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Halftime—Jon Najarian: Unusual Activity In This Retailer

Tuesday, 25 Jan 2011 | 1:43 PM ET

From the options market, Jon Najarian on Tuesday spotted some unusual activity in Nordstrom.

The Seattle-based retailer saw "very strong" put activity at the 41 strike, noted Najarian, co-founder of optionMONSTER.com. Someone bought more than 10,000 contracts of the April 41 puts, which Najarian said is "just out-of-the-money." Being as there hasn't been a corresponding stock print, that tells him someone is making a "very bearish call" on JWN.

Najarian said any time he sees a big print like this, either bearish or bullish, he likes to get on the same side of that trade.

Steve Cortes, founder of Veracruz, had been short the retailers. On Monday, he took profits on that trade, though. Walmart has been doing well, he explained, so that could bode well for the rest of the retail space. It's interesting, he added, that the high-end retailers haven't followed Walmart's lead thus far.

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TRADING YAHOO! AHEAD OF EARNINGS

Yahoo! is expected to report earnings after Tuesday's closing bell and Joe Terranova said expectations aren't very high.

This is a very "unloved" stock , said Terranova, chief market strategist at Virtus Investment Partners. Yet he thinks this could be the one quarterwith an upside surprise, but didn't say why or endorse buying the stock.

Patty Edwards, chief investment officer at Trutina Financial, said she's not interested in YHOO. She would rather go with Baidu , a Chinese Internet search company based in Beijing.

If you must be in search, Cortes recommends Google . In addition to its strong market share in Internet search, it offers an array of other products, like its popular Droid operating system for smartphones.

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Najarian, on the other hand, likes Yahoo! because he thinks it has "limited downside." The options trader said the company was smart to cut 700 workers last month, as he thinks it will help give the Sunnyvale, Calif.-based company postive guidance going forward.

After the program, Yahoo! announced additional layoffs affecting about 1 percent of its global workforce, or 150 people.

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POPS & DROPS

Stocks pared their losses, but remained under pressure, following disappointing earnings reports from a handful of major Dow components and mixed economic news. By midday trading, the "Fast Money" traders found these market movers to be the most interesting:

Pops (stocks that went higher)

Cheesecake Factory (CAKE) popped 2%: The restaurant chain rallied after entering into an agreement with Alshaya Group to open 22 restaurants in the Middle East; UBS also upgraded CAKE. Edwards said she thinks the company could benefit from the expansion.

Drops (stocks that went lower)

Eastman Kodak (EK) dropped 13%: The camera company lost a U.S. trade ruling that could hurt efforts to collect patent royalties from Apple and Research In Motion . Cortes likes EK, but wouldn't move on it until there is a resolution to litigation.

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Trader disclosure: On Jan. 25, 2011, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Jon Najarian owns (RIMM), is short (RIMM) calls; Jon Najarian owns (VZ), is short (VZ) calls; Jon Najarian owns (WMT), is short (WMT) calls; Jon Najarian owns (JWN) puts; Jon Najarian owns (AMD) puts; Jon Najarian owns (EGLE) puts; Jon Najarian owns (GS) puts; Cortes owns (GS); Cortes owns (TSN); Cortes owns (SVU); Cortes owns (CLX); Cortes is short (LVS); Cortes is short (XME) vs. S&P long; Cortes is long U.S. Treasuries; Cortes is long USD vs. Mexican Peso; Cortes is short Corn; Terranova Owns (UPL); Terranova Owns (VRTS); Terranova Owns (PVH); Terranova Owns (GM); Terranova Owns (CVI); Terranova Owns (CNQ); Terranova Owns (LTD); Terranova Owns (C); Terranova Owns (PEP); Terranova Owns (CPX); Terranova Owns (ARUN); Terranova Owns (MS); Terranova Owns (RSH); Terranova is short Gold; Terranova owns (POT); Terranova owns (CRM); Terranova owns (FCX)

For Patty Edwards
Edwards owns (SPY) for clients
Edwards owns (GLD) for clients
Edwards owns (SLV) for clients
Edwards owns (BA) for clients
Edwards owns (AMZN) for clients
Edwards owns (F) for clients
Edwards owns (V) for clients
Edwards owns (JNJ) for clients
Edwards owns (AAPL) for clients
Edwards owns (GOOG) for clients
Edwards owns (VZ) for clients
Edwards owns (MSFT) for clients
Edwards owns (RIMM) for clients
Edwards owns (C) for clients
Edwards owns (TGT) for clients
Edwards owns (MCD) for clients
Edwards owns (GLW) for clients
Edwards owns (JNJ) for clients
Edwards owns (GE) for clients

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)

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CNBC.com with wires.

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