tv Closing Bell CNBC August 6, 2012 3:00pm-4:00pm EDT
it looks like we will break our case of the mondays. down nine mondays in a row. today looks like it will be different. would points away for 3,000 for the nasdaq. >> hi shall everybody. happy monday to you. welcome to "the closing bell." i'm maria bartiromo at the new york stock exchange. sit really monday? it has been a long time since investors were in a buying mood to begin the week. hoping to snap a nine-week monday losing streak. >> we will see if we can finish that way. scott wapner in for bill griffeth. wall street following after friday's better than expected jobs report. major averages near session highs. it seems to be resolved and done so with private money. much more on that coming up. >> yes. we want to look at the way
things stand. market best levels of the session. up 80 points. 13,175. nasdaq right now up 31 points. s&p 500 is picking up eight points. it was a year ago today that standard & poors stripped the united states of the triple-a debt rating. seemed like america was going to be in it for the world of hurt. since then the market has surged. >> take a look at these numbers. since then all three major averages are up double digits across the board. while treasury yields keep hitting new lows. joining us now are cnbc contributor s rick santelli. we should be rooting for another downgrade. >> you know, i was one of the few people in this -- when this
occurred that said we would not flinch over it. that doesn't mean it is not important. i remember it quite kerrily. remember, with fitch and moody's, on negative outlook, s&p's reafirmed our rating with a negative outlook in june. couple of months ago. probably s&p nothing bad on continued downgrade until 2014. here's the issue. our treasury secretary runs all over europe telling them how to fix what's wrong. in 2010, april 2011 for the downgrade, he said there was no chance. in "the wall street journal," yesterday writes oh, investors are very pleased with the way it turned out. no, they are not. they understand relative value. certainly not pleased. not buying it because our fiscal house is in order. you know what, humorous as the story may be, that's the real story. and how we added more than a trillion of debt since that downgrade and with no plan in sight to stop. when it ends, propagated so much
more debt. power in congress is -- empowered congress. >> it could end with a real big spike in interest rates. isn't it interesting, tells another story about the sentiment and the risk aversety of investors today. ever since the downgrade so much money has gone into treasuries and even though yields are at the rock bottom levels. they have been telling you, people are more concerned with shaving assets, protecting what they have than taking on any more risk or yield. >> no question. you know, i don't get to say this often on air but rick santelli is right. we should be really ashamed that we saw our debt get downgraded. the united states of america is a triple-a country. nobody should be using this as any kind of a positive point anywhere. that we seem to be the nicest house on a lousy street. really, i don't think that gives as you great deal of assurance. you know. but i think that the fed keeps showing up, markets keep getting rewarded every time the fed shows up because things are growing more dire. your point is right, maria. sooner or later this ends with a
spike up. in the meantime, you know, we have gotten through a very difficult year and we are muddling through the economy. but this is tough going and it isn't really a good thing. we should listen to santelli on this. >> zack, it did, the downgrade, did get us to focus a bit more on our finances, did it not? we do not want to go down that road again and i'm talking, obviously about the fiscal cliff because this time it may be different in terms of what the stock market's longer term reaction is if we keep playing around with that. >> yeah. i think it got the political class to focus on the degree which you cannot use this as a game of chicken to either default on debt or shut down the government when you don't have to. i don't think it led to any urgency at least visible urgency to curtail long-term spending. i don't agree with rick. i mean, i think that's a dangerous thing for me to do on air but i will try anyway. in that we will continue to pul on debt as long as interest rates remain critically low. degree to which these rating
agencies occupy mind share of people is i think equally ludicrous. if anything it should show you have to assess risk on your own p.m. not based on what agencies say. you know, rates are low so the government will keep spending. when rates are high -- >> no, zach. that one -- government will keep spending because that is what government does and don't seem to know how to stop. they haven't shown any evidence they are not going to spend just because rates go up. these people -- all they are doing is spending and haven't gotten to austerity and haven't looked at it serious. >> i i have to judgment in and disagree with you, scott. allowed us to focus on finances. really? i mean, congress just went away on vacation. hello. we got a fiscal cliff on the horizon and nothing is being done about it. no conversation. where are we? >> i'm somewhat hopeful that we will focus, dan greenhouse, more closely on what lies ahead. maria and i talk every day about the looming fiscal cliff. hopefully they will take it seriously, unfortunately they are taking it a little longer
than most people would like. >> i don't know in what world everybody lives where our -- our government a our congress suddenly will become fiscally sane. this hasn't been seen in decades of either party in power and congress or in the white house. this is not a republican or democratic issue. i don't understand why all of a sudden next year or next month is going to be the moment where we get things under control. let me also add that the fact interest rates are extraordinarily low is not only because of the federal reserve. the rest of the world, commercial banks here in the united states, households, everybody has increased holdings of treasuries. if you want to blame anybody for lower interest rates, there's plenty of blame to go around besides the federal reserve. >> you know, also, just one thing on this. i mean the reality is markets are up 15% since then. if you read any of these headlines in the past year you would have assumed we were down 20%, that the credit was constrained and world was falling apart. this is not a hosannah. it is just -- you know, companies are making money in this world.
stocks are rising accordingly. >> get -- we are drinking the cool-aid. we are seeing -- you know, earnings start to falter a little bit coming in here. we are hearing a lot about a -- currency adjustments. we have the problems in europe, our own fiscal cliff. we still seem to have a fundamental belief the federal reserve can fix everything and every time they ring that pavlovian bell the stock market goes up. until we get there i think we are living in a little never neverland. >> would you sell into the rally then. >> no. i think you always have go to fundamentals and i stay invested all the time. where we have had really good profits in here, yes, we are taking money off the table but i -- equally reinvested in things i think are cheap. >> you have to saw invested in stocks and it is the only way you are going to afford to pay the taxes that everybody is going to be a force to pay. >> corporate bonds --
>> rates go up. might stop spending but servicing the debt will cost a fortune. >> capital appreciation has been -- >> twice in -- >> thanks so much. rick santelli. >> that's why it is called an exchange. >> see you then. thanks, everybody. we appreciate it. steve liesman was going to be with us at that hour but he's on his way to boston right now. tomorrow steve has an exclusive interview with eric rosen w ros >> material sector leading the way today. jackie deangelis is at the real-timex change with those details. >> good afternoon, guys. pretty good day for stocks. in fac-- they are posting gains more than a percent each while it is the utilities that is the only sector in the red. still really is an ever so slight loss now. take a look at the top five best material performers today. u.s. steel, titanium metals, new mining, allegheny technology.
hopefully we will get those up for you. gains in the stock from 4% to 7% each. it is counting on expansion of its asia operations and to replace a shortfall due to maturing operations elsewhere. it is targeting overall output growth of 40%. let's move on and look at the tech space. leaders there, looking at cognizant, first solar, jds, f-5 networks, sales force.com. cognizant seeing a nice pop today. reporting a higher than expected quarterly profit. first solar, second quarter profit jumping 82%. that topped expectations. company will boost production to meet rising demand and raised full year guidance as well. big moves. which of the stocks that are lagging today? we said it was the utilities? edison internation aes's second quarter profit fell 20%.
maria and scott. >> thanks so much. we have about 50 minutes left before the closing bell sounds on wall street. market holding on to gains. up 77 points on the dow industrials. >> coming up, latest details on what could be a huge scandal. charges that standard charter gave hundreds of billions of dollars in deals with iran. plus a whole lot more. >> coming up, the dow sitting above 13,000. friday's jobs report almost doubles expectations. the housing market showing signs of a rebound. feeling optimistic the economy is back on track? then why is one veteran money manager saying we are smack dab in the middle of a recession. plus, best buy's founder trying to take his company private again. we take a hard look at if mums just ahead.
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welcome back. final stretch here, 45 minutes to go until the closing bell sounds for this monday. time for a quick market stat check on the dow. holding up well today. market hitting three-month highs as borrowing costs in spain and italy are down on the hopes the european central bank will come through with more assistance. the industrial average up 75 points, shy of the high of the afternoon. the dow snapping a nine-week string of negative mondays today with a gain. materials and technology stocks leading the markets higher today. s&p materials index now at that time the highest level in more than two weeks. >> forget the rally on wall street. next guest says the economy is in a recession right now. >> he does. black bay group's todd schoenberger. chris thornberg is with us who is not nearly as pessimistic about the economy. the economy is growing, although
slowly, but growing. how is that a recession? >> stuck in quicksand right now. look, just simply go back to world war ii. any time the year over year gdp rates dips below 2%, the united states economy always ends up in a recession. we were in first nine months of last year below the 2% threshold. right now we are at 1.6% year over year. this number will continue to move further south and as a result we are in a recession and it is getting deeper by the day. >> yeah. that would fly in the face of what a lot other people think is going on now in the me. if you take a look, everybody talks about the strength of corporate balance sheets. what about the fact businesses are not hemorrhaging or shedding jobs at a rate the they would be if we were in a recession. yes, they are not adding them nearly as fast as anybody would like. certainly we are not getting rid of them and flushing them nearly as much as we would if there was a recession. right? >> that's right, scott. look, these companies right now are feeding on the earnings per share number. that's great. at the expense of human capital
they definitely aren't hiring. look, you need the companies to go out and as healthy it is a balance sheets are, that's good for shareholders but awful for the labor market. you want them to hire and that way you have highway turners that -- high-wage turners that go-go out and buy a home. that's what you need for a growing economy. >> my take on this -- you don't see this as negatively as todd does. it doesn't really matter what you call it. right? you can call it recession and slowdown. you can call it anything you want. the bottom line is most people are not feeling so great. they are worried about their job and their families' jobs. worried the issues in this country as well as europe worsening. how is this a good story? >> right off the bat, we have to take the numbers step back. claim is we are in a recession now because the other talker here is predicting a recession at some point in the near future. i don't get that at all. there are clear limitations from the 250i78 when the economy is considered in a recession. that's typically when the economy is contracting.
if you want a forecast recession fine. that certainly doesn't mean we are in a recession now. clearly the economy is expanding now. as important the forecast of a recession, well, you know, ultimately, i don't believe we are going to be in a recession just because you pull one statistic out of the air doesn't mean anything. there has to be a driver of the recession, frankly, there isn't one now. to your point, yes, there are a lot of worries out there. i think to some extent a lot of the worries are due to the fact we have said i think -- set high expectations for performance in the u.s. economy. the fact is right now, the economy is growing and at about 2% a year. the private sector economy, about 2.5% per year. we are probably going to be in that slow growth mode for couple of years. you know what, we still have the highest per capita income in the world. it is time for americans to stop feeling for themselves. >> no. >> are you kidding me? >> respond. >> which world are you living in? look, you can go to -- >> one based on data and analysis, sir. >> 5% -- data analysis. that's great. let's look up the textbook recession after definition.
ask cnbc viewers. 5% inflation on food cost. pliss at the pump moving higher. you will tell me the household balance sheet is decimated. american consumers for the first time in three years are adding more debt than they are bringing home. payroll. stating facts here, guys. we are in a recession. >> todd, i mean -- >> listen, sir. average how well -- household wealth is the highest it has been any time before 2004. that's a statistic. >> what? >> look it up. overall inflation is 1% now. look it up. that's a -- >> interesting. you are going to make up stories. look at the real data. as important -- >> sorry. i'm not making up stories. >> as far as the balance sheet situations go, financial obligations ratio which an estimated of percentage income spent on current financial obligations, dropped levels we haven't seen since 1992. >> what about the data on unemployment? i mean -- you can't sit there and say everything is so rosy.
>> i'm not saying it is rosy. between 1975 and 1985, unemployment and in the u.s. economy averaged 7.6%. it wasn't the best period of time but wasn't a decade of recession either. what we have right now in the united states is slow growth economy leaving a lot of slow growth work others the sideline. as a social crisis, not an economic crisis. we need to deal with those folks with social tools and not economic tools. >> guys, we are going to make that the last word then. todd, chris, thank you so much. >> thank you. >> we have breaking news right now. we want to get to john forth. breaking news right now on apple. over to you, john. >> big news here, maria. when you upgrade your iphone or ipad or other device to ios 6 the youtube app will not be preloaded on it. apple pushed it out of the latest build and told me it will not be preloaded in the final version of ios 6. they say their license expired. still get it on safari.
this is a big deal because it follows google maps. google's maps product was also preload order the iphone. apple gave that the boot. they will not get free pass on to ios. who knows if consumers will enjoy the fact the most popular video app is gone. >> if you want you can load it yourself, right? >> you can. but people -- you can just load it if you want but you have to go through that extra step after you upgrade to the next version of ios most likely. people may be a little bit confused by that. hey, they are no longer friends. maybe they will figure it out. >> if you want it bad enough you will go get youtube like any other app. >> absolutely. it shows a reordering of apple's friends. apple's friends with facebook, twitter, yelp, companies like that, google, not so much. >> yeah. >> thanks. have about 40 minutes to go before we close it up this monday. 73-point gain on the dow.
i'm tired president of the monday. >> yeah, i am. i wouldn't -- >> nine is enough. >> yeah. i want to he the market hold on to the gains going into the close. best buy, founder offering to take the struggling company private for $8 million. is he following his head or is his heart leading things? best info on best buy coming next. >> warren buffett making a big bet on the housing market. so far paying off. did you get in as well? we are back in a moment. with the spark cash card from capital one, olaf's pizza palace gets the most rewards of any small business credit card! pizza!!!!! [ garth ] olaf's small business earns 2% cash back on every purchase, every day! put it on my spark card! [ high-pitched ] nice doin' business with you! [ garth ] why settle for less? great businesses deserve the most rewards! awesome!!! [ male announcer ] the spark business card from capital one. choose unlimited rewards with 2% cash back or double miles on every purchase, every day! what's in your wallet?
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oil price extending gains for a secretary straight day. sharon epperson. >> scott, we are looking at oil prices near highs of the session here in electronic trading. following what equities are doing today and strengthened by the weakness that we are seeing in the dollar. the overlook story by the markets today really seems to be what the news that came out overnight from saudi arabia. the fact it is cutting official selling price for its asian customers. number of analysts pointing out this is another way that saudi arabia is killing iran's market hair and some say perhaps may be an indication the saudis may want to cut production somewhere down the road. big mover, though in the energy markets today, natural gas. natural gas is to the upside after four days of steep declines. we are now in the midst of
hurricane season. tropical storm ernesto and florence let you know that even though we are not expecting them get into the gulf of mexico. it does let you know that is an issue and will be watching the storage levels as well. >> sharon, thank you so much. meanwhile, shares of best buy having a good day. stock up 13% after the retailers founder and largest shareholder richard schultz offered to acquire the company for 24 to $26 a share and take the company private. stock still trading higher. standard & poors is cutting the company rating to junk status. now even of today's move that would be a nice premium to the current price. investors are not buying into the offer. let's start talking numbers now. best buy, on the technical side of things, chief market technician with oppenheimer. and r.j. good to see you. thank you for joining us. r.j., let me kick this off with you. can this deal get done? >> yes. i'm skeptical the deal gets done. at least the way it is structured. i don't think that they are
going to get the board support. we have one board member who wants to be the ceo in michael mccan. i don't think they will get full support from the board. a lot of question marks whether or not they have financing and, frankly, i don't think the offer is large enough to satisfy current share holders. >> carter, what's the chart say about best buy? are you surprised to see the big rally? >> in principle p. companies are struggling, stocks are struggling. this has been a struggling stock. and the trend it has been in for the better part of two years is quite atrocious. it is so bad that it is good. and what's happen sing we are getting a lot of activity right at the '09 lows. while they have been selling off aggressively we have not violated that '09 low. presume sings that this has a little bit more throwback potential. it does make its way back tords the 23/25. >> you would be buying it? >> yes. i think it is worth a shot. >> bottom line, can this company be turned around? >> i'm skeptical. it is a wash to turn around the
business. i would be apprehensive buy into the quarter. this company over the longer term has an uphill battle to compete with amazon and costco, walmart and apple who has become a lot less dependent on the distributing products through best buy. we are maintaining a long-term negative deal on this company. >> fundamentals and technical side telling a different story. thank you very much. good to have you on the program. thank you, r.j. and carter. we will see you soon. >> a look at the markets here. dow good for 71 points. nasdaq having a good day as well. technology leading the way. night trading glitch, latest thing to crush investor confidence. but in this case, should investors actually get more confident? we will explain that view. plus the u.s. economy is steamrolling towards the fiscal cliff. economy already feeling the effects. what's congress doing about it? nothing. it is now on a five-week
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welcome back. nightmare may be over for might capital on some fronts but not when it comes to the share price. stock down another 20% today after the company received a $400 million financing deal. th leaving the investors with a lot less of the company than they had a week ago. that does mean mite will survive. bob pisani joins with us the highlights. once it happened there was no way for investors to win here. >> a matter of how much they are going to lose at this point. stock is down. good news is tom didn't keep the firm together but paid a heavy price. new investors on 7 a% of the company. mr. joyce said he was launching an internal investigation to determine what happened and why it took so long to shut that errant trading program down. i asked mr. joyce if he would support new rules that would
limit of this sort. >> i will support additional rules once we have the data. we will have a lot more data once our investigation is comple complete. >> mr. joyce was very vocal in his criticism ofs in dakota's handling of the facebook ipo at that time and now faced his own embarrassment. but he maintains there is a difference between knight's snafu and facebook debacle. >> we screwed up last wednesday. knight capital group screwed up last wednesday. and knight capital group paid the price. nasdaq screwed up on that friday and in the industry paid the price. so i think it is different. >> so what's next for knight? the company has three new board members that are representing the new investors. they will likely look at the pact mr. joyce is the chairman as well as the ceo. they may or may not want a nonexecutive ceo. just because the company survived doesn't mean they are going to keep all parts of the
company necessarily. in addition to the market making operations, that's the heart of the company, the company also owns futures and option, trading platforms as well as 20% stake in the direct edge exchange. all of which may be valuable if they want to raise some cash. maria? >> bob, thanks very much bob, thanks. knight capital adding to a growing list of missteps by the financial industry that's been chipping away at invest wror confidence all summer. from the facebook, nasdaq, jpmorgan trading loss, rate rigging scandal and now this. >> andrew is with us. he says the securities industry has zero credibility left. tim ryan of the securities industry and financial markets association says that not so fast. both join us now. let me start with you, andrew. why so strong? >> you look at the parade of horrible it is securities industry engaged in. each and every time, retail client that winds up getting left the with the bag. it is like the movie "groundhog
day." same thing but different firms over and over again. >> isn't that true, tim? at some point -- what needs to happen here? one thing after another. investors are left wondering what the hell is going on. and yet, you keep hearing from people more regulation is not the answer. what's the answer? >> well, let's be clear. we haven't had our best three months to -- just no doubt about it. >> let's go back to the flash crash. past few years. >> well, when you are under this type of microscope, you know this. you are in this business. everything is -- made larger. but that's no excuse. we had errors and mistakes. and we are serious about correcting them. this industry -- let me finish, please. this industry is very, very large. for instance, we represent small firms, big firms, firms that have problems and firms that have no problem. everybodies that same view. without trust and confidence, we really have no business. >> it is too late. it is gone. you can look at the securities industry and not just in the
last couple of years but even go back to the tech crash in 2000 where we have undisclosed conflicts of interest and brokerage firm research departments p you can go back to the mutual fund trading scandals, market timing. it goes on over and over again. it true sly the groundhog day. >> i would -- actually would expect that type of comment from a personal injury lawyer who is spending time doing securities litigation. but the industry is very serious about these issues. very serious. >> you almost melted down the global worldwide economy in 2008. and now you are saying that things are -- going to be different. >> let him answer maria's question. >> well, what are they doing about it? how to get confidence back and what real fundamental changes do you see? >> you need to divide and it look at issue by issue. and -- for instance, let's take one issue that's been discussed quite frequently on your shows. we are talking about lyborg. here there are ongoing
investigations. we all know about that. from an industry standpoint, we are focusing on how do we fix, for instance, what is the appropriate structure for a survey basin decks? what is the appropriate governance? we have a very serious issue around controls. we need to mick sure controls and compliance work in these firms so we don't have these types of issues again. so we are very focused on it. >> they haven't worked. what needs to be done? >> some instance that's have not worked. in many they have. that was my point -- when you are under this type of microscope, everything looks much, much bigger. it is much more intense. and when you get into this kind -- kind of one thing rolling on top of another, everything looks bad. you all know do you this for a living. this industry is not a bad industry. >> let me follow up while we have you here. do you think that mary shapiro and sec made the right digs in not canceling more night trades? i would assume you have lobbied on behalf of knight to thinking that more trade should have been
cancel snd. >> no. that's not true. tom joyce is one of our board members. never called me or asked for any help. >> do you think mayor shapiro made the right decision? that's why knight found itself in the position it did. >> i don't know. i don't have all the facts. tom does haven't all the facts. i don't know whether mary made the right decision or not. she has a very hard job. she does an excellent job. and in a very tough circumstance. >> andrew, real quick, what do you want to see here? i mean, you know, it -- i understand the whole politics of it and screening and that -- that place of the masses. but fundamentally, we all need the finance industry. to finance things that mat other main street. what do you want to see? >> well, i think at a minimum until some corporate executives start getting indicted and serving criminal -- >> indicted? who do you want to see indicted? indicted. >> absolutely. if we don't see criminal -- >> who do you want to see indicted? >> executives of lehman brothers. take a look at the bankruptcy
report filed against them. that provides a road map for financial fraud. it is for whatever reason prosecutors are unwilling to bring those charges. >> comments? observation? >> my observation is that, you know, this is type of individual you will get to come in and talk about some of these issues. it is very unfortunate. >> if there -- >> a lot of hyperbole. >> if there was an investor speaking directly to you while the words may be different, the anger may be the same. >> no. and i -- we all hear that. i mean -- when we have a board meeting, we start talking about mistakes and errors and where we are, it is very disappointing. and we are very serious about fixing it. you have to fix it issue by issue. some of them are just -- >> andrew cuomo made a comment to me once. he said people will go back in the water when they know the shark is dead. should someone have been indicted after lehman brothers?
>> i don't have the facts on that. you know -- >> how can you not have the facts? how do you not know the facts? >> listen -- >> we all have the facts. come on, we all have the facts. >> let's be clear. i have a little credibility in this. i tran ran the s&l cleanup. >> we will have the same problems again and glen i have a lot of confidence in the justice department. if they have the facts to go after people they would have. these are professional prosecutors. that's what they do for a live. >> that's the bottom line and the country we live in. democracy. thank you, gentlemen. we appreciate it and will see you soon. 20 minutes before the closing bell sounds. >> coming up, 10,000 point sell-off. that's what somebody on this show is predicting and blames it all on the baby boomers. >> after the bell, one of the word's largest banks, break the law by doing a quarter after trillion in business with iran.
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with the details. >> once again, in fact, if you look at technology sector, it is the best performer with the two-day rally. we have seen here in august. take a look at these stocks surging here in the afternoon. after the fda approved the company's ability to expand production of a drug to treat a swelling that's similar to hives. cognizant technology is the big winner in software. the company actually raising its outlook after having warned last quarter. >> thanks, bertha. >> barring a last-minimum meltdown and my phone ringing again, looks like the blue chips are finally on track to snap their monday blues. take a look at where the dow sits. right now we are plus 64 on the dow jones industrial average. end up closing higher index will break a nine-week monday losing streak. >> divine capital, danny hughes,
impressed with the market. also joined by brian. good to have you on the program. thank you for joining us. danny, what do you like about this rally? do you think this is sustainable? >> i think it is extremely row silliant. despite the fact of europe coming out with bad news, we have actually gone from a quite panicky statement in europe to some kind of acceptance. we could see an upside going into september. and the banks rebounded very nicely in europe which is another big sign of confidence. we think that we are going to see more of that to come. >> is that the difference we finally believe what we are hearing out of europe? >> yeah. i think the believability portion of a lot of things, no only the news but really where the power of this market is going to come from is the believability and fundamentals and that's why we have been big believers in the quality of earnings we are seeing, continues improve. that's why we think we see multiple expansion coming out of the environment and the new bull market is on the horizon.
happy with the quote, unquote quality of earnings we have seen? point about the revenue side hasn't been all that pretty. >> quality of earn sings really about -- diagnosing and looking at organic growth scouts. look at the amount of cash flow, it is coming out of they income, improving. clearly off of the type of sales growth we have seen the last couple of quarters, we are going to see a slowdown, ceos have become cautious near term. longer term remember, we had a little bit of a lull last two years. market rebounded both from a macro economic perspective and fundamentally. we are in a much better base this time around meaning 2012 in terms of fundamentals both 2010 and 2011. >> let me ask you about some of these issues. domestic issues like the fiscal cliff and what's happening in europe. what do you want to see knowing that these are unknowns right now? are you expecting that these things will come back and -- upset this market by -- before election? >> if there is one thing we know for sure, maria, is that this market is not linear for long. right? so all we immediate some sort of
a bullet point kind of scare from europe to send people to the exits in terms of taking profits. we are still very much mired in a situation where investors are near term focussed and focus order near term performance and as such with the election coming up, too, i think wire going head into the volatile next couple of three months. >> great stuff. talk to you again soon. let's go to brian shactman who is watching the individual stock movers now. brian, what do you have? >> look at avon products. thank you vy much. up 4.5%. cody's last offer if you recall, when they tried to take it out was for 24.75 a share. lot of chatter avon may be a target. it is almost $10 below the last offer. it is ripe for the picking according on some. up 4.5% on the day. >> thanks so much, brian shactman. 15 minutes to go on this monday before the closing bell rings. we are looking at a gain that's losing a little bit of steam. 50 points for dow.
>> giving up some of the momentum. american libyans like gabby douglas, racking up medals in london. they are also racking up a big tax bill from uncle sam. can that be fixed? >> fiscal cliff may not be resolved but that's not stopping congress from vaca. five-week one. usually when congress does nothing that helps the economy but not this time. we want to know whether you think lawmakers should be leaving town for over a month with the fiscal cliff unresolved. sometimes investing opportunities are hard to spot. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.
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the united states won more than 60 medals so far from the olympics. the irs is itching to get ahold of its share of the prize money from each of the medals. >> numbers are unbelievable, as they value the gold. coming into today gymnast gabby douglas won two gold medals each of which she will receive $25,000 for. assuming she ends up in the top 35% tax bracket for endorsement deals, douglas will pay around
$18,000 in taxes just for winning the gold. >> swimmer missie franklin has won four golds and a bronze. that comes out to $110,000 in prize money. she says she wants to remain an amateur so she can swim in college. if that's the case she would be in the 28% tax [ et and pay $31,000 in taxes for those metals. president coming out today saying he supports this bill that marco rubio put forth to exempt the athletes from paying it. what do you think? >> you know what, i'm on the side of -- making it law that they don't pay the taxes. these are young people. young people have been practicing so much, working hard, win the gold for their country, okay, and then they have their face -- faced with a huge tax bill. we know the stories of their families. these are low-income families. you just say moments ago gabby douglas' mother was in dire straits. >> if any of these families are in some precarious financial shape, i think one of the main
swimm swimmer's family may be facing foreclosure on their home. gabby douglas situation. you have -- >> oh yeah. let's make it more difficult for them and give them a winning -- you know, give them the gold and -- force them to pay all this money in taxes. >> let's also point out there's service men and women on the floor of the stock exchange. that's why you -- >> huge applause. >> that's why you hear the applause. certainly not hard to find agreement probably from this group sitting in here. >> absolutely. they are about to be here to ring the closing bell. >> up next, back with the countdown. with the spark cash card from capital one,
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introducing trade architect, td ameritrade's empowering web-based trading platform. take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. welcome back to the floor of the noyng. time for the closing countdown. here with maria bartiromo. looks like no more case of the mondays. we have been down nine straight mondays on the dow. thankfully we are getting rid of that. >> we are. showing gain at the close here. just a few minutes before. we should point out we should have sell and balances at the
close. coming off of the best levels of the afternoon. finishing up 35 points, wondering what this bodes -- if this bodes poorly for tomorrow. given where we are ending near the lows of the day. >> couple of interesting stories we followed, of course, throughout the last several days. that's the investment into knight of $400 million. saving that company. bunch of firms coming together in making that investment. then the best buy situation, founder trying to buy it, take it private, faces a debt financing hurdle as well. two interesting stories we followed. >> tom joyce did a great job with bob pisani and held the firm together and, you know, unfortunate what has gone on. another sort of dim against sort of computer generated technology. one of our guests think about that. particularly warren myers. >> yeah. warren myers and brian with us. as you sit here, the knight situation good folks behind us here making their living every day, down here but the firm was saved. >> yeah. i'm glad it happened. glad they were saved. it was a terrible incident that
happened in the first place. lot of people are calling them a high frequency firm that's not an accurate terminology. it just shows you how to control up aly sometimes. even when you think you have all the precautions and measurements in place to watch. and -- you know, that's -- scary and troubling. it is not what the markets needed at this time, unfortunately. >> extraordinary story. >> we have time to get to your picks in the market here. how do you get investors to feel more confident about the market for people that -- get some of that money on the sidelines and get back in when you have incidents like knight, facebook, everything else? >> there's no doubt about that we see -- the very high likelihood of global regulation, probably next year especially as we come out of the election. right now we have to focus on the domestic issues in terms of the economy. forefront with the respect to the election. clearly gold and regulation coming. don't think it isn't. with respect to the confidence issue rising stock prices take care of a lot. and -- really, that's how bull
markets start because have you such a tremendous amount of doubt and investors are still buying bond funds because they are still scared and as that fear abates, stock prices go higher, people will feel more comfortable buying stocks again. >> what do you think happened at the end of the day? up much more earlier. >> part of it, as you noticed the transportation index, was underperforming all day. i think that might help pull it down. this were selling balances that triggered the late afternoon selling. you know, we had a nice runup for a few days as well. not surprising. >> that's a disappointing move. you will be all over that in the next hour. >> see you at 4:00. good to see you. thanks so much. >> we will see maria in just a second. as we look at this move here today, figure out where we are now, after last week such a big week with central bank dictating the action, where do people want to be invested right here, right now? >> we think from a longer-term perspective, looking out the next six the 12 months, favorite sectors are tech industrials and
energy. near-term also consumer staples make a lot of sense. volatile market until the end of the year. no doubt about it. prior segment, things are linear for not very long. there is a very good chance we can see near-term profit taking. longer term u.s. stocks on a an absolute basis look to be the best asset in the world. >> what's the next catalyst then, warren? if you have a little bit of time before the eu summit and little bit of time before jackson hole and big jobs report that just got out of the way. what's in front of you here? >> i think what you -- september is going to be a huge month. august will be a little vacant or some -- information with data, you know, have periodic big pieces of news. august will be a little bit quieter. i think what you are going to do, look for any piece of positive news you can find. especially economic data coming out of the united states to hang your hat on. get some of that you may continue this run-up. >> thanks so much. we will see you again soon. dow is losing steam pretty