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Halftime Pt. 1: Did Bernanke Just Put Floor Under Stocks?

The Dow surged higher on Friday after Ben Bernanake said the Fed was ready to take further steps if needed to spark growth.

”The committee is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly," Bernanke told the Fed conference, held in Jackson Hole, Wyoming.

Did the Fed chairman just put a floor under the stock market?

How should you trade?

Instant Insights with the Fast Money traders

The time to get bullish is now, according to Joe Terranova. The tape is telling you not to sit back and wait, he says. We’re seeing a significant reversal in the bond market. I think this is the time to be stepping in a buying, right here and right now. The economy isn’t as bad as you think.

I also think things aren't that bad, echoes Pete Najarian. If the economy was as weak as the Street thinks, I don’t think we’d see the strength we’re seeing in copper or the recent reversal in oil .

It’s also worth noting that rails are running, Najarian adds. Greenbrier came out and said they have more orders for rail cars, particularly those that move iron ore as well as coal.

I agree that the economy is not as bad as market sentiment would lead investors to believe, adds Zach Karabell. However, I’m focussed on the post-Labor Day period. We can’t know what’s really happening until volume returns to the market and that probably won't happen for another week.

I’d head to the beach while you can, counsels Patty Edwards. I find the market action on Friday bizarre. Boeing delayed the Dreamliner again and shares are up while Tiffany put up good numbers and its shares are down.


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TECH REVERSES

Tech reversed and move higher Friday as the hope for more M&A activity overshadowed Intel’s worrisome commentary.

On Friday, Intel warned that third-quarter revenue could fall short of its own estimates by more than $1 billion on weaker-than-expected demand for personal computers.

However, investors seem much more focused on the potential for further acquisitions after Hewlett-Packard raised its offer for 3PAR Inc to $2 billion, once again topping Dell’s bid and showing it had plenty of ammunition in the bidding war for the data storage company.

HP's offer of $30 per share came less than 3 hours after Dell announced 3PAR had accepted its bid of $27 per share, which matched HP's previous offer.

Dell's agreement with 3PAR allows it to match competing bids, but analysts say HP may be the stronger player with $115 billion in annual revenue compared with Dell's $53 billion.

What's the take away?

I wouldn’t make too much out of the Intel revision, counsels Pete Najarian. In fact, I think all the bad news is out there now. Looking forward I see nothing but upside.

Turning attention to 3Par, options action indicates that some investors are expecting yet another even higher bid, adds Najarian. There’s action in the 32-strike but I can’t help but wonder if it’s all getting out of hand.


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WHAT’S WRONG WITH GOLDMAN?

The traders are keeping a close eye on Goldman Sachs; shares fell apart on Friday dropping below the 50 day moving average.

What should you make of the move?

I’m a buyer of Goldman Sachs below $140, says Joe Terranova.


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Trader disclosure: On August 27th, 2010, 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 (CELG), (TCK), (CNI), (TEVA); Najarian Owns (HPQ) Calls; Najarian Owns (V) Calls; Najarian Owns (STX) Calls; Najarian Owns (WDC) Calls; Najarian Owns (MU) Calls; Karabell owns (C), (GS); Terranova Owns (AXP), (GS), (IBM), (QCOM), (AAPL), (GOOG), (BRCM), (TER), (MSFT), (C), (MRVL), (BMO), (V), (POT), (OXY), (GLD), (SU), (FCX), (APA), (XBI)

For Zach Karabell
River Twice owns (GS)
River Twice owns (DD)
River Twice owns (POT)

For Patty Edwards
Edwards owns (INTC)
Edwards owns (TBT)
Edwards owns (TLT)
Edwards owns (LQD)
Edwards owns (JNK)
Edwards owns (HPQ)
Edwards owns (MOT)
Edwards owns (BAC)
Edwards owns (WFC)
Edwards owns (C)
Edwards owns (SLV)
Edwards owns (GLD)
Edwards owns (PGM)
Edwards owns (TIF)
Edwards owns (DD)
Edwards owns (SYT)

For Joe Terranova
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (DRYS)
Virtus Investment Partners own more than 1% of (EXR)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (XLK)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)


For Brian Tunick
Men's Wearhouse is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company investment banking services, non-investment banking securities-related services and non-securities-related services.

JPMSI or its affiliates received in the past 12 months compensation for investment banking services from Men's Wearhouse.

JPMSI or its affiliates expect to receive, or intend to seek, compensation for investment banking services in the next three months from Men's Wearhouse.

JPMSI has received compensation in the past 12 months for products or services other than investment banking from Men's Wearhouse. An affiliate of JPMSI has received compensation in the past 12 months for products or services other than investment banking from Men's Wearhouse.

CNBC.com with wires.

Symbol
Price
 
Change
%Change
DJIA
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4331
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GBX
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GS
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HPQ
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INTC
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TIF
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SPDR TEC SEL
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BA
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