Global growth names boosted the market after Caterpillar posted stronger-than-expected quarterly earnings on Tuesday and raised its full-year outlook, citing what it said were growing signs of stability in the world's credit markets and economies.
The company, the world's largest maker of construction and mining equipment and a closely watched component of the Dow Jones industrial average, said fiscal stimulus programs, especially in China, were beginning to pay off and commodity prices were holding in a range that was positive for investment.
The upbeat outlook, which Caterpillar's chief executive said "set the foundation for an eventual recovery," sent the company's shares surging.
What’s the trade?
I’d stick with this name, counsels Tim Seymour. I like hearing that they see some recovery in the US side of the business.
My concern is that the Caterpillar move was a short squeeze, adds Steve Grasso. If I was long Caterpillar I’d take some profits.
The theme I took away from Caterpillar earnings is strength in mining and infrastructure, says Pete Najarian. And if that’s the case then Bucyrus and JoyGlobal should explode.
CAN MACK KEEP MOJO GOING?
Morgan Stanley reports earnings for the fiscal second quarter on Wednesday with commercial real estate losses widely expected to weigh heavily on the firm.
Commercial real estate exposure has been one of the stark contrasts between Morgan Stanley and its largest competitor, Goldman Sachs.
What’s the trade?
I think Morgan Stanley has an incredible capital markets division, muses Tim Seymour, and I think they’ll be right there with Goldman over the next 20 years It should be a very profitable company. But for the time being, keep in mind that at $29 the stock keeps running into resistance.
Nobody needs to jump into this stock with both feet. However, I’d recommend averaging into Morgan Stanley on pullbacks, says Pete Najarian, for the long-term.
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Trader disclosure: On July 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; Seymour Owns (APPL), (BAC), (DRYS), (EEM), (FCX), (FXI), (INDY), (SBUX), (UNG); Grasso Owns (OXY), (WMT), (XLF), (CSCO), (V); Grasso's Clients Own (UNH), (V), (WMT), (USB), (OXY); Najarian Owns (AAPL) Call Spread & Put Spread; Najarian Owns (INTC) Call Spread; Najarian Owns (ISRG) & (ISRG) Call Spread; Najarian Owns (JNJ) Call Spread; Najarian Owns (MS) & (MS) Call Spread; Najarian Owns (MSFT) & (MSFT) Short Calls; Najarian Owns (PALM) Call Spread; Najarian Owns (V) & (V) Short Calls; Najarian Owns (YHOO) Call Spread; Finerman Owns (RIG); Finerman's Firm Owns (MSFT), (NOK), (PBR), (RIG), (TGT), (TBT), (WMT); Finerman's Firm And Finerman Own (BAC) Preferred Shares; Finerman's Firm And Finerman Own (WFC) Preferred Shares, Finerman's Firm Is Short (WFC); Finerman's Firm Is Short (IJR), (IYR), (IWM), (MDY), (SPY), (USO)
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