The threat of more blood letting in the financials dragged down the Dow by 362 points, Thursday. How are the traders playing this and the day’s other top headlines?
STOCKS SLAMMED
The headline: The Dow Drops 362 Points, While S&P 500 Loses 2.6%, Worst Drop Since August
Karen Finerman thinks fear in the stock market stems from language used by The Fed which suggested Bernanke would not cut rates further.
Jeff Macke says although Thursday’s trading was brutal, the overall market is inching up. For perspective, the Dow is 8 points higher than it was on Oct. 19th
Pete Najarian tells the panel how he played Thursday’s down market. He sold Baidu (BIDU) because the stock was up while the market was down. Also he added to his position in Google (GOOG) and BHP Billiton (BHP) for global growth.
COMMODITY STOCKS FUEL SELLOFF
The headline: Crude Oil Briefly Crosses $96 Before Retreating 1% To $93.
Exxon Mobil (XOM) shares slid after earnings fell short of expectations, says Guy Adami. The 10% slip was due to reduced output and slimmer refining margins, he adds.
On a related note, Adami says the sector dragged down Chevron (CVX) and at current valuations, he thins CVX might be a buy, soon. He’s also keeping an eye on Tesoro (TSO).
Karen Finerman likes the risk reward in Tesoro.
Pete Najarian thinks Chevron will miss when they reports earnings on Friday.
WHAT WAS GREEN THURSDAY?
The headline: Microsoft (MSFT) Manages To Stay 'Green' In Thursday’s Terrible Tape.
Jeff Macke feels that Google (GOOG), Hewlett-Packard (HPQ) and other tech names traded well on Thursday, because they provided investors with decent valuations and good fundamentals.
HOW BAD ARE THESE BONDS?
The headline: Ambac (ABK), 2nd-Largest U.S. Bond Insurer, Plunges 18% On Deepening Credit Market Fears.
In an interview on CNBC, Ambac CEO Bob Genader said, “There clearly is a disconnect between the value of our portfolio, which is in good shape, versus the stock price. Over time, because we are a long term risk taker, our company is very solid and very safe.”
The stock lost more than half its value over the past month, explains Dylan Ratigan.
Doug Kass, founder and president of Seabreeze partner joins this discussion. He says “This industry simply doesn’t have enough capital… these are not banks and do not have access to the discount windows. If you take out the private market insurance business, which I believe is in the process of happening, (it would) crush Fannie Mae (FNM), Freddie Mac (FRE),Washington Mutual (WM)….”
Is there anything that would change your bearish position?
“If there was some magical recovery in housing. If there was some huge martial plan brought forth by the (Bush) administration that would make a significant dent in the record level of unsold homes,” Kass says.
Any thoughts on Citigroup?
“I go way back with Citibank, (and I have pretty good sources) and I think CEO Chuck Prince will be out by Sunday night,” says Kass.
AFTER HOURS ACTION: LAS VEGAS SANDS (LVS)
The headline: Las Vegas Sands (LVS) Falls 17% After Hours On Earnings Miss
Pete Najarian says the stock was overvalued.
AFTER HOURS ACTION: FORD (F)
The headline: WSJ: Ford Plans To Trim 2008 Spending By Up To 15% In Sales & Marketing
Guy Adami thinks the stock is going to $9.75.
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Trader disclosure: On Nov. 1, 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), (YHOO), (INTC); Najarian Owns (BHI) Options, (C) Options, (GOOG) Options, (GS) Options, (HAL) Options, (YHOO) Options, (BHP) Options; Finerman's Firm Owns (TSO),(WMT), (YHOO), (NMX), (BEAS), (GS), (NVT); Finerman's Firm And Finerman Own (KFT), (FLS); Finerman's Firm Owns (C) Options, (MSFT) Options, (NVT) Options, (CROX) Options; Finerman's Firm Is Short (IWM), (SPY), (MDY), (BIG); Finerman's Firm Is Short (MER) And Own (MER) Puts; Finerman's Firm Owns Russell 2000 Puts; Finerman's Firm Owns S&P 500 Puts
