Stocks Up Sharply In Late Rally



The Dow jumped on Friday as investors bet that a steep drop in oil prices will boost consumer spending and, as a result, the retail sector . Both Wal-Mart and Apple were among retail's biggest winners.

Surprisingly, the positive move in the Dow comes after a government report showed that U.S. employers cut payrolls by 533,000 in November, the weakest performance in 34 years, while the unemployment rate rose to 6.7 percent, the highest reading since 1993.

In fact it’s been a week of negative headlines. In case you're forgotten, some of them follow:

Bad Headlines This Week

*Recession Official: Began Back in December ‘07
*Outlooks Slashed: AT&T, Merck, DuPont
*Worst Holiday Shopping Start in 35 Years
*533,000 Jobs Cut In November – Worst Since 1974
*Home Foreclosures at a Record High
*GM and Chrysler on the Brink

How on earth could the Dow rally after a week with so much negative news?

Strategy Session with the Fast Money Traders

The market is finally digesting the fact that the news cycle is bad, adds Zach Karabell. Perhaps the market is starting to look beyond the immediate headlines.

I think it’s a very bullish rally at a time when the data is getting much worse, muses Tim Seymour.

I like that the S&P tested its lows and bounced, adds Guy Adami. Technically, if the S&P closes above 900 the S&P will soar 100 points.

If you think the financials are ready for any kind of turn, look at the ProShares Ultra Financials or the FINANCIAL BULL 3X, adds Pete Najarian.

Dupont has been a great “tell” adds Adami. Also keep an eye on Home Depot and Target .

On top of that you could not have lower global inventories, adds Karabell.

Also, REITs had a monster week, says Najarian. It’s seems to me that’s where people are starting to put their money. Maybe they’re oversold.



dropped more than 6 percent to a four-year low on Friday. Analysts have slashed price and demand forecasts on the mounting economic gloom, with Merrill Lynch predicting oil could drop to $25 a barrel if the global recession extends to China.

I am very interested in the commodity space and I’m starting to nibble, says Tim Seymour.

The current flight to treasuries could be commodity money in early ’09, adds Guy Adami.

Redemptions are driving the commodities lower, adds Pete Najarian. But there will probably still be pressure through the end of the year. If you’re looking for a trade look at American Airlines , Continental and United Airlines he adds. They should be able to make money in this environment. I see opportunity to the upside.



Hartford Financial Services Group raised its 2008 profit forecast and said it had more than enough capital to withstand significant further deterioration in equity markets, leading its shares to more than double in price.

The outlook provided reassurance to investors, who had driven Hartford's shares down 92 percent this year on worries that the life, property and casualty insurer could run short of the capital needed to back policies.

"A shroud of uncertainty was lifted after Hartford commented on its capital provisions. Investors immediately went looking for a lasting reversal in the share price," says Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut.

Options action suggested this stock would explode higher, adds Pete Najarian. And potentially there’s more room to the upside.

I agree that the stock has room to go, adds Tim Seymour. It’s still an interesting trade.

If you want to play space, stick with the banks that have been performing well, counters Guy Adami. I like U.S. Bancorp..

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Trader disclosure: On Dec. 3rd, 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); Pete Najarian Owns (AMR) And Is Short (AMR) Calls; Pete Najarian Owns (FCX) And Is Short (FCX) Calls; Pete Najarian Owns (HIG) Calls; Pete Najarian Owns (UYG); Pete Najarian Owns (SBUX) Calls; Karabell Owns (AAPL), (FCX), (GLD), (GOOG), (JPM), (UYG), (DRYS); Seymour Owns (AAPL), (BAC), (F), (MER); Seygem Asset Management Owns (FCX)

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