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Banking On A Bottom?

The Dow closed lower on Tuesday with stocks slipping on concerns about the economy after consumer confidence fell to a 16-year low. Also a profit warning from United Parcel Service didn’t help buoy investors’ spirits.

BANKING ON A BOTTOM?

Financials turned around Tuesday mostly on value buying and speculation that UBS could become a takeover target.

Forget the rumors, says Pete Najarian. There were a lot of speculative options trading. "It seems the someone is looking for UBS to come back on the 2 for 1 split that was unannounced."

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AG LAGS

On Tuesday UBS upgraded their price target for fertilizer maker Potash from $250 to $285. Despite the positive news, shares of Potash closed lower.

If you’re long Potash I’d take some profits, counsels Guy Adami.

Meanwhile, Swiss agrochemical company Syngenta said Tuesday it has signed a crop-protection technology agreement with U.S. specialty chemicals maker DuPont.

Under the deal's terms, the companies will share the costs to prepare regulatory studies for DuPont Cyazypyr, a new insecticide aimed to control moths and sucking insects such as leafhoppers and aphids.

Also, keep your eye on Intrepid Potash , says Jeff Macke. It did two and half times normal volume, peaked early in the day and then sold off.

That just seems like rotation to me, counters Pete Najarian. I wouldn’t read too much into it.

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A CRUDE FINISH.....

Oilfutures ended a choppy session almost even as traders await news on supply data as well as the outcome of the Fed meeting. Retail gas prices, meanwhile, slid below a national average of $4.07 a gallon.

I’m really quite concerned about the impact of oil prices on the economy, says Karen Finerman. Right now for every 100 dollars I'm long, I’m 54 dollars short as a hedge.

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INFLATION OUT OF CONTROL?

Dow Chemical , the biggest U.S. chemicals manufacturer, said Tuesday it will raise prices for its products by as much as 25 percent, institute freight surcharges and cut back on output of some products because of soaring energy prices.

Dow Chemical seems to have pricing power, says Guy Adami, but I wouldn’t buy this stock at current levels. I do, however, think the steel stocks are worth your time.

> Check out how Adami recommends trading in
Steel Still Works

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PROFITS IN AISLE 2

Kroger , the largest U.S. grocery chain, Tuesday posted a better-than-expected quarterly profit, helped by an emphasis on lower prices, gasoline discounts and other efforts to appeal to cash-strapped consumers.

I like the way this company has positioned themselves, says Jeff Macke. They’re taking market share from the higher end grocers.

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TOPPING THE TAPE: DRUGS

Lots of news out of Big Pharma on Tuesday. Merck climbed due to strong sales of Vytorin And Zetia, shares of Novo Nordiskrose after Goldman upgraded the stock to "Buy" from "Neutral," and Novartis popped after it received an upgrade from Exane BNP.

I’ve been trying to pick bottoms in Merck for a while and it hasn’t worked, says Guy Adami. Instead, I’d look at Celgene .

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KODAK MOMENT

Eastman Kodak said Tuesday it is buying back up to $1 billion, or about a quarter, of its outstanding stock, by tapping a $581 million tax refund and a cash surplus the picture-taking pioneer has amassed since selling its health-imaging business early last year.

I like buybacks, says Karen Finerman. I think it’s a good use of capital.

Hey what do most parents think of their kids, they think they’re above average, says Jeff Macke. And that’s how the board feels about it’s own stock.

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ALL TALK AND NO ACTION....

The Federal Reserve began it’s two day policy meeting on Tuesday with many investors expecting them to leave rates unchanged at the meeting’s conclusion, Wednesday.

What's the trade heading into the Fed announcement? For insights we turn to Jim Iurio, futures trader with TJM Institutional Services

As of this morning, the futures market was pricing in a 90% chance of a rate hike in August. But those people are seeing things that I certainly don’t see, says Iurio. I don’t think the Fed can raise rates until the Winter because they can’t tighten in the face of a slowing labor force and a shaky credit market. It seems to me that the futures market is wrong.

The fed won’t hike rates in this environment adds Jeff Macke, because it’s a confidence game.

I think the Fed has to raise rates, counters Guy Adami. And probably by the end of the year.





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Trader disclosure: On June 24, 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 (AGU), (C), (GS), (INTC), (BTU), (NUE), (MSFT); Macke Owns (DIS), (WMT), (MSFT); Najarian Owns (AAPL), (HD), (NOK), (TSO), (XLF); Najarian Owns (WFMI) Puts, (MER) Puts, (DHI) Puts; Najarian Owns (YHOO) Calls, (EK) Calls, (UBS) Calls; Finerman Owns (GS)
Finerman's Firm Owns (AXP), (MSFT), (NYX), (PZN), (TSO), (VLO), (PPH); Finerman's Firm Owns SPX Index Puts; Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY); Finerman's Firm And Finerman Own (HD) And (HD) Puts

Iuorio Is Short S&P 500 Index Out-Of-The Money Call Spreads; Iuorio Owns (C)

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