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Fed Disappoints, Market Slammed

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FED DISAPPOINTS; MARKET SLAMMED

The headline: Fed Disappoints Traders Hoping For More Aggressive Interest Rate Cuts.

The Fed cut both the funds rate and the discount rate by ¼ point, explains Dylan Ratigan. Now the fed funds rate stands at 4.25% and the discount rate stands at 4.75%.

Jeff Macke feels guidance from the Fed was “mealy” and he sold Coach (COH) on the news.

Karen Finerman says she doesn’t pay that much attention to the Fed. Instead she trades on valuation.

In breaking news, Steve Liesman reveals that the Fed might be considering alternative measures to address liquidity issues. He suggests Wall Street could be misreading Tuesday’s Fed decision as the only action that the Fed is taking.

Symbol
Price
 
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NASDAQ
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S&P 500
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FINANCIALS IN FLAMES AFTER FED

The headline: Brokers, Bond Insurers, Money-Center Banks Pounded After Fed Decision.

There’s still a lot of uncertainty in the investment banks says Pete Najarian. Investors don’t know what the write-down numbers will be.

Take financials off the table, recommends Jeff Macke.

On a related note, Karen Finerman explains that Citi named Vikram Pandit as their brand new Chief Executive, Tuesday. She’s not sure why the stock dropped on the news.

Guy Adami thinks investors would have preferred to see someone from the outside take over the company.

Symbol
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NOVU
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SC0Y
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GS
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WM
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> Read More: First on Fast Money: Q & A with Vikram Pandit

THE BROTHERS GRIM

The headline:Lehman (LEH) releases quarterly earnings Thursday before the bell.

Karen Finerman explains that she’s done research and found that in the last quarter, Lehman moved $11 billion from “Tier 2” to “Tier 3” assets. She interprets that as a negative sign and she’s reiterates short LEH.

For an in-depth analysis of Finerman’s research please watch the video.



TOUGH TECH

The headline: Tech Shares Hold Tough On Strong Moves In AT&T (T), Texas Instruments (TXN), Cisco (CSCO).

Pete Najarian likes AT&T’s 13 billion buy back as well as their dividend. AT&T is doing everything right, he adds. Also “because the gadget revolution has just begun” Najarian he likes Cisco (CSCO) and Juniper (JNPR).

On a related note, Pete Najarian is cautious about the chipmakers, especially Micron (MU) and Rambus (RMBS).

Jeff Macke recommends buying T on any dip.

Guy Adami prefers Intel (INTC).

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CSCO
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INTC
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JNPR
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MU
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RMBS
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T
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TXN
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BIOGEN BOUGHT?

The headline: Biogen Idec (BIIB),

Currently Up For Sale, Pops Today On Virtually No News.

Pete Najarian explains that options investors are buying December options and selling July options. To him that suggests a deal could be imminent and he thinks it will be between $85 - $90 per share.

Karen Finerman adds that current speculation suggests either Pfizer (PFE) or Merck (MRK) could be the buyers.

I don’t think it will be Merck, adds Jeff Macke.

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DTST
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COMMODITY COMMOTION

The headline: ArcelorMittal (MT) To Buy Argentine Steel Distributor M.T. Majdalani For Undisclosed Amount.

Guy Adami expects to see more M&A in this sector and believes US Steel (X) could be a takeover target.

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MT
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X
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AMERICA STILL ON SALE

The headline: Swiss Chip Maker STMicroelectronics (STM) To Buy Genesis Microchip (GNSS) For $336M.

Because the dollar remains relatively weak, American companies are available at a discount explains Pete Najarian. In any M&A situation, it’s important to recognize that buyers could be foreign.

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STM
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Trader disclosure: On Dec. 11, 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 (SWY), (INTC), (EMC), Najarian Owns (BIIB) Options, (CCL) Options, (CSCO) Options, (EMC) Options, (BIDU) Options, (GOOG) Options; Finerman's Firm And Finerman Own (GS); Finerman's Firm Owns (NMX), (NYX), (TXI); Finerman's Firm Owns (BIIB) Options, (MSFT) Options; Finerman's Firm Owns Russell 2000 Puts; Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Is Short (IWM), (SPY), (IYR), (IJR), (MBI); Finerman's Firm Is Short (MDY) And Owns (MDY) Puts; Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; GE Is The Parent Company Of CNBC