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RIM To Take A Big Bite Out Of Apple?

Tuesday, 26 Oct 2010 | 5:43 PM ET

The startling recovery in RIM shares continued Tuesday with another sharp jump.

It seems a demo of their tablet, called "The Playbook," at the Adobe developer conference was pretty impressive with some analysts now speculating it could actually challenge the mighty iPad.

Word on the Street
The Fast Money traders take a look at today's top business stories.

What’s the trade?

Around $56 I think RIM runs into resistance and out of gas, says Tim Seymour.

I can’t get excited at these levels, says Guy Adami.

If you followed me into this trade onMonday's web extra, I’d raise my stop from $47 to $50 and I’d stay with it, says Joe Terranova.

RIM is only trading at 9 times this year’s earnings, says Patty Edwards. If it’s as good as the chatter suggests, I think this is a stock worth watching.

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IBM $10BLN BUYBACK REVERSES MARKET

Investors were cheered by the latest from IBM. Big Blue led stocks higher on Tuesday after it announced an additional $10 billion stock buyback; also the company declared a $0.65 a share quarterly dividend.

What’s the trade?

IBM is telling us that they’re firing on all cylinders, says Guy Adami. Valuations look cheap to me. I’d go long.

I agree, says Joe Terranova. I like this story.

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AFTER HOURS ACTION: BROADCOM

Shares of Broadcom popped 6% in extended trade after the company said its third-quarter net income more than tripled, helped by higher sales of both wired and wireless communications technology.

Taking a closer look at the numbers, net income for the July through September quarter jumped to $327.1 million, or 60 cents per share, from $84.6 million, or 16 cents per share, in the same period last year.

Excluding stock options expenses, Broadcom said it earned 74 cents per share.

That's more than Wall Street expected. Analysts surveyed by Thomson Reuters forecast net income of 71 cents per share.

Revenue increased 44 percent to $1.81 billion from $1.25 billion in the year-ago quarter, more than the $1.75 billion analysts predicted. The company said in a statement that both wired and wireless communication

What’s the trade?

If you’re long I wouldn’t get off the ride, says Joe Terranova.

The name is attractive but I wouldn’t rush in on Wednesday, adds Guy Adami.

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MARKET BUZZ KILL - WORLD'D BIGGEST STEELMAKER WARNS

Investors pummeled shares of Arcelor Mittal - the world's largest steelmaker after the company issued a weak fourth quarter outlook citing weak demand and higher costs.

What’s the trade?

In this space, I’m by a buyer SID and a seller of GGB, says Tim Seymour.

US Steel has traded between $40-50 since July, says Guy Adami. Watch to see if $40 holds.

If you must play the space I’d look at Steel Dynamics, says Joe Terranova but only on an under weight basis.

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DEBT-FUNDED BUYBACKS ON THE RISE?

Bank of America is anticipating more buybacks in the days ahead. Take a look at a note issued recently:

And the coming corporate finance response means issuers have historic incentive to sell the overvalued portion of their capital structure (debt) to buy back the undervalued (equity). The gap in valuation relative to history suggests a potential 50% increase in debt funded buyback activity over the next year.

Source: Bank of America Merrill Lynch

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FAST FIXED INCOME

Let's look at some fast fixed income: On Tuesday Goldman Sachs gave investors a chance to bet that the firm will be around in 2060 by selling $1.3 billion of 50 year bonds.

But will this debt issuance come to a halt? The 10 year Treasury is now all the way back up to 2.63%.

What should you make of it?

I’d be concerned about duration risk, says Tim Seymour. And it’s all stored up in the long-end of the curve.

The people who are buying these bonds are not worried about the duration risk, explains Gary Kaminksy. They want the coupon which is 6.25%.

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TICK BY TICK: FORD

Check out the tick by tick in Ford which turned higher on Tuesday after investors digested the company's 70% jump in third quarter profits.

This was Ford's sixth straight quarterly profit and the company's best third-quarter performance since at least 1990.

What’s the trade?

I’d make sure to have it on the radar, says Guy Adami, but I can’t help but worry it’s making a double top.

UBS analyst Colin Langan is largely bullish. Find out why. Watch the video above! The conversation starts around 17:00.





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Trader disclosure: On October 26th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour owns (AAPL), (BAC), (GOOG), (F), (HPQ), (NOK), (POT), (TM); Seygem Asset Management is short (MT); Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Terranova owns (APA), (AAPL), (AXP), (C), (GOOG), (GS), (IBM), (ISRG), (MCD), (MDT), (MMM), (NKE), (ORCL), (OXY), (PCP), (PEP), (PFE), (UPL), (VRTS), (XBI)

For Brian Kelly
Accounts managed by Kanundrum Capital own (JEF)
Accounts managed by Kanundrum Capital own (GLD)
Accounts managed by Kanundrum Capital own (GDXJ)
Accounts managed by Kanundrum Capital own (SLV)
Accounts managed by Kanundrum Capital own (PPLT)
Accounts managed by Kanundrum Capital own (REE)
Accounts managed by Kanundrum Capital own (MCP)
Accounts managed by Kanundrum Capital own (POT)
Accounts managed by Kanundrum Capital own (ANDE)
Accounts managed by Kanundrum Capital own (JO)
Accounts managed by Kanundrum Capital own (JJG)
Accounts managed by Kanundrum Capital own (SGG)
Accounts managed by Kanundrum Capital own (NIB)
Accounts managed by Kanundrum Capital own (TIP)

For Patty Edwards
Edwards owns (AAPL) for clients
Edwards owns (AXP) for clients
Edwards owns (BRCM) for clients
Edwards owns (F) for clients
Edwards owns (GOOG) for clients
Edwards owns (GS) for clients
Edwards owns (HPQ) for clients
Edwards owns (JPM) for clients
Edwards owns (MA) for clients
Edwards owns (MS) for clients
Edwards owns (V) for clients


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)
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Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (XLP)
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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 (DRYS)

For Colin Langan
(F) has been an investment banking client of UBS within the past 12 months
(F) has been a non-investment banking client of UBS within the past 12 months
(F) has been a non-securities client of UBS within the past 12 months
UBS has received compensation from (F) within the past 12 months

For Janet Bashear
Bernstein own more than 1% of the outstanding common stock of (H), (HOT)
(MAR) has been a client of Bernstein during the past 12 months
Bernstein has received compensation from (HOT) for investment banking services
In the next three (3) months, Bernstein or an affiliate expects to receive or intends to seek compensation for investment banking services from H / Hyatt Hotels Corp, HOT / Starwood Hotels & Resorts Worldwide Inc, MAR / Marriott International Inc.

For Scott Nations
***No Disclosures***

For Andrew Busch
***No Disclosures***


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IBM
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