Stocks dropped Monday as the country's largest bank raised suspicions that the credit crunch is not yet behind us. But the headline of the day belonged to oil, which surged 3% to a record $86. With earnings from tech giants Intel and IBM looming, what's your next move?
BANK STOCKS PRINCE OF WAILS:
The headline: Chuck Prince's Citigroup (C) Reports 57% Profit Plunge, Dragging Down Financials, Market.
Citigroup warned of accelerating defaults and fixed-income losses explains Dylan Ratigan.
Karen Finerman says she wasn’t surprised by Citigroup’s results.
Guy Adami adds Citi now says they’re not going to buy stock back until early ’08 and that spooked some investors. He recommends stopping out at $45.
Jeff Macke feels there’s no reason to get long Citi.
On a related note, Pete Najarian recommends watching Knight Capital (NITE) and E*Trade (ETFC) which both report earning on Wednesday.
OIL SOARS TO RECORD $86:
The headline: Crude Surges 3% To $86.13, New Record Close; Oil Has Gained 9% Over The Past 5 Sessions.
Both Exxon Mobil (XOM) and Chevron (CVX) climbed Monday as crude hit a new highs, explains Dylan Ratigan.
The refiners did not participate in the oil rally, Pete Najarian adds. He thinks that investors are starting to look more closely at coal. Also Najarian says the surge in oil crushed the transports.
BULLION BOOMS ON BUCKS & BARRELS:
The headline: Gold Leaps 1.1% To 27-Year High As Dollar Flags, Crude Oil Flies; Gold Is Up 19% So Far This Year
Guy Adami feels Monday’s action was a flight to quality. Again, he says gold makes him skittish.
Jeff Macke doesn’t see a reason to buy gold right now, either.
AFTER HOURS ACTION: DNA
The headline: Genetech (DNA) Earnings Beat Estimates, But Revenue Comes In Below Expectations.
Pete Najarian says the stock isn’t doing a whole lot after hours, which suggests to him the market priced earnings perfectly.
BIO GENERATING EXCITEMENT:
The headline: Biogen Idec (BIIB) Skyrocketing As Investors Await Possible Carl Icahn Offer.
Karen Finerman explains that Carl Icahn offered $23b for Biogen Idec last week. In addition, Elan (ELN) holds 50% interest in Biogen's key multiple sclerosis drug Tysabri says Finerman.
Pete Najarian thinks Biogen’s pipeline is quite strong.
DEALMAKING NOT DEAD?
The headline: Test Equipment Maker Danaher (DHR) To Buy Tektronix (TEK) For $2.85B, Proving M&A Is Far From Dead
Shopping Spree Stocks? - Cash On Books
Microsoft $23 Billion
Merck $5.5 Billion
Pfizer $22 Billion
Source: Standard & Poors
Jeff Macke says some companies have a lot of money on the books and as a result, M&A activity should return.
SINO THE TIMES:
The headline: China Financial Power In Full Display Monday As CSI 300 Index, Hong Kong's Hang Seng Reach New Records.
China and Hong Kong markets soared to new heights even as the government kept tightening monetary policy says Dylan Ratigan. He adds PetroChina (PTR) surpassed General Electric (GE) as the world's 2nd-biggest company after it reached $434b market cap.
Pete Najarian feels that China has made such a magnificent run that, for the first time, he says the top could come before the Olympics.
BERNANKE IN DA CLUB:
The headline: Ben Bernanke To Speak At Economic Club Of New York Monday Night; Will Bernanke hint at what Fed will do at its next meeting on October 30?
Karen Finerman doesn’t think so. Also she doesn’t expect the Fed to lower rates.
The headline: Ousted Children's Place (PLCE) CEO Hires Bear Stearns To Explore Bid For Retailer.
Children's Place shares surged on the possible bid by the controversial ex-CEO says Karen Finerman, who already owns 17% of the company. She likes the risk / reward ratio of this trade.
Jeff Macke doesn’t agree. He recommends buying Build-A-Bear Workshop (BBW) instead, also on takeover speculation.
OPTIONS ACTION: SIRF'S UP:
The headline: Pete Seeing Unusual Options Activity In GPS Chip Maker SiRF Technology (SIRF)
Pete Najarian says Monday’s options action suggests to him the stock could go higher.
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Trader disclosure: On Oct 15, 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 (HAS), (INTC); Najarian Owns (BBW), (C), (CY), (GOOG), (SIRF); Finerman Owns (GS), (C); Finerman's Firm Owns (COP), (GE), (KFT), (NMX), (NYX), (NVT), (MO), (PLCE); Finerman's Firm Owns Russell 2000 Index Puts; Finerman's Firm Owns S&P 500 Index Puts; Finerman's Firm And Finerman Own (FLS); GE Is The Parent Company Of CNBC