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Halftime Report: Will Consumers Lead Us Out Of Recession?

Around lunchtime the Fast Money gang was wondering if consumers are going to lead us out of this recession. New data showed consumer confidence jumped to its highest level in 8 months – and the news sent the Dow soaring by triple digits on the hope the recession may be abating.

"(It’s a) huge number -- much higher than expected, obviously giving the market a good boost here," says Todd Clark, managing director of stock trading at Nollenberger Capital Partners. "The extent of that could help consumer spending and economic growth in general. It's a good thing," he said.

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Consumer confidence isn’t typically a reason why stocks rally, reminds Fast Money trader Joe Terranova. However, Tuesday's bounce says to me there’s tremendous resiliency in the equities market.

Patterns in the S&P 500 suggest a double top in stocks, counters Greg Troccoli of Opalesque. I booked profits against long positions at 916. I’m cautious right now.

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HOMEBUILDERS SHAKE OFF S&P CASE-SHILLER

Homebuilder stocks popped higher despite new information which showed prices of single-family homes in March fell 18.7 percent from a year earlier. However the same data also offered some bullish insights -- the pace of decline slowed for a second consecutive month.

It seems to me the move higher in the housing sector stems from a belief that the worst news is now out there, muses Jon Najarian. The data from the Case-Shiller Index was so bad – I think investors are asking themselves how much worse can it get.

I agree, echoes Jared Levy, I think this is capitulation in Case-Shiller.

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TOPPING THE TAPE: APPLE UP OVER 5%

Apple shares surged on Tuesday and was a top boost on the Nasdaq after Morgan Stanley upgraded the iPhone maker to "overweight," saying the company is emerging as the clear leader in the battle over mobile Internet and will see iPhone-driven earnings growth over the next two years

I like Apple, fundamentally explains Jared Levy. But there’s a lot of expectations for this company and I’d be selective in the sector. I don’t expect to see a surge until back to school time.

As long as the S&P 500 holds it’s upward momentum, I think it’s okay to be long Apple as well as RIMM, Google and IBM, counsels Joe Terranova.

In the space, I’m very cautious of Palm , adds Greg Troccoli. It could be a sucker’s rally.

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OIL, GOLD LOWER, WHEAT

U.S. crude oil futures fell on Tuesday as the dollar gained versus the euro and the market awaited OPEC's meeting Thursday amid expectations that oil ministers will leave production targets unchanged

Tuesday’s moves are all about the dollar, explains Joe Terranova. The dollar made gains on geo-political concerns over North Korea. But for the long-term I like commodities, ag, energy and gold for a strong broad market recovery.

Near-term I’d be a seller of gold and oil, adds Jared Levy, but only for the next few weeks. Longer-term I agree with Joe.

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COULD NORTH KOREA DERAIL THE ECONOMIC COMEBACK?

Overseas investors struggled with a case of the jitters after receiving word that North Korea fired two more short range missiles.

I think the ‘tell” is how China engages the rest of the world on how to address the North Korea issue, counsels emerging markets trader Tim Seymour. Until we know that, I would not form a trading thesis.


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