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Economy Fears Knock Down Dow

Thursday, 28 Feb 2008 | 6:27 PM ET

ECONOMY FEARS KNOCK DOW 110 POINTS

The headline: Bernanke’s Negative Comments On Job Growth And Bank Failures Drags Stocks Lower.

Slowing economic growth and rising oil prices pushed The Dowlower Thursday, explains Dylan Ratigan. Before the market opened, the Commerce Department reported economic growth slowed dramatically during the fourth quarter, with the GDP expanding at an annual rate of just six-tenths percent. It had zoomed ahead at a nearly five percent clip in the prior three months.

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AFTER HOURS ACTION: DELL

The headline: Dell Profit Tops Forecasts, But Sales Fall Short

Dell reported earnings that, excluding one-time items, beat expectations, but the company fell short of forecasts on the sales side, explains Dylan Ratigan.

If you want to get long Dell, buy Hewlett Packard (HPQ), says Jeff Macke.

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Dell Profit Tops Forecasts, But Sales Fall Short


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AFTER HOURS ACTION: AIG

The headline: American International Group Reports A $5.29 Billion Q4 Loss.

If this stock breaks $44.50 it could go down to $30, says Guy Adami.

Stay away, adds Pete Najarian.

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OIL HITS ANOTHER RECORD

The headline: Crude Oil Climbs 3% To $102.59, New Record High; Crude Oil Now Just Shy Of All-Time Inflation-Adjusted High

On Thursday, oil settled at a record $102.59 a barrel in New York, and continued to climb in after-hours trading, spurred in part by weakness in the U.S. currency in which the commodity is denominated, explains Dylan Ratigan.

It’s all about inflation, says Tim Seymour. Oil is an inflation trade.

I like the United States Oil Fund , adds Jeff Macke.

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NAT. GAS NOT TO BE OUTDONE

The headline: Natural Gas Surges After U.S. Stockpiles Fall More Than Average; Apache, Other Natural Gas Stocks Post Sharp Gains Thursday

I expect to see a pull back in nat gas when a warm front goes through. When that happens, I recommend buying nat gas stocks on a pull back, says Guy Adami.

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GOLD RUSHES TO NEW RECORD

The headline:Gold Roars To Record High Of $974.80 In After-Hours Trading.

Gold prices trekked higher Thursday, as an inflationary combination of high oil prices and a falling dollar pointed investors to the relative safety of precious metals, says Dylan Ratigan.

I think gold is going to $1000, says Jeff Macke.

Look at Mittal (MT) says Tim Seymour. And I’m worried about Posco (PKX) because they might have to acquire another company.

I prefer copper, look at Freeport McMoRan (FCX), counsels Guy Adami.

Or coal, Pete Najarian adds. Look at Arch Coal (ACI), AlphaNatural Resources (ANR) or Ivanhoe (IVAN).

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CUSTOMERS SPRINTING AWAY

The headline: Sprint Nextel Falls 10% After Posting $29.5B Loss, Suspending Dividend.

Sprint Nextel posted a quarterly loss of $29.45 billion Thursday due to a huge goodwill write-off and forecast deepening subscriber losses, pushing its stock down as much as 13 percent to a five-year low.

Also, the No. 3 U.S. mobile service said it would stop paying dividends for the foreseeable future, and Chief Executive Dan Hesse said it would take many quarters to turn the company around and rebuild its brand.

Sprint is the crazy guy in the corner, says Jeff Macke. I wouldn’t touch this stock with a ten foot pole.

Sprint can’t get out of its own way, adds Pete Najarian. But I like AT&T (T) and Verizon (VZ).

I agree with Pete, says Guy Adami.

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APPLE OF TECH'S EYE

The headline: Apple’s Surge Thursday Helps Tech Sector Outperform Broader Market.

Shares of Apple rose as much as 5 percent on Thursday on optimism that the maker of the iPod and iPhone can overcome an economic slowdown and as it prepares to give details next week on how outside programmers can develop software for the iPhone.

More investors are jumping on the bandwagon, says Pete Najarian. I sold some upside calls Thursday.

Or look at Western Digital when it dips to $28.50.

Stay long Intel (INTC), exclaims Jeff Macke.

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AN EVEN SOFTER SIDE OF SEARS

The headline: Sears Profit Plummets 47%, Even Worse Than Expected.

Sears Holdings reported a 47.5 percent decline in fourth-quarter profit Thursday as sales fell at its Kmart and Sears stores and it marked down prices.

The retailer, which is searching for a permanent chief executive and restructuring its operations, said it plans to reduce inventory purchases this year and take other steps to improve longer-term performance.

I’d love for this turn out like the Giants winning to Super Bowl, says Tim Seymour, but I don’t see it.

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DREAM DRUG

The headline: Novartis Ends Trial Early After Kidney-Cancer Drug Proves Highly Effective

It could be worth a half billion when it hits the markets, says Pete Najarian. I like Novartis. Also look at Pfizer (PFE), he adds.

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AFTER HOURS ACTION: THE GAP

The headline Gap Meets Earnings Estimates, Raises Dividends, Annoucned $1B Buyback:

I’m a buyer, exclaims Jeff Macke.

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AFTER HOURS ACTION: KOHL’S

The headline: Kohl’s Shares Fall After Hours On 15% Decline In Profit

It’s not a disaster but it’s not great, says Jeff Macke.

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VICTORIA'S SECRET: JUST TOO SEXY

The headline: Victoria's Secret Chief: Sales Are Falling Because Brand Has Become 'Too Sexy'.

Word on the Street
The Fast Money guys take a look at today's top business stories.

They’re just too darn good at what they do, says Dylan Ratigan.

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Trader disclosure: On Feb.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), (INTC); Seymour Owns (AAPL), (BX), (DELL), (INTC), (MER), (MSFT), (TMA), (TSL), (SHLD), (SBUX); Seygem Asset Management Is Short (PBR); Seymour Is Short (S); Pete Najarian Owns (AAPL), (BIIB), (C), (MS), (MSFT), (NVS), (XLF), (CSCO), (BKC), (MCD); Pete Najarian Owns (XTO) Calls, (IVN) Calls; Pete Najarian Owns (YHOO) And (YHOO) Calls; Jon Najarian Owns (FRE), (FNM), (GS)

  Price   Change %Change
DJIA
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AFF
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APA
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4331
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GLD
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GPS
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KSS
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NOVN
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S
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SHLD
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USO
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WDC
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AAPL
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