They like rising rates."

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That is, Brown takes the strength in some of the cyclical names as a sign that pros have come to interpret higher rates as a positive.

Trader Jon Najarian, co-founder OptionMonster.com, says much the same. "Coal stocks, including Walter, Arch, and Cliff are moving fast." Najarian says that's a sign that big money is trying to get ahead of an expected global recovery.

Trader Stephanie Link also concurs. However, rather than put money to work in the industrials, the director of research at TheStreet suggests putting financials on the radar.

"Bank stocks should also benefit from recovery and so far they've lagged. "I think you could see the sector play a game of catch up," she said.

Trader disclosure: On September 5, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long VRTS; Joe Terranova is long GS; Joe Terranova is long MS; Joe Terranova is long OXY; Joe Terranova is long HOS; Joe Terranova is long HAL; Joe Terranova is long APC; Joe Terranova is long SNDK; Joe Terranova is long SBUX; Joe Terranova is long TRIP; Joe Terranova is long SJM; Joe Terranova is long CXO; Jon Najarian is long AAPL; Jon Najarian is long JPM; Jon Najarian is long BBRY; Jon Najarian is long FB; Jon Najarian is long GRPN; Jon Najarian is long MU; Jon Najarian is long COP; Jon Najarian is long SVU; Jon Najarian is long CIEN; Jon Najarian is long RKUS; Stephanie Link is long AAPL; Stephanie Link is long WFC; Stephanie Link is long JPM; Stephanie Link is long COST; Stephanie Link is long CSCO; Stephanie Link is long JCI; Stephanie Link is long FB; Stephanie Link is long JOY; Josh Brown is long GOOG; Josh Brown is long AAPL; Josh Brown is long LOW


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