Is the Stock Market Rally Over? Pros Are Split

Weakening prices midday don’t necessarily mean the rally has ended, “Fast Money” pros said Wednesday on CNBC.

OptionMonster.com’s Pete Najarian said he was looking to how financials report, which will show how they are managing the mortgage landscape and whether they are fairly valued.

“I think we get a lot of those answers come Friday,” he said.

(Read More: Marc Faber: Market Setting Up for ‘Serious Setback’)

Joe Terranova of Virtus Investment Partners wasn’t calling it yet.

“Rally over? I’m not necessarily ready to say that it is,” he said, adding that he expected insurance companies, real estate and consumer discretionary names to continue upward.

(Read More: S&P Still on Track to Hit 1,575 Year-End: Dwyer)

“The market is on the brink of challenging a critical support level at (S&P 500) 1,422.38, previous high for the year,” he said. “We all know what it is technically. Everyone’s going to seek some protection there.”

(Read More: Two Catalysts for Hitting S&P 1,500: Jim Paulsen)

Stephanie Link of TheStreet.com saw opportunity.

“I think expectations have come down, and guidance has come down, but I think it’s going to be a stock-picker’s market,” she said, pointing to earnings from Cummins, Alcoa and Yum! Brands. “People are dying to buy high-quality companies on sale.”

Link also liked materials, industrials, staples and discretionary.

“I think those are interesting groups, and if they are weak, you buy,” she said.

Enis Taner of RiskReversal.com wasn’t buying it.

“I think it’s over. I think institutions, large institutions, have been starting to distribute stocks over the last two months as the central bank liquidity really gave a boost to stocks, but the earnings picture doesn’t look very good,” he said. “Earnings year-over-year are going to be down for the first quarter in a long time, and in reality earnings growth next year, when we have the ‘fiscal cliff’ coming up in a few months might not look so appealing, either. So I think growth versus valuation here is a bit skewed.”

The so-called “fiscal cliff” would trigger automatic federal spending cuts in January.

Trader disclosure: On Oct. 10, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s “Fast Money” were owned by the “Fast Money” traders: Enis Taner is long GS; Enis Taner is long AMZN PUTS; Enis Taner is long FDX PUTS; Joe Terranova is long NXPI; Joe Terranova is long VRTS; Joe Terranova is long WFM; Joe Terranova is long SBUX; Joe Terranova is long NFLX; Joe Terranova is long SWN; Joe Terranova is long TRV; Joe Terranova is long VZ; Joe Terranova is long XOM; Joe Terranova is long CSTR; Joe Terranova is long CHKP; Joe Terranova is long GLW; Joe Terranova is long EMC; Joe Terranova is short Dec. Mini S&P futures; Pete Najarian is long AAPL; Pete Najarian is long C; Pete Najarian is long JPM CALLS; Pete Najarian is long INTC CALLS; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long MSFT; Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long SBUX; Stephanie Link is long CVX; Stephanie Link is long DG; Stephanie Link is long FDX.


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