Lehman Plunges; Weighs On Markets
LEHMAN PLUNGES, WEIGHS ON MARKET
The Dow closed with modest gains as oil prices retreated. However, Lehman Brothers weighed down the market by announcing their first quarterly loss since being spun off by American Express in 1994. The bank also said it would raise $6 billion through a stock issuance to bolster its capital base.
Investors tried to shake off the news, but by the end of trading all the financials rolled over, explains Jeff Macke. A body of rhetoric is building around a case for rates going up sooner rather than later.
I think it’s the Fed’s attempt to try and do something about oil. Especially with the price of oil pegged so closely to the dollar, adds Karen Finerman.
To heck with financials! Don’t bottom pick the banks or you’ll get a handful of something, exclaims Pete Najarian. Keep an eye on what’s working in the Dow like McDonald’s .
> Did Lehman's Plunge Mark The Bottom?
After much anticipation, Apple introduced the new iPhone on Monday but investors appear under whelmed. The stock dropped.
“I think Apple already had a tremendous run into the developers conference so I’m not surprised to see the stock lower today,” says Pete Najarian. “I think it’s cheap and I’m long.”
An 8 gigabyte model will sell for $199 starting July 11th. A 16 gigabyte model will cost $299. They'll come in a black case with a white case optional on one model. The devices are to roll out initially in 22 countries.
"I think it’s big news,” says Piper Jaffray analyst Gene Munster. “The iPhone went from being a niche (item) to mass market. (At the current price point) I think it could triple demand.”
“Most investors have not seen the iPhone as an “invsestable” theme but today they will because demand should skyrocket.”
OIL RECORD RUN OVER?
Oilfinished more than $4 lower, falling to nearly $134 a barrel, after surging an unprecedented $16 in the previous two sessions. The move lower was due in part to Treasury Secretary Henry Paulson who said he wouldn't rule out intervention to stabilize the dollar and Saudi Arabia’s decision to call a meeting and discuss crude prices that it called unjustifiably high.
At the pump, the national average price of a gallon of regular gas rose 1.8 cents overnight to a record $4.023, according to AAA and the Oil Price Information Service. Prices first moved above $4 nationally on Sunday, though they've been higher than that in many parts of the country for weeks.
Whether oil is up or down I think investors should stick with the oil services stocks such as Halliburton , says Pete Najarian.
WHY DO THE FRENCH LOVE MCDONALD'S?
McDonald's , the world's largest restaurant chain, said on Monday global May sales were up a stronger-than-expected 7.7 percent at established restaurants, and its shares rose more than 4 percent. Overseas sales drove the results and have been outpacing domestic results for some time at McDonald's, which has been heavily promoting its Dollar Menu during the current U.S. economic slowdown.
I think this stock will continue to rock, says Jeff Macke.
Also check out Yum! , counsels Tim Seymour, for growth overseas.
AG STOCKS AWESOME
Corn futures continued their climb, rising to a record for a third straight session Monday as heavy rains flooded fields and battered crops in Midwestern states.
Farmers are worried that excessive rain in the U.S. Corn Belt will damage recently planted crops and hurt yields, adding to the food inflation that has driven up the price of everything from eggs to meat to bread. Last week's rain-fed jump in corn prices was the largest one-week rally in the contract's history.
Look at Monsanto , counsels Pete Najarian.
OPTIONS ACTION: TITANIUM METALS.
Unusual options action in Titanium Metals suggests to Pete Najarian this stock could soon move higher.
As planes need to get lighter I think titanium demand will increase, says Tim Seymour. I like this stock.
WILL ICAHN'S WAR OF WORDS WORK?
Carl Icahn fired off another harsh letter to Yahoo , this time blasting the Internet firm for failing in its growth plan.
It’s starting to look a little messy, says Jeff Macke.
OPTIONS ACTION: GAME STOP
Unusual options action in GameStop suggests to Pete Najarian this stock could soon move higher.
I’d use this opportunity to get out of the stock, says Jeff Macke. We’re well into the videogame cycle.
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Trader disclosure: On June 9, 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 (EMC), (ATVI), (INTC), (WMT), (MSFT), (DIS); Pete Najarian Owns (AAPL), (BKC), (TSO), (XLF), (HPQ), (AMLN); Pete Najarian Owns (AA) Calls, (GME) Calls; Pete Najarian Owns (LEH) Puts; Finerman Owns (GS); Finerman's Firm Owns (AAPL), (MSFT), (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); Seymour Owns (AAPL), (AA), (INTC), (MER), (TIE), (TSO), (F); Seygem Asset Management Owns (EEM), (HAL), (TTM), (MBT), (GAF)
Piper Jaffray Received Non-Investment Banking Securities-Related Compensation From (MCHX) During The Past 12 Months; Piper Jaffray Received Non-Investment Banking Securities-Related Compensation From (SOHU) During The Past 12 Months
Piper Jaffray Is A Market Maker In (AAPL), (ADBE), (ADSK), (BIDU), (CHKP), (CNET), (GOOG), (MCHX), (MFE), (MOVE), (SINA), (SOHU), (SYMC), (VRSN), (YHOO)