DOW CLOSES JUST SHY OF 8,000
The Dow rallied for a third day on Thursday, and traded above 8,000 for the first time since early February on an intraday basis. The market optimism was largely due to a belief that changes to a bank-accounting rule will likely shore up the volatile financial sector in the short term.
The G20 also lifted sentiment after they announced an additional trillion dollars to support the International Monetary Fund and boost flagging trade.
Industrial, technology, consumer discretionary and energy stocks were the biggest gainers after government data showed U.S. factory orders rose in February for the first time in seven months, adding to positive economic news earlier in the week.
Strategy Session with the Fast Money Traders
I was a seller of financials early in the day, counsels Jeff Macke. It feels like investors are chasing stocks and that’s the sign of the end of a rally; not the start. I think we’re running on fumes. If you’re buying stocks on Thursday you’re trading wrong. Sell the rips and buy the dips!
It seems that money is going back to work, counters Guy Adami. I still think the S&P marches to 900.
Bullish comments from Bank of America CEO Ken Lewis probably added fire to the rally, muses Karen Finerman. (Lewis believes the U.S. economy may bottom out in the second half of this year.) But I think its all about jobs going forward and the jobs number on Friday should have a big influence on the market.
It seems to me the Vix is not a believer in this rally, muses JJ Kinahan.
COMMODITIES & MATERIALS SOAR ON HOPE OF GLOBAL GROWTH
The industrial sector ranked among the top gainers in Thursday’s broad-based rally after data showed new orders received by factories rose 1.8 percent in February breaking six months of declines and boosting hopes of a start to climbing out of recession.
I think the commodities markets may have put in a bottom, says Guy Adami.
AFTER HOURS ACTION: RIMM
After hours Research in Motion reported improved earnings that topped estimates and gave an outlook that was well ahead of analysts' forecasts. Its shares skyrocketed about 20 percent.
Solid demand for smart phones helped boost results despite the recession, RIM said. The maker of the popular BlackBerry line of handheld devices reported earnings of 90 cents a share in its fiscal fourth quarter, compared with a profit of 72 cents a share last year.
Goldman Sachs said to buy RIMM ahead of earnings, reminds Guy Adami. Kudos to them. I think it’s worth a look on a pullback.
Meanwhile, Verizon might be ahead of itself right now, he adds. However on a pull back VZ and AT&T are both interesting.
In tech, I’m long Apple , adds Jeff Macke. It works.
TRANSPORTS KEEP ON TRUCKIN’
The Dow Jones Transportation Index rallied Thursday and with its gain today, the Dow Transports is now up 40% from its March low of 2,134.21 - outpacing all the other major averages.
Bulls would argue that the index’s recent strength may in fact be a good indication for the broader economy. Many note that a recovery in the sector is one of the first signs of improving economic conditions. Remember, as the overall economy improves and consumer demand begins to rebound, companies will need to ship more goods from one place to another via trains, trucks, and planes.
I think you have to ask yourself if the move is too much, muses Guy Adami. Just look at the move in FedEx . That stock looks like its ahead of itself.
I was surprised to see the strength in the airlines on Thursday, adds JJ Kinahan. I don’t think they’re going to soar but they do seem to be rallying a little.
MEDIA CAN’T BE STOPPED
Big media names including CBS and News Corp. jumped on Thursday as the broader market rallied. Are the media companies a buy despite falling ad revenue and new forms of competition?
There’s just no way that CBS is worth 20% more Thursday than it was on Wednesday, says Karen Finerman. No way. I do not view this as a sea change, at all.
It seems like a classic relief rally, adds Guy Adami.
OPTIONS ACTION: PHARMA SECTOR
JJ Kinahan has spotted unusual options action in Forest Labs.
Unusual call buying suggests to JJ Kinahan this stock could go higher. He says it’s a great place to be long.
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Trader disclosure: On Apr 2nd, 2009, 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 (WFC), (AAPL), (GE), (GS), (MOS), (WMT); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Kinahan Owns (AA), (BAC), (C), (MSFT), (YHOO); Finerman's Firm Is Short (IJR), (MDY), (SPY), (USO), (IWM), (BAC), (BBT), (WFC); Finerman's Firm Owns (MSFT), (PBR), (RIG), (AXYS), (SRS); Finerman's Firm Owns (WFC) Preferred, (BAC) Preferred, (BAC) Preferred
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