×

Best Dow Gain Since 2002

graphic_word_ofthe_street.jpg

BEST DOW GAIN IN FOUR YEARS

The headline: Dow Soars 284 Points, Best Point Gain Since Oct. 2002...Dow's 2.1% Gain is Best Since Oct. 2003.

RECIPE FOR A RALLY
What Was Behind the Dow's Record-Breaking 284-Point Gain Today?
#1 Retail Surprise
#2 Metal Merger Mania
#3 Financials Stabilized
#4 Technology Breakout
#5 Midday Short Squeeze


- RECIPE FOR RALLY: RETAIL

The retail numbers were just “good enough” to spark this rally, Jeff Macke says. Investors were too negative leading into the number today and they got a nice surprise.

- RECIPE FOR RALLY: METAL MERGERS

Rio Tinto’s (RTB) $38 billion cash offer for Alcan (AL) is 33% higher than Alcoa’s (AA) bid. Alcoa now has a target on it, Eric Bolling says. Consolidation in the metals is probably far from over.

- RECIPE FOR RALLY: BANKS

The financials stabilized today, Guy Adami says. And the credit card companies are ripping, too. Mastercard (MA) was up 5%, American Express (AXP) up 5%. “I still love the credit cards,” Guy says.

- RECIPE FOR RALLY: TECHNOLOGY BREAKOUT

Chipmakers, computers and servers all made a move today. They’ve been underowned for some time, Pete Najarian says. He thinks this is only the beginning for tech and they will continue to go higher. Once earnings season starts, he thinks you can expect tech as a whole to see a lot of upside. The back half of the year is typically stronger for tech. Jeff Macke is especially bullish on the chipmakers – Intel (INTC) in particular. “There is more room for tech to run,” Jeff says.

- RECIPE FOR RALLY: SHORT SQUEEZE

There was the largest short position in S&P futures in three years today – over $45 billion in buying power – and a midday squeeze sent this market off like a rocket. Pete thinks this kind of volatility should be expected for the foreseeable future as this is a news-driven market. When the news is bad, the market is terrible – but when the news is great, like it was today, the market is terrific.

Symbol
Price
 
Change
%Change
VANG SC VAL
---
AL
---
INTC
---
MA
---

And as earnings season comes again, Eric thinks analysts are low balling expectations again. The third and fourth quarters are historically great ones for the economy, and history has also said that they are even better in the year prior to an election.

FOUR FOREIGN PHONE PLAYS:

The headline: The Trades Behind the Boom in Wireless Around the World

Pete’s Four Foreign Phone Plays:
Alvarion (ALVR)
China Mobile (CHL)
Vodaphone (VOD)
America Movil (AMX)

Alvarion is headquartered in Israel and covers the Middle East; China Mobile covers Asia and has 300 million subscribers; Vodaphone is the play in Europe with 200 million subscribers; and America Movil has 90 million subscribers in Latin America.

Symbol
Price
 
Change
%Change
509040
---
APRM
---
VOD
---

There’s still a ton of room for expansion in the wireless industry, Pete says, and the other traders agree – this is where the money is.

IS THERE HOPE FOR NYMEX?

The headline: Will NYMEX (NMX) Return To Its High Following Chicago Mercantile Exchange's (CME) Acquisition Of CBOT (BOT)?; NYMEX Surged Today After Banc Of America Said It May Be Targeted By NYSE Euronext (NYX)

Symbol
Price
 
Change
%Change
CME
---
NYX
---

The NYMEX deal will get done by Labor Day, Guy says. Eric, a shareholder of NMX, says he sees “a ton of smoke” in NMX and “where there’s smoke, there’s fire.” Without having any inside information, he would recommend against shorting NMX.

WHAT NOW FOR WHOLE FOODS?

The headline: What Does the Future Hold For Whole Foods (WFMI) After CEO Mackey's Notorious Web Postings?

Whole Foods stock isn’t going anywhere to begin with – but it sure didn’t need this, Jeff says. This story doesn’t speak well to Mackey’s reputation, and it’s possible that if a potential deal with Wild Oats (OATS) goes away because of it, Mackey could take the fall. If you want a grocer, go with Safeway (SWY), Jeff says.

Read more about what happened:
> Whole Foods CEO Panned Wild Oats In Web Postings

WHAT NOW FOR WHOLE FOODS?

______________________________________________________
Got something to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! Prefer to keep it between us? You can still send questions and comments to fastmoney@cnbc.com.

Trader disclosure: On July 12th 2007, 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 (EMC), (SWY), (JWN); Bolling Owns (MPEL), (ICE), (NMX), Gold, GE Is The Parent Company Of CNBC