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Late Buyers Fuel Surge

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LATE BUYERS FUEL SURGE

The Dow surged on Tuesday after an unexpected leap in housing starts pushed Home Depot and other retailers higher while bullish comments from a broker on Cisco Systems helped technology shares rebound.

Also the rally may have been helped along by comments made by top White House economic advisor Larry Summers on CNBC’s Power Lunch. In an exclusive interview Summers dismissed the notion of tax hikes for the immediate time being.

He said, “There are no, no tax increases this year, there are no no tax increases next year, in fact there are substantial tax cuts to the people who are most likely to spend and push the economy forward.” (Click here to see Sr Economic Correspondent Steve Liesman's entire interview with Larry Summers)

Strategy Session with the Fast Money Traders

I don’t think Larry Summers’ comment had a lot to do with the rally, says Pete Najarian. It was much more about that momentum in the market.

The S&P looks like it's going to 900, adds Guy Adami, and it could get there by the end of the week.

Once we held above 740, a critical technical level, it said to me the rally is for real, says Joe Terranova.

I hate to crash your party but sell this rip, counsels Jeff Macke.

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FINANCIAL ‘LAND OF CONFUSION’

As banks continue to rebound, comments from analysts leave many investors lost in a land of confusion. Just take a look.

Stock Move Analyst Firm

JPMorgan Upgrade to ‘Buy’ Bank of America/Merrill
Morgan Stanley Downgrade to ‘Underperform’ Bank of America /Merrill
Morgan Stanley “May See More Upside” KBW
Morgan Stanley Estimates Lowered UBS
Goldman Sachs Downgrade to ‘Market Perform’ KBW
Goldman Sachs Estimates Raised UBS

And here’s the kicker. The replacement at Oppenheimer for the legendary Meredith Whitney started coverage on the financials today. He rates Goldman and Morgan Stanley at 'Outperform' and Bank of America, Citi and JPMorgan Chase at 'Perform'. Whitney had been -- and remains -- much more bearish on banks.

It’s hard for me to reconcile that Oppenheimer is now much more positive on Goldman and Morgan just because Meredith Whitney left, muses Guy Adami. If you’re looking at Goldman, I think it’s a little rich at these levels, he adds.

Goldman was a $74 stock a little over a week ago and now it’s trading over $100, reminds Pete Najarian. In my book it’s a hold, not a buy.

Goldman and Morgan and great places to trade, adds Jeff Macke. But they’re purely trading vehicles.

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TOPPING THE TAPE: TECH SNAPS BACK

The Nasdaq reversed a 1.9 percent slide on Monday after Goldman said investors should buy Cisco Systems on the view a new server will increase the company's profits.

Shares of Apple also gained after the firm unveiled an iPhone software upgrade with new features ranging from copy-and-paste and message notifications to picture messaging, as the company pursued further growth in a hotly contested cellphone market.

In the space, I’m keeping an eye on Oracle, says Guy Adami. Valuations look interesting.

Options action in the SMH suggests the Street is getting more encouraged by what they’re seeing in the chip sector, reveals Pete Najarian.

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OIL NEARS $50

U.S. crude oil futures settled at their highest level since December, supported by a surge in heating oil and gasoline futures and on options expiration play for the front-month April crude contract.

Oil went higher on bad news Tuesday and that suggests to me it has more room to run, says Guy Adami.

Action in nat gas suggests to me that it could have bottomed, adds Joe Terranova.

And in commodities, I’d keep an eye on the steel names, counsels Pete Najarian. Nucor was absolutely slammed on Tuesday but maybe that was the whoosh we needed. In other words, maybe it’s time to start looking at these names.

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TOPPING THE TAPE: HOUSING & THE CONSUMER

Shares of Home Depot climbed after data showed housing starts jumped 22.2 percent in February, the biggest percentage rise since January 1990, and also the first increase since last April

I still think Home Depot is an interesting looking stock, muses Guy Adami. At current valuations it’s interesting.

Building permits aren’t up enough for me to get excited about housing, counters Joe Terranova.

SUMMERS SPARKS STOCK RALLY

As we mentioned on the previous page, stocks surged higher Tuesday after an exclusive CNBC interview with top economic advisor Larry Summers.

During the discussion Summers confirmed earlier reports that the administration planned to create a "systemic risk regulator" to oversee banking and market problems that could threaten the economy

And he also said the administration will be "as creative as we can" to get back at least some of the $165 million in bonuses that AIG paid to executives after the insurance giant got billions in federal bailout money.

(Click here to see CNBC's Steve Liesman's entire interview with Larry Summers)





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Trader disclosure: On Mar. 17th, 2009, 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 (GE), (GS), (MS), (MOS), (AAPL); Macke Is Short (BRK.b); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU) ; Terranova Owns (MA), (AAPL), (RIG), (CVX), (GS), (AMZN), (BP), (KCE), (JPM), (X), (POT), (WYNN), (XBI), (HESS), (INTC), (BRCM), (DELL), (JOYG), (FXC), (MS), (XOM); Terranova Owns (AMGN) & (AMGN) Puts; Terranova Owns (IBM) Spread; Terranova Owns (DIS) & (DIS) Calls; Terranova Owns (COP) Calls; Terranova Owns MACI Oil Futures; Najarian Owns (GDX); Najarian Owns (C) Call Spread; Najarian Owns (FCX) Call Spread; Najarian Owns (GD) Call Spread; Najarian Owns (X) Call Spread; Najarian Owns (GLD) Put Spread; Najarian Owns (JPM) & (JPM) Calls; Najarian Owns (MS) & (MS) Calls; Najarian Owns (MSFT) & (MSFT) Calls; Najarian Owns (WFC) & (WFC) Puts; Najarian Owns (XHB) Call Spread; Najarian Owns (XLI) Calls

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