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Pros Look at SPDR Plays Heading Into 2012

Utilities outperformed all other sectors in the SPDR space, but the “Fast Money” traders said 2012 looks to perform differently.

Investment pro Jon Najarian of OptionMonster.com said Friday that the utilities SPDR’s best days might be behind it. XLU, the utilities SPDR, was up 15 percent year to date.

Najarian attributing much of that to lower fuel prices.

“The cost of making electricity for folks down dramatically these year because of those big drops,” he said. “I think that reverses in 2012.”

Shorthand for “Standard & Poor's depositary receipt,” SPDR exchange-traded funds track nine sectors in the S&P 500.

Gina Sanchez, director of equity and asset allocation strategy for Roubini Global Economics, said she wasn’t a buyer, but not because she saw higher commodities prices next year.

“We think that it’s going to be a volatile year next year, and we want to stay defensive,” she said.

In addition to all the talk about Europe, China looks to become a big factor next year, as does the U.S. political landscape, she added.

“There’s definitely a lot of fear there, and we actually don’t think that fear is going away,” Sanchez said.

Trader Pete Najarian said big pharma names losing patents on some of the moneymaking drug brands was an area for concern, but there was still opportunity in smaller companies that were acquisition targets.

XLV , the healthcare SPDR, was up 10.4 percent year to date.

Najarian said materials — which trades under XLB, down 12.6 percent YTD — were a better play.

“Beaten up in 2011,” they managed to hold on, he said. “That area is one to keep an eye on.”

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Trader disclosure: On Dec. 30, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Najarian is long AAPL; Najarian is long C; Najarian is long GOOG calls; Najarian is long HPQ; Najarian is long MRK; Najarian is long PFE; Najarian is long GE; Najarian is long INTC; Murphy is long AAPL; Murphy is long INTC; Murphy is long AKS; Murphy is long TEX; Murphy is long CHK; Murphy is short MHK

For Gina Sanchez
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For Greg Zuckerman
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For Macneil Curry
Bank of America makes a market in treasuries and the Euro currency