STOCKS REBOUND FROM LAST WEEK'S DROP
The headline: Tech, Consumer, Bank Stocks Lead Bounce; Nasdaq jumps 1.8%
Stocks got off to a good start on this first trading day of the week with the Dow making triple digit gains for the week.
APPLE, EDS LEAD TECH HIGHER & H-P MAY BUY EDS
The headline: Apple Climbs on Anticipation of New 3G iPhone Next Month; Meanwhile H-P Confirms Advanced Talks With EDS on Possible Combination
Big-cap technology shares led the broader market's advance as investors bet the U.S. economy may not be in as poor shape as previously feared, and expectations that exports will underpin profits.
Also Research In Motion was buoyed by the launch of a new high-end version of its BlackBerry e-mail/networking device and Apple signed a deal to bring the iPhone to four Asian countries later this year, which should help the company surpass its sales goal of 10 million units by the end of 2008.
I think you can look at Microsoft ,Intel and Cisco , says Guy Adami.
I prefer AAPL exclaims Pete Najarian.
Meanwhile, Hewlett-Packard , the world's largest personal-computer maker, confirmed it is in advanced talks to acquire Electronic Data Systems in an apparent bid to boost its presence in the lucrative business of tech consulting and support.
If Hewlett Packard feels they need to buy EDS to compete with IBM then it’s bullish for IBM, says Guy Adami. I think IBM is the play.
AN END TO OIL FEVER?
The headline: Oil Falls For 1st Time In 7 Sessions, Closing Down 1.4% To $124.23;
Light, sweet crude for June delivery jumped to a new all-time trading record of $126.40 a barrel in light trading on the New York Mercantile Exchange before falling back to settle at $124.23, down $1.73 from Friday's closing record of $125.96. It was the first time oil has closed lower in six sessions.
Monday's price fluctuation underscored the uncertainty over oil's future direction. Many analysts believe the weak dollar has driven oil prices to levels that defy fundamental supply and demand economics. But other investors see continued strong demand for oil and fuel from China and India as a sign that oil prices have further room to rise.
Moreover, growing concerns about declining crude production in Mexico, Russia and elsewhere are keeping prices in record territory, analysts say. Goldman Sachs said in a report last week that crude prices could rise to $150 to $200 within two years.
I think the refiners were the story of the day. Tesoro and Valero finally started to move, says Pete Najarian.
If you’re wondering what the options market is watching, keep an eye on Pride International as well as the Energy Select Sector SPDR .
I expect oil to trade down 25% from here, counters Jon Merriman of Merriman, Curhan & Ford. But even if oil slides to $80, the big trade is alternative energy. I like Energy Conversion Devices which I think could go to $80 by the end of the year. Also I like EMCORE Corp. .
BULLISH ON THE BUCK
The headline: Futures Traders Bullish On The Dollar For 1st Time Since December 2005.
The dollar furthered a modest rally Monday as markets awaited hints from the U.S. Federal Reserve about interest rate moves, and also economic figures from Washington. The dollar has now risen 3.6 percent since hitting an all-time low of $1.6018 against the euro on April 22, climbing on the belief that the U.S. Fed may finished cutting interest rates and that the U.S. economy may avoid a severe recession
In the second half of ’08 I expect the dollar to go significantly higher, says Guy Adami. Specifically I think it will be strong against the euro and my play is long dollar or short gold.
Be careful what you wish for, exclaims Jeff Macke. The weak dollar has been driving earnings for US-based multi-nationals!
I think the play is short the CurrencyShares Euro Trust and the CurrencyShares Japanese Yen Trust , adds Tim Seymour.
AFTER HOURS ACTION: FLUOR
The headline: Fluor Profit Jumps 63%
Fluor Corp , the engineering and construction company, said on Monday its first-quarter profit rose 63 percent, and raised its 2008 profit outlook, citing new business. Fluor's shares rose about 4 percent in afterhours trading.
I love this stock, says Guy Adami.
DOLANS BUY NEWSDAY
The headline: Cablevision To Buy 97% Stake In Long Island Newspaper Newsday For $650M.
Cablevision Systems has sealed a $650 million deal to buy the Long Island daily newspaper Newsday from Tribune, but analysts doubt the cable company can achieve cost savings to justify its investment.
Arghh, it just doesn’t make sense, exclaims Jeff Macke. They’re not a newspaper company yet they outbid Rupert Murdoch and Mort Zuckerman, two newspaper guys!
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Trader disclosure: On May 12, 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 (MSFT), (INTC), (ATVI); Najarian Owns (AAPL), (BKC), (ENER), (TSO), (XLF), (PDE), (DIS); Najarian Owns (AA) Calls, (C) Calls, (MSFT) Calls, (YHOO) Calls; Adami Owns (AGU), (BTU), (NUE), (C), (GS), (MSFT), (INTC); Seymour Owns (CSCO), (INTC), (MBI), (MER), (TSO); Seygem Asset Management Owns (VIP); NBC Universal Is The Parent Company Of CNBC
MCF & Co. Has Received Compensation For Investment Banking Services Within The Last 12 Months, Or Expects To Receive Or Intends To Seek Such Compensation In The Next Three Months, From EMCORE Corp.; MCF & Co. Is A Market Marker In (ENER), (EMKR), (FSLR)