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S&P Falls To 14-Month Low

Wednesday, 16 Jan 2008 | 10:09 PM ET

S&P 500 FALLS TO 14-MONTH LOW

The headline: Intel Plunge, Recession Concerns Send S&P 500 Below 2007 Low..

Word on the Street
The Fast Money traders take a look at today's most noteworthy business news stories.

Stocks closed lower for a second straight day as the market absorbed more disturbing economic news, explains Dylan Ratigan. The Dowfinished lower after Wall Street spent most of the session combing through corporate profit reports and economic news.

I think this sell-off was excessive and I bought Tesoro explains Karen Finerman. Also I bought the MVRX(the Morgan Stanley Retail Index) options that expire Friday. With jobless claims coming out the retailers could take a big hit.

I took off a long put position in refiners says Pete Najarian. I have yet to see TSO or Valero show any signs of life. Also I’m watching the volatility index which suggests to me that we’re in for a mostly down market until there’s a blow-off.

Retail and financial stocks, which had been weak, were strong Wednesday. But the market still couldn’t rally. I think that’s a sign of bigger problems, says Jeff Macke.

Read More:

> Chartology: Flirting With Disaster



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INTEL DROPS 12%

The headline: Tech Stocks Hammered As Intel's Earnings, Outlook Spook Investors.

Intel's failure to meet forecasts for the fourth quarter, along with lowered first-quarter projections, weighed on technology stocks, Dylan Ratigan explains. Intel finished down 12%.

It’s not the news it’s the reaction to it that concerns me. The market action is not the sign of a healthy enviornment, says Jeff Macke.

Read More:

> Find out how Guy Adami is playing it in “Trading Intel at $20”

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BREAKING NEWS: ANTIDEPRESSANTS BIAS

The headline:.Doctors & Patients Getting Distorted View On 12 Anti-Depressants; New England Journal Of Medicine

A new study suggests the makers of antidepressants never published the results of about a third of the drug trials that they conducted to win government approval, explains Dylan Ratigan. It’s possible these drugs aren’t as effective as formerly believed, he says.

Seems likely to move Pfizer and Wyeth, says Pete Najarian.

If you own these stocks, do nothing counsels Jeff Macke. It’s an ambiguous study.

Read More:

>
The New England Journal of Medicine

> Researchers Find a Bias Toward Upbeat Findings on Antidepressants


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AS THE WORLD BURNS

The headline: Stocks Linked to Global Growth Help Lead the Sell-off in the Markets Wednesday

Crude slid 1.2% to $90.84, dipping below $90 at one point says Dylan Ratigan.

Bank of America raised their price targets on hot rolled steel for ’08. I think that bodes well for US Steel long term, says Guy Adami, but I’m cautious short term.

I’m out of all these things, says Jeff Macke. I see declines.

The put volume in the Material SPDR (XLB) caught my attention, says Pete Najarian. Investors are buying the higher strike and selling the lower strike which suggests to me the global story could be broken.

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ORACLE FINALLY BUYS BEA SYSTEMS

The headline: BEA Systems Takeover Saga Ends After Oracle (ORCL) Agrees To Pay $8.5B For The Business-Software Maker.

Oracle agreed to pay $19.375 per share for BEA explains Karen Finerman, which is a 24% premium to Tuesday's closing price. They had let a previous offer of $17-per-share offer expire after BEA insisted on $21 per share. Meanwhile, Carl Icahn sued BEA Systems to force a shareholder vote on the Oracle bid.

Read More:

> "BEA Accepts Sweetened Oracle Bid of $8.5 Billion"

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BURNING DOWN THE HOUSE

The headline: Insurance Industry Fearing Increase In Arson As Foreclosures Soar: Fortune.

I don’t think it will come to this, says Jeff Macke. And quite frankly, there have to be more efficient ways of achieving the same goal.

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Trader disclosure: On Jan 16, 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 (INTC), (YHOO); Najarian Owns (C), (CSCO), (BIIB), (FRE),(MCD), (TIBX); Najarian Owns (AAPL) Options, (YHOO) Options, (WM) Options; Finerman's Firm And Finerman Own (CROX); Finerman Owns (GS), (TSO), (VLO), (WMT), (YHOO); Finerman's Firm Owns (MS) Options; Finerman's Firm Owns (MSFT) Options; Finerman's Firm Owns (MDY) Puts And Is Short (MDY); Finerman's Firm Owns Russell 2000 Puts And Is Short (IWM); Finerman's Firm Owns S&P 500 Puts And Is Short (SPY); Finerman's Firm Is Short (IJR), (IYR); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts

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DJIA
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S&P 500
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INTC
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PFE
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TSO
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VLO
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X
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