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Banks Fuel Dow's 176 Point Gain

BANKS FUEL DOW'S 176-PT GAIN

The headline: Dow Adds 176 Points to Rebound That Began Last Week Amid Global Credit Panic.

A jittery Wall Street advanced Monday, reversing some of Friday's sharp losses as investors took a dismal new home sales report as a sign the Federal Reserve will lower rates this week, explains host Melissa Lee who is filling in for Dylan Ratigan.

I think investors are becoming less certain about a 50 bps rate cut, says Karen Finerman. Now there’s more talk that it could be 25 bps. But the language from the Fed is probably more important. Watch the three paragraph statement about growth, inflation and guidance are critical she counsels.

If you’re a trader sell the Financial Select Sector , says Pete Najarian. It’s had a phenomenal run.

I think investors should buy financials on the dip, counters Guy Adami.

The long shot play is that we take-off like a scalded chimp back to new highs, says Jeff Macke. But I’m concerned going into the Fed meeting.

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AFTER HOURS ACTION: AMERICAN EXPRESS

The headline: American Express , on Monday said fourth-quarter profit fell 10%, hurt by a charge to boost reserves for bad loans.

I think investors should stay away from American Express stock, says Guy Adami. However, if Mastercard (MA) falls on the back of AXP – I think MA is a buy.

I agree, adds Jeff Macke, MA is the buy.

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CME, NYMEX EXCHANGE NUMBERS

The headline: Exchange Consolidation Continues With CME Group In Talks To Acquire NYMEX For $11B.

I think the CME trade is over, says Guy Adami. Look at the NYSE Euronext (NYX) instead, he says

If you want to play CME because you expect more upside - then play the options, says Pete Najarian. Put on a call spread.

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GOLD HITS RECORD

The headline: Commodity Stocks Lead Market Higher As Gold Surges To New Record.

It’s a volatile sector, says Karen Finerman but I do believe there’s value there. Holly Corp. was upgraded, Monday.

If you want to play commodities I prefer Potash , says Guy Adami.

Gold looks like it will go to $1,000, says Jeff Macke. That might sound stupid but investors like those milestone numbers. I recommend buying the streetTRACKS Gold (GLD).

Don’t do that, says Pete Najarian. Buy stock in the miners, instead, so you can protect your position with put options.

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AFTER HOURS ACTION: VMWare (VMW)

The headline:VMware Inc Reported Quarterly Revenues That Fell Short Of Wall Street Expectations On Monday, Sending Its Shares Plunging Over 23 Percent.

I think at some point this stock becomes interesting, says Guy Adami. If EMC dips below $15 I think that’s the trade.

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BLITZING THE MARKET

The headline: Companies Advertising During Super Bowl Tend To Beat S&P 500 In Late Jan., Early Feb.

A University of Wisconsin study suggests that Super Bowl advertisers have outperformed S&P 500 in 10 of the last 12 years with Coca-Cola (KO), Toyota (TM), Dell (DELL) and Hershey (HSY) among the outperfomers.

This study makes no sense to me, says Jeff Macke.

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Trader disclosure: On Jan 28, 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), (EMC); Finerman Owns (GS); Finerman's Firm Owns (AEO), (GLNG), (TSO), (VLO), (YHOO), (WMT); Finerman's Firm Is Short (MDY), (IYR), (IJR), (SPY), (IWM); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Najarian Owns (C), (EMC), (MS), (MCD), (MSFT), (BIIB); Najarian Owns (AAPL) Calls, (BBY) Puts, (COP) Calls, (CTSH) Calls, (YHOO) Calls, (YRCW) Calls; Najarian Owns (DOW) Calls; GE Is The Parent Company Of CNBC

Symbol
Price
 
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%Change
ALXN
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CETV
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EMC
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POT
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VMW
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SPDR FIN SEL
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NYX
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