STOCKS DROP 2%
Stocks tumbled more than 2 percent on Thursday after a report showing yet another drop in U.S. home sales prompted investors to take profits in financial shares, which had rallied over the past week. Meanwhile, the Dow fell the most in a month, as the rising price of oil compounded worries about the economy.
BANK STOCKS POUNDED BY 6%
Banks which have been incurring huge losses from the housing slump, slid after data showed June sales of existing homes hit a 10-year low.
Trading has been very volatile in recent weeks given a flood of serious setbacks stretching from a high-profile bank failure to the cobbling together of a last-minute rescue plan of the two pillars of the U.S. housing market-- Fannie Mae and Freddie Mac .
Karen Finerman recommended shorting financials a few days back. At the time she said the financials services sector could dip by 5%. I wouldn’t continue to short the Financial Select Sector SPDR, she says on Thursday’s Fast Money. But I would short BB&T Corp..
Conversely, Finerman boughtWashington Mutual on Thursday as a value play.
There’s speculation on Wall Street that Washington Mutual won’t be able to make their funding, counsels Tim Seymour Be careful.
Washington Mutual denied that rumor, adds Dylan Ratigan.
A lot of time the trade to make is no trade at all, counsels Jeff Macke. I think we’re in speculative no-man’s land.
OIL BACK ABOVE $125
Oil prices rebounded from a seven-week low on Thursday in what traders said was technical trading and a short covering bounce after recent declines left the market oversold.
Adding some support Thursday was the threat from a militant group to sabotage oil facilities in exporter Nigeria.
I think investors are playing defense again, says Joe Terranova. Personally, I bought gold.
In case you're wondering, in Q3 Terranova thinks oil will, once again, be "off to the races."
AFTER HOURS ACTION: CROX
Shares of Crocs lost half their value on Thursday after the shoemaker slashed profit and revenue forecasts for the second quarter and full year, citing a challenging U.S. market for its colorful shoes.
The last time something like this happened, it seemed to me that they didn’t have a handle on their business, says Karen Finerman. For the same money I’d own WaMu.
FORD POUNDED BY 15%
Ford stock dropped after it posted a $8.7 billion quarterly loss Thursday and wrote down the value of truck and SUV operations. Also, the automaker cautioned that it did not expect to see a U.S. economic turnaround until 2010.
In addition, Ford also announced a sweeping realignment of its North American operations intended to reduce its reliance on trucks and and SUVs by rolling out a range of smaller, more fuel-efficient vehicles and converting three truck plants to make cars.
I think there’s brand value here, says Tim Seymour. I own it as an international play.
Ford is going to be really, really hard to fix, counters Jeff Macke.
MICROSOFT DRAGS ON TECH
Microsoft Chief Executive Steve Ballmer on Thursday defended the company's need to make steep investments in its Internet business in order to compete with Google and said such moves could boost its value in time.
Speaking at the company's annual analyst meeting, Ballmer said its online businesses could eventually generate a majority of the economic value created by the world's largest software maker.
He also said that Kevin Johnson, who as president of Microsoft's largest business division spearheaded the company's pursuit of Yahoo! , is leaving the software maker.
Microsoft didn’t give investors a single reason to own their stock on Thursday, says Jeff Macke. I’m baffled why I’m long other than to say I’m self-abusive.
I’m long too, says Karen Finerman. Arghh!
AFTER HOURS ACTION: WYNN
After the bell Thursday Wynn Resorts said its second-quarter earnings more than tripled partly due strong revenue growth in Macau.
It’s a trophy wife trade, says Jeff Macke. Eventually they opened their mouth and you had to talk to them. It’s time to sell Wynn and all the casino names.
MOVER OF THE DAY: AMAZON.COM JUMPS 12%
Amazon shares leaped 13 percent Thursday after the Internet retailer showed that it doesn't seem to be bothered by the sputtering U.S. economy.
Chief Executive Jeff Bezos said Amazon suspects increased fuel prices may give it a "relative advantage" over other retailers.
"Even just driving 10 miles these days is a few dollars worth of gasoline," he said during a conference call with analysts. "And consumers, we suspect, are beginning to take that into account and try to do trip consolidation. So our free shipping offers and Amazon Prime are clearly of even more value to customers under that set of circumstances."
The weak economy doesn't seem to be bothing the Seattle-based e-tailer, according to Sanford Bernstein Analyst Jeff Lindsay. He tells the Fast Money traders that, "these guys are moving ahead like it’s 2006."
For the quarter that ended June 30, Amazon earned $158 million, or 37 cents per share. Amazon earned $78 million, or 19 cents per share, in the same quarter last year.
The company's revenue climbed 41 percent to $4.06 billion, including a 35 percent leap in North American sales. The number of total active customer accounts also jumped, rising 18 percent to more than 81 million.
“I think they can keep driving growth for a long time. But the questions is margins. How long until they get hit by oil? I think they can keep going for quite some time,” Lindsay tells Dylan Ratigan. “A lot of their delivery rates are locked in.”
In case you’re wondering, Jeff Lindsay’s price target on Amazon is $97. “I’d buy it on a dip,” he concludes.
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Trader disclosure: On July 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; Macke Owns (WMT), (MSFT); Finerman Owns (GS), (WM); Finerman's Firm Owns (SUN), (TSO), (VLO), (MSFT); Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (BBT); Seymour Owns (AAPL), (BAC), (F), (MER), (MSFT), (TSO), (BX); Seygem Asset Management Is Short (MTL); Seygem Asset Management Owns Gazprom
Terranova Owns (YHOO), (INTC), (IYT), (BNI), (GOOG), (CME), (RIMM), (VLO), (SA), (XLF), (FCX), (SU); Terranova Is Long Crude Oil September $154 Calls, Terranova Is Short Crude Oil September $130 Calls, Terranova Is Short Crude Oil September $130 Puts, Terranova Is Long Gold Futures (December)
Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.; Phoenix Investment Partners Owns More Than 1% Of (DBV), (RWX), (LNET), (EXR), (SKT), (DLR), (IGE), (ARE), (DBC), (ABD), (OFC), (CLB), (BLV), (CNTY), (FL), (HPC), (PSPT), (ESS), (OIIM), (BIG),(ENG),(PFD),(DRH)
Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO; Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
Charles Schwab Is A Sponsor Of "Fast Money"
Accounts Over Which Bernstein And/Or Affiliates Exercise Investment Discretion Own More Than 1% Of (AMZN); Bernstein Is A Market Maker In (AMZN)