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Stocks Start Week Lower

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STOCKS START WEEK LOWER

The Dow closed in negative territory Monday, ending a four day winning streak.

Shares of Citigroup and JP Morgan dragged the blue chip index lower after prominent analyst Mike Mayo revived worries about the health of the bank sector and warned of rising loan losses by the end of 2010. He rated a number of big and regional banks at "underperform" or "sell.”

Meanwhile, billionaire investor George Soros, didn’t help sentiment any when he told Reuters the U.S. economy was in for "a lasting slowdown" and that it wouldn't recover in 2009. He also said the "banking system as a whole is basically insolvent."

The KBW Bank index fell sharply but came off its lows after Meredith Whitney, another closely followed analyst, said banks -- by and large – should have made "a little bit of money" in the first quarter.

Strategy Session with the Fast Money Traders

You have to respect the price action in this market, says Jeff Macke. The financials should have sold off by 10% but they bounced back hard. And by the way, there was absolutely nothing new in Mike Mayo’s note.

(Macke always says sell the rips and buy the dips and on Monday) I added to my position in Wells Fargo.

Mayo said bank losses could rival those of the great depression, explains Zach Karabell. But I would not look back to the 1930’s for insights on how this crisis plays out. It’s apples and oranges.

It seems to me that this is how a market that’s stabilizing acts, muses Joe Terranova.

I was impressed by Meredith Whitney’s comments, adds Tim Seymour.

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CHART OF THE DAY: GOLD A LOSER IN '09

Gold slid again on Monday with bearish momentum gathering pace as investors liquidated some long positions and targeted key support levels around $860

If gold breaks $860 I think is falls a lot further, counsels Joe Terranova.

I think gold bounces off $860, counters Tim Seymour.

I think there will be a point in this year when consumer buying of gold globally will be its own support, adds Zach Karabell.

Who cares about gold, bristles Jeff Macke. It’s a druid metal.

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FORD SURGES ON DEBT SWAP

Ford said on Monday it has slashed automotive debt by 38 percent, or $9.9 billion, bolstering its finances amid a deep auto industry downturn, and its shares were up considerably, as a result.

Ford said the debt restructuring would trim its cash interest expenses by more than $500 million per year, providing the latest evidence that Ford is ahead of domestic rivals General Motors and Chrysler in restructuring to survive the lowest U.S. auto sales in three decades

From the way GM traded it seems investors think GM will benefit from the momentum generated by Ford, explains CNBC’s Phil LeBeau. But they’re two different animals.

If you think the automakers are going to land in bankruptcy court don’t buy their equities, bristles Jeff Macke.

I think the long-term win is Toyota , adds Tim Seymour. However the stock has run substantially, so in the short run the quick Toyota trade is to take some off the table.

I’d also take a look at AutoZone, counsels Joe Terranova.

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TOPPING THE TAPE: AIRLINES

U.S. crude oil futures fell Monday, retreating after an early jump above $53, which in turn led investors to feel more bullish on the airline sector, overall.

It’s crazy town, exclaims Jeff Macke. I don’t know what to make of the move in airlines other than it was a slow day.

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COMMODITY NAMES CRUNCHED

Investors bid commodity stocks lower with steel names such as U.S. Steel and A.K. Steel sliding considerably. And in the ag space, investors took profits in Potash , and Mosaic .

It seems to me that commodity prices are trapped in a range, says Tim Seymour. I’ve been bullish on commodities but I’m growing more cautious.

Keep a close eye on Alcoa earnings, counsels Joe Terranova. It will give you some insight into what aluminum prices are doing.

You can’t just toss all commodities into one basket, counters Zach Karabell. They all trade differently on different fundamentals. And I wouldn't look at Alcoa earnings as some kind of indicator.





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Trader disclosure: On Apr. 6th, 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 (WFC), (AAPL), (SDS), (GS), (MOS), (WMT); Seymour Owns (AAPL), (BAC), (EEM), (FCX), (FXI), (F), (MSFT); Terranova Owns (KCE), (AMGN), (IBM), (HESS), (BRCM), (DIS), (DELL), (JPM), (INTC), (X), (JOYG), (WYNN); Terranova owns (COP) Calls; Terranova Owns (POT) & (POT) Calls; Terranova owns (XOM) & (XOM) Calls; Karabell Owns (AAPL), (CSCO), (FCX), (FXI), (GOOG), (JPM), (NOK), (NVDA)

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