AFTER HOURS ACTION: MICROSOFT:
The headline:Microsoft (MSFT) Soars 11% After Reporting 29% Profit Jump, Higher Outlook
CNBC’s Jim Goldman called MSFT’s numbers “staggering.” The Street was looking for 39 cents per share and got 45. It looked like every business saw significant increases, Goldman said.
Jeff Macke pointed to Microsoft’s increase in deferred revenue, a good indicator for things to come.
It’s not particularly expensive and it’s got “something for everybody,” Karen Finerman said.
Guy Adami liked MSFT for a play on Dell (DELL). The earnings blowout speaks to the worldwide PC demand cycle. Who will benefit from that more than Dell?
RUMOR, RINSE, REPEAT:
The headline: Market Drops, Recovers, Ends Unchanged as Write-Down Worries, Earnings, Record Oil Collide
As CNBC's David Faber disproved a market-moving rumor that American International Group (AIG) was about to announce a major write-down of its own, Karen Finerman expressed concern some of the financials are yet to test their lows. There is clearly a bifurcation now between “those who can”, like Goldman Sachs (GS), and “those who cannot,” like Merrill Lynch (MER), she said.
OIL RECORD CLOSE:
The headline: Crude Oil Surges Nearly 4% to $90.46, New Record Close
The increased rhetoric on Iran is what’s propelling oil, Guy Adami said. But the fact that ExxonMobil (XOM) can’t play catch up in tandem with the price of crude is predictive that it will probably miss the quarter, according to Guy.
THE TWO FACES OF TECH:
The headline: EMC (EMC), VMware (VMW), Motorola (MOT) Surge Thursday But Chip Stocks Continue To Get Beaten Up
Jeff Macke is long EMC and Intel (INTC). The latter is an investment and will win on the PC upgrade cycle, he said. (INTC traded up 2% on the back of Microsoft’s report after hours).
EMC has enjoyed its run thanks to the spin-off VMware, but it’s up so much that it is time to lighten up if you’re long, Pete Najarian said.
Guy Adami would buy EMC on a pullback.
WAFER THICK PROFITS:
The headline: MEMC Electronics (WFR) Surges After Hours on 66% Profit Jump, Higher Outlook
Pete Najarian said investors who are long WFR, after underperforming for so long, should take profits now before the stock gets taken down again. That said, the solar complex continues to work with oil prices so high, he said.
WILDFIRES IMPACT:
The headline: Allstate (ALL) Loses Ground For 3rd Day Even as California Fires Largely Come Under Control; Insured Losses From Wildfires Could Exceed $1.6B
Sadly, natural disasters are often bullish events for insurance companies. Karen Finerman and Guy Adami both recommended ALL as the premier play, although Guy would wait until it trades to $50 before getting in.
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Trader disclosure: On Oct 25, 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 (INTC), (ATVI), (EMC), (YHOO); Najarian owns (UA), (DISH), (GOOG), (YHOO), (MSFT) Options; Finerman’s firm and Finerman own (GS); Finerman’s firm owns Russell 2000 Puts, S&P 500 Puts, (NMX), (NYX), (MSFT), (BEAS), is short (BIG), (MER); Finerman owns (C)