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Stocks Surge To New '09 Highs

STOCKS SURGE TO NEW ’09 HIGHS

Afraid of missing the next leg higher, investors poured back into stocks on Friday sending the S&P 500 to a new high for 2009. A better-than-expected jobs report fueled hopes of an economic recovery and suggested the recent market run-up was on solid ground.

For the week, the Dow was up 2.2 percent, the S&P 500 was up 2.3 percent and the Nasdaq was up 1.1 percent.

With the bulls large and in-charge how should you be positioned?

Considering the market action, I think we could easily see 1050 on the S&P, muses Steve Grasso.

The bullishness was generated by the part of the jobs report that showed manufacturing was improving, adds Joe Terranova. Investors liked the strength and that’s what sent stocks higher.

There’s also a lot of put protection in the market, says Pete Najarian. That actually gives investors more confidence (because losses are limited) and they become okay with taking more risk.

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THE RALLY: DOLLAR HITS 7-WEEK HIGH VS. YEN

The dollar on Friday hit its highest level since mid-June against the yen and rallied versus a basket of currencies after the stronger-than-expected jobs report stoked expectations that the U.S. economy was on the mend.

The move signals a shift in mindset among currency investors, with the dollar now moving in tandem with stocks. Previously they had been moving in opposition with the dollar attracting investors when equities were considered too risky.

What must you know?

It suggests investors are betting the US leads us out of the malaise, explains host Melissa Lee.

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RALLY: FINANCIALS ROAR TO END STRONG WEEK

The financials soared on Friday led by AIG , which posted its first profit in seven quarters. Also, CIT Group jumped after the troubled lender reported progress on its restructuring plans.

What’s must you know?

If people aren’t losing jobs they’re more likely to staying current on house payments and credit card payments, explains Tim Seymour. That’s bullish for financials .

In the space, I’ve got my eye on Goldman Sachs, says Pete Najarian. If you’re in this stock I’d also buy some protection. Right now the stock looks awfully weak.

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RALLY: TRANSPORTS REV HIGHER

The Dow Transports jumped on Friday with railroads, airlines and UPS all climbing on new found optimism that the recovery is here to stay.

What’s the trade?

I’d look at the IYT , counsels Joe Terranova.

In the space I like CSX , counsels Tim Seymour, but overall I’m cautious.

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THE OBAMA TRADE

On Friday Labor Department data showed employers cut 247,000 non-farm jobs in July – a serious loss – but far less than the 320,000 expected and the smallest decline in a year.

Also, the July unemployment rate eased to 9.4 percent from 9.5 percent in the prior month, the first time the rate has fallen since April 2008.

The data comes at the end of a wekk in which a Quinnipiac University poll shows the President's job approval rating has dropped to 50 percent as Americans express doubt about his handling of the U.S. economy.

"Today we're pointed in the right direction," Obama said in prepared comments. "We have a lot further to go. As far as I'm concerned, we will not have a true recovery as long as we're losing jobs."

Obama has defended vigorously the effectiveness of his $787 billion economic stimulus package in recent weeks, and the unemployment figures -- fresh after a report showing that GDP contracted only a modest 1 percent in the second quarter -- strengthened his argument

The traders spoke to CNBC's John Harwood about the political implications of Friday's jobs reports. To see that interview please watch the video.

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OPTIONS ACTION: PLANES AND GOLF CARTS

Pete Najarian has spotted unusual options activity in Textron.

A large amount of call buying suggests to Najarian that this stock could go higher.

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CHARTOLOGY: HOW MUCH HIGHER CAN STOCKS GO?

The S&P 500 is now up about 50 percent from its 12-year closing low in early March, helped by stronger-than-expected corporate earnings and a string of economic data that has suggested a recovery.

Are the bulls here to stay? Seems like a good time to consult the charts with Oppenheimer chief market technician Carter Worth.

How does he interpret that latest patterns? Watch the video now and find out!




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Trader disclosure: On Aug. 7th, 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 (AAPL), (AA), (BAC), (BX), (TCK), (USU); Seygem Asset Management Owns (CZZ); Grasso Owns (ASTM), (BAC), (COST), (CSCO), (FAZ), (PFE), (PRST), (V), (WMT), (XLF); Terranova Owns (MCD), (RIMM), (AMZN), (MSFT); Terranova Is Short (F), (TM); Najarian Owns (AA) Call Spread; Najarian Owns (BUCY) And Is Short (BUCY) Calls; Najarian Owns (GS), Owns (GS) Puts, Is Short (GS) Calls; Najarian Owns (HIG) Calls; Najarian Owns (INTC) And Is Short (INTC) Calls; Najarian Owns (JPM) And Is Short (JPM) Calls; Najarian Ownws (MS) And Is Sohrt (MS) Call; Najarian Owns (MSFT) And Is Short (MSFT) Calls; Najarian Owns (V) And Is Short (V) Calls; Najarian Owns (YHOO) Call Spread; Najarian Owns (NSC) And Is Short (NSC) Calls; Najarian Owns (CSCO) And Is Short (CSCO) Calls

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For Steve Grasso:
Stuart Frankel And/Or Its Partners Own (CUBA)
Stuart Frankel And/Or Its Partners Own (GERN)
Stuart Frankel And/Or Its Partners Own (MSFT)
Stuart Frankel And/Or Its Partners Own (NWS.A)
Stuart Frankel And/Or Its Partners Own (NXST)
Stuart Frankel And/Or Its Partners Own (NYX)
Stuart Frankel And/Or Its Partners Own (PDE)
Stuart Frankel And/Or Its Partners Own (PRST)
Stuart Frankel And/Or Its Partners Own (RDC)
Stuart Frankel And/Or Its Partners Own (ROK)
Stuart Frankel And/Or Its Partners Own (TLM)
Stuart Frankel And/Or Its Partners Own (TMK)
Stuart Frankel And/Or Its Partners Own (XOM)
Stuart Frankel And/Or Its Partners Own (XRX)
Stuart Frankel And/Or Its Partners Own (SDS)
Stuart Frankel And/Or Its Partners Are Short (QQQ)
Stuart Frankel And/Or Its Partners Are Short (CL)

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO
Virtus Diversifier PHOLIO Owns (IGE)
Virtus Diversifier PHOLIO Owns (DBC)
Virtus Diversifier PHOLIO Owns (DBV)
Virtus Investment Partners Owns More Than 1% Of (ABD)
Virtus Investment Partners Owns More Than 1% Of (CAL
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (DBC)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (SKT)
Virtus Investment Partners Owns More Than 1% Of (TNB)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (CLB)
Terranova Owned (MSFT) On 7/22/09

For Scott Nations
Nations Owns (C) Calls And Is Short (C) Puts



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