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Buy the Big Bank Sell-Off?

Banks continued to sell off Monday after that foreclosure ruling made by the Massachusetts’ courts rattled investor confidence in the sector.

As you likely know, last week a court said two foreclosures were invalid because the banks -- Wells Fargo and USB -- didn't prove they owned the mortgages.

Since the ruling, investors have been in sell first and ask questions later mode, clearly worried that the decision will guide lower courts to make similar rulings.

However, chatter is starting to surface that the sell-off was overdone; after all banks have faced serious headwinds in the past few years, and at least most have weathered the storm.

Perhaps Fast trader Steve Grasso summarized the bullish view best when he said, "Banks survived the plague and now you're worried that they have the flu?"

Grasso's pithy comment begs the question, is this weakness a buying opportunity? Or are the risks still too big?

Morgan Stanley financial analyst Betsy Graseck tells us she thinks investors can buy dips in 4 names. They are BofA , JPMorgan, PNC and Wells Fargo.

Find out more about her picks. Watch the video above!


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Trader disclosure: On January 10, 2010, 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); Seymour owns (BAC); Seymour owns (F); Seymour owns (FXI); Seymour owns (GE); Terranova owns (GM); Terranova owns (C); Terranova owns (VRTS); Terranova owns (UPL); Terranova owns (PEP); Terranova owns (OXY); Terranova owns (GS); Terranova owns (LTD); Terranova owns (CNQ); Terranova owns (PVH); Terranova owns (CVI); Terranova owns (GLD) puts; Finerman's firm is short (IJR); Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman's firm is short (XRT); Finerman's firm is long S&P puts; Finerman's firm is long Russell 2000 puts; Finerman owns (AAPL); Finerman owns (BAC); Finerman's firm owns (BBY); Finerman owns (BP); Finerman's firm owns (BP); Finerman's owns (GOOG); Finerman owns (HPQ); Finerman's firm owns (HPQ); Finerman's firm owns (IBM); Finerman owns (JPM) and (JPM) leaps; Finerman's firm owns (JPM) and (JPM) leaps; Finerman owns (MSFT); Finerman's firm owns (MSFT); Finerman's firm owns (WMT); Jon Najarian owns (AA), is short (AA) calls; Jon Najarian owns (AAPL), is short (AAPL) calls; Jon Najarian owns (APOL) put spreads; Jon Najarian owns (BAC), is short (BAC) calls; Jon Najarian owns (BBY), is short (BBY) calls; Jon Najarian owns (F), is short (F) calls; Jon Najarian owns (GM), is short (GM) calls; Jon Najarian owns (GS), is short (GS) calls; Jon Najarian owns (IBM), is short (IBM) calls; Jon Najarian owns (MOS), is short (MOS) calls; Jon Najarian owns (MSFT), is short (MSFT) calls; Jon Najarian owns (NFLX), is short (NFLX) calls; Jon Najarian owns (ORCL), is short (ORCL) calls; Jon Najarian owns (RIMM), is short (RIMM) calls

For 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 (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 (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 (NCRI)
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)

For Brian Kelly
Accounts Managed By Kanundrum Capital Own (TBT)
Accounts Managed By Kanundrum Capital Own (YGE)
Accounts Managed By Kanundrum Capital Own (FCX)
Accounts Managed By Kanundrum Capital Own (MON)
Accounts Managed By Kanundrum Capital Own (ANDE)
Accounts Managed By Kanundrum Capital Own (GLD)
Accounts Managed By Kanundrum Capital Own (JPM) puts
Accounts Managed By Kanundrum Capital Are Long USD
Accounts Managed By Kanundrum Capital Are Short The Euro
Accounts Managed By Kanundrum Capital Are Short The Yen
Accounts Managed By Kanundrum Capital Are Short (XLF)

For Betsy Graseck
(C) may be deemed to control Morgan Stanley Smith Barney LLC due to ownership, board membership, or other relationships. Morgan Stanley Smith Barney LLC may participate in, or otherwise have a financial interest in, the primary or secondary distribution of securities issued by (C) or an affiliate of (C) that is controlled by or under common control with Morgan Stanley Smith Barney LLC.
Within the last 12 months, Morgan Stanley managed or co-managed a public offering (or 144A offering) of securities of (BNY), (C), (KEY), (NT), (PNC), (USB), (WFC)
Within the last 12 months, Morgan Stanley has received compensation for investment banking services from (AXP), (BAC), (BNY), (BBT), (COFI), (C), (DFS), (FITB), (JPM), (KEY), (NT), (PNC), (USB), (WFC)
In the next 3 months, Morgan Stanley expects to receive or intends to seek compensation for investment banking services from American Express Company, Bank of America, Bank of New York Mellon Corp, BB&T Corporation, Capital One Financial Corporation, Citigroup Inc., Discover Financial Services, Fifth Third Bancorp, J.P.Morgan Chase & Co., KeyCorp, Northern Trust Corp., PNC Financial Services, Regions Financial Corp, State Street Corporation, SunTrust, U.S. Bancorp, Wells Fargo & Co..
Within the last 12 months, Morgan Stanley has received compensation for products and services other than investment banking services from American Express Company, Bank of America, Bank of New York Mellon Corp, BB&T Corporation, Capital One Financial Corporation, Citigroup Inc., Fifth Third Bancorp, J.P.Morgan Chase & Co., KeyCorp, Northern Trust Corp., PNC Financial Services, Regions Financial Corp, State Street Corporation, SunTrust, U.S. Bancorp, Wells Fargo & Co..
Within the last 12 months, Morgan Stanley has provided or is providing investment banking services to, or has an investment banking client relationship with, the following company: American Express Company, Bank of America, Bank of New York Mellon Corp, BB&T Corporation, Capital One Financial Corporation, Citigroup Inc., Discover Financial Services, Fifth Third Bancorp, J.P.Morgan Chase & Co., KeyCorp, Northern Trust Corp., PNC Financial Services, Regions Financial Corp, State Street Corporation, SunTrust, U.S. Bancorp, Wells Fargo & Co..
Within the last 12 months, Morgan Stanley has either provided or is providing non-investment banking, securities-related services to and/or in the past has entered into an agreement to provide services or has a client relationship with the following company: American Express Company, Bank of America, Bank of New York Mellon Corp, BB&T Corporation, Capital One Financial Corporation, Citigroup Inc., Discover Financial Services, Fifth Third Bancorp, J.P.Morgan Chase & Co., KeyCorp, Northern Trust Corp., PNC Financial Services, Regions Financial Corp, State Street Corporation, SunTrust, U.S. Bancorp, Wells Fargo & Co..
Morgan Stanley & Co. Incorporated makes a market in the securities of American Express Company, Bank of America, Bank of New York Mellon Corp, BB&T Corporation, Capital One Financial Corporation, Citigroup Inc., Discover Financial Services, Fifth Third Bancorp, J.P.Morgan Chase & Co., KeyCorp, Northern Trust Corp., PNC Financial Services, Regions Financial Corp, State Street Corporation, SunTrust, U.S. Bancorp, Wells Fargo & Co..
The equity research analysts or strategists principally responsible for the preparation of Morgan Stanley Research have received compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors, firm revenues and overall investment banking revenues.
Morgan Stanley and its affiliates do business that relates to companies/instruments covered in Morgan Stanley Research, including market making, providing liquidity and specialized trading, risk arbitrage and other proprietary trading, fund management, commercial banking, extension of credit, investment services and investment banking. Morgan Stanley sells to and buys from customers the securities/instruments of companies covered in Morgan Stanley Research on a principal basis. Morgan Stanley may have a position in the debt of the Company or instruments discussed in this report.

For Adrianne Shapira
(TGT), (WMT), (KR), (SWY), (COST) Are Clients Of Goldman Sachs
(TGT), (WMT), (KR), (SWY), (COST) Received Non-Investment Banking Securities Related Services, Non-Securities Services From Goldman Sachs In Past 12 Months
(TGT), (WMT), (KR), (SWY) Received Investment Banking Serviecs From Goldman Sachs In Past 12 Months
Goldman Sachs Received Compensation From (TGT), (WMT) , (KR), (COST), (SWY) In Past 12 Months

For Mike Khouw
Cantor Fitzgerald and Co is a market maker in (AAPL)
Cantor Fitzgerald and Co is a market maker in (VZ)

For Romit Shah SOT
Nomura Securities Inc. is a market maker in (AMD)

For Dennis Gartman SOT
Funds Managed By Dennis Gartman Were Short The Euro on 1/10/2011

For Craig Berger
FBR Capital Markets & Co is a market maker in (INTC)
FBR Capital Markets & Co is a market maker in (NVDA)

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