The headline: Stocks close mixed.
The S&P 500 and Doweked out gains on Monday as record oil prices boosted energy shares, but the Nasdaq slipped after a chipmaker's warning about consumer spending hurt technology shares.
SANDISK SOURS NASDAQ
The headline: Nasdaq Drops as Hot Tech Stocks Roll Over on Warning From Chipmaker SanDisk.
Technology shares fell after the chief executive of semiconductor maker SanDisk warned on consumer spending levels. CEO Eli Harari told Reuters on the sidelines of a conference in Boston that "with the oil prices hitting $127 a barrel, discretionary spending is going to be affected."
This was just the market looking for a case to roll over, exclaims Jeff Macke. I’m no more worried about the affect of oil on stocks today than I was yesterday.
Well you should be, counters Pete Najarian. I don’t think we can afford to live in a society where gas is $4 a gallon.
I agree with Pete, adds Guy Adami. Oil should go lower in the long run but I can’t tell you when.
A MARKET ON TRACK
The headline: Rail Shares, Transports Are Market's Top Performers Monday.
Railroad stocks jumped to new all-time highs Monday, after a Stifel Nicolaus analyst upgraded Union Pacific to "Buy" from "Hold," suggesting a new management plan should boost shares over the next several years.
Look at Burlington Norhtern and Norfolk Southern, counsels Pete Najarian. However, you should know that these stocks have already run. If you get in this space now, also buy puts to protect yourself, he counsels.
I’m still bullish on this space, adds Guy Adami.
The headline: Microsoft Abruptly Returns To Yahoo With Proposal For Search-Ad Partnership.
Microsoft said it proposed an alternative deal to Yahoo rather than a full acquisition, but the move was unlikely to win favor with financier Carl Icahn, a person familiar with his thinking said.
The New York Times reported that Microsoft and Yahoo may form a partnership or joint venture for search-related advertising to take on Google which dominates the search market with a share significantly larger than a combined Yahoo and Microsoft.
Will this merger ever get done? Tell us now! Answer the Charles Schwab Question of the Day.
AFTER HOURS ACTION: DRYS
The headline: DryShips Q1 profit beats market expectations
Greek dry bulk carrier DryShips more than doubled its first-quarter net income, beating market expectations, helped by higher freight rates and an enlarged fleet.
Keep an eye on these spot rate shippers, counsels Pete Najarian, both DRYS and Excel Maritime could go higher.
I’d wait for a dip before buying DRYS, adds Guy Adami.
LOWE'S DOWN DIRTY SHAME
The headline: Lowe's Reinforces Economic Fears After Posting 18% Profit Drop.
Lowe's, the nation's second biggest home improvement retailer, reported a 17.9 percent drop in first-quarter earnings and lowered its guidance for the year on Monday as the slumping U.S. housing market and softer economy hurt sales. Its shares fell more than 2.5 percent in morning trading.
I like Home Depot better and on a dip, says Guy Adami.
TAKING DOWN DISNEY
The headline: Disney Has Bested Market In '08, But Will Consumer Weakness Eventually Trap The Mouse House?
Pali Media Analyst Richard Greenfield downgraded Disney Monday to “Neutral,” and he joins the panel to explains why.
We upgraded Disney to a “Buy” in January because investors had dire expectations for the theme parks, explains Greenfield. But the theme parks have performed dramatically better than investors expected. The question is now, what’s next? It’s hard for me to believe that Disney doesn’t see some impact from the overall economy.
Now, I realize Disney’s has never been stronger on the cable side. (Look at Hannah Montana and High School Musical.) But there’s concern on the film side. Especially when the Narnia sequel comes out and doesn’t perform as well as expected.
What's the bottom line?
I think investors should take profits now and get back in at a better level, he concludes.
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Trader disclosure: On May 19, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (C), (GS), (INTC), (MSFT), (AGU), (BTU), (NUE); Najarian Owns (AAPL), (TSO), (XLF); Najarian Owns (TE) Calls; Macke Owns (DIS), (INTC), (ATVI), (EMC); Finerman Owns (GS); Finerman's Firm And Finerman Own (HD) And (HD) Puts; Finerman's Firm Owns (GLNG), (MSFT), (SUN), (TSO), (VLO); Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm Owns SPX Index Puts; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM)
Tatro Owns (GLW),(SPY)