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Halftime: Key Bernanke Comments For Traders

Stocks tumbled on Thursday as investors grappled with growing chatter that suggested the rally may be exhausted.

For example, chart watchers are telling us they’re concerned about the recent negative divergence between the S&P 500 and the Dow against the Dow Transports.

And investors who watch fundamentals aren’t any more optimistic. Although, new data showed the services sector grew at its fastest pace in 5 years, stocks still couldn’t rally.

However, the bulls may have a friend in Ben Bernanke. In a prepared speech the Chairman made several comments that could be bullish.

According to the Fast desk and CNBC’s Steve Liesman here are the important takeaway points for traders and investors:

- Bernanke feels the recovery has strengthened and he sees increased evidence of a self-sustaining turnaround in business and consumer spending.

- Bernanke says growth is not fast enough for significant improvement in jobs; that it will take several years to reduce employment to more normal levels.

- He also cites the real estate market saying the overhang of foreclosed homes weighs heavily on home construction.

But the big takeaway probably follows. Bernanke believes that overall inflation remains quite low and expects it will stay that way for quite some time.

Steve Grasso takes the comments to mean there will be no change to Fed’s QE2 policy. He’s a buyer of the market. “When the worst of the rioting in Egypt broke, the market held at 1275,” he reminds. As far as Grasso is concerned, “The market has shown us the downside is limited."

Meanwhile, Steve Cortes is a buyer of Treasurys, largely because of no ‘credible threat of real inflation.’

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VERIZON

The traders are also keeping a close eye on Verizon , which reported overwhelming demand for its iPhone in online pre- orders. Also the company announced a $100 million stock buyback.

What’s the trade?

I had expected to see a sell-off, says Guy Adami. If you have profits I’d take some money off the tables.

If you want to play phones, I’d do it longQualcomm, says Steve Cortes.

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RETAIL
Retailers were among the best performers on Thursday after January same store sales came in better than expected.

What’s the trade?

I’m watching BJ’s, says JJ Kinahan. I’m seeing somebody roll the Feb 50 calls out into March as well as a seller of a March 47 calls and buying the March 45 puts.

Abercrombie and Fitch under $50 looks interesting to me, reveals Guy Adami.

I agree, around $50 I’m a buyer of ANF, echoes Steve Grasso.



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Trader disclosure: On Feb. 3, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Guy Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE) and (BTU). Steve Cortes owns (EXC). Steve Cortes owns (MO). Steve Cortes owns (PM). Steve Cortes owns (SVU). Steve Cortes is short (LVS). Steve Cortes is long U.S. Treasuries. Steve Cortes is long German Bonds. Steve Cortes is short Gold. Steve Cortes is short Crude. Kinahan is short (SPY) through options. JJ Kinahan is short (NFLX) through options. JJ Kinahan is short (INTC) puts. JJ Kinahan owns (F) Calls. JJ Kinahan is short (YHOO) puts. Kinahan owns (C). Steve Grasso owns (ASTM), (BA), (BAC), (BWC), (C), (CSCO), (JPM), (LIT), (LPX), (MT), (MHY), (NDAQ), (PFE), (PRST) and (S).

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GUY ADAMI
Adami's wife works for (MRK)

STEVE GRASSO
Stuart Frankel & Co and its partners own (AAPL)
Stuart Frankel & Co and its partners own (ABT)
Stuart Frankel & Co and its partners own (ABX)
Stuart Frankel & Co and its partners own (CUBA)
Stuart Frankel & Co and its partners own (GERN)
Stuart Frankel & Co and its partners own (HSPO)
Stuart Frankel & Co and its partners own (NEM)
Stuart Frankel & Co and its partners own (NWS.A)
Stuart Frankel & Co and its partners own (NYX)
Stuart Frankel & Co and its partners own (PDE)
Stuart Frankel & Co and its partners own (PFE)
Stuart Frankel & Co and its partners own (PRST)
Stuart Frankel & Co and its partners own (RDC)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners own (UAL)
Stuart Frankel & Co and its partners own (XRX)
Stuart Frankel & Co and its partners own (SDS
Stuart Frankel & Co and its partners are short (QQQQ)
Stuart Frankel & Co and its partners are short (AAPL)

DOUG THOMAS
Thomas has no disclosures

FAST 360
Carter Worth, Scott Nations, and David Katz have no disclosures on (LVS)



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