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Fast Money Now: Mid-Day Trades For Thursday Aug. 14

ON THE MOVE NOW

Before the opening bell, Wall Street got some sobering news about the U.S. economy. The Labor Department's Consumer Price Index rose at twice the rate expected in July for the fastest year-over-year inflation rate in 17-1/2 years. The jump was blamed on costlier energy and food costs.

However by mid-day the Dow and broader stock market were adding to gains, briefly driving the Dow industrials up 1 percent, as the financial sector rallied and oil prices declined.

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BANKS BOUNCING

Financial shares rebounded from an 8 percent slide over the last two sessions, in part on news that the US Securities Industry and Financial Markets Association (SIFMA) has given the go-ahead for Fannie Mae and Freddie Mac to include larger loans in up to one-tenth of their bonds that trade in the mortgage-backed securities (MBS) market.

Also late government data showed inflation pressures may have peaked, especially in light of the recent sell-off in commodity and energy markets. Some investors believe that could allow the Federal Reserve to at least hold off on rate increases.

Shares of Bank of America and JPMorgan Chase led the banking sector higher with the KBW bank index up nearly 3% mid-day.

The government is getting involved, says Jeff Macke. It’s hard to be short if the government is actively involved.

The market is rallying in the face of a bad start to the day, muses Qunt Tatro. That's interesting. Continue to watch the financials. If they fall take profits.

Any pullback in USB looks like a huge buying opportunity to me, adds Guy Adami.

I’m not excited, counters Tim Seymour. I didn’t like hearing this morning that wages were falling. I don’t think the consumer is in good shape. If you must trade the space, look at the Ultra Financials ProShares .



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OIL BACK DOWN

Oil prices pulled back slightly Thursday, a day after surging almost $3 a barrel, as waning U.S. demand for energy outweighed supply threats from the conflict in Georgia.

Wednesday’s strength in crude was hardly a reversal, says Guy Adami. With all the news out of Russia it should have gone significantly higher and didn’t.

Tim Seymour is more bullish. I don’t think global growth is going to collapse, he says. I would watch M&A chatter in the space. Keep an eye on BHP as well as Vale.

I think the trade here is UltraShort Basic Materials ProShares , counsels Quint Tatro. If the trend is truly broken commodities have a long way to fall. I’m also looking to short the Energy Select Sector SPDR but not yet.

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STREET YAWNS AT WAL-MART

Wal-Mart second-quarter profit jumped 17 percent, but the discount retailer forecast future results could miss Wall Street estimates as consumers worldwide deal with tough economic times.

Executives at the world's largest retailer said on Thursday that a boost from U.S. tax rebate checks, which spurred shopping in the latest quarter, was mostly over, and sales remain volatile as shoppers run out of money in between paychecks.

Wal-Mart and Costco remain the only two retailers that I like, says Jeff Macke. I remain long.

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TOPPING THE TAPE: RESEARCH IN MOTION

On Thursday Merrill Lynch reiterated it’s $170 price target on Research In Motion as the BlackBerry maker began shipping their ‘Blackberry Bold’ smartphone to Europe.

It’s tough to stand in the way of this stock, says Tim Seymour. I think technically it has room to go.

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TOPPING THE TAPE: AMGEN

Shares of Amgen enjoyed a nice pop on Thursday after Goldman Sachs added the biotech to its prestigious Conviction Buy List.

Amgen is a great company, says Guy Adami, but I think Celegene is a better bet in the space. Also look at Gilead .

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BUILDERS BOUND ON BAD NEWS

Despite word that existing home sales had slid to a 10-year low, the homebuilders are trading higher.

In the space I like Home Depot , says Guy Adami. If you wait for the housing market to turn you’ll be late to the party.

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GM REVVING HIGHER

Shares of General Motors revved higher Thursday propelling the Dow higher too.

The stock has tested $10 dollars three times, says Tim Seymour. I think it’s worth a look

If you want a pairs trade I’d get long GM and short Toyota as a hedge, counters Jeff Macke.

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OPTIONS ACTION IN THE ZONE:

Jon Najarian has spotted unusual options action in Watson Pharmaceuticals mid-day Thursday. Watson is trading higher despite a ruling that its generic drug 'Naproxen' poses a patent infringement.

Jon Najarian is also seeing heavy options action in Nvidia. He’s seeing “a ton” of out of the money calls and in the money calls trading.

I’m long both, he says.



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Trader disclosure: On Aug 14, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Quint Tatro Is The Principal Of Tatro Capital; Tatro Owns (C), (GS), (INTC), (JPM); Tatro Capital Owns (GS), (EEV), (QQQQ), (SPY), (SSO), (UYG)’ Adami Owns (C), (AGU), (GS), (MSFT), (INTC), (NUE), (BTU); Macke Owns (MSFT), (COST), (UUP), (WMT); Seymour Owns (AAPL), (EEM), (MER), (TSO); Jon Najarian Owns (WPI) Call Spreads, (NVDA) Call Spreads

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