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Halftime Report: Are Stocks About To Stall?

Stocks bounced between gains and losses on Wednesday as Wall Street closed out the first quarter of 2010 with about a 5% gain for the 3-month period.

But can this market continue to push higher into Q2 or are the headwinds starting to kick up – especially headwinds from the jobs market.

Strategy Session with the Fast Money Traders

The market is pushing higher despite the ADP jobs report which showed U.S. private employers shed 23,000 jobs this month, missing expectations for a rise of 40,000 jobs, says Guy Adami. It just goes to show - you can’t fight the tape.

However long-term I’m bearish, Adami adds, however I would not fight the tape until it breaks 1150 on the downside.

I just can’t understand why the market keeps climbing, adds Jared Levy of Peak6. I want to call Susan Powter and shout “Stop the insanity.” I can’t get long until we get the jobs report. I expect to see the market drop by the end of the week.

I’ve been selling into the rally, adds Brian Kelly of Kanundrum, but so far that hasn’t worked. Into the close I’m a buyer as long as it trends higher.

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TROLLING FOR WINNERS AND LOSERS

With the quarter drawing to a close, we put together this list for you of the best and worst stocks in the S&P.

Top 5 S&P Performers YTD
Zions 70%
Genworth 63%
Smith Int'l 57%
Tyson 56%
Cliffs 54%

Bottom 5 S&P Performers YTD
H&R Block -21%
Boston Scientific -19%
AES -17%
First Energy -16%
Southwestern -15%

What's the play?

From this list I like companies involved in food, says Jared Levy. I'd go long Tyson and I’m also bullish on ADM – not only as ag plays but because both names have been beaten up recently.

I like that thesis, adds Patty Edwards of Storehouse -- I’m also looking at unloved stocks – but unloved stocks that also pay dividends, she says. Coke fits that criteria as does Arrow Electronics.

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TOPPING THE TAPE: HONEYWEL

Honeywell topped the tape on Wednesday. The industrial name raised its first quarter guidance above consensus, citing stronger order and sales.

With the stock up 16-percent this year, what do you do here?

I wouldn’t let this stock go yet, counsels Guy Adami. I think it has some giddy-up left. My sense is the stock takes a run at $50.

If you’re looking for a trade in the industrials space. I like Ritchie Bros., says Brian Kelly.

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TAKE YOUR POSITION: RIMM

All eyes are on Research In Motion, which reports earnings after the bell on Wednesday. The stock has experienced a volatile week following published reports which suggest Verizon may be inking a deal with Apple to carry the iPhone.

What is your best play on the name ahead of its release?

If I were long RIM stock I’d remain long, says Jared Levy. I have a slight bullish bias going into earnings. If you want to play options, I’d be a buyer of the RIM 70-put and sell the 80-call.

The best way to play RIM post earnings is to fade it, says Guy Adami. If it collapses I’m a buyer and if it rips I’d put on a bearish position.

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TRADE UPDATE: FORD

The desk is watching a big loser in Wednesday’s session; Ford . Not only is the stock down on the day but it’s off about 8% for the week.

According to chatter on the Street recent weakness may stem from news that the United Auto Workers healthcare trust plans to auction Ford stock warrants for at least $1.27 billion, capitalizing on the automaker's share price rise to fund its retiree plan.

But on a bullish note, Ford Chief Executive Alan Mulally reiterated a profitable 2010 and 2011 for the auto maker as sales continue to strengthen.

What must you know to trade in this space?

I think Ford has been such a strong performer the pullback is simply investors taking profits, counsels Brian Kelly.

I like Ford long-term but I think it may trade down in the short-term, says Guy Adami. But at $11.75 I’m a buyer.

I’d take a look at Toyota , says Patty Edwards. I think all the bad news is priced in.

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DEALS IN THE COAL SPACE

Another day, another hostile takeover bid, this time in the coal sector.

On Wednesday, Peabody Energy made an unsolicited bid for Australia-based rival Macarthur Coal for $13-dollars / share.

Fast Money trader Patty Edwards sees a second derivative play. What is it?

I’d be a buyer of Exelon, says Patty Edwards. Not only does it have an awesome dividend but it provides exposure to nuclear and natural gas.

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BOND OUTLOOK FOR 2ND QUARTER?

U.S. government debt prices rose on Wednesday as a flurry of buying drove prices higher as fund managers scrambled to meet their quarter-end needs.

What can you expect from the bond market in the second quarter? Watch the video now and find out from CNBC’s Rick Santelli!

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CALL THE CLOSE:

Guy Adami: As long as the market holds above 1150 I wouldn't fight the tape.

Jared Levy: I can’t get long until we get the jobs report. I think we sell off.

Brian Kelly: I’m a buyer as long as stocks trend higher.

Patty Edwards: With Passover and Easter, I think the market is asleep for the rest of the week.


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Trader disclosure: On March 31st, 2010, 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 (INTC), (GS), (AGU), (MSFT), (NUE), (BTU), (C); Seymour Owns (AAPL), (BAC), (GE); Najarian Owns (BAC) Calls; Najarian Owns (C) Calls; Najarian Owns (CLF) Call Spread; Najarian Owns (IPI) Call Spread; Najarian Owns (JDSU); Najarian Owns (NSC) Calls; Najarian Owns (RDC) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (SWN) Call Spread; Najarian Owns (WFR) Call Spread; Najarian Owns (YHOO) Call Spread; Finerman's Firm Is Short (IYR), (IWM), (MDY), (SPY); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Owns (BSX); Finerman's Firm And Finerman Own (JPM); Finerman's Firm Owns (MUR); Finerman's Firm Owns (WFC) Preferred; Finerman's Firm Owns (YUM); Edwards Owns (GLD) For Clients; Edwards Owns (TM); Edwards Owns (UUP); Kelly Owns (FXE) Puts

GE Is The Parent Company Of CNBC

For Tim Seymour
Seygem Asset Management Owns (POT)
Seygem Asset Management Is Short (FCX)

For Mike Khouw
Cantor Fitzgerald & Co. Is A Market Maker In (SPY)

For Brian Kelly
Kanundrum Capital Owns (GFI)
Kanundrum Capital Owns (GLD)
Kanundrum Capital Owns (RAX)
Kanundrum Capital Owns (RBA)
Kanundrum Capital Owns (CCI)
Kanundrum Capital Owns (MON)
Kanundrum Capital Owns (RRC)
Kanundrum Capital Owns (UPL)
Kanundrum Capital Is Long U.S. Dollar
Kanundrum Capital Is Short (AA)
Kanundrum Capital Is Short (GS)
Kanundrum Capital Is Short (ACH)
Kanundrum Capital Is Short Yen
Kanundrum Capital Is Short Euro
Kanundrum Capital Is Short Pound
Kanundrum Capital Is Short Franc
Kanundrum Capital Is Short Treasuries

For Patty Edwards
Edwards Owns (SPY) For Clients
Edwards Owns (QQQQ) For Clients
Edwards Owns (F) For Clients
Edwards Owns (TM) For Clients
Edwards Owns (EXC) For Clients
Edwards Owns (CBI) For Clients
Edwards Owns (NE) For Clients
Edwards Owns (KO) For Clients

For Jared Levy
Peak6 Investments Is Short And Has An Options Position In (SPY)
Peak6 Investments Is Short And Has An Options Position In (QQQQ)
Peak6 Investments Is Short And Has An Options Position In (ARW)
Peak6 Investments Is Short And Has An Options Position In (ESV)
Peak6 Investments Is Short And Has An Options Position In (NE)
Peak6 Investments Is Short And Has An Options Position In (SU)
Peak6 Investments Owns And Has An Options Position In (F)
Peak6 Investments Owns And Has An Options Position In (TM)
Peak6 Investments Owns And Has An Options Position In (EXC)
Peak6 Investments Owns And Has An Options Position In (CBI)
Peak6 Owns And Has An Options Position In (TSN)
Peak6 Is Short And Has An Options Position In (ADM)
Peak6 Is Short And Has An Options Position In (RIMM)

CNBC.com with wires

Symbol
Price
 
Change
%Change
S&P 500
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ADM
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ARW
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BTU
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EXC
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F
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HON
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KO
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MCC
---
RBA
---
BB
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7203.T
---
TSN
---
VZ
---
COKE
---
AES
---
HRB
---
SLW
---
ZION
---
AAPL
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