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Oil Hits Record; Stocks Fall

OIL CROSSES $112

The headline: Crude Oil Closes Up 2.2% to $110.87 After Climbing as High as $112.21 on Unexpected Drop In Supplies

Natural gas is ripping off this. Pete Najarian noted that many of the nat gas stocks – Apache , Chesapeake – are at or near their 52-week highs. The oil services ETF (OIH) is screaming higher too.

Jeff Macke recommended taking half off any gains made on the back of oil. This is not a full-fledged breakout and it’s never a bad idea to take profits, he said. He’s still bullish on oil over the long term.

Oil has become a currency unto itself in some respects, according to Pete Najarian. Sovereign wealth is putting its money straight into oil as options traders speculate it will continue higher. It’s no longer about the dollar.

On the broader commodities front, Guy Adami recommended Freeport-McMoRan on global copper demand, especially in Latin America.

AIRLINE STOCKS SLAMMED

The headline: Airline Stocks Drop on Rash of Safety-Related Cancellations, Record Oil

Awful. Terrible. The worst industry going. Those are some of the superlatives the traders used to describe the airlines. However, there are still trades to be had. Guy Adami thinks AMR , parent of American Airlines, is set up to go higher if it continues to have huge volume days like Wednesday.

Remember, Pete Najarian said, that AMR is still trading where it was only three days ago – and that’s after the disastrous news of cancellations coupled with record oil prices. AMR will survive and, in a field with less competition, it might end up actually being a winner.

BOEING’S DREAM STILL ALIVE

The headline: Boeing (BA) Jumps After Reporting Better-Than-Expected 787 Dreamliner Delay

However terrible the airlines, they still need to go through an upgrade cycle. That’s good news for suppliers like Precision Castparts (PCP), Kaiser Aluminum (KALU) and Rockwell Collins (COL), according to Guy Adami. And don’t forget Honeywell (HON) – that company’s airline component is one of its best.

Tim Seymour said he would consider buying Titanium Metals (TIE) as a play on the airlines because, as its name suggests, it deals in titanium, which is one of the lighter and therefore more fuel-efficient materials for building airplanes.

YAHOO, GOOGLE IN AD DEAL

The headline: Yahoo To Carry Search Advertising From Google In 2-Week Test Partnership

In this test run, Google would effectively sell ads into the Yahoo platform. It’s an obvious defensive move against Microsoft’s hostile bid. And in an ironic twist, Microsoft put out a statement that said it worries this deal would have antitrust implications as YHOO and GOOG would together control 90% of the ad space on the web.

Sure, Jeff Macke said, there are obvious antitrust concerns. But the deal is a good one, even if it’s just a result of Yahoo trying to give off the impression that it’s conducting business as usual even as Microsoft threatens to take it over. He and Guy Adami agreed: the trade off any of this is Microsoft.

‘LEVEL 3’ LEVELS FINANCIALS

The headline: Goldman Sachs (GS), Lehman (LEH), Morgan (MS) Hammered on ‘Level 3’ Disclosures

Level 3 assets are illiquid securities likely to be written down. For any of the major firms to warn that they may have increased Level 3 assets is going to be an issue because, as Tim Seymour noted, they need to raise capital more than anything.

But Citigroup (C) may be the short-term winner as it reported it’s close to selling $12 billion of troubled debt. Citi needs to get that debt off its balance sheet at any cost and if it does, Jeff Macke thinks it is a “nakedly bullish” sign for the financials. He would short the group for a trade but buy on dips for an investment.

BROWN LEADS TRANSPORTS INTO RED

The headline: Transport Stocks Lead Market Lower After UPS Issues Profit Warning

The second half of the year should provide much better earnings for the transports, Guy Adami said. He’s a buyer of the group on a pullback, although he hasn’t yet determined how much they need to sell off to become attractive.

SHORT CIRCUIT

The headline:Circuit City Posts Unexpected Profit But Shares Roll Over After Initial Pop

Circuit City has been, and remains, a “slow-motion trainwreck,” according to Jeff Macke. The only way to fix this company would be to disband it.

AFTER HOURS ACTION: BBBY

The headline:Bed Bath & Beyond Shares Fall After Hours on Missed Estimates, Weak Forecast

Specialty retail is nothing special right now, Jeff Macke said. BBBY is a particularly broken stock, and it has been for a year now.


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Trader disclosure: On Apr .9, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (AAPL), (AMR), (BIIB), (CSCO), (NOK), (TSO), (XLF), (YHOO), (EMC), (WLT); Najarian Owns (CHK) Calls, (COP) Calls, (MSFT) Calls, (SLB) Calls; Najarian Owns (LEH) Puts, (OIH) Puts; Macke Owns (YHOO), (INTC), (DIS), (MSFT); Seymour Owns (AAPL), (BX), (CHL), (CSCO), (INTC), (MSFT), (SBUX), (TSO), (TIE); Seygem Asset Management Owns (COP)

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