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Halftime Pt.1: 4 Stocks Could Benefit From BP’s Woes

Dedicating new urgency to the Gulf oil spill, President Barack Obama told the nation, "We will make BP pay."

Obama did not detail exactly how but described BP as ‘reckless’ in the wake of the massive damage it has caused to lives, businesses and shorelines.

On a related note, the New York Times is reporting that BP agreed to place about $20 billion in escrow to pay claims resulting from the spill.

How should you be positioned now?

Instant Insights with the Fast Money traders

As the situation deteriorates I think it’s entirely possible that BP divests some of it’s US assets, speculates Joe Terranova. And I do think the divestiture will have to meet the approval of the White House which suggests they won’t go to China.

Personally, I think they go to Exxon , Shell, Chevron or Occidental , he adds. As a result, I suggest owning those 4 names because at some point next year I think they benefit from these developments.

I don’t think we’re in any position to speculate about an asset sale, counters Jon Najarian. This is a UK based company. If they do decide to sell assets, the White House can oppose their decisions, but I don’t think they could stop anything. As far as I’m concerned China isn’t off the table in the least.

But before investors start thinking divestiture; it seems highly likely to me that BP comes to the equity markets and raises money, Najarian says. And I doubt they’ll have any trouble doing it. They own assets that are extremely valuable. That’s the most likely scenario.

Going back to the President’ speech, it’s hard to listen to anything he said and think it’s positive for BP, adds Jason Trennert of Strategas. As an investor it’s important to know that the rules of the game can change and change capriciously.

In terms of rapidly changing environment, in Clean Water Act penalties alone BP is probably up to $12 billion, says Melissa Lee.

As far as I can tell, BP may be looking at a total liability north of $100 billion, adds Brian Kelly.

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EVERYBODY LOVES APPLE

Once again Apple is wowing Wall Street. This time it's because demand for the new 4G iPhone is so strong Apple had to stop taking orders, at least temporarily.

The crush of 600,000 orders in less than 24-hours suggests we'll again see long lines and potential chaos at stores when the phone is released on June 24.

What’s the trade?

Historically Apple climbs ahead of a product launch and then its pulls back on its release, muses Jon Najarian, but I’m not sure that happens this time.

If it does and Apple pulls back, I’m a buyer, says Patty Edwards. I see it going to $325.

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TWO BIG EARNINGS DISAPPOINT: FEDEX & NOKIA

The Fast Money desk spent Wednesday taking a hard look at FedEx and Nokia after disappointing outlooks.

Nokia said its profits this year will be hit by tough competition from rivals in the smart phone market. Meanwhile, FedEx said it’s profits will come under pressure due to increasing pension costs and a spike in maintenance costs.

What should you make of it?

I think the model at Nokia is broken, muses Joe Terranova. And I think the pension issues at FedEx may be a recurring theme, broadly.

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WEAKER THAN EXPECTED EARNINGS?

The results above may not surprise you. New research from Bespoke shows net earnings revisions have now moved into negative territory and are forming a downtrend.

What should you make of it?

It concerns me, says Brian Kelly. It seems the market is ripe with pockets of weakness - as well as pockets of strength.

Fast Money EP John Melloy wrote about this trend at length. Click here for "Warning: Rough Earnings Ahead"

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BERNANKE SPEAKS

The traders will be keeping an ear open for comments from Ben Bernanke, with the Fed Chairman scheduled to make remarks at 5:45pm ET.

What should you be listening for?

I’ll be listening to hear what he says about the economy over the next 6 months, muses Brian Kelly.

Financials are moving higher into Bernanke’s talk, adds Jon Najarian. That may be telling us something.

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CALL THE CLOSE:

Jon Najarian: Take profits

Brian Kelly: Take profits.

Joe Terranova: Stay long in quality names.


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Trader disclosure: On June 16, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova owns (IPSU), (BX), (PFE), (UDN), (GMCR), (RSX), (TER), (AXP), (BMO), (BBY), (DIS), (XCO), (SWN), (AAPL), (IPI), (SU), (V), (TEVA), (FXE), (FXB), (XOM), (COP), (OXY); Terranova owns (RDS.A); Terranova owns S&P Futures; Terranova owns UK Pounds; Terranova is short the US Dollar; Jon Najarian owns (RIG) and short (RIG) calls; Jon Najarian owns (NE) and short (NE) calls; Jon Najarian owns (WMT) and short (WMT) calls; Jon Najarian owns (JPM) and short (JPM) calls; Jon Najarian owns (GS) and short (GS) calls; Jon Najarian owns (BAC) and short (BAC) calls; Jon Najarian owns (WFC) and short (WFC) calls; Jon Najarian owns (USB) and short (USB) calls; Kelly is short (GS); Kelly owns (BP) puts; Kelly owns (GLD); Kelly owns (GDXJ)

For Joe Terranova
Terranova works for (VRTS)
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners owns more than 1% of (AMKR)
Virtus Investment Partners owns more than 1% of (IGE)
Virtus Investment Partners owns more than 1% of (DBV)
Virtus Investment Partners owns more than 1% of (XLB)
Virtus Investment Partners owns more than 1% of (XLV)
Virtus Investment Partners owns more than 1% of (XLY)
Virtus Investment Partners owns more than 1% of (XLI)
Virtus Investment Partners owns more than 1% of (XLU)
Virtus Investment Partners owns more than 1% of (DRYS)

For Patty Edwards:
Edwards owns (XOM) for clients
Edwards owns (CVX) for clients
Edwards owns (COP) for clients
Edwards owns (RIG) for clients
Edwards owns (NE) for clients
Edwards owns (SLB) for clients
Edwards owns (HAL) for clients
Edwards owns (WFT) for clients
Edwards owns (DO) for clients
Edwards owns (HD) for clients
Edwards owns (NOK) for clients
Edwards owns (BJ) for clients
Edwards owns (WMT) for clients
Edwards owns (COST) for clients
Edwards owns (JPM) for clients
Edwards owns (C) for clients
Edwards owns (BAC) for clients
Edwards owns (WFC) for clients
Edwards owns (STI) for clients
Edwards owns (PNC) for clients
Edwards owns (CVX) for clients
Edwards owns the S&P 500 for clients
Edwards owns (QQQQ) for clients
Edwards owns the Russell 2000 for clients
Edwards owns (VXX) for clients
Edwards owns silver for clients



CNBC.com with wires

Symbol
Price
 
Change
%Change
BP.
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CVX
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FDX
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NOK
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OXY
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RDSA
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SPDR FIN SEL
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AAPL
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XOM
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