Market tailspin on housing concerns while MSFT is up on good earnings numbers. The pharma sector is getting squeezed by the generic drug makers and it all adds up to the worst day for the market in 2 months. Tonight, Jon Najarian, founder of OptionMonster.com, is filling in for Tim Strazzini.

Macke: The housing market numbers are really much ado about nothing. Now is a great chance to buy the great stocks we’ve been talking about on the cheap.

Najarian: Definitely time to buy on the dip.

Adami: Inflation is the bigger risk. The Fed could very well raise interest rates in the Summer or Spring. When that happens, you could see a big correction and that would be a great opportunity to buy.

Bolling: Shorted S&P 500 and the NASDAQ, but says he may have jumped the gun, that it may still be too early to short the markets.

MSFT Trade

Jim Goldman, CNBC’s Silicon Valley Bureau Chief: Big numbers today from MSFT. The company is going to do fine, but Vista adoption might take a lot longer than expected.

Najarian: XBox is a significant driver of revenue for MSFT, likes the stock.

Adami: If MSFT opens below $31, get out, the stock is too dicey. Says ZUNE stands for: Zero Users No Exaggeration.

Macke: There are 8,000 stocks in the world, why would you want to own MSFT out of all those? Their guidance is ho-hum and there’s no big news here. Get long on the video game makers instead. BUY ATVI.

Najarian: Also likes THQI. Says ERTS is an even better buy.

Bolling: ERTS is terrible, going lower. Sell it.

Wall Street Power Trip

Bolling: Word on the street is that the U.S. power grid is almost completely maxed out. The smart money (like GS) is buying power storage. Buy the following:

DUK
EP

Adami: EAS is a great power play, and it has a great dividend.

Macke: NRG is also a great play in this space. Has a low P/E ratio of 11.

The CAT Trade

Adami: CAT has the most interesting earnings report of the Quarter. There is huge risk in CAT to the downside.

Najarian: Says options activity tells him to BUY CAT.

Macke: CAT looks terrible.

Bolling: Charts for CAT do look bad, but there might be some upside for the stock if AG sector heats up.

Najarian: MCD is a BUY (Macke agrees)

STREET FIGHT with Herb Greenberg

Herb: M&A space not yet at it’s trough. GHL’s backlog is very volatile.

Adami: GHL is filled with the best minds on Wall Street. It only takes them one or two big deals to make their entire year a huge success.

Herb: Disagrees with Bolling on SMG, says that the prices for urea, a key component for fertilizer, are going through the roof. Says SMG is a bad pick.

Bolling: Corn is the new oil, and corn requires a lot of fertilizer. SMG should really benefit from this dynamic. BUY SMG.

Herb says that brokerages have been benefiting from momentum buyers. Najarian disagrees and says that fundamentally the financial services sector is incredibly strong. GS and LEH are both BUYS.

AT&T, Ford and EOP

Macke: Stay long with T. The stock stayed green today.

Najarian: Also SELL VZ.

Adami: Absolutely stay long in T.

Bolling: F will keep going down, stay out.

Adami: F should be a pink sheet stock the way management runs that company.

Najarian: BUY EOP; lots of traders think that Vornado will step up and raise their offer for EOP.

>>Happy 52 week high to TOPP<<

Face2Face:

Sharon in ME– Does the VZ spinoff of FRP represent a fast money opportunity?

Adami: FRP’s small market cap is scary, but there could be some upside here. Najarian reminds Sharon to stay clear of VZ.

Stephen in NY– What’s a good Vancouver play?

Macke: There won’t be a sustainable boom in Vancouver, look into Calgary instead. Buy BOWFF.PK instead.

The Boomer Trade

Bolling: REITs are on fire. AVB is a great boomer play. They make luxury apartments targeting retiring boomers.

Adami: AVB might be a little rich trading at over 50 times earnings.

Macke: AVB looks absurdly extended.

Najarian: WCI a good buy. They own golf courses, boating communities. Stock made a recent correction, definitely time to BUY.

AMP CEO James Cracchiolo

AMP CEO says that people are living longer, will be spending 30+ years in retirement and will need financial products and services to fund this long retirement. AMP is the leading provider of CFPs in the US, has a client base of 2.8 Million and has $466Billion in assets under management. The company will benefit in a huge way from retiring boomers.

Bolling: Own AMP until it trades at $54. Adami agrees.

Najarian: Own AMP.

FINAL TRADE

Najarian: Sell X.

Macke: SYY is a BUY.

Adami: SELL MSFT.

Bolling: If NASDAQ and S&P 500 open higher, get out of the short position.

See you tomorrow!