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S&P 500 Rallies 7%

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S&P 500 RALLIES 7%

U.S. stocks surged around 7 percent on Monday after the Obama administration detailed a plan to purge toxic assets from bank balance sheets, fueling optimism about a revival in bank lending and driving double-digit gains in financial shares.

The S&P 500 and the Dow industrialsposted their biggest one-day percentage gains since late October after Wall Street finally got what it was asking for: relief for the battered banking sector and more data suggesting the housing market could be on the mend.

The success of Treasury's plan hinges on private investment, so markets were encouraged when several large investors, including PIMCO and BlackRock said they would participate in what has become a key part of the government's efforts to unlock credit markets and revitalize the recession-hit economy.

"It seems to me that private equity is the big beneficiary of the Geithner plan," muses Pete Najarian.

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The market action today was the exact opposite of fear, says Karen Finerman. It was sheer euphoria. And as a result money that was on the sidelines became afraid to miss the boat.

The market action was exhilarating, adds Pete Najarian. But you have to be careful. The Vix is still trading well above 42, a level that suggests fear remains in this market.

It’s a 7% rally in one day, exclaims Jeff Macke. The market broke technical levels to the upside, he says. I don’t believe in triple tops and we hit 805 for the third time then ripped through it. Enjoy it!

I think these are the best market internals we’ve seen in a long time, adds Guy Adami. As far as I can tell, the S&P should climb to 900.

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NASDAQ CLIMBS 7%

Chip names such as Intel and Applied Materials led the Nasdaq higher after a Stifel Nicolaus analyst said rival chip manufacturers had experienced a "demand surge."

Carter Worth predicted that the Semiconductor ETF would lead us to the upside, reminds Pete Najarian. And now I’m seeing big institutional investors buying the sector across the board.

I bought Apple at the end of the day, says Jeff Macke. I think by the end of the day investors just wanted to be in stocks because the dollar was dropping.

Oracle had a monster move recently, says Guy Adami. I wouldn’t chase it. Instead I’d look at Hewlett-Packard , he adds. I think it goes to $34.

Even Microsoft participated in the rally, adds Karen Finerman. That is a powerful rally indeed, she chuckles.

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The commodities markets performed noticably well on Monday - investors seem to feel the Geithner plan could well provide the underpinning for the global growth scenario.

I think the play is copper , says Guy Adami, as well as nat gas and maybe aluminum. Crude oil is getting a little lofty. I’d be out ahead of stats on Wednesday. And gold looks like no-mans land.

The oil services index was much higher on Monday, says Karen Finerman. It feels to me there is a lot of interest in that space.

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CONSUMER SIGNS OF LIFE

The consumer showed signs of life on Monday with an unexpected rise in housing sales, seen as a key to an economic recovery. Data showed the pace of sales of existing homes in the United States rose 5.1 percent in February, the biggest increase since July 2003.

Also, retail investors enjoyed some good news for a change. Tiffany reported quarterly profit that beat expectations.

There was huge across the board buying in retail on Monday, explains Jeff Macke. But, I’d take profits because they’re probably report terrible quarters in May.

Guy Adami concurs.





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Trader disclosure: On Mar. 23rd, 2009, 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), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman's Firm Owns (MSFT), (RIG), (AXYS); Finerman's Firm Is Short (WFC), (BBT); Finerman's Firm Owns (WFC) Preferred; Finerman's Firm Owns (DNA) Call Spread; Finerman's Firm Owns (BAC) Preferred; Macke Owns (GE), (AAPL), (GS), (MS), (POT), (MOS); Macke Is Short (BRK.b); Najarian Owns (PALM) Stock & (PALM) Calls; Najarian Owns (SWY) Calls; Najarian Owns (C) Call Spread, (GS) Call Spread, (GD) Call Spread, (MS) Call Spread, (POT) Call Spread, (TGT) Call Spread, (XHB) Call Spread

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