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Dow's First 3-Day Gain Since August

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DOW'S FIRST 3-DAY GAIN SINCE AUGUST

The Dow closed slightly higher Tuesday on optimism that the Federal Reserve's latest rescue package could revive the sagging housing market and free up consumer lending. This marks the Dow’s first positive three-day run since late August.

Under the latest plan, the Fed said it will buy up to $100 billion of debt issued by government-sponsored mortgage enterprises Fannie Mae, Freddie Mac and the Federal Home Loan Banks. It will also purchase up to $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae.

The central bank also teamed with the Treasury Department to launch a $200 billion facility to support consumer finance, including student, auto, and credit card loans and loans backed by the federal Small Business Administration. This will lend to investors who hold securities backed by this debt.

Strategy Session with the Fast Money Traders

Sometimes the government announces plans that never happen, reminds Karen Finerman. I think it’s a good plan, now will they actually do it?

It’s possibly meaningful, adds Jeff Macke. But we’re in this mess because consumer credit was too loose and now the government is saying, here’s more money.

If the plan can send mortgage rates lower and keep them there I’m encouraged, says Guy Adami.

I like the plan, Pete Najarian exclaims. The new plan goes right to the heart of the problem. This gives you car loans and student loans.

I think the scale of the $200 billion is far too small, counters Finerman. It’s not nearly enough.

Despite the fact the government is throwing money at the problem I expect the dollar to hold its value, adds Macke. it's still the premiere currency of the world.

I’m concerned about unintended consequences, adds Adami. And that’s probably hyper-inflation. But I’m encouraged by action in ConocoPhilips . It suggests fundamentals are back in play.

If you want to play fundamentals, keep an eye on ExxonMobil , Chevron and COP. They all hit lows and investors jumped back in.

I don’t think the market is back to fundamentals yet, counters Finerman. There’s a reduction of fear. But don’t confuse that with fundamentals.

You can not draw conclusions from the last 3 trading days, bristles Macke.

And on a (somewhat) related note Najarian exclaims, if you’re holding Freeport McMoRan and Southern Copper they’ve climbed substantially over the past few days. Time to get out!

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CISCO SHOWS HOW BAS IT IS

The Nasdaq closed lower on concerns that demand for technology may be weakening. That after, Cisco Systems said it will close most of its U.S. and Canada operations for five days to cut costs, sparking fears that demand for its products was weaker than expected.

The shutdown from December 29 through January 2 is part of Cisco's previously announced plan to cut costs by over a $1 billion in fiscal 2009, spokesman Terry Alberstein said on Tuesday.

I think there could be some great opportunities in this stock, muses Najarian.

I own a little Cisco, adds Karen Finerman. It could go lower but I like it.


H-P SEES DEMAND SLUMP

Shares of Hewlett-Packard fell Tuesday on concerns about weak sales of printer ink and personal computers, fed in part by pessimistic quarterly earnings from one of the company's distributors.

HP, a Dow Jones industrial average component, was down far more than the index.

If you're looking for a technology play, keep an eye on Research in Motion. That seems oversold, says Najarian.




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Trader disclosure: On Nov.25, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Macke Owns (MSFT), (WMT), (UUP); Macke Is Short (TM); Najarian Owns (CTX) Calls; Najarian Owns (ETFC); Najarian Owns (MOT) Calls; Najarian Owns (PHM) Put Spread; Najarian Owns (PRU) Calls; Najarian Owns (UYG) Calls; Finerman's Firm Owns (DNA) And (DNA) Calls; Finerman's Firm Owns (CSCO), (XLF), (MSFT); Finerman's Firm Is Short (USO), (IYR), (IJR), (MDY), (SPY), (IWM)

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