The Dow finished modestly lower Monday as anxious traders await news of the government's bank rescue plan.
Uncertainty regarding the bank rescue has shaken financial shares, pushing them down nearly 21 percent year-to-date on fears that the government would be forced to nationalize some banks. Those fears have now been easing on expectations the Obama administration's rescue plan will focus on getting private investors to buy up bad debts.
At the same time, Wall Street is keeping a close eye on the $827 billion economic stimulus package currently in Congress. President Barack Obama appears sure of winning a vote in the Senate for his $827 billion package to revive the staggering U.S. economy. However, Democrats are having to cut back on spending to win enough Republican support to get the measure through.
Strategy Session with the Fast Money Traders
I just hope we’re done talking about this, says Jeff Macke. Then finally we can stop pretending there’s a magic plan to make everything better.
I expect to hear a plan that addresses a few more contingencies than the Paulson plan, muses Tim Seymour.
I don’t think it matters what the plan is – just as long as there is one, says Karen Finerman.
I see some encouraging things in the market, says Pete Najarian. The S&P traded and held above 850 for two days. You’ve got to like that. Now, I’m seeing put buying on the S&P, but I interpret that as institutional investors giving the market a bottom.
It appears the Pit Boss is growing more confident that the market might have bottomed. However, the Wolf doesn't see it that way, at all.
Don’t get too excited about the S&P, counters Jeff Macke. We have to talk about the auto industry in March. However, I wouldn’t go out and short anything right now. Companies are coming out and missing by 18 miles and still closing higher.
I’m a little bit more confident in the market, adds Finerman. It seems like things are calmer and that’s a good thing.
In the financials, keep an eye on Goldman and Morgan , adds Najarian. I like that they intend to pay back the TARP funds by the end of the year. I’m seeing call buying in these stocks (bets these stocks could go higher) while I still see a lot of put buying in the money center banks.
I’m long Morgan and Bank of America , adds Jeff Macke. But I typically sell my Bank of America by the end of the day. My fear is that the government could blow up Bank of America at any monment.
I’d keep an eye on UBS , adds Tim Seymour.
WILL OIL EVER COME OUT TO PLAY?
Oil prices fell Monday as a gloomy U.S. demand outlook outweighed talk of OPEC production cuts. The steep decline in demand, has led to a record oil supply glut at the world's largest storage site -- a factor that could soon trigger another fall in crude prices.
Inventories at the storage hub at Cushing, Oklahoma -- the delivery point for U.S. crude futures -- have surged a whopping 139 percent to near the available capacity since early October, as sliding energy demand makes holding oil more profitable than refining it.
Analysts say that once the hub's tanks fill to the limit -- which at current rates could happen any time -- the scramble by suppliers to unload excess barrels could knock already depressed U.S. crude benchmark prices down further.
I’m a believer that oil is something you want to be long over the next several years, says Tim Seymour. But not right now.
In materials, I’d keep an eye on Freeport McMoRan , says Pete Najarian. It struggles above $30 which could be a serious resistance level for this stock.
BOSTON PROPERTIES HALTS ITS BIG DIG
Boston Properties , an owner and developer of office buildings in key U.S. cities, said on Friday it was suspending development of a Manhattan skyscraper after a potential major tenant backed out.
Less than a week after the company said it was nearing a deal to sign a lease for 480,000 square feet in the building at 250 West 55th Street, Boston Properties said it had been unable to come to an agreement on final terms with a major law firm.
It’s amazing to me that there’s a prime piece of property in NYC in which the owner thinks it’s better to sit on that property rather than develop it, muses Karen Finerman.
Until you see building like that resume, you can’t make an assumption that the build-out is back on in America, adds Jeff Macke.
GE LEADS DOW HIGHER DESPITE DIVIDEND CONCERN
Shares of GE closed higher despite comments from Credit Suisse which suggested the future of the dividend may be in question. Meanwhile Barron’s suggests that GE shares have already priced in a dividend and ratings cut.
If you’re short GE it’s time to cover, says Jeff Macke.
I think people were just looking at their fundamental business, says Tim Seymour. That’s what led the stock higher.
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Trader disclosure: On Feb. 9th, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders;Seymour Owns (MT), (BAC), (EEM), (FCX), (VIP), (BIDU); Seymour's Firm Owns (VIP); Macke Owns (MOS), (TM), (SDS), (AAPL), (BAC), (DIS); Najarian Owns (FCX) & (FCX) Calls; Najarian Owns (MT) Calls, (GS) Calls; Najarian Owns (MSFT) & (MSFT) Short Calls; Najarian Owns (MS) & (MS) Short Calls; Najarian Owns (CAT) Call Spread, (ENER) Call Spread, (EEM) Call Spread, (GDX) Call Spread, (MOS) Call Spread; Najarian Owns (GE) Puts; Finerman's Firm Owns (MSFT), (PM), (RIG); Finerman's Firm Owns (DNA) & (DNA) Calls; Finerman's Firm Is Short (IYR), (IJR), (IWM), (MDY), (SPY), (USO)
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