tv Countdown to the Closing Bell FOX Business July 17, 2013 3:00pm-4:01pm EDT
you may own the names or stocks affected by these companies. who is expected to hit it out of the park and how you can prosper. they come back after the edward snowden leak scandal. the clients may surprise you. and remember this? the iconic kids pop in a candidate's first new flavor in 20 years. wait until you hear what it is. "countdown to the closing bell" starts right now. liz: good afternoon, everyone. i am liz claman. it is the last hour of trading. if you have money in the market or a pension plan, 401(k), you are interested in what ben bernanke had to say today.
the pullback of the bond purchasing program is critical to the future not only of the entire economy but of course your stocks and your money. the market not quite sure what to make of ben bernanke's comments in may before members of the house service committee today. peter barnes live on capitol hill where he is following every word ben bernanke uttered before the economic data was released in the 2:00 p.m. eastern hour. nicole petallides, and we have in the newsroom where she is covering the publicly traded company trying to make a comeback from that national security leak scandal. they hired edward snowden, in the middle of the security leak. the fed chairman making quite a few headlines during his testimony today, but what jumped out to you? >> the main thing is he talked
about the path forward for tapering the bond purchases, he said the course is not preset, depends on the data. more in a minute. liz: he sounded very flexible. now at the new york stock exchange. nicole: traders got a lot of what w is expected to hear from ben bernanke. very tight range today, the vicks fear index to the downside. liz: a bit later today, right? >> if any worry he was going to lose business in the u.s. government because of edward snowden, he can follow those worries away. coming up. liz: all of this and more. ben bernanke commencement of the most today. peter, back to you. he was very clear in his fed speak, kind of an oxymoron
there, did we learn anything more from the fed chairman relating to the bond buying program? >> he stayed on message with that, and said once again that if the economy continues to grow, and if it continues to add jobs at the paste the fed forecasts, he says once again yes we can start tapering later this year. but if we don't get what we forecast, we may not taper later this year, we may increase bond purchasing. with the new language was with these plans by no means been a preset course. possibly hurting the housing market.
>> many think the role is to save the day. this is very dangerous. >> this is an idea going around the fed can step away and not do anything. we have to have interest rates somewhere. we have to do something. i think we're better off getting the economy moving then not. >> when he was pressed if interest rates are going up, he kind of, i don't know, slipped a little bit at the end and said the economy is weak and if we raise interest rates, it will tank. liz: i think he was very clear when he said rates will remain exceptionally low. that remains. >> fed fund rate is what he was referring to there. the market is controlling the
mortgage rates. liz: still relatively historically low. thank you very much. not remaining low at all, yahoo. this not so much about yahoo did or did not do, it is a company which owns a stake is doing. nicole: that is right on the news. that was the winning point right here for yahoo. of course melissa meyer has done a lot with the turnaround. they're giving her credit, but when you talk about ali baba. yahoo over 24% stake in alibaba. the revenue actually nearly tripled. increase its revenue by 71%. any company anywhere. everybody is going to love it, and so with the stake in that,
that is a big deal. we have a three-year chart, yahoo is the highest level since 2008. they raised their valuation from 90 billion, that is well beyond facebook and the ipo we saw at home. it is a big behemoth. liz: that is pretty stunning. nicole: that is right. liz: we had two people yesterday, they both dislike yahoo, but listen, writes not bunch of others don't, that is why we try to bring everybody close-up to this story. i want to say 15 minutes before the top of the hour, the dow dipped back below the flatline, where backup trying to find why there is so much indecisiveness today. they have been watching it every step of the day. have had several hours, why the
indecision? >> honestly he wanted to be reassuring by saying he was flexible and going with economic data but to me that was not reassuring at all. he is not sure where the economy will go. i would feel better if you taken a clear stance on something one way or the other. to me when ther there's that kif uncertainty, you will find the caution with fed traders. liz: the dollar strengthened today what he was saying what is usually dollar negative. you will not see any kind of tightening for quite some time. >> we had something for everyone and ended up essentially with nothing. the s&p futures we have about at know how many hours.
we did take out the all-time highs this morning by one tick, little profit taking. people have to look bigger picture. he is saying nothing. i am encouraged by the dollar you just mentioned the dollar has had a pretty sharp selloff in the last week, made new highs and close lower. it can be helpful for the stock market, more safety money coming out. liz: i am very interested in everything you see that looks and spins it forward at this moment. we're still holding on to 105, $106 per barrel of oil. >> we had options expiration at the end of the day we spiked up. we settled up at 106 and a half, or thereabouts. that number looking at a long term chart a couple of weeks ago i was look at this area nearing a high.
the market rallied near the end of the day to settle just below 106 and a half. it really feels like it wants to trade up and go to $110. the third week in a row of drawdowns in the numbers. liz: david put out a note, he is a smart economist who talk too often, this level may very well hurt equities at some point unless they can make more money themselves or if the consumer can somehow find more money in his or her pocket. >> if you look back a couple of years ago we had a run-up in oil, and that hurt equities. getting to that point, that is a very good point. if the oil markets drives higher and higher, looks like it is going to trade at the end of the year, that could be a big
problem for the stock market. i think we are going stay firm. liz: some breaking news on electronic arts, the game maker. shares are falling, very close to the session lows today on a report the ncaa is declining to renew its contract with the game maker. they make all kinds of things but the ncaa says no more renewal of contract, we are done with you guys, it is falling. at the moment $23.64 per barrel. per share. the annual high as $24. so we are not that far from the year high for ea. it is down to the wire for michael dell. over his hugely controversial buyout plan may be too close to call, but not for one. a fox business exclusive with an
asset manager that owns more than 1 million dell shares. is he going with the founder, michael dell, or shareholder advocate carl icahn? wait until whom he is supporting and why. what is next for the market and your money? inside investing strategy of a money manager in a brave new world of tapering. he has billions in assets under management and will tell us what he loves right now, but perhaps just as important is what he is avoiding. next. peace of mind is important when you're running a successful business.
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have more reserves, that is why fox business is the place to be, that is why i'm glad you're with us. i asked him what investors are getting wrong about the stock. >> what they're missing is an awful lot of value right now, getting really good room moving forward. liz: we had not the housing data yet. we have to talk about it but it has some investors questioning the strength of the recovery. one money manager with $700 billion in assets says keep calm and carry on. don't worry about a single data point here or there. david, great to see you, you're always a voice of reason, which amazes me because you have a lot of weight on your shoulders.
pc specifically housing starts for a month of june tumbled 10%, a big surprise, i think. why does that not worry you about the one thing that has been sure and exciting about the recovery? >> it was a disappointment, there is no question. you have to keep in mind it is one data point occurring when there was a lot of confusion about what the fed was up to. a big backup in mortgage rates, so at least at this point it is only one data point. if this is replicated next month or the month after that, we have something to worry about. a lot of the weakness was in the single-family side, that can be multi family can be very volatile from month to month. disappointment, but let's move on for the next. liz: is that speak for then i will start to make changes in
the way i allocate my portfolio? >> i think yes, and in particular i think it would suggest the economy is not as strong for example the fed would like it to be, and it makes the commencement of tapering of quantitative easing and less likely to occur in the september, october timeframe, and that might mean he looks more attractive excellent .5% on the 10-year than we thought was the case. we will have to wait and see. liz: okay. for our viewers who are familiar. you owe me one. every quarter david and i make an s&p 500 bed. i won the most recent one. david that for the last quarter he said we would be at 1562, said 1566, clearly i won.
thank you ladies and gentlemen. what are you saying? >> i am going to stick with my assessment from back then, which is the market treads water here until they get a clear signal on the economy, so i'm going to say flat again from where we are today, so 1650 on the s&p. liz: i'm going 1675. >> have a symbolic handover. liz: i need to know what that's you are actually making stocks and investments. what do you really like right now, where do you feel there is an opportunity even though you filling may be flat for the quarter for the s&p? >> i still like stocks, like u.s. stocks better than almost any other geography that is where the focus needs to be. at the sector level, like
financials, like technology, and i like consumer discretionary. and so a couple of names in each of those in the financials i think the banks are doing better, jpmorgan has had a nice run, but it is still a significant upside, a very good quarter, things are improving the jpmorgan chase is one. in the technology space, google continues to grow revenues, and just an innovative company that continues to take market shares. liz: your third take his home depot, you're still very much a believer there. >> exactly. of course it is a direct play on the continuation of the housing recovery, which i think is still in tact. very good management as it has maybe 15% upside from here. liz: how much to look at management because frank is
amazing. look at this one your chart. a great job, he has been very confident even in light of a downgrade or two in the stock which has been the appropriate that but what else to look for when you are strategizing? you have a proven record, people want to know how does david joy do it? >> management management are exe important. you can have a great strategy, if you don't execute it will not succeed. the management is extremely important but you also have to be in a business where there is a growing marketplace. at this point housing is grown. it's obvious that that is a catalyst and thoroughl certainlo have a decent valuation. if you're overpaying for the stock you're not going to make any money. those three things i think are the most important. liz: was it underdog where he bit the nickel? i'm going to win again on the
s&p target. thank you so much for joining us. >> my pleasure. liz: 700 billion in assets under management. the closing bell about 39 minutes away. china turns up the heat in the showdown with one of the world's biggest pharmaceutical companies over a huge bribery scandal involving and money. the development that anyway doing business in china needs to pay attention to. and college the cheeseburger ring of america. now an iconic pasta in a can company has jumped into the cheeseburger bandwagon. what company publicly traded, will it feed the new profits from this flavor? stay tuned, we will be right back. you are watching "countdown to the closing bell."
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in the country. not been placed in custody, but here's the story, for chinese executives are in detention over this issue. please have accused them of transferring $489 million to travel agencies and consultancies that basically people who may have involved sexual things it the company says it is deeply concerned by these allegations which it called shameful. companies try and get doctors to push their drugs they make by giving them pads of paper that have the logo on them. certain things that are very illegal, pretty sure sexual favors are illegal. let's take a look at shares, because shares are up 20% so far this year not taking a hit this year. will follow this story because
it involves anybody who owns companies that do business in china sort of the okay corral, the frontier, if you will and guess what, the cops are on it right now. the end of july is critical for sa c capitol phone embattled billionaire. here he is, charlie gasparino. i have to push your book. >> kind of fits into this. he said he can go out to dinner every night of the week with most beautiful saleswoman at one of the most expensive restaurants as they push their drugs, whatever. then the antidepressants of the day is. this interesting sort of everything that goes on. going out to dinner is not. the pay like it will not to
olive garden, would go to the best places. he can go out in the night, that is how much of a sales job they do. when you have that sort of a thing going on, it seeps over. liz: acca member they would push drugs and say to my dad a little logo on the pen. >> getting back my private practice, there's a lot of stories if and when he will be charged, i will say this. i don't have a birdie telling me, but i spoke a lot of defense attorneys come a lot of defense attorneys related to people involved in this massive practice.
it was a full employment act for lawyers. they are saying july is the critical month. watch fox business over the next couple of weeks. this is just my gut, this thing is going to the rubber is going to meet the road. if he makes it through july without getting as ac getting hit criminally or flipping. cases after this will be a lot more difficult. i think they know they are brushing up against the statute of limitations against the company, against him a lot of different things. so i think this fit it i am not hearing this from the u.s. attorney, i am talking to a lot of people. i think the next two weeks are going to be critical. this is my gut. i think they're going to see something. something is going to come out
of this. liz: were you beef baroni person? i was the beef baroni girl. this is important. what happens with spaghettios? speakers and that stuff that for you? liz: i raised the mac was raised on that stuff and i look fine. even the 1980s. there is a new flavor in town we had it is a historic shift for one of america's favorite food brands. the company hired and is a leaker it was noted and got slammed after he blabbed about all kinds of stuff.
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reached a new contract shaking the bad news from their shoulders. >> this is very striking news. a month ago we were talking about how he may or may not affect the business with the u.s. government. it is very clear now the contractor is still a key partner with the u.s. navy. the defense determined one of 13 companies winning $900 million contract for expanding cyber security support for the military. this is the first major military contract since snowden outed himself using the job to reveal classified surveillance information. under this new deal, he will compete with the other 12 companies including honeywell and general dynamics for work with the navy over the next five years. work will include contracts for the procurement of cyber operation services which includes intelligence, surveillance and reconnaissance.
this comes a week after the u.s. air force said they were not responsible for snowden's actions last month and will continue collaborating with the firm. receiving a large part of the $6 billion in revenue with contracts from the government, so certainly something to watch closely. liz: indeed. thank you. this is for the first time in more than 20 years, campbell soup comedie companies announcia twist with a new flavor in the spaghettios lineup. the famous o shaped pasta will now include another childhood favorite flavor. cheeseburgers. they are making the cheeseburger os. that is what they are saying. the first time the os were given a new flavor profile, but back
in the '80s was the last time. currently sold with meatballs, sliced franks and infused with the health benefits of added calcium i. we will do a taste test. the closing bell ringing and 20 minutes, we are ready for a slew of companies you may own. reporting earnings after the bell in just minutes. today on the docket, intel, ibm, american express and ebay taking an in-depth look at what to expect from intel specifically next. as the high-stakes dell dell shareholder meeting supposed to be tomorrow. we don't know because it may not happen, but owning more than a million shares of the company. he has some pretty strong opinions on who should be running the company. sharing them with us right after the break.
we have seen it year to date slightly to the downside today, but investors will be watching to see what the new ceo has to say. the first earnings under the new ceo, he took over for paul. we will see with the mobile market. sales of pcs kimono those have fallen. 11.4%. so not good news there. they are obviously competing in a huge market of tablets and smartphones, so we will get more on this throughout the next hour or so. the dow component one to watch entering the closing bell. liz: everybody has to stick around after the bell because we have immediate reaction from the chipmaker chief financial officer stacy smith. we will ask them about the set-top box and the chips they came out with a new generation
of them, they have double the graphic stability. incredible things come from this little chip with more than a billion transistors on it. they are set to vote tomorrow on michael dell controversial buyout bid. "the new york post" saying dels deal is dead. meaning michael dell. so we have wrought in a shareholder, intrepid c-uppercase-letter a president with 1.1 million dell shares, all kinds of shareholders institutional, individual taking sides right now. mark, let me get right to it. the two big offers are won by michael dell and the other is carl icahn. who are you going to vote for? >> i am voting for carl all the way. for me, michael dell bottom
picked this. the shares traded at eight or $9. magically appeared and bid $30.65 with the help of his private equity friends in silicon valley. i think they are stealing the company from shareholders at this price. we are very conservative, you know, you look at the free cash flow of this business. it certainly dropped off as a pc business trailed off last year or so, but if you look back at 2000, dell computer has generated anywhere from three and half to $5 billion in free cash flow for 2013, pegging $2.8 billion. they generated three and a half to 5 billion. what would you pay to that? i think the offer is less than 10 times free cash flow, which i
find egregious. i did use a very high discount rate to adjust the falloff in one segment of the business, not the entire business, only one segment. i will wait until i get it. liz: i am with you. it seems very obvious to me. am i missing something? $13.65 per share, the stock is slightly below that right now. it was above it at many points ibetween the time he announced that, and since then, carl icahn $14 per share. and depending on the circumstance, it just seems like carl icahn, i believe he is serious about this, a serious billionaire phenom, i believe he really, really wants to get
control over this and improve the company. what do you think is the real problem, what do you think carl icahn would do to fix that? >> i don't know exactly. i'm not technical savvy enough for what you do about the desktop pc, but i have talked a little bit earlier about the operations and the free cash flow operations. let's talk about the balance sheet. the business with 13, 14 billion in cash, you have half the equity value today in cash if you say oh, well, 25% of the share price in cash, why couldn't we have enjoyed a higher dividend over the course of the last three, four, five years as share prices come down or why couldn't we have read bought shares in 2128 or $9 created value because a lot of
buybacks destroy value, above intrinsic value. liz: looking at a five-year chart, you bought when the stock was in the high 20s, 26, 25, what did you like about it then? that was pre-tablet revolution, right? >> that price sounds relatively high compared to our basis. a million shares to the viewer is a lot of capital and it is not a large position for us, but i don't think we are underwater to tune of half price. we are probably close to our basis at this point. what we like is generally management that has equity skin in the game, balance sheet very stable and bulletproof which i tend to view dell as having. a predictive free cash flow you
can discern a value. we want capital we can get a discount to that carefully calibrated in transit or fair market value and so that is why we have sat here as we wait for it. liz: you have all kinds of other things like berkshire hathaway. do you think the vote will happen tomorrow? there are all kinds of rumors it will be delayed. >> i think there is a giant poker game going on right now. you have to get to 42%, and you back out carl icahn, southeastern asset management, the price is already voted against it. liz: do you get the sense that
this is a name if it hits a certain level, you are out, and what is that level? >> you mean up or down? if it rises? liz: is the result point reassesses it hits this level i'm going to sell? >> i can say we have a value today between 15, $16. you certainly have some loss of business as we talked earlier, but a high discount rate with a very nominal assumption about growth and that cash flow discounted cash flow that is where we get to 15, $16. i think carl icahn and southeastern asset management on the right track, if you really look at the share price, forget about five years ago, we haven't been there that long. if you look at the share price,
what is it down, 40%? liz: about that. the total opposite of something like starbucks, doing very well. just want to quickly mention how well your fund has done the past year. the benchmark up 14%. i cannot wait to hear what happens tomorrow, will you come back? >> i would be happy to. anytime. liz: ceo and president. i am going all the way with carl icahn on this vote if it happens. we're getting ready for all of those major earnings. ebay, ibm, intel, american express. should you be in those stocks? after the earnings announcement. my mantra?
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liz: looks this very moment like a win for the dow jones industrials but not for the laggards in the index. take a look wealth have caterpillar moving lower and microsoft and mcdonald's. caterpillar, short seller jim chanos on another business network, cnbc, going unchallenged when he in essence said he was shorting caterpillar. some analysts who were pro the stock said he went completely unchallenged on it. was able to beat up on the stock. so it is falling 1.66%. mattel, one of the laggards on the s&p 500. softness in barbie as one of the headlines said. every barbie i had is kind of rock hard. you can't even bend their arms.
softness in barbie sales they really mean. get ready for "after the bell" with my partner david asman. we have major names coming up. david: those laggards, you can't beat the laggards. we have ibm, intel and one of the major, members of the management team from intel coming in to talk to us about it. we have ebay and of course american express which has been doing quite well as americans are pulling out their credit cards. let's go to nicole petallides at the new york stock exchange. talking ba laggards? tesla was the big laggard yesterday. it came roaring back today. it is up over 10% right now. not all the way back from its losses yesterday but quite a bit. >> right. it's really a volatile stock. it does trade in big moves. today you see it up about 10%. yesterday we heard goldman sachs talk about they thought it would be more fairly valued around4 bucks. yesterday it dropped and -- $84 and today it came back we're
awaiting earnings from intel and ibp looking ahead for their results. we know intel there's a lot of question what they will do when it comes to the pc and how weak it has gotten as far as sales are concerned. ibm surprised us a quarter ago and not in a good way. >> it will be interesting to watch what intel has to say. i know you are chatting with ceo. pc sales have been to the downside about 11%. just the intense competition they face with tablets and the like. so intel right now down half a percent while ibm is smoothing out a gain of 1/4 of a percent. david: another duaner out there yahoo! which we reported yesterday. they're doing well a day after they reported their earnings. >> obviously marisa mayer has been on a huge turn around plan for that and the valuation of alibaba is more than everyone anticipated. everyone is loving that. seven brokerages upgraded their
calls on yahoo! today. [closing bell ringing] liz: they're so excited down at the nasdaq. look at them jumping up and down. the nasdaq with a gain of more than 10 points. amex and ibm. david: all of the indices posting gains today. all about the same amount by the way. about .3%. but big cheers on wall street a lot of questions concerning traders about what ben bernanke was going to say. he did kind of give in to the doves saying he would do what he can for as long as he can going against what esther george said about starting tapering now. ben bernanke says, no we're going to wait and the markets were pleased. not overwhelming joy here but generally pleased by what they heard. liz: here is a look at the front page headlines. yes, ben bernanke, he did try to calm investors about the fed's plan to begin easing the bond-buying during congressional testimony today. the chairman said because the fed's purchases depend on economic and financial developmen