Markets Rebound from a 4% Slide


After the market's worst day in weeks on Monday, stocks made up some ground , with the markets closing up on a day where companies rattled off earnings – both good and bad – throughout the day.

The Big Day For Banks

The big story of the day was the market turnaround, and the banks leading the charge, with both Bank of America and Morgan Stanley making significant percentage gains ahead of Wednesday’s earnings announcements. Tim Seymour sees the move tracing back to Geithner, who yesterday left markets thinking banks didn’t have enough capital, but today in front of the congressional committee the secretary sounded more optimistic. However, Seymour cautions that the comments could potentially be a little sugar-coated.

But you can’t deny the action, says Guy Adami, who brings up US Bancorp. He points out that their earnings were not very impressive, in today’s trading the stock was up over 20% on big volume, not to mention its significant percentage gains over the past few months.

Karen Finerman is cautious when it comes to the banks, however. She says the Government may have boxed themselves into a corner in regard the stress tests. She thinks some institutions, perhaps some of considerable size will not pass the tests and the government may be setting up an expectation for something of this magnitude, which could result in another big drop in some bank stocks.

For more on the banks, specifically the Regional banks, and specific picks in the sector, check out the video for a conversation with Gerard Cassidy, Regional Banks Analyst for RBC Capital Markets.


After Hours Action

With Yahoo! and AMD both expressing uncertainty over the future of their operations, there has been some extremely volatile movement in the stocks in the after hours session. CNBC’s Silicon Valley Bureau Chief Jim Goldman will join the crew later in the show to dissect the company’s conference call and cut through any misguided speculation on the street today.

Capital One is another firm traders are tracking closely after hours, as losses came across worse than expected, which was seen in other credit card issuers this week. In this case, Karen Finerman recommends keeping an eye out on delinquencies, as this can give a solid perspective on losses down the line. Guy Adami sees shorts pressing into COF tomorrow, pressuring the stock down, although he sees potential to buy for the long term a little further down the road.


Topping The Tape: Blue-Chip Comeback

The other leg of the market turnaround was in blue-chip stocks, led by Caterpillar and United Technologies closing higher by over 3% each. Tim Seymour cautions that the news on the Caterpillar front may not be as good as it’s cracked up to be. With sales down over 20% in the second half of the year, but are bolstered by both low expectations and the fact that over 60% of their sales are global.

United Tech, on the other hand, had decent numbers, says Guy Adami, but he thinks the trades in UTX are basically over for now. He points to Honeywell, who Adami expects to see rally into earnings, which is set to be announced later this week. He’d rather buy into Honeywell than others in the sector.

The other group faring well today was in the Tech sector, with IBM rebounding post-earnings and Texas Instruments releasing good results. Guy Adami sees good multiples arising from IBM and still sees it as a buy. On the other hand, Jeff Macke finds it “virtually impossible” to get excited about Texas Instruments, and recommends Intel instead.


The Obama Trade: Good For Defense?

President Obama is also a hot topic for Wall Street, particularly when talking about defense stocks. Guy Adami points out that defense stocks got sold off into the election, but there is no reason to expect US defense spending to decrease. With Lockheed Martin raising their guidance and Northrop Grumman up 23% in the last month, Adami suggests LMT as a rare long term buy recommendation.

For more from the traders, including Oil picks and more stocks to watch after the bell, check out the video!

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Trader disclosure: On Apr 21st, 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 (AAPL), Macke Owns (GS), Macke Owns (WMT), Macke Owns (WFC), Macke Owns (GE)

Adami Owns (AGU), Adami Owns (BTU), Adami Owns (C), Adami Owns (GS), Adami Owns (INTC), Adami Owns (MSFT), Adami Owns (NUE)

Seymour Owns (AAPL), Seymour Owns (BAC), Seymour Owns (EEM), Seymour Owns (FCX), Seymour Owns (FXI),Seymour Owns (TCK)

Finermans Firm Is Short (IJR), Finermans Firm Is Short (MDY), Finermans Firm Is Short (SPY), Finermans Firm Is Short (IWM), Finermans Firm Is Short (USO), Finerman's Firm Owns (AXP), Finerman's Firm Owns (BAC) Preferred, Finerman's Firm Owns (C) Preferred, Finerman's Firm Owns(MSFT) & (MSFT) Put Spread, Finerman's Firm Owns (PBR), Finerman's Firm Owns (ELX),

J Najarian Owns (AXN), J Najarian Owns (MEDX), J Najarian Owns (CERN)

Sanford Bernstein Owns (AAPL), Sanford Bernstein Owns (HPW), Sanford Bernsteinn Owns (IBM), Sanford Bernstein Has Had (AAPL) Has A Client