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Pro Trader: Amex Results Confirm High-End Strength

”Everything we see in earnings from American Express confirms my belief that high end is doing well. It tells me the story at Lululemon , Tiffany and Fossil is very much in tact,” says Joe Terranova

That was Terranova’s knee-jerk response as he parsed through the latest results from Amex which showed second quarter earnings rose, as customers spent more on their cards.

By the numbers, average spending on the company's cards rose 15 percent to $3,767 and the number of people carrying American Express cards rose 6 percent to 94 million.

"Spending also increased more quickly than expected," adds host Melissa Lee.

"American Express stands out as benefiting from a customer base that's high end," adds Terranova. "And I think this is a name investors should continue to own."

The company posted quarterly earnings of $1.32 billion, or $1.10 a share, compared with $1.00 billion, or 84 cents a share, in the same quarter last year. The company was seen earning 99 cents a share on revenue of $7.35 billion, according to a consensus estimate from Thomson Reuters.

Sales for the most recent quarter rose to $7.6 billion, up from $6.86 billion last year.

”If you want to play credit cards, it’s probably the best name,” agrees Steve Grasso. “But if the market comes in – the stock comes in too. If that's your thesis I'd be more defensive than Amex.”

Pete Najarian sees opportunity in rival Visa. "If American Express moves higher I think Visa moves into the $90s."



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Trader disclosure: On July 20, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Terranova owns (XOM) ;Terranova owns (DIS); Terranova owns (WFM); Terranova owns (LULU); Terranova owns (MSFT); Terranova owns (TM); Terranova owns (JWN); Terranova owns (MCD); Terranova owns (PEP); Terranova owns (MA); Terranova owns (BX); Terranova owns (GS); Terranova owns (DAR); Terranova owns (CAT); Terranova owns (VRTS); Terranova owns (AAPL); Terranova owns (F); Terranova owns (CVI); Terranova owns (IBM); Terranova owns (FCX); Adami owns (AGU); Adami owns (C); Adami owns (GS); Adami owns (INTC); Adami owns (MSFT); Adami owns (NUE); Adami owns (BTU); Pete Najarian owns (AAPL); Pete Najarian owns (BX) calls; Pete Najarian owns (HPQ); Pete Najarian owns (MS); Steve Grasso owns (AKS); Steve Grasso owns (AMD); Steve Grasso owns (ASTM); Steve Grasso owns (BA); Steve Grasso owns (BAC); Steve Grasso owns (C); Steve Grasso owns (D); Steve Grasso owns (JPM); Steve Grasso owns (LIT); Steve Grasso owns (LPX); Steve Grasso owns (MAR); Steve Grasso owns (MHY); Steve Grasso owns (NDAQ); Steve Grasso owns (PFE); Steve Grasso owns (PRST); Steve Grasso owns (XHB); Steve Grasso owns (XLB); Steve Grasso owns (XLI); Stutland Owns (GOOG) and short (GOOG) calls; Stutland Owns (IBM) and owns (IBM) calls; Stutland Owns (INTC) and owns (INTC) calls

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Patrick Wang
**NO DISCLOSURES

For Ed Mills
The financial analyst preparing this investment research, , certifies that the views expressed herein accurately reflect their personal views as to the subject security or securities and the issuer(s), and further certifies that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the analyst in their investment research.

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