Bulls Save The Day Again

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ROLLER COASTER CONTINUES:

The headline: Dow Rebounds Over 250 Points Over 2 Days As Late-Day Bulls Step In

The higher close was perhaps less relevant today than the volatility itself, as buyers bid the market into the close. And while the trading was choppy intraday, most of the day was spent in the green, which is a good sign, Eric Bolling says. He thinks it shows that liquidity isn’t dead – it’s just on the sidelines.



The most important part of Friday’s trading will be the first half hour before the jobs report is released, and the last half hour when a lot of the big orders get placed, Pete Najarian says.

With volatility rising, Merrill Lynch put out a report recommending that investors buy healthcare and consumer staples and sell tech and consumer discretionary stocks.

It’s a pretty traditional list, Jeff Macke says, except for one thing - it recommends selling tech. Tech is underowned right here, he says. Eric agrees. He would also buy consumer discretionary and sell healthcare, which is contrary to Merrill’s report.

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S&P 500
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LENDER BENDER:

The headline: Accredited Home Lenders Plummters 34% to $5.34 After Warning Of Bankruptcy; Private Equity Firm Lone Star Agreed To Buy Accredited Home For $15 per share in June; Could Accredited Home Buyout Be the First Deal To Collapse?

To get an idea of how bad it is, look at the percentage change in mortgage lenders since last Tuesday: Genworth Financial (GNW) and Principal Financial (PFG) are both down 8%. IndyMac (IMB) is down 20%. Accredited Home Lenders (LEND) is down 59%.

Yet Countrywide Financial (CFC) seems to be hanging on. Pete Najarian notes that CFC is trading near $30 but there are options listed at $10 that expire in two weeks – which he says is not a good sign for the lender.

“If you’re going to 10, you might be going to zero,” Eric says.

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GNW
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PFG
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DIS-INTEGRATED OIL:

The headline:Exxon Mobil (XOM), Big Oil Shares Weigh on Market Even As Crude Prices Rise

The production issues are really affecting Big Oil and Eric says the smart play with oil is to put your money in oil service names like National Oilwell Varco (NOV). Everything else in the space is rolling over – the services are not, he says.

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NOV
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XOM
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STRONG FINNISH:

The headline: Finland-based Nokia (NOK), World’s Largest Cell Phone Maker, Soars On Earnings; Nokia Profit More Than Doubles, Global Market Share Rises To 38%

Nokia is on fire and it is “taking it to any competitor,” Pete says. The market share combined with the over 100 million units the company sold this quarter alone tells the story, he says.

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NOKIA
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DECONTAMINATE-ME ELMO:

The headline:Mattel (MAT) Recalls Nearly 1M Chinese-Made Toys On Lead Paint Fears

The cost of the recall (about $30 million) isn’t even the issue for Mattel, Jeff says. The problem stems from the supply chain. If the company has to up its cost there, that will lead to more expensive toys.

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MAT
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HOT EARNINGS - HOTEL TRADE:

The headline: Starwood Hotels Jumps On Stronger-Than-Expected Profit, Forecast; Is The Hotel Trade Back On Even As Buyout Speculation Fades?

With the hotel names, it’s important to look at “revenue per available room,” Guy Adami says. Starwood (HOT) had “decent guidance on that front.” He thinks it is the biggest LBO candidate in the space. Own it here for a trade, he says, but stop out below $60.

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HOT
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OPTIONS ACTION - IS THIS THE REAL THING?

The headline: Najarian Seeing Unusual Options Activity In Coca-Cola (KO)

The September 55 calls traded at “extreme volume” today, Pete says, although he is unsure what catalyst is driving the options higher.

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KO
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Trader disclosure: On Aug 2nd 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 (ATVI), (HAS), (DIS); Bolling Owns (MPEL), (BP), (T), (XOM),Gold; Bolling Is Short Natural Gas; WWE Programs Air On Networks Of NBC Universal; NBC Universal Is The Parent Company Of CNBC