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Halftime Report: Is The Selling Over?

Thursday, 14 May 2009 | 1:20 PM ET

Bargain shoppers were driving both the Dow and S&P 500 higher midday as they gobbled up retailers such as Macy’s and Kohl’s after profit reports revealed losses, but also showed business wasn’t as bad as many had feared.

Investors also scooped up technology bellwethers such as Apple making the iPhone seller, king of the Nasdaq . Sentiment was further buoyed by Barclays which shot higher after the bank received an upgrade from Morgan Stanley.

We may be in the green but are we in the clear?

Fast Money Halftime Report
Traders weigh in on the best trades of the day, with Zachary Karabell, River Twice Research President; Joe Kinahan, thinkorswim; Greg Troccoli, Opalesque; Jared Levy, Peak6 Investments and Fast Money's Melissa Lee.

Instant Insights with the Fast Money Traders

It seems to me that people are under-invested and earnings have been decent, muses Fast Money trader Tim Seymour. That’s what’s I think is driving the mid-day run higher in stocks.

Technically we had the pull back I was looking for, reveals Greg Troccoli of Opalesque. However, I still think we could get another 10% on the downside.

It seems to me the market could be relatively flat for a while, muses Zach Karabell of RiverTwice Research. I think investors should play stock picker and buy best of breed stocks such as IBM on dips. In my opinion big blue has 20% upside, but it’s a long-term hold.

I also like IBM, adds Jared Levy of Peak6 Investments. I like the 100-95 put spread and I’m a buyer at current levels.

I would not be a buyer of IBM unless it pulls back to about $92, counters Troccoli.

If you can wait, I’d wait, echoes Seymour.

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WAL-MART FAILS TO WOW

Wal-Mart reported flat first-quarter earnings in line with analysts' estimates. Its chief executive said overall business was stable, adding that until unemployment eased, it remained cautiously optimistic about a timetable for the economic recovery.

I’d be careful playing retail, muses Zach Karabell. I wouldn’t rush into the consumer space.

I like Wal-Mart, counters Tim Seymour. They’re delivering and hitting their estimates. And their growth is coming from a consumer that will probably stay with them when the economy recovers.

I also think Wal-Mart will do well, adds Jared Levy. But I’m a seller of other retailers.


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GOT BANKS?

Bank shares are bouncing mid-day; should you buy into the close?

In the space I’d keep an eye on Key Corp, explains Jared Levy. And I like Goldman as a best of breed play.

I wouldn’t touch Goldman at these levels, counters Greg Troccoli. I think it goes down to $120. And I think JPMorgan is a buy at $27.

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OIL RETREATS...AGAIN

Oil fell toward $57 a barrel on Thursday after the International Energy Agency (IEA) forecast global oil consumption will fall this year at the fastest rate since 1981.

The Paris-based IEA, adviser to 28 industrialized nations on energy policy, said the rise in oil prices to a six-month high above $60 this week was due to sentiment rather than supply.

What's the trade?

It’s been a momentum trade but I think fundamentals will soon come back into play, says Addison Armstrong of Tradition Energy. As a result, I think it’s time to play oil from the short side. Demand is falling all around the world.


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Trader disclosure: On May 14th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders;

Seymour Is Short (NUE)
Seymour Owns (PBR)
Seymour OWns (TSL)
Karabell Owns (JPM)

CNBC.com with wires

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NASDAQ
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BARC
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GS
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IBM
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JPM MLP ETN
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KEY
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KSS
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M
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WMT
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SPDR FIN SEL
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AAPL
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