DOW GIVES UP 129-POINT RALLY
The headline: Dow Gives Up 129-Point Rally to Close Lower For the Day. Did More Bear Stearns Subprime Hedge Fund Concerns Cause Monster Reversal?
Brokers were indeed the spoiler today. And this is concerning, Pete Najarian says. Today’s reversal further proves how volatile this market is, and perhaps how the Bear Stearns (BSC) “fiasco” is bigger than it was made out to be. When it was rumored today that Goldman Sachs (GS) could have some similar problems, Eric Bolling said he senses some nervousness. If Goldman gets hit with the subprime mess, it “could be a problem,” he says.
Sell first and ask questions later – that’s what Guy Adami says seems to be the motto of this market. The brokerage problems will likely last a couple more weeks, he says, and the market thinks the problems are widespread. If you’re going to be a buyer, Eric Bolling says, this correction is a good time to buy some of the quality names that had gotten expensive but are now a bit cheaper.
The headline: Blackstone Plunges 7%, Making It 2nd-Worst IPO of 2007 In Terms of Two-Day Performance.
Blackstone (BX) is still rich and will probably still go lower, Guy says. There’s no reason to be involved in it one way or another, Jeff says. Pete says it’s overpriced. If you’re going to own – Eric says at least wait until it finds a bottom.
ONE YAHOO! OF A WEEKEND:
The headline: Yahoo! Shakes Up Management, While Barron’s Says Stock Is “Almost Sure To Rise”
Yahoo! (YHOO) is doing the right thing, Eric says. It finally jumped on the Google (GOOG) bandwagon with regard to its ad model, and that has worked wonders for GOOG so why not YHOO?
COMING TO TERMS:
The headline: NYT: Dow Jones (DJ), News Corp (NWS). Near Deal On WSJ Newsroom Independence
Now that the company’s future is in the hands of the board and not the Bancroft family, the deal is even more likely to get done, Pete says. But the stock is slipping a little every day. He likes the July call options, which can be used to take advantage of the speculation and uncertainty about the deal. But Jeff thinks the upside is “negligible.” Eric would rather buy Pearson (PSO), onetime Dow Jones suitor, if it spins off its financial assets – mainly the Financial Times and the Economist – and focuses on its educational content.
TAKE CHIPS OFF THE OLD PORTFOLIO?
The headline: Is It Time To Take Profits In NVIDIA After Goldman Downgrade?
Ten days ago, Guy said NVIDIA (NVDA) was rich at $40 but probably worth the multiple. Now, after the downgrade, the stock is still rich, he says. If you got long NVIDIA, it might be time to take some position off. It reached the top, Pete says. At $43, it’s a good time to “exit and move on.”
The headline: Following JBS, Brazilian Beef Companies Marfrig, Minerva Will Soon Go Public
The Brazilian meat processors are on fire, Eric says, and it isn’t all related to the currency upside. He points to Perdigao (PDA), up 110% over the last year, and Sadia (SDA), up 100% as examples of reasons to check out this sector.
LOSE SOME OF YOUR RELIGION:
The headline: Is It Time To Take Profits In True Religion Following A-Rod-Inspired Surge?
Eric Bolling doesn’t think so. The market was down today, yet True Religion (TRLG) still trended higher. He’s sticking with it.
DIABETES TRADE UPDATE:
The headline: GlaxoSmithKline’s Avandia, Bristol-Myers Hot Topics At Annual Diabetes Conference
CNBC Pharmaceuticals Reporter Mike Huckman, speaking from the American Diabetes Association Conference, says the issue of Avandia’s safety is a huge topic at the meeting. He spoke to six specialists who treat diabetes from around the world and five of them said they haven’t written a single new prescription for GlaxoSmithKline’s (GSK) drug since the safety issue arose.
Out of the Avandia problems, there are some winners, Mike says. Eli Lilly (LLY) has a partnership with Amylin (AMLN) and Alkermes (ALKS) on a once-a-week diabetes drug called Byetta that analysts say could be a blockbuster. The “make or break data” on Byetta comes out in the fourth quarter. Also keep an eye on Orexigen (OREX), Mike says, which recently came public and had a big day on good news from weight-loss drug results.
Pete is bearish Glaxo, bullish Lilly on the Avandia situation. He also likes Bristol-Myers (BMY) on takeover rumors. But neither Eric nor Jeff want to go near anything in the pharma space on an extended basis because of the overall volatility in the market. Guy says Glaxo is a huge company, and it shouldn’t necessarily be written off because of Avandia. He also likes Merck (MRK).
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Trader disclosure: On June 25 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:Najarian Owns (.VIX), (TIF) Bolling Owns (SZE), (VE), Gold; Bolling Is Short (FXI) And Owns (FXI) Puts; Bolling Is Short S&P Futures; Bolling Is Short Nasdaq Futures; CNBC Is A Service Of NBC Universal And Dow Jones; GE Is The Parent Company Of CNBC