by: SA Editor Joan Wickham posted on: June 23, 2008 | about stocks: AAPL / APOL / ASTI / BBBY / CELG / CHK / CHL / DIS / DV / ELN / ENER / ESLR / GENZ / GILD / GLW / GSK / HK / ISIS / MA / MER / MON / MS / MT / MYGN / NKE / ORCL / RIMM / SD / SU / TEVA / TIE / TMX / USO / WMT / WYE / YHOO    

Recap of Fast Money, Friday June 20.

Dow Falls Below 12,000

The market closed sharply lower Friday, registering its third triple-digit loss in four sessions. This is the worst week since mid May. Reasons to sell included a downgrade of automakers, a reduction in earnings estimates for regional banks by Merrill Lynch, and a rebound in oil prices.

Banks Fall to New Credit-Crunch Low: Merrill Lynch (MER)

Rumors of an impending profit-warning and further writedowns sparked a selloff of Merrill Lynch stock as well as other financial stocks Friday. Merrill denies the rumor. Pete Najarian said we should have seen this financial train wreck in the market since all the major news this week is in the financials. Meanwhile Merrill analyst Edward Najarian said Friday that regional banks appear to be in capitulation suggesting we could be near a bottom. Not yet says Guy Adami but it’s coming. The July put trading has exploded on the downside, says Pete Najarin. I think all you can do in the financials is own puts. Guy Adami thinks there is no reason yet to jump into the financials and Jeff Macke agrees with him.

$140 Oil Next Week: SandRidge (SD), Chesapeake (CHK), Petrohawk (HK)

Oil rebounded about $3 a barrel on Friday in response to views that a fuel price increase in China may actually boost demand. Get long what’s working with a tight stop and hang on. If you want to play energy look at natural gas, adds Pete Najarian, that is the sector to focus on. I like SandRidge (SD), Chesapeake (CHK), and Petrohawk (HK).

A Meeting of the Minds The world’s largest oil producers and consumers will meet Sunday in Saudi Arabia to discuss escalating oil prices. Month to month the oil market is flat, says Joe Terranova, chief alternatives strategist with Phoenix Investment Partners. I think the chatter out of this weekend will be less about supply and more about consequences. In other words are speculators to blame. As a result money will probably go out of oil futures but park itself in integrated oil because the theme doesn’t change. The world needs energy. I’d get out of oil futures or the United States Oil Fund (USO) and get into integrated oil, counsels Terranova. Personally, I own SunCor Energy (SU).

Gold Back to $1000

Gold ended slightly lower on profit taking despite a recovery in crude oil prices. The metal eased Friday after Thursday's price rally failed to take gold through its previous high of $908.70, hit on June 9. I don’t see why gold would go higher anymore, says Guy Adami. If you buy, you’re buying on hope. I agree that it makes no sense to see gold going higher, adds Quintatro. But you just have to go along with the trend. Commodities are a hedge against inflation.

A Reorganization! Yahoo (YHOO)

A number of senior executives may be leaving as the company looks to improve earnings. President Sue Decker is also considering a reorganization that would centralize Yahoo mail, search and homepage divisions into a global product organization, the Wall Street Journal reported, quoting people familiar with the matter. This absolutely does not make me want to buy this stock, exclaims Jeff Macke. Everyone agreed.

Consumer Stocks Wrecked: Walmart (WMT), Disney (DIS), Mastercard (MA)

This week consumer stocks from Wal-Mart to Disney weighed down the market as high gas prices curbed discretionary spending. Retail is a ridiculously hard place to play right now, says Jeff Macke. Najarian said the Disney ESPN deal about airing more pro-football games is a great move for Disney and will help carry them higher. I think you can look at Mastercard if it drops a little lower, adds Guy Adami.

Sun Stocks Shine on Week: Evergreen Solar (ESLR), Ascent Solar (ASTI), Energy Conversion Devices (ENER)

Shares of Evergreen Solar shot up Thursday after the solar panel producer inked two long-term sales contracts valued at about $600 million. Najarian loves this name and says this is a profitable industry. Quintatro loves solar across the board and thinks Evergreen Solar is definitely a buy at current levels as well as Ascent Solar and Energy Conversion Devices. Hewlett Packard, IBM, and Applied Materials seem to be getting into the space. That suggests the industry could become very profitable. Sell the exuberance in Evergreen, counters Guy Adami. I think you’ll be able to buy it with a 10-handle.

Summer School Breakout: DeVry (DV), Apollo (APOL)

Credit Suisse upgraded Apollo Group to “Outperform” on Friday citing raised tuition costs. The move gave other stocks in the space a nice boost. When the economy stinks people go back to school and get degrees, says Ratigan. I’m a buyer of DeVry and Apollo. I also like Apollo, says Guy Adami.

Breakthroughs: GlaxoSmithKline (GSK), Myriad Genetics (MYGN), Teva (TEVA), Gilead (GILD), Wyeth (WYE), Elan (ELN) Positive results from an experimental Alzheimer’s drug sent shares of Wyeth and Elan higher while GlaxoSmithKline received a bounce after their prostate drug Avodart received FDA approval. Keep an eye on Myriad Genetics says Pete Najarian, as well as Teva I like their pipelines. It wouldn’t be Fast Money unless I recommend Gilead adds Guy Adami. But I think the stock still goes higher.

In Tech We Trust? Research in Motion (RIMM), Oracle (ORCL)

Investors looking for opportunities in an otherwise bleak market are hopeful that technology could be a beacon in a very stormy sea. Next week the BlackBerry maker Research in Motion and Oracle report earnings. Considering only 2 stocks in the S&P tech index closed higher Friday, how should you trade? Pete Najarian says “I love RIMM in every way except for the fact that it ran $10 this week. If it pulls back a few more dollars then look at it. Right now the stock is probably ahead of itself.” Quintatro says he is paring down his position in RIMM ahead of earnings, as he always does.

According to Jeff Macke, Oracle is in two businesses –

1) Rolling up lesser, weaker software businesses

2) Selling a lot of software especially to financials.

The financial sector is a tough sector to sell to. Oracle is a well run company selling to customers who are miserable. Guy Adami would not race into Oracle either ahead of earnings. But they have international exposure, counters Pete Najarian. If the stock dips I say jump in. You've got to get ahead of the trend.

One Bourbon, One Scotch, One Trade: Brown-Forman (BFB)

Brown-Forman reported a much better-than-expected quarterly profit, helped by strong international demand and the weak U.S. dollar. The stock is now consolidating, short term players are being replaced by longer (term players), explains Quintatro. Guy Adami says the stock looks rich on a valuation basis but agrees it could go higher. The growth overseas is underestimated.

The Transparency Trade: China Mobil (CHL), Telefono Mexico (TMX), ArcelorMittal (MT), Apple (APPL)

I think you can be totally transparent and be totally fraudulent, says River Twice Research president Zachary Karabell. Just look at Enron. People who are going to cheat are going to cheat. And that leads to Karabell's thesis. Just as there are companies that can be transparent but fradulent, conversely there are some companies out there that are worth owning even if they’re not that transparent. Most are international plays. Karabell likes China Mobil which sold off 30% without any fundamental change. They’re not being run for the benefit of the stockholder but you can still go along for the ride. He also likes Telefono Mexico, ArcelorMittal and Gazprom and says they are transparent but worth a look. Domesticay he thinks of Apple which is somewhat transparent.

The Week Ahead: The Fed, Nike (NKE), Monsanto (MON), Bed Bath & Beyond (BBBY), Isis (ISIS), Celgene (CELG), Genzyme (GENZ)

Fed Decision: Ben Bernanke speaks Wednesday - will he talk Hawk or Dove?

I’m expecting to hear both hawkish and dovish rhetoric, says Pete Najarian. Mike Darda, MKM Partners economist, expects The Fed to talk up inflation but leave the rates unchanged. They will probably harden the language they use when talking about inflation risk which got a bit more hawkish in the last meeting. Europe is in worse shape but they are expected to remain flat or up slightly. Futures markets expect a 50 bps hike by November and a 75 bps hike by early next year. Personally, Darda thinks the Fed hikes this year, but probably not until the fall or winter. On the flip side, further cuts are off the table even if the economy or the financial markets get worse. As bad as they look the bank stocks might be worth a trade. Their credit spreads have been looking better and they tend to be a good leading indicator.

Nike Earnings: The sneaker giant comes out with earnings after the bell on Wednesday.

I think Nike will beat, says Jeff Macke, but they’re a consumer name in a tough space.

Monsanto Earnings: Also Wednesday, seed stock Monsanto releases earnings before the bell. I think Monsanto is a sell the news play, says Quintatro. Everyone loves the seeds but not me.

Bed, Bath & Beyond's Earnings: Pier 1's disastrous numbers this week don't bode well for Bed, Bath & Beyond which reports -- you guessed it -- Wednesday. Don’t buy dips in Bed, Bath Beyond or the rest of specialty retail, warns Jeff Macke.

Biotech Boost: The Jeffries Healthcare Conference runs from Tuesday to Thursday and will spotlight a string of biotech names. Pete Najarian says Isis, Celgene and Genzyme should deliver the best news.

Fast Fire: Titanium Metals (TIE), Morgan Stanley (MS), Disney (DIS), Corning (GLW)

Najarian liked Titanium Metal previously stated the stock was an underperformer but at this level to buy. The stock is now down 13% and Najarian said he will have to pull the plug on this one.

Adami liked Morgan Stanley and now that the stock is down advises investors to stay away.

Macke liked Disney, which is down 5% and stated that even though it drifted lower, he still likes it, although it has so much piled up against it with this economy. Macke said he hasn't sold it yet.

Quintatro likes Corning and said this is still a great company. Quintatro is still long, although the stock is down 9%.

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Joan Wickham

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