With the Dow and S&P closing modestly higher, Wall Street was keen to hear the latest numbers from Intel after hours hoping they showed signs of economic improvement.
And Intel did not disasspoint.
The chip maker reported a profit that was lower than last year but which blew out analysts' expectations, and the chip maker gave a forecast for current-quarter revenue that also topped analysts' estimates.
Intel Chief Financial Officer Stacy Smith attributed the upside to strengthening computer markets and strong execution within the company. Intel saw "pockets of relative strength" in consumer PC markets as well as in the Asia Pacific region and in China, Smith said.
And Chief Executive Paul Otellini said the results "reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half."
What’s Intel mean for the market?
I think these results take the market higher, speculates Joe Terranova. It’s very impressive. To me it says the bottom was 830 on the S&P.
I hate to throw a curve ball, counters Guy Adami, but I’d be taking profits in Intel on Wednesday. I think it’s a short-term top.
Taking profits also make sense to me, adds Patrick Wang of Wedbush Morgan.
I think Intel’s news is very bullish, adds Pete Najarian. We needed something strong to follow Goldman and Intel gave it to us.
DELL SLAMMED 8%
Meanwhile shares of Dellslid substantially on Tuesday after the PC maker said demand from businesses large and small is still very weak and the company faces a big challenge long-term in its hardware business, where falling PC prices will pressure margins.
GOLDMAN FLEXES ITS MUSCLE
Investors got the solid results from Goldman Sachs they wanted on Tuesday, but the gains were modest after a big rally the day before.
However, there’s no denying that in Tuesday’s quarterly report the Wall Street bank knocked the cover off the ball with earnings that surged 33 percent on blowout trading results.
What’s the bank trade?
I think Goldman’s results say the capital markets have healed, muses Joe Terranova. Now, I’d look to Morgan Stanley to see what they say.
Or if Goldman pulls back to around $140, I’d get long, adds Pete Najarian.
I would not commit new money to Goldman at these levels although they’re a great compay, says Tim Seymour. And I don't think it's wise to use Goldman as a barometer. JPMorgan is the company we need to hear from to understand how healthy the banking sector is, he adds.
I think the bank trade is short JPMorgan with a stop above $35.25, counsels Guy Adami.
FAST FOOD TRADE FINISHED?
Yum Brands reported a lower second-quarter profit on Tuesday that fell short of Wall Street expectations.
The owner of Pizza Hut, Taco Bell and KFC had mixed results as the stronger dollar cut into overseas revenue while costs in its U.S. operations moderated as commodity prices eased. The fast-food company benefited from customers seeking cheaper alternatives to sit-down restaurants, but the weak economy has hampered dinner business at Pizza Hut and KFC.
Meanwhile, Burger King traded lower on Tuesday after BofA-Merrill downgraded the stock citing negative sales.
What’s the fast food trade?
I think Yum is a great story and I’m still bullish, says Guy Adami.
Because of their exposure to China I’m also a buyer of Yum, adds Pete Najarian.
I also look at Yum as an international play, adds Patty Edwards of Storehouse. I'd go into the stock at current levels. I think it has legs.
TOPPING THE TAPE: CONSUMER SHARES RISE
Consumer shares popped on Tuesday after Commerce Department data showed sales at U.S. retailers rose a stronger-than-expected 0.6 percent in June, boosted by a big jump in auto sales.
Meanwhile, U.S. producer prices jumped by twice as much as expected in June on a big rise in finished energy prices.
How should you play?
If you strip out gas and autos, the retail number is negative, reminds Tim Seymour. I don’t think it says consumers are strong.
If you want to play the space I like Gap, says Guy Adami. They’re running their business well.
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Trader disclosure: On July 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; Adami Owns (AGU), (C), (GS), (INTC), (BTU), (MSFT), (NUE); Seymour Owns (AAPL), (BAC), (GE), (VIP); Terranova Owns (TER), (RIMM), (MSFT), (SUN), (FTO); Najarian Owns (CSCO) Call Spread; Najarian Owns (GE) Calls; Najarian Owns (INTC) Call Spread; Najarian Owns (JNJ) Calls; Najarian Owns (JPM) And Is Short (JPM) Calls; Najarian Owns (MCD) Call Spread; Najarian Owns (MS) Call Spread; Najarian Owns (NVLS) And Is Short (NVLS) Calls; Najarian Owns (STI) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO) Call Spread
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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)
Virtus Investment Partners Owns More Than 1% Of (ABD); Virtus Investment Partners Owns More Than 1% Of (CBL); Virtus Investment Partners Owns More Than 1% Of (CAL); Virtus Investment Partners Owns More Than 1% Of (CLB); Virtus Investment Partners Owns More Than 1% Of (DLR); Virtus Investment Partners Owns More Than 1% Of (EXR); Virtus Investment Partners Owns More Than 1% Of (IGE); Virtus Investment Partners Owns More Than 1% Of (MEE); Virtus Investment Partners Owns More Than 1% Of (DBC); Virtus Investment Partners Owns More Than 1% Of (DBV); Virtus Investment Partners Owns More Than 1% Of (DBA); Virtus Investment Partners Owns More Than 1% Of St Mary Land & Exploration Co; Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights; Virtus Investment Partners Owns More Than 1% Of (SKT); Virtus Investment Partners Owns More Than 1% Of (TNB); Virtus Investment Partners Owns More Than 1% Of (UA); Virtus Investment Partners Owns More Than 1% Of (WBMD)
For Patrick Wang:
Wedbush Morgan Securities Is A Market Maker In (INTC)
Patrick Wang Has A Long Position In (INTC)
For Patty Edwards:
Edwards Owns (COST), (WMT), (PM), (SH)
For Dani Hughes:
Hughes And Her Clients Own (DIOD), (ITRI), (FTEK)
For Jeffery Harte:
Sandler O'Neill Recvd. Inv. Bank. Comp. From (C) In Past 12 Mos.
Sandler O'Neill Expects To Receive or Seek Inv. Bank. Comp. From (BAC), (JPM), (C) In Next 3 Mos.
(BAC), (C), (JPM), (MS) Are Clients Of Sandler O'Neill
Sandler O'Neill Has Received Non-Inv. Bank. Comp. From (C), (JPM), (BAC)
(GS) Is A Non-Inv. Bank. Client Of Sandler O'Neill
For Rich Greenfield:
Pali Is A Market Maker In (DTV)
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