IN THE RED FOR '07
The headline: Stock Market Rolls Over Today on Credit Crisis, Erasing S&P 500's Gain For the Year.
Dylan Ratigan explains that the S&P 500 is down 6.1% over 5 days. It’s the biggest drop since January 2003. Also, he says, with the Dow below 13,000; it’s down more than 1,000 points from a record high set in July.
Jeff Macke says the last hour of trading has become a dangerous hour lately, because traders don’t want to hold stocks overnight.
COUNTRY FRIED FINANCIAL:
The headline: Countrywide (CFC) Plummets 13% On Merrill Downgrade, Bankruptcy Speculation;
Pete Najarian says the Countrywide sell-off worsened on reports of a significant jump in its borrowing costs. Pete also says options volume suggests to him that CFC has further to drop. Pete tells the panel he’s short CFC.
On a related note, Pete Najarian says the bank stocks rolled over Wednesday as countrywide plummeted. If Goldman Sachs and Morgan Stanley are having problems, it will likely ripple through the entire space, says Pete. He sees a lot of put buying in the Financial Select Sector SPDR(XLF).
Finally, Pete recommends investors buy the volatility. In other words if you buy stock in this environment, buy a put spread as protection.
Guy Adami adds that Warren Buffett sees something in Bank of America (BAC). Guy suggests that BAC might not have much exposure to the subprime slime.
Tim Seymour reveals he bought materials companies today. He also says that as liquidity dries up, the dollar benefits. Consequently, he recommends buying CurrencyShares Canadian Dollar Trust (FXC).
AFTER HOURS ACTION: AMGEN AFTER HOURS:
The headline: Amgen (AMGN), the Biggest Biotech, Rises After Hours On Job Cut Plans;
Pete Najarian explains that the pop stems from an announcement that Amgen intend to reduce its work force by as much as 14%. On a related note, Pete doesn’t feel the stock will move until late 2008.
DEERE IN THE SPOTLIGHT:
The headline: Ag Trade Still Going Strong As Deere (DE) Reports 23% Surge In Profit;
Guy Adami says Deere & Co. beat earnings, but the news was swept under the carpet because of the distress in the market.
BUFFETT'S DOW WOW:
The headline: Berkshire Hathaway (BRK) Bought 3% Stake In Dow Jones (DJ) In Winning Bet On News Corp. Takeover;
Dylan Ratigan corrects an error made on the show Tuesday. He says a 2-for-1 stock split caused Berkshire's Nike (NKE) holdings to double; Buffett may not have changed his stake. He adds that Buffett did not disclose his stake in Union Pacific.
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Trader disclosure: On Aug 152007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money Macke Owns (EMC), (JWN) Najarian Is Short (CFC), (GS), Seymour Owns (X), (EEM), Seymour Is Short (LEH), Red Star Asset Management Owns (MBT), Red Star Asset Management Is Short (EEM)