Utility stocks are the only S&P industry in the green over the past five days and now new hope for an inter-meeting Fed rate cut – sparked after the weak service-sector data – could spell more juice for these high-yielding names.
The XLU has seen a nice rebound since its lows last month, Guy Adami noted. Lower interest rates tend to play right into the hands of the utilities and he thinks the whole space is ripe for investing even with the rest of the market in a downturn. But go best-of-breed with stocks like PG&E or Exelon , Guy recommended. The utilities are not typical “fast money” stocks but they are safe, defensive names when things are volatile, he said.
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Trader disclosure: On Feb.5, 2008, 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 (YHOO), (DIS), (INTC); Finerman Owns (GS); Finerman's Firm Owns (NMX), (RTP), (SKS), (TSO), (TYC), (VLO), (WMT), (SUN); Finerman's Firm Owns (YHOO) And (YHOO) Calls; Finerman's Firm Is Short (SPY), (IJR), (IYR), (IWM), (MDY), (CME), (COF), (BHP); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Jon Najarian Owns (CME), (DIS), (MRK), (CMC), (YRCW); Jon Najarian Is Short (AIG), (XOM); Jon Najarian Has A Protected Long Position In (XLF) Through Options