Investors are weighing a weak jobs report and the threat of bond-insurer downgrades against enthusiasm over Microsoft's bid for Yahoo, causing a seesaw effect in the markets.
CNBC asked the experts where investors should place their bets to make it through the volatility.
Betting on Express Scripts
“We’re looking for stocks that will benefit from an economic slowdown. Also, this is an election year so we’re looking for companies that are going to help with cost containment. I think that’s going to be a priority for lots of companies, and also for the government. So, Express Scripts helps with the pharmacy benefit management program for a lot of large firms, utilities and government organizations. They’ve been able to top anlayst expectations for 11 of the last 12 quarters.
Paul Alan Davis, Schwab Portfolio Manager
Super Bowl Stock Picks
"DirecTV was actually quite a surprise to me. I expected to find a terrible company here, and what I found was a company that has a forward PE of only 15 times earnings...and their earnings are up 28 percent year-over-year, [without] a lot of debt. The stock's about 20 percent off its 52-week high.”
- Brent Wilsey, Wilsey Asset Management President
Wilsey recommends: Best Buy, DirecTV and Brinker International.
Investing in New Media Stocks
"Bankrate should still be getting some traction with its stock price. You have companies like Vistaprint and Shutterfly--those are niche e-commerce players that have very different business models, their revenue growth has accelerated, and they’re still growing north of 40 percent. We like them a lot."
- Youssef Squali, Jefferies & Co. Analyst
Squali recommends: Bankrate , Vistaprint and Shutterfly .
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The Friday Trade
"I was looking at some of the unusual activity we've seen in Commercial Metals…They recycle as well as mill steel, and that sector has been red hot, as we've all known."
- Pete Najarian, Najarian Capital
Najarian recommends: Commercial Metals , Norfolk Southern and CSX.
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Betting on Tech
"I think now you look around, you look at tech, it hasn't participated in this rally. You have great news out today from Yahoo and Microsoft. Despite what you think about the deal, it's good news for the sector. I think there are a number of areas in tech that will work well; I particularly like storage."
- Michael Church, Church Capital Mgmt. Senior Portfolio Manager
Searching for a Bargain
"In this environment, what happens is we see the baby being thrown out with the bath water. There is so much value you can find where there's fear and panic running the marketplace. Microsoft found that value--that's why they came after Yahoo the way they did, and we're going to see a little bit more of that. Keep your eyes on the small cap stocks. They're probably going to be the greatest beneficiary of that type of news. Now the question is who's next. Who's going to buy who? And we could see a bit of a consolidation over the course of the next couple of months.”
Jack Bouroudjian, Brewer Investment Group Principal