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Halftime Report: Trading Market's 5-Day Advance

Thursday, 10 Sep 2009 | 1:12 PM ET

Both the Dow and S&P traded higher on Thursday after new data showed jobless claims fell last week. High unemployment is one of the biggest concerns as the economy attempts to pull out of recession.

If the gains hold, it would mean a fifth day of advances that would push the S&P 500 index to its highest level in nearly a year.

Is the move a bullish sign?

Fast Money Halftime Report
The Fast Money traders weigh in on the markets and share their midday trading advice.

Instant Insights with the Fast Money traders

It's the week after Labor Day and we’re still in a slow volume period, muses Jon Najarian. Both Apple’s media extravaganza and President Obama’s speech made headlines but neither was strong enough to turn investors strongly bullish or bearish.

The President's speech suggested a lack of agreement lingers in Washington on health care, adds Patty Edwards of Storehouse. The Street interprets that to mean gridlock remains. As long as it remains investors think they’ll get upside gains in the HMOs. Trouble is when the gridlock ends, there could be sharp downside.

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FINANCIALS WEIGH ON MARKET

Financials traded lower on Thursday after widely followed banking analyst Meredith Whitney told CNBC that another leg down was coming.

Banks are not going to see their earnings rise too much from now on, she warned.

"Banks are taking advantage of what the government is doing by artificially inflating asset prices so they can ride a steep yield curve and they're going to have a third quarter that reflects that," Whitney said.

However, she’s not entirely bearish. Whitney did say Goldman Sachs still has "gas in the tank" and she kept her 'buy' on its stock. "Goldman is taking a lot of the place that Lehman left," she said.

What’s the trade?

I’m still bullish on the financials as long as they still have a steep yield curve, says Brian Kelly. But if that goes away there could be real problems in the sector.

I think the opportunities in the space are with insurance, adds Oppenheimer’s Carter Worth. I’d look at Chubb and Marsh & McLennan . They’re beaten down and left for dead. On a relative basis they could outperform.

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CHIPS PUSH NASDAQ HIGHER TODAY

Chip makers helped give the Nasdaq a boost on Thursday after Texas Instruments raised its third-quarter forecast suggesting a recovery was well underway in the global semiconductor industry.

What’s the trade?

We’re seeing emerging markets as the growth players in tech, explains Brian Kelly. That could push the entire market higher.

Considering the entire sector is up about 40% versus a 14% move in the S&P I’d look for profit taking opportunities, counsels Carter Worth

In the space I’d play Apple or RIM, counsels Patty Edwards. I’m still a believer that Apple hits $200/ share. And be careful of Palm; they seem to be stumbling.

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YAHOO JUMPING ON BOFA/MERRILL UPGRADE

Internet search giant Yahoo! edged higher on Thursday after after Banc of America Securities-Merrill Lynch Research upgraded the company to "buy" from "neutral", saying growth in user traffic continues to outpace growth in the Internet as a whole.

What’s the trade?

I’m a fan of Yahoo, reveals Jon Najarian. I still like the company and think CEO Carol Bartz is focused on the right things.

Or why not buy Microsoft , adds Brian Kelly. They have a big cycle coming up.

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AG TRADE: MONSANTO SLAMMED

Not all the headlines on Thursday were rosy. Optimism was tempered by Monsanto after the world's biggest seed company forecast fiscal 2010 earnings below Wall Street's estimates.

What’s the trade?

I’d be careful about buying Monsanto right now, counsels Dennis Gartman, author of The Gartman Letter. It’s basically a bet on how much is going to be planted next year. With prices down and heading lower I think there will be less planting of corn and soybeans next year.

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TRADE TO GO: BIOMARIN PHARMA

Jon Najarian has spotted unusual options activity in BioMarin Pharma . The volume of calls traded suggests to him that this stock could make a sharp move higher.

They’re partnered with Genzyme so there could be some deal news coming, Najarian speculates.


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Trader disclosure: On Sept. 10th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (AAPL) & Short (AAPL) Calls; Najarian Owns (BAC) & Short (BAC) Calls: Najarian OWns (C) Calls: Najarian Owns (FCX), Owns (FCX) Put, Is Short (FCX) Calls; Najarian Owns (JPM) & Is Short (JPM) Calls; Najarian Owns (JOYG) & Short (JOYG) Calls; Najarian Owns (MS) And Is Short (MS) Call; Najarian Owns (MSFT) And Is Short (MSFT) Call; Najarian Owns (MOS) Call Spread; Najarian Owns (PALM) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (TEVA); Najarian Owns (V) & Short (V) Calls; Najarian Owns (YHOO) Calls; J Najarian Owns (AAPL), (BAC), (C), (BX), (ESLR), (GS), (GLW), (HGSI), (NUE), (PDE), (SUN), (WFC); Seymour Owns (AA), (AAPL), (BAC), (BX), (DRY), (EEM); Seymour's Firm Is Short (FXI), (F), (RIG); Karabell Owns (AAPL), (BHP), (C), (FCX), (FXI), (IBM), (JPM), (MON), (NOK), (HON)

For Charles Boorady
Citi has managed an offering of securities of (CI)
Citi has received compensation from (AET)
Citi has received compensation from (CI)
Citi has received compensation from (UNH)
Citi has has (CI) as a client in past 12 months
Citi has has (AET) as a client in past 12 months
Citi has has (HUM) as a client in past 12 months

For Joseph Greff
J.P. Morgan has an investment banking relationship with Bally, Boyd, Carnival, Host Hotels & Resorts, International Game Technology, LaSalle, Mariott, MGM Mirage, Pinnacle, Royal Carribean Cruise, Starwood, Sunstone, WMS Industries.
A J.P. Morgan exec it on the board of Choice Hotels International.

CNBC.com with wires

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CB
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GS
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MO
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MSFT
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BB
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TXN
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YHOO
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AAPL
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