GO
Loading...

Halftime: ‘Buys’ On Back of GE Dividend Bump?

With the S&P ambling higher on Friday, the Fast Money traders were looking at at yield with dividend payers landing front and center after industrial giant GE boosted its dividend by 2 cents to 14 cents per share.

Though that might not seem remarkable at first – it marks a 17-percent increase and the second time the company raised its quarterly dividend this year.

GE – the parent company of CNBC - cited a few factors for the move including 1) strong cash generation, 2) recovery at its lending unit GE Capital and – 3) solid performance in its industrial businesses this year.

How should position? What’s the trade?

Instant Insights with the Fast Money traders

Looking at the technicals, the chart of GE suggests the stock wants to break out, says Steve Grasso of Stuart Frankel. In fact, I think this is the kind of catalyst that can take the entire market higher.

As you can see above GE cited solid performance in its industrial business, adds Joe Terranova. In terms of momentum, the industrial space had been a leader in 2010, but the question is going forward – ‘can it perform at the same pace in 2011,’ he says. For my money, it’s okay to be long industrials but I wouldn’t go overweight. Names that I like in this space include GE, Eaton, Flour , and 3M .

------

After discussing GE’s dividend increase, the Fast Money desk also parsed through the top 5 highest yielding Dow stocks. They follow:

  • AT&T
  • Verizon
  • Pfizer
  • Merck
  • Kraft

What's the trade?

If you're looking to play yields, I’d look DuPont and Microsoft , says Pete Najarian. Or check out AT&T or Boeing. I'd think the stocks that provide yield may attract money from the bond market.

--------

THE BANK TRADE

Financials were also up big this week on expectations of dividend raises - with Bank of America and JPMorgan seeing strong gains.

Banks’ Big Week
Bank of America + 6.8%
JP Morgan + 3.8%
Citi + 5.8%
AIG + 8.5%
Goldman Sachs +2.5%

What’s the trade?

If you must play this space I’d do it with Bank of Montreal or BlackRock, says Patty Edwards.

I’m long Citi , adds Steve Grasso. If the stock can hold $5 it could trigger a great deal of institutional buying. Read more - click here to go to Did Citi Just Become A Must-Have Stock?

--------

TECH: MOVERS AND SHAKERS

The traders are closely watching a number of interesting movers in tech, including RackSpace which hit a new 52 week high.

What’s the trade?

I’m seeing a large volume of options traders buying December 31, 32, 33, 34 calls and Jan 33, 34 calls. It’s very interesting activity to see considering the stock is already at 52-week highs.

--------

COFFEE CRASH

Take a look at shares of Green Mountain Coffee; on Friday they continued their after hours slide, after the company issued a weak forecast and warned of high coffee costs.

What’s the trade?

They also said they’re not giving guidance, reminds Patty Edwards. Historically the Street punishes companies that don’t give guidance.

If you want a coffee trade, I’d look at JM Smucker , says Joe Terranova. They own Folgers.

--------

TIME TO SEND BACK NETFLIX?

Netflix shares jumped in Friday’s session after the announcement it will be added to the S&P 500. The move follows a sell off on news of the CFO's departure and a downgrade this week.

Is the momentum back or should you sell the rip?

Wedbush analyst Michael Pachter has an underperform rating on the stock with a $78 price target over the next 12 months. Why does he think the stock is going to decline so much?

Watch the video and find out now!

--------

CALL THE CLOSE

Joe Terranova – I think the market goes higher.
Steve Grasso – With the market closing above 1228. a key technical level, I think we go higher.
Patty Edwards - I’m a buyer.
Pete Najarian – I also think the market is going higher – with the financials and industrials climbing.



______________________________________________________
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 December 10, 2010, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Pete Najarian owns (YHOO), (F), (C), (CNI) and (CRUS). Pete Najarian owns (MSFT) call spreads. Pete Najarian owns (DRYS) call spreads. Pete Najarian owns (SMH) call spreads. Pete Najarian owns (MCD) call spreads. Pete Najarian owns (RAX) call spreads. Terranova Owns (C), (GS), (NKE), (OXY), (PEP), (PFE), (VRTS), (UPL), (IBM) and (RSH). Terranova Owns (FCX) calls. Terranova Owns (GLD) puts. Grasso owns (ASTM), (BA), (BAC), (BWC), (C), (CSCO), (JPM), (LIT), (LPX), (MOT), (MHY), (NDAQ), (PFE), (PRST), (S) and (X). Dennis Gartman is long gold in euro terms. Dennis Gartman is short the euro.

JOE TERRANOVA
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (ALK)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EPR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (LPHI)
Virtus Investment Partners Owns More Than 1% Of (MGRC)
Virtus Investment Partners Owns More Than 1% Of (NRCI)
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 (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DRYS)

PATTY EDWARDS
Edwards Owns (AAPL) for clients
Edwards Owns (GS) for clients
Edwards Owns (C) for clients
Edwards Owns (CME) for clients
Edwards Owns (AMZN) for clients
Edwards Owns (COST) for clients
Edwards Owns (MCD) for clients
Edwards Owns (F) for clients
Edwards Owns (TTM) for clients
Edwards Owns (MSFT) for clients
Edwards Owns (GLD) for clients
Edwards Owns (SLV) for clients
Edwards Owns (INTC) for clients
Edwards Owns (SBUX) for clients
Edwards Owns (CYH) for clients
Edwards Owns (BKCC) for clients
Edwards Owns (BMO) for clients

STEVE GRASSO
Stuart Frankel & Co and it’s partners own (AAPL)
Stuart Frankel & Co and it’s partners own (CSCO)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (NWS.A)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PDE)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RDC)
Stuart Frankel & Co and it’s partners own (TLM)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co And Its Partners Own (UNM)
Stuart Frankel & Co and it’s partners are short (QQQQ)
Stuart Frankel & Co and it’s partners are short (MCD)
Stuart Frankel & Co and it’s partners are short (AAPL)

MICHAEL PACHTER
Wedbush Securities Is A Market Maker In (NFLX)

GE Is The Parent Company of CNBC
NBC Universal Is The Parent Company of CNBC

Funds Managed by Dennis Gartman are long gold, short Euro





CNBC.com with wires.

Contact Halftime Report

  • Showtimes

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