TALKED OFF THE LEDGE
The headline: Dow Finishes Flat After Late Turnaround Erases 340-Point Loss; S&P 500 Reverses Course Right After 1-Month Loss Reaches 10% ‘Correction’ Threshold
Bear Stearns (BSC) led the charge higher and brought the rest of the group with it, Pete Najarian says. It is notable that the Financial Select Sector SPDR (XLF) was much higher than it was just two days ago, he adds.
Eric Bolling agrees. “Keep your eye on the XLF,” he says.
Guy Adami thinks the next 500 points in the Dow will be to the upside.
“This is the snap-back rally we’ve been looking for,” Jeff Macke says. He doesn’t think the market is out of the woods yet but things “look a little brighter.”
WORST TO FIRST
The headline: JP Morgan, Financials Post Biggest Gain in a Week
The intraday percentage changes in the big money centers were substantial: Bank of America (BAC) gained 3.3%, JP Morgan (JPM) gained 5.7% and Citigroup (C) gained 4.3%.
It appears that the things that led us down now may be the thinks that lead us back up, Eric Bolling says. He thinks the financials have bottomed and that the market will follow.
Guy Adami would urge investors to pay attention to U.S. Bancorp (USB) because Warren Buffett just increased his stake in the bank.
The headline: Metal Stocks Get Murdered as Freeport-McMoRan (FCX) Plummets 8%; Alcoa (AA), U.S. Steel (X), Suffering Heavy Losses Thursday
Eric Bolling says commodity stocks got hurt because world markets ran for cover in the U.S. dollar. And when the dollar goes up, commodities and commodity-based stocks go down.
Pete Najarian thinks Alcoa may have reached a bottom. It has been so beaten down and now the calls are going up. “The opportunity for the turn is now for Alcoa,” he says.
YEN SURGES MOST SINCE 1998
The headline: Japanese Yen Rallies 3.4% - Most In Nearly 9 Years – As Carry Trade Unwinds
The unwinding of the yen carry trade involved investors who borrowed or shorted the currency at a very low interest rate and used it to buy things with higher yields - they are now getting rid of what they had.
Eric Bolling has closed out of his long Yen futures trade because he thinks the market has bottomed.
AFTER HOURS ACTION: Hewlett-Packard
The headline:Hewlett-Packard (HPQ) Jumps After Hours as Earnings, Revenue Trounce Estimates
Whatever you think of the market, Jeff Macke says, on a fundamental basis its hard not to love Hewlett-Packard.
They beat on every aspect of their business, Pete Najarian says. And he expects Hewlett’s blowout quarter to lift other PC stocks as well.
Eric Bolling uses Hewlett as the proxy for the tech sector.
AFTER HOURS ACTION: Dell
The headline: Dell (DELL) Says It Will Restate Financials Back to 2003 Because of Accounting Issues
Some clarity at last, Guy Adami says, now that the internal investigation is over. He still thinks Dell is under-owned simply because global demand for PCs is “off the chart.”
The headline may sound bad, but it should be good news for the beleaguered PC-maker, Jeff Macke says. The company basically “ripped the Band-Aid off” which is good news from an investor’s perspective, he says.
WHOLE FOODS FEELS ITS OATS
The headline: Federal Judge Denies FTC Request to Block Whole Foods (WFMI) Acquisition Of Wild Oats (OATS)
If Whole Foods can get its act together it still has room to grow, Jeff Macke says. It’s better than other “beaten-down retailers, (most notably Starbucks)” he says.
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Trader disclosure: On Aug 16 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money; Macke Owns (INTC); (JWN); Najarian Owns (TMA); Najarian Is Short (GS); Najarian Owns (AA) Calls; Najarian Owns Straddles In (ETFC); Bolling Owns Gold; Bolling Is Short (FXI) And Owns (FXI) Put,; Bolling Has Closed Out Of His Long Japanese Yen Futures Trade