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tv   Power Lunch  CNBC  May 30, 2012 1:00pm-2:00pm EDT

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final trade. b.k., give me a ticker. >> microsoft. >> weiss. >> jc penney short. >> guy. >> walmart. >> joe. >> cf. >> all right. that does it for final trade. b.k., give me a ticker. >> microsoft. >> weiss. >> jc penney short. >> guy. >> walmart. >> joe. >> cf. >> all right. that does it for us. more fast at 5:00. power begins now. >> announcer: halftime's over. the second half of your trading day begins now. all right. welcome everybody to "power lunch." the second half of the trading day does begin right now. these days it seems that what goes up one day must come down the next. the markets getting hit today from the opening bell. here's where we stand right now across the board. at about 9:30 east coast time this morning the yield on the u.s. 10-year bond went down record low of 1.65%. there you see it dow industrials down 152. s&p down about 1.3% or 18 points. nasdaq town 1.25%. and russell for the good measure down 1.75%. the dollar continues to be a big story as the euro falls down
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6.5% this month. and there you see that one. now, moving on. there's oil falling again today. oil down 16% in a month. and so that is yet another story. silver lining for those of you who have big suvs like me, but not so much around the globe. now to sue, who's in the middle of it all at the nyse. >> yeah, tyler. good to see you. if you're long the markets, you've given back yesterday's gains and then some. the dow down triple digits about 151 points or so. there's a lot of tension down here because it's not a pretty picture if you're long. we have a trifecta to yet another record low. courtney reagan is on oils for us today. and we start with bob pisani with me at the nyse. not a pretty picture, although i did find some bright spots. >> just as i came off a day off. seven to one advancing to decli declining. volume not on a heavy side.
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you know where we were one year ago, sue? may 30, 2011, 1331 on the s&p 500. you know where we opened today? 1332. the s&p is unchanged from exactly a year ago. you can see we're down a little bit. but let's not quibble. we haven't gone anywhere. look at the energy sector. when you get natural gas down 3%, oil down 3%, you've got an ugly day. doesn't matter if you're an exploration production company or equipment company like tide water or a driller like transocean, the whole complex is down 4%, 5% even 6%. home builder numbers a little disappointing. saying the giveback from the warm weather earlier in the year. home builders to the downside. sue. >> thanks, bob, very much. fear is ruling the yield on the 10-year. which put it at a new record low today. as a matter of fact, we fell below the 1.65% mark. right now we're at 1.63%. that would put it at a new record. and rick santelli's in the pits in chicago. fear trade is alive and well
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today, my dear. >> it absolutely is. and what's more is just how orderly and somewhat it is. it's not about return on capital. it's return of capital. we've said this before. if you look at an intraday chart, you can see briefly we traded under 1.62. so 1.618. if you look at a two-day chart, very interesting because yesterday's high yield was around 1.77 as we sit at 1.62. if you want to open it up as we're closing out the month of may, for the last day of april we were at 1.91. and here we sit at 1.62. of course the last chart's year-to-date. we continue to not only see it happen here, it's happening in the german markets. it's happening in the uk market. and to some extent even in the jgbs, the japanese bond market. back to you. >> i think that's one of the worrisome things, rick, is it is a global phenomenon into safety, correct? >> it absolutely is.
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and once again how low will interest rates go? that isn't the big question. the big question is what happens when the safe harbor issues start to go into the rearview mirror? that's the thing that is the most commonly discussed ax yum on the floor. >> thanks, rick. we'll check in with you later. oil prices sinking below $88 a barrel. 7-month lows right now. west texas intermediate crude down 3.25%. courtney reagan's at the nymex for us. courtney. >> good afternoon, sue. you can see oil prices very, very sensitive to movements in the euro today as well as many headlines out of the eurozone. so when you combine all of that plus worries about slowing chinese growth, you have a lot of pressure on these oil prices. we are about 40 cents off the lows of the day but still down more than 3.3%. this also means that we're down more than 16% for the month. which would be the biggest monthly drop since december of 2008. some traders are saying that this next technical level to watch is $80 a barrel, which we
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could see by weekend if this down trend continues. and last but not least, check out prices of gold. really reversing for us. i'm told this is on technical trading. down as lows a 1532 before reversing to 1655. tyler, back to you. >> courtney, thank you very much. let's go to jackie deangelis now for a quick cnbc market flash. >> we are watching shares of coal miners today this after pay treat coal sinking new financing downgraded by ubs and crt capital group. look at the board patriot coal, peabody energy, all of these stocks taking a hit today on that news. >> jackie, thank you very much. let's turn to danny hughes as the fonder and ceo of divine capital looking for divine ideas how to play a day like this. my immediate instinct is don't play it, stay away from it. you say you've got thoughts, short-term and longer term. >> and you know, tyler, every girl loves a share. today the market's on sale. that's how i look at it. johnson controls is one of my
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longer term plays. they're probably one of the leaders in the smart building space. they do everything from saving money on hvac, lighting, equipment to technology. >> automobile interiors too. >> batteries is doing well too. we like the battery space. autos continue to do well. controls. there's one. >> so shorter term, playing against the yields. tbt. you're looking at the interest rates all-time low. why not take a shot on the bounce of the yield and buy some tbt. it's an etf. again, shorter term play. additionally gold is another one to look at, gld. it's trending down because the dollar's been so strong. but also a nice way to play because the central banks are going to continue to reflate. >> little bit of a fear trade. dani, thanks very much. back with you in a little bit. meanwhile, the euro falling, dollar rising, as she just mentioned. and that of course has a major impact on u.s. stocks, especially those with exposure to europe. steve liesman is here now going
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to tie the macro picture -- >> at the cross roads. >> at the cross roads of macro and micro. >> x marks the spot. profit concerns for u.s. companies and questions about the economic outlook here at home. take a look at what we're talking about. the euro fallen to a near two-year low against the dollar. still again below 1.24. just a year ago 1.38. about a third of the decline has come in the past month with growing concerns of greece leaving the eurozone and recession in europe. carl wineberger the u.s. has been on a broad decline latest financial disarray in europe every time something comes up the euro takes another leg down. economists say it matters a lot, why the euro's falling and current reasons don't bode well for anyone. the flight to safety among the dollar. hurt this rebound we've had in u.s. manufacturing by making u.s. goods more expensive abroad and hurt overseas profits. could help more european exports and ease u.s. inflation, you see that with the dollar coming down
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providing more flexibility to the federal reserve. what am i to think about the investment -- get out of the way. having no overseas revenues. you can see some of those have done reasonably well. marathon more tied to oil prices. then there are these companies among those with some modest and in some cases substantial connections to the euro area. at least some profits could be heard in currency translation depending upon how the company handles it or through direct sale problems with the economy we hear about e-bay, for example, a report on that. here's a plus, stronger dollar should put downward pressure on oil prices and overall u.s. inflation which could help growth. and so far the rate of inflation has eased in europe even while the euro has weakened. a lot going on there. >> and that coca-cola quote we just showed there is not the main coca-cola. >> shout out to gina who puts together the data for us on the
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companies. >> absolutely. let's bring in simon hobbs now and ask the question, can the u.s. succeed if europe fails? >> let's put it this way. the fate of most people's 401(k)s, tyler, like it or not depend upon how the greek voters vote and what the european politicians decide to do. unfortunately for the moment we're in a bit of a no-man's land. we've got four weeks until the ei summit where they might attempt to muck that up. in an environment where you're concerned, but the contagion is more than just lapping at the shores of spain. the big realization this week from many people on the floor here is that, yes, there are ideas out there like euro bonds or perhaps some eu bank guarantee, but those aren't about to land any time soon. they're a long-term conversation that may or may not take place at that summit in four weeks time. so near-term, the only thing you've got it appears at this
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stage to support you is intervention from the ecb. and the ecb within the last 24 hours may or may not have said it's not prepared to come in and support the spanish bank, bankia. at this stage things look very bleak. but as you know, ty, we could turn on the head of a pin and suddenly have a big rally if something positive happens. but that's unlikely because they're waiting for the greeks to vote. >> remember when get smart used to say we're surrounded by a thousand army troops and then he'd go down to 100 police and now he'd say would you believe a troop of girl scouts? that's about where the eu is right now in terms of saying what we can pull out of our hat to help us. i don't think, simon, anybody's going to believe what they say anymore. they keep suggesting things. the germans have already knicksed. >> steve, simon, we have to leave it there. it's going to be a long and interesting summer, sue. >> indeed it is. pep boys has been getting slammed today. the stock has been down about
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20%. last trade is down just about 20% and change at $8.87. that's because of the sale of the company to private equity firm gores group has been canceled. they'll get a $50,000 termination fee reimbursed for some of the attempted merger-related expenses. zynga investors are poed. shares are down 30% in a month trading in the 5.90 range. julia boorstin joins us live. hi, julia. >> hi, sue. well, the ceo just left the stage moments ago. as you might have guessed, his company's reliance on facebook was very much in focus as is the fact that zynga's stock is down about 27% just in the week and a half since facebook's ipo. he really deflected questions about zynga's stock price insisting he's focused on running his company's product,
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not the market movement saying in defense of his company and others that -- we have this quote here. the crop of companies that have recently gone public are awesome and i'm optimistic --. one place he was very critical of facebook was in mobile saying that while mobile is a huge opportunity, it's still a fragmented space and that facebook just has the potential to be a big player in zynga's mobile growth. it's too soon to say just yet. now, while he did say that mobile growth is crucial, he was very clear that he's not interested in getting into the traditional video game market of the likes of electronic arkts and act vision. he doesn't want to compete on another platform but to make zynga the best platform for gaming. while impressed on zynga's reliance on facebook, he never thought in terms of attachment or detachment that facebook is really worth more investment as
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a platform for zynga's games and he's also starting to see real growth in the android apple operating system platforms for more mobile apps. clearly he has his eye on growth outside of facebook, but he's not decrying facebook or saying it's not worth investing in just yet. sue, back to you. >> actually, i'll take it. thanks very much, julia. we're going to move now to jackie deangelis for a market flash. >> hey, ty. david einhorn is at it again. this time with florida developer st. joe's. more criticism for the company saying the business model is flawed and the company needs to take further writedowns on its model of its unsold beach front real estate. he's had a short in this position for quite some time. down 6% on the day. >> jackie, thanks very much. apple's next contribution to society, rim's next move. and is mark zuckerberg really fit and ready to lead a public company? three key topics coming up after
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the break. first, some of the etfs that are going the other way. these are inverse etfs. in other words, if you bet on them, you're up today as those green arrows all demonstrate. back in two, folks.
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welcome back to "power lunch." let's run down three big stories in the tech world. jon fortt of cnbc fame and john herring the ceo of lookout mobile are players and both
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joining us from our all things d conference. gentlemen, welcome. first up, the mess at blackberry widens the company's warning of an operating loss. wall street bankers helping research in motion assess its financial condition. mr. herring, what do you think is the future right now of blackberry? >> well, i think what's most interesting to observe right now is the trend we're seeing especially with respect to rim that they're really focusing on rim as an asset, as a financial asset, rather than on the product itself. and i think that's going to have significant implications for the long-term of blackberry users both current and future. and it's also going to create a very large opportunity for other platforms like android and ios while rim is so focused on that rather than itself. >> is that the way to go? don't focus on blackberry, focus on rim and other assets. >> people are dumping faster
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than expected. i think the question is what rim can do to reverse this. that means blackberry 10 has to be spectacular. hard to imagine it will be spectacular enough or have a major shift? strategy towards services and software. hard to see if they pull that off. >> is it too late? jon fortt? >> i'm probably not the one to call whether it's too late or not. some companies have done some amazing things. but this is kind of a last-second buzzer beater. >> the venture capitalist, mary maker of kleinor perkins unveiled her report and says mobile products now are about 10% of all internet traffic and three years it was 1%. that's a ten-fold increase. how important is that change, jon fortt? and how high could that number get in let's say the next three to five years? >> it's maybe the most important change that's happening right now. in three to five years, i mean, i'm just guessing it could get
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into the 30% range. possibly even higher than that. depending on how quickly tablets start to encroach on pc share. if we see windows 8 tablets become popular, for instance, people stop caring whether something is technically a pc or a tablet. we see it affecting facebook, we see it afblgting apple. we see it affecting amazon in all the ways most important happening in consumer technology. >> john hering, if you don't get mobile right, and there are questions right now about facebook's ability to monetize its mobile platform, are you a cooked goose? >> we're really a mobile-first company. mobile is our entire world. and the smartphone and tablet platform in our opinion is the future of computing. we don't think of anything but mobile. yes, our future is dependent on the mobile platform. >> all right. a provocative article from "news
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week" can mark zuckerberg actually be up to the job running a very large publicly traded corporation. mr. hering, what do you think? he is young, however he single handedly built the company initially and smart enough to bring in people from the outside on his board that are very accomplished. >> yeah. i think that he's been focused on the product and the user and really tried to make sure they take a long-term viewpoint while surrounding himself with a phenomenal team. i think those are the rightin greepd #greed yents to build something over the longer term. i'm very bullish on the opportunity for mobile. it's very early days. i think they're thinking about it in all the right ways. the instagram acquisition is an example of that. i think he is focused on the long-term. >> jon fortt, how much of it is because the ipo did not go as everybody thought it would go, it basically flopped in many people's eyes and we haven't heard from mr. zuckerberg yet.
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is this sort of a pointing fingers blame game if you will? >> yeah. when anything blows up you have to point fingers and blame somebody. he's not only the ceo or founder, but he has the majority share. i think in the past he's done a great job focusing in on the product on what's most important despite what everybody else thought. now he has to care more about public perception because the government even more than because of individual shareholders. that could get facebook into a lot of trouble if he doesn't pay attention to that. >> interesting perspective. thanks, guys. appreciate it. coming up, analyze this. up next, three big calls and how they're impacting stocks today. plus, not crazy about the stock market? don't worry. we're detailing how to get into the housing market. and we have some keys that could lead to investment opportunity. back in a minute. in a minute. [ male announcer ] this... is the at&t network.
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change, we're down about 3.5% on the day. take a look at some of those energy names, exxon mobil, bp, shelve von, halliburton, all down today. keep an eye on that sector. tyler. >> we have started a brand new segment called analyze this. we're going to look at the big calls of the day from the analyst community to see how they're effecting stocks. you can decide which analysts you want to follow and which you want to kick aside. dani hughes is here to help us out as she did yesterday. let's start with citi. it raised its rating on linkedin to buy from neutral. and citi has long viewed linkedin as one of the strongest ipo internet stocks. we've written that we would become more constructive on a pullback. here's the pullback. here's the upgrade. do you agree that now -- do you agree with citi that now's the time for linkedin? >> they're basically saying it's on sale and you should purchase it now. we like linkedin.
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we like the space. i also think we should look at crm, salesforce.com. they just made a large purchase recently into the social media space. so they're going to be competing directly -- >> you like that one better than linkedin. >> these guys are much more embedded in large organizations than linkedin is yet. >> all right. next, goldman sachs upgrading wynn resorts to buy from neutral saying we believe the stock price reflects most of the risks currently associated with the company but does not reflect the potential upside to this premier u.s./asian casino story. analyze that one for me. >> it's been an embattled space. wynn resorts, las vegas sands, they've all been clocked because of china and the slowdown in macau and so forth. marriott is the one we like in this. >> there's an upside to the
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u.s./asian casino. for market perform in our opinion the rim investment proposition is almost entirely driven now by takeout potential. they like it. they're betting on a buyer here. >> right. they're betting on a buyer. if you're going to bet on a buyer, i would bet on a buyer that's got a little bit less risk inherent. rim's model did not work at all. there's a lot of overhang there i think the stock could still perform terribly even though it's down 75% already this year. we actually like yahoo! for that kind of a takeout space. they sold that alibaba piece back to alibaba. so they have some cash now. >> so you want to bet on a takeout, bet on yahoo! and not rim. >> they've deen well this year as well. >> dani, thanks very much. the countdown to the metals close is on. we're going to hit the floor after the break.
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gold prices closing right now. and it's all about the euro and the risk-off trade in today's trading session. courtney reagan's tracking the action for us at the nymex. courtney. >> it's been a very interesting trading session here today, sue, for gold. it looks as if we're going to settle just above 1560. that's quite a reversal from earlier in the session.
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we hit a low of 1532.10. before staging that reversal looks as if they're buying on technical levels. traders telling me gold could once again become a safe haven sooner rather than later. if you look on the flip side, not the precious metal but the industrial metal, copper is closing and will settle at a new 2012 low. this is as a result of the weakened chinese demand and concerns out of that region. sue, back to you. >> courtney, thanks very much. here on the floor of the nyse, bob pisani rejoins me. the volume is not necessarily in the usual suspects. it's in a lot of the etfs today. >> yeah. that's a good point. >> the inverse etfs? or both? >> even regular ones we're seeing today. the important thing is we're not getting big volume here at the new york stock exchange, but we are getting volume in certain exchange traded funds. this is a little bit unusual. we are seeing money coming out of the big emerging market etfs. the two big ones are the eem and the vwo, the vanguard and
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ishares. volume is notably on the heavy side. when you have a 3% decline in natural gas and oil, you get a lot of volume in energy stocks. the xle is also getting unusually heavy volume down on the 3% side. spider gold trust, i don't care what they tell you about gold, they're selling into the spider gold trust today. the biggest bond etf in the world, the tlt, very, very heavy volume. that's ten years old and it's at an historic high price today. >> bob, thank you very much. all right. the selloff is also in the nasdaq. seema mody is following the big movers. some interesting comments among mary meeker. >> that's weighing on the tech sector, research in motion as well setting the tone for the broader tech sector. down better than 8%. the worst performing stock on the nasdaq 100 again setting the tone if you look at cisco and google both trading in negative
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territory. facebook has been seesawing between positive and negative territory. we're now down roughly 2%. that's a look at some of the stocks we are following here at the nasdaq. sue, over to >> thank you, seema. the only safe haven has been the treasury market where the 10-year note yields hit about 1.63%. rick santelli's tracking the action for us at the cme. that's the only place to hide today, ricky. >> yes. i'm the toll keeper for the safety island of fixed income markets, at least the domestic ones. if you look at treasuries, look at intraday of 10-year note yields, you can see we're hovering pretty close to the lows of the session in terms of yield, highs in price 1.62. we did trade briefly under it. open to a 20-year chart, you will not find a lower yield. let's look at some of the other maturities along the yield curve. what about a 5-year note? it's currently at 69 basis points. a 20-year chart shows historic low yields. now, let's go to the longest
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maturity, a 30-year bond, this is a bit different than the rest of the curve. not only is it the longest maturity, highest yield of 2.71, a 20-year chart reveals that in december of '08, right after the meet of the fall crisis, we traded very close to a 2.50 closing yield. we're still about 21 basis points away from a 30-year closing yield record. back to you, tyler. >> all right. rick, thank you very much. let's go hunting with those yields in mind for yield. what's better than 1.65% on the 10-year note right now? lots of things. here are some companies in the s&p 500 that pay a much better dividend yield than that as a percentage, microsoft, intel, p&g, merck, coca-cola, kraft, mcdonald's, they're all there. let's head to dani now. how are you playing this low rate environment? >> how are you doing, tyler? there's a lot of ways to play the low rate environment. and there's a lot of stocks to buy. so i picked three, htc, hatteras
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financial pays about 12.8%. they do retail mortgages. the stock's actually done well over time. it's been a stock that i've owned and held for some time. another one is sjt, this is an oil and gas leaseholds. stock pays about 5%. and they mine in the northwest of new mexico. and then finally we've got cbo, they're also doing reits, but they are in the malls and open spaces also paying 5%. >> all right. dani, thanks very much. you know, kayla tausche's been following the facebook story since long before the ipo debacle. now the blame game reaching a new stage. and she's live across the room. >> well, tyler, nearly two weeks after that botched ipo we're finally hearing from lead underwriter morgan stanley. ceo james gorman addressing the issue in a weekly strategy meeting according to dow jones news wire saying the firm worked "100% within the rules and
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sharing information between analysts and investors gorman also saying facebook coo, sheryl sandberg, called him to offer morgan stanley a reference for their work on the ipo. now, as for what happened the day of the deal, gorman said there was "unprecedented confusion and disarray in the opening hours and that the share price actually last week was" disappointing, the blame game has been ongoing, perhaps gorman's comments put the ball in the ceo's court yet again, tyler. >> this will be a book length report later on. kayla, thanks very much. as rates head lower, does real estate suddenly become a good investment or an even better one? our diana olick is here in the studio taking a look at some new wrinkles in this asset class. diana. >> that's right, tyler. today's drop in signed contracts to buy existing homes after three months of gains shows just how volatility this housing market is. and that's why investors in rental properties are not concerned about a recovery in home buying.
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in fact, some are banking on rental rewards getting much bigger. as foreclosures flooded the market, investors began reaping rental rewards. in las vegas and feen phoenix, colony capital. >> the biggest opportunity we've seen in our careers. >> and in florida and california, carrington holdings. >> i think the notion of conceivably pooling these rental properties and creating a reit of some sorts makes sense. >> they are the pioneers of an exploding new asset class. single family rentals. colony capital began buying 200 homes when we met them in march. today they tell us they will have 1,200 by the end of june and launch a publicly traded rental reit next year. carrington is considering the same. >> you're creating a new investment category and new investment class, investors can participate in something like this based on the performance of the portfolio properties. >> connecticut-based carrington holdings just bought foreclosed properties in california, nevada, florida, georgia and
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texas. >> this is sort of a microcosm of what we're looking to do in many places across the country. >> while inventories of distressed homes are low now, rental occupancies are high and more coming. >> there's probably 6 million or 7 million homes across america are the shadow inventory which as the banks can foreclose are going to start becoming assets we can all look at again. >> that's why colony is going the public reit route. they need hundreds of billions in equity capital, which they can't get from the private sector. and public home builder, beezer, is also getting in. recently announcing it has formed a reit to buy and lease existing homes. reits are also attractive because by law they're required to pay roughly 90% of their profits in dividends. investors take note with reits, the bulk of the dividend is taxed at ordinary higher income tax rates. only the dividend that comes from the sale of properties is taxed at the lower capital gains
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rate. you were interested in that. >> i was interested in that because people think plump yields, but the tax treatment of them is different than yields on an ordinary bond. >> exactly. >> diana, thank you very much. sue. >> ty, time for some headlines. stocks of course as you know are down triple digits. but there are some bright spots. walmart the only dow member up in today's trading session trading at levels not seen since january of 2000. monsanto higher as well. oil sinking in seven-month lows. and so goes oil stocks. exxon, chevron and bp down better than 2%. at&t sitting at a four-year high while the sector peers, windstream and metro pcs hit new lows. telecom's the only sector generally positive in may. up some 2%. up next on "power lunch," forget silicon valley. check out detroit.
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brian shactman is in detroit for us. >> come on in for a second. it doesn't look like much, right? but this is going to be a coffee shop in a building full of tech start-ups because standard issue for a tech start-up, black t-shirt and a good cappuccino. in all seriousness detroit technology helps lead an urban renaissance. i'll put it together next on "power lunch." like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering, web-based trading platform. trade commission-free for 60 days,
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in every way, shape, and form. it's my dream vehicle. on a day to day basis, i am not using gas. my round trip is approximately 40 miles to work. head on home, stop at the grocery store, whatever else that i need to do -- still don't have to use gas. i'm never at the gas station unless i want some coffee. it's the best thing ever. as a matter of fact, i'm taking my savings so that i can go to hawaii. ♪ welcome back to "power lunch." in this market flash we are looking at forest labs. carl icahn planning to nominate another slate of directors at the upcoming shareholders meeting. he owns 9.92% of forest shares up from 9.2% in august. he tried to get some of his nominees on the board last year, but he failed.
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we're looking at shares up on a down day about 2 cents right now. over to mandy drury. >> thanks for that. coming up on "street signs" at the top of the hour, we're going to run the scenarios for greece and its future in the eurozone and ask a top money manager how you can profit no matter what the outcome. also maybe you don't want to worry about europe. we're going to have the top ten stocks of companies that do most if not all of their business right here in the united states. and which embattled stock is a better buy? facebook or research in motion? we're going to debate that. and the co-founder of myspace, the back to sue and tyler on "power lunch." >> thank you very much. detroit is a lasting symbol of course of the great recession, the near collapse of the auto industry. and at one point 18% unemployment. few years later it's still a stubborn 10.5%, the unemployment rate. but the city is clawing back. part of the resurgence is technology. not kidding. brian shactman is on the streets of detroit to explain.
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brian. >> you know, tyler, this building's name -- it's kind of a cute symbol, right? but it is representative of what's going on in detroit. this building was an old office space for a theater. and then dan gilbert, who is a native of detroit also chairman of quicken loans based in detroit and owner of the cleveland cavaliers, bought the abandoned space and he renovated it. the whole thing, specifically with start-ups in mind. vc firm detroit venture partners seated a slew of start-ups hoping to become a fast but lasting economic anchor for detro detroit. >> technology as a whole can create value and wealth a lot quicker than, you know, 1.0 economy manufacturing. so you have a long runway in manufacturing. you're going to have five or seven years maybe from conception to building a plant. where in the technology business as we all know the time frame is shorter and the investment of capital is a lot shorter. >> one really interesting
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start-up is called upto. as in what are you up to. basically facebook chronicles the past, twitter captures the present. and upto wants the future. people create a network and not only access their schedules but communicate about them. here's an example. i want to meet tyler for coffee, i see he has lunch with sue, dinner with bill griffeth. i can find out if he can squeeze me in. and gregg schwartz, who moved back home from the city is one of the co-founders. >> we live in a day and age where you can build a technology company anywhere and in many ways i think we're at a competitive advantage being in detroit. we can offer competitive salaries that can go a lot further in an environment like detroit. and, you know, you don't get lost in the shuffle in detroit. >> by that he means in new york or silicon valley, it's another ambitious app. here it's high priority and high profile. this at symbol isn't just for show. twitter just got an office upstairs.
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>> brian, thanks very much. we can always fit you in to our schedule. thanks a million. bringing it back down to the floor of the new york stock exchange to talk about stocks right now with the dow down -- we just had a 20-point pop in the dow jones industrial average. our freiend, art cashin, is her with us. 20-point pop to the upside or off of our lows of the trading session, despite the fact that we have what you described as a vision selloff in the euro. >> yeah. and it stabilized over the last ten minutes or so. and i think that's giving bargain hunters a chance to shop in the equity market. the key will be what happens to the currency? if they can stabilize it here, we might see some mild improvement. but this is going to be a dangerous week. >> how do you think the afternoon is shaping up? when i came down here this afternoon there was just a lot of tension. there's so much uncertainty. and the dollar is soaring against the swiss franc, which there rumors of intervention out there as well. what do you think? >> again, it's about the currency. the euro has seen a dramatic fall. almost historical in the sense
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that you don't visually see currencies move in that fashion. they're trying to stabilize it here under 1.24. if they can hold it, we might be able to trim some of these losses. if they start to sell it again with worries about europe, we're going to have a very tough time. >> steven, how do you feel about the market today? the volume is moderate, certainly. but we're seeing bp bp pointed out etfs getting very heavy volume. how does it feel to you? >> there's no panic. the market bounced at 1311 right where it was supposed to bounce, support came in right on schedule. we're going into two very heavy macro days here in the united states where maybe the focus can shift to domestic. the gdp and the nonfarm payrolls, which is something that the voting membership of the fomc, which has been put on the back burner a little bit, they're going to have to revisit if these numbers are poor. >> are you expecting them to be poor? what's your sense of how the economy is doing? >> i think the gdp is going to have a hard time hanging onto 2.0. if it comes in below that, that will be key. and i think the nonfarm payrolls
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are going to have a hard time getting above 150,000. we're hoping for 200,000. realistic consensus is 150. i think it will be real lucky to get 150. >> oh, okay. i think. i'm not sure. it looks like it's going to be an interesting afternoon, guys. thanks so much. >> read each others papers. >> exactly. ty, back to you. >> thanks, sue and all. up next, europe's debt crisis raising serious questions about u.s. corporate profits. is made in america the way to go? should you invest in companies with zero exposure to europe? and from made in america to a better america, can you see what's wrong with this? romney's moment. oops. tdd# 1-800-345-2550 i'm constantly working my screens.
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time now for the power rundown. our participants today, bob pisani and simon hobbs. first up, gentlemen, let's talk spain. some people are saying that the country is too big to rescue.
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but also big enough to succeed outside of the common currency unlike greece. simon, should spain leave the euro? do you think it would leave the euro before greece would? >> if you're asking me if spain should be forced out of the euro, if that happens, we might as well all pack up and go home. that means contagion walls have failed and presumably take out italy as well. that my friend is a worldwide depression. >> i agree. spain is a core member of the euro. they're either in or out. if spain leaves, then the euro itself disintegrates. >> do you think they'd be more likely to go out than greece, simon? >> no. >> in a word. that's a succinct answer. bob, do you? >> no. absolutely not. they're going to be in with the euro or they're going to be out. >> the finance minister of spain said that the battle for the euro will be fought in spain. and that is what we're witnessing this summer, like it or not. >> all right. there you go. no, they're not going to get
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out. and, yes, it would be terrible if they did. let's go to question number two. given all the concerns about europe, should investors stick with companies that have no exposure to europe and get all of their revenues from the usa? bob, you first. >> it's an interesting idea patri patriotically. but doesn't make sense. all of the earnings for the s&p 500, the biggest 500 companies in the united states are made outside the united states. if you want, fine, you can buy small companies where you'll get u.s. exposure, go ahead, buy the russell 2000 and sell the s&p 500. but i don't think that makes very much sense from an investment point of view for a long-term investment. >> simon, pure american play or not? >> yeah. it's a nice cute idea. people that sell you stocks for a living on television will recommend that to you because they want you to be fully invested. but if you look at the price action on the dollar, on oil, on gold, people are drawing the similarity between after the collapse and before lehman wept under.
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if there is a lehman-style event about to occur, you know those assets correlate together whether you're inside the united states or not. >> i like a u.s. company with little exposure in europe, but lots of exposure around the globe elsewhere because i don't think -- >> emerging markets are doing really badly. >> yeah. >> in the long run they're going to do just fine. and companies that sell -- american companies that sell to asia, if you're not there, you're not in latin america, you're square. move on to the last one. the romney campaign hitting a snag with the launch of the official mitt romney iphone app. boy, i got to get that. america is misspelled. in the slogan a better amercia, the typo gone viral. big gap for romney as he clinches the republican presidential nomination. how hard should we be on him, simon? >> not as hard as we should be of the president of accusing the
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polish having death camps. >> i think mr. romney should be forced to write america 50 times on the chalkboard along with bart simpson. didn't president obama say he'd been to all 57 states. are we going to collect all the gaffes people have made so far? is this an issue? >> if you spent a day looking at the cnbcs, you might find some words that are a little misspelled. >> thank you. >> to get the debt stricken europeans up in arms, imf christine lagarde offers she pays no financial tax. lagarde gets a salary of $468,000 on top of that she gets an allowance of more than $80,000 making her total package worth more than president obama's. but unlike obama, lagarde doesn't have to pay any tax on
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it because of her diplomatic status. this comes on the back of her recent controversial remarks saying that the greeks are trying to escape paying taxes. sue. >> my, my, my. still ahead on cnbc, myspace co-founder on facebook's ipo fiasco and whether social network history may repeat itself. that's coming up on "street signs." back in a moment. oment. or creates another laptop bag
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or hires another employee, it's not just good for business, it's good for the entire community. at bank of america, we know the impact that local businesses have on communities. that's why we extended $6.4 billion in new credit to small businesses across the country last year. because the more we help them, the more we help make opportunity possible. the economy needs manufacturing. machines, tools, people making stuff. companies have to invest in making things. infrastructure, construction, production. we need it now more than ever. chevron's putting more than $8 billion dollars back in the u.s. economy this year. in pipes, cement, steel, jobs, energy. we need to get the wheels turning. i'm proud of that. making real things... for real. ...that make a real difference. ♪
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let's bring you up to date on the markets with the dow jones industrial average down 136 points. we should note that's off of our lows of the trading session. the nasdaq down better than 1% as well. it's down almost 30 points on the trading day. the s&p 500 down 16. bounce in gold up $18. and a selloff in oil, we're down almost $3 on the day at $87.85. ty. >> all right, sue. let's turn to dani hughes and find out what she's watching this afternoon. >> i picked enc. >> why? >> we like the cloud space. we like the storage in the cloud. we like the file sharing. emc does that very well. the stock got clocked because of disappointing earnings. we think that's built in. we think the stock deserves a bounce. >> you can see the clocking

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