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Comeback Continues; Microsoft to Rally Market Friday

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MICROSOFT TO RALLY MARKET FRIDAY

The headline: Microsoft Shares Surge After Hours on Better-Than-Expected Profit, Sales, Forecast

Where $32 was resistance it will once again be support, according to Guy Adami. But he wouldn’t chase MSFT. Buy it on dips instead.

Tim Seymour said it’s safe to predict this “very important” earnings report will buoy the broader market on Friday.

COMEBACK CONTINUES; DOW ADDS 100

The headline: Market Rebound Continues on Strong Earnings, Good Jobs Data and Higher Commodity Prices

Karen Finerman predicts the rally will go on, at least for a little while. Even with a couple good days in the bank, the month of January is still a “disaster,” she said. She was, however, particularly bullish on the part of Thursday’s announced government stimulus plan that addresses the mortgage crisis by raising the limit on loans and mortgages that Fannie Mae and Freddie Mac can purchase. The raise, which she called “significant,” should be a good sign for the high-end homebuilders like Toll Brothers .

Now that the banks have the Fed in their back pocket and the transports aren’t giving such bleak assessments of the economy, Guy Adami said the key is clarity. As the market looks to stabilize, be prepared to catch some gains in some of the recent underperformers.

AFTER HOURS ACTION: AMGEN

The headline: Amgen Tops Analyst Estimates for Both Sales and Earnings but Lowers 2008 Outlook

CNBC’s Mike Huckman reported that in addition to earnings, the company reported that its anemia drug sales did not go down as much as was expected. Also, it put out a note of positive data for its osteoporosis drug, which many believe is the future of the company.

Pete Najarian would still prefer to hold off on Amgen. While this is encouraging news for the beaten down biotech, showing that it’s finally assembling a pipeline, there are better names out there, he said. Don’t chase it.

SAVING BONDS

The headline: NY State Insurance Superintendent Says Helping Troubled Bond Insurers Will Take Time; Will Banks Help Rescue This Market – and Themselves – by Rescuing Bond Insurers?

With news breaking that Wilbur Ross is in takeover talkswith Ambac , Karen Finerman said a buyout would make perfect sense for both parties. She wouldn’t short the bond insurers at this junction but wouldn’t be long, either.

Guy Adami noted that the financials are going to continue to have the wind at their backs through this cycle. With so much momentum building, he thinks it would be a mistake to sell these stocks into rallies. And with the Fed on their side, investors can expect that the banks will “crush” the numbers into the third quarter.

THE SCOURGE OF SOCIETE

The headline: French Banking Giant Societe Generale Loses $7.1 Billion after Rogue Trader’s “Exceptional Fraud”

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Trader disclosure: On Jan 24, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Najarian Owns ( C), (COP), (CSCO), (EBAY); Najarian Owns (AAPL) Options, (WM) Options, (YHOO) Options; Finerman Owns (GS), (HD), (MO), (MSFT); Finerman’s Firm Owns (HD), (MO), (SUN), (TSO),(VLO),(WMT), (YHOO),(SPG); Finerman is Short (FS); Finerman is long (FS) and long (FS) puts; Tim Seymour is Owns (AA), (DELL), (INTC), (MER), (MSFT); Tim Seymour’s firm owns (AAPL), (COP)