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Apr.29

5:50 PM ET

Wednesday, 29 Apr 2009

S&P 500 Highest Since January 28th

Posted By:Lee Brodie

Topics:Stock Picks

S&P 500 HIGHEST SINCE JAN. 28

The S&P 500 [.SPX Loading... () ] climbed on Wednesday pushing through key technical levels with investors shrugging off a headline GDP number which was bearish, and instead focussing on GDP data that showed a rise in consumer spending and a decline in inventories - two signals that are bullish.

Then, the Federal Reserve backed up the positive sentiment when its said the economic outlook had improved modestly since its last meeting in March.

Wednesday's gains sent the S&P to its highest levels in 3-1/2 months while the Dow [.DJIA Loading... () ] scored its highest close since February.

Strategy Session with the Fast Money Traders

I think it’s time to take some profits, counsels Guy Adami.

We didn’t really break out on the S&P, counsels Jeff Macke. We’re still in a range and I too, would take some profits.

At this level on the S&P I'd be careful, adds Pete Najarian. However, even if we do pull back, I'm expecting higher lows on the S&P.

I too am cautious here, adds Tim Seymour. However earnings have beat expectations and that’s a strong fundamental.

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THE RALLY: FINANCIALS NOT STRESSED

Bank stocks [XLF Loading... () ] posted impressive gains Wednesday despite reports that “at least six of the 19 largest U.S. banks require additional capital, according to preliminary results of government stress tests.”

According to Bloomberg, “while some of the lenders may need extra cash injections from the government, most of the capital is likely to come from converting preferred shares to common equity.”

I wouldn’t put too much money on the stress tests, bristles Jeff Macke. Every time the government gets involved we’re left with a lot of noise.

Meanwhile investors kept an ear toward Morgan Stanley [MS Loading... () ] which held it’s annual meeting, Wednesday. CEO John Mack has said he is not likely to pursue a retail bank acquisition, but will focus on its Smith Barney deal, which will give Morgan Stanley a controlling stake in what is by some measures the country's largest brokerage.

Morgan Stanley needs to get above $26 before I can get excited, says Jeff Macke. Typically it gets to $26 and then it pulls back to the high teens.

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BREAKING NEWS: MGM MIRAGE

MGM Mirage [MGM Loading... () ] and Dubai World on Wednesday said they have reached an agreement with lenders on a plan to fully fund their $8.5 billion CityCenter joint venture on the Las Vegas Strip.

Under the plan, Dubai World and MGM will fund their remaining equity contributions to CityCenter through letters of credit.

In addition, CityCenter's lenders will immediately fund an $1.8 billion senior secured credit facility.

I think the news is already in the stock, says Jeff Macke.

In the space, I'd turn my attention to Las Vegas Sands [LVS Loading... () ], counsels Guy Adami. Frankly, it's up over 30% for the week. I’d take some off the table.

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TOPPING THE TAPE: COMMODITIES BOOST RALLY

Energy shares also provided a strong tailwind for stocks as the price of crude rose back above $50 a barrel following a much larger- than-expected decline in gasoline supplies. Energy behemoths Exxon Mobil [XOM Loading... () ] and Chevron [CVX Loading... () ] were two of the day’s biggest winners.

I l like BHP Billiton [BHP Loading... () ], Transocean [RIG Loading... () ] and Baker Hughes [BHI Loading... () ] on the gasoline numbers, says Tim Seymour. In metals, however I’m cautious. I think copper and iron ore and steel are in trouble here.

I also think Baker Hughes has room on the upside, adds Guy Adami. And I’d get long US Steel [X Loading... () ] with a tight stop.

Or take a look at Siemens [SI Loading... () ], adds Pete Najarian.

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TOPPING THE TAPE: CONSUMER STOCKS

Shares of Wal-Mart [WMT Loading... () ] gave the Dow a big boost after the retail behemoth said customers are spending more on discretionary items as payroll taxes come down and gasoline prices fall.

The world's largest retailer is seeing customers treat themselves to items such as sporting goods and bedding, using the extra pocket money generated by Obama’s tax cuts and lower gas prices, says Walmart U.S. CEO Eduardo Castro-Wright.

I’m not so sure what this represents, says Jeff Macke. I wouldn’t read too much into these comments.

I agree, adds Tim Seymour. I wouldn’t fly into the space on this news.

In retail, I’d keep an eye on Gap [GPS Loading... () ], says Guy Adami. Around $13.50 it’s a buy.

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FAST MONEY WORLD: EMERGING MARKETS EXPLODE HIGHER

The iShares MSCI Emerging Markets ETF [EEM Loading... () ] jumped substantially on Wednesday with America Movil [AMX Loading... () ], Latin America’s largest mobile phone company also surging.

I’m a little worried about emerging markets, says Tim Seymour. I think we could be ahead of ourselves.

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AFTER HOURS: FIRST SOLAR

First Solar [FSLR Loading... () ] on Wednesday reported quarterly earnings and revenue that topped Wall Street estimates, sending the U.S. solar company's shares up 9.4 percent in extended trade.

First-quarter net income was $164.6 million, or $1.99 per share, compared with $46.6 million, or 57 cents per share, a year ago.

I think the numbers are very impressive, muses Pete Najarian. I like what they’re doing.

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Trader disclosure: On Apr. 29th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (AAPL), (BAC), (EEM), (FXI), (PBR), (F); Seymour Is Short (X); Macke Owns (LVS), (WYNN), (GE), (SDS), (AAPL), (WMT); Najarian Owns (BX) Call Spread; Najarian Owns (INTC) Call Spread; Najarian Owns (MS) & (MS) Calls; Najarian Owns (PALM) & (PALM) Calls; Najarian Owns (RHT) Calls; Najarian Owns (VAR) Call Spread; Najarian Owns (XHB) Cal Spread; Najarian Owns (XLB) Call Spread; Najarian Owns (BYD) Calls

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