The Dow and S&P closed higher on Thursday as investors bet on a year-end rally with money rotating into the technology sector.
Shares of Corning were among the top performers after worldwide LCD TV sales rose 45 percent in October from the year-ago period, which Corning said led to an improved outlook on 2010 glass market growth.
Traders also scooped up shares of Research in Motion, betting the stock will benefit from a BlackBerry distribution deal in China.
How should you be positioned?
I noticed unusual options activity in the Technology SPDR, says Pete Najarian. I’m seeing investors rolling out from XLK Dec to the XLK Jan 23 calls. To me, that suggests options investors expect more upside in tech.
In this space, I think the best long play is Hewlett-Packard, adds Guy Adami.
The smartphone makers have really been beat up and it seems to me that’s why RIM traded higher, adds Tim Seymour.
Meanwhile all the traders are closely watching the action in Apple which can’t seem to break the $200 level. But I’d be a buyer of Apple on the release of their new tablet, Tim Seymour says.
TOPPING THE TAPE: HEALTH INSURERS SURGING
Health care stocks traded higher on Thursday after swing GOP Senator Olympia Snowe said she does not support the Medicare— buy-in and could not see a way for Senate Democratic leaders to even tweak the proposal to win her vote.
“I can’t see it,” said Snowe, who met Wednesday with President Barack Obama. “I am talking to a lot of my providers this afternoon and I know they are mighty unhappy.”
What’s the trade?
I think some of the HMO’s are a little ahead of themselves on a belief that everything will be fine, says Karen Finerman. If you’re going to play this space I’d do it with device makers such as Becton, Dickinson .
For me the play is Johnson & Johnson, says Pete Najarian, not only as a device makers but also for their dividends. And I also like the generic drug makers such as Teva.
TOPPING THE TAPE: AMAZING MOVE: NATURAL GAS
Natural gas prices surged 7 percent Thursday as the government reported supplies dropped for the first time in nine months largely due to wicked winter weather forcing some homeowners to turn up the heat earlier than they otherwise would.
Temperatures dropped to 10 degrees from Des Moines to Chicago, and frigid winds have led to wind chill temperatures as low as negative 25 in parts of Wisconsin, Iowa and Illinois, according to the National Weather Service.
"The weather is a significant driver here," analyst and trader Stephen Schork said. "It's about as bullish as it can get this year."
Meanwhile, oil prices fell below $70 for the first time since October as ample inventories stoked fears of over-supply.
What’s the trade?
I think nat gas is also an options expiration story, adds Tim Seymour. It seems to me commodity traders are rotating out of oil and into nat gas.
In this space, I’m watching IOC, says Guy Adami. It’s a hard name to chase but the momentum is in its favor.
In energy, I like coal names such as Peabody , says Pete Najarian.
*In case you're wondering, the move higher in the spot price of nat gas is unlikely to mean higher heating costs. Utilities have long since locked in cheap prices and that is passed on to homeowners. In fact, a number of utilities have already sent out notifications that rates are coming down.
TRADE OF THE DAY: MARKET BETS ON GLOBAL TURNAROUND
It appears traders are betting on a global growth turnaround with United Technology and 3M among the top gainers in the Dow.
What’s the trade?
In this space, I like Ingersoll-Rand and Flowserve , says Karen Finerman.
I think the best play here is Honeywell, adds Guy Adami.
The XRT closed higher on Thursday after Costco said shoppers continued to flock to its stores in its first quarter with shoppers not only buying food but clothing and housewares.
What must you know?
I find it hard to get too bullish on retailers after Goldman said unemployment wouldn’t trough for quite a while, says Guy Adami.
Amazon shares appear to be breaking out but it’s tough to get on board this trade, says Pete Najaian. Mark Mahaney has a $140 price target on this stock and it’s getting close.
Amazon is a great company, adds Karen Finerman, but I can’t be a buyer with valuations like these.
I like Mercado Libre, adds Tim Seymour.
SPOTLIGHT ON GOLDMAN, CITI
Goldman stepped into the market spotlight after the firm said its top executives will receive stock instead of cash bonuses this year and that the stock cannot be sold for at least five years.
Meanwhile, shares of Citi traded higher on Thursday after CNBC reported the bank may raise $10 billion to $15 billion in a share offering to help repay the TARP, not the $20 billion initially proposed.
What’s the bank trade?
I take Goldman's decision as an endorsement of the stock at these levels, says Jon Najarian on the Halftime Report. These guys are locked in for 5 years. Personally, I expect the Goldman news to help lift the market.
In the sector, I’m watching Wells Fargo, says Guy Adami. I think it’s a sell on any bounce higher.
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Trader disclosure: On December 10th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman's Firm Owns (MSFT), (WMT), (AAPL), (FLS); Finerman's Firm Is Short (IJR), (IWM), (SPY), (MDY); Finerman's Firm Is Short (UNG); Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spread; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (WFC) Preferred; Seymour Owns (AAPL), (EMM), (INTC), (PFE), (TKC), (BAC), (FXI), (GE), (POT); Seymour's Firm Owns (MTL); Najarian Owns (BRCD), ; Najarian Owns (PFE); Najarian Owns (TEVA); Najarian Owns (AAPL) Calls; Najarian Owns (DELL) Calls; Najarian Owns (FCX) CAlls Spread; Najarian Owns (INTC), Is Short (INTC) Calls; Najarian Owns (TXN), Is Short (TXN) Calls; Najarian Owns (RIMM) Call Spread
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