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Manufacturing Sparks Market Rebound

The bulls are hoping that Monday's market action kick-started a rally afterthe S&P 500 made gains following a terrible January.

Positive sentiment was largely generated by stronger-than-expected economic data, which showed manufacturing grew in January at a faster rate than expected, echoing strong manufacturing data from China.

What’s the trade?

That’s the best expansion we’ve had since 2004, explains Joe Terranova. That suggests the economy is getting better. I’d use pullbacks as a buying opportunity.

I’m watching CSX, says Guy Adami. If you’re looking for a trade it’s okay to get long with a stop at $42.58. But I don’t like it as a long term investment.

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AFTER HOURS ACTION: BARNES & NOBLE

Barnes & Noble said in a filing on Monday that one of its largest investors, groceries magnate Ronald Burkle's Yucaipa Companies, is seeking to raise its stake in the U.S. bookseller without triggering a poison pill.

Shares rose $3.10, or 17.6 percent, to $21.10 in after hours trading.

Yucaipa, which increased its stake in Barnes & Noble in January to 18.7 percent, sent a letter last Thursday to company's board asking to be able to own up to 37 percent of shares without the poison pill taking effect, and to express concerns about its corporate governance policies.

What’s the trade?

I’d be terrified to be in BKS, says Karen Finerman. The book business is a terrible business to be in. The only reason I wouldn’t be short is that I think Borders could go under and that would make BKS stock pop

I’d be a buyer of puts and play it on the short side, muses Pete Najarian.

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TOPPING THE TAPE: ENERGY

Exxon provided the rally with a tailwind after the energy giant reported a fourth-quarter profit on Monday that topped Wall Street expectations with natural gas projects boosting results.

Still, Exxon's net income fell 23 percent as weak demand for fuel in the global economic slowdown caused a loss in its refining business.

Considering a slew of big energy names report in the week ahead, how should you be positioned?

Energy Earnings This Week
Tuesday: BP, SU, MRO, TSO
Wednesday: NOV
Thursday: SUN, DO

What’s the energy trade?

I’m long the OIH , and Halliburton, says Joe Terranova. I believe energy is where investors should be focused. Historically it bottoms around January and February.

I’m long BP, adds Pete Najarian. I like the dividend and the diversification of their businesses.

I think it’s okay to get long Exxon as a trade, says Guy Adami, but with a very defined stop.

Mike Khouw of Cantor Fitzgerald suggests an options trade. Get all the details. Watch the video now!



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Trader disclosure: On February 1st, 2010, 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), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman's Firm Is Short (IJR), (IWM), (SPY), (MDY), (UNG), (USO); Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (FLS); Finerman's Firm Owns (KFT), (MSFT); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm And Finerman Own (GOOG); Finerman's Firm Owns (BSX); Najarian Owns (AAPL) Call Spread; Najarian Owns (AKAM) Call Spread; Najarian Owns (BP), Is Short (BP) Calls; Najarian Owns (ITMN) Call Spread; Najarian Owns (MS), Is Short (MS) Calls; Najarian Owns (PFE); Najarian Owns (XLF) Calls; Najarian Owns (STLD) Calls; Terranova Owns (XLF) Calls; Terranova Owns (BAC), (JPM), (XOM), (HAL), (OIH), (FCX), (GOOG), (EMC), (DELL), (MSFT), (QCOM); Terranova Is Long British Pound March Futures

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
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 (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)

Other Relevant Disclosures:
Terranova Owned (FCX) On 1/29/10


CNBC.com with wires