tv Closing Bell CNBC May 9, 2012 3:00pm-4:00pm EDT
we enter the final stretch. hi, everybody. welcome to the "closing bell." i'm maria bartiromo here at the new york stock exchange. >> i'm bill griffeth. another volatile session. off the worst levels after selling off sharply at the open. the dow fighting to snap a five-day losing streak. as we go into the next hour, we see the nasdaq hit positive territory. will it be six down days, you ask? the next traunch of bailout
money and then the rumors were denied later in the day and in fact a plan is out there to give them at least a portion and that's brought the market back here well off 77 points. the nasdaq, there it was, briefly positive about an hour ago and now down eight points. at this hour, below 3,000. s&p down six points. >> a pretty volatile day. we have less than an hour to go. we set our sights on cisco. check it out. stock rallying today after the close tonight. i'll speak with john chambers about the company's latest results. going to keep it right here with us on that because cisco has a great opportunity in terms of a window into where they are spending their money and that may very well with resilience is
the word on the street for the third day in a row. and after the first few hours of trading, art cashin saying today was the rumor mongers olympics. positive one allowed for that turn around and bill just told you about the headlines out of greece. the market taking a hit on fears that uncertainty in greece would prompt european officials to suspend the country's bailout money. some taking comfort that that means that the tronch will be made available. >> you get the influence with
the overnight trade and then a sell. simon hobbs here with us onset and rick santelli also joining the conversation. bob, kick it off with you. >> i'm encouraged that we're continuing to see outperforming. it makes some sense. 46% of the earnings with the s&p 500 are outside the united states. europe is an important component. we should be down somewhat. if our markets are going to do better than the rest of europe, we should be doing better and i think the markets are reacting rationally. the issue is what is going on with spain. spain is facing nationization. >> they are contemplating cash going into the collection of the
seven savings banks that is a break. that is a u-turn and opens up the fear that more tax money might have to go in. of course, the other spanish barvegs with bad loans. they are going to have to raise that. >> there's no leadership there. there's nobody there to say we don't want this traunch and who is there to endorse the check when it arrives? >>. >> well, a proportion of it is until it's needed in june, if you look at what the germans and chiefs are saying around europe,
if they don't, to the extent it can be put through, the implication is that greece will be asked to leave the euro zone possibly this summer. that's what we're talking about. >> predicks. let's say, hypothetically speaking, it's not going to be a major -- greece are expecting people to leave the euro. but at this point, after the last couple of weeks, it's not a surprise to say spain may very well follow suit. >> i think greece itself leaving the euro zone would be hugely traumatic. you got a report saying half the gdp is a go. it doesn't matter who you think will be next. it's the fear of who will be next. if you're in any of those countries, you start moving your money out of local banks for fear it will resort to what the beaten down currency will be. >> don't you think ultimately we're going to move towards a euro bond, though? there is going to have to be a
joint and liability to hold this together. >> i no longer think that's true. i did think that was true, that they were very united and they were going to hold it together but when you look at the way that france has gone, spain yields have gone, where greece is right now, i don't know that there's that unity. >> there's no evidence of euro bonds. that isn't it at all. i think there's a total fear that we spoke about. >> rick, meantime, that means that we get the risk off trade, a stronger dollar, much lower yields and so forth, right? >> the stronger dollar is definitely a positive. i look at it a different way talking to traders. the defense part of europe has been nasty and i look at defenses, building defense, contagion, ltros but sunday
showed us how bad the offense is going to be when they try to get these economies to grow or come out of recession. and that dynamic is going to plague and hammer the u.s. markets for years to come. >> uh-huh. >> steve, how do you play this, then, as a trader? i guess you're expecting more volatility, which is what you trade for the most part. how do you make money on this kind of trade right now in. >> well, it's extremely difficult. everything we're talking about is europe and if you're an investor, all you have to really worry about is whether the u.s. can be dragged down with europe. you want to own volatility in europe and perhaps sell it in the u.s. it seems a bit overpriced. economically speaking, we are rather stable right now and the question is, while they are trying to stabilize europe in what is a messy situation, will the u.s. get dragged down? and that's something that we just don't know and the markets right now are starting to become at what i would describe as
cautiously pessimistic. they are starting to begin to price in us getting dragged down. but it doesn't hold. it hasn't helped. >> very much a tug-of-war. gentlemen, thank you. talk to you soon. see you later. meantime, the financials are among the laggards at this hour. seem ma most dee has more on what is driving the selloff today. seema? >> the stock is still sliding on concerns over europe. the dow down 84 points. s&p lowered by 7 and tech-heavy nasdaq down by 10. taking a look at where we see the most pressure, financials currently trading in economic territory. weighing on the sector as a whole, we have citigroup down better than 2%. one of the bright spots, though, is disney. posing a strong second quarter earnings, revenue up 6% and profits up 21, this is the fifth quarter in a row that revenue is up and the fourth that disney has increased its profits.
walt disney currently up 1.6%. however, macy's actually beat street estimates holding a 38% surge in net profit. 38% on the bottom line. but shares are trading lower because it's fully a profit forecast that remained unchanged. also, we have health care stocks in focus today. it's a combo hiv treatment reviewed by the panel on friday. ahead of that, documents that outline the issues with the drug. so far, no major red flags. analysts reflect a stock p better than 2%. lastly, a quick look at pfizer. the advisory panel voting in favor of the arthritis pill, a drug that could be the company's next blockbuster. keep in mind, the fda usually goes with what the advisory panel recommends. back to you. >> seema, thank you very much. if you can stick around for
the next couple of hours, a lot of action is coming. >> we are headed down south once again. we are hearing more talk of a bubble in bonds and if that one bursts, someone here says it will not be pretty. also, speaking of not very pretty, hundreds of protesters forming outside of the meeting in north carolina. and apparently it hasn't been pretty either. one of the protesters is going to explain to us exactly why they seem to hate bank of america especially so much right now. >> wow. >> announcer: cisco is set to report earnings after the bell. will the network equipment makers turn-around strategy continue to pay dividends for investors or will fears of a global economic slow down weigh down the results? chairman and ceo john chambers breaks down the numbers exclusively on the "closing bell."
the latest. >> president obama has take answer risk by coming out in an interview with robin roberts who says he believes same-sex couples should be getting married. he said that his views are evolving on this issue. vice president biden said that he was comfortable with same-sex marriage. this puts him in a place that no other president has been. the question is going to be whether the dynamics have changed so much that this becomes an issue that barack obama can score points with or whether mitt romney will be able to, in some states, where the democrats hold their convention, to pick up the incremental votes that he needs to carry with that state that obama carried four years ago. >> john, thank you very much. about 45 minutes left in the trading session. time for a quick market stat check. a familiar trading pattern lately. we've been cutting the losseses
thanks to some strength among other sectors. utilities doing pretty well. the financials weighing down on course for the first six-day losing streak since the fiasco of last august during the debt ceiling crisis in washington. we all remember what was going on during that time. dow down 95 points, heading lower at 12,836. maria? >> bill, this move just doesn't stop. the 30-year is just above 3%. >> the question we often ask is if this is a bond bubble with priceses so high and yields so low, what does it mean for the market? brenden clark is concerned. he runs capital clark management. rates could stay longer than
most people are expecting and brendan, i'm not sure i buy the bubble argument. the dot-com bubble of the '90s was market-oriented. the real estate mania of a few years ago was market-oriented but this time it's artificial. the fed keeping rates as low as they are, how can we be worried and why would you be worried about that? >> good afternoon, bill. you're right. these are differences because these are manufactured by the feds. there is one thing in common. individual investors did not think that they could lose money in the '90s and real estate in 2005 and the large majority feels the same about bonds in 2012. >> so there you have it. it's the false expectation that this is a safe place to be. and brenden, you see rates down lower than most people think. what's your expectation? >> we think over the long run
rates will move higher. we don't think you can continue to borrow and not engs pekt the market to push rates higher. we hope that the fed pulls rates higher as the global economy continues to expand and improve but that remains to be seen. >> what about the implications of rock bottom rates in japan? we saw rates of inflation. can rates go lower as we've seen in the '90s like in japan? >> the fed is trying to keep interest rates artificially low. fundamentally it doesn't make sense that we have negative rates but the fed will continue to keep rates low and this could continue to lower. >> are you expecting more easing from the fed, eric? >> i think we will get more easing.
the core of the fed is very dovish and there's an operati twist with mortgage backs. >> i share your concern that people can lose money if they are hurt by a rise in rates when the fed decides it's time to start letting those rates rise. but don't you feel that bernanke and company are mindful? it's not like they are going to take the rug out from everybody and pull at once. don't you think there will be a subtle way for them to do that so you don't have everybody heading to the exits at the same time? >> yes, there are still so many emergency stimulus in place that they will withdraw before they get to rising interest rates. so, yeah -- but, at the same time, if the fed was really concerned about individual investors, would they really keep rates artificially low on the heels of retirees on fixed income? probably not. >> how do i want to invest
around this whole scenario? you've got over $200 billion under management. >> clearly you don't want to have the money in the bank. absolute return strategies, currencies outside the u.s., even some credit bank loans and high-yield bonds are places where you can get back from the fed. >> we'll leave it there. thank you very much, gentlemen. we'll see you soon. appreciate your time tonight. >> thank you. >> we have 40 minutes before the "closing bell" sounds on wall street. the dow jones industrial average down 85 points. that's the good news. we're well off the lowest levels. >> one of the hottest stocks and, no, we are not talking about apple this time. >> the company that killed off captain kirk even though william shatner is not doing priceline commercials anymore. the stock that he has represented for years, the stock is on fire.
both sides of the priceline debate coming up. and let's get into it, 18 leading ceos think so and they are letting timothy geithner know their feelings. that's our twitter question of the day. what do you think? do you think if we were to see dividend taxes go from 15% to nearly 45%, does that hurt the stock market? tweet us your responses. make it good and we'll read your answers later on in the show. as we head to a break, here's the heat map at this hour. it looks a lot better now than it did. a little more green than red. stay tuned. and i thought "i can't do this, it's just too hard."
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welcome back. what happens in europe matters here. especially when it concerns commodity prices. >> look at the index and follow the slide that we've seen over the last several sessions. and as we talk about oil and gold in particular, with oil prices here closing above that 200-day moving average, that's significant and we see fresher, still six day in a row for the sliding prices. what happened with the oil is that the investor data showed a big build but not as big as the industry data had shown. still, gold prices marking the first time in 2012 that they
settled below $6 an ounce. back to you sharon, thank you so much. price lyon is in the spotlight tonight. reporting earnings after the bell. we'll have those numbers for you. the stock is up 50% year to date. quite a move this year and priceline, is there still room to get in or is it looking a bit frothy at current levels? on the technical side, rich ross is on the fundamentals, jake from the fun mentals. let me kick it off with you. you have an $800 price target and you're looking at fundamentals but the company is in europe. is priceline vulnerable? >> i don't think that's a risk and i give you three reasons. first, only a third of hotels
and people search out deals and go on priceline. secondly, travel demand is strong, europe didn't fall apart. it held up quite well. and then finally they are pushing aggressively into asia and latin america. it gives you a driver of growth. i think you're in for a strong earnings report. >> three good reasons to own the stock right here on the fundamental side. let's go to the technicals, rich. do you think this stock is going to 800, based on what the chart says? >> i'm going to have to disagree with jake on this one. we think priceline is poised for a roundtrip down to 550. we see a well-defined 13-year high that takes us back to the peak of the internet bubble. it's left the stock vulnerable to that breakdown. the yellow line around 707 is just a bounce. we really believe you're going to get a breakdown through 675
at the low end of the trading range. that's going to set us up for a fast move down to close the window around 590, 600. we think we're going to end up around 500. meet chart support that goes back to the highs that we set back in 2011. with the stock up 1500% since the 2008 low, we're not going to stick around. we're a seller ahead of the earnings. >> 550, quite a move away from 800. thank you so much, rich. jake, thank you so much. we'll be watching these numbers and fill our viewers in once they come back after the clothes. >> novato and so that must mean that it's time for a flash with brian shactman. >> it's a market watch is what it should be. taking a look at the intraday chart, it's up 40% year to date.
they had 11,000 shares and now own 943,000. so money piling on the back of that. it's now up 5 1/4%. back to you. >> well done, mr. shack man. thank you very much. >> we'll breakdown the very real threat. why this market is trading on that expectation. that's next. stay with us. tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 the spx is on my radar. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus. tdd# 1-800-345-2550 i can custom build my own screens
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well, you can't say the stock market is born. a big selloff again today though we are losing altitude in the final 30 minutes or so. market down 82 points on the dow industrial. bob pisani, are you there? >> any time now, bob. >> hey, bob. >> put your earpiece in, robert. >> maybe we ought to pick up the phone and call bob. >> somebody let bob know it's
time. >> markets aren't showing signs of austerity but they are closely monitoring the sovereign debt concerns when it pertains to greece. what is the worst case scenario, you ask? >> well, jpmorgan says negative head winds in europe may be strong enough to knockout the tepid recovery in the united states. how do you want to look at that? thank you both for joining us. let's talk about that. how severe might an upset be in the united states because of europe? >> well, there's rumors that they announced that on friday. of course, political party after political party and greece don't seem to be doing a good job at building a coalition.
certainly it's a significant headwind for that. >> what do you make of the market action lately where we get this fear factor in the morning and then the rest of the day it comes back? feels like the market wants to go higher, doesn't it? >> the phrase we've been using is rolling brownouts. i don't think one agreement was going to change the game. that said, i think what we are seeing is that a decoupling going on. we noticed about $90 billion of capital were raised in the high yield market in the third quarter. that's about twice the number annualized. the capital markets are easy. we're going to do this dance with europe and at the same time, the earnings side seems to be stabilizing. >> earnings stabilizing.
in fact, bob, earlier in the week bob thought that the third, fourth quarter was actually higher earnings than what we've been seeing in the first and second quarter. bob, are you with us? >> i am. that's sort of the issue right now. we're not expecting a lot in the second quarter earnings. only up 2%, starting in the third quarter and especially in the fourth quarter aside from the earnings, expectations are going to jump up 15, 16%. do you think we're going to attain that? evidently we're starting to see. >> i know that you're not hearing bob. he's asking about expectations going into the fourth quarter. >> what we really liked about the earnings backdrop, a lot occurred in november of last year. the sell side in the u.s. dramatically cut estimates. it's a lot lower than they were 12 months ago. >> so it's a good comparison thing? >> the hurdle rates are better. the are reality is, there is a slowing that is going to go on but the market is doing a good
job sort of forecasting it. >> how much of it is already expected, anthony? it's all a game of expectations, right? does this market can expect europe to be a problem? does the market sell off because it's unexpected? >> i think the market is expecting a little bit of turbulence but somehow at the end of the day the market feels like it's going to be resolved, we're still looking for 2.25. >> so are you a buyer of stocks? >> i think longer term the stock market will do well. this year we're going to see an 8 to 10% growth in the s&p by the end of the year and we certainly are -- have more to go. the hope is that things will settle down a little more. >> how do you make money in this
market right now? >> i think you're going to need to be selective. we're finding some defensive areas like food, i.t. consulting that makes sense. >> part of it is, we're not strong enough to forecast europe. find things that make sense. we've seen opportunities on the high beta side where they are a lot more compelling. cap x isn't bad and estimates have been cut nicely. if you look at the adviser fees, we think there are pockets that you need to pay attention to. >> we'll leave it there you. thank you so much. >> the closing bell is sounding in 20 minutes. dow is down 80 points, bill. when we come back, the showdown at the bank of america
shareholders, protesters that will join us. cisco reporting earnings after the bell. we'll talk to the ceo, john chambers, before he speaks with analysts on the call. tax rates on dividends are set to skyrocket next january. do you think that will hurt the stock market? what it affect your investments? tweet us your thoughts @cnbcclosingbell. stay tuned. tuned. today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe?
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look at gilead and arena. arena has an obesity drug that gilead has and also the hiv treatments. back to you. this is flirting for 20 for a couple days now. last time is settled above 20 was april 11th. the nasdaq, meanwhile, on pace for the lowest close in two months. nasdaq down seven points. a quarter of a percent lower. nasdaq will be down for a fourth session in a low.
and the stock is not moving much. there has been a rough time the last few weeks but an estimated 500 protesters outside the shareholders meeting being held in charlotte, south carolina. a couple arrests have been made at this point. >> bank of america is a morally bankrupted institution that has been too large to fail. we don't think that as american taxpayers we should be propping
up a financial institution and do you think it's different for b of a right now? >> i think the consistently worst offender and i was defrauded to the tune of thousands of dollars in illegal foreclosure fees and that's something that they settled for in civil cases and persistently done over and over again. we think there's a real pattern of behavior there that can be addressed through restructuring. >> so what do you want to see happen? what would you like to see as a solution? what are you trying to accomplish today? >> i think bank of america is a ticking time bomb that threatens to explode on the american economy and we have a proactive solution. we think that's the only way to change the he will legal pattern and behavior.
>> what kind of credit do you you have in terms of really understanding and knowing what is involved in the break-up of a bank? why would what you say matter more so than what the board says or management says in terms of understanding the complexity of the company? >> sure. so i think that there are a couple of answers. we've been helping put together this campaign but more importantly we're all citizens and we have an outcome of what happens with this company and the fact that we have these too big to fail banks, we can't let them continue to exist and we need to break them up. bank of america, i think, is the worst offender in that regard because they are so weak and because they still depend on so much government support that continues to exist. >> max, i'm glad you're here because, you know, working here on wall street, especially the new york stock exchange, we've
seen the occupy folks outside all the time with various plackards and whenever i discuss this issue with people, what exactly are you protesting? it seems to be an unfocused anger. for example, you have income inequality issues, racial discrimination, foreclosure practices and on and on as it pertains to the banking industry. do you lack credibility simply because you lack focus with your protest movement? >> so i think there's two answers. this is an incredibly focused protest. we say break up bank of america because it's insolvent. wire here to support equality and fairness and we want the
same system for everyone and the bankers who broke the law should be treated the same as the rest of us. >> max, how would you like to see the bank broken up? go through the various divisions? >>. >> that's not something i'm really able to talk about in great detail. there's a lot of different ways. >> do you know the divisions of bank of america? do you know this company in terms of how it makes its money versus the other divisions? can you tell us the divisions of the bank? >> i feel a little bit ill prepared to speak about that. >> no problem. >> max, thank you for joining us. >> thank you for having me. >> that was an interesting and enlightening interview, isn't it? >> you know what, i get that they are angry. i get that there is a malaise that exists and i understand the anger at the financial services
industry but they are still so disorganized overall that there's no clear focus of what exactly they are protesting right now. >> and my feeling is, and i think a politician has said this, i feel like the occupy movement, they are going in there and protesting at one headquarters. what are they expecting? brian moynihan to come down there and right a check? if you really want to change the system, go to washington. make sure that the overall banking system is changed. what are they looking for? i just don't get it because you're not doing anything to change the laws and the structure of the real banking system by protesting outside of bank of america or the steps of -- >> right. >> but i get it to. we are all frustrated. we have 8% unemployment. i'm mad, too. >> whyeah, exactly. >> okay. we're going to take a break as
we head towards the close. >> we're going to go to the head of news corp. the company reports earnings. the bottom line will be hurt because of the ongoing hacking scandal. here's a look at each sector of the s&p and how they are trading at this hour. s hour. on my journey across america, i found new ways to tell people about saving money. this is bobby. say hello bobby. hello bobby.
welcome back. coming from the floor of the nyse, we are coming to you from the chiquita brands. cqb is the ticker symbol. it's 30% lower on chiquita. it's dropped to a three-year low. this t downgraded as well as jaffrays. the fruit and vegetable distributor blaming lower banana prices as well as higher fuel
prices. the analyst is telling clients that economic difficulties, coupled with currency pressures suggest profitability will be cut this year. the loss of a major customer in the company's salad business also hurting profits there. jaffray is cutting the price target to 750 and that is down from 12. the stock is 560. chiquita shares have been lagging well behind those at dole foods as well as del monte. >> yeah, or something like that. yesterday maria spoke extensively with house speaker john boehner about taxes. today we're asking for your take on this situation. would a potential tax increase on dividends hurt the stock market? here are some of your selected tweets. jim said, if taxes go up, companies will reduce dividend payments, stock prices falter,
and dividend is a strong long-term buy. the corporation giving a dividend is a strong long-term buy. then there's jack tweeting us who says, on the one hand, bernanke wants you to put money in the markets. on the other hand, obama wants to take an added chunk of those dividends. all in one tweet. we appreciate all of your tweets coming in. keep the comments coming. we'll have more in the next hour of "closing bell." tweet us @cnbcclosingbell. >> get set for another big hour on the "closing bell." >> announcer: cisco is on a roll. the company has beaten earnings ex be peck tagss for three straight quarters. can it extend that streak to four? john chambers breaks down the numbers. plus, will the ongoing hacking scandal at news corp.
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about four minutes left in the trading session. dow is headed down 3% in the last six trading sessions and it looks like another down day today. the longest since last august. when we had all of that turmoil going on in washington at that time. in the hot days of summer. right now, as long as europe is our focus t. would appear that the foreign exchange market is calling the shots. this is the market to keep an eye on right now. this is the dollar index going back a year and we are just coming off the 200-day moving average. it could mean that the trend will be higher and as long as the dollar goes higher, that means the euro goes lower. the risk assets in the united states could be going lower. let's look at the other markets. s&p 500 for the last year is now testing its 50-day moving average, the shorter-term indicator for the first time this year. the price of oil is now below
its 200-day moving average for the first time in a long time. there it is. just below that average as we go back a year. that was last summer with all of that turmoil. gold has been below the average for a long time and now we're back below the $1600 range. we'll see what that means for the short term here. the vix, the fear indicator, was testing the 100-day moving average. we're back below 20. we're not exactly in territory. s&p sectors for the trading day just today, technology leads the way followed by those defensive utilities. it's been a risk off day for the markets. let's talk to savvy guys here. what's the message of the market right now? we get the selloff in the market lately and then the market spent the day coming back. >> well, today was the olympics. we had aid on greek government
formation and that's what led to this roller coaster action. i think the message is nervousness. we have more of this to play out. europe is still driving the bus. >> yes, it is. >> how do you invest in this right now, anthony? >> i think in a world of nervousness we're advising our clients, you want to go in the markets, you want to go in with a helmet, that gives you downside protection. i think the train is headed in the right direction but it's going to be a bumpy ride. the industrial and sectors and entering in with a downside protection is not going to hurt anyone at this time. >> what do you watch more? the european trade or fundamentals? >> right now it's the european trade. we'll wait and see if the american economy comes back to the forefront. for now it's all about europe and what's going to happen with greek and the euro currency.
>> and if the european trade continues to be troubling, does that mean that the fed could step in with more quantitative easing? >> i think central bank are over the world are doing that and that gives me some encouragement. >> do you think our debt will be going higher? >> yes. >> what do you think? even with the economy slowing down here? >> the economy is slowing down but it's growing. we're going to go to 2.25 prz. >> cisco earnings out shortly. that could determine tomorrow. >> yes. we have to wait for that overnight. thank you, gentlemen. that is the first hour. wouldn't you know, coincidence or not, on the same day that president obama comes out for same-sex marriage, today is international equality today and