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Stocks End Good Week On Low Note

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STOCKS END GOOD WEEK ON LOW NOTE

The Dow slid on Friday after the Federal Reserve's plan to rekindle consumer and small business lending fell short of expectations and General Electric was hit by analysts' bearish comments.

Chevron was also among the Dow's biggest drags, dropping substantially as oil prices fell and American Express slipped after a broker warned of more losses and predicted the credit card company's dividend would be cut.

Even so, the S&P 500 finished its best two-week run since 1974 as markets extended last week's bounce off of 12-year lows. For the year, however, the broad index remains down 15 percent.

Strategy Session with the Fast Money Traders

I’m watching to see if the S&P holds the 740 level, says Joe Terranova. Keep your eye on that.

The Vix spiked on Friday, adds Pete Najarian. It’s clear that fear is coming back into the market.

Credit spreads over the last 10 days have gotten worse, reminds Tim Seymour. I think equity investors could be out on a limb right now.

It seems to me that the Feds are changing the rules almost every week and that’s no good for the stock market, adds Jeff Macke.

What do you think? Tell us now!










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FINANCIALS FALL ON PROFIT TAKING

Financial shares fell for a second day, giving up some of their recent sharp gains; meanwhile the Street learned that investors only tapped a very small portion of the TALF, a program considered key to reviving ailing banks. "The expectations for TALF were not met by any measure," says Michael Pento, senior market strategist at Delta Global Advisors.

Also GE failed to reassure investors that the worst was over for its capital arm. Shares were also heavily traded, falling 5.8 percent to $9.54 after analysts lowered their 2009 profit forecasts for the economic bellwether.

In addition, hard feelings are growing over Washington’s move to put a 90 percent tax on bonuses for the employees of companies that have received at least $5 billion through the government's financial rescue program (applies to employees making more than $250K). The bill has already passed the House and a Senate version is poised to pass as soon as next week.

Don’t forget what Bernanke said on 60 Minutes, reminds Joe Terranova. That we’ll know the financial crisis is easing when private equity gets into banks. But why on earth would they do that right now when the rules keep changing.

I’ve got my eye on Blackstone , says Pete Najarian. They’ve got dry powder and they say they want to put it to work.

But as long as Washington keeps changing the rules, they’re not going to get in, adds Jeff Macke.

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THE WEEK: DOLLAR DIVES

The dollar headed for its biggest weekly fall in 24 years on Friday as investors feared the Federal Reserve's plans to buy longer-term government debt would erode the world's reserve currency.

The dollar has slid 5.1 percent against a basket of major currencies this week, set for the steepest decline since 1985 when the major economies agreed a formal depreciation of the dollar in the Plaza Accord.

But don't forget that three quarters of the world’s reserve currencies are doing the same thing as the Fed, says Tim Seymour.

I’m concerned about a currency war, adds Jeff Macke. Japan is clearly trying to devalue the yen and the recent Fed action was quite a slap in their face.

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COMMODITIES ROAR ON DOLLAR FEAR

Crude oil futures edged higher in seesaw trading on Friday capping a 10% run for the week. Meanwhile gold rallied to a 3-week high early in the session shooting 8% higher for the week.

I think oil is the best way to game inflation, says Joe Terranova. But I’d wait for a pull back.

I’m not too overwhelmed with bullishness in oil, adds Tim Seymour. Instead I’d look at Alcoa as a aluminum play if aluminum prices can bounce.

I’d look at copper, adds Pete Najarian. But be careful of playing it with Freeport McMoRan . It’s probably ahead of itself.

I’d give the commodities some space, adds Jeff Macke. Just relax.

TOPPING THE TAPE: HEALTH CARE ONLY UP SECTOR TODAY

UBS upgraded Johnson & Johnson to "buy" from "neutral," after a U.S. advisory panel recommended the approval of the company's anticoagulant drug Xarelto.

I like the way JNJ is doing business right now, says Pete Najarian. They’re making small acquisitions rather than going into one big merger.

Also Cowen & Co upgraded Merck to ‘Outperform,’ citing a stronger pipeline after the Schering-Plough merger.

Big Pharma is where love goes to die, bristles Jeff Macke. This was a good day to sell Merck.

If you want to play the space, I’d own biotech with the SPDR S&P Biotech, counsels Joe Terranova.

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BANKS: IS THE WORST OVER?

The Fed programs combined with possible accounting rules chances and bullish CEO comments have led many investors to wonder if the worst is over for banks.

According to Paul Miller of FBR Capital Market, that’s probably not the case.

Political uncertainty is a big problem right now, he says. “Why would anyone enter into a contract with the government when they’re so willing to change rules.”

He thinks there’s just too much uncertainty in this crisis to say that worst is over.

He’s particularly concerned that the government’s move to put a 90 percent tax on some bonuses could send some talent packing.

“You need competent people running these operations.” Miller fears bankers will walk away from these companies and start their own hedge funds outside the intense government scrutiny.




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Trader disclosure: On Mar. 20th, 2009, 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 (AA), (AAPL), (BAC), (EEM), (FXI), (TCK); Seymour's Firm Owns (PBR); Terranova Owns (KCE), (FXC), (XBI), (BRCM), (WYNN), (INTC), (JOYG), (DELL), (XOM), (IBM), (POT), (X), (JPM): Terranova Owns (COP) Calls; Terranova Owns (HESS) & (HESS) Calls; Terranova Owns (DIS) & (DIS) Calls; Terranova Owns (AMGN) & (AMGN) Calls; Macke Owns (GE), (SDS), (POT); Macke Is Short (BRK.b); Najarian Owns (C) Call Spread; Najarian Owns (GS) Call Spread; Najarian Owns (GD) Call Spread; Najarian Owns (MS) & (MS) Calls; Najarian Owns (POT) Call Spread; Najarian Owns (MSFT) & (MSFT) Calls; Najarian Owns (TGT) Call Spread; Najarian Owns (XHB) Call Spread

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