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Stocks Stage Dramatic Late Day Rally

STOCKS STAGE DRAMATIC LATE-DAY RALLY

In the final hour of trading Wednesday the Dow Jones Industrial Average wowed the bulls by jumping 100 points closing above the psychologically important 8000 level.

Late buyers made big bets on the banks with JP Morgan among the strongest names in the blue chip index. Investors appear to be optimistic that this bank could follow in the footsteps of Goldman Sachs and report surprisingly strong numbers on Thursday. Also they’re betting that CEO Jamie Dimon did a good job at managing expectations.

Another factor that buoyed investor sentiment was news from American Express that credit card delinquencies were not as bad as feared. The firm said that the rate for loans at least 30 days delinquent -- an indicator of future defaults -- decreased to 5.1 percent from 5.3 percent.

Strategy Session with the Fast Money Traders

Since JPMorgan has run so far and so fast, I can’t help but wonder what kind of numbers will they have to put up to impress the Street, muses Pete Najarian.

It only makes sense to bet with the banks because the government is on your side, says Jeff Macke. I’d buy the dips and sell the rips.

I think American Express turned the market Wednesday after investors learned their charge-offs weren't so bad, adds Karen Finerman. If that’s a trend forming it’s very good news.

I’ve got my eye on U.S. Bancorp, adds Guy Adami. The stock has doubled but I have no reason to think that the stock can’t continue to run. It’s a buy on a pullback.

And keep an eye on the regional banks, adds Adami. The way the yield curve sets up – Fifth Third and others could be extremely profitable going forward.

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TECH ONLY SECTOR TO FALL

Tech investors showed little love for the Nasdaq on Wednesday with unhappiness stemming from Intel’s murky forecast. The chip firm did not provide guidance and as a result investors anticipated the worst.

As you may know, many tech investors watch Intel closely and consider their results a proxy for the overall health of the industry. That’s because Intel's chips serve as the nerve center for a wide range of computers.

I thought Intel’s quarter was fine, says Guy Adami. I think investors were taking profits. It’s a buy at $15.

I think you’ve got to like Intel at these levels, adds Pete Najarian.

They said inventories were going down, counters Jeff Macke. To me that means they’re not expecting a recovery any time soon.

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TOPPING THE TAPE: SIMON PROPERTY GROUP

Goldman Sachs must see something in Simon Property Group that the rest of the market doesn’t. They upgraded shares and added the stock to the Conviction Buy List .

This was not a good day to be short commercial real estate, chuckles Karen Finerman. But I understand Goldman’s decision; Simon Property is a good company with good management.

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TOPPING THE TAPE: GANNETT

Shares of Gannett popped on Wednesday ahead of earnings due out on Thursday. Analysts polled by Thomson Reuters expect Gannett to earn 25 cents per share on revenue of $1.45 billion. The revenue projection represents a 14 percent drop from last year's first quarter.

Most of the pain is concentrated at Gannett's 85 daily newspapers, including USA Today. But the McLean, Va.-based company's 23 television stations also have been pinched by the recession.

I like this stock, says Jeff Macke, because they’ve been beaten down something like 90%. I’m long but will probably sell if the stock goes to $6.

If you see 25 million shares or more trade in any given day, that’s your day to get out, counsels Guy Adami.

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BURGER KING PLUNGES 18%

Burger King said on Wednesday it saw a surprise drop in customer visits to its restaurants in March, shaking investor confidence and sending shares down 17 percent.

They’re just not as good as McDonald’s , says Jeff Macke. If you want to play fast food get long MCD; but I’d stay away from Burger King.

I like McDonald’s much better too, says Pete Najarian.

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JOIN THE SURGE?

It seems investors are shrugging off bad news with the Dow rising despite Intel’s murky guidance and negative comments from Wal-Mart’s CEO about stress among his customers.

If you don’t jump in now, will you be late to this party?

According to Joe Terranova, the short answer is yes. He says there’s been a dynamic shift in the market and although others talk about moving to the sidelines he sees no reason for it. I’d get long strong names in the financials and the energy sector.

And the Vix is below 40, adds Pete Najarian. That says to me that sentiment is not that bad.

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OPTIONS ACTION: TO YOUR HEALTH

Pete Najarian has spotted unusual options action in some health care stocks.

Larger than expected buying in the Varian Medical May 35-calls suggests to Najarian that this stock could soon move higher.

Also a spike in the volume of King Pharma. May 10-calls also leads Najarian believe this stock could soon move higher.

What’s the bottom line? Keep an eye on both of these names, says Najarian




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Trader disclosure: On Apr. 15th, 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), (WMT), (GS), (GE), (SDS), (GCI); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU) ; Finerman Owns (BAC) PreferredFinerman's Firm Owns (CTX), (MSFT), (RIG), ; (PBR), (UNH); Finerman's Firm Owns (BAC) Preferred; (WFC) Preferred; Finerman's Firm Is Short (BAC), (WFC), (MDY), (SPY), (USO); Najarian Owns (BX) Call Spread; Najarian Owns (C) Call Spread; Najarian owns (GS) Calls; Najarian Owns (INTC) Calls; Najarian Owns (JPM) Call Spread; Najarian Owns (PALM); Najarian Owns (RIO) Calls; Najarian owns (VAR) Call Spread; Najarian Owns (XHB) Call Spread

Terranova Owns (JPM), (AMGN), (DIS), (INTC), (XOM), (IBM)

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