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The fall of Lehman Bros. and Merrill Lynch is rippling outward and the technology sector is being rattled.
Large-cap tech stocks took a hit on the open -- though some have regained their footing.
Click on tickers for company headlines:
- Research in Motion
But analysts are weighing the drop in Electronic Arts and Take-Two Interactive differently: the videogame publishers are also feeling the impact of news that their acquisition/takeover talks had ended.
Click to see Scott Wapner's report on tech stocks.
New from CNBC.com:
Oil prices keep slipping -- but Michael Hall says natural gas looks strong as ever.
Hall, the vice president of Oil & Gas Equity Research at Stifel Nicolaus, offered CNBC his insights -- and his top natgas stock picks.
He believes the market is oversold, due to investors misunderstanding the historical trend cycles -- and gas' relationship to oil.
"We have a strong seasonal outlook," he said. "Nine out of the last 10 years, we've seen prices climb" through autumn to December. He says the winter heating season should put a nice floor under natural gas prices.
"We like larger cap, more liquid names," said Hall.
- Chesapeake Energy -- "the U.S.' leading natural gas supplier"
- Cabot Oil & Gas
- XTO -- After the firm's 2008 acquisitions "and the underperformance that's typical of such acquisitions," Hall expects a big XTO rebound.
New from CNBC.com:
Stifel Nicholas expects to receive or intends to seek compensation for investment banking services from all of the companies mentioned above, in the next three months.
Christian Andreach, managing director at Manning and Napier Equity Fund, told CNBC it's a good time to take advantage of what big-cap stocks offer.
Don't get used to the dollar rally: Sharada Selvanathan, currency strategist at BNP Paribas, says the euro/dollar might edge higher in the very near term.
She explains why -- and gives her take on the other currencies / forex trades.
(Click on tickers for interactive charts)
- CurrencyShares Euro Trust
- CurrencyShares British Pound Sterling
- HOLDRs Regional Bank
- KBW Bank ETF
- PowerShares Dynamic Banking
Disclosure information was not available for Selvanathan or for her company.
While the financial sector looks gloomy as Lehman Brothers continues its search to find a suitor, there are still attractive companies in the sector, Wouter Weijand, chief investment officer for high income equity of Fortis Investments, told CNBC Friday.
Qatar's Doha Bank, French insurance heavyweight AXA and U.S. bank People's United Financial are the best bets, Weijand said.
CNBC's Investor Intelligence:
Doha Bank has a strong market share and a strong margin position, Weijand pointed out, adding that the Middle Eastern bank is expanding in Kuwait and Oman.
"They are just way too cheap and that's why we want to pick this stock," Weijand told "Worldwide Exchange."
AXA is also attractive a current levels after recent selloffs, Weijand said. Investors should look to their "great" second-quarter results and exposure to emerging markets, he added.
CNBC’s Matt Nesto said investors might want to look into placing their money in the railroad sector.
Dazzle your friends and perplex your neighbors: 'Cuz for the next two days... the S&P 500 index will only have 498 members in it.
That's because Fannie Mae and Freddie Mac were kicked out after the close of trading Wednesday -- but their replacements, Salesforce.com and Fastenal, don't go in until after the close Friday!
That not only leaves MGIC and Dillards as the 2 smallest members of the index but also the only two with market caps less than $1 billion.
But wait... there's more..!
Paul Hickey of Bespoke Investment Group wrote me to say:
"The rationale behind taking FNM and FRE out is that their market caps were below the $5bln threshold required for inclusion. However, as of Tuesday there were only 381 stocks in the S&P 500 with market caps of more than $5 bln, and in the US there aren’t even 500 stocks with a market cap of more than $5 bln!"
Furthermore, CNBC colleague Juan Aruego discovered another index anomoly due to the Fannie-Freddie eviction. Their ousting has actually caused the Q3 consensus earnings estimate to go negative, since both companies were on-tap to post a sharp rebound from their disastrous year-ago results.
As Apple courts business customers for its iPhone, what's the best smartphone play now?
Tavis McCourt of Morgan Keegan and Jim Suva of Citigroup weighed in with their top handset stocks.
McCourt sees the field opening up to several players -- undercutting Apple. "Carriers have been subsidizing these smartphones substantially," he said. "Now, there's not that much of a difference between paying up front for a smartphone, sometimes amounting to $99, [versus] a basic handset. Why wouldn't a consumer upgrade?"
And whose handhelds will they upgrade to?
"One with the most upside, as a pure play, is Palm," says McCourt. He concedes that the Treo maker is a risky play -- "but you could end up with a return similar to Research in Motion."
He advises investors that RIM, which makes the BlackBerry, is the "safer bet."
Suva also likes RIM for "delivering products today and tomorrow," and says the firm will meet holiday sales projections. But, he cautions, "we have a sell rating on Palm. It's not going to deliver for Christmas."
Suva sticks with his mid-August take on Motorola , which he sees poised for steady growth.
Citigroup Global Markets owns a significant amount of shares in Palm; and may have furnished investment banking services to Palm. Motorola is an investment banking client of Citigroup; and Citigroup or its affiliates has acted as manager/co-manager of an offering of Motorola securities.
Jim Huguet, president and co-CEO of Huguet Associates, said diversifying is the way to go. He sees growth opportunities in a variety of sectors despite the economic slowdown.
"You've got to look for terrific companies that have outperformed in this [volatile] environment," said Huguet.
Natus —“The company specializes in testing of hearing in infants – their stock is up 20 percent this year.”
Dolby —“They have wonderful products and will continue to grow.”
The developments at Lehman Brothers are making the options market swirl in general, according to Rebecca Darst of Interactive Brokers.
"In general, the brokerages, en masse, took a hit to morale on Lehman's ongoing struggle to survive, but if you take a look at the volatility developments, it certainly was most interesting in Merrill Lynch ," she said on CNBC's "Squawk Box " Thursday morning. "We saw a lot of seesaw action in Merrill Lynch options yesterday; actually, at one point, late in the morning, implied volatility on all Merrill Lynch options (check options here) blasted through those mid-July highs. ... There's still a large, large risk premium being priced into the options on Merrill, twice as many puts trading as calls. ... People are getting very defensive on Meriill." (See her full comments in the video)