GO
Loading...

Halftime: Will Europe Wreck Our Rally, Again?

Once again concerns about the financial health of Europe weighed on the market with both the Dow and S&P trading lower on Tuesday.

Headwinds were largely generated by a report out of Germanywhich said the country's 10 biggest banks may need significantly more capital under revamped rules.

Also, a Wall Street Journal report suggested the recent stress tests results out of Europe weren’t as rosy as they appeared. "Some banks didn't provide as comprehensive a picture of their government-debt holdings as regulators claimed," the paper said.

How should you be positioned now?

Instant Insights with the Fast Money traders

Last week we had a 70 point rally in the S&P, so giving back some of those gains shouldn't surprise anyone, says Steve Cortes of Veracruz. I remain constructive on the market. One of the reasons I got long stocks a couple weeks back is because silver has been outpacing gold and that typically indicates a pick-up in industrial demand. (Read more about Cortes' bullish outlook; click here to go to "Market Tell Suggests S&P About To Zoom?")

I agree that the move in equities is a natural correction after last week’s gains, adds Joe Terranova. Looking ahead, China import and export data due later in the week will probably be the next big catalyst. I don’t expect the market to make any big moves until we get those numbers.

It seems to me that the pullback on Tuesday was generated by money managers who are hedging a little more actively, adds Jon Najarian. But the action in the Vix leaves me optimistic; it's near lows that we haven't seen since April. Also, I don't expect to hear bad things out of Germany for much longer so I'd be a buyer of dips.

But don't forget that historically, September and October is a volatile time, adds Patty Edwards of Storehouse. There are probably stocks worth buying but I suggest proceeding with caution.

-----------

MARKET BUZZKILL: RESOURCE/INDUSTRIAL STOCKS

Resource and industrial stocks led the way lower on Tuesday due to fears that last week’s euphoria may have been overblown.

How should you play the dip?

Hong Kong rallied sharply on Monday, says Steve Cortes and that suggests to me Asia’s market is strong enough to feel bullish about resources. I’m a buyer of Freeport and BHP on pullbacks.

I also like FCX, says Joe Terranova. And I’d also suggest long US Steel if it breaks above $51, it’s 200-day.

-----------

UNUSUAL ACTIVITY: X

Speaking of 'Letter X' Jon Najarian has spotted unusual options action in US Steel.

Chatter in the market suggests Mittal could be looking at an acquisition, reveals Jon Najarian.

-----------

TOPPING THE TAPE: ORACLE

Shares of Oracle topped the tape on Tuesday largely due to word the firm hired Mark Hurd, the former chief at Hewlett-Packard as its new president.

What’s the trade?

It definitely makes me more bullish Oracle; I think it’s a great fit, says UBS analyst Brent Thill. HP stock doubled to its peak when he was its CEO.

*Find whether the move signals that Oracle is on the patch to make more acquisitions. Watch the video now!




______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On September 7th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Cortes owns (SFD), (BMO), (TD), (FCX), (BHP); Cortes owns the British Pound; Terranova Owns (APA), (AAPL), (BMO), (FCX), (GS), (IBM), (MRVL), (QCOM), (OXY), (ORCL), (SU), (XBI), (C), (POT), (GLD), (TBT); Jon Najarian owns (ORCL) short calls; Jon Najarian owns (X) short calls; Jon Najarian owns (AKS) short calls

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 (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 (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 (XLB)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLF)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)
Virtus Investment Partners own more than 1% of (DLUEY)
Virtus Investment Partners own more than 1% of (DRYS)

For Patty Edwards
Edwards owns (ORCL) for clients
Edwards owns (NSC) for clients
Edwards owns (UNP) for clients
Edwards owns (CSX) for clients
Edwards owns (VXX) for clients
Edwards owns (PGM) for clients
Edwards owns (GLD) for clients
Edwards owns (PM) for clients
Edwards owns (PM)
Edwards owns (KFT) for clients
Edwards owns (JNJ) for clients
Edwards owns (CPB) for clients

For Brett Thill
Thill, or a member of his team own (MSFT), (ORCLE)

(MSFT) is, or within the past 12 months has been an investment banking client of UBS Securities.

(MSFT) is, or within the past 12 months has been a non-investment banking securities-related client of UBS Securities.

(MSFT) is, or within the past 12 months has been a non-securities services client of UBS Securities.

Within the past 12 months, UBS Securities has received compensation from (MSFT)


CNBC.com with wires.

Symbol
Price
 
Change
%Change
DJIA
---
S&P 500
---
BHP
---
FCX
---
MT
---
ORCL
---
VIX
---
X
---
SPDR IND SEL
---

Contact Halftime Report

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET