all right. it's time for "last call." that's mike cavanaugh, looks like he's 12 years old, but he is not. he's the cfo of jpmorgan-chase, going to report earnings tomorrow. we're going to have an exclusive, live interview with mike cavanaugh to go over earnings tomorrow at 11:00 a.m. eastern, probably going to do it sometime in the middle of the show here on "the call." the banks leading the way this quarter, we think. goldman sachs blew the doors off jpmorgan tomorrow. a little more question about morgan stanley maybe? >> i think it's the single best play out there, trish.h. i've been chanting this the last ten days. maybe i got it right one time in a row. but a positive curve in a zero interest rate, even a banker can make money. >> it's clear that, you know, they're charging still a decent amount, wouldn't you say? i mean, 5, 6, 7%, whatever it may be. and like you said, the money is

basically zero. so it's all profit. >> and we want to hear about wamu and the bears stearns integration. all of that tomorrow. that's it for today on "the call." >> i'm trish regan. >> and i'm larry kudlow, see you tonight on "the kudlow report", at 7:00 p.m. eastern, and now "power lunch" is up next. hi, everybody, welcome to "power lunch" i'm sue herrera, bill griffith is off this week. a triple digit advance for the dow jones industrial average. and that on the back of a three-day percent gain in about six weeks, the s&p 500 also up you for a third straight day. and tech is rocking, as well. nasdaq on a six-day winning streak. >> i'm michelle cabrusso-cabr a cabrusso-cabrera, and lawmakers holding hearings on capitol hill on whether or not to ramp up regulation on wall street. so is washington going to kill the market's new mojo with a whole new set of rules? we have two top bankers and a member of the house set to answer those tough questions. >> and i'm david faber.

the spotlight on media and the box office is the latest harry potter movie opens in theatres.. we're going to tell you which stocks could be the big winners from this multibillion dollar franchise. here's what else is on the menu. >> in washington, this next hour and several hours after that are crucial to the senate's attempt to come up with its way of paying for health care reform.. they don't like the house surtax on the wealthy, senators and staff in both parties are meeting right now at a tax on some provider employer provided health benefits is not dead yet. a disappointing earnings season for the airlines. oil prices down substantially. but so are passenger revenues. we'll have all of the numbers. i'm jim goldman in the silicon valley. com score says google's search market share was unchanged at 65% in june. yahoo fell fractionally, but check it. microsoft's bing, the only gainer, 4/10 of 1% to 8.4% on

the eve of google's earnings.. more on that, coming up. >> and that's part of what's moving the markets today. let's get to that. the dow tramped up for a sixth straight day and oil is push being higher. bob pisani kicks it off at the new york stock exchange and usually the transports and oil move in opposite directions. not this time around, bob. >> relative positive news from csx recently, relatively positive, good cost-cutting and positive comments from them. the s&p, sue, in the last three days, up 5.3%. that is one of the best three day rallies that we have seen since the march bottom. take a look so far today. remember what happened on march, rather monday, we saw a nice move up through the financials rallying. today, of course, we're seeing partly techs, but not just techs, sue, because we have a weak dollar here, and strengthen china with the shanghai index at a 52-week high so the commodity stocks are moving, as well. we have 4, 5, 6% increases in caterpillar, in freeport, u.s. steel and alcoa. bottom line is, 8-1 advancing to

declining stocks.. first it's over at the nasdaq.. you know, bertha, we are also having good moves up in the nasdaq, as well. we're approaching the june highs. >> yeah, and that is all thanks to intel, which at this point is at at a 9 1/2 month high, moving the big cap sector and moving the pc universe. we'll see if google can -- one trader was worried about google's earnings thursday. the intel's chips moving forward, best performers of the day. the worst performers so far are the haulers, the truckers. j.b. hunt says pricing is still a big problem did he say the pit the fact that fuel has come down. roth has been hitting it out of the park and rilely automotive, people continue to fix their cars and hold on longer. >> thank you very much. the buying was kind of muted after that eia data came through, but we've gathered steam as we have gone on here,

firmly above $61 a barrel, the nymex about 61.27. let's take a look at the numbers, the drawdowns when the numbers came out was 2.8 million barrels in if crude oil. the gas stocks were up 1.5 million, but it didn't really happen that way. the refinery run rate is really what we're talking about here, uptick by more than 1%, and so that's really -- the refiners are really dealing with t. i want to point out the dollar index, since santelli is not here, that's really -- ray car bone from paramount options telling me that's a big driver and gold and copper on the move to the up side, david. copper at a nearly one-month high. back to you. >> thanks. goldman sachs far exceeding expectations on its earnings yesterday. tomorrow, jpmorgan chase reports bank of america citi are on friday. so how do they stack up to the gold standards.s. mary thompson is at the earnings central desk. >> reporter: analysts are

expecting a noisy quarter for the second quarter, noisy, because various charges and gains that will be included in these banks' numbers.s. take a look at what the forecast is suggesting. weaker year over year results. we have it there for jpmorgan and bank of america. tomorrow, of course, jpmorgan, forecaster report profits 4 cents a share on friday and bank of america 28 cents a share. citi to 31 cents a share, marking the seventh straight quarter the bank has lost money. like goldman, all three expecting higher strength. and in mortgage refinancing. weak spots are credit card where rising unemployment is driving charge-offs with commercial real estate exposure expected to be a drag on citi, as well as bank of america. also a number of charges for all three, including one fdic assessment. marksof jpmorgan, a charge for repaying the t.a.r.p. money. also gains for citi and bank of america. for citi from the sale of smith barney to morgan and b of a, a

sale of china on construction banks. we're looking for a strong quarter, and weaker for mortgage refinancing, and also analysts are watching to see what kind of increase if any there is on loan activity at these banks. michelle, back to you.u. >> thanks for the preview, marry. by the way, jpmorgan's chief financial officer, michael cavanaugh will be on "the call" in a cnbc exclusive interview to talk about the banks, and the outlook for profits.s. that's tomorrow on "the call." >> less than an hour from now, president obama set to to push his health care plan again. the republicans also making noise about this plan. cnbc's chief washington correspondent john harwood here to make sense of the madness going on in the beltway these days. hi, john. >> reporter: hey, sue. things are starting to pop on both sides of the capitol on health care, which is what barack obama wants to happen. right now, senate staff and

senators, both parties are negotiatesing the contours of a potential financing package for the senate. yesterday, of course, the house democrats laid out that surtax on the wealthy, going all the way up to 5.4% on million-collar incomes. republicans hit back this morning on cnbc with one member of the leadership saying it would be economic disaster. >> this is nothing but a job-killing, tax-raising measure that will actually take away the quality of care that we have become used to. and in a recessionary time that we're in, will kill jobs. >> reporter: now, sue, democratic aides tell me there is a good chance that that surtax on the highest incomes may be scaled back somewhat when the committee, weighs and means committee, chaired by charlie rangel marks it up this week. you could also see tweaking on the levy on employers who don't provide health care for their workers. but the main goal for president obama right now is to get something through the house, something through the senate, doesn't matter what it it is, and then you have the real negotiation, which he hopes will take place this fall, sue. >> i've got to tell you, john.

this one is getting a lot of chatter on wall street, main street and in washington. it's going to be fascinating. thanks so much. all that is going on and the house financial services committee is close to wrapping up a hearing to overhaul regulation on wall street and also on your money. here to talk to us about that and the rest of the busy washington agenda is the committee's ranking republican member, congressman spencer backus of alabama. representative, good to see you. thanks for joining us. >> thank you, michelle. >> when it comes to financial regulation, one of the most controversial aspects of this is the consumer protection agency. is that going to survive? did you hear anything that's going to convince the democrats to let that one go? >> well, i tell you, it's just another government agency, and we already have six federal regulators of the bank. so they're going to create a seventh one, and that's going to grow government and the consumers are going to pay the costs. >> is that going to get through, though? >> i don't think it will. because i believe the american people, whether it's on health care, whether it's on energy or on this bill, they want to make choices. they don't want the government

limiting their choices, they don't want the government making choices for them.. you know, the government, and these federal regulators, ought to protect them from fraud, protect them from abuse and predatory practices. but when you start telling them what contract they can enter into and the terms of that contract, it gets to be a lot of big brother. >> congressman, the other rather controversial topic is the super regulator, if you will, and a lot of people think it should be the fed. and an equal number of people are very worried that if it is the fed, it really throws a wrench into the fed's mandate right now. would you favor the fed in that role, or not? >> well, i don't want a permanent bailout agency, and that's what i'm afraid they're talking about. i've asked secretary geithner, i've asked the chairman, ben bernanke, are you going to use taxpayer money to bail out failed institutions? and they say they're the no. but it's -- but the law allows them to do it. the obama proposal allows them to put more taxpayer money -- >> but do you think that the

person or the entity that is in that role should be the federal reserve, or do you think, as many people do, that some of what we're in right now happened on the fed's watch, and they should not be that super regulator? >> it did happen on the fed watch, and there are two or three big mistakes the fed made. i would say put it all on what the republicans say -- let's put it all in a bank regulator under an umbrella, which brings the occ, the ots, merges them, and brings them together. and then form a council to identify a systemic risk. and that ought to be people from the private sector, independent people, as well as regulators, and even state regulators. let them identify problems, and then let the agencies that are now charged with avoiding or remedying that take charge. >> but the private sector -- isn't the private sector the one -- we were counting on them to identify risks that there were institutions in the past, which they fully failed to do.

how can we rely on them now? >> mark, in fact, several people warned about the inverse curve that the fed allowed, which hurt the banks. they were warned about the very low interest rate. there were several economists who did predict this, with derivatives, there were -- even warren buffett back five, six years ago, called them weapons of mass destruction. >> unfortunately, none of them were running our nation's large banks. on the subject of the consumer -- >> i'm not talking about ceos of the bank. >> i see. >> i'm talking about independent authorities, like, you know, a former s.e.c. chairman. >> sure. on consumer protection, if you're not in favor of that, you know, the $12 trillion mortgage market, lightly regulated, the largest direct to consumer market in this country that really had very little regulation certainly planted the seeds for our financial crisis in many ways, what would you appropriate in terms of regulation on the mortgage market so that we don't have the same problems that we saw from

2002 to 2007? >> well, mark, those problems were basically three days. there was gaps in the regulation. i think we have fixed a lot of those gaps. i know the republican plan puts the responsibility within one agency. you also had -- you had had forum shopping. you had institutions that went from one regulator to the other. and you had to dummy down. if you pull those all within one umbrella, you can't do that. and then we didn't have the subprime and credit cards. we now have regulations on the books, which we have passed this year, which i think will remedy those problems and other credit card legislation may create additional problems. but we have really had plenty of agencies, plenty of laws, we have not had enforcement. and in certain cases, we didn't have the law. >> representative backus, quick question. it's on health care. different than what we were talking about before.. but orrin hatch says surcharges on the wealthy, dead on arrival.

do you agree? >> well, whether it's health care or whether it's energy, whether it's financial services, the consumers is going to pay, because the government simply cannot do the job as well or as efficiently or as cost efficient as the private sector. so when you grow government, when you involve the government, when the government starts making the decision, they're going to ration care, there was diminished quality, and cost went up. and that's not a recipe that i think the american people want. i don't think they want the government between them and their doctor. >> representative bachus, thanks for joining us. the dow is up for the third straight day.. this has been a tremendous rally. does it have legs, though? task force time after the break. then on the "power grid," small business getting hammered

by the president's health care plan. and two top bankers sound off on congress's plan to overhaul wall street. "power lunch" is back in two minutes, and the "fast money" halftime report is waiting in the wings, too! d#: 1-800-345-250 "i'm rethinking everything... tdd#: 1-800-345-2550 including who i trust to look after my money." tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 "the dust might be settling... tdd#: 1-800-345-2550 that's great, but i'm not." tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 "i guess i'm just done with doing nothing, you know?" tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 "oh, i'm not thinking about moving my money. tdd#: 1-800-345-2550 i am moving it."

financials leading the way

today. jpmorgan chase reports tomorrow investors making big bets ahead of it, because that stock is up more than 4%. american express higher by 4%, and bank of america 4%, as well. >> and a lot of that is because earnings so far so good. 33 s&p 500 companies have reported over 2/3 of them have beaten estimates. but can earnings keep the power alive. our "power lunch" task force is with us. car mine, i guess that's the key question. intel certainly was a big positive for the market. but can it all be done on the back of a couple smaller sectors like certain parts of tech, certain parts of health care? is that enough? >> it's possible. i think the important thing to remember about intel is that it's signalling a recovery that could last into early next year, at the very least. typically, semiconductors lead in the economic revival, so from that standpoint, it's quite favorable.

the inventories across the board in the technology sector are lean, and we're destined to build.d. beyond that, i think we've got some problems. commodity related companies, i expect exposure, and do not expect favorable earnings and i think that could be a catalyst for the market to continue its consolidation phase. >> we had a great couple days here, best throw three-day gays in months. is it going to be strong enough to justify this move? >> well, the earnings are beating the estimates, and that certainly is good reason for the market to rally. but i think a lot of people are having trouble with the fact that they can't see the green chutes. they hear about green chutes, and they talk about green chutes. >> what about intel? isn't intel a green chute? they're seeing a turn around for pc demand. >> intel makes a lot of chips, but there is competition now in a lot of nations for chips. and i think that what happened is our guy said, the inventory levels got very low, and they

are building those back up. and we had some pretty drastically reduced sales expectations, which are now turning out to be a little bit lower than expected. so the sales are beating the expectations. so i think when you combine those things, intel is beating the estimates that we had out there for them. but those estimates were pretty awful. so you know, they're coming in better than awful. >> yeah, carmine, this whole idea of lean inventory and inventory build, what is your prediction for the third quarter in terms of actually seeing demand come through so they'll need to build inventory again at the end of the year? >> unfortunately, the economy does not look good. it doesn't seem to be building momentum. there is concerns about the economic stimulus package, whether or not it's working. it's certainly not reviving activity, if you look at employment, retail sales, none of that seems to be confirming pick up in it momentum in the economy. so i think when you hear guidance from these companies, it's going to be that they're not seeing any green chutes. intel was most definitely a green chute. but beyond that, we're going to be hard-pressed to find some

others, and i think that that -- the recovery in the bull market -- the continuation of the bull market will probably take place a few months from now, and i think it's going to be driven by liquidity. we are hitting on the largest liquidity measures in it history. it's actually staggering. >> okay. thank you, gentlemen. appreciate it very much. see you again very soon. >> coming up, we have a firestorm building over the president's health care plan. is it a body blow for small business? will the plan save lives or just kill jobs?s? sparks are going to fly on our "power grid" debate. >> and in a few minutes, two bankers sound off on the evident to ramp up financial regulation. does it give the fed too much pow power? "power lunch" is back in two minutes. when you're really in pain relief can't come fast enough. introducing bayer quick release crystals. it's ready to dissolve faster than caplets or tablets. it's a whole new way from bayer to dissolve pain fast. new bayer quick release crystals.

♪ so blessed with inspiration ♪ ♪ i don't know much ♪ but i know i love you

♪ and that may be ♪ all i need ♪ to know (announcer) customers love ge aircraft engines almost as much as we love making them. innovation today for america's tomorrow. are enjoying the new palm pre with its revolutionary web os. they're running multiple live applications at the same time. - ( thunder and rain ) - 3 million are using the simply everything plan. each is saving $1200 - over an at&t iphone plan. - ( cash register dings ) together that's over $3 billion. - enough to open a dunkin' donuts in space. - lkie-talkie sounds ) from america's most dependable 3g network. bringing you the first and only wireless 4g network. get the palm pre from sprint. only on the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com.

all right. the technology stocks on top today. led, of course, by intel. the street really liked its report, up a buck 24, and motorola also on the list. >> michelle. house democrats unveiling a health care plan that would take a big bite out of small business owners and entrepreneurs. this as president obama prepares to talk health care reform right at the top of the hour. obama care. is it a lifesaver or a job

killer? thoughts from former labor secretary and cnbc contributor robert reich, and wall street journal's steven moore. we give you each 20 seconds. secretary risch, start with you. if you have a payroll of more than 250,000, you have to pay up when it comes to health care. if i get a payroll of 300,000, secretary reich, why wouldn't i let people go so i wouldn't have to pay this? >> well, michelle, undoubtedly, there is no free lunch. somebody has to pay for health care. many small businesses are going to pass those costs on to consumers. look, this issue of how small a small business has to be in order to get away from the mandates for employers is an old issue. right back to richard nixon, when he first proposed -- that all employers have that kind of responsibility. >> steven moore -- is it a job killer?? >> it's a debatable proposition. >> 20 seconds, mr. reich. is this a job killer? >> that was a short answer for

mr. reich.h. there is no question, you put an % payroll tax on the backs of small employers, some will be driven out of business. bob, you were the department of labor secretary, you know these are terrible taxes for businesses trying to hire workers. >> wow, he did that in 15 seconds, mr. reich.. >> and steve, you made very sense.e. my point was small business -- any business is going to put these costs ultimately on to consumers, but the real issue is a tradeoff. either the business and consumer pays, or, you know, you're going to have a lot of people who don't have health insurance who are going to go emergency rooms. somebody has to pay.y. this seems to be a very good compromise. why not? >> because businesses can't pass on these costs. we're living in a global economy right now. what happens is, that the costs of producing things in the united states becomes more expensive relative to things that are produced in other countries. you're going to -- i think you're going to have exactly the situation that you all just talked about, where employees

stair under these caps so they're not affected by these. >> answer that directly. if you run a small -- mr. reich, if you run a small company with a payroll that is around 250,000, aren't you going to work really hard to make sure you don't get above that? and doesn't that -- in essence -- >> and michelle, that's true wherever you set this threshold. this is inevitable.. but steve, i want to go back to steve's point, because steve, i think i heard you say that businesses don't pass on the costs to consumers. but this is exactly contrary to what every conservative has been saying about every regulation. all week, all i hear is conservatives saying ultimately conservatives are going to pay. >> they're going to substitute out of labor which becomes more expensive in this bill toward more capital and more other ways of providing goods. look, i just think that the evidence is very clear that when you raise the cost of hiring a new worker, businesses are going to hire fewer workers, bob.

look, this is going to have a very negative effect. and one of ways this is going to be impacted, by the way, is that businesses are going to pay workers less to make up for the higher cost of the tax. do you see that -- >> steve, i don't think that's -- empirically, that's not right, and also, small businesses who now provide health care to their employees are at a competitive disadvantage. why not require all small businesses of a certain size to require, you know -- require they either pay or play? >> because you know what, bob -- >> pay for insurance or pay into a common fund. >> this is exactly the wrong approach. what we ought to do to reform health care is get employers out of the health care business. i mean, i think our small and big manufacturers are heavily burdened by the fact that they have to pay for health care. >> great point. gentlemen, have to leave it there.e. mr. reich, steve moore, thanks very much. >> you gave steve the last word. >> got to get rid of employer-based health care. it's just ridiculous. i hate it! >> we're going to talk more about regulation nations. and that includes health care, and much more..

what's on tap for wall street? sure, the system failed during the crisis, but was it the result of not enough regulation or simply market watchers not enforcing the regulations? asleep at the switch, if you will. we'll ask two top bankers in approximate washington about to kill the rally in stocks. >> and the "fast money" halftime report minutes away, a big day of earnings on top tomorrow. jpmorgan, chase, ibm, google. melissa, what is on the "trader radar?" >> technology is certainly one of the shotsest sectors, we go to the charts. and two dig events in tech land. earnings reports from ibm and google, how the stocks react in response to e. you don't need a crystal ball.. we have the implied volatility and implied price move on the stocks. and we will tell you what they are, straight ahead.. on that power report, but first, mo more. but first more "power lunch." (announcer) it is the most advanced automobile

we have ever created. a car that can help awaken its driver if he begins to doze... keep him in his lane if he starts to wander... even stop itself if he becomes distracted. if you want to see the future of the automobile, just look at the new e-class... today. this is the 9th generation e-class. this is mercedes-benz. with annuities from fidelity. turn your savings into income -- guaranteed, and get a retirement "paycheck" for life -- guaranteed. call... to get started, and learn how to secure retirement income that won't go down -- guaranteed.

call fidelity at... for details about guaranteed income for life, and change the way you think about your retirement savings.

all right. market cap. we're going to talk moore about that in a minute. here's what's happening. shares of gannett surging after reversing a loss from a year ago. the company owns 80 daily newspapers beat annual

estimates. abbott labs, heading other direction, down more than 3%. earnings at the pharmaceuticals company coming in line with estimates overall revenues slightly below forecast. and boeing flying high. there were reports that boeing says that it will have to cut about 1,000 jobs because of budget cuts. david. well, congress continues to try and put its own stamp on financial regulatory reform, but when the dust settles, will washington's push actually make banks safer and stronger?? and will consumers be better off? let's hear from john core sin, president and ceo of the bankers association, and the executive of umb financial, the 2008 community banker of the year by american banker. mr. kemper, let me begin with you. i've spoken to some community bankers lately who say they're feeling picked on. they have been done anything wrong. they weren't part of the problem. and yet they are going to be penalized by the solution.. do you agree with that?

>> i think the whole industry is going to be penalized by the route that we're taking, and i fully agree with what other bankers have said to you. you know, we need less command and control, and more incentive-based thinking. you know, obviously this problem was caused by complexity and scale in the industry, and to think that we're going to solve that by making a larger, more complex regulatory body doesn't make any sense to me. >> you agree with that, mr. coresin. >> we do. one of the issues that got us here, in our opinion, is the lack of a strong, uniform national standard. and frankly, consistent federal regulation. in our case, as mortgage bankers, we're asking -- we are normally regulated by the states. we're asking congress to give us a strong prudential safety and soundness regulator that also would regulate uniform national standards. and those standards would apply across the board to all lenders,

so there can be, in fact, the consumers can have consistency as opposed to this patchwork of state laws, that frankly, didn't serve us well through the situation we have been through over the last couple years. >> do you support then -- do you support the consumer protection agency that's being proposed by the administration? >> no. we think there are great concerns with that.. of obviously, creating another agency does, in fact, create the opportunity that there will not be -- there's not been a great history of regulatory agencies doing well, communicating with each other, talking to each other. and we have good examples of that in the fannie mae, for example, where we had hud doing one piece of the regulation, and the other. so there are big issues with the cfpa. mary, you were nodding in agreement with that. what do you have with that component? >> well, clearly having a systemic regulator, overseeing all things financial services, is important. and i agree with that notion. but to have a committee structure underneath it, makes

no sense at all. all these regulatory bodies today don't play well in the sand box as it is, and to ask them to become a committee and manage the overall industry makes absolutely zero sense. the consumer protection agency, we have one. we need enforcement. we don't need more regulation.. you could have seen this thing coming. >> yeah, along those lines, the last time we had you on, it was that you were just the named community banker of the year, and you were saying that you made loans the old-fashioned way and that was the only way you did it. how has your bank fared through this whole thing? are you still able to make the type of loans that you were making a year or so ago when we talked to you? >> we are certainly making loans. i think that's one of the interesting things. people continue to talk about whether the banks are making loans.s. and i think it's one of two things. either the borrower, who is talking about not getting a loan is not a qualified borrower, or they just haven't found a bank that isn't in trouble.e. of there are plenty of banks like umb across the country that

are making all sorts of great loans. our loans are up nicely through the first part of the year. and we feel very good about our prospects. we have got liquidity and capital. the regional banking model works. we lend within territory, we lend to customers we know, we don't buy loans through intermediate areas, and we do it with core funding. so, yeah, we're lendsing. >> that's good to know. wanted an update. thank you both for joining us. >> sounds so quaint, doesn't it? lending in your area, knowing your customer. the transports surging six days in a row, up another 1 plus percent today and amr heading higher after reporting better than expected numbers. we have phil lebeau waiting in the wings to tell us how the carrier is surviving in turbulent times. >> and we will tell you about someone who got a credit card bill you wouldn't believe. how about 23 quadrillion dollars? seriously. and president obama speaking out about his controversial l health care plan. we'll bring you the view there live.

"power lunch" coming up. oñ&ñ&j mr. evans? this is janice from onstar. i have received an automatic signal you've been in a front-end crash. do you need help? yeah. i'll contact emergency services and stay with you. you okay? yeah.

onstar. standard for one year on 14 chevy models.

a lot of people dread looking at their monthly credit card bill, but this is taking it

to a whole new level. texas man got the shock of his life when he went online to look at his credit card statement and saw a bill for $23 quadrillion! you want to know what that looks like? here it is. this is what $23 quadrillion looks like.. not me, we'll have graphic in a second. 15 zeros at the ends of it. oh, down below.. that's it. more than 2,000 times the national debt. visa says it was a technical glichl which caused the astronomical charge and only affected some customers with prepaid visa cards. the company says the problem has been corrected and the $20 overdraft fee has been removed. sue. >> and they had the nerve to put in the $20 overdraft fee on top of that. unbelievable. thanks, michelle. parent company of american airlines posting a narrow loss in this tough requirement. those results may be the bellwether of the industry, however. phil below lebeau joins us with

more. >> a disappointing quarter in terms of earnings for the airlines. let's take a look at what american reported. overall, better than the street was expected, but still a loss of a buck 14 a share. revenue, this tells the whole story. $4.9 billion in the second d quarter. second quarter compared to $6.2 billion a year ago. we did the math on that. both a drop of 23% in passenger revenue the in second quarter. what went wrong? weak economy, that certainly hurt leisure fares, but business travel off substantially, and that's why we saw limited, if any, fare growth. in fact, when you look at average fares in the second quarter, down 15%. just how bad is the industry right now? amr's ceo gerard arby says if someone predicted sale prices would be cut in half from $150 a barrel a year ago, yet the airline industry would be in worse shape, not many would have believed it, but it seems to be that's exactly what happened. amr a bit of a bounce, not much, four or five cents.

keep in mind, down 60% year-to-date, sue. and again, this is the beginning of what will be a very disappointing quarter when it comes to the airlines. sue? >> phil, thank you so much. still ahead on "power lunch," live coverage of president obama's big push for his health care plan. moments from now. plus, what are the smart money-making plays in in commodities right now? we have the picks you need to know about. >> and up next, a lot more earnings on deck. how do you trade ahead of them? melissa and the "fast money" gang will tell you. and the half-time report kicks off in just two minutes. of undefeated professional boxer floyd "money" mayweather has the fastest hands boxing has ever seen. so i've come to this ring to see who's faster... on the internet. i'll be using the 3g at&t laptopconnect card. he won't. so i can browse the web faster, email business plans faster. all on the go. i'm bill kurtis and i'm faster than floyd mayweather. (announcer) switch to the nation's fastest 3g network and get the at&t laptopconnect card for free.

you have questions. who can give you the financial advice you need? where will you find the stability and resources to keep you ahead of this rapidly evolving world? these are tough questions. that's why we brought together two of the most powerful names in the industry. introducing morgan stanley smith barney. here to rethink wealth management. here to answer... your questions. morgan stanley smith barney. a new wealth management firm with over 130 years of experience.

♪ hotwire.com welcome to the "fast money" halftime report. we're getting to the heart of as it is happening. intel pushing restart button. techs, financials and energy jumping on board. but not out of earnings season yet. in fact, just getting started. get your ibm, google and jpmorgan trades in now. our "fast money" crew today, tim seymour, the ambassador, scott nations of nation shares and patty edwards and john co sar, our all-star panel today.. tim seymour, nice to see you in person once again. what do you make of this rally if you are in this market? do you lock in the profits given? we are just at the very tip of earnings. >> well, yeah. that which we're looking for is an upbeat outlook and intel knocked the cover off that, and even goldman gave you reason

they can sustain the earnings. but jpmorgan tells a different tale, of a broader economy and with the s&p, a broader resistance. once we broke through 910, plenty of room to run, but it's such a good day, i'm getting cautious for tomorrow. >> patty, when will you feel good about this earnings season? is it when we get the news out of jpmorgan, bank of america or is it a consumer stock you're watching? >> well, i think jpmorgan is definitely going to be a major tell. they have a lot of the consumers' debt. but they're probably the best operator in that space. you also want to see bank of america, and then honestly, it's going to be the retailers that are more interested, and those aren't even going to hit until august. what. >> is the bellwether retailer you're watching, patty, and what are you buying ahead? >> absolutely walmart, i think that's going to be the tell on the lower end consumer, and then i want to look at jcpenney, kohls and macies will tell us about middle america. i'm not expecting fabulous things. i think they have been cost-cutting a lot.

cost-cutting is not going to drive this market higher. >> let's talk about technology, because for today it is certainly helping to drive this market higher, and that brings us to our chart of the day. and john kosar, looking at the charts and thinking maybe this rally is long here. >> well, what we're looking at on the chart is we're looking at the ndx versus the s&p 500. and those vertical lines you can see going in between both bars show that the ndx is overbought now versus the overall stock k market. and when that has happened in the past, that's been kind of a peak in technology. so it doesn't mean we have to top right now, but it means tha we're probably within a couple of weeks of a peak, so even though the market is strong  today, it's just a little bit of a warning sign to be careful up here. >> you know, the thing i like about technology, the sector, this is low-leverage -- very low leverage, very defensive cyclicals.s. as we look at these guys, they probably have the ability to outperform.. but i think google will tell you there is better ad revenue out

there than people think. so, again, look at the place where they can be most defensive both for the consumer, but even tech spending is spending you'll see lower in this economy. >> and scott is one of the traders in "options action" and the great thing about the options market is it's almost t like a crystal ball because they price ahead of earnings. what is the move expected out of ibm and google? certainly the big events in tech land we're looking forward to.o. >> that's right. google expects a 5% move after earnings, ibm a 4% move. the important thing is since the start of earnings season, over the past week, implied volatility for both of these names has come down. it's come down over 10% for both of them. now, it's tough to see with both of them up over 2.5% today, it's tough to see we would ganother % following earnings so half of the move may already be done based on intel follow-through. >> tim, as a stocks trader, how do you use that information? because the key thing about that full screen we should point out is that that is an up or down move, so you've got a range there, and as scott points out,

athletes already a big move today. >> i think you have to position your portfolio, and we don't trade necessarily on earnings, but you have to be prepared for where you have you seen the moves and down side. as i look at technology, i think we have seen breakout to the up side. and intel broke through 1660, 1675, and i think other guys are looking to do that, as well. so that's how i would play this, but i probably wouldn't trade that number. >> let's move on to the other big driver oil rising, and inventories at work and manufacturing data out of china sending copper to a one-month high. joining us on whether the commodity craze is here to stay, dennis gartman of "thegartman letter" known as the commodities king. what are you putting on today? >> well, i think the thing to take a look at is how strong these commodity stocks really are. look at alcoa and freeport mac more an, they're all moving up to the 200-day moving averages. after some consolidation, you

have to pay attention to that sort of thing. and for the chartists, you left a gap on the up side in many of up side, you have to follow through. i wouldn't be surprised if we see more follow-through on those commodity stocks. >> thematically it's been about china, to learn china researches are over 2 trillion, record highs, diversification into strategic researching, is what john is doing. that will move this market tomorrow if they deliver on the up side. if they disappoint, i think we could see a pullback. >> what's your favorite in the space? >> go to the one with the most volume. i've liked alcoa for a long time. i like freeport mcmoran.n. >> dennis, thank you. next take your position, jpmorgan, the second big bank is out tomorrow before the bell, giving you all afternoon to place your bets. the stock, by the way, up 10% already this week, on the back of goldman's blowout results.

you know, it's interesting, patty, because dick bove came out with a research note saying that goldman sachs is strong capital market business, that bodes well for jpmorgan. do you feel the same way? >> jpmorgan is one of the only big things left. they also have the ben fis of taking over wamu, there's going to be a lot of up side, because they paid a bargain price. the question is how much is already baked in. if you're looking for the long term, i would buy, but for the short term, not so much. >> john kosar, what is the char saying about the xlf. >> they've had a pretty nice move here, but i think it's a bit long in the tooth. we might have another week or two of up side, but i wouldn't be starting to press it at this point. i think there will be a pullback later on this quarter. >> and the options mark, how are

they positioning themselves?? is there protection buying out there? >> there remains a bit of protection buys, as the stock rallies.s. not a whole lot based on goldman sachs' blowout. do you buy yum? tim? >> i think you do. people expected so much, but the margins are getting better. their top line was terrible, they are growing, the u.s. sales are still very important. >> harley-davidson has outperformed. patty, what do you do here? >> easy rider turns 40 years old this year, and their consumer turns a lot older than that. i don't see where we'll have good numbers. we're looking for a number one quarter of what it was same quarter last year. i would say away from it. >> implied move, plus or minus 5%. scott, what do you do? >> well, google is a great company, so i'm a buyer of the stock. it's probably looking for the june 5th high of 444, but it's

had most of the move expected, so i would be quick to sell the quick turner. >> and big blue after the bell. john kosar, do you buy ibm? >> i think for a short pop, you can, but i would be actually taking some profits if we get there. >> that was kruse "fast and furious." on tonight's "fast money," well, we have the top internet analysts so tell the score on whether to buy or sell the search giant, but up ahead, the new harry potter movie opens today. but we will be back in just a minute. stop searching for the trade. the number one analyst on the street gives us his exclusive play on google. move over, kech bacon, it's six degrees of hu jintao. plus they buy the world a

coke. the largest bottler on america's postmark shows tonight. welcome to the now network. currently, thousands of people

are enjoying the new palm pre with its revolutionary web os. they're running multiple live applications at the same time. - ( thunder and rain ) - 3 million are using the simply everything plan. each is saving $1200 - over an at&t iphone plan. - ( cash register dings ) together that's over $3 billion. - enough to open a dunkin' donuts in space. - lkie-talkie sounds ) from america's most dependable 3g network. bringing you the first and only wireless 4g network. get the palm pre from sprint. only on the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com.

welcome back to the "fast money" halftime report. tim, you're watching nokia. what was interesting about the intel report yesterday, is they said the china stimulus plan is helping to unite demands there. >> i like it. actually you can have a name and definitely the china story. this is 30% market share in china, far and away the leader, the same way the leader across the smartphone handset and 30% of that market, but it's rare when you get the industry leader at its cheaper all-time price to sales going into number, where you think they'll probably so margin improvement. so very different year-over-year

comparisons, because second quarter 08 was very strong, but these guys are best positioned in china. this is our china growth story play, even more that china mobile. >> patty, there's a blackberry blog saying a new curve model is being released in the next weeks or so. do you like rimm or nokia? tim brings up a good point. 30% of mark share is nokia. >> and that's nothing to be messed with. that being said, you know, more and more of the consumers i'm talking to are looking at the infone and blackberry and going with the blackberry, because they like the keys better. not as many, but it's got good apps, and it has the business thing. i would be holding on to rimm also. time to close, scott? >> i'm a buyer, but reluctant. >> i wouldn't sell it even at gunpoint. >> i have been short, i actually covered it this morning. my dad said never step in front

of the a moving train, but if it's a runaway train, get on neither side, so i'm -- >> i don't want to hold them for any more than a week or two. the cheaper way to play coca-cola, buy the bottler. we've got the ceo tonight. but first on "power lunch," i'll be back with a preview of the cnbc special presentation, "important, business of pleasure." >> we look forward to that very much. we'll dig deeper into today's wall street rally. that and much more in just a couple minutes. walmart plans to sign so-called green ratings according to "wall street journal." jerry brown is announcing lawsuits designed to shut down

what he calls massive loan modification scams in the state. hank paulson will tell congress tomorrow that it would have been a colossal lack of judgment for bank of america to cancel its acquisition of merrill lynch. hello, everybody. welcome to the second hour of "power lunch." bill is on vacation. the dow's in triple digits, the nasdaq going for a six-day winning streak. >> and i'm michelle caruso-cabrera, moments from now we'll hear from president obama, to make his case for the massive health care coverage. we'll bring you live coverage. >> and the tech watch turns to google, up more than 40% so far this year, should you get in

ahead? stick around to find out. >> we're joined by the power player, jack addland, and a author of this book which is "reading minds and markets" but i think the most important line is this, minimizing risk, mac mizing returns in the global marketplace. that's what it's about. >> that's what we all hope for. >> do you think things will get better? >> i do. one of the things -- the message that i try to tell investors is, look, there's a lot of information. if you were to take a snapshot there's probably a million pieces of data to latch onto, and some of it is relevant, but some of it is not. there's certainly a lot of positives like valuations. there are a lot of negatives like regulations. >> where does that bring for you this rally? is earnings season justifying this rally? >> this rally is fantastic, because this week, to me, is probably one of the most

important preplanned data weeks this whole year, because you can't get a better listing of the best companies from a variety of different markets. so where whether we'll end up or down, i can't say, but by friday we'll have a lot of conviction behind the numbers we've got. >> jack will be with us for the whole hour, but that cross section of earnings is what's driving the market today. health care among the biggest losers right now, and of course we're waiting for president obama to make his address in the rose garden to talk about that. we have brian schactman at the nymex, but robert is at the stock exchange. >> there's positive news. we've been getting some of the master trust information for the credit card companies, just in the last hour, look at american express. they came out with their june data, and it was a rather pleasant surprise. good news here, charge-offs for

the credit cards, these are the debts they don't think will ever be selected dropped to 10.2% from 10.4%. in may, the dollar value, also dropped, earlier, capital one reported charge-offs, rose a bit, but the delinquencies were lower. you can see amex moving to the up side. a couple other things.s. take a look at financial this is weeks. goldman sachs has had multiple upgrades, but look at the nice moves up. we're getting nice moves up on the media stocks, gannett, mccla mcclatchy. hey, brian schactman, weaker dollar also helping commodity stocks. >> weak dollar, strong equities, bigger drawdown, and even addison armstrong says there's shortcoming. an intraday chart of crude oil, you see the momentum gathering from the buy side, so the bulls

are firmly in charge, up nearly 2.25. now, on the flip sigh. nat gas with a huge run-up yesterday, a fair amount of profit-taking. i want to take a quick look at metals, gold, about a two-week high. and also copper right around a one-month high. mcc. back to you. this just hours after the senate health committee passed its own version of a reform bill. let's bring in john harwood. you brought a lot of news. higher taxes, bigger burdens to small businesses. >> reporter: that's in the house bill. there's this arduous back and forth that's dragged on for weeks within the senate financial committee. you may remember i interviewed

max back us, and chuck grassley some weeks ago. they said our bill would be bipartisan and it will be the vehicle that president obama can sign. it hasn't happened. they haven't struck a deal yet. they're negotiating this afternoon and we have to see what their alternative will be to this house surtax on the rich, which senators say is a nonstarter what we expect from the president in a few minutes is to come out and say we need to keep the process moving along. we want the house to pass their bill, something, anything, the senate to get something going, try to move something by the august recess, though that's looking increasingly unlikely. then we have the real discussions, the real negotiations and real fight in september, october. >> john, our "power lunch" guest today is jan ablin. he has a question. >> what i have heard is the real key to paying this whole thing will be eliminating the tax

benefit for, you know, deductibility of health benefits for corporate america. is that still out theren. >> reporter: one aide in the senate said we're talking about taxes health benefit plans valued at more than $45,000 a year. that's a relatively small percentage, but that could still be $90 billion over ten years. i just got a message after going on the air that now it looks like that's being pulled back, because labor unions are objecting to that provision.n. so we're going to see where democrats are willing to draw the line, who are they willing to say no to in search of a deal with republicans. we just don't know theages. the senate financial committee hopes to release their bill tomorrow, but we've seen those deadlines slip. >> just as a follow-up, do you

think we can have both a second stimulus and a health care package in the same year? >> i think that's going to be very difficult, and i think of the two, the most likely to fall out is going to be the second stimulus. the obama administration does not want to go there.. they're very concerned about the republican attacks on them. the substantive point as well. the obama commitment is to a health care plan that is paid for. that is to say, does not increase the deficit. if there's a choice between enacting near universal health care plan that doesn't increase the deficit or expanding spending to have additional stimulus that they think of is of dubious value, they'll clearly go with health care. >> where do things even stand with the second stimulus given that the administration doesn't seem to be pushing it at this point? >> reporter: basically what's happening is everyone is watching the economic data, the xwloun raiment, now 9.5%, will

crack 10% before too long, and i think the obama administration will try to see how much pressure they get from democrats and the left. it's not coming from republicans, and they'll try to resist it as long as they can. and they have real concerned about the state of economy, so they're going to be pushing harder. but if we get economic data that shows in fact we have resumed growth in the third quarter, that we have resumed growth perhaps at a faster pace in the fourth quarter, they're going to have to say, we've got to be patient. john, stay with us. we'll take a quick break. we're moments away from the president coming owl and talking about his proposal. we'll take a quick break and then continue on "power lunch." back in a moment.

in these markets, i'm glad i turned to fidelity for an annuity with guaranteed income for life. that's right, guaranteed income for life. my annuity from fidelity means my retirement income is safe. it's guaranteed, no matter what happens. if guaranteed income for life sounds good to you, do what i did -- let fidelity be your guide. call fidelity at... for details about guaranteed income for life.

last month, this woman wasn't even able to get around inside of her own home. they chose mobility. and they chose the scooter store! if you or a loved one live with limited mobility call the scooter store! no other company will work harder to make you mobile or do more to guarantee your complete satisfaction. if we pre-qualify you for a new power chair or scooter and your claim isn't approved, the scooter store will give you your power chair or scooter free. that's our guarantee. they were so helpful and nice. they filed all the paperwork, and medicare and my insurance covered the cost. we can work directly with medicare or with your insurance company. we can even help with financing.

if there's a way, we'll find it! so don't wait any longer, call the scooter store today. we're showing you a live picture from the reese garden where we are awaiting president obama's remarks.s. we did get the two-minute warning as we were heading to break, and there he is. >> good morning, everybody. good afternoon. i am pleased to be joined by not only some of my former colleagues and outstanding legislators, but also by nurses, and i think i've said this before, i really like nurses so

to have them here today on behalf of a critical issue at a critical time is extraordinary. let me introduce a few of them. we have becky patten, raise your hand over here, president of the nurses association. we have dr. mary wakefield, a nurse and happens to be the health resources and services administration at hhs, our highest-ranks nurse in the administration. keesha walker, an rn, currently a research nurse as john hopkins bloomberg school of health. dr. rebecca wiseman, nurse and assistant professor of adult health at the university of maryland school of nursing, and i'm also joined by representative johnson, representative caps, representative mccarthy, chairman george miller and my friend chris dodd. i am very pleased to be joined today by the representatives

from the american nurses association on behalf of 2.9 million registered nurses in america, men and women who know as well as anyone the urgent need for health reform. as i said before, i have a long-standing -- when our daughter sasha was diagnosed with meningitis when she was just 3-month-old, we werety fied. we were appreciative of the doctors, but it was the nurses that walk us through to make sure she was okay. when both my daughters were born, the obstetrician was one of our best friends, but we saw her for about ten minutes in each of our deliveries. the rest of the time we saw nurses, who did an incredible

amount of work in not only taking care of michelle but also caring for a nervous husband and then later for a couple of fat little babies. so i know how important nurses are, and the nation does, too. nurses aren't in health care to get rich, last i checked. they're in it to care for all of us, from the time they bring a new life into this world to the moment they ease the pain of those who pass from it. if it weren't for nurses, many americans in underserve and rural areas would have no access to health care at all. that's why it's safe to say that few understand why we have to pass reform as intimately as our flags's nurses. they see firsthand the heartbreaking costs of our health care crisis. they hear the same stories that i've heard across this country

of treatment deferred or coverage denied by insurance companies, from insurance premiums and prescriptions that are so expensive they consume a family's entire budget just because they could afford to see a doctor. wkt kick the can down the road any longer. deferring reform is nothing more than defending the status quo. those who wee oppose or efforts should look at what they're defending. of costs have risen three times faster than wages. and every single day we wait to act, thousands of americans lose their insurance, some turning to nurses in emergency rooms as their only res course, so make no mistake. the status quo on health care is

not an option for the united states of america. it's threatening the financial stability of families, businesses and government. it's unsustainable, and it has to change. i know a lot of americans who are satisfied with their health care right now, are wondering what would reform would mean for them, so let me be clear. if you like your doctor or health care provider, you can keep them. but this is what reform will mean for you. you will save money. if you loose your job or change your job, you'll still find health care. if you have a preexisting medical condition, no insurance company will be able to deny you coverage. you won't have to worry about being priced out of the market. you won't have to worry about one illness leading your family

into financial ruin. that's what reform means not just for the uninsured, but for the people who have health insurance right now. the naysayers and cynics doubt that they can do this, but thanks to the work of key committees in congress we're now closer to the gold of health reform than we've ever been. today thanks to the unyielding passion and inspiration of our friend ted kennedy and to the bold leadership of senator chris dodd, the senate health committee reached a major milestone by passing a similarly strong proposal for health reform. it's a plan that was debated for more than 50 hours, and that, by the way, it includes 160 rep amendments, a hopeful sign of bipartisan report for the final

product if people are serious about bipartisan ship. both proposals will take what's best about our system today and make it the base for our system tomorrow, reducing costs, raising quality and ensuring fair treatment of consumers by the insurance industry. both include a health insurance exchange, a marketplace to allow families and small businesses to compare prices, services and quality, so they can choose the plan that best suits their needs.s. and among the choices available would be a public health insurance option that would make health care more artable by increasing competition, providing more choices and keeping insurance companies honest. both will offer, and artable option toss those who don't. this progress can't make us xlasened, should instead provide the urgency for the house and senate to finish their critical

work before the august resist. if we modernize health expenses, we can streamline the paperwork frees nurses to spend more time with their patients. if we make their jobs a bit t easier, we can attract and train the young nurses we need to make up a shortage that's only getting worse. nurses do their part every time they check another healthy patient out of the hospital. it's now time for us to do our part. i want to be clear, becky just pointed out we need to buck up people a little bit here. that's what nurses do all the time, they buck up patients, sometimes some young resident

who doesn't know what they're doing. you can look at becky, you can tell she knows what she's doing. she's saying it's time for us to buck up congress, this administration, the entire federal government to be clear that we've got to get this done. our nurses are on board, the american people are on board, it's now up to us. we can do what we've done for so long and defer tough decisions for another day, or we can step up and meeting our responsibilities. in other words, we can lead, look beyond the next news cycle and next election and look for the next generation, and build a system that works not just for the nurses, but for the patients they care for, for doctors, hospitals, families and businesses, and for our very future as a nation. i'm confident it's going to get done, because we have a great team behind us, and we will be continually talking about this for the next two to three weeks until we've got a bill out of

the senate and the house, and then we'll deserve a few weeks rest before we come back and finally get a bill done so we can sign it here in the rose garden. thank you, everybody.. president barack obama really talking tough when it comes to health care reform. john harwood is standing by. throwing down the gauntlet, right? after headlines in the "wall street journal," where it's clear small businesses will face a burden, he knows he has a tough fight. >> reporter: absolutely. you heard him say it's time to buck up, and it's time to buckle up. it will be a wild ride. i think i heard the president backing into a threat to congress to keep them in session if they don't pass this by august. they've been reluctant to draw that line so far, but i think the urgency the president is try to go communicate may be leading him in that direction and taking away their vacation is always a good way to influence senators. >> but the republican response,

it's all well, fine and good to criticize what's been put forward, but isn't it incumbent on the republican party to come up with some sort of counter to this? >> reporter: well, sort of. the minority party will tep you that their duty is to oppose the administration. however, you do have some that have a different mindset. that's why the discussions i mentioned between max back us, chuck grassley and olympia snowe, susan collins, mike enenzi, and orrin hatch may be amenability to a compromise. the question is, can they strike the deal before democrats run out of the patience and say, you know what? we have this reconciliation procedure pro, we can pass it with only democrat votes, let's try to do that. but even that won't be easy. if you turn away from the republicans and do a democrats-only deal, watch some of the conservative democrats to

say, wait a minute, let's put the brakes on this train. >> jack, considering all the tax breaks and what it will cost for small business, we're looking at a rally. we've had a tremendous week. does the market not think this is going to happen? or they're not worried about it? >> it seems like the market is not even paying attention to this right now. i think we've made a run at this before. remember '94 health care stocks got completely decimated only to recover in 1995 i think investors are skeptical and will take a wait-and-see perspective on this. we have breaking news after the break. there are concerns, as you know, on capitol hill and elsewhere about the fed's independence, especially as they talk about new financial regulation. we have breaking news when we come back.

what's on the minds of independent investors? let's ask. when i trade, i want a straightforward price.

they lure you in with a $5.99 trade, then charge you 15 bucks. you get a low price, but only if you make a ton of trades. at td ameritrade, every online stock trade is just $9.99. period. no matter how often you trade. no matter how much money you have in the account. i hate those hidden fees buried in the fine print. surprise! it's a maintenance fee! i hate surprises. at td ameritrade, you never pay a maintenance fee. you get low, straightforward pricing, so you always know exactly what you're paying. hey, that works for me. are you ready to declare your independence? independence is the spirit that drives america's most successful investors. announcer: trade commission-free for 30 days plus get $100 cash when you open an account.

mary? >> there's growing concerns in the economist community, michelle, about the future independence of the central bank. "wall street journal" reporting there's a petition circulating among the economic community, so far 175 economists have signed it, essentially the petition urges congress as well as president obama to avoid compromising the federal reserve. this petition raised by two

concerns primarily, the recent anger we have seen in congress over the fed's actions during the financial crisis and regulatory changes by the obama administration that would basically extent the fed's supervisory role. their concern, of course is this could take the eye off the inflation ball, which the economists see as its primary responsibility. again, the petition urging that attacks on the fed by congress may compromise monetary policy management. back to you. >> what do you think about that, jack?? i mean, that's pretty -- it's unprecedented to see a petition like that circulated among economists? >> i'm thinking of laying 150 economists end to end, they're probably better off that way. i think the fed's independence is probably sack ra saint. they've had to work together with the administration, but at the end of the day it's their

job to maintain. >> but are they under threat? what we worry about is you have a president that saw lower interest rates because or monetize the debt to help me out here. how crucial is it that they are not subject to that kind of pressure? >> i think it's critical. i think to the extent that the investment community our creditors believe that the fed is now beholden to a political body, in that of having monetary and fiscal policy, you have fiscal policy on steroids. so, you know, i have no problem with fiscal policy. if we agreed to spend, stimulate and generate a little activity, great, but we really do need to have monetary, at least as an offset. >> james thinks it threatens the credit rating. >> yeah, if you really drill down. let's go back to john

harwood. >> reporter: let me just add on what you've got talking about. i'm not too impressed with 175 of the 20 pa zillion economists in the united states signing a piece of paper to say they're concerned about this. i think the fed's independence is not subject to threat, and in fact the -- there's probably a greater danger less danger from pressure from the administration that will ben bernanke's term is up and he might like to be reappointed. we've had an economic crisis, cries always tests the limits of on you power and institutions, and we saw the fed turned to, because people thought the congress couldn't appropriate enough money to deal with the scale of the problem. the fed could act unilaterally, they stepped in, everybody was happy. now the question is how quickly can we unwind and avoid the threat of inflation that you guys are talking about. >> in idea when the

administration might make a move, john, quickly? >> reporter: i think they'll wait as long as they can. my assumption would be that the president will want to appoint his own person to the fed, but i don't think he'll show his hand before he has to. >> john, thank you very much. straight ahead, the bulls are roaring again today. that includes the folks in the commodities pits. we're going to tell you why sugar might be a very sweet play for investors right now. plus it's a big business and rather hot one as well. melissa lee will be here in a second with the inside story of her documentary, "important, the business of pleasure." it's quiet on the home front-- not a lot of activity. you read the news. and yet, some people need to sell and other people want to buy. this is a moment of challenge and opportunity.

fortunately, re/max agents have the experience to help you meet the one and recognize the other. thanks. because the future's counting on us. nobody sells more real estate than re/max.

tyson foods says it will sell five hog farms and eliminate more than 28% of the hog herd due to ongoing hardships. gannett reversed a loss from a year ago, advertising still down sharply, but the company which owns eight daily newspapers did beat analyst estimates despite significant slumps in ad revenue. oil prices back above $60.

energy department data shows crude inventories fell for a sixth consecutive week. well, of course we have a rally in stocks today, but commodities like gold, silver and some of the soft commodities as well joining the rally. let's bring in steve frankel, and joining us to tell you "the smart money" playses. welcome, guys. steve, you know, triple-digit advance so far so good with earnings. >> goldman sachs, as you just said, with intel started this. this is the catalyst to have all this earnings season heat up and the market rally, but i think there will be a range balance. remember 927 here? we were just flirting with the low arened of the trend line. at that starts to cool down, as earnings start to cool down, this health care debate will start to heat up and there's

nothing sexy about that right now. >> jonathan, i know you want to talk about sugar in a second, but i'm curious about the gold play. the last few days and weeks we've had a lot of people talk to us about rampant inflation down the line, and a number of recommending a strong position in the gold market. what do you think? >> i certainly agree with that. given the backdrop of all the stimulus, all this monetary increased policy, you can only imagine downstream at some point there is an inflationary issue. there isn't a better hedge against that kind of inflationary increase than raw materials or commodity prices. among that the most monetized our securitized commodity is probably gold. >> i look at the correlations between disparate commodities. i see no reason why cattle should trade with natural gas or other commodities, and yet they

are converging. what that suggests to me is there's a lot of speculation going on, investors buying baskets of these things.. do you agree with that? or what's your take? >> i do. if you look at it from an investment standpoint, if you're looking forward to gaining exposure to this class, you'll do so by a diversified portfolio, including all the commodities. the indexing of commodities is certainly driving some prices, but there is in fact a fundamental issue of inflation, increases in working cost with his emerges market growth. there's quite a few arguments that say commodity prices are attractive beyond the fact they're noncorrelated. >> which is one of the reasons why you like the sugar market. >> indeed. sugar is quietly up. it's a great inflationarile

play. it's a global staple. it has an emerging market factor, most every the production is in brazil, so you have a lot of value. a lot of breaking news at this hour. mary? >> former credit sweet broker has been apprehended. julian zoloft was apprehended by the department of justice today. he was charged earlier with fraud in connection of, tzolov had been declared a fugitive back in june after the fraud charges surfaced. he resigned from credit suisse back in november. back to you. >> auction rate securities, a drama i hadn't thought about for a long time. pornography all in the cross hairs of critics.

one major case involving max hardcore is putting the balance between freedom of speech and the good of society to the test. melissa lee joins us now with more. >> that is his stage name, by the way. his real name is paul little, and he's serving a sentence. while he was the poster boy of important to the extreme, even those who find him and his movies disgusting, he says he has a right to make them and sell them. little's conviction is a victory for anti-important crusaders and law enforcement sim. it's a symbolic state, but for the $13 billion pornography industry, it's a warning. for defenders of the first amendment, it's troubling this is little's only interview before reporting to prison. there would be an audience for, but society says not for us?

>> well, society has spoken, and they've demanded it. >> reporter: by buying your videos? >> right. there's more people buying my videos than people protesting my videos. >> legal crackdowns and all the protester are just one of the challenges that the industry faces, we'll tackle many of the challenges. we go inside the business. premiering tonight right here on cnbc. >> looking forward to it, me his aa. coming up next, binge versus google.. chrome versus -- the google reports earnings tomorrow.. what should investors expect? we have a task force with an inside look. >> just minute ing fromnow, the minutes from the latest fed meeting could be a big market mover. we'll get you ready for the 2:00 p.m. release. undefeated professional boxer floyd "money" mayweather

has the fastest hands boxing has ever seen. so i've come to this ring to see who's faster... on the internet. i'll be using the 3g at&t laptopconnect card. he won't. so i can browse the web faster, email business plans faster. all on the go. i'm bill kurtis and i'm faster than floyd mayweather. (announcer) switch to the nation's fastest 3g network and get the at&t laptopconnect card for free.

ed dow jones at around 200 points, right around the highs of the day. still lots of earnings to come, as this week unfolds. massachusetts top regulator taking a hard look at regulated exchange funds. william gavin, massachusetts -- william galvin, thank you, mr. secretary for being with us. the leveraged etfs have become

popular? what's your problem with them? >> we're concerned about sales practices. we're concerned as they aggressively in print and television advertising, they may be finding their ways into the hands of people who may not know what they are, who may not understand the leverage aspect of them, the fact that they have a high volatility, and if you do invest, you need to pay very close attention. >> they're very volatile, and many professionals know you can trade them for a short amount of time, but cannot own them, because there's not a

correlation with the typical eff. >> yes, that's why we're asking the major venters to tell us how they're telling them. the issue is to whom they're selling them and how they're presented. frankly the advertisements are too simple. they're playing to the frustration that people might have about treasuries or some other aspect, and is obvious the case, some investors think they -- we believe the obligation is to provide them the information. we're obviously going to hold them to strict standards. we have strict consumer laws here in massachusetts, and hold people in the industry to a high standard. i don't want to be premature. we are starting off by asking

what they are, and i think it serves as a wake-up call to look carefully at these instruments. >> secretary galvin, thanks for being with us. google reporting second quarter earnings after the bell tomorrow. investor ares are watching for signs that business conditions have bottomed and perhaps the consumer is bag. shares are trading higher by $12 ahead of the earnings, $436 a share. joining us is jim goldman and cnbc's dennis kneale is here look with our power player here, jack ablin. it is first quarter ever they didn't show 10% growth. what do you want to hear from the company?? what will satisfy the treat? >> yes, hi. if you look at last quarter, google had a couple headwinds. the macroeconomic environment

was difficult. they were facing foreign exchange pressure as well. if you look at second quarter, you know, what we think we're looking to hear from the company whether things have stabilized or not and what kinds of discussions they're having, you know, and second thing, we also would like to hear what they're doing to manage their costs during this different environment. >> dennis, do you think that's the most important thing? >> it's seen as the cipher for tech and the appetite for tech stocks, but it's a nice pulse on the economy. advertising is the first thing companies cut when the economy heads down, lastr last thing to come up, and i'm interested in that line. right, jim? >> yeah, dennis. i think you're absolutely right. this is a key barometer for the broader economy. what we hear from google, this is a company that doesn't provide any meaningful guidance of any kind, but we will get a pulse of exactly what this

company saw in the first quarter and also get an idea of what to expect from yahoo! as well. the color wee looking for, how binge is affecting the -- >> are they going to say anything. >> i think they'll go bingeless-ness. >> think mae address it. you have the comp numbers showing that microsoft binge was the only thing that gained market share in june. so, you know there is this new sense of heated competition between google and microsoft, then the cloud web-based operating system, this is shaping up tore interesting, but google pretty much still a one-trick pony. >> would it get the government off google's back, because they're so concerned about how much market share they have? a little strength in binge to cool things off? >> i think that's a fairway to think about it. mic microsoft is a credible

competitor, and i think we published a report where we did a survey to look at what's happening in the market. we talked about that binge, microsoft, could potential gain market share over the next few months. we think most of it will come -- but what i think it highlights is it's an extremely complicated business. >> and you also have microsoft getting ready to offer apps free, the same way google does. i question whether the antitrust department will ever let up on google. >> jack, what do you think about that? >> yeah, i've heard eric shh mitt in the press in recent weeks. one of the things we're looking at, if analysts and investors will be looking at the outlook, you know, schmidt has said, yeah, we've hit bottom, but he's not optimistic about the future. do you have a take on that? >> you know, i think if you look

at our estimates, we have been carrie -- you know, if you look at last year, the company grew their business in the fourth quarter by four percentage points. fourth quarter was one of the toughest quarters in many, many many years, and also on top of that the foreign exchange. i would say the investor expect saying aren't that outlandish. >> good discussion. thank you very much. david? >> thanks, michelle.. the latest fed minutes are out at the top of the hour, we'll get you ready for what could be a market-moving event. >> meanwhile, a 3% gain in the nasdaq and significant percentage day in the dow as well. up 2.5 in the nasdaq, 3% in the nasdaq. we're back in a minute. d i'll g. come here. yeah, good boy. here's your treat. ♪ ( neighing, whimper )

♪ show off. ( neighs ) ♪ so, what's the problem? these are hot. we're shipping 'em everywhere. but we can't predict our shipping costs. dallas. detroit. different rates. well with us, it's the same flat rate. same flat rate. boston. boise? same flat rate. alabama. alaska? with priority mail flat rate boxes from the postal service. if it fits, it ships anywhere in the country for a low flat rate. dude's good. dude's real good. dudes. priority mail flat rate boxes only from the postal service. a simpler way to ship. you have questions. who can give you the financial advice you need? where will you find the stability and resources to keep you ahead of this rapidly evolving world? these are tough questions. that's why we brought together two of the most powerful names in the industry.

introducing morgan stanley smith barney. here to rethink wealth management. here to answer... your questions. morgan stanley smith barney. a new wealth management firm with over 130 years of experience. i'm sorry. i can't hear you very well.

announcer: does someone you know have trouble hearing on the phone? dad. dad, let me help you with that, okay? announcer: now, a free phone service shows captions of everything a caller says. i'd like to make an appointment to see the doctor. announcer: to learn more about captioned telephone, call 1-800-552-7724 or go to our website. i'll see you at 3:00! announcer: captioned telephone - enjoy the phone again! we are a few moments away from receiving the minutes of the last fed meeting. joining us to talk about that, michelle mire, economist at bar clays capital, and jack ablin. we have a triple-digit gain in the dow, but what would the market like to hear from the federal reserve? >> i think what we're probably going to see is the fed will

highlight in this wait-and-see mode. there are a few interesting things we can get out of the minutes. first, what was the discussion like about the decision not to expand asset purchase program. were there members on the committee in favor of increasing the program? or was it is view more towards the fact we're seeing the slowdown and more convinced about the recovery? the other important thing is was there any discussion about the liquidity function, the next day the fed announced they were changing some of these programs, so did they discuss it? was there views that maybe they. >> it's these capital market transactions that i would like to see, you know, what is the relationship with the banks? are they getting banks to actually lend money out?

what's the reaction to that? >> you know, at this point, michelle, a lot of people are wondering whether or not the green shoots have staying power. that's been called into question the last couple weeks. what's your overall read? i'm not sure we'll get anything from the fed minutes certainly, but it does influence policy. >> it certainly does. they're first going to note they're seeing these green shoots, the data points that suggest that at least the economic recession is slowing. i think they will be pretty cautious about the strength of the recovery. the latest beneficials have highlighted that. they think there will be a subdued recoveries. >> michelle, thank you very much. appreciate it. i want to also talk about these two gentlemen. we highlighted user books, minimizing risks and mac mizing returns, and david, you also have your book out "and then the

roof caved in." did you ever think you would be writing about a time period that has been so extraordinary? >> you know it's remember when i first wrote about it, i would bring up stories about how drammic it was, back in the asian contagion, and then 2008 hit, and essentially made all of those stories irrelevant. >> my book begins on that memorable night when we reported in for duty on september 14th, where you had literally three events occurring in one night that could have conceivably been the three biggest stories, ai giismt, merrill link, and of course the bankruptcy of lehman: brothers. >> we all felt like we were being hit by a truck that day. it all came due to desperation. >> and four days later, that thursday we really were facing potential. >> i remember giving a speech that day to clients, just

petrified, seeing that $180 billion came out of the money market funds and still try to go keep a good face. >> but we are still here and will be after the break as well. greet beach reading. >> see you after the break. thet tools is crucial to being able to manage your diabetes properly. it's very important for me to uh check my blood sugar before i go on stage. being on when i'm feeling low can be like a rollercoaster. it does at times feel like my body is telling me to do one thing... and, my mind, my heart is telling me to do something else. managing my highs and lows is super important. with my contour meter i can personalize my high/lo settings so it really does micromanage where my blood sugar needs to be. i'm nick jonas and never slowing down is my simple win. tdd#: 1-800-345-2550 including who i trust to look after my money."

tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 "the dust might be settling... tdd#: 1-800-345-2550 that's great, but i'm not." tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 "i guess i'm just done with doing nothing, you know?" tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 "oh, i'm not thinking about moving my money. tdd#: 1-800-345-2550 i am moving it." come on in. you're invited to the chevy open house. where getting a new vehicle is easy. because the price on the tag is the price you pay on remaining '08 and '09 models. you'll find low, straightforward pricing. it's simple. now get an '09 malibu 1lt with an epa estimated 33 mpg highway. get it now for around 21 thousand after all offers. go to chevy.com/openhouse for more details.