Word On The Street
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Apple Talk
The traders discussed some of the action in the technology space. Najarian explained that margins are going down which could impact the bottom line. However, he thinks the new iPhone will boost sales for the Mac, so he’s bullish on Apple. Gene Munster said if Apple lowers the price of their products then the Street number will go up and the stock will go up. Macke said he would take the other side of that trade.
Pharma Trade
Lehman Brothers pharmaceutical analyst Tony Butler joined the traders to discuss the drug stocks. Butler said there’s fear around the cholesterol market due to a study that showed some people who took Vytorin went onto develop cancer. Shares of Merck (MRK) fell 11% on the news. Butler thinks the stock is a value play but he doesn’t see the stock doing much for awhile. Butler mentioned he has a buy rating on Schering-Plough (SGP). He said Pfizer (PFE) is having problems growing revenues, despite their cost cutting efforts. Butler thinks that Bristol (BMY) will report good numbers and is the best play in the drug space. Terranova recommended SPDR S&P Biotech ETF (XBI) for a pure play on the entire sector.
JetBlue CEO Interview
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POPS&DROPS
POPS- United Parcel Service (UPS) popped 4%. Finerman said UPS announced that earnings will be a bit better for the second-half of the year. Dominos Pizza (DPZ) ripped higher by 22% off of a strong profits report. Macke said the move was insane. Royal Caribbean (RCL) shot up 18% on news the cruise operator is cutting jobs. Terranova said he wouldn’t buy RCL. Amylin Pharmaceuticals (AMLN) jumped 8% after Goldman Sachs Group added the stock to its conviction buy list. Najarian said they don’t make a lot of money but they didn’t lose a lot either.
DROPS- SanDisk (SNDK) plunged 24% after the chip maker missed estimates. Macke said it’s hard to be a tech company right now. Boston Scientific (BSX) fell 11% after the company missed earnings due to lower sales and charges from acquisitions. Najarian said they’re starting to have problems.
Fast&Furious
The traders commented on two earnings plays in Boeing (BA) and McDonald’s (MCD). Finerman said she hopes Boeing can maintain their guidance. Najarian said he loves McDonald’s. The housing bill is coming up for a vote on Wednesday. Terranova said watch for trading action in the dollar. Amazon.com (AMZN) is set to report earnings on Wednesday. Macke thinks the stock could work. New York Times (NYT) will report earnings on Wednesday. Finerman said the newspaper industry is in trouble. Baidu.com (BIDU) will report earnings on Wednesday. Najarian said if Yahoo! (YHOO) and Google (GOOG) are any indication, then Baidu.com could get hit.
Final Trade
Macke likes AT&T (T). Terranova said get long gold futures. Najarian picked Wal-Mart (WMT). Finerman said short the Financial Select Sector SPDR (XLF) for a quick trade. Chat and share ideas with the best small cap traders LIVE each day free at Stocknetworkonline.com