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Stocks Fall 2% As Ugly January Continues

STOCKS FALL 2% AS UGLY JANUARY CONTINUES

The headline: The DowPlunged Friday As Stocks Rack Up 4th Triple Digit Loss Of ‘08.

Wall Street plunged lower Friday amid renewed fears that the financial sector's troubles with bad credit won't end soon, explains Dylan Ratigan. Also concerns that some consumers are buckling under signs of a slowing economy dragged stocks lower too, he adds.

I was surprised that volatility didn’t spike higher says Pete Najarian. I think that’s because financials were in positive territory.

In a market like this I don’t think you want to be in mid-cap stocks, adds Karen Finerman. The Russell really underperformed the S&P on Friday. And when you buy stock look at the company’s balance sheets she adds. Stay away from debt.

Number of Triple Digit Losses By 8th Trading Session of Year

2000 2
2001 2
2002 0
2003 1
2004 0
2005 0
2006 0
2007 0
2008 4

Source: Thomson

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BANK OF AMERICA LENDS A HAND

The headline: Bank Of America Buys Troubled Mortgage Lender Countrywide For $4B.

In a career defined by blockbuster deals, Bank of America chief executive Ken Lewis has taken his biggest gamble yet with an attempt to rescue the country's biggest mortgage lender, Countrywide Financial explains Dylan Ratigan.

Lewis may have become a market savior by buying the troubled Countrywide for about $4 billion in stock, and keeping the industry and regulators from the messy task of cleaning up the bankruptcy of a company that is servicing 9 million U.S. home loans worth $1.5 trillion.

Sell strength and buy glaring weakness in financials, says Jeff Macke. Take gains on days like Friday, he adds

I think the worst could be behind some of the banks, adds Pete Najarian. I don’t think it’s the bottom, but I do think there are opportunities. My trade is to “slap a buy-right on Bear Stearns (BSC) or Citigroup” – buy the stock and sell the "out of the money" call.

How’s Karen Finerman playing it? Read “Take Off Your Shorts”

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YOU DESERVE A BREAK, TODAY

The headline: McDonald's Drops 5% On Analyst Forecast.

A Friedman, Billings, Ramsey analyst said McDonald's shares were "fully valued" and forecast the stock would trade at the $53-dollar level by next year explains Jeff Macke. I think this is where you hold your nose and buy.

I also like McDonald’s says Guy Adami.

Me too, adds Pete Najarian.

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LITTLE BLUE BOMB

The headline: Tiffany Plunges To 52-Week Low After Cutting 2007 Guidance.

Tiffany has been a big beneficiary of the weak dollar says Karen Finerman. Maybe that’s coming to an end. If you want to be in retail I like DSW Inc. (DSW) because they have a ton of cash on the books.

Tiffany is still doing a great foreign business, Jeff Macke adds, but why bother?

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CLEAN BILLS OF HEALTH

The headline: Healthcare Stocks Post Sharp Gains This Week On Big JPMorgan Healthcare Conference.

I see more upside in Pfizer but be careful of Merck (MRK) says Pete Najarian. Meanwhile, Novartis (NVS) and Wyeth (WYE) have had rapid runs. Also check out Cepheid (CPHD) and Celgene (CELG).

I prefer Gilead (GILD) and Humana (HUM) says Guy Adami. Also I agree 100% with Pete on Pfizer.

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GOLD HITS $900

The headline: Gold Hits $900 For 1st Time Friday On Rate-Cut Expectations.

I’ve traded gold for 15 years and I know this trade ends in tears, says Guy Adami. I just don’t know when it ends.

Limit your risk and buy call spreads on mining stocks such as Newmont , says Pete Najarian.

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HOGAN'S ZEROES

The headline: German Index's Bearish Double Top May Mean More Trouble Ahead For U.S. Stocks.

According to Jon Kosar of Asbury Research, the German stock market has had a 93% correlation with the S&P 500 over the last decade. If the DAX is breaking down, that could well mean we're breaking down.

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Got something to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! Prefer to keep it between us? You can still send questions and comments to fastmoney@cnbc.com.

Trader disclosure: On Jan 11, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Macke Owns (YHOO), (INTC): Najarian Owns (BIIB), (C), (CSCO), (MCD), (MSFT); Najarian Owns (AAPL) Options, (CFC) Options, (VLO) Options, (YHOO) Options, (WM) Options: Finerman Owns (GS); Finerman's Firm Owns (YHOO), (DSW), (WMT); Finerman's Firm Owns (LEH) Puts; Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns (MDY) Puts And Is Short (MDY); Finerman's Firm Owns Russell 2000 Puts; Finerman's Firm Owns (MSFT) Options; Finerman's Firm Owns (CROX) And (CROX) Options; Finerman's Firm Is Short (IYR), (IWM), (SPY)

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