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tv   Closing Bell  CNBC  August 9, 2012 3:00pm-4:00pm EDT

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mark. of course we moved up above 1400 for the first time since may, and we're sitting in positive territo territory. >> pointing a finger at dc, you're off on vacation, enjoy. i'll be solo with herb tomorrow. "closing bell" is next. hi, everybody, into the closing stretch, i'm maria bartiromo, it's a close one but the dow and s&p flirt with a five day winning streak. >> i'm scott walker in for bill griffeth, and if we close higher it will be the first time for both indices in five months. right now the dow jones is a
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fractional winner. the nasdaq is higher by seven and a third points and the s&p is up one and a half. >> the s&p bha close to multiyear highs, but are stocks still cheap? they're trading at 13 times forward earnings, the lowest level in about three years. it's typically the forward pe, that means things are looking company and there is value in this market. with all of the uncertainty about europe, they're all still hanging over us, do you want to stay in the side lines? joining us is mike gibbs, and our own rick santelli, good to see you all, thank you for joining us. we've been waiting on the fed and waiting for more intervention, do you think it will happen in exception, is this rally getting tired?
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>> no i don't think the rally is getting tired. people are talking it down saying we're going from 13,000 to 3,000 in the next couple years. i think this is a market that is reallyly valued, stock that's have gotten inexpensive, and whether we're waiting on the fed or better use about the economy, the market is telling us something better is coming. i think the speech from ben bernanke may set that up. >> are the stocks still cheap? we've had this run, earnings have been pretty good, but if you consider margins peaked, earnings coming down, is the market cheap right now? >> for a longer term investor, absolutely. when you look where bond yields are, there is not a lot of profitability there. those companies are very
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attractively profitable, and therefore at 14 or 15 times expected earnings and it's hard to argue with the valuation. we have head winds between now and then, and as we go through august and september, it will be interesting to see what happens there. when you look at stock prices, the trade dollar, the shape of the yield curve, none of those things are suggesting the fed needs to get more easy. >> mike, what is moving this market? >> it's been anticipation. the ecb expecting bond buying, the feds clear they will stimulate if need be, but do i agree that we don't know the answers to that yet, the leaders don't meet begin until september. we also have a market that moved up to technical resistance.
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so i think we need to pause in here just for the near term until we get more bonds out. we had initial claims that are better than expected today. i don't think it suggest that the fed will move any time soon, so i think stocks move for the near term. >> is that where you see it, rick? >> yeah, we climbed over 170 to 173 and overtook 280 briefly in a 30-year bond. i agree, i think it's a dumb short. maybe for different reasons, and i think interest rates could fluctuate. but one thing i'm sure off. all of the microphones are turned off in europe because they're all on vacation, we can see what that has done and how much influence some of those issues have. that's one of the reasons we're
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at highest yields. >> among the lowest volume numbers as well. vacation in europe and a slow down here what do you think about that, mike? volume is very, very light. does that bother you? >> it's always a concern. you want pull participation, but it is summer months. lower volume is to be expected. the up volume has not been that strong either. there is always something you want to watch that may not paint the pictures to be perfect, i think we need to pause here for the near term. >> would would get more risky in the markets that you take a peek at and not just look at the utilities and dividend payers. >> yeah, i have not talked about those much at all. i would take money out of the
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high yield market and put it into beaten down names. caterpillar, home builders, i think those areas are interesting. if you're looking for over valuation, that's money that can be redeployed and better used there. >> all right, gentleman, thank you very much. >> thanks, we'll see you soon. >> more good signs for housing, home builders hitting a four-year high today. jackie deangeles has those details. >> home builders are breaking out. the etf trading at the highest level since september 2008, 2238. the strength is coming on the back of jpmorgan saying it seized demand and housing prices. they are saying it's time to buy
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on some of the pullbacks. toll brothers was downgraded on valuation. nice moves in these stocks today. gold stocks on the move as well despite having lower profits yesterday. the company naming the coo as president today seen as positive. energy also in the green today, alpha natural resources making a big move despite it's poor second quarter report. the market for power generates coal is boosting stock. they well above the $7 rainge where it's trading now. >> the dow industrials down about eight points, the nasdaq composite in the plus column. >> what will the latest earnings
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reports say about jc penney's new pricing strategy. and the fed voicing concern for using emanant domain to seize under water mortgages.
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welcome back, federal and new york authorities are forming a group to negotiate a settlement with standard chartered saying they illegally conducted business with iran. steve leisman has the latest. >> thank you, news that a settlement group is being formed leaves unclear the reason. is standard trying to move as quickly as possible to resolve the issue before a hearing, or is it because the government is trying to say the case was filed
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prematurely. benjamin lawsky said that laundered money. there is a possibility that lawsky could pull their banking license. he moved ahead without the corporation of other agencies and is created an international incident. you can't help wondering whether all of the beating up of british banks is protectionism and if it's motivated by jealousy. several private experts said lawsky's case seems to ignore key changes to the law that took place in 2008 and 2009. >> you know, steve, stay there, last week the british
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establishment all got together and pushed bob dimon out of bar cl barclays. and now there are reports that they're considering counter suing u.s. regulators. do they have a case? >> that's the question. we have two experts to weigh in on those questions. tom, do they have a case? >> they certainly have the right to bring a lawsuit if this is all brought by the department of financial services in bad faith. when you look at the department's order, it's hard to see that there is bad faith there. so i doubt there is a bad faith case there. what's really going on is standard charter is scrambling, trying to save their reputation, and i think there is a dispute between them and the department of financial services for how many transactions there were here.
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it seems there has been some, but certainly not as many as the department of financial services says. >> and the department is also saying they tripped out information over the years. so that's also part of the charges, that they weren't, in fact, open about who they were doing business with and that's called deceiving the department. >> i can tell you that i have talked to nuk rouse experts that say the stripping was legal through 2009, it was only in 2009 that the government changed the rules to allow -- or to prohibit the stripping and there was a reason they did that. in cases where the wire transferring were legal, if they had an iranian name, they took longer. did he go forward without finding out which of the transactions -- >> let me follow up quickly with
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steve. steve, in something like this, wound lawsky gotten any kind of approval from anybody higher up in government, treasury secretary? anybody at that level? >> no, normally he would have, and if you note mervin king's statement, they were done on a cooperative with the agencies and this was distinguished because it was not. >> ron, what's your take on this. >> having been at the fcc, there's always at some point in time turf war between the federal regulators and other regulators. he wanted to jump ahead of the federal regulators. >> scott, if i can give you my reporters notebook here, my guess is that the treasury and the manhattan district attorney's office were in the process of figuring out which ones of those transactions were
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actually violations of law, which ones fell into a gray area, and it seems like lawsky went ahead before that distinction was made. >> i don't think anybody i dden that. >> i heard they took them very seriously. >> right, i think the question is the quantity and the size. >> what do you think will be when you look at similar cases, ing, $600 million, where are you in terms of the settlement right might see. >> i was reading they were expecting $1.5 billion. >> steve, is the treasury upset with the fact that this was brought when it snfs. >> i think all other agencies outside the dfc who were involved in this were upset by this.
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i think there's a lot of concern and consternation for what happened here. there had been a formula that yielded hefty fines, and settlement talks didn't happen first. i think one of the criticisms could be that at the end of the day they were allowing the banks to get off the hook without allowing. penalties. the penalty that's have been imposed on these banks have been meaningful, cut a lot of money off of the bank's capital base, off their market shares, so i think they see this as a process that has worked and what i'm hearing is that the process was violated. >> there was an interesting point in the complaint that suggest that he aided and abetted the bank. that could spell trouble for the auditor in that regard. >> also that standard charter
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was subject to a action previously for other violations. maybe there is a pattern here in the eyesf the department of financial services. >> one other thing, there was a quote in the complaint that we talk about americanism or patriotism interests international jurisdictions. where somebody within standard says something very negative, i can't say on the air without violating certain rules of efficacy, so saying that we need to mind our positions in the world and who are we to say that other banks cannot conduct with other nations. >> it's like a war of ward that's you have been talking about on this program between london and new york. these financial capitals battling with each other, there it's king, or the mayor of
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london. >> and the establishments really getting behind standard chartered. with barclays, the ceo of barclays was an american. these are all issues i was going to get into with peter sands later on in the show, unfortunately minutes ago, mr. sands cancelled the interview. we'll have more on this later on in the show, and we hope to have peter sands on soon, we'll reschedule that interview. >> we have about 40 minutes to go, we are fairly negative by 2.5 points. >> when was the last time you were at jc penney. >> too long for me to remember. >> should we go shopping for their stock? find out if the beaten down brand is finally a buy. >> and wall street supported obama's election four years ago, this year not as much.
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speaking of the white house, jared bernstein says taxes should be raised on all americans because we're under taxed. >> you never know what will happen on the floor of the new york stock exchange. he plan. you have a plan? first we're gonna check our bags for free, thanks to our explorer card. then, the united club. my mother was so wrong about you. next, we get priority boarding on our flight i booked with miles. all because of the card. and me. okay, what's the plan? plan? mm-hmm. we're on vacation. this is no plan. really? [ male announcer ] the united mileageplus explorer card. the mileage card with special perks on united. get it and you're in. with special perks on united. this is new york state. we built the first railway, the first trade route to the west,
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. welcome back, nat gas on a roller coaster ride after the eia reported a smaller than expected supply bill. sharon epperson has more on this. >> this is a wild chart today. we saw a 6% spike in futures right after that bullish report came out and we got all the way up to $3.12. but quickly those gains fizzled andhen it went below $3 it intensified and it continues to sell off here in electronic trading. if we see a close below $2. 80, we could see prices fall all the
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way to $2.50. thank you, look at jc penney stock today. they will report it's quarter tomorrow morning. it lost half of it's value in the last six months. are things set to turn around for this battered store? let's get right to it, mark newton is with me, on the fundamentals, monica meshmeyer. thank you for joining us. does it look like this turn around is happening, is it a success? >> there are no signs of that yet. everyone expects them to be down, the stores are still in a state of flux, so there is no sign of success yet, and we're
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curious to hear what management has to say about going back to school. >> they're certainly anticipating something, mark, how do the charts look? >> we're starting to see real sign that's it's a good risk reward to buy. the stock is down 50% in the last sixth months. now it's down and cut in half. there are a couple things to look at. the stock is right at 2010 lows. we're seeing increases stabilization. if you go over here and we'll focus on that, the stock recently moved up 20%, you are starting to see stabilization. so from my view, i don't want to sell jc penney after it's been down ahead of earnings when you're seeing signs of stabilization. >> would you buy it? >> i would, i think it will go
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up to $25. then you can lighten up a bit. there are technical reasons to respect a bounce. >> erica, would you buy this ahead of the numbers? >> i would not buy it. i think we're getting closer to when the stock would work, but i don't think we're there yet. >> thanks, guys, over to you. >> the dow is negative by about five, the s&p positive by one and a third and the nasdaq in positive territory as well. some governments are considering using emanant domain to help struggling homeowners to stay in their homes. are americans under taxed? former white house economic advisor jared bernstein thinks so and says why you should pay more to the irs. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused.
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welcome back, stocks in a
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tight range today. let's go to mary thompson. >> the question mark now is the dow that's under a bit of pressure. as you said, it's been a mixed market. let's look at some of the do you movers. you have seen a strength in cisco and as well as goldman sachs. caterpillar also down, the company in a conference call yesterday said there has been a slow down in consumer spending in july, and that's pressuring it's stock today. look at some of the groups we have been following today. we had a positive outlook from james hoover coal. overall, positive sentiment there. and broker dealers getting a lift from etrade that replaced
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it's ceo. this is great speculation, the company could put itself up for sale. airlines remain a drag on the market and the transports today are down as well. the down just off as we go back. >> raiding serious concerns and threatening to block a proposal out of california to seize under water mortgages by using eminent domain. >> on wednesday, that regulator issued the following statement, the fhfa has significant concerns about the use of eminent domain. they have determined that action may be necessary on it's part to avoid a risk to safe and sound operations at it's regulated entities to avoid taxpayer
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expense. steven runs the company behind the plan and says they're wrong, but tom says the feds are dead right to block this. steve, this is not what eminent domain was meant to do, it was? >> absolutely it was, it was meant to allow governments in times of need to take property, pay fair value with it, and move forward with whatever plan they have. we think of it as real estate, but all of the laws say property, not real estate. >> you're making a leap though in that judgment that this is exactly what it is, these are not people delinquent on their loans, they're simply under water, paying their bills, and it's a back door way of principal write down. >> that's what intention is, because if you don't write their principal down, these people will be foreclosed upon and
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thrown out and they will not participate in our economy. the within we have not seen a recovery is because we have not written principal down. we know it, secretary geithner made that point a few days ago as well. >> but they're paying their mortgage. >> but they're the people who will be -- that is the incoming body of people foreclosed. these are people with mortgages of $3$300,000 or more. >> i think maria in these circumstances, those owners are current on their mortgages. they have been able to pay their mortgages for as long as they have been able to. they're proposing to give them money back, doctors and lawyers with the ability to pay. they're trying to prevent
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borrowers from throwing the keys away. it's filled with middle class americans struggling to stay afloat. people who are hundreds of thousands of dollars under water. >> how do you know that if they're paying their mortgages. >> we're starting in san bernardino, and you just talk to people. you're throwing darts, they're paying their mortgage, they're not -- >> they were the most valuable loans for the cities to steal, sell to mrp, and for mrp to sell them back at a discount. >> is that tom? >> yeah. >> mrp is not buying any loan or
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stealing anything. let me tell you what the plan is. tom and his colleague's plan is to continue to foreclose on middle class americans, take their homes, and amass pools of capital so they can lease them back to the homeowners, these are the americans most at risk at this moment. the people foreclosed on already, behind in their payments, they have gone through the system. there's little we can do to help. it's that shadow inventory waiting to come. >> it's critical to look at the program details, of the mrp program. they're trying to take the loans the borrower has the ability to pay. the only reason they default is if they want to walk away. they came out very clearly and said we cannot give out reduction, because the responsibility for them to pay on their contracts is critical or the loss to american taxpayer
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wills be enormous. >> i need to respond. fhfa owns many of the bonds backed, and you should read the footnotes in their statements which is how they reserve these very loans. you should go do that work, tom, and see exactly how the fhfa reports. you'll recall if you read carically that mr. demarco himself says that the a principal write down would save money. the fundamental argument is dramatically more. >> and the last daytime will be, the banks are the ones who will pay the ultimate price in all of that. >> yes, thank you. >> ultimately it's the consumer goesing to pay the ultimate price. if you go in and steal these mortgage loans, discounted values, the next time that lenders come to the market, they're going to require higher down payments or higher interest
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rates. >> thank you, we appreciate it we'll keep following and have you back soon. >> 25 minutes to go, and we have a mixed market here on this thursday. >> do you think you pay too much already in taxes? jared bernstein says you need to pay more. every american needs to face the trust that we don't pay enough in taxes. we love hearing from you, let us know what you think. we want to know what you think at jared's comments. mamama
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welcome back, the tech sector is one of the few bright spots today. bertha coombs has the details. >> pech is pushed higher because of cisco today. the stock has been really em battled of late. some executive departures today sending stocks higher. etrade is being replaced by ken
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griffin. zynga loses the coo that was out of the mix with the shuffle announced last week, and take a look at elizabeth ar den and express scripts, both at all time highs today. >> thank you, bertha. in the meantime, the s&p 500 is trying to eek out the first five-day win streak. >> yes, even though bullish sentiment rose this week, it's only at 36%. so where has this rally have been coming from? we have mike thompson and anthony chen. let's talk earnings, first. give us a sense of what you're seeing in the second quarter period, and do you think the fourth quarter be stronger than people think? >> let's take a look. we're finishing up second quarter. up very modestly, up.82%.
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hardly anything to brag about. next quarter is not looking so rosy. we're looking for it being down. five of the sectors are looking to be weaker, and the fourth quarter, you know we're expecting 10.5%. >> where does 10.5% come from? >> well, i guess hope springs eternal, but i think there is a lot of inflection in the market place, and i don't think it will be horrible because of the gains and efficiencies and they will be able to work those numbers. >> anthony, why do you think this is the most hated rally ever? >> i think because if you look at the fundamentals, they're still fragile. we still have the risk that europe may implode. those things may not happen and probably won't, but they're still on the table. >> don't you get the feeling
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that the economy is a little better than they think? >> we certainly saw that in the initial claims numbers and in the trade deficit numbers. they would suggest a slight upward position. but i think it's the element of surprise. republican it's coming near us at the enof the month, and that's what the market is preparing for, that element of surprise. >> what do you think happens? what does bernanke do? >> i think bernanke will position the federal reserve for more quantitative easing. i think the question is how much, and not whether we will get it. >> michael, do you think to maria's point that bernanke and company and draghi and company put a floor under stocks? you know, we're flat here, a little bit of a because yesterday, but we're only about 150 points away from the dow.
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>> yeah, i think so, and i think the market being socialized to the concepts that were unheard of. even though we have anythingtive costs across the yield curve. >> in terms of the estimate that's are way too high for the fourth quarter, 10.5%, do you think that is priced into the market or this market trading on hope, on air, if the numbers are not there, i suspect it's going to be a sell off? >> who can explain the market, but i think there is a lot of factors. i think there is hope, i think the numbers will be supported by the fact that companies are bying so adaptive at leaving markets and getting better efficiencies, it's not cost cutting, that's an art fact of the '70s.
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they moving their businesses around and that will help earnings in the fourth quarter. >> do you think the trade continues to work? that being dividend yielding stocks over stocks, industrials, technology, and the sexy names? >> as long as you have awful returns in the bond market, where else will you go? so you might as well do it. >> anthony, are you seeing any enmarket demand here? mike just told us the raw facts, revenue has been weak, do you see end market demand? >> i think we're seeing possible increase in demand, but it's still slow going. i think that element of surprise is not just relegated to the federal reserve. we have the people's bank of china, we have the european central bank, and believe it or not, even the bank of japan may do more. that may create a little end
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welcome back, more breaking news on standard chartered. >> thanks, cnbc confirmed that standard chartered officials met with the new york banking regulators. this according to a source that's familiar with these meetings. they were described not as formal meetings, but setting the stage for future discussions. you know there is a story going around there has been a committee of other regulators formed and told that standard charter is not considering a lawsuit. there was a store that there would be a reputational lawsuit under consideration.
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we understand standard charter is not considering that. maria, those two pieces getting together meeting with new york bank regulators, but not formal meetings. >> you were supposed to speak with the ceo, and then they had logistical reasons to cancel the interview. >> agreed to come on, said they wanted to talk to us because they did not like what was happening to their reputation, and then they putted out right before we go on air. here we have a story that our viewers care about, doing business with terrorists, and rather than just talk and explain it, the guy pulls out. i'll not happy about this, the viewers are not happy about this, they were expecting it and we have been promoting it, and we hope to get him back. >> they're not considering a lawsuit, because that was the
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big story circulating today, and if they even had a case. >> i don't know that there's a case there. the bottom line is six out of the seven charges from the new york regulator is about stripping and hiding information and deceiving regulators is what a source close to the situation put it to me earlier, so, i don't know that there is a case there in terms of reputational damage. >> a bank before this with a pretty good reputation. came through the financial crisis better than a lot of other people, really good reputation, now fighting to get it's reputation back. >> let's not forget, this company is largely an asian company. their footprint is in some of the hot spots of the world. it's been able to outperform others because it's doing business with asia and europe and africa where much of thetivity is happening in the world today. >> a short break and then the closing count down. >> and after the bell, americans
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it is time again for the closing count down. down here on the floor of the stock exchange with maria, it looks like o our rally won't don't today. >> yes, the volume is so deadly and it really bothers he. he would expect it in the summer time. you're not necessarily seeing the momentum there, but there is a upside. >> it really does feel like the market buzz not want to go down. >> that's extraordinary to me liven the fact that you have so many issues, fiscal cliff, uncertainty over the election, i
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think think there would be trouble if we don't get reaction from the fed. >> absolutely not only from the fed, but in terms of what draghi may do, stimulus in china, and earnings are big today today. you will hear from nordstrom after the bell today. >> yes, retail an important sector out there. earnings are strong but it's because of cost cutting and you're not seeing the end market demand that you want to see at this point in a recovery. >> yes, sales growth has been miss appointing. how do you feel? we're getting some retailers.
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>> i don't think it's good. i think if they don't do something you're in a bad way and if they do something and they have another hiccup out of europe, the market will get to pint where the fed is out of bullets and that's a dangerous place to be. then it gets back to the fiscal and that doesn't look good either. i don't think there is any shift here. >> volume is light. it's a low month, and it's a rocky hoed. >> we're 100 points away from a four and a half year high. >> it's incredible that we're
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staying this high, but i don't think anything good is coming out of this. >> so you want to sell it ong the rally? >> yes. >> the technicals don't see the volumes that's a broad day's rally and there is a problem with returns. i think people are getting desperate for any kind of yields. that's what's attractive to investors? that's not sustainable. there will be a correction. i think they're waiting for the next hiccup, and it's a good bond trade. >> i'm going back onset, see you on the show. >> what other areas of the market could you stay away from?
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>> i would look at strong companies, multinationals, i would be very cautious going forward. >> what do you think makes you anticipate this happening? >> yes, and i think if you have a more tepid commentary coming out of europe -- listen, if you go to europe, it's rolled over there. they're in a state of paralysis. so until something breaks there, and i think it will more likely break negative. this could be a long period. >> right now we're the best house in the worst neighborhood. in


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