So much for a quiet pre-holiday session.

A lot of traders expected Friday to be another "nothing day" like Thursday, with many hoping to get a jump on Memorial Day weekend.

But the stock market was tumbling midday Friday after existing home sales fell for eighth time in nine months and inventories -- which Schwab's Liz Sonders said yesterday are key to housing's fate -- rose to their highest level since June 1985.

Oil's rebound is also weighing on sentiment. Earlier, I discussed the details of the oil trade with Jon Najarian, co-founder of optionMONSTER.com and a CNBC contributor. Here, we discuss how oil's surge is generating renewed fervor for solar stocks such as Solar Fun and Suntech Power.

Najarian and I also discuss the options activity in Apple and Dell, which each received upgrades Friday morning and are, thus far, sidestepping the broad market's slide.

The Dow fell nearly 200 points, or 1.5%, while the S&P; and Nasdaq each shed about 1%.

Surging crude and gold prices gave a boost to commodity producers like Occidental Petroleum, Gold Corp. and Terra Nitrogen. Crude's latest spike also helped alternative energy stocks like Pacific Ethanol, which reported better-than-expected profits late Monday.

But declining stocks led advancers by a 2-to-1 margin amid renewed concern about consumer spending after the weak results and/or guidance from, most notably, Home Depot and Saks. Meanwhile, Smart Modular's warning, following Monday's cautious comments from SanDisk, weighed on the consumer electronics "food chain", including component makers like Micron, which fell 6.3% in heavy volume. (And, yes, having been bullish on Micron I am eating crow today.)

Compounding the market's woes, financial stocks were scuttled by news AIG is raising $20 billion in capital, while Lehman Brothers cut estimates on fellow brokers Goldman Sachs and Morgan Stanley. Also, Citigroup, JPMorgan and other big banks slumped after influential analyst Meredith Whitney of Oppenheimer forecast banks may write off an additional $170 billion by the end of 2009.» More

Herro, Harris Associates' chief investment officer - international and (along with Warren Buffett) one of SmartMoney's "World's Greatest Investors" of 2007, believes the current backdrop of scary headlines is creating opportunities.

"There is bad news. But our job as investors is to weigh the bad news vs. the good," Herro says in the accompanying video (recorded Thursday). "We try to use this fear, use this short-term instability as opportunities as long-term investors."

Again echoing Buffett, Herro is a value investor who sees opportunity in pharmaceutical stocks like GlaxoSmithKline and Novartis. He also recommends financials, as discussed in detail here, and retailing stocks like U.K. jeweler Signet Group.» More

As someone who was investing in Internet stocks before, during, and after the Web 1.0 bubble burst, Dan Chung knows a tough market when he sees one.

I was therefore a little surprised when Chung, now manager of the $1.7 billion Alger Mid-Cap Growth Institutional Fund, said the current environment is more difficult than the vicious 2000-02 bear market.

That said, Chung said the downside risks in individual stocks is lower today, and believes there are plenty of opportunities to make money on the long side.

Chung's fund -- which obviously has a liberal definition of mid-cap -- has big positions in tech stalwarts Apple, Research In Motion, and eBay.

Chung is also making a big bet on solar stocks both indirectly via MEMC Electronics and directly via JA Solar.

Warren Buffett is the world's richest man and George Soros is hardly a pauper -- having earned nearly $3 billion just last year, according to Alpha magazine.

Aside from immense wealth, these two legendary investors have at least one other thing in common: Both are making big bets on healthcare technologies, specifically those involving vaccines, says James Altucher, managing director of Formula Capital and columnist for The FT and Street.com.

Altucher, who literally wrote the book on Buffett's trading, says the "Oracle of Omaha" is actually more focused on demographics than classic valuation metrics, contrary to popular mythology. What Buffett and Soros both see is a world with aging populations in the developing world, greater demand for vaccines in the emerging markets, and the potential for pandemic diseases that threaten all of humanity.

So wrote Bank of America analyst Sumit Dhanda. He was referring to Intel and the chip sector, specifically, but captured the overall theme of Thursday's upbeat session.

It was Dhanda, you may recall, who downgraded Intel on Jan. 2 - back when the Dow was still above 13,000, Bear Stearns was still an independent entity and the outlook for Intel "never looked better," as the analyst said at the time.

Based on the "as good as it gets" theory, Dhanda downgraded Intel that day and the stock subsequently tumbled from over $26 to a low of $18.05 on Jan. 22.

Fast forward to Thursday, when Dhanda's upgrade of Intel, National Semi and other chipmakers helped the tech sector outperform on a day chock full of positive news (for the bulls).» More

The Yahoo-Microsoft-News Corp.-Time Warner-AOL-Google drama is grabbling all the headlines. But Thursday also brought news of an actual M&A; deal, rather than just speculation thereof.

Millennium Pharmaceuticals was Wall Street's star performer Thursday after getting a takeover bid from Japan's Takeda at a big premium to Wednesday's closing price.

The deal is a sign that Japanese drugmakers are even more desperate to do deals than their American counterparts, says Robert Cyran, a Breakingviews.com correspondent and former drug industry market researcher.

The Millennium takeover is likely to revive speculation about more M&A; in the biotech space; Cyran has a few suggestions, including one name sure to surprise as a possible takeover candidate.

Biotech investors bet on life-altering medical breakthroughs, but many (whether they admit it or not) are also looking for companies that have the potential to be swallowed up by big pharma. Thankfully, such companies are not mutually exclusive, but the M&A; side of the biotech ledger has been quiet of late as the credit crunch has curtailed takeover activity of all stripes.

This helps explain why big-cap biotechs have outperformed their smaller peers so far in 2008, as the "takeover premium" has been removed from many names, including those previously on the block like Biogen Idec.

Monday brought news of separate deals for LifeCell and Alcon -- more life sciences than pure biotech, but close enough to get some investors hoping another round of deal-making may be in the offing.

Predicting takeovers is very difficult, admits Adam Feuerstein, a senior writer for TheStreet.com. But Feuerstein, formerly a biotech analyst at Gilder Gagnon Howe, names some smaller biotechs that could be ripe for the picking by a drug company searching to reinvigorate its pipeline.

Shares of Wyeth and Elan were big winners Monday thanks to a Barron's article about the potential of bapineuzumab, a treatment for Alzheimer's disease being codeveloped by the firm.

But the Barron's story omits many key items, says Adam Feuerstein, senior writer at TheStreet.com. Feuerstein's own coverage has revealed that an oft-cited paper touting the promise of bapineuzumab was written by authors who are paid consultants to Wyeth and Elan.

Feuerstein further notes the drugmakers also developed the test cited in the paper, suggesting a level of control (and conflict) that is not being reflected in the rush to buy the stocks.