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tv   Power Lunch  CNBC  June 10, 2013 1:00pm-2:01pm EDT

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behind us on a day when the markets have turned negative. apple is holding up quite well. that brings us to final trades. dr. j, you're up first. >> emerging markets, got short them. last week, judge, adding to that short. >> steve? >> most of the carnage is over in japan. dhj on any dip. >> all right. that's the moment we've all been waiting for the worldwide developers conference behind us. tim cook is set to take the stage, and "power lunch" will follow all of it next. and as scott so aptly put it, the big story this hour is apple, apple, a. let's look at the stock. there it is, 446.92, and up $5 a share right now, as you see. this is ahead of that big event that scott and the team are monitoring out there for us, and we're going to watch very closely throughout the hour of "power" today. the stock in that range, 445, 4456, 447, likely to move up or down in the next hour based on what comes out of that developer's conference out at the mosconi center in california. within a tough year for apple,
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of course. year to date, the shares, as you see, down 16% so far. the event is getting under way right now. we expect mr. cook to take the stage momentarily. we're going to take you inside the hall throughout the next 60 minutes so you can see and hear firsthand what cook and his other chefs have in store for the company and the consumer alike. sue is down at the new york stock exchange, but we start in san francisco with scott wapner as we wait for that big event to start. scott? >> reporter: absolutely, tyler. thanks so much. tim cook is expected to take the stage in the building behind me any moment now. he'll eventually be joined by other apple executives in a presentation that is expected to go about two hours. anticipation, of course, was high. tickets for this event sold out in just two minutes for the 5,000 developers who wanted to be a part of this, and it really comes at a bit of a strange time for apple given the fact that the stock has come all the way down.
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it's performed a little bit better lately, but certainly nowhere to the expectations of what apple traders and investors would certainly like. you have the news flow going against apple these days as well with the sam sung patent verdict over the last week or so, so anticipation is incredibly high. so what's really likely to happen here. most expectations say you'll get some sort of an update to the ios operating system and os operating system as well. maybe a slight refresh to the max and mac book so that will be closely watched. then all bets are off. sure, there's speculation about ide radio, some sort of music streaming service, maybe mention of some sort of wrist watch, maybe a television-like product of some kind that they will talk about or software related to it. perhaps other hardware as well. tim cook, as i said, is likely to go about two hours at the top. he'll probably give key numbers as to how many devices apple has
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sold. that will be closely watched, and then he'll take the stage and see what he has to say. we'll cover all of it live jon fortt is inside the building behind me and whatever he sees we'll bring that to you in realtime, and we'll see what the stock does. sue, tyler. >> can't wait, scott. thanks so much. the stock right now up 1.25%, so we'll have more apple as it happens. right now though i want to bring in our senior economics reporter steve liesman. a big and some might say quite surprising move by s&p today regarding the u.s. credit rating. in their estimation now, we're stable, steve. >> how are you feeling, sue? are you stable, sue? >> i feel stable right now. >> i teeter just a little bit. s&p saying that there is now just a one in three chance that there will be a downgrade as they upgrade the united states to stable, and i have a chart here, sue, i'm calling s&p please downgrade us again because yields have done nothing but go down since the s&p downgrade which had to do more with political deadlock in the
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united states more than anything else. july 11th, it warned of the downgrade, and the yields were 2.98. they went down further when they actually downgraded the u.s. on august 5th and then fast forward to today, june 10th, 2013, and what you see is that the s&p upgrade from negative to stable, yields at 2.27 and actually rising. the reason is because of better economic growth, better -- there's the tale of the tape right there. you can see the little tick of of late there. better economic and better receipts and maybe a little bit less gridlock in washington. here is a growth update from the weekend after the jobs report. economists update their forecast. 2.3% is the first quarter. that's a tick down from what was originally reported. second quarter, 1.8, but there's one big forecast in there, 2.9% from ubs. everybody else in that 1.5% range. third quarter, 2.5%, so a grad yawl uptick in growth as the
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quarter goes -- as the year goes by to 2.8% in the fourth quarter. and, sue, what i'm hearing from economists over the weekend is the jobs report, not definitive enough to cause the fed to move over the summer. still looking like a fall to late fall event when it comes to tapering from the federal reserve. sue? >> objection steve. thank you very much. >> a pleasure. a quick note on a. right now the keynote has begun out in san francisco. it's expected to last -- the whole event is expected to last about two hours. we'll be monitoring all the key headlines and bring them to you as they break. the stock up 1.25%. mcdonald's is also moving higher today. the fast food chain says may sales rose a better than expected 2.6% worldwide as it expanded its breakfast fare. the stock is up 1.5% to 91.75, up more than 13% year to date. travelers is also moving high. the property and casualty
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provider will buy dominion of canada general insurance for $1.1 billion in cash. this as it strengthens its reach across the border. the stock has now turned down. higher earlier in the session. last trade, down 44 cents at 34 even. ty, back to you. >> we're tracking shares of google this hour as well. take a look at where the stock is sitting, 887.20, a $47.03 move, this amid reports that the company is close to a deal to buy the israeli mapping company waze for 1.3 billion, that according to the israeli-based financial nooup newspaper "globes." intel, meanwhile, moving higher by 33 cents at $24.92. that company reportedly making progress in talks to buy content from media companies for a new tv certificate advice. reuters reporting that intel has not closed any programming deals though. sue? >> ty, a tale of two economies in asia playing a big role in
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today's trading here in the united states. japan's nikkei jumped nearly 5% after data showed that country's economy grew at a much quicker pace in the first quarter than previously thought. the index has been down nearly 10% over the last month. other data pointed to weakness in china's economy. exports falling in may and imports also fell for the country's second highest economy. the shanghai index finishing down 1.33%. given that push and pull overnight, let's get to the trading action here on the nyse with bob pisani on the floor here. >> how are you? >> down about 12 points. >> a bit cheap, in and out of positive and negative territory. 3-2 declining and advancing stocks. sue mentioned the weak economic data out of china, the weak export data. take a look at the effect it's had on stocks. base metals, aluminum, for example, put that back up. how much we're declining on the base metal stocks, aluminum,
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zinc, copper, all down and that's affecting all the commodity stocks. iron ore stocks, a lousy market for these stocks, rio tinto, valle and billiton is not, but starlight, a big copper company, essentially at a 52-week low so these material companies have not participated in the rally and home building stocks, lenar was downgraded and these stocks have moved up rather aggressively. home building stocks tend to underperform the stock market during periods of rising interest rates, sue. that is, indeed, what we're seeing. my overall sense and take a look here. there on bottom, that's the home building etf, the green line. the white line is the s&p. the last two weeks, can you see the underperformance. >> my sense is that we're up 0.6% on mortgage rates. have to go up a lot more in order to stall out the home building recovery. my history, about two percentage points. >> okay. >> we're at 3.5%, now you're at
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the low, now at 4 on 30-year mortgages. uhave to go to 4.5 to 5.5. >> we'll see because the backup in the ten-year is moving rates up. ty, up to you. >> all right, sue, bob. thank you. the latest numbers regarding second-quarter receptions at sac capital therein, kate kelly broke the story and has more now on the details from new york city. kate? >> reporter: tyler, the news is in and it's not reassuring. sac capital lost close to $3 billion last broke as part of second quarter redemptions. that figure is in line with expectations but consult a blow for the hedge fund which is fighting to reassure investors that their money is still safe despite an ongoing and intensifying investigation of insider trading by the u.s. justice department. at the start of the year, sac managed about $15 billion in total assets, 6 billion of which came from external investors but amidst new charges against an s.e.c. worker of improper
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trading, investors asked for $1.7 billion back. now, they pushed that number to more than 5 billion in total in a sign of their waning confidence. sac and cohen have said consistently they have done nothing wrong but the efforts to clear their name has so far fallen short. federal prosecutors have not been persuaded to not pursue the probe. a high-level meeting with justice officials seems to have yielded no agreement to the point, tieier, where sac announce it had was no longer cooperating unconditionally with the government. >> kate, thank you very much. >> sue, back to you. >> learning more about a man behind had a massive security loc that's captured the attention of the nation. plus, the businesses that actually do a lot of that spying. we'll have that straight ahead and, of course, scott is out at the big event at san francisco
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in apple. >> that's right, sue. if you want to know how coveted this event is down here, tim cook on the stage right now says signatures sold out in 71 seconds. no matter. you won't need one. we'll track you inside rand tell you everything that tim cook is saying as the stock is at the highs of the day when we come back on "power lunch." [ male announcer ] my client gloria has a lot going on in her life. wife, mother, marathoner. but one day it's just gonna be james and her. so as their financial advisor, i'm helping them look at their complete financial picture -- even the money they've invested elsewhere -- to create a plan that can help weather all kinds of markets. because that's how they're getting ready, for all the things they want to do. [ female announcer ] when people talk, great things can happen. so start a conversation with an advisor who's fully invested in you. wells fargo advisors. together we'll go far.
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elan pharmaceuticals rejecting a royalty offer saying it's received unsolicited interest from other companies it's not yet named. last week royalty upped its bid from 12 3507b9 to $13 per share, plus up to $2.50 a share in performance milestones. elan is up 1%, ty, at 13.57. >> thank you very much, sue. shares of booz, allen, hamilton. there you see it, down about 63 cents, about 3.5% right now. this after it came to light this past weekend that the man who leaked information about u.s. surveillance networks worked at booz allen. eamon javer is here with more on the big business of spimpingt this is in the category for me of who knew? >> yeah, that's right, tyler. a lot of people outside the beltway aren't familiar with the industry, but those of us inside the beltway have been exposed to it over the years and it's astonishing, i've got to tell you, to me and others i've talked to just how much the intelligence community outsources some of the key
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aspects of intelligence-gathering to private companies. it's a trend that exploded after september 11th, and booz, allen, hamilton is deeply intertwined with the intelligence community employing future and past heads of the director of national intelligence, key executives up and down the line with intelligence experience. tens of thousand of employees at this firm. one of the questions here is what exactly was edward snowden doing? he's the man who says that he leaked this key information while he was an employee in hawaii of booz, allen, hamilton. here's what he said he could do at one point in his career, whether at booz, allen or another firm inside the government, not entirely sure about the comments but take a listen to what he said an analyst could do in terms of national security information. >> i sitting at my desk certainly had the authorities to wiretap anyone from you or your accountant, to a federal judge to even the president if i had a personal e-mail.
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>> so who are these companies in this space? take a look at this long list of firms that booz allen lists in his own s.e.c. files saying the competitors xlu caps lick l-3, man tech, tasc, also large defense contractors including general dynamics, lockheed martin, engrummond and also diversified service providers including accenture and deloyal. collectively a lot of the phones are known semi-derisively as the beltway bandits, those who depend on government contracting for their livelihood. can i tell you, tyler and sue, i've heard anecdotes of one company actually recruiting employees inside the cafeteria at the khai headquarters, some upset thinking you better come to work fours, can do you the
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same coined work but we can pay you a lot more. a lot of the appeal is the salary. not subject to government-scale salaries once they go to the contractors. snowden at the age of 29 he was making a $200,000 a year salary, not something you could do as a government intelligence agent. can't pay that well. >> certainly they can't. >> part of what's going on here in this culture. >> pretty brazen to recruit them in the cafeteria. >> it was. that particular incident caused controversy, but it's the type of thing you see, the revolving door at the public and private sector. see that at the top level and the junior level now as well. >> thanks, appreciate it very much. 3-m shares on the move hovering at a 52-week high, up 52%. the company's ceo is speaking exclusively to cnbc in his first tv interview taking that top job last week. our chief international correspondent michelle
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caruso-breyera joins us. michelle? >> i'm going to live this very bright light on television, but i want you to pretend it's inside a mousium or a server farm. if you use water to put out that fire, you're going to ruin the paintings and electronic equipment so 3-m has a new product called no vac. watch this. i'm not going to pour out the liquid. i'm just going to pour out a little bit of the fumes, and the fire goes out. pretty amazing, right? we'll show you more cool stuff from 3-m right after this commercial break. don't move here on "power lunch." a brand new start. your chance to rise and shine. with centurylink as your trusted technology partner, you can do just that. with our visionary cloud infrastructure, global broadband network and custom communications solutions, your business is more reliable - secure - agile. and with responsive, dedicated support, we help you shine every day of the week.
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so everyone goes home happy. shares of apple are now up $5 on the day. that's almost 1.25%. 447.17 is the last print, and, of course, we are at the apple developers' conference in san francisco. scott wapner is anchoring from there, and we have jon fortt inside that conference, so he's bringing us all the latest headlines so you don't have to move. we'll bring you everything you need to know as tim cook begins his address. ty, back to you. >> 3-m, as you may well know, is on the cutting edge of innovation going well beyond r & d. 3-m shares sitting at new highs, 110.47 right now. cnbc's michelle crewsa-cabrera
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speaking exclusively at the live innovation center in mexico city, michelle? >> hey there, tyler. we showed you in a novak fluid earlier that puts out fires. it's also used for something else. we have a much larger quantity here. they put computers into it to keep them cool so that way your server farms can be smaller. you don't need as much electricity for air conditioning, et cetera. it is safe for electronics. watch. here's my phone. i'm going to put it right in there. i'm going to leave it in there while we show you some of the cool stuff they have in their lab in minnesota and take you out after the break and show you it's going to be just fine. we went out to minnesota and got an exclusive look at the labs and all the innovation they are working on. take a look. >> 3-m known for postit notes, scotch tape and inside the company's new decline lab the team takes old staples, gives them a facelift and tries to
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make them cool. from high heel shape dispenser and, even, even zebra print lint removers. >> this is a business we has really been good for us. >> help to reintroduce the category. >> of limit removers? >> yes. >> kevin says the recently revamped design lab is crucial to bringing in new talent and new ideas. mick lass may be only 23 years old, but he's a senior product designer. why does such a young, hip guy want to work for such an old-school company? >> one day you could be working on a laminateors and the next day you're working on a spray paint gun and the next day it's tape. it's that diversity. i always found it really fascinating. >> one sort of new product out of the lab has already garnered a side of the word, the big pad. >> got good idea.
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>> this is just a really big post t. why didn't you think it baf? >> it comes out of this environment and gives us the ability to look at things in new ways. >> now, because the company sells so many products all over the world, it's also susceptible to up and downs when we see them within the global economic psych. that's one of the reasons why when they announced earnings for the first quarter and also for the year, that they were below what analysts accepted. they are very sesible and that means more sales for now. you can see it's working just fine, and it will be dry within seconds, and i'll show you this fire thing run more time here because i think it's so cool. and i'm going to do this. we'll do it the old-fashioned way, how about that? this is one of those bad tv moments, guys, this is what we
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feared. it's happening, it's okay. okay. now, i'm going to take this liquid, we're going to spin it around and watch this, there comes the heavy vapor, no liquid came out. see. isn't that cool, and this phone is very dry. it's really cool. it's amazing. >> it is amazing. >> back to you. >> it is amazing, michelle. thanks so much. really appreciate it. i wonder if it was the fumes from the phone that kept the candle from being able to be lit. that could be. you never know. >> that's true. >> thanks. >> all right. let's send it over to josh lipton for a quick market flash. josh? >> have a look at soda stream which is enjoying a nice move higher and hits a new week 52-high. the company cancelling an appearance at an oppenheimer experience and it seemed flying investors might be implying, lots of rumors that was denied
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to cnbc's becky quick. barb, back to you. >> stopner has an update from a. scotty? >> sue, thanks so much. the headlines are starting to come in. on the stage right now is the senior vice president of software engineering, and apple has just announced the next generation of its mac operating sis team tab called mavericks. that would take the place of mountain lion, a couple of the features that they say they have been working on. number one, extending the battery life. everybody that uses a mac would like that, right, and the other part is finder tabs, so the headline is coming in. tim kook is off the stage. we're looking for the ios operating system running iphones and ipads, and there is news to be expected that is going to come out regarding those. you can see the stock is moving around just a little bit.
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as we came on the air, as tim cook took the stage, stock at the highs of the day and pretty much sitting there in wait-and-see mode as all of us are as well. guys, back to you. >> all right, scott, thank you. back to you in just a tomb of minutes. meantime, trading action is kind of quite for a monday. a lot of forecastous on the united states section and there's a lot of green with the interest rates. >> interest rate sensitive groups are getting hit. home builders, we talked about this earlier, are on the downside. a downgrade over at lenar, but also home-building stocks have been under pressure for the last two weeks as interest rates have been going up. my personal opinion is they are not rising fast enough to really put any dent in sales of homes at all, but it's got people concerned a little bit. take a look at some interest rate sensitive sector like real estate investment trusts who have had a tough time recently. utilities did a bit better last week and are under pressure again today.
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tonight bond etfs, down again and the tlt, that's the 20-yearics the long-term treasury and the agg is the big found that includes all kind of pounds, including corporate and government. weakness in commodity stocks following on weakness in britch countries. brazil at a four year lie and africa two-year lows. russia near a ten-month low so we're seeing the global weakness story play through in the commodity stocks as well as commodity-rich countries as well. >> very interesting. thank you. see you a little bit later, bob. apple making the big headlines from its dellers' conference. what about the rivals? seema modi is following those at the has damage for us. hi, seema? >> hi, sue. apple shares react together latest announcements made by tim cook's at the company's developers' conference.
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keep an eye on some of the competitors in the online music space because that's where they expect apple to make an announcement. google is trading higher on the day. speaking of tech, am don expending its way. we're seeing shares of am shon trade-year on the day. ebay, micron tech, from the semiconductor space, and take a look at nasdaq, sue, off its high and in the green, composite nearing 3,500 which, of course, is that key psychological level that investors watch. >> thanks, seema. to gold now because that market is about to close. jackie d'angelis is over at the nymex today. good afternoon. >> good afternoon. a mixed picture in the metals space. we started down across the board today, but the prshs metals managing to gain some steam into the close here. gold holding above the 1,380 mark. right now gold is up 3 bucks.
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roughly a 1% gain, that after seeing pressure last week. both gold and silver are higher. some traders say it's in safe haven buying that we came on the numbers that came out. topper, a big one it is move to the down sed and that, of course, on the back of the china data as well. back over to you. >> down here on the floor of the nyse, one thing they aring about is the move in the yield. how much hour could you think it will go. >> you can see the intradeal high is 1.23. on the 29th of main we had a rate of 22.93.
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should you be raped, and as as look at going back to april. testing ongoing 14-murrant heels. bob talked about the hyg and high. he's look at the intrakay chest, can hold on -- if we now go to a 24 hoour site, it shows you it can't even hit the '95 level. 95 was the low level week, and if we look at the dollar index clear to date. the information is negative and many think the upside is that it's something to pay attention to. >> rick santelli, thanks very much for the bond report. most mondays we get a lot of calls but we'll hear from jeff kilburg, a cnn contributor. let's take them, jeff, beginning with the upgrading of facebook from a buy to horld.
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analyst jordan hoja thinks fook is one of the most activities in the center and the shares down 35% since its/po a year ago. >> sewn a nice time. i'm a longtime facebook bull, but they are still recovering from this ipo, that black eye on the i'm yoepio. can't get over there. one of the most hated tech stocks and he also talked about the inclusion of the s&p 500 and i think we'll see it outperform. >> loves it there. up 4% today. let's move on. oppenheimer downgrading morgan stanley to perform from outperform. one analyst says we believe that further outperformance would need to be driven by a sustained
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improvement in returns. morgan stanley shares surging 90% over the past year, do you agree with this one? >> i do. you're right, moran stanley is up and look at this kwp. very repillient, nearly $2 million just in their financial advisory vertical. i do think they are being very prudent, booking pocket. i would like to see them come down and i think financials have red this rally, so this is a good call other to book profits. >> mccarron to outperform from neutral. one analyst said we upgate from
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hoisted, i don't know what hoisted means, but what hoisted estimates for fiscal 2014 and physical can a 2015. hasting those estimates, do you agree here? >> well, the only thing we like to talk about in hoisting is the stanley cup because the blackhawks are going for it, but back to the net, tyler, a lot of things going for montanto right now. they are the so they have a great global footprint and the revenue is growing. they will launch a $2 billion buy boc and one thing that was pointed out today and there's a large activity to the bash irside. once we saw north korea eventually want the words. right now they have to get through the volume knit and i do like it from a long-term perspective. >> jeff kilgore, heard being
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hosted on your own. so, back down two? >> i'm go the going this, ty. it's the mobile abb and taking the app world. speaking of a. gets about pack out to scott wapner who is tracking the latest healed lines out of the worldwide developers' conference in san francisco. scotty? >> what will tim cook say about iradio, i 75 and so much money. if you would enthis stock or rate to hold the kints, you cannot affect to fix. we'll bring you those headlines when "power lunch" comes back.
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