Biggest Jump In A Month
BIGGEST JUMP IN A MONTH
Stocks rose the most in more than a month on Thursday with the Dow making a triple digit advance due to stronger same-store sales for May and data which showed a surprising fall in weekly jobless claims.
The discount stores experienced the largest gains with consumesr spending government stimulus checks at retailers such as Wal-Mart which jumped to a four-year high.
We’re starting to see money flow into everything, observes Guy Adami. I think this time the S&P could power higher than 1410, which has been a point of resistance.
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OIL ROARS BACK BY $5
The price of oilroared back from a three-week low as a big drop in the dollar forced traders to backtrack from bets that crude had further to fall.
Fresh money looks like it’s coming into oil, says Guy Adami. But the path of least resistance should be lower.
It seems to me that this move results from speculation, says Jeff Macke. What else can explain a move of this magnitude.
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LIGHT AT END OF LEHMAN TUNNEL?
Lehman shares closed higher after a Deutsche Bank 'Buy' recommendation, while Greenlight Capital's David Einhorn reiterated his bear case against this stock on CNBC’s Squawk Box.
Mr. Einhorn has done his homework, says Guy Adami. I’d side with him.
I disagree with Einhorn, says Karen Finerman, this could be the bottom for Lehman. And there’s a lot of money out there if they need it.
I expect the rally in financials to extend, adds Jeff Macke, but I’d sell into the strength.
Meanwhile, in breaking news CNBC’s Charlie Gasparino reports that Lehman executives are weighing whether to pre-announce earnings in an effort to dispel market rumors that the firm is facing a liquidity crisis. (Typically Lehman reports the week of the 16th.) Also he says the firm is looking at some form of rights offering.
On a related note, if you’re looking for a trade in the financials Guy Adami thinks Wachovia is a buy on the day they cut their dividend.
Read More:
Find out what David Einhorn said to the Fast Money traders during our recent interview with him
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SILICON RALLY
Cisco, Hewlett-Packard and the rest of technology closed higher for the second consecutive day after economic data sparked optimism about the nation’s economy.
Options action suggests to me that Hewlett Packard will continue to climb higher over the next 6 weeks, says Pete Najarian.
I love Western Digital , adds Guy Adami, as long as the PC cycle continues.
Meanwhile, Verizon stock jumped more than 6% after Verizon Wireless agreed to buy Alltel for $28.1 billion, including $22.2 billion in debt, vaulting the combined company to first place in the U.S. mobile services market ahead of AT&T.
I think the deal is good for the companies which benefit from wireless infrastructure build out, says Pete Najarian.
In the space I prefer AT&T , says Guy Adami.
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BREAKING NEWS: TRIBUNE
Tribune plans to redesign its financially struggling newspapers in the next few months to save money while making them more appealing to readers, a move that could lead to more job cuts.
It doesn’t make me bullish on the sector, says Karen Finerman.
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AFTER HOURS ACTION: TAKE-TWO INTERACTIVE
Take-Two Interactive raised its profit forecasts and posted higher-than-expected quarterly net earnings on Thursday, citing the success of its blockbuster criminal action video game "Grand Theft Auto 4."
I would look at TTWO tomorrow, says Karen Finerman.
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AFTER HOURS ACTION: NATIONAL SEMI
Analog chipmaker National Semiconductor on Thursday posted a lower fourth quarter net profit, but revenues topped expectations as it sold more profitable chips, and shares rose 3 percent.
I think Intel is the play in this space, says Guy Adami.
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YELLOW METAL BLUES:
Gold recoiled on Thursday as some investors ditched the precious metal after the dollar held onto gains, with gold falling $21.50 over the last 3 sessions.
Gold and oil typically move hand-in-hand but that didn’t happen today, says Guy Adami. I think in the second half of the year gold goes lower.
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PFIZER FALLS TO LOWEST SINCE 1997
Goldman downgraded Pfizer cutting its price target to $22 from $26 as near-term pipeline products decrease in value and recent safety issues pressure the brokerage's forecasts for the company's anti-smoking drug Chantix and cancer drug Sutent.
Pfizer needs to build their pipeline, says Pete Najarian. I think that’s a big problem for this stock.
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NASDAQ COMEBACK?
Nasdaq OMX shares are down this year on fears that credit crunch-saddled Wall Street firms are cutting back on trading activity. However, Lehman sees opportunity and upgraded Nasdaq last week because of global opportunities.
“We see in our business that our volumes are setting records,” says Nasdaq OMX Group CEO Bob Greifeld. “And in May we had a price increase in our transaction services. It was the first time we had that in many years and our market share went up in May and continues to go up in June.”
Also it’s worth noting the Nasdaq now provides real-time data on the web, the first 30-days are free and after that there’s a charge. But investors don’t pay. The charge goes to the host site. "That generates a whole new revenue stream," Greifeld says.
Traders, what do you think?
I love this name, replies Pete Najarian. At an 8 P/E it seems cheap to me.
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Trader disclosure: On June 5, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (ATVI), (MSFT), (WMT), (INTC); Adami Owns (AGU), (C), (GS), (INTC), (BTU), (MSFT), (NUE); Najarian Owns (EXM), (HPQ), (AAPL), (BHI), (CHK), (HD), (TSO), (XTO), (XLF); Najarian Owns (LEH) Puts; Najariain Owns (NUE) Calls; Finerman Owns (GS); Finerman's Firm And Finerman Own (HD); Finerman's Firm And Finerman Own (C), (C) Leaps; Finerman's Firm Owns (MO), (PM), (JCG), (AAPL), (AEO), (MSFT), (NYX), (SUN), (TSO), (VLO); Finerman's Firm Owns SPX Index Puts; Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY)
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