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Dow Up More Than 400 Points

DOW UP MORE THAN 400 POINTS

The Dow made another triple digit move on Monday this time soaring more than 400 points higher.

A sharp drop in the cost of banks borrowing dollars from each other raised hopes that global efforts to shore up the banking system were taking hold. A lack of confidence had spurred financial institutions to hoard cash.

Meanwhile, Fed Chairman Ben Bernanke lifted the sentiment on the Street after he told a Congressional hearing a second economic stimulus plan might be needed. His testimony marks the first time that the Fed chairman explicitly endorsed a second stimulus package.

With stocks at 5-year lows, thawing credit markets inspired investors to scour for bargains among beaten-down shares. Energy, utilities and materials companies led the way higher.

I saw some big outperfomance in the energy equities because they were so overdone to the downside. Look at the OIH and the XME , counsels Karen Finerman.

I like Transocean a lot, adds Tim Seymour.

Commercial paper finally saw net inflows of 10 billion, adds Joe Terranova. And Libor dropped. There was finally comfort in the market and investors turned to energy.

I’d keep an eye on the coal names, adds Pete Najarian. Look at Arch , Peabody and Massey . They’re ripping to the upside.

Also, volatility dropped 25% on Monday, he adds. I’m buying stocks and selling calls. As stocks run up call volatility gets smashed.

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AFTER HOURS ACTION: ORACLE

Oracle Corp. announced Monday that its board has authorized the repurchase of up to an additional $8 billion of common stock under its share repurchase program

There are a lot of companies out there with tons of cash and their stock hasn’t been this cheap in at least a decade, explains Karen Finerman.

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AMERICAN EXPRESS JUMPS AFTER HOURS

Shares of American Express jumped as much as 8% in after hours trade due to an earnings report that blew past analysts' estimates.

Expectations are marked down pretty low, says Joe Terranova. And stocks that behave favorably are those worth owning.

I like this stock though I doubt we’ve seen the peak of the credit cycle, adds Karen Finerman.

32% of their debt has to roll over in the next 6-9 months, counters Tim Seymour. That makes me a little nervous.

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AFTER HOURS ACTION: TEXAS INSTRUMENTS

After hours Monday Texas Instruments reported a profit that fell and missed forecasts by a penny, and the semiconductor maker gave a forecast for the fourth quarter that was lower than analysts' projections.

I wouldn’t rush into the chip sector, says Pete Najarian. There’s no need to bottom pick.

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BATTLE THE BEAR: DRUGS CONTINUE RUN

Drug stocks still look like the best place to do battle with the bear. Shares of Novartis climbed after a management shake-up while Merck and Pfizer also closed in the green.

I like Merck, says Joe Terranova. It’s a name that has been beaten up so significantly that this is a buying opportunity.

The Merck move over the past week has been extraordinary, adds Karen Finerman. It’s already climbed 25%.

I like the positive news out of biotech. Of all of them I’d keep an eye on Amgen , says Pete Najarian.





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Trader disclosure: On Oct.20, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money trader; Finerman Owns (GS), (MRK), (JNJ); Finerman's Firm Owns (MSFT); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (USO), (BBT), (COF), (IWM); Finerman's Firm Owns (OIH) Puts; Finerman's Firm Owns (NKE) Calls; Seymour Owns (AAPL); Seymour Owns (CCJ); Seymour Owns (MER); Seygem Asset Management Owns (FXI), (VIP); Najarian Owns (AAPL) And Is Short (AAPL) Calls; Najarian Owns (ADM) And (ADM) Call Spread; Najarian Owns (EMC) And Is Short (EMC) Calls; Najarian Owns (FCX) And Is Short (FCX) Calls; Najarian Owns (MS) And Is Short (MS) Calls; Najarian Owns (MSFT) Calls And Is Short (MSFT) Puts; Najarian Owns (SNDK) And Is Short (SNDK) Calls; Najarian Owns (BNI); Najarian Owns (TSO) Calls And Is Short (TSO) Puts; Terranova Owns (AAPL), (EXM), (FCX), (FTO), (MA), (NOV), (POT), (X), (VLO); Terranova Owns Dec. Crude Oil; Terranova Owns Dec. Gold;

Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV;

Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Virtus Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (CNW), (OFC), (DLM), (DRH), (DLR), (EPR), (EXR), (FL), (SLB), (LNET), (MAC), (DBC), (DBV), (SKT), (UA), (BLV), (VV), (CLB), (GWX), (IGE), (FSMXX); Virtus Investment Partners Owns Seagate Tax Refund Rights; Virtus Investment Partners Owns Seagate Technology Tax Refund Rights; Virtus Investment Partners Owns More Than 1% Of Shares Of Incitec Pivot Ltd.; Virtus Investment Partners Owns More Than 1% Of Shares Of Essex Property Trust Inc.

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