Dow Breaks 5-Day Losing Streak

DOW BREAKS 5-DAY LOSING STREAK

The Dow rose in a holiday shortened session on Wednesday after a barrage of economic data signaled the economy was weak, but not as bad as feared, while a fall in crude oil prices and bargain hunting helped retail and airline stocks.

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MORTGAGE APPLICATIONS SURGE 48%

Mortgage applications surged to the highest level in over five years in the latest week, as potential borrowers came out in droves to refinance as government interventions helped push interest rates down to record lows, data from an industry group showed on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications which includes both purchase and refinance loans, for the week ended Dec. 19 soared 48.0 percent to 1,245.4, the highest reading since the week ended July 18, 2003, when it reached 1,284.3.

The big question is how many of the mortgages are funded, muses Karen Finerman. It’s one thing to apply and another to get the money.

Only 50% of the applications are actually closing, adds Joe Terranova. And people are applying with multiple banks so the number is inflated.

Banks want to lend to credit-worthy customers, adds Zach Karabell. There are a lot of people out there who can afford loans and low rates should trigger stimulus.

It shows people are out there and they see and opportunity, muses Pete Najarian.

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OIL SINKING AS GASOLINE SUPPLIES SURGE

Oil fell below $38 on Wednesday as another round of gloomy U.S. economic data showed U.S. jobless claims rose to a 26-year high and consumers cut spending in November. This reinforced expectations of a continued slowdown in energy consumption.

"Until the price is low enough to break through the cloud of economic gloom and doom, oil is going to be under some pressure," says Mike Fitzpatrick, vice president at MF Global.

There was a $2 sell-off in the last few minutes, explains Joe Terranova. It was probably 5 people trying to sell to 1 person who was walking out the door. In other words, trading was thin.

Meanwhile, the world's top gas exporting nations will set up a formal organization at a December summit in Moscow, a Russian official said on Wednesday, but denied the new body will seek to copy OPEC's production quotas.

"No one is planning to regulate gas production volumes. It is a crazy idea," Deputy Energy Minister Anatoly Yanovsky told reporters.

He said energy ministers from 16 gas exporting nations would meet in Moscow on Dec 23, as planned, to sign a charter for the new organization.

It will create a global benchmark for nat gas, explains Joe Terranova. And despite what they say, they’re obviously trying to corner the market.

It was the airlinesthat performed today (as a proxy for oil), adds Pete Najarian. So, I got back in the game. Airlines are not hedged at extreme price levels as we once thought. I like them as a trade. And you can get almost a 20% premium for the February options.

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MIRACLE ON 34TH STREET?

Retail stocks experienced a bit of a miracle on Christmas Eve. Target , The Gap, and Wal-Mart all closed higher setting the stage for a comeback. Despite tough economic conditions, the Retail HOLDRs ETF is up 3.5% the past month.

I don’t think that anything happens in a Christmas Eve market means a lot, says Karen Finerman.

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INTERNATIONAL SPENDING, KICKSTART GLOBAL ECONOMY?

Japanese Prime Minister Taro Aso tried to put a rocket under his nation's stricken economy on Wednesday, announcing the country's biggest ever annual budget, as fear mounts that Japan faces a long recession.

I think you may see China and Brazil follow suit, muses Zach Karabell. Money is going to be put in motion. That’s why I like the global infrastructure play.

Saudi Arabia is spending $125 billion to stimulate their economy, adds Joe Terranova. There really is a globally coordinated effort to stimulate economies.

I expect to see a lot of different winners and losers linked to the governments’ willingness to intercede, adds Karen Finerman. But I don’t know how successful they’ll be.

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Trader disclosure: On Dec. 24 th, 2008, 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 (AMR) And Is Short (AMR) Calls: Najarian Owns (MSFT): Najarian Owns (XHB) Calls: Finerman's Firm Owns (AEO): Finerman's Firm Owns (MSFT) And (MSFT) Put Spreads; Finerman's Firm Owns (OIH) Puts; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (BBT), (COF), (USO); Finerman's Firm Owns (ROH) Call Spreads; Karabell Owns (AAPL), (GOOG), (JPM), (CSCO)

Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV)

Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.: Virtus Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (OFC), (DLR), (EXR), (IGE), (MAC), (DBC), (DBV), (SKT), (UA), (CLB): Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights

CNBC.com with wires