STOCKS FALL ON BERNANKE COMMENTS
The headline: Bernanke Testifies For First Time That U.S. Recession Is Possible
Bernanke’s trips to Congress don’t mean as much as they used to, as far as Jeff Macke is concerned. He did a fine job Wednesday, but the fact is that Treasury Secretary Hank Paulson is clearly in control and his testimony will do more to move the markets, Macke said.
Karen Finerman took the opposite view, exclaiming that Bernanke is in control and doing a “good job.”
Each of the last six times, including Wednesday, that Bernanke testified before Congress the Dow ended the day lower. The biggest loss was 306 points in January; the smallest was 33 points last November.
AFTER HOURS ACTION: RESEARCH IN MOTION
The headline: RIMM Moves Higher After Hours on Better-Than-Expected Profit, Revenue
Pete Najarian put on a complex options trade before the earnings his the tape where he essentially sold April calls and bought May calls in RIMM as a way to take advantage of the stock’s volatility.
Even after a blow-out quarter, Jeff Macke isn’t convinced the stock soar higher. He believes the earnings have been priced in as the stock as moved steadily from $100 to $120.
The headline: Oil Surges 3.8% to $104.83 After Gasoline Stockpiles Fall Most Since August
When oil goes higher, you can bet the solar names are going higher. And that’s what they did Wednesday. Pete Najarian urged restraint – there’s no need to chase these stocks but they are definitely buys when oil is this expensive. His favorite is Energy Conversion Devices .
Guy Adami prefers to play high crude prices with the oil service sector. Schlumberger (SLB) or Baker Hughes (BHI) should get it done, he said. (Najarian added he would buy that oil refiner Holly ).
BERNANKE SAYS BEAR FACED CHAPTER 11
The headline: Financials Give Back Some of Tuesday’s Gains on Bernanke Comments; Merrill (MER) to Cut 10-15% of Workforce
If the Merrill news is true, it will be a sign of more layoffs to come on Wall Street, Karen Finerman said. Be prepared.
OPTIONS ACTION: EVERY STOCK HAS ITS THORN
The headline: Pete Najarian Seeing Heavy Put-Buying in Embattled Lender Thornburg Mortgage
The July puts were especially active, Najarian said. Don’t buy TMA, Karen Finerman added.
BEST OF BUYS IN WORST OF TIMES
The headline: Best Buy (BBY) Shares Trade Higher on Better-Than-Expected Profit
Sure, Best Buy is easily best-of-breed. But look at the breed, Jeff Macke said. Consumer electronics is not exactly a flourishing sector right now. Best Buy benefited from selling high-priced laptops and video game units but the company only makes margin on those sales. It needs to sell more high-end televisions and software, he said.
Guy Adami looks to companies like Corning , that make the parts for many of the products, like televisions, that Best Buy sells. GLW should have a $30-handle on it, Adami said.
THE BOTTOM IS IN … FOR NOW
The headline: Dow Double Bottom Suggests Market May Be Due For a Turnaround: Analysts
Guy Adami believes the Bear Stearns collapse effectively marked a bottom. He’s not saying everything is going to be fine from here on out, but he thinks the worst is over and the market’s next big move is to the upside.
GROWING, GROWING, GONE
The headline:Monsanto (MON) Profit Tops Estimates But Shares Fall on Disappointing Outlook
Is Monsanto a seed company or a fertilizer company? Actually, it’s a biotech company with plenty of upside, according to Pete Najarian. He still prefers DuPont when it comes to agriculture chemicals.
MON shares sold off Wednesday because the company didn’t raise guidance, but has Wall Street’s memory become so short sighted that it forget that the company just raised its outlook last week? The stock was unduly punished, Guy Adami said. It’s a buy.