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Fast Money HomeFast Money Rapid RecapAbout Fast MoneyFast Money BiosFast Money Web ExtraFast Money Disclaimer
Text Size
Aug.26
5:54 PM ET
Tuesday, 26 Aug 2008
Dow Ends In The Black
Posted By:Lee Brodie
Sectors:Oil and Gas

DOW ENDS IN THE BLACK

The dollar rose and the Dow [.DJIA  Loading...      ()   ] edged higher on Tuesday as optimism about consumer confidence and the struggling housing market overcame fresh worries about the flagging U.S. economy and financial sector.

The tape is centered around the financials, says Quint Tatro. It’s impossible to predict and I recommend sitting on the sidelines in financials and wait things out.

For me defense stocks are working in this market, says Guy Adami. Look at Lockheed Martin [LMT  Loading...      ()   ], Raytheon [RTN  Loading...      ()   ] and Rockwell Collins [COL  Loading...      ()   ]. I like all three.

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STORY OF THE DAY: DOLLAR RALLY

The dollar [UUP  Loading...      ()   ] climbed to six month highs against the euro and held gains after the minutes from the last Federal Reserve meeting provided no surprises.

"This is a big change," says TJM Institutional Services trader Jim Iuorio, "it’s not a correction.  We’ve broken some technical levels and it’s a big deal."

The move in the dollar will likely  pop the oil bubble and, as a result, airlines and shipping are the most likely to benefit according to Iuoio. But he doesn’t like companies with big international exposure, “I’d look at the more regional airlines,” he concludes.

I agree 100%, says Guy Adami. I think the dollar has a long way to go. Also Europe seems to be at the beginning of a downturn, he adds. I can’t imagine the EU raising rates. My trade is to sell gold, he counsels. And avoid the miners such as Newmont Mining [NEM  Loading...      ()   ].

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OIL CLIMBS 1%

Oil [US@CL.1  Loading...      ()   ] rose as Hurricane Gustav churned through the Caribbean and took aim at U.S. oil and natural gas installations in the Gulf of Mexico. Energy shares rose on fears Gustav could wreak havoc on Gulf installations.

"All of the oil platforms off Texas and Louisiana will probably be at risk, but that's real long-range," Eric Wilhelm, a senior meteorologist at AccuWeather Inc, told Reuters. Gustav could hit the Gulf as a Category 3 hurricane, he said.

I think the energy market is confused right now, says Joe Terranova. The hurricane should be bullish for refiners but it hasn’t been.

Nat gas stocks might be worth a look, adds Guy Adami. Look at Apache [APA  Loading...      ()   ] and XTO Energy [XTO  Loading...      ()   ]. Also Schlumberger [SLB  Loading...      ()   ] and Halliburton [HAL  Loading...      ()   ] , he counsels.

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FANNIE, FREDDIE HIGHER AGAIN

Investors were little troubled by news from the FDIC that 117 banks were on its troubled banks list at the end of the second quarter, up from 90 after the first three months of the year.

FDIC chairman Sheila Bair said that more banks will come onto the list as credit problems worsen, but she categorized 98 percent of U.S. banks as well capitalized.

Bair also said the amount of securities held by U.S. banks and issued by troubled mortgage finance giants Fannie Mae [FNM  Loading...      ()   ] and Freddie Mac [FRE  Loading...      ()   ] was "not problematic."

I think the market is now digesting these reports and moving back to the sidelines, says Joe Terranova. Why get involved?

I would not be buying Freddie or Fannie, adds Jon Najarian.




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