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Dow Plunges To New 2008 Low

Thursday, 26 Jun 2008 | 5:44 PM ET

DOW PLUNGES TO NEW 2008 LOW

Who needs theme park thrill rides when you’ve got Wall Street. The Dow recorded one of the year's worst losses Thursday after oil climbed to $140 for the first time ever.

Meanwhile, Goldman Sachs put out an alarming note about further losses that sent financials into a tilt-a-whirl like spiral. A separate Goldman note on the auto industry woes sent General Motors stock plunging to its worst level in 53 years.

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GOLDMAN PREDICTION PUMMELS BANK STOCKS

Freddie Kruger must be giving lessons. Goldman Sachs analyst William Tanona slashed his way through the financials today leaving Citigroup at its lowest level in nearly a decade.

Tanona also added Citigroup to Goldman's "Conviction Sell" list. The analyst expects Citi as well as Merrill Lynchto take another round of writedowns.

In his research call, Tanona recommended a "paired" trade in which investors short Citigroup, betting on a decline, and buyMorgan Stanley which he thinks is better positioned.

The move came as Goldmanitself was downgraded to market perform by analysts at Wachovia, who cited a poor outlook for the brokerage business for their decision. The call may have surprised some as Goldman is often considered to be one of the strongest investment bank in the U.S.

I wonder what Goldman’s agenda is, says Karen Finerman. I find it humorous that all the banks are downgrading one another. Typically on a day like today I get out my buy list, but I didn’t today because oil is such as wild card.

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OIL RECORD ABOVE $140

Oil prices surged nearly 4 percent to a record over $140 a barrel after Libya said it was studying ways to cut output in response to potential U.S. actions against producer countries.

Crude was boosted earlier in the day by the weak dollar and comments by OPEC President Chakib Khelil who said prices could rise as high as $170 this summer.

Libya is using the oil card for political gain in Washington D.C. explains Joe Terranova. What I don’t like is that our government had no response.

Stay with what’s working, says Guy Adami. I like Halliburton .

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NASDAQ DROP - RESEARCH IN MOTION, APPLE SLAUGHTERED.

Two of the Street’s favorite names were taken out to the woodshed, Thursday. Both Apple and Research In Motion were beaten senseless, the latter despite a surge in profits. (The profits were below estimates) Meanwhile, Oracle dropped like a rock after it suggested growth may show.

I think the way to play tech is with UltraShort QQQ ProShares, says Pete Najarian. In other words, short technology.

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GM HITS LOWEST SINCE 1955

We have even more slashing to tell you about. Goldman cut General Motors to a sell rating and warned it would have to raise capital. As a result the auto maker’s stock dropped to its lowest level since 1955.

GM doesn’t have a cash problem, says Guy Adami. It sets up for something interesting. Within the next few trading days it will be a buy, just not yet.

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BIGGEST GOLD JUMP IN 2 YEARS

Gold ended nearly 4 percent higher as funds poured into commodities after tumbling stocks boosted the appeal of the precious metal as an alternative investment.

Meanwhile, the dollar had run up against other major currencies earlier this month on expectations of an imminent U.S. rate hike. On Thursday, it stood at a near three-week low against the euro.

I don’t like gold. If you must play it look at Freeport McMoRan, says Joe Terranova. Personally, I bought dollar index futures toward the end of the day because I expect the government will come in and support the dollar. If you agree and want to play the dollar from the longside look at the PowerShares DB US Dollar Index Bullish .

I still think gold ultimately goes lower, adds Guy Adami.

If you want to play commodities go with coal, exclaims Pete najarian. I like Alpha Natural Resources. Or play oil with the United States Oil Fund.

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NIKE LEADS CONSUMER PLUNGE

Shares of Nike dropped on Thursday after the athletic footwear and apparel maker reported fiscal fourth-quarter profit rose, but acknowledged a difficult consumer environment in the U.S.

I think Nike is probably worth a look, says Karen Finerman. It’s a wonderful company.

I love Nike at this level, adds Pete Najarian.

I think we might have seen capitulation in this name, Guy Adami says.

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CHARTS SAY TOO SOON TO BUY

How do the charts suggest trading the current market environment. For insights we turn to Oppenheimer chief market strategist, Carter Worth.

By all accounts I don’t think the market is anywhere near finished, says Worth. For every industry group that has succumbed there’s another that hasn’t broken yet. The market will only be oversold when stocks at 52-weeks low have broken and those in steady uptrends have started to succumb.

My presumption is that we will break and head back to the lows of 2006. So I’m looking for 1220 on the S&P .

Word on the Street
The Fast Money traders take a look at today's top business stories.

For more of Carter Worth’s technical analysis please watch the video.














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Trader disclosure: On June 26, 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), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Finerman Owns (GS); Finerman's Firm Owns (MO), (MSFT), (PM), (SUN), (TSO), (VLO), (AXP), (DVA); 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), (SPY), (IWM); Najarian Owns (AAPL), (ANR), (CHK), (RIMM), (TSO), (XLF); Najarian Owns (MER) Puts; Najarian Owns (NUE) Calls, (QID) Calls, (SLB) Calls, (YHOO) Calls; Terranova Owns (BNI), (CME), (FXC), (LUV), (GOOG), (INTC), (IYT), (XLF), (SU), (YHOO), (FCX); Terranova Owns Dollar Index Futures

Terranova is chief alternatives strategist at Phoenix Investment Partners;; Phoenix Investment Partners Ltd. Owns (RWX), (DBC), (DBV), (IGE), (AAI), (ALK), (AMR,) (APA), BP plc, British Airways plc, (CHK), (CVX), (COP), (CAL), (DAL), ENI SPA, (XOM), Gazprom, (HA), (HES), (HOC), (HSE), (JBLU), Lukoil, (MRO), (MUR), (OXY), Petrobras Intl Fin, Petro-Canada, (PBR), Petroleos De Venezuela, (QAN), (RJET), Royal Dutch Shell plc A Shares, (SKYW), (LUV,) (SU), (TSO), Texaco Capital, Total SA, (UAUA), (LCC), (VLO)

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DJIA
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ANR
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C
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FCX
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GM
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GS
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HAL
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MS
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NKE
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ORCL
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QID
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BB
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USO
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UUP
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AAPL
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