MICROSOFT DRAGS DOWN MARKET DOWN
The Dow slid on Thursday after Microsoft worried the Street when it said it would cut up to 5 percent of its estimated work force over the next 18 months
The company cautioned that it could no longer offer profit forecasts for the rest of the fiscal year after posting a quarterly profit that fell short of expectations.
I’m a disgusted Microsoft shareholder, sighs Karen Finerman. I don’t know what to think about tech, right now.
Meanwhile, the U.S. economy showed further signs of deterioration on Thursday as initial weekly claims for jobless benefits rose to a seasonally adjusted 589,000, and housing starts sank 15.5 percent to a seasonally adjusted annual rate of 550,000 units-- the lowest on record.
Investors were not appeased by the Senate Finance Committee's backing of Timothy Geithner. The panel's approval cleared the way for a full Senate confirmation vote.
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AFTER HOURS ACTION: GOOGLE
Google posted strong fourth-quarter earnings on Thursday, beating Wall Street forecasts, as its Web search advertising business remained strong despite a bleak economy.
Investors have been concerned that Google's paid search business would face challenges due to the worsening economic environment, but the company said search query growth was strong with revenues up.
The metrics look good to me, says Guy Adami. At a 15 multiple I think it’s fairly valued though some may argue it’s cheap.
I expect to see slowing growth at Google, says Jeff Macke. I think they have some issues going forward.
I’m not sure Google can do as well next quarter, adds Tim Seymour. But I’d keep an eye on Baidu.com, he says. It could pop tomorrow on Google's strength.
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BATTLE THE BEAR: DEFENSE STOCKS
Share of Lockheed Martin closed in positive territory after the world's No. 1 defense contractor reported a 3 percent increase in quarterly profit.
The maker of F-22 and F-35 fighter jets, and a range of electronic systems for military and civilian use, reported fourth-quarter profit of $823 million, or $2.05 per share, compared with $799 million, or $1.89 per share, in the year earlier quarter.
That beat Wall Street's average forecast of $1.91 per share, according to Reuters Estimates.
The stock was sold off on fears that Obama would cut defense spending, explains Guy Adami. I still like this stock but wait for a pull back. And also look at L-3 Communications , he says, as another defense sector play.
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BRITISH POUND POUNDED
The British pound slipped again on Thursday, staying near a 23-year low against the dollar on persistent concern that the UK is heading for a deep financial crisis while the economy languishes in a recession.
From here I would not continue to be short the pound, counsels Karen Finerman.
My bigger concern is the euro, adds Tim Seymour. Germany, France and other nations are all issuing separate debt. Short the DAX against the S&P, he counsels.
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AFTER HOURS ACTION: CAPITAL ONE
Capital One, a credit-card issuer and bank, posted a fourth-quarter loss on Thursday, hurt by goodwill impairment, and set aside more money to cover more bad loans.
The McLean, Virginia-based company swung to a fourth-quarter net loss of $1.4 billion, or $3.74 per diluted share, compared with net income of $226.6 million, or 60 cents per diluted share, a year earlier.
Trouble in the credit card space? Now there’s a surprise, Karen Finerman chuckles.
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Trader disclosure: On Jan. 22nd, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (AAPL), (BAC), (EEM), (F), (FXI); Macke Owns (MCD), (BAC), (C), (TM), (SDS); Adami Owns (AGU), (C), (BTU), (GS), (INTC), (MSFT), (NUE); Finerman's Firm Owns (MSFT), (UNH), (AET); Finerman's Firm Owns (DNA) & (DNA) Call Spread; Finerman's Firm Is Short (IYR), (IJR), (IWM), (MDY), (SPY), (USO), (ANF)
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