BREAKING DOWN THE FED DECISION
The Dow fell for the fourth day while the S&P closed well off the day's highs on Wednesday after the Federal Reserve reiterated concerns about the economic outlook at the end of its policy meeting.
As expected, the Fed left the benchmark fed funds rate at almost zero, and said it would continue its program of purchasing U.S. government bonds and mortgage-related debt. However, stocks pulled back after the Fed did not suggest in its statement that it sees any notable recovery any time soon.
How should you position yourself?
Strategy Session with the Fast Money Traders
I don’t think this was a constructive day at all, muses Guy Adami. The reversal was pretty severe.
I think the play is to fade the Fed move, counters Jon Najarian. I expect the market will trade higher tomorrow.
Nothing the Fed said was particularly surprising, adds Karen Finerman.
There were some minor tweaks to the Federal Reserve's statement today, adds CNBC’s Steve Liesman, but otherwise Karen’s right, the major thrust of the Fed's policy to combat the financial crisis remains in place.
* As you can imagine Steve Liesman has a lot to say about Wednesday’s Fed statement.Click here to read more from Liesman.
It seems to me the market got a little disappointed by speculation that Ben Bernanke was involved in a cover up, adds Joe Terranova.
The Liquidator is referring to comments made by Representative Darrell Issa (R-CA) in which he suggested the Federal Reserve sought to hide its involvement in Bank of America's acquisition of Merrill Lynch.
Bernanke is scheduled to testify before Congress on Thursday. We'll be all over it.
AFTER HOURS: JEFFERIES
Jefferies Group, an investment bank focused on mid-sized companies, on Wednesday projected second-quarter net profit and revenue well in excess of analyst forecasts, and its shares rose 8.8 percent in after-hours trading.
The New York-based company said it expects net earnings of more than $50 million, equal to about 29 cents per share, on record net revenue exceeding $500 million.
I really think this company is doing everything right, counsels Guy Adami. However when I look at valuations I think it might be a good time to take profits.
TOPPING THE TAPE: TECH
Meanwhile, the Nasdaq made gains on Tuesday led by strength in Orcale which topped Wall Street forecasts Tuesday, after the bell.
Also, Oracle's chief financial officer, Jeff Epstein, said in a statement that Oracle executed "substantially better" than the company expected. Investors took the comments to mean that the economy may be stabilizing.
In the space, I like Oracle as well as IBM, counsels Joe Terranova. I think these are names you want to own for the long-run.
I wouldn’t pile into Oracle at these levels, counters Guy Adami. I do like it for the long-term but in the short-term I think it could roll over especially if the market rolls over.
OPTIONS ACTION: LEGG MASON
Jon Najarian has spotted unusual options action in Legg Mason.
The volume of calls traded suggest to Najarian that the stock could move higher. Najarian speculates it could be a takeover target.
DOG OF THE DOW: BOEING
Boeing dragged down the Dow for the second day in a row after the U.S. Army canceled its Future Combat Systems modernization program. Boeing had been the military’s top contractor for the project.
One day earlier the company postponed the first test flight of its 787 Dreamliner for a fifth time, citing a structural problem.
I think investors just threw in the towel saying they don’t have a handle on their business, muses Karen Finerman. I think there will be a better time to buy it.
OIL TRADE STRUGGLING
U.S. crude oil futures ended lower on Wednesday due to gains in the the dollar as well as new data which showed gasoline supplies rose much more than expected last week.
The price action sort of scares me, counsels Guy Adami. I’d take profits.
If oil doesn’t get back above $71 and the Transports fail, I think oil heads toward $60 pretty quickly, said Addison Armstrong on Fast Money’s Halftime Report.
AFTER HOURS ACTION: BED BATH & BEYOND
Bed Bath & Beyond on Wednesday reported an unexpected rise in quarterly profit as the retailer cut costs to offset slumping consumer demand for home furnishings, and its shares rose 6 percent in the aftermarket.
Net income for the fiscal first quarter ended on May 30 rose to $87.17 million, or 34 cents per share, from $76.78 million, or 30 cents per share, a year earlier.
AFTER HOURS ACTION: NIKE
Nike posted better-than-expected quarterly earnings but its forward orders fell 12 percent, sending shares of the world's largest athletic shoe and clothing company down 5 percent.
Nike, which is shedding 5 percent of global staff as part of a broader push to lower costs in a tough economy, said net income in its fiscal fourth quarter ended May 31 fell to $341.4 million, or 70 cents per share, from $490.5 million, or 98 cents per share, a year earlier.
This stock looks interesting to me, says Guy Adami. I think it could hold $49.50.
I agree completely, says Jon Najarian. Nike down $3 from Wednesday’s close is attractive.
BULL MARKET OR BS?
With the S&P 500 essentially flat for the year, how should you be trading? For insights we turned to Patty Edwards of Storehouse Partners.
Edwards told us she expects the S&P to remain caught in a range with the SPY bouncing between 88.5 – 95. However she does think the weak consumer is a trend worth trading and suggests capturing consumers through discounters such as Wal-Mart and Kohl’s .
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Trader disclosure: On June 24th, 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), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman's Firm Owns (MSFT), (WMT); Firm Is Short (WFC); Finerman's Firm Is Short (IWM), (SPY), (MDY), (IJR), (USO); Finerman's Firm And Finerman Own (BAC) Preferred Shares, Finerman's Firm Is Short (BAC); Finerman's Firm And Finerman Are Short (WFC) Preferred Shares, Finerman's Finerman's Firm And Finerman Own (FLS); Jon Najarian Owns (AAPL), (BRK.B), (JPM), (MS), (RIMM), (WFC), (WMT), (YHOO); Jon Najarian Is Short (AZO); Terranova Owns (TER), (XBI), (BTU), (ABT), (RIMM), (HES), (MS), (MSFT)
Terranova Works For (VRTS); Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV), (ABD); Virtus Investment Partners Owns More Than 1% Of (ABD), (CAL), (CLB), (DLR), (EPR), (EXR), (IGE), (MEE), (DBC), (DBV), (DBA), (SKT), (UA), (WBMD); Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights; Virtus Investment Partners Owns More Than 1% Of St Mary Land & Exploration Co
For Patricia Edwards
Edwards Owns (COST)
Edwards Owns (WMT)
Edwards Owns (SH)
For Jim Suva
Citi Employees Own (RIMM), (GLW), (MOT)
Citigroup Global Markets Or Affiliates Owns 1% Or More Of (PALM), (RIMM)
Citigroup Global Markets Or Affiliates Managed An Offering Of Securities For (TEL)
Citigroup Global Markets Or Affiliates Has Received Investment Banking Compensation From (JBL), (CELL)
Citigroup Global Markets Or Affiliate Received Non-Investment Banking Compensation In Past 12 Months From (MOT), (GLW), (TEL), (APH), (JBL), (PALM), (CELL), (MOLX)
(APH), (JBL), (MOT), (TEL), (CELL) Are Or In Past 12 Months Were Investment Banking Clients Of Citigroup Global Markets
(MOT), (GLW), (TEL), (APH), (JBL), (PALM), (CELL), (MOLX) Are Or In Past 12 Months Were Clients Of Citigroup Global Markets (Non-Investment Banking, Securities Related)
(MOT), (GLW), (TEL), (APH), (JBL), (PALM), (CELL), (MOLX) Are Or In Past 12 Months Were Clients Of Citigroup Global Markets (Non-Investment Banking, Non-Securities Related)
Citigroup Global Markets Or Affiliate Received Compensation In Past 12 Months From (APH), (JBL), (MOT), (TEL)
Citigroup Global Markets Is A Market Maker In (PALM), (RIMM), (CELL), (MOLX)
For Nishu Sood
Deutsche Bank And/Or Affiliates Owns 1% Or More Of (CTX), (DHI), (LEN), (RYL), (HOV), (PHM)
(CTX), (LEN), (TOL), (PHM) Is An Investment Banking Client Of DBSI
(DHI), (PHM) Has Been A Client Of Deutsche Bank Securities In Past Year (Non-Investment Banking Securities-Related Services)
Deutsche Bank And/Or Affiliates Has Received Non-Investment Banking Related Compensation From (LEN), (MTH) In Past Year
Finerman's Firm Owns (APC), (RIG), (TBT)
Jon Najarian Owns (LM), (PALM)
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