S&P 500 REBOUNDS FROM 2-MONTH LOW
The S&P edged higher on Thursday with investors rotating into beaten downenergy names and also financials after BofA-Merrill upgraded Goldman Sachs to “buy” and raised its price target to $175.
Analysts, led by Guy Moszkowski said the company's earnings power and book value were increasing rapidly again.
On the other side of the rotation, investors dumped shares of consumer stapes and pharma with Merck being the biggest drag on the Dow on speculation its Zetia cholesterol drug fared poorly in a clinical trials.
What’s the word on the Street?
I like Goldman, says Guy Adami, but I wouldn’t chase it here. If you’re looking for a trade in the financials look at shortingJP Morgan around $35 with a stop above $35.25. And in terms of the broad market on the S&P I think 870 is the bogie.
It seems that a lot of good news is priced into Goldman, muses Tim Seymour. However, the data I liked most today was the data which showed China’s auto sales had climbed 48%, he adds. That lifted metals and resources and was probably behind the broad gains.
I like the US market held the gains from late yesterday and I think that’s important, adds Joe Terranova. On Friday we get new information about consumers and so far the consumer has surprised to the upside.
TOPPING THE TAPE: OIL STOCKS
U.S. crude oil futures fell below $60 a barrel Thursday morning as early euphoria over a drop in jobless benefit claims faded and oil markets tracked Wall Street, where investors remain on edge as the second quarter earnings season gets under way.
Analysts suggested the overnight and early rebound after six days of losses was technical, spurred by oversold conditions.
"While the price plunge may have been a bit overcooked short term, we are still viewing a resumption of the downtrend to the $56-58 area as a high probability prior to the August WTI contract expiry (on July 21)." says Jim Ritterbusch of Ritterbusch & Associates.
What’s the oil trade?
I’m concerned about the rhetoric out of the administration about limiting oil speculation, muses Karen Finerman. As a result I think money has already started going into equities because it's afraid to be in futures. That's why I think the OIH is higher.
I’d look at Schlumberger , adds Guy Adami.
In the space I love Diamond OffShore, says Tim Seymour.
BREAKING NEWS: CITADEL
In breaking news the CNBC's Michelle Caruso-Cabrerra explains that Citadel Investment Group, one of the world's most successful hedge fund firms, has sued a former top executive in its highly successful quantitative trading unit and two others for setting up their own firm.
Chicago-based Citadel, founded by 40-year-old billionaire Kenneth Griffin, said in a lawsuit filed on Thursday that Mikhail Malyshev, 40, and two other former employees had violated their non-compete clauses by starting their own firm, Teza Technologies LLC. The lawsuit was filed in the the circuit court of Cook County, Illinois.
Teza Technologies made headlines this week when it was identified as the firm that had hired Sergey Aleynikov, a former Goldman Sachs computer programmer whom federal prosecutors had accused of stealing trade secrets from the Wall Street investment bank.
Malyshev, a Russian emigre with a doctorate in astrophysics from Princeton, left Citadel's quantitative trading unit in February after the funds he helped run returned about 40 percent last year. Their performance stood out at a time when most hedge funds lost money and Citadel's flagship portfolios tumbled 50 percent.
> Citadel sues former employees who set up Teza Tech
SECTOR TRADE: RETAIL SALES
June same store sales fell for most U.S. retailers as the plunging job market and cool, rainy weather dampened interest in summer shopping for consumers, triggering concern about the back-to-school season.
Sales at stores open at least one year fell 4.9 percent overall, Thomson Reuters data showed. More than half of the retailers polled missed expectations, with teen apparel chains and department stores posting the steepest declines.
Among clothiers, Gap, Limited Brands , and American Eagle Outfitters all reported double-digit drops.
But some retailers stuck to their forecasts, or even raised their outlooks after spending months trimming inventories and cutting costs.
Both J.C. Penney and Ross Stores raised their quarterly earnings outlooks. While same-store sales fell 8.2 percent at Penney they were up 1 percent at Ross, whose shares hit a 52-week high.
What’s the trade?
The Buckle is a name that I love, but right now I think investors should stay away from retail, counsels Joe Terranova.
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Trader disclosure: On July 9th, 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); Finerman's Firm And Finerman Own (BAC) Preferred Shares; Finerman's Firm And Finerman Own (RIG); Finerman's Firm Owns (ELX) And (ELX) Puts; Finerman's Firm And Finerman Own (WFC) Preferred Shares, Finerman's Firm Is Short (WFC); Finerman's Firm Owns (DYN), (TGT), (MSFT), (PBR), (WMT); Finerman's Firm Is Short (XRT), (IYR), (IJR), (MDY), (SPY), (IWM), (USO), (USO); Seymour Owns (AA), (AAPL), (BAC), (C), (DBA), (EEM); Seygem Asset Management Is Short (FXI); Seymour Owns (MGM); Seygem Asset Management Owns (DO); Terranova Owns (OIH), (XBI), (ABT), (MSFT), (POT), (RIMM); Terranova Owns Crude Oil Futures
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), (CBL), (CAL), (CLB), (DLR), (EXR), (IGE) (MEE), (DBC), (DBV), (DBA), (SKT), (TNB), (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
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