STOCKS JUMP DESPITE OIL SURGE
The Dow and S&P 500 climbed higher on Wednesday after an unexpectedly strong report on the job market offset a surge in oil prices.
CRUDE REBOUND: OIL JUMPS MORE THAN $4
Oil rose more than $4 a barrel on Wednesday after U.S. government data showed a drop in gasoline stocks.
Additional support came from U.S. refinery problems, with BP cutting rates at its Texas City, Texas, plant due to mechanical problems. Top U.S. refiner Valero plans to cut gasoline production by an average of 330,000 barrels per day (bpd) in the third quarter at its 16 plants.
Oil services stocks rallied on Wednesday, explains Jeff Macke. I was impressed that the OIH snapped higher.
I like Halliburton adds Guy Adami. Or you can look at Schlumberger.
I own Transocean , says Karen Finerman. The valuation looks attractive.
I expect Exxon and ConnocoPhilips to generate big, big orders and that’s positive for the oil service sector, adds Pete Najarian. On a related note, Pete Najarian says, “because Suncor moved 7% on Thursday, I took some off the table.”
BANKS GAINING MORE BULLS
Bank stocks rose after the U.S. Federal Reserve announced new plans to further stabilize financial companies struggling with credit losses.
Meanwhile, at least one analyst is changing his mind about Merrill. After reacting positively to the latest write-down, Bank of America strategist Jeffrey Rosenberg issued a report Wednesday titled “On Second Thought.”
"Perhaps the initial euphoria over Merrill's asset sale and capital raise ... overstates the positive implications,.” he wrote. ”Merrill now finds itself effectively in the position of having sold off its upside but retaining its downside."
Financials took off late day, explains Pete Najarian. That really took me by surprise.
In only a week and half USB traded from $20 to $31 and I still think it has room on the upside, says Guy Adami.
I said yesterday that I think Merrill's news is negative for the sector, reminds Karen Finerman. It says to me more bad news lies ahead and I got short today, she reveals. I shorted BB&T .
AFTER HOURS ACTION: DISNEY
Walt Disney reported a profit and sales that topped analysts' estimates, but the company's shares dropped in extended trading.
The entertainment giant and world's largest theme-park operator said it earned 62 cents a share in its fiscal third quarter, excluding one-time items. Sales came in at $9.24 billion.
Lehman analyst Anthony DiClemente explains, "it wasn't as much of a beat as investors were hoping for. This is a company that has beat the last couple of quarters by 8 to 10 cents."
"(And) ad sales are a real concern. At ABC and ESPN ad sales have slowed in just the past few weeks," he adds. "I have an underweight rating and in a vacuum of information between quarters the stock will likely trade down."
I sold Disney ahead of earnings, exclaims Jeff Macke. They came out and said they’re doing great things and still the stock rolled over. That’s because the Street is concerned that the consumer can’t sustain this company.
AFTER HOURS ACTION: VISA
Credit card network Visa said that quarterly earnings rose 41 percent as fee revenue from international transactions rose.
The results were better than Thomson's estimate of 48 cents per share.
I would own Mastercard over Letter V anytime, says Guy Adami. “It’s been a volatile little sucker.”
> For complete coverage of Visa’s earnings click here
AFTER HOURS ACTION: SBUX
Starbucks traded higher in the after hours despite posting its first quarterly net loss since it went public in 1992.
Investors liked hearing that the java giant would close more stores than it would open next year. Starbucks now expects to have a net decrease of 60 stores in the U.S.
It’s going to take a long time for this to turnaround, says Jeff Macke. “If they hire people with mops and divest the music business I might get long.”
> For complete coverage of Starbucks earnings click here
TOPPING THE TAPE: COMMODITY STOCKS.
ArcelorMittal ,the world's largest steelmaker, said Wednesday its second-quarter profit more than doubled as it increased steel prices to defray higher costs for energy and iron ore.
Their numbers are stellar, exclaims Pete Najarian. Their only area of weakness is in coking coal which is used to make steel. Keep an eye on them.
I own Macarthur, adds Karen Finerman. But other than that I’d be flat.
I’m going to give you a new stock in the space, says Guy Adami. Look at Harsco. They are the largest renter of scaffolding in the industry. I think it’s a buy.
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Trader disclosure: On July 30, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (AAPL), (TSO); Najarian Owns (CSCO) Calls, (EMC) Calls, (XLY) Calls, (SU) Calls; Macke Owns (WMT), (MSFT), (COST), (ATVID), (DIS), (EMC); Adami Owns (C), (GS), (INTC), (NUE), (AGU), (MSFT), (BTU); Finerman Owns (GS); Finerman's Firm And Finerman Own (C) Leaps; Finerman's Firm Owns (FLS), (MO), (NOK), (PM), (RAI), (SUN), (TSO), (VLO), (RIG), (MCC); Finerman's Firm Is Short (SPG), (KIM), (XLF), (BBT), (IYR), (IWM), (MDY), (SPY), (IJR)
Terranova Owns (SU), (BNI), (IYT), (CME), (VLO), (SA), (XLF), (KOL), (FCX); Terranova Is Long Crude Oil $154 Call (September); Terranova Is Short Crude Oil $130 Put (September); Terranova Is Short Crude Oil $130 Call (September)
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)
Lehman Brothers And/Or Affiliate Has Recvd. Inv. Bank. Comp. From (DIS), (CBS), (TWX), News Corp., Viacom In Past 12 Mos.; Lehman Brothers Has Received Non-Inv. Banking Compensation From (DIS), (TWX), (CBS) In Last 12 Mos.(DIS), (TWX), (CBS), News Corp., Viacom Are Or In|Past 12 Months Have Been Investment Banking Clients Of Lehman Brothers And/Or Affiliate(DIS), (TWX), (CBS) Are Or In Last 12 Months|Have Been Non-Investment Banking Clients (Securities-Related Services) Of Lehman Brothers