tv Closing Bell CNBC September 6, 2013 3:00pm-4:01pm EDT
it's not like there's not precedent for ways to get it out there and incent them to spend it. look, apple is repeating what they've done through their entire history. >> right. >> do something amazing, have this long lull that puts them behind. >> okay -- >> we're running out of time? >> you're the best. >> we talked to genetics, a company in that area, just yesterday. i'll leave it there. mark cuban. thank you, jim. enjoyed it. >> great. >> have a pleasant weekend, everybody. hi, yes, we enter the final stretch. welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange where we have already had a very volatile day in this market. >> i'm david in for bill. we're on dow 15,000 watch, of course, on today's show. for a while, syria wasn't overshadowing, worried that russia would be more involved if
the u.s. takes more action in that country, and then the fears subsided, and a bad jobs report interpreted as good news for stocks, because investors think perhaps it will mean the fed won't taper later this month. but is that the right bet? we'll hit all of the important questions from all sides. >> so just how bad was that jobs report? we are going to be talking with the former top economic aide to the white house, christina roma with us, and the battle for the federal reserve seat is heating up. we'll talk with her. she worked with larry summers in the early days of the obama administration. why are so many people dead set against it? and the president is set to address the nation prime time on tuesday, making the case for military action on syria. we'll get reaction from william cohen. in the markets right now, let's look at where we stand. there's a good rally under way. as you can see, we are off of
the worst levels of the day, which happened at the hope. we're now showing you a gain of 33 points, just shy of the high. 14,981 last trade on the dow. nasdaq, gains there. double-digit moves. 14 points higher. also at the high of the day. 3,672 approaching the final stretch. the s&p 500 up about 7 points. as the market continues to react to the weak jobs report, how do you want to invest, and what does this mean about the fed action, the meeting in two weeks? >> yeah. we're closing in. of course, steve liesman knows that, and he has the results of a new cnbc fed flash. it's a flash survey. take it away. >> reporter: hey, david. it's a small one we do quickly, as opposed of the one we do ahead of the meeting. the market believe the fed's plans were shaken but not stirred by today's jobs report. you can see here when we asked people what happens to your belief in what does the august
jobs report do to your belief in tapering, september, 62% say less likely. october, about even. and december, you can see 32% more likely. a little shift in the thinking that maybe it happens, maybe undercutting the sense it's september. however, when we look at what month people think the month will happen in, what you see is the plurality, 43% still point to september, though they've reduced the average amount of taper expected from $19 billion in our prior survey to $13 billion. you can see there 48% had picked september, and the average month, because you have to include the outlying month is november 2013, the average month for ending qe is august 2014. that, at least, is the consensus market expectation. consensus also sees a little more qe than they had anticipated. 942 billion versus 922 in the prior survey. you can see they're still looking at a pretty sizable amount of quantitative easing next year. 375. that would be if you figure out through the august 2014 date
about $45 billion a month. respondents believe around 80% of the impact of the taper they expect is already discounted in the treasury and mbs markets, but a somewhat smaller, 73%, factored into current equity prices. so there's -- the belief is there's a bit more for stocks to adjust than there is for mbs or bonds to adjust to a taper. and the market outlook, which is interesting. 3% 10-year seen in december 2013. 3.3% for june 2014. s&p, now that's a mark down from the prior survey, 1,654 and 1,704 in june 2014. and the fed funds remain under control. the market does believe in a september taper but not a whole lot, guys, in a fed funds rate. the market did push back the expectations for the first rate hike from the average of the third quarter of 2015 to the second quarter. guys, shaken but not stirred in the belief of a september taper. maria? >> all right, steve. stay right there. we want to join the conversat n conversaticonversation
in our "closing bell exchange," with peter, john, michael, and our own rick santelli. first, let me get your take, michael yoshikami. the market seems to have anticipated the taper will come. here we are at 3% on the 10-year. is the taper already priced in? >> i think the tapering is already priced in. i think if the numbers play out the way steve outlined in terms of consensus, i think the market's priced in even more tapering. so i think that perhaps markets ahead of what's, in my view, likely to happen, which is maybe not 13, maybe even 10 billion reduction in tapering in september. i think that's more likely, in my view. for that reason, i think there's a reasonable chance that we're going to see fixed income yields actually drop and that the market's going to stabilize and go higher from here, because i think that there is more negativity around the tapering
than i think perhaps is going to be somewhat impacted by what happened today in the jobs report. >> john, let me get your take on this, particularly on syria. you know, what are you supposed to do with that? do you push it to the side and ignore it? >> you can't push it to the side. we never know what really is going to happen. sometimes we're more aware that we don't know what will happen. this is one of those circumstances. i think the market -- i won't say expecting the worst, but over the next couple of weeks, until something happens, it will overhang it. it's important to remember that some of this has been priced in to a certain degree. you can never discount the worst. i have to admit that. on the other hand, i think in three, four weeks -- maybe three, four months -- this will be farther in the rearview mirror, and fundamentals will be the sense. i'm an accumulator over the next month or two. >> rick, what's your reaction? >> i'd like to be able to take this big tube of lipstick and put it away, because to me, putting lipstick on today's number just shows -- you know,
here we are at 45 points in the dow. [ laughter ] we're up 45 points. we shouldn't be up 45 points. and when i look at yields, they're now up 16 basis points on the week. so we could talk about the taper. nobody has any answers. i'm still not convinced that the fed group even has an answer as to what they're going to do the next meeting. the one thing i'm sure of, no matter how the taper goes, the treasury market, the world's high-quality sovereign debt market, is pricing in less. and it's getting more towards a real normalization and yields falling after the lipstick kind of number today, in my opinion, is a good thing. >> what have you got there, rick? show us -- you had a tube of lipstick? >> yeah, yeah, because the labor secretary -- yeah, mr. thomas perez tried to tell us how great that number was today. so i thought i was going to mail him some lipstick so he could try to put it on that giant pig of a number today. >> ah, okay! rich peterson, jump in here. >> well, maria, i think what
we're seeing right now is just the uncertainty that goes on, what's transpiring in washington. the fact, you look at equities now, we're trading at about -- less than 15 times forward earnings, less than 13 1/2 times 2014 numbers. the fact is, so much uncertainty. the fact is, whatever happens with the congressional vote -- if it goes up or down -- there's more critical issues in terms of the debt ceiling, in terms of the fed replacement, the discussion today of senator liz warren of massachusetts will likely oppose larry summers nomination if that comes about. the fact is we're seeing a deceleration of earnings. we went from over 7% in the fourth quarter last year to over 5% in the first quarter. expectations now for third quarter. less than 4%. financials are going to go from the best in the second quarter to the worst in the third quarter, and that's in no small way contributed to by higher interest rates. even though good news about ism,
about car sale, and job numbers to the extent that we -- >> rich, can i interrupt you for one second? i'm confused. we have a hugely steep yield curve -- i know that's the wrong adverb there. it's incredibly steep. why is it that banks are expected to make less money with this environment? you would think that if these banks cannot make money with the steepness of the yield curve, you ought to sell their stock. >> well, here's one arcane, you know, statistic. you talk about qsep requests, requests for identifiers for securities. in the month of july, it was one of the worst numbers for qsep requests in the past two years. >> so it's trading. >> well, not just for trade, but forthcoming merger activity, forthcoming refinancings, just forthcoming activity by -- >> okay. >> -- investment banks for traders. so that does have decline. you know, even though housing numbers look good, you know, mortgage refinances will be affected by the higher rates, i
think auto sales, you know, rick mentioned earlier this week about the subprime auto loans, it could impair auto sales. there's a lot of factors that could come into play, and also the fact that beyond the big banks, you got the real estate issues. >> michael, you know, every t e time, it seems as though you want to get constructive on the u.s. economy, we seem to hit a hiccup. it's been going on for years now, it seem, one of the reasons we have qe to the third degree. i'm curious how do you view this jobs report, which is uniformly been received as negative, perhaps except by the labor secretary, in light -- how do you make that square with those who believe the economy is getting stronger as we head into the end of the year, and what does that mean if you're an investor? >> well, i think from an investment standpoint, you have to look at what this is going to show long term, what it shows long term. you know, look at the worker production rate. that's really the number, i think, that shows what will happen in the long term. this economy may be getting better, but it is stumbling
forward. it is struggling. we have exports that are up. why? because the dollar has been weak in the past. so i think what you have to do is you have to take a shorter-term perspective, be tactical and buy in the dips but position your portfolio strategy for something that no one wants to talk about right now, which is globalization and cash-flow companies. because the economy -- i don't know, i hate to be so pessimistic on a friday before the weekend, but i just don't think the economy really is structurally that sound on the long term. and i think you have to invest in companies that are going to pay great cash flow and have global growth footprints. emerging markets aren't going to be down forever. they will come back. >> and a lot has to do with the expectation, though. you look at the chart of payr l payrolls. we went up from june. june was rerised lower. s that was a big part of the concern. doing 169. it's enough to put down the unemployment rate, whatever is happen with the participation. you know, i think, yes, we should be doing -- we could be
doing more, but we're still putting more people to work, we're still bringing down the unemployment rate to 7.3%. >> oh, come on, steve. >> i know you're putting -- i know you're putting lipstick on -- >> no, steve. yes, absolutely. you look at -- let me tell you something. if you look at the 35 to 40-year run of the labor force participation rate, you come up with a generalized trend line average of about 65. if you use 65, you turn 7.3 to 11.4. >> right. >> and i'm telling you, that 4% spread are millions of americ s americans. and what are they not doing? they're not contributing to growth in the economy. what are they doing? they're sucking up services, because they need to. that's all. >> rick, rick tell me, 35, 40 years ago we had 10,000 baby boomers retiring every day. >> you know what, steve -- it doesn't matter! we have to deal with it! >> i agree with it. but how do we deal with it -- is
that a failure -- >> -- 7.3. >> rick, hold on. if people want to retire and leave the workforce, because they have aged -- >> it's not the only dynamic. >> it's not. but when you talk about it, rick, you need to talk about it in the correct perspective. which is -- >> i did. >> no, you didn't. some percentage has to do with retiring baby boomers and demographics and another percentage is discourage workers. >> steve, if you sue me with a million bullets, why would we debate which one killed me? >> it's an irrelevant metaphor for what we're talking about. >> the metaphor is we have structural issues where we can't put enough people to work, and we need to get to it. i'm getting along just fine, david, truly. >> that's true. >> the problem is overstated. >> steve, the participation rate certainly told volumes in terms of the number of people that stopped -- >> right. maria, it's been falling -- it's been falling -- >> we'll talk to you soon. >> -- it's been falling since 2000. it's been falling for 13 years.
>> thanks. >> you're welcome. >> have a great weekend. the 10-year treasury, trading from 3%, after today's jobs report, a 3% yield, which it did briefly break above. michelle explains why that is a crucial benchmark and it could have an impact on a variety of your investments. michelle? >> hey there, david, it's not that 3% is such a high level. it's much higher than a year ago. when the 10-year yield rises and rises fast, it has two impacts. borrowing costs and other types of investments that pay interest. the 10-year yield is the interest rate the u.s. government has to pay if it wants to borrow money for 10 years. today, that level briefly crossed overnight 3%. look to the left of the chart. one year ago, it was 1.68%. so a near doubling. why that's important. mortgage rate, credit card rate, car loans, business loans, generally set based on the 10-year yield. so when it goes up, those rates go up, too. last year, the average rate on a
30-year fixed was 3.55%. now it's 4.57%, says freddie mac. the rising 10-year yield can also hurt parts of your portfolio, because it provides competition to other investment that pay dividends or interests. why put money in something that pays 3% dividend or 3% interest when you can get it from what is considered a very safe investment. yes, u.s. government bonds still considered a very good credit risk despite all of the controversy levels about our levels of debt and spending in the u.s. so investors tend to switch out of riskier investments because they can get into something that they perceive as safer. that's why emerging markets, high-yield bond, some high-dividend paying stocks have sold off as we've seen interest rates rise. maria, back to you. >> thank you so much. we want to get a check on the stocks making big moves. before i hand it over to dominic chu, i want to point out that the market has lost some of the momentum. we're up 20 point, but in the last 10 minutes or so, we have been really giving up some of
the early ral. dom, what's really moving and shaking today? over to you. >> reporter: maria, there are standouting. let's get things out with the huge upside mover. quicksilver. the surf and sport apparel, not the oil and gas company. the stock is soaring after the company reported earnings that beat estimates. sales did fall a little bit short. investors are just optimistic about the company giving its progress on overseas expansion. and shares of johnson & johnson moving higher, after reports the consumer products and drug giant is kicking off a sale process for its clinical diagnostics unit. the reports say the company could get around $5 billion in a sale for that unit. it makes blood-testing equipment. on the downside, check out smith & wesson, the firearms maker beat earnings and sales but offered a less robust forecast due to fewer days of production, and speaking of downside, mattress retailer, mattress firm, is getting hammered. they posted profits and sales and a forecast that missed
estimates. the stock had been up 67%, so far entering today's trade. i want to make a quick mention of this, guys. facebook, the world's biggest social networking site, trading shy of a record, yeah, a record, the highest price it ever got, 45 bucks back on its ipo day on that fateful glitch-filled trading day, may 18, 2012. maria, back over to you. >> thank you so much, dom. 40 minutes before the closing bell sounds for the day. after the break, we'll talk to christina roemer. we'll get her take on the jobs report and find out who she thinks is the next fed chair. some say it should be her. after the bell, we'll find out how companies are preparing for obama care from the cfos of at&t and u.p.s. that and more coming your way on "closing bell." (announcer) at scottrade, our clients trade and invest
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david, that is the question. is the jobs report enough growth for the fed to scale back or another sign of the weakening economy that can't survive without the fed's bunch bowl. joining us now is christine rommer. good to see you. thank you for joining us. >> great to be with you. >> what's your characterization of the jobs number? clearly, everybody is talking about it being a disappointment, the downward revisions for the prior months, also signaling that the momentum has slowed. what do you think is happening? >> i agree, it is a disappointing report. there's sort of no way around that. the headline number wasn't too far off expectations. but, you know, even at 169,000 jobs created, that's not anything to really crow about. we need a lot faster than that to repair the labor market. just a little context, employment is still 2 million
down from where it was before this recession started. so we still have a long ways to go. >> a lot of focus on the labor participation rate, ms. romer. it's fodder for debate between steve liesman and rick santelli. i'd love to get your take. is it abnormally low, or is it really the result of the baby boomers retiring? >> oh, i think it's unquestionably some of both. one thing that i certainly noticed in the numbers, and i think a good perspective to bring, is about half of that 300,000 drop in the labor force was teenagers. and so, if that's teenagers going back to school, you know, normally that should be caught by the seasonal adjustment, but that, we know, can be a little messed up. you know, that's less troublesome than if it is prime age workers dropping out of the labor force. we certainly have seen some prime age workers drop out. we know the
employment-to-population ratio is a better indicator of the real health of the labor force. that number is down a lot. >> so, i mean, how do you move the needle on that number? let's talk about this rate. this is really one of the big stories of the day. people have just simply stopped looking. >> well, it is certainly -- it is certainly worrisome, and especially you would expect as the economy is getting a little bit healthier that people should -- who might have been discolon discouraged a year or two ago should be pouring into the labor force, not continue to drop out. so it is certainly something to be worried about. >> which gets us to those revisions. you would expect them to be revised up, instead, particularly for july, we had significant revisions down. i guess i'm curious. does this -- does this make you question the pace of economic growth as we head into the fourth quarter when there are a lot of people starting to get a little more optimistic? >> certainly the revisions are problematic. it paints a picture of the last
three months of pretty anemic job growth. now, you know, how to interpret that, what we know is we've had a lot of headwinds on the economy. we had a lot of fiscal contraction at the start of the year with the tax increases and the sequester. ever since the fed started talking about tapering, we've seen, as you all have been discussing, long-term interest rates have jumped up, at least a percentage point, and emerging markets are currently having a rough time. so all of those are holding back the u.s. economy. so at some level, it's not surprising that we're seeing somewhat anemic growth. the big question is are they going to wain or are they going to get worse? and that's, you know, going into the third and fourth quarter, that's going to be the big questions and what we see in the data -- >> well, we only have a couple of weeks left in the third quarter. what's your expectation for the economy for the rest of the year? >> you know, i think like most people, i keep hoping it's going to pick up.
so i certainly expect gdp growth to be a little bit better, probably not a lot better. >> i'd love to get your take on the fed chair. we are going to have a new fed chairman. who it will be is still unclear, although it does appear the president still favors or favors perhaps lawrence summers. who would you rather see, lawrence summers, janet yellen, cohen, perhaps some other name? >> i am strongly in the janet yellen camp on this. >> why? >> i think she is -- you know, i think she is as smart as they come. i think she is an expert in monetary policy. i think that's really important. she's been working on this for the last 10 or 15 years. she showed good judgment as a policymaker. and then, the final is that more intangible one, but it is so important in the personality and leadership style. i think the modern fed is a very democratic organization. and you lead that by bringing people along with you.
and i think janet will be consensus builder who can get things done and protect the independence of the fed. >> that's great analysis, christin christina. increasingly we're hearing that people like yourself are siding with janet yellen. yesterday, we had sheila baron on, and she reiterated her support for yellen. listen to exchange. do you think larry summers is too tied to wall street? >> i don't know. i probably said more than i should about larry already. let me just leave it -- saying positive things about janet yellen. i think she's a fabulous candidate, would be a spectacular choice as the head of the fed and i hope the president nominates her. >> what is the issue with larry summers? what do you think? >> well, the thing that's been impressive about janet, or one of the signs that she is such an outstanding candidate is this sort of outpouring of support from unexpected places. you know, i have had people that
i went to school in -- i went to graduate school with, e-mailing me out of the blue, what can we do? how do we help janet's case? i think you are seeing -- i think -- i like to think of it as much more widespread support for janet rather than a lack of support for larry. >> yeah. it's funny. i mean, you know, some people might say, oh, you know, he has too many ties to wall street. but you probably want some ties, because you want a guy in there, or a gal in there, knowledgeable about the market. is he too abrasive to work with? you worked with him. is he too abrasive? >> so, i think you're right, you want someone who understands financial markets. that's clearly important. they need to understand lots of things. monetary policy. regulation. what happens in financial markets. and i think janet, by having been at the fed for so long, obviously understands those. you know, personality is a big issue. under chairman bernanke, the policy making committee has
become a very democratic organization, as i said. and you don't lead that by just telling them what to do. you've got to bring them to your point of view. you have to -- you have to persuade them by a good arguments and by really listening to them. and then responding. and i think that's where janet's going to be much stronger than larry. >> i could see what you're saying. he's probably going to be telling everybody what to do at the end of the day, right? >> that's a part of his personality. >> thanks, christina. good to have you on the program. >> great to be with you. >> we'll see you soon. 30 minutes before the closing bell sounds on the wall street for the week. the dow up about 21 points. >> yeah. -- had a close connection with ballmer and now speculation ma lawy could succeed him at microsoft. which would be the better stock to own? does that equation change if mulally were to leave ford and
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welcome back. it is the story that has both the auto world and tech world buzzing today. microsoft reportedly trying to recruit ford ceo alan mulally to be the next ceo. here's what mulally told cnbc earlier today. >> clearly, immensely focused on ford, and we have a great partnership with microsoft, as you pointed out. they helped us and partnered with us to develop the original sync system, so we look forward to continuing that relationship. but i absolutely love serving our ford. >> all right. so which company is a better investment for you, ford or microsoft? and if amulally leaves ford to head up microsoft, does that change the numbers? we're joined by gina sanchez, and, gina, kick us off. two very different companies. if you had to buy one, would you
pick microsoft over ford? >> obviously, the choice is clear. whose ceo is being asked to run which company? i think ford is a great stock. they have turned in fantastic earnings. they've turned in -- they fired on all cylinders. i mean, we've seen an increase in net income, an increase in prenet profits, liquidity, operating margin, the whole shebang. and they've been doing that by focusing on overseas growth. they've had incredible growth in china, and they've had incredible growth in india. what makes it an interesting story going forward is kind of what they're planning in india, in particular, they've had tremendous success with the ford fego, selling into the small-car market, and the ford ecosport, the compact suv. next year, they're opening a new plant, $1 billion investment. and we've seen, you know, incredible growth in disposable income in india.
so that will be great for them. but, also, the european business, which has been a laggard is starting to pick up. we've seen -- >> uh-huh. >> -- a stabilization there in new auto demand. and so, i think it's a fantastic stock to own and certainly i think much better than microsoft, who's been having significant issues. >> all right. >> j.c., what are you seeing? >> i agree with gina. microsoft extremely boring. right now, i want to talk about the chart of ford. it's so close to becoming an extremely bullish chart. i've had a longer-term chart, going back to 1999 and 2000. the first thing you notice is the extreme drop from 60. over the last 13 years, the stock has basically moved sideways. what gets me excited is when it was moving sideways, it traced out and inversed head and should irs, left shoulder occurring 2002, 2003. the head 2008, 2009 and just recently the right shoulder. it has a little more work. and i want to see a close above
20. if we can get the stock above 20, it could be off to the races. now, don't get too excited. it's a longer-term pattern which has longer-term price implications, but the stock is getting close to getting very bullish in my book. >> all right. good analysis on both fronts. thank you very much to you both. we'll see you soon. >> we should point out microsoft's board still in the midst of who will lead that company. very much unclear. as for the dow and s&p. it's clear they're having some gain, but also that they're off from the highs, certainly off from the lows when we were down sharply on words about syria earlier in the session. president obama taking his case for military strikes on syria straight to the american people in a prime-time address next week. could an attack escalate into something nobody bargained for? former defense secretary william cohen will join us next. if you're serious about taking your trading to a higher level, tdd#: 1-800-345-2550 then schwab is the place to trade. tdd#: 1-800-345-2550
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who put a lot of the word the into context, and, in fact, the market started to rally after that. steve sedgwick is still in st. petersburg, russia, and he joins us. >> reporter: yeah, i think they were bellicose comments and the world should take note of them, but they were comments that were a reiteration of what we heard previously. it wasn't an escalation. markets are concerned about an escalation, not a reiteration. let me tell you what he said. he was answering a reporter's question. will we help syria? yes, we will. we already are. we send arms, economics, we expand our cooperation on humanitarian sphere, as well. so the point he was making is they help in many ways and anyone can just web search the amount of sales, arms-wise, that russia sells to syria, as well. it was a reiteration rather than an escalation. i think that was a very clear point. that said, there are clearly two very intransigent views. on one side, putin and his allies, and on the other,
president obama and his allies. a whole host of countries signed up to president obama's point of view that they held responsible the assad regime. we had been talking about economics here at the g-20, as well. that's kind of what we came here to do. but syria dominated literally from the start to the end, as well. to his credit, president putin did try to put that on the table last night. a couple of issue, one for the u.s. audience, about monetary policy. the communique said monetary policy changes, maria, need to be carefully calibrated and clearly communicated. that's because the emerging markets are very concerned about tapering. back to you. >> all right, steve, thank you very much. steve sedgwick with the latest. the next guest is familiar with the military air strikes having overseen u.s. operations in serbia and kosovo. he's been face to face with vladimir putin. >> we'll welcome former secretary of defense william cohen. mr. secretary, thank you for being with us. first, just give me your opinion on where we are right now, seeking -- with the president,
seeking congressional approval to launch missiles at syria. do you support president obama in that desire? >> well, it's unclear to me exactly what the mission's going to be. this is part of the problem the president's having. for example, he has talked in the past about firing a shot across the bow of assad. that to me is not going to achieve much, if any, of a result on the ground, other than saying, well, you crossed a line, we're going to punish you for it. but it leaves it quite ambiguous in terms of the impact. secondly, he has had to address senator mccain and also senator lindsey graham, who have argued if it's just a shot across the bow, we're not with you. so he's had to tell them either in private, and guarantee it will be much more robust attack than currently is being talked about publicly in order to get them on board, plus much more muscular support for the syrian rebels. so on the one hand, he's talking those who want to go to war --
and this is an act of war, by the way -- that it's going to be robust, to those who were reluctant, he's saying it will be limited an surgical and antiseptic and relatively bloodless. that's the problem he's having right now. i think he's got to make a persuasive case to the american people that we have overwhelming evidence that chemical weapons were used, that the international community is not just him alone that feels this is intolerable. action must be taken, and then go to the u.n. and present this to the u.n. security council and force russia to reject it. once the evidence is made very clear that russia's now on the side of using chemical weapons against innocent men, women, and children. that's what he needs to do. >> secretary, i guess some people -- i guess -- i'm scratching my head, saying, why are we telegraphing everything so specifically, no boots on the ground, it will be antiseptic, it will be clean, military strikes. obviously, syria knows
everything we're doing. but put that aside. i want you to give me your analysis on that. you know vladimir putin. how afraid should we be of him? >> he's made it very clear he will continue to support the syrian government. he has indicated he may even send s-300 missiles, very highly sophisticated group of missiles that would pose serious challenges to our air force if we ever seek to send in our air force for additional bombing as opposed to cruise missiles. it's not in doubt that russia will be there to support assad. the iranians will be there, hezbollah will be there. that's in the mix of things. that shouldn't come as a surprise, and it shouldn't be seen as an escalation. it's going to be -- meaning they'll have even higher levels of weaponry going in, by them and by us, and so the carnage is going to increase potentially. i don't see us going into a cold war stance with russia over syria, which is in dangerous of disintegrating in any event.
>> what's in the best interests, then, of the united states? there are many who look on the situation on the ground, well, we can't stand assad, but at the same time the rebels seem to be getting more and more radicalized and they're as much of a threat as he is. where do we end up, and not to mention the region itself, just driven by sectarian v tatarian not just syria, but iraq and throughout. >> it's not a win-win under any circumstances. if the united states takes action, it does, in fact, certify that the president, when he draws lines on behalf of the united states, we intend to enforce them. it's important. it's not to be minimized, because other countries are watching this, including israel. this is more about iran than it is syria, because we have made a pledge to the state of israel that if a red line is crossed by the iranians in pursuing a nuclear capability, we will take military action. if we fail to take action in this particular case, however limited, that's going to send a
signal to the israelis that they're on their own. and they have shown by past experience that if they're on their own, they will act unilaterally when they see an existential threat. it's been phrased as syria crossing a red line, putting the president on the side of saying, well, now, we have to take action. i think there's still an opportunity to go and work with the russians to say, look, we want to try to find a political solution here. we're prepared to take action. we think it's not a great solution. there are all sorts of imponderables, i mean, incalculable issues involved, in terms of who will be involved, how many will be killed, how many innocent will die, et cetera. let's see if we can't work this out politically, which should be the end game. i think we have an obligation to do that, if we possibly can. i don't think that putin has ruled that out. once the evidence is so compelling, if we have that kind of compelling evidence. >> all right. we'll leave it there. mr. secretary, good to have you on the program. thank you very much. >> good to be with you.
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welcome back. the market's three-day winning streak in jeopardy now. the dow up about three points. mary thompson has the big moves. >> reporter: a wild day. 220-point swing for the dow, holding onto a fractional gain now, which would make it the fourth day in a row for the markets. today, if indeed the markets close in the black, would be the first day that we have seen a divergence in rates and stocks. they've been moving in tandem, i.e. higher, throughout the day, until today, we look at the chart of the 10-year treasury's yield over the past week, climbing to 3% overnight and dipping on the jobs report we had earlier this morning. this, in turn, has basically given a boost to a number of rate-sensitive groups that have been leaders today throughout the session -- reits, utility, consumer staples. for the week in total, they've been laggards. also seeing strength today in homebuilding stocks. the stocks, of course, hard-hit
since may when bernanke made the comments about tapering. today, rebounding a little bit, in particular ryland group looking strong. and energy stocks have been a winner. that has to do with the pick up we've seen in crude oil prices, and energy also moving higher today. but losing some steam. as we head toward the close, the dow down 7 points. david, back to you. >> thank you very much, mary thompson. what have we got? 10 minutes before the opening bell -- >> the opening? it's the closing bell! >> i sit at this desk for the opening bell every morning. >> i know. >> it's happened. it's the closing bell. it's friday. we can leave for the weekend. >> it's true. thanks, david. laying out the three things he's watching closely as he tries to figure out where the market heads from here. back in a moment on "closing bell." king all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. that's why we partnered with hp to build the new nascar
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we've got the -- you can see it right there, of course, the dow jones is in negative territory. it was a lot lower earlier, but we did have significant gains. they're now all gone. >> art cashin said $500 million for sale in the close. a lot of nervousness having to do with syria. joining us is janet engels from
rbw wealth management, and david darish. as you look at portfolio management, and you have the long list of worries, how do you advise? >> so what we're saying to investors is you need to look at the long term and look at the short term, but you can't react to every piece of news. from a short-term perspective, we're cautious. there's a long-worry list, and it will work out over the fall. as we look out to 2014 and beyond, we see a catch-up phase in terms of growth and reasonable valuations. >> any change in your opinion, david, from today's news? not syria but the jobs report? >> david, our adam parker, our u.s. equities strategist, a touch to the conservative and bearish side, put out his forecast the day before yesterday -- maria, you'll love this -- up 12% to 1,840 next year. >> in the s&p 500. >> that's right. >> and we are at 1,565. >> right. improving economy, moving up to
the 2.75% growth rate toward the end of the year and into 2014. we would use any pullback, whether driven by syria, whether driven by the discussion of the new fed chairman, whatever it is, use it as an opportunity to buy good-quality stocks -- pfizer, johnson, abbott. good, quality, healthcare stocks, buy some coke, buy some pep pepsi, buy some colgate. >> janet, the yield on the 10%. is 3% scary for you? do you advise differently when -- as opposed to when it's lower, 1%, 2% range? >> if we're saying you're looking at yields at 3%, it's not a problem overall. yields at 3%, still not even back a normal. i don't see that as an impediment. what it does become is a dislocations in the market from a short-term perspective in certain sectors. so certain sectors where there are premium valuations and perhaps higher yields they're getting impacted and they will continue to get impacted as yields spike up. that's the adjustment in
portfolios that we would suggest. we agree, quality companies looking for companies that can grow their dividends are important, and looking for more cyclical companies is our -- >> real quick. one group to own as rates go higher. what is it? >> industrials. >> what do you think? >> apple, maria. >> that's not a group. >> yes, it is. it's bigger -- it's bigger than many sectors of the s&p. >> apple. >> buy apple, and they'll get the contract, and then china mobile. a lot of good things coming for apple. the stock going higher. >> all right. the closing bell is coming up. >> next, we're coming right back with the "closing countdown." and gold has plunged 26% since hitting an all-time high two years ago. find out if the precious metal is looking attractive once again? you're watching the "closing bell" on cnbc, first in business worldwide. mine was earned in djibouti, africa. 2004.
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[ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ welcome back. i'm going to call it flat for the day on the s&p. i have alvin here. it's been a strange day. we started with the nasty jobs report. let's call it what it is. that response, sort of a positive equity market, people saying the taper may not come soon, or it won't be as much. then you get the syria worries. where do we stand? >> right down. >> yeah. >> we would have loved to close above 15,000 today. we're not going to do it. we have a big sell on the bell. we'll have to wait for monday. the jobs number behind us, now
worry about syria. >> yeah, geopolitical worries will play on the market, i guess. >> sure, no one knows how the vote will go. it will weigh on the markets. [ bell sounding ] >> there it is. the closing bell ending a short, tumultuous week. we'll see what happens on syria, of course, the votes yet to come. maria? take it away. >> thank you, david. it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." the dow snapped a three-day winning streak. a real sloppy close. the nasdaq up barely in positive territory, holding onto a gain, barely, about one point higher. s&p 500 also slipping into negative territory at the end of the day, as worries continue to swirl around syria. the dow snapping a for-week losing streak. we'll go to mary thompson now for the week that was.