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tv   Closing Bell  CNBC  September 17, 2012 3:00pm-4:00pm EDT

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a new survey says that 1 in 5 mobile phone users is paying more per month for their mobile phone plans than they are for groceries. nearly half pay more than $100 a month. chew on that. "street signs" back tomorrow. "closing bell" starts right now. hi, everybody. good afternoon. we into the final stretch. welcome to "closing bell" at new york stock exchange. tough week for blue chip indeection. dow down half a percent. >> here's a stat to remember. the dow has only fallen three times this month. and in each case it was on a monday. in fact, we're down 14 out of the last 15 mondays for some reason. overall, blue chip average is up more than 3% since the beginning of september. but we saw stocks take another leg down on the last hour with oil taking a big hit. we're looking at some of the reasons behind the drop in oil. have an update on that coming
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up. first, look at major averages. there's crude oil down 2.6% off the lows. and it took the stock market with it briefly, as you can see there. now the dow is off its low, 48 points at 13,545. the nasdaq at this hour is down 12 points, 0.3%. and the s&p 500 index is down six points at 1459. >> with the fed rally behind us, what is it going to take to get closer for the dow for all-time intraday high which is just 600 points away? amazing we're only 600 points away. we have a pretty big plunge in energy prices hitting stocks. is this something else we should watch out for? >> let's talk about this on "closing bell exchange." d dani hughes, blacksmith, and jack from bull and bear partners in chicago. jack, do you have any sense -- i know you like gold and oil right now.
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why the selloff in oil the last hour and a half or so, do you know? >> well, two things. remember, the holiday market condition, and on top of that you've had a rumor they're going to wree lease something out of strategic petroleum reserve. it takes one note like that to drive the market. it's gold that's really the question. why is gold moving the way it is? these are both markets that can turn around very quickly. i would not be -- i would not be reading too much into that noise. >> dani, you're skeptical of this market at these levels. you think it will be tough sledding from here to the end of the year, yes? >> it's going to be tough. you have so many things going on that have absolutely nothing to do with the market, like the election and fiscal cliff we're on. third quarter guidance will continue to be ratcheted down. it's four to one against right now in terms of earnings guidance. but take a look at some of the names that recent downgraded. intel, dell, yes, they're down over 10% in a month, but then you look at lowe's and it's up
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5%. fedex is flat. they're coming out with earnings tomorrow. you know, it's time to kind of take a look and start picking away at great names. i keep saying this, that have great dividends. u.p.s. is another one. it's probably baked into the stock. have you qe3 driving people towards having to perform and outperform the market before the end of the year. so, i think there is some opportunity for some good names. >> hank smith, what do i think? i would be afraid to get in front of any market train because the rally still has momentum? sure, we're seeing down day to day but it is the jewish holiday, volume on the light side. how are you invested going into second half? >> well, maria, i agree with you. two market adages. the trend is your friend and don't fight the fed. we found out late last week, the fed is all in for a long period of time. so, that is a huge secular macro trend i would not get in the way with that -- i would not get in the way of. doesn't mean we won't have pullbacks but we think the direction is decidedly up,
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unless there is a geopolitical blowup. of course, there is that risk. we saw over the weekend china and japan flare up a little bit and everything in the middle east that's been well covered. absent that, the trend is your friend. >> todd schoenberger, you would get in front of that trend, wouldn't you? you've been skeptical of this market all along. >> i have been but i think ben bernanke just made me shift course here. hank said this is unlimited posturing by the fed. the only place to be is equities. learn for upcoming earning season to be a little rough as we heard earlier because you're going to probably see only 3% earnings growth quarter over quarter. that should be a great opportunity to build up that war chest. i might be turning bullish on you guys because i start thinking -- >> what? >> i'm telling you, going into next year, it's the only place to be. i don't know where else to go.
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as long as ben bernanke is in charge, it's a great place to be in equities right now. >> let me get your take on oil. we are still very, very sharp move in a very short period of time on the price of oil. what's behind it? and is there a way to make money on this right here? dani? >> you know what, i want to see what's behind it. i don't know. could it be another glitch? why are we not finding out until days later, weeks later what actually happened? that concerns me a lot. we saw that with night, it took 45 minutes to an hour. if something technical happened, i want to find out but i do want to lock in my oil prices here i think for the winter. that's one thing -- >> actually when they say it's a technical selloff that's because they can't figure out why it went lower otherwise, right? that's a good excuse. jack, are you inclined to stay with the basic materials like the golds and oils, or what about equities? they look pretty good right now? >> bill, everything looks great. when you have your fed chairman come out and basically say what he said, it is the david tepper
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trade all over again. you have to be long commodities. have you to be long equities. pe this are debasing currency. it's a blinding glimpse of the obvious. this is money that's going to be coming out of the government-sponsored mattress, 10-year and 30-year and going into equities. we've already seen it. this is going to be a dramatic move. this is going to be a september to remember. >> hank smith, todd shownen berger just turned bullish on us. you want to change your tune? >> contrary indicator? >> not yet. easy money is ahead of us. let's think of it that way. the blowoff is not there yet. >> hank smith, what about you? >> no, we're going to stay positive. look, if we have a tepid earning season, i think there's still going to be great interest in dif kedividend-paying stocks because in the yield-starved environment equities is the place to go for income. >> todd, now that you're bullish, are you worried you're bullish? >> not at all.
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look, here's the risk -- >> contra indicator. >> look, look, on ben bernanke, his term comes up january 2014. depending on who wins the white house, that could have implications there. plus, the fiscal cliff mess. still a mess. hank talks about dividend-paying stocks. that may not be the one area you don't want to be a part of because if we jump off that fiscal cliff you're looking aat dividend tax rate going up. that could hurt those. moving forward, consumer discretionary should do wonderful next year. build up the war chest while you can in the fourth quarter because next year should be lights out. a great year for the bulls. >> thanks, everybody. see you soon. we have a market down 47 points on dow. let's get to jackie from market flash. >> hey, watching shares of vivas getting a nice pop as it announces public availability of obesity drug. we were looking at fourth quarter launch of this drug. our physician prescribe the
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drug? looking at a pop of more than 3%. 22.7. we'll watch vivus. heading toward the close, anything can happen. down 48 points. that's nothing, though. this market can turn on a dime. will it be 14 down mondays in the last 15 or not? we'll find out. >> 14,164, the all-time high on the dow industrials. don't touch that dial. a lot more headed your way on this special edition of "closing bell." coming up -- not so fast. gm says the government's bailout of the automaker is hurting its aim little and its business and it wants out. but it could cost taxpayers billions in losses. should uncle sam wait until it gets its money back or is ditching the bailout the only way for gm to move ahead? plus, phoning it in. the iphone 5 flies off the shelf. is there a way to make money from this phenomenon without owning apple stock?
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the answer you can't afford to miss is straight ahead. and the battle ahead. investment profits front and center. as congress takes on capital gains this week. could this be a linchpin moment for the future of tax reform in this country? that's all ahead on "closing bell." with the fidelity stock screener, you can try strategies from independent experts and see what criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments. the expert strategies feature is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
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welcome back. stocks struggling to fin irhigher in the final hour. mary thompson has the latest. >> another low volume monday and s&p 500 down six points as we head toward the close today. it has recovered from the dip that it took. of course, after oil fell off today. pacing the decline, the s&p 500, today we have weakness and materials, financials as well as energy stocks and even though financials aren't the leading decliners on a sector basis, six of the -- or four of the six stocks are contributing most to the decline in the s&p 500 are
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banks, big banks that had a nice run up in the last couple of weeks. specifically, bank of america as well as citigroup have been strong, giving back some gains today. the other stocks contributing to that decline, cisco and exxonmobil. >> thank you. we'll be checking back with you a little later here. now to the topic of bailouts, general motors is pushing for the government to sell its entire stake in the automaker. government kept gm alive with the $50 billion bailout in 2009. it's now at a 26% stake in gm. >> the company doesn't necessarily like the rules that go along with it. it's that stake that has gm worried. leaders of the company say the stigma of being government-owned is a drag on the brand and even hurts the company's ability to hire talented people. selling means the government or u.s. taxpayers could lose $15 billion. joins us is james who says the government should get out now. former clinton white house aide who says selling now does not make sense. good to have you on the program.
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james, you say the government needs to get out of the auto business. explain. >> the taxpayers have already taken the loss. government's shares are worth considerably less now than when they bought them. whether or not you recognize the loss by selling or not doesn't make that much of a difference. what does matter is having continued government oversight and control of the company. this is america. we don't want the government owning the means of production. >> i get that but if you're an investor and at a loss right now, as the government is, look at the profit they made on aig when they sold shares recently. why not just wait it out and if you believe that gm is going to grow from here, wait it out, and when you have a profit, you sell. what's the harm in that? >> that's what we call speculation. a lot of people are looking at gm and saying there's a lot of headwi headwin headwinds. coming out of the recession, the sales of the volt are not doing well at all. why speculate? let's get the government out of here? we've taken a loss.
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accept that and move on. >> keith, why shouldn't they take the loss? you disagree. say it doesn't make sense to risk taxpayer dollars right now. >> the government is willing to take some kind of loss but not exorbitant loss. the ipo in 2010 was $33 a share. gm is now trading at $23 a share. why should the government sell $23 when it could perhaps get it up to $30 or more? i think that's what the government wants. it would have to be even higher to be able to make a profit off it. it doesn't make sense for the taxpayer to take a huge hit, billions in losses just to get the government out of the business. the government is actually helping the gm to push to make some changes it needs to make. the government pushed gm to get rid of some outdated brand. the government's involvement can be a instructive influence. >> what about their point, keith, there's a stigma attached to being partially owned by the government and it's making it difficult to hire the talent they need right now, because some of the rules imposed by
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this government ownership. >> that's understandable. certainly if you have government involvement, it's not government control, that means have you to have lower wages to pay your top executives. at the same time, they were able to create record profits last year and still pretty significant profits in the first and second quarter of this year, even with government involvement. the idea government involvement is an inhibitor that prevents the company from being profitable doesn't add up. >> it's interesting. all we've been hearing is how great this bailout was for auto industry, gm. now when you look closer at the situation, you realize gm wants governments out. you're having problems selling the volt. they're selling production factories. what about the issue of billions of losses in putting taxpayer dollars at loss. how do you address that? >> well, look at why we lost money. the reason we lost the $25 billion is because the administration made a decision to protect the uaw, the union, from the losses they normally
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take in bankruptcy. they decided that the unions -- the existing members weren't going to take a cut in their pay, keep their benefits. that doesn't normally happen in bankruptcy. that cost over $25 billion. the reason we're taking these losses is because the administration decided to protect the union. it wasn't necessarily to keep the companies running. >> that's actually -- >> that's the loss that happened. accept it and move on. >> we've heard that argument before. keith, what's your answer? >> that's been discredited by some reports that have looked into that. only 10% of the cost of the vehicle is about -- comes from labor costs. i mean, the idea that the unions were -- or the ones obstructing the progress, unions have made a number of concessions in order to get to this point. >> the unions got about 80 cents on the dollar on their debt. the other unsecured creditors got 20 cents on the dollar. >> the unions got the best deal out of that bailout. >> the idea dais-- the notion -
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i've heard some say the viva is responsible, but they own less than 10% of the stock of gm. still, it's an independent board that's not controlled by the uaw, so the idea the unions are the ones who made the -- made off like a bandit doesn't take into account that gm had liabilities they had to take care of, regardless of who was going to take care of those. >> we've gone off the rails on the issue of whether to sell the shares. but thank you for your shoutful comments. >> no, don't sell the shares. >> thank you, guys. we'll see you soon. speaking of bailout, it's been less than a week but the romney campaign is accusing the president of oshg straighting a bailout. >> reporter: it's not easy to make ben bernanke a campaign issue. most people don't know who the fed chairman is but mitt romney is trying in the wake of qe3 last week. you a fund-raising solicitation.
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take a look at the text of that saying barack obama's at it again, spending money we don't have to prop up his failed economic plan. the federal reserve announced last week it would spend $40 million a month to try to help out this jobless recovery. of course that argument from the romney campaign ignores the assertion from fed independence which we got from ben bernanke last week. mitt romney is making this argument as he goes to the hispanic chamber of commerce today. president obama is firing back by linking romney to another figure who's somewhat better known, george w. bush and his tax cuts. here's the president in cincinnati today. >> they don't want to tell you their plan. the reason is because the plan they've got is the same one that they've been offering for decades. tax cuts. tax cuts. got a few regulations and then let's try some more tax cuts. tax cuts in good times.
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tax cuts in bad times. >> of course, the issue of trade is also front and center today. the president announced wto case against china for, in his view, unfairly subsidizing auto parts. he made that case to try to win votes from ohio workers. mitt romney himself is also proposed a crackdown on china is saying he declared currency manipulator on day one of his presidency. >> thank you so much. john harwood there. >> the dow down 5 5 points. looks like we may have another down monday. >> serving up holiday sales. mcdonald's delays its popular mcrib sandwich until late december. >> say it's not so! it's your favorite, maria! >> smart move or warning signal about fourth quarter profits? endless lines, bountiful apple cart, two of wall street's finest showing how to benefit from apple's pop without buying apple's stock. capital gains tax reform takes center stage on capitol hill this week.
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let's solve this. a dramatic move in the oil market midafternoon, prices plunging in the last hour and a half. sharon epperson at the nymex. >> we know oil prices dropped five bucks in that period of time and it was the biggest one-day drop since june 21st.
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we also know the white house is saying, yes, all options remain on the table but there's been no announcement of a release of emergency reserves from strategic petroleum reserve. we also know there have been some technical moves here in this market in terms of the fact oil prices topped $100 a barrel on friday and were unable to regain those highs. we also know that there have been a great deal of long positions in this market. according to the latest report from the cftc's commitment of trader report we've seen the longest level of long positions as of last friday. there may have been significant profit-taking here. maria, what may have spurred this may have been due to something that happened in the treasury's market dealing with an inflation bet taken off the table. we noticed commodities tanked right after that trade. back to you. >> thank you so much. for fans of the mcrib. don't cry, bill. according to several reports, mcdonald's is pushing back the
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yearly unveiling of this porky concoction from november to december. let's talk numbers on mcdonald's. on the technical side of things, carter worth, chief market technician from oppenheimer, fundamental side from morning side. appreciate your time. what's with this decision to push back the mcrib? >> i think it's more from a sales perspective. last year the company was up against -- or will be up against 7% comps in the fourth quarter and lofty 9.8% comp in the december period. i think this is a move to fill out a hole that would are been in the product pipeline back half of the year and make sales look better in the back half of the year especially against difficult comparisons. >> fundamentally speaking, how is mcdonald's doing? >> i think they're doing okay. they're kind of the victims of their own success. they've had a great three-year
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run where you've seen comparable store sales in the single to mid digits this year with competitors in the negative range. that will make it much more difficult for them to keep up that streak. for the first time, they're being out-comped by their peers. they're investing a lot in republican or vating stores and i.t. platform. while they're facing pressures on that side and investing a lot, they're seeing some gains by their competitors. if you look on a two, three-year basis, they're doing well. >> let's look at chart, carter. >> it has had a great three-year run. now it's not having such a good run. long-term chart, five years. well-defined trend. one of the rules of thumb, when you hold trend, that's great. once you break trend, then the trend becomes your ceiling. the stock is struggling along this trend line. take a look at the same five-year chart. now we have a new down-trend in effect. we'll zero in on this daily circumstance. right now, you have one of the
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worst performing stocks in the dow. and it is continuing to now bump up against a new down-trend. basically, not good. >> so, when things are going poorly, you expect them to continue going poorly. >> like in all things, almost in life, good phases and bad phases. this stock has had a great phase for three years. now it's in a bad phase. >> thank you so much. we'll be watching it. >> release the mcrib. release it! i'm telling you. where were we? the dow -- about 30 minute left, down 64 points so the push continues lower at this hour. we're going to talk about the hail low effect from apple when we come back. marching towards $700 a share earlier today thanks to the huge demand for iphone 5 over the weekend. up next, a pair of wall street's finest on how to play the rise in apple shares without actually buying the stock itself. plus, a sign of the times. business school applications for mba programs continue their four-year slide.
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welcome back. the new iphone 5 due out friday of this week but that's not stopping a record of iphone lovers from getting their preorders in and helping to lift the stock to new highs. jon fortt here is with all the numbers. >> 1.5 billi$1.5 billion dtin t. you have to wonder, does this mean apple will tell us next week they've done 8 million units? we'll probably know a week from today. meanwhile, people lining up outside apple stores in new york to make that happy. it's not just a phone. it's a mini economy. many will shell out for accessories, apps and data plans, too. >> thank you, jon. >> if you want to get in on the
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iphone action, but you don't want to own apple shares right now because you feel maybe the price is a little too rich, right? >> is it the product suppliers in how do you get in on the action if you don't necessarily want to buy apple right here? joining us is chris casso to tell us which names are on his buy list. let's talk qualcomm first. you say this is the time to own qualcomm. >> that's right. we've liked qualcomm all year. it's been our top pick all year. they do the cellular modem for iphone and they get a royalty on every iphone sold due to their 3g and 4g patents. >> you're looking at the classic situation, if you're going to invest in war, you don't pick a side. you buy the guy that's going to supply the ammo to both sides. broad com is another example. >> yes, they do the wi-fi and blue chip on the iphone. both companies supply to a vast majority of cell phone makers.
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as you say, it doesn't really matter who wins or loses, both companies will do well as long as the overall cell phone category increases. >> is it? >> it is. >> the iphone aside, aren't we hearing anecdotal evidence there's wear and tear on the cell phone industry? >> what you're hearing is apple and samsung are taking so much market share. the other thing to look at is there are billions of users in emerging markets that don't have smartphones and most of the emerging markets have 2g phones, just feature phones. both of these companies, qualcomm and broad com, stand to benefit as emerging market moves to 3g, regardless of whether it's an apple or from someone else. >> it's really the product suppliers. any other ideas around the whole apple phenomenon? i mean, yes, they're taking market share. i think one of the reasons you had a stall in the phone business is because people were
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waiting for the new iphone. >> that's right. actually, if you look at both of these companies as well as a lot of semiconductor companies, the second quarter results were not all that stellar because it did reflect some pause ahead of the built. we think third quarter, fourth quarter, you start to see the full extent of the built plans. looking through the supply chain in i asia, the entire apple food chain is set up for a very strong fourth quarter. >> there are those that feel apple itself is getting a little pricey. why don't we believe the suppliers would also if they're anticipating the kind of demand we're seeing so far for the iphone 5? >> that's right. and i think if you look at just apple alone, it's no surprise now. again, these are stocks we've been recommending all year. it's no surprise to anyone right now that iphone is selling well and it's going to sell well as you go through the year. i think as you look at the semiconductor suppliers, you go through the year, really the thing to look at is emerging markets. all the folks in china that don't have smartphones.
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>> right now out of the 5 billion phones on the planet, only a billion are smartphones. there's an enormous amount of potential as we see that population growth happen across the world. >> another point to make also, if you take a look at intel as a proxy for pc space, they lowered their estimates a week before last. what you're seeing in terms of consumers' wallets a big shift of wallet away from the pc, which has always been historically the largest end market for semiconductors. now you're seeing that shift toward smartphones. >> thanks for joining us with your thoughts. appreciate it very much. >> we're in the final stretch here, 25 minutes until closing bell sounds. a market that's worsened but down just 61 points on light volume. >> having said that, we are still near five-year highs for the stock market. should investors start shifting into bonds? two of wall street's top money pros will weigh in next. and after the bell, capital gains tax reform grabs the spotlight at a rare joint hearing in washington this thursday. do favorable rates help create jobs or just give rich people
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another break they don't need? we'll have the debalt. drama outside the new york stock exchange. dozens arrested. we have the latest on today's occupy wall street protests. so -- tell me again what happened. i was downstairs making coffee, and we heard it. it just came crashing through the roof, out of nowhere. what is it? it's our ira. any idea what coulda caused this? maybe. i just sorta threw a little money here, a little money there. and i loaded up on something my dentist told me was hot. yeah. ♪
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welcome back. apple shares are trading higher this hour but the broader nasdaq composite is under pressure. bertha is at the nasdaq. >> apple has been bucking the trend, so have bioteches on a day we're seeing profit taking. biotech stocks have been on fire. gillead leading the charge. boosted the biotech to all-time highs today. social media stocks today giving back all those gains they saw after really strong week last week. groupon leading the way down after the folks at evercore put it on conviction sell list. they started today after a monster week for facebook. best week ever since being a publicly traded company. that's not saying much. >> no, it's not. as we see the chart. thanks, bertha. so, overall it's been a great month so far for stocks with the exception of mondays,
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right? >> yeah, you're right. this month alone we've seen every monday has been a selloff for the dow. this summer, 14 out of the last 15 mondays has been a down day. i don't know what that's about. given the fed it's made its move for more stimulus, which is the better bet right now, stocks or fixed income? >> that's what we want to talk about right now. brian bellski along with kathy jones from charles schwab. you want to get into fixed income now after the year we've seen? what do you think? >> we had a big rally friday in most fixed income in the corporate sector, in particular, even as treasury sold off. but, you know, if you -- if you've main taped a reasonable asset aloe kagil allocation ove last five, ten years you should be doing well. >> i would think so. >> there's no reason to wholesale shift. >> what do you think? >> so many people have talked about, you know, the lost decade of equities and either/or type
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of thing. most investors are not 100% either/or. a balanced approach would be a 60/40 type portfolio. 60 stocks, 40% bonds. oh, by the way, that type of mix has actually provided very good returns the last ten years. >> the fear, giving i guess, for a lot of fixed income investors we hear there's a bubble, high profile investors feel there's a bubble in fixed incomes. prices are way too high because the fed keeps it way too low which suggests when the top comes it's katie, bar the door and everyone else gets out. is that how you see it or slow shift south? >> i see a slow change. the fed is holding down rates, longer-term rates, and set short-term rates to zero. we know all that. the idea we're going to get a big jump in yields really depends on the idea we're going to get a big jump in inflation.
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so far we haven't seen that materialize because we have so much excess capacity in our economy and global economy. i think we have a long way to go. >> in equities, where do you want to be specifically going into the election? we've had so much momentum, it's hard to want to stop it and get in front of this momentum. what's your take on that? >> you know, we wrote a note a week ago talking about bulls after 10%? now we're bullish? we've been bullish all along. it's dangerous on a short term basis to call markets on a six week basis but we feel there could be a pull back in stock prices because from a fundamental perspective we need 150,000, 200,000 jobs to maintain these levels on the s&p. next year our target is 1575 and we're still very bullish. from a sector perspective, our favorite sectors are technologies, consumer staples, industrials. but we would be worried about a
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bond fund bubble not a bond bubble. technically you can't have a bond bubble but bond fund are a big issue. we think bottom lines equities outperform bonds for the next ten years. >> good point. where would you put money to work, fixed income high yield or -- >> we would be avoiding too much money in high yield right here because the high yield index hit a new low last week. so, we don't think you get particularly well compensated for the credit risk you're taking. you can stay four years and under in high yield and get -- >> it's a bit of a misnomer to call it high yield. >> it's not as high as it was and not as high as it should be to get good compensation for the credit risk. still like investment grade corporate pipt rallied a lot. we still think you get yield over treasuries. you don't have to take a long duration. we think duration is the longer risk than credit risk. >> what do you think the next catalyst is for credit income? >> fiscal cliff.
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you have to worry about the first of the year. seems like some fiscal tightens is coming. >> i guess it's the same for equities, right? >> the problem is you still see inflows into bond funds and outflows from equities. until we start to see more consistent returns from equities over the next few years, mom and pop retail are not going to be able to come in and buy equities. they're not going to be able to buy them. you see this slow and steady wins the race for bonds, slow and steady wins the race for bonds. more and kenconsistent is bette >> what about european, if ecb engages in a bond-buying program over there, those are attractive yields over there, aren't they? >> yes. risk/reward not that attractive in the peripheral markets. they still haven't put any money up to buy those -- >> oh, that? >> yes. they have a plan, as opposed to having a plan to have a plan.
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but they haven't put any money into the plan. but there are issues unrelated to the bond buying. banking sector is still a big challenge in europe. risk/reward, peripheral europe doesn't look that great. >> all these worries about u.s. credit rating getting downgrade, has that played? >> we haven't seen the markets react to sovereign downgrades. france was downgraded, we were downgraded last year. not likely to have a big impact. >> europe? >> second downgrade. history shows after the first downgrade rates don't go up but second downgrade they start to be affected. there could be potential for increased volatility. >> would you buy european equities here? >> no, absolutely not. first of all for a trading aspect they're up pretty much -- pretty high. >> they are. >> that was the negative trade heading into the summer. i think there's a lot of construction on the economy that has to happen there in europe before -- plus, let's find out
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and see in writing what this plan is, how they implement it. then we can feel better about european equities. >> boy, are the two of you skeptical about europe and the ecb? >> i think they've earned that. >> i do, too. i agree with you. thank you so much. >> thank you much. where are we? coming off the lows a little bit here with 14 minutes left. the dow down 43 points. >> housing recovery hitting an unintended speed bump from the fed stimulus plan. wait until you hear whaelgs slowing things down. >> business school applications for mbas drop in applications. [ male announcer ] the 2013 smart comes with 8 airbags, a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety.
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we all know what happened with the financial debacle of 20
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2008. applications to mba programs, two-year programs students go into for mbas and things, started a decline. and we've seen that now for four straight years. this is the fourth year now that some of the major business schools around the country have seen a decline in applications for mba programs. those were the -- show them again. these are the five schools that have the biggest declines in applications for mba programs right now. a couple that are right in town here. one near and dear to your heart. >> yes, nyu. you know, i also think, though, the economy has diversified since then. >> yes, it has. >> so much of the talent coming out of business school was going to wall street. they weren't going to the procter & gambles of the world. they were going to black stones of the world. since the financial crisis things have -- we've seen a focus -- look at new york. new york is being rewired for health care, for science, for engineering. you're seeing increasingly women
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get into science and engineering and want to excel in those areas because even the salaries have changed on wall street. >> one area that has yet to see a hiccup in hiring is health care. but i think you'll see more applications for engineering programs. i think infrastructure will be a big play here. >> maybe. but i think health care continues higher. >> absolutely. >> you look at the demographics of this country, we're living longer. we'll need millions of nurses in the coming years. >> the pay is not as good, though, right? >> it's not. >> in health care. >> not many areas that pays as well as wall street. >> well, engineering can be, if you get the right part of engineering. where there are some business schools where they're seeing an increase, interestingly enough, most of them are in california. ucla leads the way. they point out the anderson school they targeted -- they had a very aggressive marketing campaign. if we brought this down to number four, stanford also saw an increase in applications for mba programs. you see there, the johnson business school at cornell and
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darden at university of virginia saw slight increases in mba programs. >> and i agree with you on engineering. i think the jobs of the future, health care, technology for sure. >> absolutely. >> as well as engineering and infrastructure. that's where the growth is. >> but it's all cyclical. if we get another big move on wall street, even though we're sit agent five-year highs, i think you'll see a return to business schools at some point. >> i'm not going to write off wall street. the fact is across the world you're seeing population growth. when you look at the numbers in china and india, those people will need all sorts of financial services, debit cards and credit cards and mortgages. i think there is still tremendous growth in financial services but it's nice to see diverse indication. >> i couldn't agree more. after the bell, shocking, shocking results from a steudy n the capital gains tax effect coming up at the top of the hour. [ male announcer ] the freedom and spirit of malibu
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this is the chart everybody is talking about today. price of oil. this is the selloff that nobody can figure out what it was about. plain and simple. there were rumors that the white house was thinking of releasing the oil from the strategic petroleum reserve sooner rather than later. they denied that. although they say it's still on the table but that won't happen any time soon. yes, it's a thinly traded happy new year to all of our jewish friends out there. you'll get an easy move, if you start rumors and things. technical selloff, we heard. as i said before, you use that excuse when you can't find out what the real reason is. at any rate, down sharply today on the price of oil after it touched $100 on friday. some profit taking since then. a 3% decline. took gold with it. gold sold off at the same time today as we saw there. we're finishing off near the lows of the session there, down $14 at $1758. took the stock market with it, although we did come back a bit there on the dow. in fact, we are coming back right now.
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there was sort of a buy side bias to the markets here as we head toward the close, down 36 points. the yield on the ten-year, moving lower. sharply higher late last week t imposition of qe3. so, we've seen some buying coming back into the treasury markets today. the yield on that ten-year, down to 1.83%. as for sectors, this again will look very familiar. health care and telecom still among leaders today, although telecom was number one earlier. then kurm staples and technology showing gains. the rest are lower, including industrials. warren myers, an easy day when you get thinly traded day to move oil. >> i like your technical explanation because there isn't another one to throw out there other than a strong run-up in the news of last week. in the absence of anyone else or anything else going on, it's not
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uncommon to have a breather. commodities acted stronger last week. that's really the only explanation i can come up with. >> what do you make of action in this market since quantitative easing three was announced? there was a feeling we would see a selloff when it was announced and we got a big rally. >> i think we got a big rally because they announced more, they threw the kitchen sink in, virtually everything in. it was a bit unexpected. i think when push comes to shove and people realize where we are now, we've had a nice pull -- nice rally. wouldn't surprise me if we pulled in a little bit with the caveat we have an expiration this friday and might keep this market up through then. >> brian, have you established in the past, you don't think we see inflation down the road. now, with the qe3, the dollar goes lower. listen to the reasoning here. dollar goes lower. that brings basic material cost prices higher. would you buy basic materials at this point? any companies with a deal in that at all? >> we upgraded energy back in
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june because from a fundamental perspective we thought valuation and cash was such that it was attractive and set a nice run. from a longer term perspective, the super cycle in commodity looks very strong. again, near term, we think those stocks have run a lot in the last five to eight years, let's say. especially on this qe3 run. we'd been a little more defensive in our bask materials and resource side of things. really default to more quality and stable earners like technology and industrials, per se. in consumers staples for that matter. >> it's been energy that's been a leading sector for the stock market this year. >> it certainly has. it's been a very strong group. although lately we've seen health care and telecom popping in there as well. i wouldn't be surprised to see technology start to work its way back up. >> you like telecom as well? that's been very strong here. >> the thing we worry about telecom, earnings look to be perfectly priced here. we would be more defensive. for dividend growth they look great. >> thank you both. enjoy your thoughts. that will t.
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