Stocks extended their gains on Thursday after President Obama called debt ceiling talks with Republicans "productive."

With the financial woes of Europe simmering on the back burner it seems the debt talks in DC have moved to the front burner.

In fact, trader Steve Grasso tells us that a resolution to the debt issue could be the catalyst that drives the next leg of the rally. It could even be the catalyst that drives the market to new highs for 2011.

Of course, on the other side of the coin, there’s a hard and fast deadline of August 2nd and no signs of progress could sideline bulls.

How will the debt talks impact the market? Get the latest from Greg McBride of Barnkrate.com. Watch the video now!

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Trader disclosure: On July 7, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Terranova owns (XOM); Terranova owns (HAS); Terranova owns (DIS); Terranova owns (WFM); Terranova owns (LULU); Terranova owns (MSFT); Terranova owns  (TM); Terranova owns (JWN); Terranova owns (MCD); Terranova owns (PEP); Terranova owns (MA); Terranova owns (BX); Terranova owns (CAT); Terranova owns (VRTS); Terranova owns (AAPL); Terranova owns (F); Terranova owns (CVI); Terranova owns (IBM); Terranova owns (FCX); Jon Najarian owns (AAPL) calls; Jon Najarian  owns (AMKR) calls; Jon Najarian  owns (BIDU) calls; Jon Najarian  owns (DANG) calls; Jon Najarian  owns (SINA) calls; Jon Najarian owns (UA) calls; Jon Najarian owns (WNR) calls; Finerman owns (AAPL); Finerman owns (BP); Finerman owns (CVS); Finerman owns (IBM); Finerman owns (JPM); Finerman owns (MSFT); Finerman is short (SPY), (MDY), (WM); Finerman owns S&P puts; Finerman owns S&P calls; Finerman owns Russell 2000 Puts

For Joe Terranova
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of  (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (NRCI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLF)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of DOMINO'S PIZZA UK & URL PLC
Virtus Investment Partners Owns More Than 1% Of (DRYS)

For Mike Khouw
Cantor Fitzgerald is a market maker in (AA)
Cantor Fitzgerald is a market maker in (AAPL)
Cantor Fitzgerald is a market maker in (AMZN)
Cantor Fitzgerald is a market maker in (C)
Cantor Fitzgerald is a market maker in (CSCO)
Cantor Fitzgerald is a market maker in (CVS)
Cantor Fitzgerald is a market maker in (DAL)
Cantor Fitzgerald is a market maker in (EBAY)
Cantor Fitzgerald is a market maker in (GS)
Cantor Fitzgerald is a market maker in (JPM)
Cantor Fitzgerald is a market maker in (GOOG)
Cantor Fitzgerald is a market maker in (XLF)
Cantor Fitzgerald is a market maker in (XLE)
Cantor Fitzgerald is a market maker in (NFLX)
Cantor Fitzgerald is a market maker in (NYX)
Cantor Fitzgerald is a market maker in (MSFT)
Cantor Fitzgerald is a market maker in (YHOO)

For Karen Finerman
Finerman's firm owns (AAPL)
Finerman's firm owns (BP)
Finerman's Firm owns(CVS)
Finerman's firm owns (JPM) and (JPM) leaps
Finerman's firm owns (MSFT)
Finerman's firm owns (TGT)
Finerman's Firm owns (USO)

CNBC.com with wires.