BEST DAY IN 5 YEARS
The headline: Stocks Rip Higher in Morning and Sustain Gains Throughout Day After New Fed Liquidity Measure is Announced
Tuesday’s measure by the Fed to ease liquidity in funding markets was greeted by the traders – as well as Wall Street – as a welcome new solution to the credit crisis.
The rally was so big because the Fed, for the first time, coordinated its efforts with central banks around the world. The Fed finally showed that it is willing to work multilaterally, Karen Finerman said, which is hugely important as it has been taking on this problem with a ‘go-it-alone’ attitude.
It changed Guy Adami’s view of the market because it looks now like new money is going to work and that will instill confidence. This rally wasn’t just short covering. It was the real deal, Guy said.
And Pete Najarian said the crucial part of the announcement is that Bernanke said he is willing to continue to provide liquidity if conditions require it – so this isn’t necessarily a one-time thing. That said, we aren’t out of the woods just yet, Pete said. He was still a seller into strength on Tuesday.
BANKS JUMP 5% ON FED MOVE
The headline: Financials ETF Surges on Hopes Fed Liquidity Measure Will Thaw Credit Markets
While it’s good news for Fannie Mae (FNM) and Freddie Mac (FRE), according to Tim Seymour, he would still be weary of the broader financial sector. Liquidity is still an issue, he said.
Guy Adami thinks Goldman Sachs (GS) is the best financial trade right now. He thinks GS bottomed on Tuesday.
CNBC’s Scott Wapner reported late-breaking news that Bear Stearn’s second-largest shareholder, Joe Lewis, told him that he has no intention of selling any Bear stock even as the investment bank has been plagued by rumors lately that it has fundamental problems generating liquidity. Bear shares were rebounding after-hours after plunging during regular trading.
CRUDE OIL TOUCHES RECORD $109
The headline: Oil Climbs to Record for a Fifth Day, Touching $109.72
Pete Najarian sees a short squeeze coming in oil and predicts it could see a sharp pullback soon.
Guy Adami recommended oil services play Schlumberger (SLB) for its leverage to international demand and valuation. He would also short the oil ETF (USO) and take profits after its huge gain as of late.
Karen Finerman opined that if the Fed proves it can effectively use measures other than interest rate cuts to stem the fallout from the credit crunch, that would ultimately hurt oil and help the dollar.
APPLE AND GOOGLE REBOUND
The headline: America’s One-Time Favorite Stocks Rebound From 2008 Rout
Keep it in perspective, Pete Najarian said. Even with the rally, Google is still off $35 since last week.
Guy Adami would buy Microsoft . After two “ridiculous” quarters, the stock is still trading well below where it should, he said.
AFTER HOURS ACTION: TAKE-TWO INTERACTIVE
The headline: Take-Two Interactive Jumping After Raising 2008 Forecasts
There’s no question that the company is delighted it got a takeover bid from Electronic Arts (ERTS), Karen Finerman said. It seems like it now thinks it can get more.
AFTER HOURS ACTION: CEPHEID
The headline: Study Shows MSRA Test Doesn’t Cut Hospital Infections or Expenses
With any healthcare of biotech stock, the effectiveness of a product is always the biggest issue, so a sell-off in CPHD should be expected.
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Trader disclosure: On Mar.11, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Pete Najarian Owns (AAPL), (AMAT), (BIIB), (C), (CSCO), (MS), (MSFT), (NOK), (XLF), (YHOO), (CPHD); Pete Najarian Owns (AA) Calls, (COP) Calls; Pete Najarian Owns (FNM) Puts; Finerman Owns (GS), Finerman's Firm Owns (AAPL), (AEO), (FNM), (GE), (JCP), (MO), (MSFT), (TSO), (VLO), (WMT), (YHOO); Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Seymour Owns (CFC), (CSCO), (INTC), (MBI), (MSFT), (S), (TMA), (TSO), (TSM); Seygem Asset Management Owns (VIP); GE Is The Parent Company Of CNBC