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Fast Money HomeFast Money Rapid RecapAbout Fast MoneyFast Money BiosFast Money Web ExtraFast Money Disclaimer
Text Size
Aug.27
6:15 PM ET
Wednesday, 27 Aug 2008
Dow Jumps 90 Points
Posted By:Lee Brodie

DOW JUMPS 90 POINTS

The Dow [.DJIA  Loading...      ()   ] rose on Wednesday as surprisingly strong data on durable goods orders soothed some concern about the sluggish economy while Fannie Mae and Freddie Mac led a rally in financial shares.

I have a very hard time getting excited about this market, says Quint Tatro. I see nothing to do in it.

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STORY OF THE DAY: THE ECONOMY

The S&P [.SPX  Loading...      ()   ], was cheered on Wednesday by data showing new orders for big-ticket manufactured items jumped a surprisingly strong 1.3 percent in July. Boeing [BA  Loading...      ()   ] shares added nearly 2 percent after the data showed a 28 percent rise in orders for civilian aircraft.

"Durable goods orders were up very nicely, and the market is going up because that has helped people start to look beyond the valley of all the economic and credit concerns to better times ahead," said Al Goldman, chief market strategist at Wachovia Securities in St. Louis. "People are a little less pessimistic."

"I (also) think it was a good report," adds Deutsche Bank chief US economist Joe LaVorgna on Fast Money. "It showed a lot of firm exports which could lift the Q2 GDP number to close to 3% when it’s released on Thursday."

However, the report shows what’s already happened and it’s where we’re going that really matters.

"What scares me is the consumer," adds LaVorgna. "I think consumer spending could be flat or negative in the next quarter and (consumers) drive our economy."

As a result he thinks the weak consumer will keep this stock market, "at best range bound or more likely it's going to re-trace."

How should you trade?  "I wouldn’t buy equities quite yet,” he concludes.

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TROPICAL STORM BOOSTS OIL

Traders pushed the price of crude oil [US@CL.1  Loading...      ()   ] higher on Wednesday on forecasts that Tropical Storm Gustav will intensify into a hurricane as it ploughs toward the U.S. oil and natural gas platforms in the Gulf of Mexico

I have no idea what’s going on with the hurricane, says Guy Adami. But I’d take profits ahead of the storm. Also Exxon Mobil [XOM  Loading...      ()   ] is trading with nearly an 81-handle, he says. I’d sell it at current levels and buy it back around $78.

> Click here to find out how Joe Terranova recommends trading Gustav

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BANKS ARE THE BIGGEST GAINERS

Singapore's Temasek Holdings has received U.S. antitrust approval to raise its stake in Merrill Lynch [MER  Loading...      ()   ] to as much as 14 percent, according to Bloomberg.

Playing the financials are tricky, counsels Quint Tatro. I’m long the Financial Select Sector SPDR [XLF  Loading...      ()   ], he says but only as a trade.

And if you’re long USB [USB  Loading...      ()   ], adds Guy Adami, now is the time to take profits.

---------------(scroll down for more trades)---------------


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GREENBACK GIVES BACK

The dollar [UUP  Loading...      ()   ] erased gains on Wednesday due to a rebound in oil prices, as well as persistent concern about the U.S. economy and banking system.

Someone in Europe said there was going to be a rate hike, explains Guy Adami. But I don’t see any way they can do it.

I expect the euro to make a little bounce, says Jon Najarian, and then keep rolling over.



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APPLE LEADS TECH HIGHER

Apple [AAPL  Loading...      ()   ] led the tech sector higher with analysts and bloggers speculating that new Mac products could be on the way.

I also think we might see a new product or two, muses Jon Najarian. And it makes a lot of sense for Apple.

Expect tech to be a leader when the market turns higher, adds Joe Teraanova. Apple and RIMM [RIMM  Loading...      ()   ] are my favorites because they’re not directly exposed to the housing woes.

I agree with both guys, says Quint Tarro. Apple traditionally low balls estimates. If the company blows numbers away it’s exactly where you want to be.


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PICKED THE WRONG DAY TO TRADE AIRLINES

The airlines sector [XAL  Loading...      (