Dow Rallies 115 Points on Hope More Deals Will Bloom in the Spring, Bernanke Will Stop to Smell the Roses
Flowers are budding, birds are chirping and the urge to merge is wafting in the air. The health care, lawn care and oil services sectors all announced major deals today, which sent stock prices climbing after last week’s slide. With the Ben Bernanke and crew likely to keep interest rates unchanged on Wednesday, will Spring usher in blooming stock prices or is it time to do a little Spring cleaning in your portfolio.
Eric Bolling says the miners and refiners were all up more than the S&P and NASDAQ. The gasoline crack reached $26. (Eric has only seen that once before, during Hurricane Katrina.) Eric says the trade is stay with Tesoro (TSO) and Valero (VLO), the refiners.
Jeff Macke says Eric is right and gas prices are breaking out. But, he adds a word of caution. Jeff believes the rally is sowing the seeds of its own destruction, since it’s being led by higher gas prices. Jeff says that makes him worried for the consumer.
Guy Adami adds that volume today was light and if gas prices start getting out of control the market will go lower. He’s not completely sold on this rally
Tim Strazzini adds that the market's strength today was also because of strategic buyers in the healthcare and private equity sectors. Today, Community Health Systems (CYH) bid higher for Triad Hospitals (TRI). Tim adds that he doesn’t love the top names in the healthcare sector. He recommends being short WellCare Health Plans (WCG) and Magellan Health Services (MGLN). He says the valuations of those companies are too high. Instead, Tim likes LifePoint Hospitals (LPNT) and Universal Health Services (UHS); both are large cap plays.
Jeff Macke adds that Service Master (SVM) was involved in a deal today, too. He says the play is to buy Scotts Miracle Grow (SMG), because it has a lot of tiny divisions (just like SVM) and that makes it attractive for a private equity buy-out.
On MAR 19, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Bolling Owns (CVX), Gold, Silver, Soybeans, is Short Corn. Strazzini owns (CHK), (EWG), (STM) GE is the parent company of CNBC.