Well, a day after we were dancing with Dow 14,000, the market gets ugly. Bad earnings from Intel (INTC) and more subprime lending woes were the culprits. Thank goodness for energy, which helped stocks recover in the final hours of trading. Let's get right to the trades behind the news. Here's the Word On The Street.
THE BROTHERS GRIM?
The headline: Lehman Brothers (LEH) Tumbles On Rumors Of Wider Subprime Exposure; Lehman Brothers: Subprime Rumors Are "Totally Unfounded"
Pete Najarian says the financials were slaughtered Wednesday because traders were selling into the news.
Jeff Macke adds that the bulls will continue to get crushed on this kind of speculation.
Eric Bolling doesn’t expect the financial sector to recover soon and recommends investors stay with what’s working.
RUN ON THE BANKS:
The headline: Citigroup (C), JPMorgan (JPM), Bank of America (BAC) Lead Market Lower Today
Pete Najarian says stay away from these names. There’s too much focus on subprime right now.
Karen Finerman says although she likes financials on valuation she doesn’t think credit fears are fully over and urges caution in the space.
LOWER CHOLESTEROL, LOWER EARNINGS:
The headline: Pfizer (PFE) Profit Plunges 48% On Lower Lipitor Sales, Generic Competition
Pete Najarian says stay away from Big Pharma and Big Biotehc. Instead, he likes Biogen (BIIB), Amylin (AMLN) and Gilead (GILD).
Karen Finerman says she was surprised Pfizer wasn’t down more. Lipitor is their crown jewel she says, and to have this kind of plunge is a problem.
AFTER HOURS ACTION: BLUE SKIES FOR BIG BLUE:
The headline: IBM (IBM) Jumps After Hours On Best Quarterly Revenue Growth Since 2001
Eric Bolling thinks IBM stock is going higher and expects their Q3 to be strong.
Pete Najarian likes IBM because it’s P/E has lagged Dell (DELL) and Hewlett Packard (HPQ).
AFTER HOURS ACTION: GOOD DAY FOR EBAY:
The headline:eBay (EBAY) Reports 50% Surge In Quarterly Profit After the Bell
Jeff Macke says eBay’s guidance was in-line, but it wasn’t enough for the stock to break out. Jeff thinks there are better names in tech.
DOLLAR DOWN, METALS UP:
The headline: Gold, Silver, Platinum, Copper All Jumping On Weak Dollar
Eric Bolling says the dollar is the weakest it’s been in 15 years and consequently he doubled his position in gold, copper, silver and platinum. Eric also likes Kennametal (KMT) as a derivative mining play.
The headline: Crude Oil Jumps to the Highest Since August 2006 as Gasoline Supplies Fall...Which Is The Better Integrated Oil Company - Chevron (CVX) Or ConocoPhillips (COP)?
Pete Najarian tells the panel he likes COP as a trade, because in the last 3-weeks the stock has gone up over $10.
Eric Bolling says CVX is the better long-term investment.
MACY'S SHARES PARADE:
The headline: Macy's (M) Soars Even As Some Doubt Women's Wear Daily Report Of $24B KKR Bid
Karen Finerman says she’s skeptical of the speculation. She tells the panel she’s called her sources and believes the smart money is also very skeptical.
Jeff Macke adds the deal would make absolutely no sense.
IS LAMPERT GROCERY SHOPPING?
The headline: Safeway (SWY) Shares, Options Soar On Rumor Eddie Lampert’s Sears is Mulling A Takeover
Jeff Macke says he likes this stock with or without the speculation of a buyout.
Pete Najarian says options volume are very high and he thinks takeover speculation might have legs.
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Trader disclosure: On July 18th 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders;Macke Owns (INTC), (JWN), (SWY); Najarian Is Short (LEH); Najarian Is Short (YHOO); Bolling Owns (XOM), (BP), Gold, Silver, Copper, Platinum, Corn; Bolling Is Short (FXI) And Owns (FXI) Puts; Finerman Owns (CX), Finerman's Firm And Finerman Own (C); Finerman's Firm Owns (BAC), (COP), S&P Puts, Russell 2000 Puts