Stocks Shake Off The Blues
STOCKS SHAKE OFF THE BLUES
The headline: Stocks Rebound From Last Week's Loss With The Dow Making Solid Gains.
Wall Street advanced sharply Monday, with solid preliminary results from IBM encouraging investors to go back into the stock market after last week's rout, explains Dylan Ratigan.
I was surprised how well socks did across the board, says Karen Finerman.
"Mr. Market paid for this rally by giving up several quarts of blood earlier in the year," says Jeff Macke. Monday was nice but don’t get carried away.
BIG BLUE BELLWETHER BOUNCE
The headline: Tech Bellwether IBM Sparks Rally After Releasing Strong Preliminary Earnings Results.
IBM's news raised hopes that fourth-quarter results might not be as bad as feared, explains Dylan Ratigan. Their estimates for Q4 were 24% above year-earlier levels with overseas sales helping to drive the numbers.
When I think of IBM I think of Western Digital (WDC), says Guy Adami. At current levels WDC could be a buy.
> Find out how Pete Najarian is playing it in “Trading The Big Blue Blowout.”
NO WORRIES...JUST WRITE IT OFF:
The headline: Citigroup , Merrill Help Lead Market Higher Ahead Of Their Earnings This Week.
In late breaking news from the Wall Street Journal, Dylan Ratigan suggests Citigroup could announce a sizable dividend cut. And CNBC's Charlie Gasparino had reported earlier that Citigroup could write down as much as $24 billion, he adds.
Citigroup numbers will likely be interpreted in a positive way, says Pete Najairan. I think there’s more upside in this stock than the downside.
If you get a dip Citi is a buy, says Jeff Macke. It’s a sign of decisive management.
I think Merrill (MER) is a buy says Guy Adami, not Citi.
COMMODITIES: GOLD CROSSES $900:
The headline: Gold Closes Above $900 For 1st Time As Dollar Dives To 7-Week Low.
If you want to play commodities I recommend Deere & Co . says Guy Adami.
Or, you could also get long natural gas and short crude oil, says Karen Finerman. Companies with natural gas exposure that I like include Devon (DVN) and Apache (APA).
Personally,I have Canadian income trusts such as Paramount Energy Trust, Daylight Resources Trust, Canetic Resources Trust, but you have to trade around them because sentiment moves them up and down a lot.
XTO Energy (XTO) also gives you exposure to energy, says Pete Najarian.
If you want to trade this headline, buy streetTRACKS Gold (GLD) says Jeff Macke, and get out at $100.
AFTER HOURS EARNINGS: GENENTECH
The headline: Genentech Said Monday Its Q4 Profit Rose 6%, Though The Stock Dropped In After-Hours Trading As Sales Of A Key Drug Fell Below Expectations.
Keep an eye on this stock says Pete Najarian. But in biotech, I think the Biogen (BIIB) has greater upside.
The headline: Lampert's Sears Sinks 5% to 1-Year Low After Issuing 4th-Quarter Profit Warning.
I think it’s going lower yet, says Jeff Macke. It looks like a screwed up REIT and a lousy retailer from where I’m sitting, he adds.
It’s not a place I’d want to be either, says Karen Finerman. Also, I’m short the iShares Dow Jones US real Estate (IYR).
THE END FOR HIGH-END?
The headline: Coach , Polo Ralph Lauren Downgrades Monday Are Latest Blow To High-End Retail.
The End For High End?
Saks (SKS) -26%
Tifany (TIF) -25%
Ralph Lauren (RL) -16%
Coach (COH) -17%
Tiffany (TIF) -25%
These downgrades could be the beginning of a longer down cycle says Jeff Macke. I would stay away.
I think Saks is the exception, adds Guy Adami. I like their balance sheet and for me this stock is a buy.
OPTIONS ACTION: SOVEREIGN WEALTH?
The headline: Pete Seeing Unusual Options Activity In Sovereign Bancorp. (SOV)
The options action suggests that Sovereign could be a takeover target, Najarian explains.
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Trader disclosure: On Jan 14, 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 (DIS), (YHOO), (INTC); Pete Najarian Owns (BIIB), (C), (CSCO), (MS), (MSFT), (EMC); Pete Najarian Owns (AAPL) Options, (SOV) Options, (VLO) Options, (WM) Options, (YHOO) Options; Finerman Owns (GS); Finerman's Firm And Finerman Own (HD); Finerman's Firm Owns (AEO), (DAI), (SKS), (WMT), (YHOO); Finerman's Firm Owns S&P 500 Puts And Is Short (SPY); Finerman's Firm Owns Russell 2000 Puts And Is Short (IWM); Finerman's Firm Owns (MDY) Puts And Is Short (MDY); Finerman's Firm Owns (LEH) Puts; Finerman's Firm Owns (MSFT) Options; Finerman's Firm Is Short (IYR),(IJR), (GLD), (SPG), (TCO); Finerman's Firm Owns Paramount Energy Trust, Daylight Resources Trust, Canetic Resources Trust