Pfizer on a Respirator - Fast Money Recap (6/18/08)

Recap of CNBC's Fast Money, Wednesday June 17.

They All Fall Dow

The Dow had its second straight triple-digit decline and fell below 12,000 for the first time since March. “The market gaveth and tooketh away,” commented Jeff Macke, and he said the market should not be bought.

Financial Fits: Morgan Stanley (MS), Financial Select SPDR (XLF), Regions Financial (RF)

Even though Morgan Stanley reported a 50% loss, it still managed to beat expectations, but doubts were raised if the bank can generate profits going forward. Guy Adami is optimistic and would buy Morgan with a stop at $37.50, and sees a 10% upside. Pete Najarian thinks XLF is still broken, but Joe Terranova bought XLF. Macke wouldn’t trade financials without an exit strategy. Options activity suggests the bottom is not yet in Regions Financial, noted Najarian. Macke doesn’t think the Fed will rescue regional banks.

Beware of Bubbles

David Kelly, JPMorgan Funds chief market strategist says to beware of bubbles, which have been quite common in this decade. He would look for valuation rather than momentum in the technology, healthcare and financials, and warned of volatility in the short run. Kelly would avoid consumer names and take a look at broadband.

Bombing Coventry Health Care (CVH), United Health (UNH)

Coventry dropped 20% after hours and brought down UNH and other HMOs along with it. When an entire sector is brought down, Macke urged investors not to fight the tape. Najarian would not be in a hurry to find a bottom.

Fed Ex (FDX) Drops the Package

FedEx reported a loss for the quarter because of fuel prices, but Adami still likes FDX for a quick trade; he sees it going to $88. Macke would look at the trucking sector instead of FDX.

Oil is Up: XTO Energy (XTO)

Oil rose again on news of striking Nigerian oil workers and low gas inventories. Joe Terranova sees oil going to $140, but thinks the current play is natural gas. Najarian says XTO is “doing everything right.”

Railroaded: Burlington Northern (BNI), Norfolk Southern (NSC), CSX (CSX), Union Pacific (UNP)

Midwestern floods and fuel prices are a setback for railroads. Najarian would take advantage of the decline to buy BNI, NSC UNP and CSX, because the rails are needed to transport coal. Guy worries about panic selling in BNI.

Pfizer’s Respirator: Pfizer (PFE), Sanofi Aventis (SNY), Myriad Genetics (MYGN)

Pfizer, after a long decline, rose slightly after it was able to delay an Indian drug company from selling a generic version of Lipitor. While Najarian likes Pfizer’s dividend, he says the company is still “on a respirator” and needs to make serious changes, such as buying generics company. He prefers SNY and MYGN.

Keep Trucking: YRC Worldwide (YRCW)

YRC bounced 8% in spite of rising fuel prices and Terranova thinks there will be consolidation in the trucking industry.

Doom and Gloom: Citibank (C), United States Oil Fund (USO), Deere (DE), Market Vector Coal ETF (KOL)

Hedge fund manager John Paulson, who made $3.7 billion shorting subprime in 2007 says more writedowns will come, and the Royal Bank of Scotland predicts a crash of the Dow by 300 points and high inflation. If these predictions are true, Macke would stick with large caps such as C and would look at USO. Adami likes Deere and ag stocks. Joe Terranova thinks integrated oils will still do well, and Najarian thinks coal is safe.

Up on the Farm: Agrium (AGU) CEO Mike Wilson

Heavy rainfall and fears the Mississippi will flood brought corn prices down on Wednesdays on fear about waning demand. Wilson commented;”Prices are sustainable as long as the grain fundamentals stay strong. If crops stay up then (farmers) can afford to use our products.” He added farmers like Agrium for “increased yield and higher return.” In addition, the company has made seven acquisitions in the last two years and is looking for profit growth overseas.

Nike (NKE) without Tiger

On news Tiger Woods is sitting out of the rest of the season because of knee problems, Macke says Nike is still strong because it is bigger than Tiger and the Olympics. Macke added the company will “steamroll.”

Taste Travel: McDonald’s (MCD), Darden Restaurant (DRI), Burger King (BKC), Wal-Mart (WMT)

Instead of traveling this summer, consumers will indulge in eating out on the cheap. Macke likes MCD, DRI and BKC. Najarian noted WMT sells a $3 bottle of wine.

Fast & Furious: Schlumberger (SLB), BJ Services (BJS), Circuit City (CC), Smuckers (SJM), Biogen (BIIB)

Jon Najarian joined the program to predict SLB and BJS will go higher based on options action. On news of impending stagflation, Terranova would get into commodities. Adami says he hopes Thursday’s Department of Labor number is strong, or Thursday could be a down day. Best Buy’s performance may affect Circuit City, which reports Thursday. Macke is lukewarm on the company. Smuckers boasts of the ability to pass on high raw costs to its consumers, but Adami warned before the company’s earnings that it’s all about input costs. Najarian thinks Carl Icahn will take a shot at Biogen on Thursday, and Joe Terranova expects a bullish number for natural gas.

Final Trade: Macke: Nike, Adami: Cheseapeake Energy (CHK), Terranova (WFC), Najarian: XTO Energy (XTO)

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