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tv   Closing Bell  CNBC  April 3, 2012 3:00pm-4:00pm EDT

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>> yep. and schools are on lockdown. "closing bell" is up next. gold drops after the fed minute show. >> everything is doing better and apparently everybody is freaked out about that. >> and i'm freaked out about being with you tomorrow. "closing bell" is next. >> bye. hi, everybody. welcome to the "closing bell." i'm maria bart roma with the new york stock exchange. >> we are seeing red right now. the stocks extending losses after release of the fed's policy meeting. that came at 2:00 eastern time, an hour ago. fading hopes for a qe 3 sent equities to session lows. oil and gold also fell on the news but so did bond prices, which we'll talk about. as for the fed itself, the march meeting minutes did note that a couple of members thought that an additional stimulus would be
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needed if inflation remains too low for too long. steve liesman will be here to discuss the economic outlook. meanwhile, the fed concerned about the housing market. we're going to focus on another interesting phenomena. we'll show you why some big name investors are swarming into the housing market and scooping up hundreds of homes in one fell swoop with a buying opportunity. maria? >> the market bass down about 40 minutes when the minutes first came out. a decline of a better than 100 points. first, take a look at where we stand as which and proech this final stretch. dow jones industrial average, down 112 points. last trade on the dow. nasdaq also weaker and accelerating the losses after the minutes were released. sharp down draft just 2:15. down 17 points. and the nasdaq and s&p dropping
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115 points. the fed minutes is getting the most attention at this hour. in short, we saw stocks fall, oil fall, and the policy makers are less keen to see them moving. one trader telling me that he's optimistic because he sees more pullback. less concern over the financials, euro zone headlines raising on that group. consumer cyclicals and retails. finally, it's a holiday shortened week according to the passover. s&p 500 has been testing support around 1405. some traders believe it will hold that level and move higher. we're looking at a sizeable selloff on that reserve meeting. we have our team in place.
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stocks sliding in the last hour. join us at the nyse. >> stock rising to an intraday. bob pisani is here. following the if i had minutes, let's talk on apple. expressing some concern that things are getting out of control but the stock keeps moving higher. >> well, we have to talk about apple. we get chris sized for talking about is so much. we've had aggressive increases. one of the few who wrote a letter to his clients trying to explain and tried to do is in a quantitative easy way. let's take a look at what he had to say here. >> once you get to a growth rate
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or a market penetration rate of a 51% of households per your recent survey, it gets tougher, in our view, to get the kind of incremental growth that they've had in the past. >> there's very few analysts that will come out and say anything negative and that's understandable. his point is, if you go and look at the next five years and look at the discounted cashflows, he's saying you should get 20% revenue growth and, again, you have analysts coming up with price targets that expect that type of revenue growth. >> 1001 is the new price target. >> of course. >> he's saying, why aren't you in this fund? >> i know tons that opted to not
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be in a a stock but this is one of the few and interestingly, if you take a look at r.i.m.m. intraday, there are big impacts in terms of research and motion stock. if apple gets to 1,000, what happens to r.i.m.m.? >> right. >> i don't know if we have that bite right here right now, but he essentially said r.i.m.m. is going to go bankrupt. that was a comment that should not have been made. you cannot make those types of comments. >> two extremes. 1 to 1,000 and 1 to zero. >> let's get to the momc here because apple is moving higher give us the details on what
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traders are and acting to. >> the federal reserve has said they don't see any need to ease right now unless the economy noticeably slows down. mr. bernanke has said this time and time again. they are worried about things slowing down. that's why they are keeping rates low right now. so the fed comes out and says the same thing. the fed thinks they don't need qe 3 or operation twist. remember, operation twist is expiring at the end of january. >> end of june. >> end of june. yes. excuse me. if that stops, who is going to be the marginal buyer. treasuries immediately shot up, dollar strengthened rather dramatically and stocks sold off. why? >> that's a fair point whochlt is going to take the place of the fed? >> if things are dissorted, the fed says the gdp might be
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revised upward. >> steve liesman, it's a vicious circle. i think the hiring comment was something that traders and investors reacted to. >> there's a big debate on the job numbers, are they for real, and that was reflected in the minutes. they are saying it's just an artifact of warmer number. some are saying that gdp are going to be higher. there's the fed job debate right there and concern about rising labor costs being inflationary. what is missing from the discussion today that i think the markets were missing was the absence of a policy discussion. a lot of discussion about the economy, very little discussion about the next steps forward when it comes to policy. they didn't talk about continuing operation twist. they didn't talk about whether
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or not they did anything. >> i think the survey shows additional quantitative easing. what we're seeing is the hot money is playing it and we'll see if this trend is continued, you can imagine a scenario where the hot money gets washed out. and then the balance of the market, the more rational market. remember, this is just a repeat of what we learned in the statement three weeks ago. >> that's a good point. thanks, everybody. >> who will be the marginal buyer? >> that's not an issue. that was not an issue when it was -- when it happened. >> it's good for investors, though. >> of course i'm talking about issues for investors. when the fed stopped bonds at the end of the second round of qe, rates did not shoot up that was not a problem. in fact, the street was dramatically short bonds and they ended up taking the place of the fed. >> kelly, sorry. we have breaking news with brian
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sullivan. more on the tornadoes that have been hitting johnson county, texas. >> bill, you're right. it's plural. according to the national weather service and our friends and colleagues at the weather channel, at least two tornadoes in the dallas metro area. they are calling it a life-threatening situation and are urging people to take cover in their homes. those storms are on the move and they are headed right for dallas-ft. worth airport. it's one of the busiest and crowded airports in the united states. the tornado touched down less than an hour ago. and this is in johnson county, texas, south of ft. worth. two super cell tornadoes being reported and a new tornado being recreated in mesquite, texas. again, severe damage done to structures, tractor-trailer trucks being thrown into the
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air. certainly massive storms and the national weather service saying those storms are headed towards another biggy right towards oklahoma city. we'll give you more news. send it back to you guys on the "closing bell." >> you this very much. let's get back to the financial news. just wrapping up a meeting with some key votes on regulations, mary thompson is there in washington. mary, what's the latest? >> thanks so much. what that means for the companies that are expected to include for the likes of aig and ge. my first question to you is when are we going to hear the rest of the companies designated as
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nonbanks entities? >> i don't know when we'll be finished with this work but now that the council has approved the process, we hope we'll have some decisions by the end of the year but we'll move quickly. >> step one in this process is sending out letters to these companies. when do those letters go out? >> step one is to look at which firms based on public information pass the screen of relevancy to begin the process and eventually we send out letters to firms to say we would like to engage you in further information. we hope that will happen some time in the next set of months. >> are hedge funds going to be included in this first group? >> they are included. everyone is included. we'll look to see who do we think bears further scrutiny. >> last question, how can a company protest your designation? can they do that? >> absolutely. they'll have an opportunity to be heard in the conversation and
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they will have a chance to challenge. >> thank you for joining us. we appreciate it. >> maria, back to you. >> mary, we're in the final stretch for the day. a market off the worse point of the day. >> will the early spring heat up the retail industry? >>. also, we were just talking about apple and preparer jaffray thinks the price is headed to $900. after the bell, we'll show you what investors are talking about the housing market when it comes to a hunt for yield. and we have much more coming up on the "closing bell." stay with us.
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welcome back. we're off the lows at this hour. we have 45 minutes to go before the "closing bell" sounds. we'll check on the dow industrials which at its worst
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was down 118 points. the federal reserve policy makers out, just about an hour ago, immediately took a move downward, two-thirds of 1%. the dow had been down after the fed minutes were released as many as 133 points at the all-time low for the day. check out the volatility index. it's speaking at 2:00 p.m. eastern. the vix now up a third of a point, more than 2% back above 16. the last time it closed above 20, march 6th. >> let's talk about retail for a bit. momentum has been builting in that sector. up 19% compared to the s&p 500. can this momentum in retail continue through the spring? our next guest thinks so.
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they are going to tell us what is driving this. strays see, it can go either way. you often hear retails say because of a warm winter and that doesn't seem to be a problem for retail. why? >> we're always blaming the weather but in this case it's good year. spring came very early this year. february numbers beat 85% of retail and those numbers are continuing into march. in addition, we have a really early easter this year, which brings traffic into the stores so the early easter is going to help retail also. >> what is your version of why we are so strong in retail so far? >> i think it the consumer wants to shop. there's a number of new trends in terms of colored products. and really the weather gets
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people going and that's what we're seeing right now. >> no worries of gasoline prices? >> well, so far certainly the weather and it trumps high gas prices. we'll have to see as we get towards summer and high gas prices, we'll have to see how the consumer reacts. those are great points. certainly there's a lot of colors and it's really brought people out and excited about investing. >> what you consider unlove retail stocks you feel people could incapitalize on. >> we think these names are well positioned for upside, especially in the back half. you have names like abercrombie & fitch and this story is really starting to clean themselves up and getting to inventories in the right spot. perry ellis, which is a
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manufacturer and tommy bahama, they came out and raised the expectations in terms of unit growth. i think it's a great time. it's a little beaten down. hasn't performed as well. >> so you're willing to go with some of the laggards? >> when we look at this, the first half of the year is gravy. not a lot of expectations for upside on the first half. what we're going to see in february and march is going to drive the upside. when cotton tries prices come down, all those pieces together really drive a strong back half of the retail segment. >> stacy, who do you like here? where would you invest money in the retail? >> i'm a bit in the other camp. so right now i would look at some of the players that have been a little more consistent, like the limited, like macy's's, certainly the team space, the inventories are cleaner but it's
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a still a very fickle space and still highly promotional. so i'm not sure i'm ready to look at that space quite yet. and finally the gap had traditional numbers. march looked pretty good. there have been a couple of upgrades and international they are looking a little better. that's a story that is inconsistent and we're starting to watch. >> thank you, appreciate it. >> thank you. bill, we're following this developing story. at least two tornadoes touching down in the area south of dallas today. the weather channel, carl parker, with the very latest. carl, what can you tell us? >> well, the tornado warnings are ongoing now. we are seeing very dangerous supercell storms traveling northward at 25 miles an hour. you can see these cells again
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driving northward here and we have a tornado in the south -- on the south side of the dallas area that did produce some damage. we actually watched that in realtime. a large debris cloud spreading out from that storm and that storm is right in here. the circulation is now right around garland and heath. so this is 635 and that is 30. still a tornado emergency associated with that storm. another well-defined circulation now coming up towards the 35 east corridor and this is going to come up between the grapevine passing by the airport. circulation is right in here. these are the two most dangerous storms working northward and, again, there has been a report, many reports of damage already with these storms. i want to show you the tornado outlook, the thunderstorm outlook for the rest of the day.
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the worst of the storms are going to be in north and central texas as well as oklahoma with general storms in the rest of the east. but this certainly is the time of the year when we find these dangerous storms. back to you guys. >> carl you said there is fair amount of damage but no fatalities to report? >> i haven't seen any fatalities. the type that we saw was consistent with ef-1, ef-2 damage. we saw semis that were flipped over and roofs that had been ripped off and more considerable structural damage but it does not appear to be, from what i have seen, the more high end tornado damage. so hopefully there have not been any fatalities but i have not heard any information about that. >> carl, thanks so much. we'll be checking in as the news develops. we have 35 minutes left in the trading day for the day. the market is down 35 points. the nasdaq weaker by 14. >> and something we're still
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talking about, is there no stopping apple? stock is set for another record close. when we come back in "talking numbers," we'll breakdown the numbers. just how high apple could go. >> and then the red hot firearm industry. is the group running out of ammo? we'll have that trade coming up. >> and here's a look at all of the arrows. only four trading higher. back after this. aughter's part fish. but when she got asthma, all i could do was worry ! specialists, lots of doctors, lots of advice... and my hands were full. i couldn't sort through it all. with unitedhealthcare, it's different. we have access to great specialists, and our pediatrician gets all the information. everyone works as a team. and i only need to talk to one person about her care. we're more than 78,000 people looking out for 70 million americans. that's health in numbers. unitedhealthcare.
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i'm sharon epperson at the nymex. even if you didn't see the fomc minutes, look how gold has dropped here. an indication that we probably will not see qe 3. no mormon tear easing. well, that means gold has dipped 40 bucks here just under those minutes and we are looking at the bottom end of the bottom end. 1625. bank of america, merrill lynch saying that they still see an upside at the end of the year for gold but not much reaction in the second quarter. back to you. >> sharon, thank you so much we have a market trading down. apple continues to march towards
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a new high as it marches towards a $600 million cap. let's look at the talking numbers. good to see you, rich. thanks for joining us. what does the chart say about apple? >> well, that in the short term we should expect the momentum to continue. there is further upside but you better have your big boy pants on because the end is near. let's start. take it back to january. we had a divisive break out from a head and shoulders bottom. here's your breakout gap. that's where it all begins. we then march higher, continuation gap. we don't need any explanation there. we get up into the 550, 570, 575 level, that's where the magic happens. this formation takes hatch way
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through the move. and that brings us up to $700. and if you've been long, anywhere from in here, 350, 450, 550, you want to be looking for exits at this point. >> but even a company trading up 15 times earnings? >> valuations are certainly not absurd but when you talk about the market cap, the large numbers are going to come come into effect and when we have a chart exhibiting this type of euphoria, you really have to be careful. >> bottom line, what is the tries target on that? >> you want to be selling right then and there. >> you're getting close. taking money off the table here. >> no doubt. >> rick, thank you so much.
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bill, back to you. >> brave man, mr. ross. here we go. the dow heading lower as we go to 106 points. we'll see if we can get back to the lows of the sessions here. investors fleeing stocks amid fading hopes for qe 3 but our next guest says that it's creating a nice buying opportunity. plus, investors are buying homes and then renting for the distressed homes market. as we head to the break, here's how the big home builders have been trading today. back for more after this. tdd# 1-800-345-2550 the 5-day moving average just crossed above the 20. tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 the spx is on my radar. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus. tdd# 1-800-345-2550 i can custom build my own screens tdd# 1-800-345-2550 or use predefined ones to help me find tdd# 1-800-345-2550 possible trading opportunities quickly.
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welcome back. bob pisani on the floor of the new york stock exchange. stocks drop because some think the economy may be stronger than expected. we have the fomc minutes out. bottom line is this, some think the gdp might have to be revised upward. that's probably a minority position but for some it means no qe 3 or less chance for a qe 3 and less chance that operation twist would be extended. on that, stocks dropped. buying yields moved up rather
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quickly and then, of course, the dollar moved up as well. it makes everybody a little crazy but that's what is going on. >> stocks have come back a little bit but certainly the dollar is at the highs of the day. as hopes for qe fade, wall street reacting big time. we saw that reaction as stocks drop to the lows of the session. is this a sign that the economy is in fact improving and with a sustainable recovery? should investors make changes to their fundamental strategy? >> joining us, is vick store, ceo at alpha technologies. good to see you both. thank you for joining us. let me kick this off with you. what would be your trade or investment where we did not get a comment about further monetary stimulus where the fed also said that hiring could slow if the economy worsens. >> this is a time to be conservative on hedge. i'm not saying that you can't
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have apple on the long side but you should have equal r.i.m. on the short side. you have long and short. >> same thing. long and short just in the bar bell strategy of the portfolio. we're going to have cash and the bond fund but equities and as this market burns off the froth and if the selloff gives us a nice pull back but also a portfolio. >> they've underperformed. >> exactly. but if the economy truly slows down, it will help. >> last time you were here, you were making the case for gold big time, longer term. if the fed is finished with its easing and all of the monetary easing at this point, does gold head lower? >> it sells off for everything
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else but bought on weakness. it's the apple of the commodity world. it's bought on weakness. it's had a great run of at 18%. what gold doesn't like, believe it or not, is growth. if you're going to get real growth and you're going to get eventually a higher nominal interest rate, then gold is a sale but i don't believe you're going to get that. i believe the economy is still 2% gdp growth. >> you're still buying gold? >> on weakness. >> is it aprop preet ate for gold to sell off, which is what happened? >> yeah. because as it showed gdp growth at 3% and if you believe that the core cpi is 1%, the markets follow those headline numbers. so low cpi core and higher
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growth rates it's not inflation rate it should be. >> if the fed is finished, that would be good for banks, i think. >> we do. we like financials. in fact, the steeper the yield can curves, the financials have pulled out of the doll drums. fundamentals are starting to matter and i think that they were the most beaten up last year. i think it has to be in the portfolio as long as there is some growth in this economy and there is. >> quincy, what about technology? do you want to own it? >> you want to own it. they have pulled up and it's not just apple. take a look at where the old technology companies are. >> ibm is on fire. >> they are all moving. and we're seeing m and a activity in technology. the small and mid-cap in a slow growth environment.
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year going to buy another company for it. >> would you buy that here? >> no. i never buy anything that has moved up at this rate. >> some analysts say it could go up to $1,000 now. >> it will without me. it could go there. >> you know what i think is pretty interesting is the bid that we're getting in retail. i don't know if it's based on economic fundamentals, if it's based on what our guests in the last segment said, people just want to spend money now because they haven't been shopping recently. is this real? does it have legs? >> it is but i think you're going to see the retail one by one move over. it doesn't mean that it's dead. americans are going into their savings in order to spend. as long as the work week continues to expand, we know there's a direct correlation, a
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positive correlation with retail and also they are being taken over. private equity is coming in and taking a lot of them out by the way, this is for you. apple's 200 billion increase is greater than the individual market capitalization of 98% of the s&p 500. >> if the market sells off, just like you go and have profit taking and people step back and i'm not saying it won't rally again but it could sell off very sharply. it's a dangerous trade unless you're doing it with other people's money. >> there you go. thank you. >> thank you. we're in the final stretch here. 20 minutes until the "closing bell" sounds for the day. a market is down 80 points. 14 points lower on nasdaq. shares of organic food maker annie's. when we come back, we'll cook up
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for the case why investors may be better off investing in one of annie's biggest rivals. and chairman ed la ziere and how you can profit from the slow comeback. here's a look at the stocks today, both higher and lower. back after this. [ donovan ] i hit a wall.
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welcome back to the "closing bell." i'm brian shactman. in that picture you just saw, percentage-wise the nasdaq is doing better than the other two indices but not a whole lot. i want to start with something in the green which is amazon. they will be able to stream on playstation 3. the mobile application which got good reviews it getting out of the beta testing phase. that was above 200 and now it's slightly below that. the downgrade from barclays is
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part of the reason from time and our parent company comcast. research in motion was down 10%. the jean munster comments are big but also you have to keep in mind, they came up with the smartphone numbers. market share is down 13% where apple is over 30 and google's android is over 50. back to you. >> brian, thank you so much. time for market check on the nasdaq which is under pressure once again today take a look at the chart that worsened after the fed minutes came out. it's still off of the lows when it dropped as many as 22 points. first solar, sirius, and
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fastenal all lower. >> and the annie's stock has doubled. has it gone too far too fast? here's what jim cramer said about that. >> annie's is a total give away for anyone who got into the like coors after it became public it was still worth buying which has made me rethink my analysis. i normally would say bear. now i'm saying bull. >> so cramer is a bull in this. is it a buy or a sell? let's ask francis gaskins. what do you think, are the fundamentals justifying the numbers we've seen move? >> i think if you look at the p.e. ratio, it's selling at 51 times compared to 43. and five times sales versus two times sales. it has a 29% growth margin
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compared to 20% for hanes. relative to coors, it was $834 million ipo. this was a $100 million ipo. >> right. >> there has been a lot of promotion. it's only a $600 million market cap company. >> i wanted to ask you about that because we've seen that with the high-performing ipos sha we've had. it's a bit of an illusion to see it go higher. it's not all on the fundamentals, right? >> two things. it's a small ipo and market cap. >> so would you say annie's is a buy right now? >> no. i think now it's fully priced. it's got a 50% p.e. ratio than hanes and the last four quarters have been lumpy. it was up 48%, down 32%, down 20%. the quarterly progress is like a
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yo yo. i like stable predictability. >> there you go. he's buying right now. >> we had a great fourth quarter. which makes software up better than 31%. that was january 24th. computer numerical control parts. and february 16th has returned 111%. the company offers a popular web-based platform for publishing and distributing videos. epam systems up 81% since february 7th. big quarter for ipos certainly and the performance was hot. we have ten minutes before the "closing bell" sounds for the day.
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dow jones industrials down after the fed minutes came out. up next, courtney reagan has all of the action at the stocks today. what have you got. some trial results are shaking up trading today and it might be time to get out of the mines. or maybe just out of the shares of a particular miner. either way, i'll sort it out coming up on the "closing bell." well, in that time there've been some good days. and some difficult ones. but, through it all, we've persevered, supporting some of the biggest ideas in modern history. like the transatlantic cable that connected continents. and the panama canal that made our world a smaller place. we supported the marshall plan that helped europe regain its strength. and pioneered the atm, so you can get cash when you want it. it's been our privilege to back ideas like these, and the leaders behind them.
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are we going to courtney reagan? all right. north texas. where are we going, gang? north texas is under a tornado emergency after a tornado touched down for several minutes in johnson county. there are now reports of heavy structural damages to businesses and homes in the area. thankfully there have not been reports of serious injuries. there are fears that more twisters could form the area and
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we will have more details as they emerge on this unfolding story, maria. >> bill, thank you. meanwhile, i'm coming to you from the post. it's very active. jim has been doing very well. an increase in auto sales but it was weaker than expected. we can see the damage. gm issuing a decline of 4 and 2/3%. we have an 11.8% in sale for the month of march. sold more than 100,000 cars, getting at least 30 miles to a gallon. it may bode well for gm. high gas prices are driving more consumers to the showrooms in search of a fuel-efficient cars. it really has not stopped significantly and sustained with
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consumers, those fuel efficient cars. ford sales were better than expected but today we're looking at gm with a decline about 20% just in the last two weeks bill, before i send it back to you, heading into the close, as we approach the market. >> as we head towards the close, shares of delta have been flying high on an otherwise down day. courtney reagan joins us now with a round up of all of them. courtney? >> good afternoon, bill. trading at a high of $106 from 82, shares just above 80. there is potential to add significantly to the top and
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bottom line for the company. shares are up 6%. delta airline shares up, too. the nation's second largest carrier, traffic rose 2% in march, marking the second straight month passenger revenue was up 13% for the month. and downgraded to outperform is ivan homes mines by $6 to 18. right now we're under 15, down almost 8%. bill? >> courtney, thank you very much. we'll take a break, come back with the closing countdown. after the bell, pistols and profits. account gun makers continue to add power to your portfolio? here's how the major averages are trading towards the close. [ male announcer ] what if you had thermal night-vision goggles,
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the march fed meeting came out and it was heading towards less quantitative easing down the road. down less than 1% at the lows of the session and the nasdaq is down for a fifth day out of six sessions. the dollar took off. as you see rates going up, value of the dollar is going to go up. stocks went lower. we'll show you the dow. and here's the dow down 68 points, down 133 points at the low. again, a sharp move lower. somebody's got to be wrong, though. if bond prices are going lower and stock prices, they are telling two different stories here. here's the s&p down sharply off the low and bias towards the buy side as we head close to trade here. yields are sharply higher. ten-year note yield is now 2.29%. let me see what the 30-year bond looks like now. it's also sitting on the high of
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the session at 343. a huge move. almost 15 basis points higher from the lows of the session today. oil moved lower. the price of wti moved much lower than the brent. so the spread between brent and wti is widening today. wti got $104.14. and then the vix, the fear indicator -- there's gold down sharply today and then the fear indicator up a percent right now. well off the highs that we're set there. 17 and change right now. we'll show you the sectors and bring in bob, the chief investment strategist at the hartford. as i said, somebody has to be wrong. if the we had is signaling less quantitative ease down the road, what does that mean? >> i think it means that the economy is not in as bad as a shape as people think. >> why did the stocks go down
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then? >> at the end of the day, what the fed is -- i think qe 3 was dead before these minutes. now we just bury it. it's off the table completely. i think the market is set up for a rebound. >> how much higher do you think yields will go? the fed is still in the operation twist mode. rates are going up here. >> i think bond traders are saying there's inflation on the horizon. the way we measure inflation in this country understating and not properly weighting food and energy. i think that's part of what is building into the higher rates because i think that's the bullet that everyone is afraid of. if that inflation number comes in higher, we're too far behind the curb to deal with it. >> bob frolic, thank you. bob of the hartford. an eventful couple of hours with the release of the minutes of the march federal reserve. the dow down 133 at one time. now we've cut those losses in half. down 65 on the close. coming up, a complete


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