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After Hours Action: Apple

After hours, the traders poured over the latest earnings reports from Apple and Texas Instruments in an attempt to determine what they signaled for tech stocks going forward.

Considering Yahoo!, eBay, Amazon and many other technology firms are also scheduled to report later in the week, how should you game the space?

Tech Earnings This Week
Monday: Apple, Texas Instruments
Tuesday: Yahoo!, Seagate Technology
Wednesday: eBay
Thursday: Amazon, Netflix, AT&T
Friday: Microsoft

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AFTER HOURS: APPLE

Shares of Apple leaped in extended trade sending shares above $200 for the first time since January 2008 after the tech titan reported profit and sales that blew past analysts’ forecasts.

The maker of the iPhone and iPod earned $1.82 a share in its fiscal fourth quarter, up from $1.26 a share in the same period last year.

Sales reached $9.87 billion in the most recent quarter, up from $7.895 last year.

This isn't just a one-quarter phenomenon, there's something bigger going on. There's a paradigm shift from a cell phone, a computer in your pocket. Apple's going to run away with that and ultimately, the numbers are going to be inching up as we go forward into 2010,” Gene Munster, senior research analyst at Piper Jaffray, tells CNBC.

What’s the trade?

I’m bullish Apple, says Pete Najarian. They have so much revenue potential going forward I can only think that more good things are down the road for this company. However, considering the stock’s recent run I don’t see how you can do anything but take some profits.

Mac sales were up something like 70%, adds Joe Terranova. That’s what matters to me. The Mac is a computer that’s purchased by consumers unlike Dell which is bought by businesses. I think it says consumers are okay.

If you’re a long term investor the stock is likely going higher, says Guy Adami. I get the big picture story. However if you’re a trader and you want to take a shot, it might be a short .

That revenue beat is pretty good, muses Karen Finerman. And don’t forget they’re classic sandbaggers.

> For complete coverage of Apple earnings click here

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AFTER HOURS: TEXAS INSTRUMENTS

In extended trade Texas Instruments gained as much as 2% after the company beat earnings forecasts Monday and posted better-than-expected revenue.

The chipmaker earned 42 cents a share in its third quarter on sales of $2.88 billion, compared with 43 cents a share on sales of $3.39 billion in the same period last year.

"Our performance in the quarter exceeded our expectations and was led by a second consecutive quarter of 20-percent growth in Analog," said Rich Templeton, chairman, president and CEO, in a press release. "We are encouraged with the strong sequential increase in demand for our products over the past two quarters as our customers are winding down their inventory corrections and have begun to increase production levels in their factories."

"This revenue growth, combined with our early actions to pare costs so that we would not be dependent upon an uncertain rebound in the overall economy, has resulted in solid improvements in our profitability," he added.

What’s the trade?

That’s a good quarter, says Guy Adami, and I still like this stock. I can’t say initiate a long position at these levels but I do think they have a lot of good things going for them.

In the space, I’d look at Broadcom , adds Joe Terranova. The results from TXN as well as Intel set up well for Broadcom.

It seems to suggest strength among consumers, muses Pete Najarian. That’s what I takeaway from these results.

> For complete coverage of Texas Instruments earnings click here

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STOCKS HITS NEW '09 HIGHS

The S&P closed at a fresh 12-month highs on Monday as optimistic investors rode a wave of solid quarterly results.

Better-than-expected earnings from Gannett buoyed the sentiment of investors looking for confirmation the economy is stabilizing.

"It's all about earnings, and it's all about momentum," muses Bruce Bittles, chief investment strategist at Robert W. Baird. "Investor optimism is really rising rapidly now for the first time since the March lows, and I think a lot of money is bursting off the sidelines as a result."

What’s the trade?

It just seems to me that the market only wants to go higher, says Karen Finerman. And I agree there’s money on the sidelines coming into this market chasing returns.

The money that’s on the sidelines didn’t want to see all this good news, adds Pete Najarian. They are definitely chasing.

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DOLLAR HITS NEW 14 MO. LOW

The dollar hovered near a 14-month low against the euro on Monday as investors bet the Federal Reserve will hold U.S. interest rates near zero well into next year.

The euro traded within half a cent of $1.50, a level not seen since August 2008. Analysts said investors would be on alert for any comments about excessive euro strength from a meeting of euro zone finance ministers later in the day.

Though the U.S. economy is expected to have exited recession in the third quarter, investors fear rising unemployment will keep the Fed from lifting interest rates quickly. That would diminish the dollar's appeal and encourage investors to buy higher-yielding, higher-risk currencies and assets instead.

"The trend clearly is for a weaker dollar due to a lack of interest rate support," said Marcus Hettinger, global currency strategist at Credit Suisse in Zurich.

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TOPPING THE TAPE: RETAIL ON THE RAMPAGE

The S&P retail index hit a new post-Lehman high on Monday with retailers rising despite record oil prices and new reports which suggested Christmas spending could be weak.

Meanwhile, off-price retailer TJX raised its forecast for third-quarter earnings on Monday above analysts' estimates, saying sales in October were coming in significantly above its expectations.

What’s the trade?

I like TJX, says Pete Najarian. I think there’s more upside.

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TOPPING THE TAPE: (CAT) STOCK FEVER

Adding to Monday’s positive tailwind, BofA-Merrill raised its price target for Caterpillar to $65 from $52 and increased its 2010 and 2011 earnings expectations, citing a faster recovery in machinery revenue next year. Caterpillar is set to report results on Tuesday.

What’s the trade?

My sense is that CAT will probably beat, says Guy Adami. But I wouldn’t be piling into this name.

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OIL HITS NEW ’09 HIGH

U.S. crude oil futures see-sawed in choppy trading on Monday, reacting to technical resistance encountered around $79 a barrel even as economic optimism and the weak dollar continued to lend support.

What’s the oil trade?

Last week crude oil broke above resistance at around $76.50, says Katie Stockton on the Halftime Report. If that breakout is confirmed on a close it would suggest the path is clear of resistance and the next level would be mid $80’s. In other words $84 may be the next stop for oil.

Oil is working as is the overall commodities trade, adds Joe Terranova. I think in the fourth quarter we see those managers chasing performance in this space and it could send the entire sector, higher.

I’m watching Walter Energy, says Guy Adami. I think it’s a buy on pullbacks. And I’m bullish on Apache.

I know that Weatherford traded lower in an up-tape, but that’s because they have a great deal of nat gas exposure, adds Karen Finerman.






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Trader disclosure: On October 19, 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), (BTU), (GS), (INTC), (MSFT), (NUE); Finerman Owns (AAPL); Finerman's Firm And Finerman Own (RIG), (PDE); Finerman's Firm Owns (MSFT), (NOK), (TJX); Finerman's Firm Owns (BAC) Preferred, (BAC) Call Spread, (BAC); Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Owns (BBT) Puts; Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm And Finerman Own (WMT); Finerman's Firm Owns (BKS) Puts; Finerman's Firm Is Short (USO), (IJR), (MDY), (SPY), (IWM), (UNG); Najarian Owns (GE) Calls; Najarian Owns (HGSI) Call Spread; Najarian Owns (POT) Call Spread; Najarian Owns (RIMM) Call Spread; Najarian Owns (STX) Call Spread; Najarian Owns (WFT) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO), Is Short (YHOO) Calls; Najarian Owns (TEX) Call Spread; Terranova Owns (HES), (HOC), (SUN)

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