Don’t Let Morgan Stanley Scare You: Pro

On Thursday, pro traders were trying to understand the price action in Morgan Stanley, with shares down more than 4% after earnings.

Investors ran for the exits after the Wall Street institution missed Street estimates with sellers pointing to a slew of negatives. (Click here to get the specific numbers - go to "Morgan Stanley Misses on Big Slide in Trading Revenue".)

Is the price action in Morgan Stanley a signal to cash out broadly?

The Fast Money pros don’t think so – in fact they think running for the exits in financials is a mistake.

They say there are some very unique things about Morgan Stanley that most retail investors don’t know.

“Morgan Stanley is traded as a proxy for Europe,” says trader Josh Brown, author of The Reformed Broker blog. “And also MS is a favorite among hedge funds as a short position,” adds Mike Murphy, founder and managing partner at Rosecliff Capital.

For those reasons and more Morgan Stanley’s price action should not be extrapolated broadly.

Instead, the traders suggest playing the financials as a sector of haves and have nots.

Although Morgan Stanley is a have not, trader Stephanie Link, thinks there are plenty of haves – that is, strong players. “I like JPMorgan , Wells Fargo and USB . They all posted relatively strong results.”

Trader Guy Adami, managing director of, agrees with a long position in USB. And he also says look at Blackstone. “The stock has been a sleeper but I think it’s a great story.”

Posted by CNBC's Lee Brodie

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Trader disclosure: On July 19, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Stephanie Link is long AAPL; Stephanie Link is long EBAY; Stephanie Link is long CVS; Stephanie Link is long JPM; Stephanie Link is long STI; Stephanie Link is long MCD; Stephanie Link is long WY; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Josh Brown is long AAPL; Josh Brown is long JPM; Josh Brown is long GDX; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long XLF; Josh Brown is long WMT; Josh Brown is long TGT; Josh Brown is long MCD; Josh Brown is long QCOM; Mike Murphy is long FB; Mike Murphy is long EBAY; Mike Murphy is long TOL; Mike Murphy is long LEN; Mike Murphy is long SWK PUTS; Mike Murphy is long EMC; Mike Murphy is long URI

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