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Fed Rally Finally Fades

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Stocks pulled back Thursday after their best two days in four years. But it wasn’t the equity market that traders were talking about. It was a record low dollar, record high oil and surging gold prices. Why have these things become the talk of the trading floors?

GOOD AS GOLDMAN:
The headline: Goldman Sachs (GS) Reports 79% Profit Surge, Record Revenue As Broker Brethren Struggle

Goldman is simply a head above its peers, Guy Adami said. And while the quarter wasn’t technically the best ever, as Karen Finerman had predicted, it was up there. GS is a “quality outfit,” she said.



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Goldman is simply a head above its peers, Guy Adami said. And while the quarter wasn’t technically the best ever, as Karen Finerman had predicted, it was up there. GS is a “quality outfit,” she said.

OIL ABOVE $83:
The headline: Crude Jumps to $83.32, 4th Record Close in a Row, on Gulf Production Shutdown

Oil’s push upward is just reinforcing Karen Finerman’s position in ConocoPhillips (COP), which she expects to have “massive earnings.”

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CVX
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XOM
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Pete Najarian notes that Exxon Mobil (XOM), ConocoPhillips and Chevron (CVX) were up a combined 15 cents Thursday, even with oil hitting a record. That indicates to him that oil service stocks like Baker-Hughes (BHI), Halliburton (HAL) and Schlumberger (SLB) are better trades, even as they hit 52-week highs across the board in the sector.

CONSUMER STOCKS HIT HARDEST:
The headline: Consumer Discretionary ETF (XLY) Drops 2% as Oil Heads for $84

Retail stocks got beat up Thursday after posting a rally, Jeff Macke said. That, and a forecast for a weak Christmas season put the stocks on the defensive. Rate cuts don’t benefit consumer stocks directly, he said, which is why you have to own the best-of-breed in this environment.

THE WORLD WILL NOT BE ON TIME:
The headline:FedEx (FDX) Profit Rises 4% But Shares Slide on Lower Earnings Outlook

Guy Adami prefers UPS (UPS) to FDX, but he said the latter is pulling back close to the point where it’s worth owning.

The bottom line, Jeff Macke said, is that you don’t want to own stocks “where the company leads with an excuse about the economy,” which is what FedEx did. He thinks the company has internal problems and its glum outlook is not a bellwether for some other macroeconomic issue.

AFTER HOURS ACTION: ORACLE:
The headline:Oracle (ORCL) Climbs After Hours on Better-Than-Expected Earnings, Revenue

Oracle is a great company that’s growing across the board, Jeff Macke said.

Guy Adami agreed and Pete Najarian added that Oracle’s recent aggressive acquisitions were what elevated the earnings.

AFTER HOURS ACTION: JUST DID IT:
The headline: Nike (NKE) Jumps in Extended Trading After Earnings, Revenue Top Estimates

Karen Finerman said Brown Shoe Co. (BWS), a vendor of Nike, will be a beneficiary, although that view was greeted by skepticism by Jeff Macke, who said Nike’s earnings will help Nike, and Nike alone.

The shoe company’s sales were only up 3% in North America, Guy Adami said, but it is “kickin’ it” in Europe, which makes Nike the perfect dollar beneficiary. Jeff Macke agreed.

OPTIONS ACTION: SLEEPER CELL:
The headline: Obscure Wireless Distributor Brightpoint (CELL) Seeing Unusual Options Activity; Semiconductor Maker Cree CREE (CREE) Also Jumping

Cree was up 7% and Brightpoint was up 4% Thursday on virtually no news, and options were strong all day, Pete Najarian said. He thinks people are putting a big bet that CELL is going to get taken out in the next few months.

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Trader disclosure: On Sept. 20, 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), (EMC); Najarian Owns (AAPL), (VMW), (CREE); Finerman's Firm Owns (BEAS), (LTD), (BWS), (NMX), (NYX), (COP), (KALU); Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns Russell 2000 Puts; Finerman's Firm And Finerman Own (HD)