Lehman Shakes Up Stocks
PLUNGING LEHMAN KNOCKS STOCKS
Lehman Bros. stock plummeted after the WSJ reported the bank is mulling a $3B to $4B capital raise, although Lehman denied the rumors.
Even after such a drastic pullback, the traders agree that Lehman is not a buy here. This could be the precursor of a “serious problem,” Jeff Macke said. While it’s unlikely Lehman is another Bear Stearns , Guy Adami thinks there’s more pain in the stock to come.
GM MAY SELL HUMMER BRAND
GM considers selling its Hummer unit as part of a restructuring effort forced on by record gas prices.
GM is not a buy, according to Guy Adami. You can’t turn a company of that size around overnight. Instead, buy BorgWarner , which makes emission controls and drive trains for environmentally friendly cars.
ICAHN SEEKING YANG’S OUSTER
Carl Icahn says he will seek to oust Yahoo chief Jerry Yang if the proxy fight is successful.
Jeff Macke believes Microsoft will still take over Yahoo, only this time it’s going to be a “mercy killing” far below Yahoo’s original asking price.
Natural gas jumps to its highest price since December 2005.
If you strongly believe natural gas is going higher, Pete Najarian recommends individual nat gas stocks like Petrohawk Energy , Devon and Chesapeake . If you’re less sure, you can always stick with the U.S. Natural Gas ETF .
YES, IT HAS GOTTEN THIS BAD
One San Diego housing developer is offering “buy one, get one free” deal on homes.
Sure, it’s bad out there, but some of the homebuilders are still higher for the year. Guy Adami thinks the bottom in names like Hovnanian and Toll Brothers could be around the corner.
TOPPING THE TAPE: STEEL & MATERIALS
Steel and material stocks hang strong in a rough tape, adding to a market-beating performance this year.
Guy’s steel picks: U.S. Steel first, Nucor a close second.
BEN BACKS THE BUCK
Bernanke strongly defends the dollar and suggests the Fed is unlikely to cut interest rates further.
This change in rhetoric from Bernanke is meanginful, said contributor Tim Seymour. It means he would be wary of weak-dollar-dependant trades, especially in the commodities space. However, he’s bullish on Chinese oil stocks Petrochina and China Petroleum & Chemical .