STOCKS RALLY FROM LOW IN FINAL HOUR
The Dow staged a late afternoon comeback on Tuesday after stronger-than-expected results and a positive outlook from computer maker Hewlett-Packard offset fears of more losses at Citigroup and other banks.
Through out the trading day stocks swung between negative and positive territory. Traders took heart that the market stayed above five-year lows.
"There's optimism that these lows are holding and so we had a bit of an opportunity rally here," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research in Cincinnati, Ohio. "There was no good news I saw today apart from Hewlett Packard."
Citigroup's shares fell 6 percent to $8.36, hitting a 13-year low, on concern that its plan to slash 52,000 jobs might not be enough to return the second-largest U.S. bank to health.
Although the S&P closed higher, earlier in the session, it tumbled to an intraday low of 826.84, below its 2008 closing low, and the Nasdaq dropped as low as 1,429.92.
Despite the indexes' wild swings throughout the day, investors' fear seemed to have ebbed, at least for the moment. The Chicago Board Options Exchange Volatility Index , lost 2.18 percent to end at 67.64. The VIX is Wall Street's favorite fear barometer.
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Although the stock market hit new lows and then came back it was really Exxon and Chevron as well as Home Depot pushing the Dow around. "This was a 'few stock' rally so don’t buy too much into it," says Pete Najarian.
"A lot of investors are talking about BUD coming out of the S&P which was replaced by Stericyle." That's important because money managers who own S&P’s might have been buying and in turn, creating articifical pressure.
"Neither you nor Mary Richards could make this day worthwhile," says Jeff Macke sarcastically. "Don’t read too much into Tuesday’s market."
"If you’re looking for a tell I really do continue to think that we’re going to see big trouble with commercial real estate," says Karen Finerman. Remember commercial real estate takes a long time to unwind and insurance companies often have commercial real estate on their balance sheet.
Sears and Target have real estate on the balance sheet, adds Jeff Macke. And it’s killing them.
OPTIONS POINT TO MORE REAL ESTATE PAIN
Pete Najarian is seeing unusual options activity in The iShares Dow Jones US Real Estate ETF (IYR).
Tuesday’s activity suggests to Pete that. “the IYR is not done going down.”
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Trader disclosure: On Nov. 18, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (DIS), (WMT), (MSFT), (UUP); Macke Is Short (YHOO), (TM); Najarian Owns (IYR) Put Spread; Najarian Owns (TSO) Call Spread; Seymour Owns (AAPL), (BAC), (F), (TSO); Finerman's Firm Owns (MSFT), (VLO); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (RTH), (USO)
CNBC.com with wires