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Fast Money HomeFast Money Rapid RecapAbout Fast MoneyFast Money BiosFast Money Web ExtraFast Money Disclaimer
Font size:
May.05
5:23 PM ET
Monday, 5 May 2008
Oil Drags Down Dow
Posted By:Lee Brodie

OIL DRAGS DOWN BLUE CHIPS

The headline: Stocks Lose Ground

Another record for crude oil dragged down the Dow [.DJIA  Loading...      ()   ]Monday despite word from the Institute for Supply Management that the service sector of the economy was no longer contracting in April.

Your oil trades are only a few stories down.

-----------------------------

BALLMER BALKS, YAHOO PLUNGES

The headline: Yahoo Shares Plummet 15% After Microsoft Withdraws Bid.

Yahoo's [YHOO  Loading...      ()   ] shares tumbled as much as 20 percent after Microsoft [MSFT  Loading...      ()   ] withdrew its $47.5 billion takeover offer, wiping about $7.6 billion off the Internet company's market capitalization and piling pressure on its leadership.

I think Microsoft is where you want to be, says Jeff Macke. I wouldn’t touch Yahoo!

Goldman has a $38 price target on Microsoft, adds Guy Adami. I agree with that.


-----------------------------

COUNTRY FRIED

The headline: Countrywide Tumbles After Friedman, Billings, Ramsey Analyst Says Bank Of America Should Abandon Deal.

Bank of America [BAC  Loading...      ()   ] will likely lower its purchase price for Countrywide Financial Corp [CFC  Loading...      ()   ] at least two analysts said, with Friedman, Billings Ramsey or even walk away from the deal.

I still see downside in Countrywide, says Guy Adami.


-----------------------------

SPRINT AHEAD

The headline: Sprint Considering Spinning Off Or Selling Nextel: WSJ.

Deutsche Telekom AG [DT  Loading...      ()   ] is considering a bid for Sprint Nextel [S  Loading...      ()   ], according to a media report Monday. Bonn-based Deutsche Telekom did not immediately comment on the report in The Wall Street Journal. Were it to make such a deal, it would catapult its T-Mobile wireless unit to the top spot in the U.S. market.

Walk away, says Jeff Macke. There’s nothing to see here. If you’re looking for a stock, check out AT&T [T  Loading...      ()   ] or Verizon [VZ  Loading...      ()   ].


-----------------------------


MILE-HIGH CLUB?

The headline: US Airways, United Parent UAL May Announce Merger Within Next 10 Days: WSJ.

United Airlines [UAUA  Loading...      ()   ] spurned last month by Continental [CAL  Loading...      ()   ], is intensifying merger talks with US Airways [LCC  Loading...      ()   ] and a deal could emerge in as soon as 10 days, the Wall Street Journal reported citing people familiar with the matter.

I like the mergers because the airlines need less competition in the space, says Pete Najarian. But I wouldn’t touch the stocks right now.


-----------------------------

CRUDE CROSSES $120

The headline: Crude Oil Closes Up 3.1% To $119.97, New Record, After Climbing As High As $120.36.

Prices of crude oil and copper, two of the world's most vital raw materials, hit new record highs on Monday before ending off their peaks as more investors turned their focus to commodities after a slump in the stock market.

Addison Armstrong, Tradition Energy Director of Market Research joins the panel for this conversation. Following is a summary of his main points.

I’m cautious, says Armstrong. Based on the light volume it could be a sucker’s rally. I think Monday was all about speculative money flying into the crude oil market and taking advantage of some bank holidays in the UK and Japan to force some shorts out of the market.

If you’re looking for a trade I would short the refiners, he says.

Or if you believe oil will go higher you might want to short the airlines, says Pete Najarian.

I like the United States Oil Fund [USO  Loading...      ()   ],  says Jeff Macke.


-----------------------------

HOT COALS

The headline: Coal Producers Rally After Alpha Natural Resources Crushes Earnings Estimates; Apache, Devon Energy, Natural Gas Producers Post Strong Gains Today

Appalachian coal producer Alpha Natural Resources Inc [ANR  Loading...      ()   ] reported a surge in first-quarter earnings, beating analysts' expectations, on rising metallurgical coal exports and higher prices. For the latest quarter, the company's net income more than tripled to $25.5 million or 39 cents a share, compared with $8.3 million or 13 cents, a year earlier.

I sold into the strength, says Pete Najarian. Wait for the pullbacks.

I like Joy Global [JOYG  Loading...      (