tv Countdown to the Closing Bell FOX Business October 30, 2013 3:00pm-4:01pm EDT
mini taper tantrum. the fed announcing it would hold its bond purchases a steady. the fed telegraph that it might have been sooner rather than later. the actual statement says the fed would wait for more evidence of economic growth before adjusting the asset buying program. the fed saying labor market conditions have shown further improvements, so take a look at the market for you. briefly popping into positive territory following the news at 2:00 p.m. eastern but you may have blinked, you would have missed it. that is how quickly things have turned negative reedit you can see we chopped half of that lowell off. following the headline from the "wall street journal" that the federal reserve will have a tapering agenda on its table at the december meeting.
not 2014. december possibly. now gold, we will see what happened. following the fed statement. you can see with a lower $3.40.e enduring a quarter of a percent moved to the downside, not too bad. last week crude virtually unchanged. down $1.30. that is what happened as soon as the market began to absorb what the article said. tapering would happen sooner rather than later. we have the statement from the fed, that we gave you. but we have every angle of this covered. head of treasuries, you may have seen the honda prices pare their games. and chief economist at first trust. see the rest of you guys in a minute. what do you make of it?
>> it is clear, it has been fickle to any announcement coming out of the fed, washington or the "wall street journal." it is clear the market did not move on the fed announcement. when he announces a december taper is not off the table, we are off to the races and the machines kick in and start selling off on that news. buit has become pretty easy to trade. listen to the fed announcements, get ahead of it. people are trying to estimate and get ahead of the market for when they do taper in a market up 25% for the year, probably not a bad move. liz: anybody who hasn't taken some profits lately, you are not being intelligent about it. the "wall street journal" has become the most effective journalist since winston churchill who always covered the gossip columns. i will take it to the chicago mercantile exchange.
it was an interesting sort of move with the market and gold, not to mention treasury prices. we are figuring it out, we stabilize and of course i even heard somebody call it the statement. what do you make of what has happened and does it really mean something we knew was coming, the tapering at some point possibly in 2014 and now possibly even december is really that shaking and that worry some to the market? >> and they said possibly december, the bottom dropped out of almost everything except the u.s. dollar. the dollar got close to that 80 range. we saw gold pulling down. all the energies, everything else was fallen down. everybody wants to believe they will taper sooner than not. i don't see it until next june.
the employment numbers. the jobless claims, next friday we've got the nonfarm payroll. those numbers will dictate if they will be able to do it in december. i don't see that happening. if we look into february at the next fed meeting in 2014, what we will be looking at is all the people that had those jobs, they will be unemployed now. we have a lot of things to really look at. gold pulled down a little bit, but i see that coming back up. everybody is talking it should be hitting the $1400 range. keep a close eye out for that one. liz: there are so many points coming out given we have the partial government shutdown still working its way through. yes, oil is falling but right now i am seeing brent moving higher, heating oil out. natural gas down along with light sweet crude. is this only fundamentals leaving out the federal reserve's decision? >> i think it is, i think the
market is so psychological of me wants to go back on the market. the inventory numbers, you saw that reaction, it reacted the way it should have. as far as the tapering whether we will get that tapering, i don't think we will see it sooner than later. people kind of jumping on these things again the machine is taking over the broader part of the market. that is what we are seeing. you have to try and stay ahead of that. if the dollar gets stronger, still feel we will get down to about $90 by the end of the year and then start gathering up going into the first of next year. liz: i am saving the tape. $90 by the end of the year. >> you still owe me dinner from last time. liz: thank you, all of you guys. great to see you.
now let me bring in keith, the founder and ceo. we also have bill o'donnell. interesting moves there. and our friend, chief economist for first trust. you are the economist here. give me your sense on when we will see that tapering and this becomes an issue now because of course he "wall street journal" is saying possibly it will be on the agenda in december but it is always on the agenda. >> i would argue that it is. sometime between december and march is the most likely time. the most interesting part of the fed statement today was basically they said we thought the government shutdown would hit the economy a lot harder than it looks like it has. the stock market is not only going to new all-time highs, 80 pieces we have 130,000 jobs.
in october during the shutdown, private sector jobs were created. initial claims went up, but they didn't go up all that much. the feds every thought it it would get it a lot harder than it did. it doesn't look like it was, so we can't take tapering off the table. so i still believe the fed wants to taper before ben bernanke is gone. whether they get a chance to do that, i am not sure. but i think he to start it so that he can always say that he did. he put his foot on the gas, and he took it off. he doesn't want to go away with his foot on the gas the whole time as fed chairman. liz: he began it, he wants to end it. tell us what you thought of the treasury relations. a lot of people own treasuries, a lot of people are watching right now. we watched the yields start to move from 2.48 to about 2.51. we saw the price of treasuries come down.
what does this say about the overall thought process? >> 's done some recent surveys and found most investors expect the first tapering in march. as of two days ago. i think the backup and treasuries was not just due to the article, but also the removal of the potential for tightening financial conditions to slow the economy and we can employment conditions. it took that out of the text from september and the rates have fallen in stock prices are up so i am not at all surprised. in my view it is not just the risk to the treasury market of a potential december tapering. we also want to watch mid-november and jeanette yellen's testimony. it is a contentious testimony and therefore i think there is a chance this woman who is painted as an uber dove can take a more centrist line in order to get through this and the market may not like that. liz: they have very important perspectives here, and so does keith reedit okay, keith, have
added, you are the money guy. you make us smarter. make us smarter on the fed and what is going to happen. >> the fed did not make you or me smarter today. the fed is absolutely confused, therefore the fed is confusing the market. the back end of this is a complete joke they are whispering. when you really think about what is going on here, it is unelected, unprecedented. what we have here is the fed is losing the battle, the battle of volatility. marking time, everybody who has spoken today is figuring out if it is december or march. the fact of the matter is the fed created that bubble. people cannot get out of that bond bubble. it is about as liquid as time. the reality is that is a huge problem they are trying to fight in the face of economic gravity. if you are trying to predict gravity, you are going lose that.
ben bernanke will lose that big-time. liz: the fed is confused and therefore the market is confused. but do you feel that way or do you think the fed is following the right process? >> i would have never done qe elect the fed is doing it. i would have started raising rates a while ago. i do agree we are in a bond bubble. i don't know if it is epic or not, but we are in a bond bubble. the fed is confusing the market. that is no doubt about that. when it came time to do it, they pulled the football away like lucy, and they shocked everybody. i also don't believe this is all about the unemployment rate or the outlook for the economy. there is a thing called the taylor rule. i don't mean to get too complicated here, but it is a really simple rule. it tells the fed where it should set interest rates. back in the middle of the winter
of '0, '09, it said rate should be negative 7%. liz: let me interrupt here. if we show where fed funds futures have been. for the past three years they have been at 02 a quarter percent. let's not forget mortgage rates. mortgage rates moving higher when the fed began telegraphing, tapering would start to happen. this almost like the fed panicked and now the fed is saying and peter bronze brought this up, as long as these rates stay low because they did come back down a bit, tapering is more of a reality. >> yeah, i think the fed was a little bit panicked. you could tell in the september press conference. both he and jeremy stein spoke about this were a little bit surprised, recruiting so many people to get long bonds that they were surprised by the backup which i'm not surprised
by. i think the mistake the fed made was leaving qe3 open-ended. i think leaving it open-ended is leaving and messy exit we are dealing with now. liz: should have had a shot clock. like it or not, what is the trade here? >> today it is pretty straightforward. the dollar, thank god, stabilizes. any expectation that we are going to taper ever is good for the dollar. we have taken away the forever expectation that we will never taper forever. janet yellen will never do it. we will turn into japan. the minute they spoke you thought america might have a backbone and might raise rates, and on the march i think that is the key trade here. if the dollar can stabilize, so does the purchasing power and potential u.s. growth. liz: barely. it is crazy. but thanks to all three of you.
our good friend head of u.s. treasury strategy. first trust chief economist. good to see you all, thank you very much. we are 48 minutes away. she has been right. what is she saying now? fox business with them with one of the biggest names on wall street. goldman sachs senior investment strategist and global market institute president. she is with us, she is live, she is exclusive and weighing in on the fed statement. more important if the bull rally that many of you are vested in will run out of steam. and what is holding up jpmorgan haggling with the justice department and what's likely going on behind the scenes? charlie gasparino joining us with an exclusive guest who has the insight. [ male announcer ] legalzoom has helped sta over 1 million businesses.
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estimates and snag the price target from the $15 to $19 bid the stock a new high today at $15.73. not too bad for them. just about every single news on the business news networks had cameras locked on the one person this morning. health and human services chief kathleen sebelius testified before congress about the pretty disastrous rollout of healthcare.gov website. let's go to rich edson in d.c. we will ask you for the real truth. not about what people are talking about but who is profiting from the affordable health care act regardless of the website because we want to make our viewers money be at >> the health care industry has done well since the supreme court decided to uphold the majority of the health care law. the government dollars continuing into the health care sector. the hospital stocks have done
115%. systems up to 55.5%. health insurers up 36%, united health care up 13%. the medical device manufacturers even though they do have the surtax on them, boston and to pick up 110%. abbott laboratories up. that is why enrollment is so key. they need to maintain those numbers and that is why the rollout has been so disturbing on this. we don't know how many people have actually enrolled in the health insurance plan. the administration says they are not quite sure because the systems right now are faulty and the secretary of health and human services is testifying on capitol hill today took the blame. sebelius: sir, i was informed that we were ready to launch on october 1. the contractors who we had as our private partners told us and told this committee that they
had never suggested a delay. that is accurate. our cms team felt we were ready to go. i told the president we were ready to go. clearly i was wrong. >> the chairman of the energy and commerce committee says if we're going to do this again in december and next time when kathleen sebelius testifies they want her to bring enrollment numbers. she says she will have them why then. liz: from those numbers to the medical device makers. while they are moving lower today, they are very close to the 52-week highs. thank you so much for the numbers, we appreciate it, rich. the closing bell ringing in 40 minutes. we are moments away from something you cannot mess. foss business exclusive with goldman sachs senior investment strategist and global financial institute president on if the market and your investment might be stretched too thin.
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liz: the settlement talks between the government and jpmorgan have hit a roadblock. we told you that yesterday. what does this mean for the future of the nation's largest bank? the two gentlemen to my right started fighting on twitter. bring them both on. charlie gasparino and a special guest. >> notice how my lip is going up? >> why are we fighting? >> are we fighting?
>> i have the most respect for this guy because i remember in 2005 walking across six avenue, he bumps into me and says you are missing the biggest story ever. i say what is that? all this mortgage stuff they are doing, it is going to explode and we will have a massive financial crisis. i am not kidding you, this was 2005. we have the utmost respect, but where we veered is this jpmorgan thing. jon stewart tried this, correct me in my beliefs here. here's what i don't get, for years into it, this was the firm that did pretty good, did not need a bailout. a deeper way. if you take out their liabilities from wamu, which
they were asked to buy, fannie and freddie. this seems like this firm is getting hit for nothing. >> what you find as they have got settlements with the government across much of the regulatory body essentially that equaled 12.5% of net income between 2009, 2012. they had rigged bids in the deals. liz: jpmorgan. not anything they inherited. they were involved in antiterrorism financing with iran. >> so, jamie dimon supports the
move in iran. the internal controls. liz: which we saw with the london well. when it knocks 28 billion off the market cap, it was a joke. how is it a joke? >> do you think the culprits of the financial crisis there were people like citigroup. i agree. you think they are a worse player then merrill lynch, citigroup and all those others? >> internal controls perspective today because they are larger, cross more businesses, more regulators. >> they are holding them accountable for the past. citigroup or jpmorgan? >> they chose to acquire.
>> is citigroup a worse player today? no. >> back then citigroup was bad, the investment bank was far worse. you are missing the ultimate point. liz: did not get admired in the subprime. >> one third of originations in 2006, 2008. >> that is what happened. selling it. >> charlie, when you make an acquisition and and acquire as, you get the kickback. they knew what they were buying. but me finish what i am saying. for a year of the transaction until they realized just how large they were at which point they found language loopholes to
say this isn't ours. >> doesn't the fdic cover some of this? >> no. when you do a purchase acquisition. >> you are saying there was language in there that allowed them to basically get out of some of their liabilities. jpmorgan? >> no. jpmorgan acknowledged they are now saying there is a loophole so there is going on about this. >> you believe the government, not jpmorgan? >> if you say they are not ours. if it is your liability, but otherwise charlie, guess what, otherwise it is a security fraud. liz: so the great news is the twitter battle will continue. take it to twitter. >> he wants to destroy the american banking system.
liz: that is exactly what he said. come on. can you guys both come back? >> they are going to agree to it, right? without the fdic having to risk his reputation. >> they're going to cave, right? >> jpmorgan is likely to cave, probably. liz: good to have you both. good to see you both. we will do this, we will make it a regular thing because we know you love seeing this guy. do your toes starts to cringe a little bit? an exclusive interview with goldman sachs senior investment strategist abby joseph cohen. no, he cannot play in on this. if this talks can keep climbing or if they're headed for a collapse or somewhere in between. ♪
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revenue, seven to nap billion dollars. we're showing you the fiat stock because seattle caused more than half of chrysler. down more than 2%. but the numbers were pretty good for chrysler. top sellers. liz: one of the best cars i ever had, my grand cherokee. >> reporter: i had a liberty. liz: you have to go with the gold package. stocks on quite a roller-coaster ride today. overtime over the past two years they have been up, but this after the poor reserve said it woulm reducing its monthly bond buying practices at this time. but then moments later fed sources told the "wall street journal" that the december tapir he could still be on the table. as you can see, the market responded moving down, although we have come up off of the floor. what is next for equities and your portfolio?
joining me now in a fox business exclusive, senior investment strategist. welcome. you know what, stocks are moving lower because yesterday and previous days before we have had s&p records, down records, dow jones transport records, russell 2,000 records. we want to talk about stocks. what happens is, is the last year going to be par for the course or to date an indication of what happens? >> you know, we always advise people not to worry so much about those short-term movements and to really focus not on the technical factors but the fundamentals. and the fundamentals have been pretty much the same for the last several months. the economy is growing. profits are increasing. although, perhaps, not as much as we would like. what we see in the equity market is a very important change in focus. we are losing which companies have lots of extra cash and the balance sheets to increased focus on which companies are
growing at the revenue line. and we think that this is actually quite typical for a bull market. liz: growing at the revenue line meaning, selling more products, selling more services to actually conducting real organic business versus cost cutting, right? >> not just cost cutting, but also using the cash on the balance sheet to return directly to shareholders. instead, using that cash on the balance sheet together business. liz: even though the paper was telegraphed, we have not seen yet. how closely does someone like you who is a strategist of the top level for equities watch what happens. of course, it could happen in december. are you sitting there in your meetings, how much does that matter to a strategy you put forth to your client? >> as obviously -- obviously we are all concerned with the federal reserve is intended to do.
perhaps it is those of us on the receiving end of those messages have been less consistent. always looking for, perhaps, and that may or may not be there. they have been consistent in the following message. at some point in the future when the economy is doing better, especially when the labor markets during better they have said, at some point we are going to taper but not quite yet it will be dated dependent. liz: when do you anticipate we will see that tape during movement? >> our chief u.s. economist has been talking about the potential timing for tapir. basically saying for a long time he thought it was not likely until the end of this we get yearly it -- a year at the earliest. like the fed, is forecast is going to be dated dependent. what we need to see, of course,
is how the economy performs posted government shut down. what we know this part is that consumer confidence took a real smack in the chin during that government shut down. if, however, we see the economy looking somewhat better in the fourth quarter than, perhaps we can be looking forward to taper a few months from now. was never the point of view that paper was a certainty at any point in 2013. liz: from large cap to text and non tech, which sectors from where you sit and what you look at all of your screens look poised to do well and which one look poised to weaken? >> great question. i will give you an non simplistic answers, which basically is that we have had a convergence of p/e ratios. this is something that is somewhat unusual. what we basically see is that there are some sectors up there with slower earnings growth that are supporting pretty high p/e
ratios, almost the same as the sectors and companies with high earnings growth. and in general we think the opportunities are with the highest earnings and high, of course to revenue growth companies. and so what we're seeing in the market is a rotation away from the so-called safe companies, led some people with all the value stocks into the growth stocks, and it is in some cases not really matter in which economic sector therein because we're seeing that if it is a company specific selection process for the successful portfolio managers and in many cases that revenue growth is not coming just from the u.s. but the international businesses as well. liz: okay. you just gave a clue, and that would be at least some other global entities, other countries as well. can you name some of those? >> so we're looking at is the fact that u.s. companies have been quite effective in terms of enhancing the margins outside the united states. so even in parts of the world
that are not growing the way we might like. they're doing well because there good margins share. basically focusing on a primarily to cyclically sensitive names. the ones with economic sensitivity because we don't see another recession in the session anytime soon. things in the industrial area, the technology area and so on will include companies that perform quite well. and one of the big question marks and of course, will be consumer spending here in the united states. i will go back to a point made earlier, and that is, with that hit that consumer confidence took during the government shut down, we will be watching, as will everyone else, how the upcoming holiday season shapes up. liz: there you are, and i guess we get a window with halloween. before we go, not only are you the top in business strategist, but you are also adviser to the investment committee of major league baseball.
socks or cardinals? >> i would not do provide a forecast. unlike in says it will be a great game. liz: inky. great to see you. senior in business strategist for goldman sticking up for the fed in dallas as comported itself. also saying, look for companies that have higher earnings and higher revenue and industrial to globally. the closing bell ringing in 16 minutes. the stock is up 92% year-over-year. is turning up the heat today, introducing a slew of new spicy items to the menu. will the shares eat up with it? strata corporation chairman ceo and president joining us in a fox business exclusive. plus, we are asking him about the success of two special guys. ♪ >> it's so great. >> my sweet potato tops are some much fun, you can play with them if you want. >> exactly. >> without having to worry about what your mom says. >> you should color until you
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and president, it is a fox business exclusive. it is very impressive, especially considering people have watched their money much more closely over the past year-and-a-half, have they not? what are you seeing at the consumer level? >> so we are seeing is a consumer that is still challenged. we have run our business quite a bit. we have done that by really taking share from our competition which is one of the things that has helped our stock growth, growth in same-store sales. that's way ahead of the rest of the industry. just over 2 percent for the last fiscal year. 20 percent in the quarter and the year. so the consumer is jealous. from our standpoint from a product standpoint top emotional standpoint, we are taking share from our competition. liz: you have 3 million customers in 44 states. you have opened a bunch of restaurants.
450 new sonics of the past five years. how many more in the near future will you expect to open and where? >> we're starting -- good question, starting the step that. we will open in throughout the united states for not looking to international expansion. it will open up throughout the ad states. about 27 stores last year and expect to be not the 40, perhaps 50 this fiscal year. this is the path that will begin to pick up for us because the sales and are improving, profitability, store level is improving. and new, less-expensive building that we have been able to test. the new franchises in the markets. with that our ad campaign, its really helping our expansion a lot. liz: this is a guy who runs a business not to sang a much more do we sell, but how do we improve and grow and figure out less expensive buildings. was it all about the press?
that has been a hot seller. >> that is a delicious product. it is done well. it is very different. it tastes great. a dollar 99. a great value for the consumer, but a wonderful product. differentiated versus our competition, so that helped us a lot in the spring and summer and many of our markets will keep that on permanently. a very popular products, particularly a bit more in the northern united states, midwest and ohio, pennsylvania. a very popular product, but it has been across all product lines. liz: here comes your new layout, the spicy menu. you guys bought a bunch of it here. we have the chicken, the spicy stuff coming through. did the world suddenly turned romania mexican? is that a changing reflection of america? >> of 57 corn dog of a on
halloween. the products are the nicer, differentiated, good-sized products. we have had this in the past, very popular item, the island fire burger. we now have not just that but are bringing back the islands fired chicken sandwich as well. liz: i am holding it. >> they're delicious. and then the brio, the breakfast burrito is also different from much of our competition, but the delicious product differentiated and well priced. liz: i have to ask you about the two guys because it has been a winner. can you make sure that they actually eat the food? >> i have been on set before and i watch them eat it. they do it sparingly, or they would not look the way that they do, but they are delightful guy is to migrate differentiators for our brand, a lot of fun. they do a great job for us, and we love working with them. liz: i would love to be on the casting because someone casting that properly.
we give you this kind of interview because you deserve it. stock is up 92% of the past year. you have to keep doing it over will come back and have a hard time for you. >> thank you. appreciate it. liz: ceo, pres., and chairman of sonic. but with the company 29 years. he knows everything. we are awaiting facebook earnings coming in just minutes after the bell. let's take a look at shares right now. we go to dennis kneale for the preview. >> reporter: a big anticipation on wall street for facebook. the stock has had such a killer year after that shaky ipo, up more than 85% year-to-date. the street expecting almost 60% earnings growth through $0.19 per share on revenue growth of maybe 52% to $1 billion. a couple things to be watching closely this last quarter. reporting more than 700 million daily active users. watch that metric. also, power they doing on mobile
stops? that is the future. investors are watching revenue per user. $4.302 per north american user second quarter. video apps, there will be a big moneymaker sunday. the company holding off widely until next year. two big questions are how well will the histogram adds which facebook owns work and will that alienate users or bring in a lot of money? finally, facebook suffer from increased competition from the photo dissolving purchase and twitter impending ipo. all that and more coming up, as they say. liz: no one can move. facebook numbers coming right up. we will be right back. ♪ it's a growing trend in business:
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liz: david's here for a busy hour. david: we indeed very busy. lauren simonetti at new york stock exchange. first of all, talk about what the fed moved, i can say they moved interest rates up a little bit and of course that moved housing stocks down, right? >> yeah the 10-year at 2.527 and we saw homebuilders move lower, sharply lower. ryland down 4%. kb home, hovnanian, red arrows. liz: that was earnings reporting after the bell. >> that was questioned. down 9%. revenue for current quarter below forecast. linked in was a big loser. david: apple, my favorite stock. i'm a slight shareholder of apple. it bucked the trend. >> it bucked the trend but not the tide that could lift all boats. part of the nasdaq and broader market. it was up but stocks overall down. liz: facebook, starbucks and kraft are set to report
earnings. still the stocks going into the close. [closing bell ringing] bells are ringing on wall street. david: they are indeed. looks like we have a down market today. it was flat-lining before the fed came out with the decision. this is not a huge loss. nothing terribly unexpected. although there was a slight improvement in the sentiment. a lot of people were thinking the fed would say because of all the bad economic news, the economy is not growing fast enough. in fact the fed was saying there is risk on the downside but not as much as the market was hoping for because they want money printing to continue. as a result of all these things, the market is down. dow jones industrials trading down. 64 points to the downside. zip 500 is down 8.6. a little more percentage wise. nasdaq more than that percentage wise. the ones hit the most were small and mid-sized caps represented by russell 2000. that index is down 1.3%. liz: time now for your front page headlines. federal reserve