STOCKS PARE LOSSES IN LATE DAY TRADING
Stocks rebounded late on Monday to end around break-even; shrugging off lighter-than-expected sales from McDonald's and lowered iPhone prices from Apple.
Analysts say the late gains were likely triggered by momentum in the S&P 500 which recently pierced its 200-day moving average. The price action gives investors confidence to buy stocks on dips in the market.
"What we're seeing is investors, both institutional and individuals, looking at dips as an opportunity to buy," says Bucky Hellwig of Morgan Asset Management. "It's a sign of the broader strength that's in the market."
TOPPING THE TAPE: FINANCIALS
Financial stocks led the market rebound, with JP Morgan providing the biggest lift to the Dow as investors awaited news from Federal Reserve and Treasury officials, who are expected to announce which banks will be allowed to repay TARP money soon
Then after hours the Federal Reserve said 10 of the largest U.S. banks under orders to raise additional capital as a buffer against further economic shocks have submitted plans to do so.
"As supervisors, we will be working with the institutions to ensure their plans are implemented quickly and effectively," the Fed said in a short statement.
I’m not sure there’s a trade on the back of this, muses Guy Adami. Long-term it’s a good thing but short term it probably doesn’t mean that much.
JPMorgan, Morgan Stanley and Goldman Sachs are the banks I’d focus on, adds Joe Terranova. But at best they won’t get back to normalized earnings for 3-6 months.
BREAKING NEWS: P&G
After hours shares of Procter and Gamble slid lower after the firm announced Robert McDonald would replace AG Lafley as the firm’s chief.
Markets don’t like uncertainty, reminds Pete Najarian. But they will probably find out the bench at P&G isn’t that bad.
AFTER HOURS: TEXAS INSTRUMENTS
Texas Instruments said on Monday that its second-quarter earnings and revenue could push past its previously announced target range, showing signs of improving demand in the chip market, and its shares rose 4 percent in after hours trade.
The stock currently trades at 21 times forward earnings, reminds Guy Adami. I can’t get that excited about the firm at these levels.
I think the play is long rival Intel off the TXN news, adds Joe Terranova.
PALM PLUNGES AS PRE LAUNCHES
Analysts tempered their enthusiasm for Palm's Pre smart phone, which went on sale this weekend, with limited supplies of the device and a relatively small number of software applications drawing concern.
What’s the trade?
I’m not sure where the stock heads next, muses Guy Adami, but my instincts tell me lower.
ALL EYES ON APPLE
Apple ended the session as the heaviest weight on the Nasdaq . Investors grew concerned about margins after the company cut the price of its 8-gibabyte iPhone and unveiled a cheaper Mac notebook.
Typically, the week after Apple's developer’s conference the stock falls 8%, reminds Melissa Lee.
I think that Apple gains market share from RIMM, muses Joe Terranova. And when the market turns higher I think Apple turns higher.
OIL FLAT AS COMMODITIES FALL
Oilprices slipped toward $68 a barrel on Monday, pressured by a stronger U.S. dollar and weakness on Wall Street.
U.S. crude fell 35 cents to settle at $68.09 a barrel, off a seven-month high of $70.32 hit on Friday.
Price action in oil all comes down to the dollar, says Joe Terranova. If the dollar goes lower then I think oil shoots right back up. However, I think the trading strategy is to wait and see what the dollar does next.
If crude backs off, I’d watch Schlumberger , adds Guy Adami. I think it’s a buy around $53.
If you’re looking for a trade in the space I’d look at BP or ConocoPhillips , says Pete Najarian. You get exposure to crude as well as nat gas. Also in the energy space I’m seeing unusual options action in ReneSola . I’d keep an eye on this maker of solar wafers.
If you’re looking for a solar trade, I’d look at the First Solar , counters Joe Terranova.
FAST FX: DOLLAR IN DRIVER'S SEAT
The dollar rose against a basket of currencies on Monday extending sharp gains made late last week.
Smaller-than-expected job losses in the United States in May sparked concerns on Friday that the Federal Reserve may lift interest rates sooner than previously thought, helping push up Treasury yields, dealers say.
The dollar index, a gauge of the greenback's value against a basket of six major currencies, rose 0.2 percent to 80.834 after choppy trade.
Does the trend favor a stronger dollar? We asked Rebecca Paterson of JPMorgan.
Paterson thinks the dollar resumes its downward slide and that the recent move higher was due to an unusual confluence of events.
“I think overextended short dollar positions, better than expected economic data and some bad news out of Europe all caused the dollar to spike,” she explains. “But I’m a seller of dollars.”
How should you trade? Find out from Rebecca Paterson. Watch the video now!
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Trader disclosure: On June 8th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (BX) Call Spread; Najarian Owns (DELL) Call Spread; Najarian Owns (FCX) Calls & Put Spread; Najarian Owns (INTC) Call Spread; Najarian Owns (MCD) Call Spread; Najarian Owns (MOS) Put Spread; Najarian Owns (PALM) Call Spread; Najarian Owns (WNR); Najarian Owns (ISIS); Terranova Owns (TER), (XBI), (ABT), (RIMM), (BTU), (BRCM), (GENZ); Terranova Owns (MS) & (MS) Calls; Terranova Is Short (FCX) & (FCX) Puts; Terranova Owns (HES) & (HES) Calls; Terranova Owns (XOM) Call Spread ; Terranova Owns (DIS) Call Spread; Terranova Owns (X) & (X) Calls; Terranova Owns (JPM) & (JPM) Calls; Terranova Owns (POT) & (POT) Calls ; Adami Owns (AGU), (C), (GS), (INTC), (BTU), (MSFT), (NUE); Finerman Owns (BAC) Preferred; Finerman's Firm Own (NOK), (PBR), (RIG), (TBT), (WRC), (KFT); Finerman's Firm Owns (BAC) Preferred; Finerman's Firm Owns (WFC) Preferred; Finerman Owns (WFC) Preferred; Finerman's Firm Is Short (BAC)
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