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tv   Power Lunch  CNBC  May 1, 2012 1:00pm-2:00pm EDT

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>> b.k.? >> exports were great. ism report. buy transports. >> pete? >> i rotated out of conoco and into bp today. that does it for us. follow me on twitter. "power" with more on the rally. halftime is over. "power lunch" and the second half of the trading day start right now. >> the whistle is blown. the second half ready to start. we have two major ceo stories this hour. a committee in partment says that this man, rupert murdoch, is not fit to manage an international media company. and chesapeake energy's audrey mcclendon and his board reach a deal over his controversial pay packa package. a bigger story, dow industrials. up 115 points now at highs not seen since december of 2007. sue herera is anchoring from the
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center of the financial world, the new york stock exchange. sue? >> indeed, ty, i am. wall street buzzing once again. the catalyst was the positive manufacturing numbers. bob pisani is here to talk about this. it's a broad based rally. this number caught everybody by surprise. >> sell in may and blow away. that's what's going to happen today. everyone was short. regional ism numbers were kind of weak. everyone figured there's got to be a correlation. wrong. it's a different survey. what's important, what got everybody talking. orders. new orders. really key. up very significantly. employment was up. new orders implies people are ordering many, higher top line and higher earnings growth. that means translating into better numbers for the s&p. that's what got people all excited. >> what i was impressed with was the fact so many of the s&p sectors are moving smartly higher. the breadth of this particular move. >> 5-1 advancing to declining stocks. volume bordering on the heavy side. i'm not going to say extremely
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heavy. better than normal. first day of the month, bear in mind. we saw the dollar move up. gold moved down. commodities moved up. that's a sign of a growing economy. that's strength. that's what you want to see. commodity stocks also moved to the other side as well. >> does one day make a trend? >> some of the recent numbers have been very choppy. >> we're going to talk more about commodities right now, as a matter of fact. oil has a significant gain today in terms of percentage moves. nat gas also on the rise today. sharon epperson covers both of those markets for us from the my an ex. >> hi, sue. perfect timing. we just hit a new intraday high in wti oil futures. above that 106 level. we have not traded that level since the end of march. yes, it was that huge surprise that we got from the u.s. ism data. also it's kind of sparked some more buying activity here for the first day of the month. and many traders looking at some key technical levels saying next up look for 106.75 for the wti contract. elsewhere in the commodities space, yes, natural gas a big
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gainer once again. up 45 cents, actually, from the lows we saw in early april. this has a lot to do with that production data we got from the energy department yesterday saying it was at four-month lows in february. we're waiting for that storage data on thursday. sue, that could be another bullish indicator for the market. >> sharon, thanks so much. how do you play all of this? how do you profit from it? jeff keelburg of keelburg capital is with us for the day once again. fwood to see you, jeff. >> hey, sue. >> we asked you for three plays that you would make right now. what are they and are you betting that we're going to be able to hold on to this advance for the rest of the day? >> we are seeing a wonderful rally here pipt does feel a little long in the toout. that's the sentiment of traders. that there is value. exelon. exc. a sector that's absolutely beaten down. that utility play you should see a bounce. also like bertha side, high in crude oil. etf space. uso, an etf that tracks wti crude. right now you're going to see legs above 40, 50. another play.
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as that oil gets translated to pain at the pump, i think gold is a good place. the gld. the gld is an etf you can play gold as central bankers will continue to ease. >> thanks a million. see you a little later in the hour. another stock we need to mention right now is herbal life. the market may be going up. that stock is getting hit very, very hard today. it is now down almost 20%. after influential short seller david einhorn asked some very tough questions on the company's conference call. herb greenburg's on the phone to tell us more about that. herb? >> hey, sue. this is actually a very interesting situation. what david asked specifically is very important here. remember, herballife is a multilevel marketing company. there's a lot of controversy that sort of surrounds that industry. the question he asked was how much of the sales go to actual retail customers? people like you and me? instead of being purchased by distributors who are sort of
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part of the company's chain. and the company came back and said 70%. typically. then he said, well, you know, he asked more about it. he said they don't have granularity on it. in recent conference calls investors have asked this question. how much of the product goes to consumers like you and me? so the company says there's this sort of 70% rule. that means 70% must go out. the distributors must certify. this is something they say. it's fascinating. they must certify they sold product -- 70% of the product to consumers. then the company said they can't verify what the distributors say they have certified. you have a question of is this a pyramid sort of an operation or is this a genuine business that is selling product to people like you and me. that is the, i think, the crux of the issue here. >> it also comes on a day when several analysts on the street upgraded the stock. it's now down 20%.
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>> they upgraded the stock because the company posted good results. it posted good cash flow. >> right. >> the question is, where is that cash flow coming from? what type of business is this really? you can take a look. you can see nus also fell today. another multilevel marketing ke company. using distributors to try to build the business. again, the question is, how much of the product is sold to people like you and me? on these calls, you know, i've seen analysts ask why aren't there bar codes on the product? the company says, well, we're thinking about it. they don't really get there. you have this question. david started asking publicly the questions that the securities analysts have not been asking. >> have not been asking. >> all along. >> we got to run. down now better than 20% on herbalife at 56.10. now to the trouble in two c
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suites. three reporters covering three great stories right now. we begin with news corp. and that scathing report on the phone hacking scandal. came out this morning. it takes dead aim at the ceo, rupert murdoch. kayla tausche, you are up first. >> tyler, that uk parliamentary committee did issue a very searing opinion nine months after receiving testimony from james and rupert murdoch concluding that news corp. exhibited willful blindness in dealing with the phone hacking scandal. the final report passed the committee by a slim margin with a 6-4 vote. news corp. has yet to respond. it likely will have to when it reports earnings next wednesday. the younger murdoch, james, as you said did get off fairly easy compared to the elder rupert. deemed not fit to run a major company. not a fit person to exercise the stewardship of a major international company.
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conservatives voted against that part of the opinion. concerned that it would actually exert undue influence over a decision by the uk broadcast regulator ofcom certainly evaluating whether news corp. is a fit and proper owner of a 39% stake in bskyb. ofcom said the committee report will be part of its assessment but its decision will be based on its own evidence. here in the u.s. we should note news corp. did trip a key limit at the fcc that places a limit over foreign stock ownership in its b shares. a person familiar with the matter told me, though, its moves to strip voting power to certain non-u.s. holders did allay that problem. it will prepare to renew licenses for its fox affiliate stationings in the mid-atlantic region. >> thank you very much. kate kelly and another ceo in trouble. chesapeake's aubrey mcclendon. kate? >> aubrey mcclendon, you're right, is in the hot seat again. this morning his board of chesapeake energy announced plans to replace him as chairman
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with a new chairman they will find who has no previous ties to the company. they're hoping to have that person in place for a vote by the shareholder meeting, which is in early june. but that process is under way. there's no guarantee as to how fast it will happen. meantime, aubrey mcclendon remains chairman and ceo. the other thing they announced this morning, interesting development, the founder's well participation program which has been in existence for a number of years was disclosed to the sec. nonetheless, caught the public scrutiny and a lot of criticism about two weeks ago when a reuters story revealed some details of the program showing mcclendon had invested in the company's wells at an early stage of the drilling process. using, among other things, a loan from a private equity company for more than $1 billion. they are terminating that program in 2014. ceo mcclendon will receive no compensation upon the termination of that program which has become very, very controversial. now, the board has been under fire. they initially said they stood by mcclendon in the well
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participation program. last week they sought to distance themselves from mcclendsen saying, in fact, they were generally aware of his participation in it but were not briefed fully on the terms of it. this to me was a very significant indication the board and mcclendon's interests may have started to didiverge. the replacement of him as chairman is yet another sign of that. investors seem to love this news. going into the company's earnings announced right after 4:00 today, companies shares have been rallying. over 6% up. this may be the answer people were looking for. but what the sec and the irs and a number of critics and shareholders still following chesapeake very closely, tyler, it remains to be seen whether this will solve their concerns. >> thanks very much. back to kayla tausche with breaking news. a statement from news corp. >> yeah, tyler, it appears i said about 30 seconds too early we had yet to hear a response from news corp. now coming back on that topic of the parliamentary select commit tees report, the company says hard truths have e mirjed from
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the report. there was serious wrong doing at news of the world. our response to the wrong doing was too slow and too defensive. some of our employees did mislead the select committee into n 2009. that is a key point. the company does regret, however, that the select committee's analysis of the factual record was followed by commentary that they are saying is divided along party lines. which we just mentioned in our hit about that quote about rupert being unfit to run a major company. the statement goes on to say we've already confronted and have acted on the failings documented in the report, conducted internal reviews of operations at newspapers in the uk and indeed around the world, saying that they're institutes sweeping changes in internal controls and compliance programs on a worldwide basis. the company going on to say as we move forward, the goal is to make sure in every corner of the globe our company acts in a manner of which our 50,000 employees and hundreds of thousands of shareholders can be proud. last week murdoch saying this
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news corp. is a brand-new company. saying they have new internal controls and noting that the report today which they say is highly partisan. tyler? >> thank you for that follow-up. to save on pay, shareholders flexing their muscle on pay votes at a time when management at technology firms are looking to consolidate power in the c suite. >> in governance circles the idea of each share representing a single vote, that's seen as a fo gold standard. 41 plans were rejected last year. this year five so far including a no vote at citi where shoulders nixed vikram pandit's $15 million payday. this doesn't tell the whole story. for activists, this kind of investor empowerment is what they wanted. empowerment denied at some of today's hottest firms.
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google, zynga, groupon, linkedin and facebook all opts for dual class structures that puts voting rights in the hands of a small number of people leaving retail investors with little say on the company. it's a structure favored by family owned companies like "the new york times," aforementioned news corp. and "the washington post." one university of delaware professor says creates an accountability vacuum for management and the potential for poor performance. but a dartmouth professor says it really comes down ultimately to the abilities of the controlling shareholders. as for those investors who buy into it, they know that management doesn't really want to hear what they have to say. sue, back to you. >> indeed, mary, thank you very much. it's made first, as you know, and the first day of the month usually means auto sales numbers are out. phil lebeau live in chicago. >> a mixed bag for the month of april. generally speaking, the results came in line with estimates. we take a look at the major automakers. a number of them are up and a number of them are down. there were three fewer sales
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months in april of this year compared to april of last year. three stories stand out. first of all, volkswagen reporting an april sales increase of 31.5%. best april since 1971. not surprising when you look at shares of voem ks wagon that they have been on a tear over the last several months. another story getting a lot of attention, chrysler. reporting the strongest april sales in four years. particularly when you take a look at certain brands like jeep. april sales for jeep up 19%. next let's talk about toyota. did you take a look at shares of toyota? sales did rebound in part because of better supply. remember, they're still catching up because of the tsunami and earthquake from last year. truecar.com, however, estimates toyota's incentives increased 4.4%. the reason that's important, tyler and sue, toyota and honda both increasing incentives not by a lot but enough that when the market held study on incentives, they certainly benefited. those are the numbers for april. again, overall looking at an increase probably of 8% to 10%. >> phil, thanks. let's take a broader look at
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this. since the start of the year toyota's numbers up about 21%. honda and gm, 15% apiece. ford bringing up the rear up 4%. as i mentioned, today is may 1st. may day. a traditional day of labor protests and thousands around the world are, indeed, taking to the streets. in europe, the protests are over the austerity measures being implemented across the continent. but are tough measures the best way to fix the economies there? austerity may already be running its course. we're talking about the impact of austerity going away, coming up next. before the break, though, the biggest dow movers on this triple digit advance include chevron, ibm, jpmorgan, exxon and home depot.
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welcome back to "power lunch." steve liesman is out at a conference in los angeles. he spoke with two fed presidents. stimulus and growth with high on the agenda. >> i think there's only so much we can do to stimulate loan demand and to change the risk appetite of the financial system or banks. so i'm not sure at this moment that more stimulus would -- at least more really active stimulus in the form of quantitative easing, for example, would have that big an
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effect. >> i think the table is still set for about 2.5% to maybe 3% growth over the next 18 months. unfortunately, i just think that's a little disappointing at this point in the recovery. i think we ought to be doing better. >> despite that chicago fed president mr. evans said he thought job growth was fairly strong. ty? to cut or not to cut is also a question that's becoming more and more important over in europe. after all those austerity measures, there are signs of cracks in the walls. john harwood's live in washington. simon hobbs is with me here at headquarters. john, take it away. >> reporter: look, tyler, there's a lot of concern within the obama administration about a slowing of economic growth. the fact that the job gains that we've seen over the winter may be slowing down and that creates a more difficult situation for the president politically. but they realize that there's no appetite in the congress for additional stimulus. and certainly the posture of the
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fed indicates that they're standing pat. i talked to tim geithner, the rshry secretary, last week and he said it would be a mistake for us to lurch to what he called severe austerity. and look at the experience of britain which is now in recession. but that doesn't mean they can move in the other direction and they're not going to. >> simon, you've got six or seven countries in the eurozone in recession right now. including britain, spain, portugal and several others. wasn't it predictable that austerity was not going to pull -- was not going to pull anybody out of recession? >> well, no, it wasn't. it was always going to make the situation worse. of course, the europeans don't have the luxury that the americans have of being the last reserve currency or having a central bank that's able to buy their debt. so in order to maintain confidence in the bond markets, they had to go through with austerity. you know, we've got important elections this weekend in france and in greece. it may be that they pull back at the margin from austerity. but really are they going to dare to challenge the bond
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markets? that's a huge question for investors. >> simon, thank you very much. john harwood, thanks to you as well. p.f. chang stock sores on buyout news. a look at other possible takeout targets. so many students at what may be the most beautiful university in the world are so upset. how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today
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welcome back. abercrombie & fitch getting a pop today. citi is bullish on that retailer
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adding the stock to its top pick list and raising its earnings estimates ahead of abercrombie's may 16th report. shares have been traded on the upside all session. they're up almost 3 bucks on the day. citi expecting abercrombie's inventory and margins to improve. the stock has been slammed overall. it is down 25% in the past year. citigroup also upgrading the u.s. solar sector to buy from sell saying demand from asia and the u.s. will offset the softness in europe in q-3. lower subsidies in europe which is a key solar market hurt demand for solar panels last year leading to a 50% plunge in prices. as for the sector check, almost all of them are in the green with the exception of ldk solar which is down better than 3%. ty? check out shares of p.f. chang's. the chinese food chain is up big after news broke that it was being bought out by center bridge partners for $1.09 billion. and all the chinese food you can eat. so who could be next in the neverending buyout competition?
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jeff kilburg is back with us. let's talk about some other ones that you think might be likely buyout, takeover targets. >> i like leapfrog. as a parent of two young boys, it's an education tablet. instead of giving that child that ipad it's nice to have the educational tablet. secondly, arrerovironment. drones. maybe lockheed comes in and takes a bite out. >> leapfrog number one. number three would be? >> 3d. ddd is the ticker symbol. 32r 3d printer space. >> who would want them? >> hewlett-packard.
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>> hewlett-packard needs something. >> they do. 3d up almost 50%. something kind of funny has been happening in the last few minutes of the trading day over the past few days. it could have a big impact on your money. bob pisani is on the case. he'll get to the bottom of it when we come back. but there's no mystery here. the metals market is about to close. we hit the floor to show you where gold, silver, platinum and palladium are finishing the session. "power lunch" is back in two. d#0 you and your money deserve. tdd# 1-800-345-2550 at charles schwab, that means taking a close look at you tdd# 1-800-345-2550 as well as your portfolio. tdd# 1-800-345-2550 we ask the right questions, tdd# 1-800-345-2550 then we actually listen to the answers tdd# 1-800-345-2550 before giving you practical ideas you can act on. tdd# 1-800-345-2550 so talk to chuck online, on the phone, tdd# 1-800-345-2550 or come in and pull up a chair.
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gold market just closing right thousand. it's been a slol volatile day in a lot of the commodities. specially with the move in the dollar. sharon epperson is tracking it for us. >> we are looking at gold prices that are down just about $1 right now. 1 1662 an ounce. basically flat. it's a tug of war going on in the gold market that we've seen since mid-march between what exactly will happen with federal reserve monetary policy. the bulls, of course, say even beyond that we're seeing strong central bank buying that should continue to lift gold prices.
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but we are looking at a mixed market here right now. and we are continuing to watch what's going to happen, of course, friday. the all important day with the nonfarm pay roms numbrolls comi. that's what traders are waiting for. may not be much action in metals before that. >> especially after the surprise in the ism number, i'm sure everybody is waiting to see what that number will look like. >> next big data point for this market, definitely. stocks at the the highs for the year. but keep a close eye on the last ten minutes of trading today. because over the past few days, volume's really been spiking in the final few minutes. something that caught bob pisani's eye. he's been looking into it. because everybody's been complaining about the lack of volume. obviously today it's a little bit of a different matter. overall volume has been a concern. >> yeah. >> what's going on? >> thursday, friday, yesterday. suddenly the last couple minutes, volume just jumps dramatically. yesterday 600 million going right into the close. suddenly closing at 850 million. that's a big jump. normally you do get a jump at the close.
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this is unusual. >> that's large. >> it's been happening on the new york stock exchange floor primarily. not on trading off of the floor. a couple things. there's a rebalancing i think fwoing on towards the end of the month. i think that's probably the most likely explanation. people are positioning themselves towards the close a day or two before. also a lod of adrs, foreign stocks that trade down here at the new york stock exchange. here primarily, not elsewhere. and positions in the commodity adr. pet r i want to see in the next couple days. i'll make a lot more noise on this if the next two days we see unusual spikes at the close. >> chart it. keep track of it for us. >> other than that, today has been great. good volume. >> don't jinx it. nasdaq, see ma mody at her post. >> it doesn't look like investors are selling in may and going away. strong guns, much fueled by the
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up beat economic data we had this morning. apple and intel leading the charge. a pocket of stocks, though, that are bucking the trend include online travel players. expedia, after reporting blowout earnings last week got slapped with a downgrade from barclays capital. the report saying that domestic hotel transaction growth is being driven primarily by deep discounting and that the company's share buyback program might be too aggressive. a look at some of the stocks i'm watching at the nasdaq. >> thanks a million. let's go to chicago. bond pits. we had some fed speak this morning. our steve liesman snagging those two interviews. what's the market doing? how did they react to it? >> in terms of the interviews, they were so fascinating. traders down here aren't necessarily in agreement with accommodation. just think about the door that was left open a crack and how it's affected us with regard to the fed and ben bernanke's comments during that q & a. it figures into my spot right now. look at an intraday chart of 10-year note yields p p they
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spiked on the ism. chart of the s&p 500. zoomed on the data. look at a chart of the dollar index. it zoomed. people are saying, wow. dollar and stocks going up. it's because of jobs, jobs, jobs. it's because of that comment referencing jobs. and maybe if it really doesn't look very positive in the future, it could open up a door for quantitative easing. look at these employment indices of chicago and the national number. chicago employment index was drubed last month. it's still below february levels. no the same for the ism national. and i think that's why the markets moved the way they did, because it is all about jobs. tyler, back to you. >> rick, thank you very much. call them the new disrupters in media and technology. julia boorstin speaking exclusively with them at the wired conference in new york city. julia? >> tyler, i just spoke with mark an dreeson. he's behind many of the most discorruptive companies of this generation including facebook. he thames me he's bullish on a
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start-up called pinterest. he's optimistic new regulation like the jobs act will help drive growth. >> in general in the last ten years there's been additional regulatory load on companies like ours. anything like the jobs bill that opens up the environment a little bit more i think is a net plus. hopefully helps companies -- helps raise money, helps them be a little more successful. maybe they're able to stay private for a little while longer. frankly we need more reform like that. >> take a look at the entire interview with mark andreeson on my blog. you can find a lot more from our coverage of the disrupters conference at wiredconference.cnbc.com. guys, back over to you. >> thank you very much. let's head back to jeff kilburg. find out how he's playing tech right now. >> ty, the tech space is heating up. i really like akami. they're the folks that make the online retailers help by the
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online experience. surfing around getting digital pictures come up and down, due to akamai. we're all data hogs. they're making that a better experience. also riverbed. they're focused in the cloud solution. the cloud solution in the space is really in its infancy. more and more development there. finally i like microsoft. wh what they did with the barnes and nobles, nook deal as well as -- as well as they're also kind of wrapping things up in the cloud space. i think it's a great stock to have. back to you, sue. >> thanks a million, jeff. may day protests under way across europe. from spain to greece and here in the u.s. from sea to shining sea. thousands taking to the streets to protest austerity measures and what the protesters call wall street greed. jackie deang liss is with the occupy protesters at bryant park in manhattan just steps away from where we are. jackie? >> hey, sue. here in bryant park it's a central location where protesters have been coming to meet and splinter off.
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about five minutes ago we saw one group leave. an hour ago a larger group left to head over to union square. that's just one of the places that they're going to hit on their way downtown to the financial district, which ultimately, as you said, is the end goal to sort of manifest that anti-greed sentiment. the numbers appear to be a little bit thin. one of the reasons for that, of course, was the rain this morning. it is thickening out here. what happens is, as they move on, we get more people at this central location. as they get ready to leave in another wave. as you know, it's all about may day. the international workers day. they're telling people, don't go to work. don't go to school. don't shop as part of this movement. they're reviving what we saw with occupy wall street last year. and trying to bring a breath of fresh life back into this. back over to you guys. >> thank you very much, jackie. one of the main reasons fuming anger among the occupy protesters is the growing cost of a higher education. and the skyrocketing debt that comes with it so often. now, many schools are locked in
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a fierce battle to attract top students. trying to convince them it's money well spent. and they're offering lots of perks along the way. jane wems is at pepperdine university in malibu, california. jane? >> reporter: hey, tyler. come for the education. stay for the views. check this out. also stay for the maid service and the custom kitchen. pepperdine university is a private school here competing for students. all freshmen and sophomores have to live here. tuition plus housing can be 54 grand. the school just renovated its student center and is about to embark on a multimillion dollar makeover of dorms. sources tell cnbc goldman sachs is behind a bond offering to the school today to raise $50 million. >> first step on campus isn't in the classroom. so they're looking at your housing. they're looking at your dining. they're looking at your facilities. >> you have a million dollar view. does it really matter what your dorm room is like? >> i'm not too picky about what my dorm room looks like really. >> as long as you have a window? >> yeah. i have a window right by my bed with an ocean view, so.
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>> 75% of the students here are on financial aid. as they told me, that includes a lot of student debt. >> when i graduate from school, i'll have to be paying loans, paying off loans and debts. but i'm still in school now. so i'd like to take it a day at a time and worry about that when i graduate next here. >> hopefully i can find a job after this. >> reporter: that's everybody's hope. william blair analysis says that private school costs have risen over the last decade about 2.5% a year. public school four-year universities up over 5%. especially even here in california. double digits. tyler, of course, it's still a relative bargain. back to you. >> jane, thank you very much. the question, sell in may and go away or stay and play? ubs's chief u.s. equity strategist gives us his best strategies for this tricky market. plus, three alternative plays to fire up your portfolio. that and more when we come back. [ male announcer ] this is the at&t network.
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coming up on "streets signs" at the top of the hour. nice start to may. traditionally a pretty tough month. investor stocks poised to pop from now until october. bill gross out with his investment outlook. a first on cnbc to handicap the chances for qe-3. we ask how he thinks you should hunt for yield. we also talk wolverine. not my countryman hugh jackman. but the shoe company. www down on the day. we've got the ceo on the show. plus, we're also going to check back in with brian, my co-host live from the conference in l.a. now back to sue and tyler on "power lunch." the market rallying strongly today on this first trading day for may. dow is on track to close at its highest level in four years. will concerns about that recession in europe derail the
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rally here? our power player is chief u.s. equity stratist at ubs. bullish on u.s. stocks. you've been right. congratulations. >> thank you. today with this really strong ism number, it looks like things are going to keep moving forward. >> you think that number holds, though? because it was so out of line with what everybody was looking for. and we haven't had some good data in other sectors. >> so i think the really big number this week is what we see on friday with the jobs report. the expectations are actually reasonably tepid at about 170,000 jobs. last month we had a really lousy number. five months before that were much stronger. i think a lot of risk both to the upside and downside friday we're likely to be positively surprised. >> we're kind of bouncing along the bottom, though, in terms of the economy. maybe 2% growth we were talking about yesterday. how do you invest in an environment where the economy is only going to grow at about 2%? unless things change dramatically.
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>> you know, i think what's really interesting is that we invest -- first of all, we invest in companies. not in the economy. corporate executives knowing exactly what you're saying, that the economy is slower than normal. if normal is 3%, 3.5% growth, you're 2.25%, maybe 2.5%, therefore they're hunkering down. they're not spending money. this earnings season, much higher growth rate than you would expect from an economy that's weak. i think it's actually a decent environment for stocks. what is also interesting, though, is this desire for yield has made yield -- high yielding stocks so unbelievably expensive. even though their growth rates are quite weak. >> what about recession in europe? we have now, you know, the big countries are now slipping back into recession. spain the latest one to do so. what's the impact on the u.s.? how insulated are we from the recession in europe? >> right. i think this is really two issues on this situation in europe. one is the direct impact from slightly weaker growth in europe than was expected. that's some impact, but not
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huge. the bigger issue is if things get really derailed over there like we saw with greece last year, if you end up with some of these elections go badly and there's more discontent, then it actually creates a liquidity shock. it hurts the banking system. and that affects our economy more directly. but direct imports into europe are reasonably small. if you look at what happened during earnings season, which is now about three-quarters over, u.s. companies were the ones that surprised the most. not the big global players. really it was on the fact that those companies were able to deliver better strength right here at home. >> you were reasonably bullish on the consumer last time we talked. are you still bullish on the consumer, and therefore would you put new money into consumer discretionary or consumer staple stocks? >> we would. what's interesting, if you look at this whole dividend discussion, people think telcos and utilities for dividends. look at total yield. dividends and buybacks together. what you actually find is discretionary is the single
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highest yielding sector when you look at it more broadly than either of those two. we like that. we think you're likely to see the jobs picture stay on track even though we had a really lousy number last month. and we think the consumers are going to continue to spend. >> some of the financials, though, have not been participating. not all of them, but some of them have not been participating. can the market move high we are the lack of leadership in financials? >> what's interesting, you've seen financials have really done well from the stock price movement this year. and if you look at this quarter, their results, they were actually fantastic results that were offset by these debt value adjustments. >> right. >> it really masked how strong things were in the financial sector. so i would argue, you know, a lot of, you know, perhaps a lot of hair on that story with respect to the financials. but you are seeing and you saw this with the loan aumpss survey, lending volumes are picking up. loan demand is picking up. we think it will be supportive of the market. >> jonathan, great to see you as always. sue, more and more investors, especially those who are self-employed are uncovering
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more and more unique ways to put their money to work. offering opportunities to put away loads of cash for the new retirement. sharon epperson joins us now with three stages that could give a big boost to your savings. sharon? >> tyler, let's get right to it. strategy number one. if you're self-employed or you have a small business, set up a solo 401(k). it'll allow you to put away up to $50,000 this year. it works like a regular or a roth 401(k) for the first part. then you can add up to 25% of your compensation up to that $50,000 mark. if you're 50 or older, you can actually put in an extra $5,500 to the pot. that'll make it $55,500 for your retirement. strategy number two. opt for an hsa or health savings account in addition to your high yield health plan. how does this work? you take the money you put into an hsa and it's tax deductible. can be taken out tax free for any medical, dental or vision expensions. the gains are going to grow tax
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deferred. susan john of the national association of personal financial advisers said this is an additional cushion for your nest egg. >> our whole health care system is so uncertain. and having a pool of money that you can use to bridge the gap between an early retirement and the availability of medicare to cover insurance premiums during that period of time is just a real sleep at night technique. >> here's another strategy to ease the anxiety. that is dealing with long-term care. you don't want to have any unexpected costs there. opt for a ten pay long term care plan. this will allow you to pay off that long term care policy in ten years. you toent have to worry about premiums going up ever because you're done paying. >> i don't know whether to feel sensitive or happy about that 50 and 55 stuff in your report, sharon. let's talk a little bit about research in motion. it has now unveiled its new blackberry 10 platform. it did it today at a developers conference in florida.
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looks like investors are already saying no, sir, hanging up on that blackberry 10. let's look at shares. down 71% over the year. down another 4.25% today. $13.69 a share. let's take a look at the main rivals. apple up almost 70%. google up more than 10% over the past year. so can blackberry 10 save rim? "street signs" is going to debate that and whether josh brown's rim pick last week in the cnbc stock draft was crazy like a fox or just crazy. that's at 2:00 eastern time. next this afternoon, why facebook wants to know whether you are an organ donor. they've changed the way we communicate. are they about to change global health care as well? americans believe they should be in charge of their own future.
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welcome back to "power lunch." i'm kayla tausche with breaking news on dolby labs. the company bought names rights
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for what was formerly the kodak theater since 2001. holds the academy awards in los angeles every year. report from the "wall street journal" just hitting the wire saying dolby won the bid. beat out more than ten bidders with a price that was substantially above the nearly $4 million a year that kodak had been paying since it acquired the lease. the current contract the academy is agreeing to extend the lease through 2033. back to you. >> thanks very much. time for the power rundown. our daily dose of discussion. first up, facebook has made it easier, obviously, to do a lot of things. now to become an organ donor. just a click of a button, not only can you donate your organs, you can also post a status update about it. you know, my liver. you don't want to know about my liver. jon fortt is on the west coast. scot cohn on the east coast. a noble cause or just facebook trying to get more information about me? jon? >> well, it certainly seems to be a noble cause.
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zucker berg said his friendship with steve jobs who, of course, had a liver transplant was part of the inspiration for this. also his conversations with his girlfriend. interesting to see. it will be interesting to see how facebook can galvanize interest in this. we saw social media can really do that with the sopa legislation issue a few months ago. it'll be interesting to see if it does the same thing here. >> scott? >> click a mouse and your kidney goes away? i don't get it. look, i mean -- >> they don't actually come and get your kidney. >> i think you take them at their word that this is a noble cause. there are 110,000 people on the list waiting for organ transplants. but it's amazing what people will put online as far as their personal information is concerned. what will others do with it? that's the thing that has me kind of scratching my head about this. yes, a noble cause. but noble causes can often go awry. >> let's move on to another cause, so to speak. that would be occupy wall street. the group protesting again today. but did the movement miss its
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moment? speaking of the 1%, did you know a growing number of drivers are opting for stick shift cars? we'll come back to that in just a moment. let's talk about occupy wall street, scott. they're down there trying to prevent the 1% from going to work today. >> you know, it's real easy to take shots at occupy wall street. you know, they got sort of cut off by the winter. today it's a rainy day. a lot of their things may be misguided. but you can't ignore what they've done. they've made this 1% versus 99% for better or worse part of the national conversation. we knew there was inequality. they've given voice to that. it certainly isn't a tea party as far as a grass roots group taking hold. they're still out there. i don't think you can ignore them. >> jon fortt, they seem to me rather disorganized like they have not capitalized on their cause the way the tea party did.
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>> oh, absolutely, tyler. my favorite unscientific way of looking at things, google trends. you take a look, interest spiked in early 2011. down to nearly nothing in 2012. they've got some kind of connection to this cleveland bridge issue today. not good for them. not relatable anymore. all right. let's move on to that earlier story about drivers opting for stick shift cars. not in europe. but here in the u.s. more and more people, maybe 1%, are doing this. is this just a marketing employ or is this people really wanting to learn how to drive? my father said you don't know how to drive unless you can drive a stick, jon. >> that's right. it's street cred. one speculation i saw was that stick shifts, about $1,000 cheaper. maybe people like it for that reason. hey, i didn't even get a license until i was 21 and out of college. so i don't drive stick. >> how about you, scott? >> as long as it's a stick shift with a clutch and not these women pimpy things where it's the automatic thing that makes no
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sense. nothing beats the thrill of popping the clutch. you feel in control. i think it's great. they've been talking about these things coming back forever. we'll see if it's true. >> thank you very much. still ahead, shares of rim taking a hit today. we talked about it. can the new blackberry 10 save research in motion? that debate coming up. it's very important to understand
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how math and science kind of makes the world work. in high school, i had a physics teacher by the name of mr. davies. he made physics more than theoretical, he made it real for me. we built a guitar, we did things with electronics and mother boards. that's where the interest in engineering came from. so now, as an engineer, i have a career that speaks to that passion. thank you, mr. davies.
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. >> reporter: strong day on the markets. dow jones industrial average up 110 points. basically it's a very broad based rally as we can see a number of the key components in terms of groups moving higher. smartly higher on the day. nasdaq up 24 points. s&p up better than one full percent. in terms of interest rates, the yield on the 10-year is at 1.95%. ty, you're up to date. >> moving up a little bit on the yield there. sell in may, no way, jeff kilburg. nice day today. let's talk about news corp. and rupert murdoch. the uk parliament committee says he's not fit to lead. is this a stock that's fit to buy, though, at this point? >> i think you can -- it has been sensational news media. no doubt about it. is he

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