GE PLUNGES MOST IN 20 YEARS, DRAGS DOWN DOW
The headline: General Electric Stuns Street With Unexpected Drop In Quarterly Profit
General Electric was expected to tell the world Friday how the conglomerate's global strategy had paid off and allowed it to ride out the credit crisis. Instead the conglomerate shocked investors with lower-than expected earnings and a profit warning that sent the Dowand the overall market slumping, explains Dylan Ratigan.
In an interview on CNBC, CEO Jeff Immelt blamed the sudden collapse of Bear Stearns and the worsening credit crunch for GE's earnings surprise. He also described the poor results as a "bump in the road," though the company lowered its earnings outlook for the entire year.
Whether other big companies will follow GE is unclear. But what so unsettled Wall Street was that a big US multinational like GE--with strong overseas operations--could be blindsided by exposure to financial markets.
Some of GE’s businesses did really well such as infrastructure. But the miss on the financial side really caught investors off guard, explains Guy Adami. These earnings were so important, he adds. Now I think there’s more risk going into next week. I’m now concerned about Honeywelland United Technologies.
GE will now have to rebuild its reputation and its credibility. But I think the Street will give them a pass, says Jon Najarian.
Make a list and buy the dips, counsels Jeff Macke. I’m long term bullish but over the short term I think the market is going down.
Check out “Emerging Infrastructure” to see how Tim Seymour recommends trading the GE earnings news.
The headline: Semiconductor ETF Slides 3% Friday After Thursday’s Surge.
Chip stocks took a hit just one day after Banc Of America upgraded the sector, explains Dylan Ratigan.
“But for today, I think the chip stocks are fine,” says Guy Adami. It’s all a matter of timing.
OIL RISES FOR THIRD WEEK
The headline: Oil Ends Week Up 3.7% To $110.14 After Hitting Record Intraday High Wednesday.
U.S. crude oil ended slightly higher on Friday, erasing session losses near the close as traders covered short positions ahead of the weekend, explains Dylan Ratigan. Prices tumbled earlier as traders booked profits amid recession fears stoked by a forecast for lower demand growth.
Oil is a flight to quality trade and a dollar trade, explains Tim Seymour.
I’d stay long the oil services stocks such as Halliburton , adds Guy Adami.
I like Baker Hughes and Schlumberger , Jon Najarian says.
I think we’re in a range between $100 - $112, Jeff Macke says. Buy the United States Oil Fundon the dips.
MIXED SHOPPING BAG
The headline: Wal-Mart Finishes Week Higher, But Most Retailers Fall On Dismal March Sales.
While most retailers reported dismal numbers for March on Thursday, Wal-Mart raised its first-quarter earnings forecast and Costco climbed on better-than-expected sales, explains Dylan Ratigan.
I think it’s okay to buy WMT at current levels, says Jeff Macke.
I think Home Depot will have a 30-handle, adds Guy Adami.
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Trader disclosure: On Apr. 11, 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), (MSFT); Jon Najarian Owns (AAPL), (AMR), (FDX), (PDLI), (TSO); Jon Najarian Is Short (HOG), (IBM), (WB); Seymour Owns (AAPL), (CSCO), (MER), (MSFT), (TSO), (INTC); Seygem Asset Management Owns (TSM), (COP), (SSL), (EEV); GE Is The Parent Company Of CNBC