bob pisani down here on the floor of the new york stock exchange, where we are closing right near the highs of the day. and what an interesting day. my e-mail has runneth over here today. i've gotten more e-mail today than i have probably in the last six weeks or so, and a lot of opinions down here and opinions about this rally are all over the map. there are the pooh-pooh guys, and there's still a lot of bearish sentiment down here that this is some kind of options expiration related thing. oh, a lot of the hedge funds have been caught short, and so there's a little bit of a short squeeze. and you know how traders will sometimes pooh-pooh a short squeeze as not being real kind of data, real buying.. still a lot of people are noting

and some guests i talked to are saying they're seeing plain vanilla buyers.. month who are those? well, those are like mutual funds, for example, or pension funds, plain vanilla types who are also buying. so there's a lot of different opinions. but here's what's really important. you have to look at this fundamentally. for the first time in a long time we've seen a string of fairly good pieces of news from companies. it started with goldman sachs. then it extended to intel. csx the railroad company also had some positive comments as well. credit card companies making some positive comments today in terms of their delinquency. that also helped. so you get little pieces of information. and remember, the main thesis of the bulls. and that is that these companies have become cost-cutting giants. they have been so efficient that any little boost to the top line, any comments that their top line is going to get better will translate more effectively to the bottom line. and that is why we're getting the rally, and don't let anybody else tell you any differently. tradertalk.cnbc.com. there's the closing bell. you know who's next. maria bartiromo.

and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to "the closing bell." i'm maria bartiromo on the floor of the new york stock exchange. a busy close here on wall street. a 260-point rally in stocks. powerful from the get-go. on the heels of intel. but gaining momentum by the closing bell. investors optimistic about earnings season following the strong results. the outlook on intel on top of better than expected numbers from goldman sachs. all powering the market higher for the third day in a row. intel, that was fueling the rally today.y. certainly fueled buying in technology. leading the nasdaq to the sixth straight winning season. and we're keeping an eye on cit group tonight. sources telling me a resolution could come imminently on the company's liquidity crisis. no word yet on whether that

means the fdic will allow it to access its lending programs or if the administration will allow cit to fail. the stock has been halted. traders down here on the floor tell me the stock did not open before the close. cnbc has learned cit applied to access the fdic's temporary facility program but has yet to be allowed that access despite becoming a bank holding company at the end of last year. we are on it and we have more on the story developing coming up. here's a look at how we finished the day on wall street. the dow jones industrial average tonight up 257 points. 3% even at 8617 on the blue chip average. financials and technology the winners. s&p 500 up 26 points. nearly 3%. at 932. and the nasdaq composite solidly above 1860 at 1862 with a gain on the session of 3 1/2%. 63 points higher. we get all the action right now, bob pisani our eye on the floor of the nyse. bob? >> boy, this was fun. now, let me just say, there is a

little best a complaint we could have had a little better volume. 1.3 billion -- >> not bad relative to what we've been seeing recently. i like the volume. >> that's true. relative. but what a broad rally. that's what's really encouraging about it. for the first time we got strings of data, maria, that support the idea maybe we'll get some real revenue growth at this point. take a look at some of the big thames. let's start with technology. you know the story about intel, very simple story here, forecasting sales ahead of expectations. that's the key metric for them. intel ahead about 7%. and all of the big semiconductor stocks also moving very effectively to the up side.. but etfs around technology stocks had few months to the up side. this is the pro shares ultra short semiconductor. you get twice the semiconductor index if it goes up. had enormous volume. more than twice the typical volume they had. so there was a lot of trading around the technology stocks. but it wasn't just the technology stocks.s. financials had big moves to the up side. you know it started with goldman

sachs. we have double-digit increases in all, all of the big financial names this week. citigroup's up over 20%. american express also up 18%. the credit card companies, all were trading higher today. we got some data indicating some of the net charge jofrz for them as well as some of their delinquency rates were not quite as bad as anticipated.. we saw american express move up in the middle of the day, discover also had similar comments. capital one a little bit different but even theirs was a little bit better than expected here. how about that weaker dollar? that was another factor.. and the shanghai index, big commodities index, also closed at a 52-week high. so all the big commodity names also moved to the up side. we had nice gains in alcoa and freeport and u.s. steel as well. also we saw some of the big global industries, global companies to the up side. brazil had a nice day. and all the companies that trade down in brazil also had a nice day. transports, another beneficiary of the commodities rally. we saw some of the big names in railroads continuing to rally after csx made positive comments yesterday. airlines were up because amr had earnings that were not quite as

bad as some people had anticipated. you see this little string of positive news here. it's not a rally on nothing, folks. this was much more substantive than some of the other rallies we've seen. finally, the media stocks strong.. gannett had earnings better than expected because they're cost-cutting giants, folks, and nobody has any illusions about what's going on in the media business. ad revenues were down 32%. but maria, even gannett said they saw some glimmers of hope for improving ad revenues in the third quarter. the key point here, data points positive. real fundamental news. >> thanks, bob. bob pisani with the latest there. the federal reserve released the minutes from their june meeting. cnbc's hampton pearson is in washington right now with those highlights. pretty good surprise here, hampton. >> absolutely, maria. the fomc saying in those june minutes that they believe the end of the recession is in sight. they upgraded their economic projections for the remainder of this year and next.. a smaller contraction this year and a return to positive growth in 2010. the updated forecast looked like this.

gdp, negative 1.5% to 1% rage for the balance of this year. unemployment 9.8% to 10.1% range. core pce inflation 1.3% to 1.6%. looking ahead to 2010, a return to positive growth. 2.1% to 2.3% says the fed in its minutes. unemployment 9.5 to 9.8%. core p krechlt 1 to 1.5. unemployment dropping to a range of 8.4 to 8.8. and inflation .9 to 1.7%. >> it's pretty much in line with what private forecasters have been saying for some time now. we're going to see a little less of a drag from the trade data. we're going to see a little bit of a positive contribution from inventories. >> other highlights from those fed minutes, the top priority developing tools to remove policy accommodations smoothly and at the appropriate time. and the staff agrees, they already have or can develop the

tools to get that job done. they also agree most backup liquidity facilities should be extended into early next year. market conditions remain fragile, say the fed minutes. removing prematurely might put renewed pressure on some institutions and markets. however, if improvements continue, a number of those facilities could be shut down by february 1st of next year. the committee agreed that changes to the program not warranted at this time while it might give some additional support for the economy the effect of further asset purchases, especially treasury securities, on the economy and inflation expectations were uncertain. ak0rding to those fed minutes, it was concerns about market reaction that led policy makers to put a hold on any additional asset purchases. maria? >> it's a good thing we have some kind of an exit strategy in place, i guess, hampton. that's certainly one positive coming out of this minutes report. >> absolutely. >> thanks, hampton.n. see you a little later. intel's positive surprise,

goldman sachs's performance earlier in the week providing some upward momentum for the market for sure. does it signal a rush for the bulls or is it sheer short covering? randy bateman at huntington firms. scott wren senior equity strategist with wells fargo advisers. cnbc's sue herera to talk about what's going on. scott wren, let me put that question to you. what was behind today's move? >> we have received some good news. certainly we've received some good company news. but i think the market since the early march lows has done a pretty good job at anticipating the news that we're just starting to see now. i still think we're getting up here to the top of the range. i think it's going to be tough to get through 950 or 975 in the s&p 500. i think we'll have more consolidation or pullback from here. >> randy, are you on the other side of the trade or do you agree with that? >> i somewhat agree with that. a week or so ago we were hearing a lost doom and gloom, we were even talking about having some more money spent from the fiscal side of things. we were saying all along these

green shoots is going to be inside a fiscal fertilizer that is going to have some traction and will manifest itself today. but it's just today. we need to see a more prolonged recovery in this market and that will draw northwest $4 trillion sitting on the declines. and that's going to propel the rest of the year on the up side. >> if we need fundamentals to go along with that, certainly we could see that money move in that direction. sue herera, we were talking earlier about the lack of evidence of real breadth, questioning whether or not this market rally had legs. at the end of the day volume ends up being close to 1.4 billion shares. not a great day but certainly q relative to what we've seen q recently in these summer doldrums not bad.q >> i agree with what you said at the beginning, i like the volume. and you know what, maria, i think you're absolutely right.q the other thing i would point q out, the zero return that a lot of this money has been getting on the sidelines is changing today because we saw a two-poinq sell-off in the 30-year bond.q we saw better than a one-point

sell-off in some of the intermedia intermediate-term securities. interest rates are moving up a little on the curve, and i think it's linked to those fed minutes and the fact they see the economic contraction lessening and also the lack of any more significant treasury purchases. the question is whether or not that will drive more people intq the equity markets, whether the risk is worth the reward to q them. and i agree with you.q volume is going to be key in the next couple of days. but this really isn't bad, given the fact that we're in the middle of july. >> no doubt about it. randy, you mentioned a moment ago $4 trillion on the sidelines. is that the number you used? >> yes indeed. >> okay. so $4 trillion. let's say hypothetically speaking we do get some evidence that this rally has legs. what do i want to be owning? what are the most-owns, must-buys for my money at this point or for that $4 trillion on the sidelines? >> we at the huntington are obviously a little bit overexposed now as relative to the benchmarks in the industrial sector, in the technology sector. and in some of the energy names.

we like those. we think they will participate more rapidly in any type of economic recovery. and certainly the technology's really been taking off. they've been the second -- or the best performer thus far this year, and we think that will continue. >> now i'm going to ask you both to stick your neck out for us. scott wren, you've got jpmorgan tomorrow, citi and b of a on friday. do i want to buy those stocks ahead of those numbers?s? >> i think we're going to see some better financial news. i think much of it is discounted but believe me over the next couple years financials are going to be -- >> you're telling me to put my money in ahead of those reports? >> i think those names and the financials as a whole are going to be good returns. if you look out over the next year or two, you want to have some financial exposure.. >> randy, where are you? do i want to put money to work in those names? stick your neck out for us. >> i'd be a little more cautious i think. it's still very, very difficult to understand what's going to take place between the lending function and the paying back function that banks always have to worry about.t. >> all right, gentlemen. sue herera, good to have you on the program.

thank you very much. see you later.r. >> thanks, maria. >> thank you. managing risk in our nation's banks.s. that's what we will focus on after a short break. the government makes a push for tougher curbs on financial institutions. right? we'll look at the ideas on the table. how washington could impact the banks and, more importantly, your money. then-s now the time to put money to work in tech? we're seeing the bulls on the move, but will the momentum continue for the long term? a preview of tomorrow's key earnings out of ibm and google. stay with us. @

the creation of a consumer protection agency. today the banking agency shared its perspective with the committee on financial services. steve bartlett is president and ceo of the financial services roundtable. he testified at that hearing. alex sanchez, president of the florida bankers association, was on the hill to raise his concerns to congress and the fdic. both join me now to discuss it. gentlemen, good to have you on the program. >> maria, good to be with you. looks like --

>> great to be with you. >> you've done your job on the market. i hope we did our job in washington. >> i hope did you too.o. i want to hear all about it. what was your sense of the hearing today?y? >> it was a good hearing. it was a good -- this was the first day, opening shot. so time will tell. i think we're going to get regulatory restructuring. i think we're going to get regulatory reform. in six months i'll tell you if on balance if was a good thing or bad thing, but i think we're going to get reform. >> i want to ask you about the consumer protection agency in a minute. but earlier today i was on the phone with roger ferguson, the former vice chairman of the federal reserve, and he voiced some concerns that as part of the financial reform we have not seen an insurance charter. he also felt that some of the agencies should merge, like the s.e.c. and the cftc. any thoughts on either of those proposals, which right now are not on the table, but roger ferguson believes they should be? >> well, maria, i think the insurance option should be available for the federal charter for the insurance companies versus having -- especially for those insurance companies that are operating in multiple states. i think that makes sense.

>> we do too. we're going to push hard for that, maria. i think roger ferguson is one of the all-time great thinkers in regulatory restructuring in this country. he's right on both counts. we're for fewer federal agencies and want to see some consolidation rather than more federal agencies.. so i think merger of some of these agencies is the right thing to do. >> well, maria, i differ on steve on that. i think the ots and the ots charter should be kept alieavli. that's a good thing for america. we need to keep that going in the united states. >> you both agree on the insurance charter but you're differing on whether or not we should see a merging of some of the agencies. alex, let me get your thoughts on the your concerns about the financial reform on the table right now. you talked about the consumer protection agency. what's the problem? >> well, maria, look, president obama himself said that 94% of the high-cost mortgages came from the non-banks. the banking industry is all for, you know, having the confidence of the consumers. 62% of our banks have been

around for 50 years or more. 31% of our banks have been 100 years or more in existence.e. without the confidence of our customers we would not be around. but with the president's comment i think that should be taken into account that in this consumer agency they're hitting the wrong people. how about the mortgage brokers? how about the payday lenders? they're depending on the state regulator system to regulate them. quite frankly, maria, the states do not have money to do that, never have, never will. so i think they're hitting the fdic banking crowd, and that's the wrong crowd to hit. we're regulated by five agencies and the current agencies all have this authority right now. so you know, why are we doing this? >> well, if they didn't have the money before, they certainly y don't have the money now, the states. steve, what do you think? >> maria, we think the weakest part of this proposal is the so-called consumer protection agency. i made it clear that we are for consumers, for financials, for protection, but against the agency. these consumer protections should be provided by the safety and soundness supervisors so you

can get some balance and so you can look at the whole picture. having a separate agency really is a non-starter and makes no sense. >> well, maria, let me jump back in and say look, maria, the rating agencies, where are they in all this? they get off scot-free. they put aaa on documents that americans depended on, american small companies depended on, and they get off scot-free. the s.e.c. have any heads rolled because of madoff? i don't think so. we're well regulated.. i think everyone recognizes that sheila bair and the other banking regulators have he done a very good job. so let's get the shadow banking industry regulated and not depend on the states on that, maria. >> you almost feel like you don't necessarily want more regulation and more sort of bureaucracies, you just want the government regulatory agencies in place now to do their job. >> that's correct, maria. that's right. >> we want better regulation. we do want some more powerful regulation in a number of areas, and we want it to be more

systemic so you look across the lines and not regulate by silos. but there needs to be better regulation and the idea of having a separate agency for consumer protection makes no sense for the consumer. you're stronger by putting it with the safety and soundness regulators. >> let me take the other side on that, try to figure out why it is that the industry is so against this, because we've had lots of bankers coming on the program and saying look, this is only going to be another layer of wasted bureaucracy. is this because they feel they're not going to get the fees they've been charging everybody for so long, the tarp fees -- >> no, maria, let me say this. i'm up here from florida to represent the main street views of america here in washington. to make sure that washington understands what main street is saying, not just the beltway. and our bankers are serving their communities, and without th that local support they wouldn't exist. our bankers are reacting-v been there for our customers, but it's that 60% non-fdic banking crowd that kroelt lending market in the united states before this recession who we have to target. of course many of them are out

of business now because they weren't regulated. >> you know, you make a great point. let me end it on this comment, and i'm going to switch gears for a minute here, steve, on you, because the other focus we're watching after the bell tonight is cit group and you have a situation where of course goldman sachs had gotten tarp money, they've got great earnings. goldman sachs doing really well. then you've got a company like cit, teetering, wanting access to some of the federal programs, certainly the fdic programs, the middle market lender unable to access those programs. is there something that doesn't look right here? should cit be saved? the stock was halted going into the close. you know, cit will tell you this is the one lender to the middle market, small and miz cap business. that's the businesses that create jobs. >> cit is a great company but this is not about cit. this is about the tens of thousands of small business borrowers that can't be banked anywhere sxels it's about liquidity to provide credit for those borrowers. so i think there's a systemic issue here. we've expressed that opinion to

the administration that look at the systemic risk to those tens of thousands of borrowers. and i think some liquidity is needed here and i think that the government ought to provide it. >> maria, i differ. maria, let's not forget the 8,000 community banks on main street, usa who are the primary lenders to small businesses in america. i know this is -- this institution was made a bank holding company over the weekend a few months ago and i don't mean any ill will on them but let's concentrate on the 8,000 community banks and the fdic banking crowd who are lending to small business in america. >> why did they become a bank holding company if they weren't going to have access to the program? >> well, because i think they wanted access to the program.. >> they are a bank at this point and they're a bank holding company. they ought to be treated as such. >> you know, what this debate goes on as we await news pending. that's why the stock was halted. we are waiting on an answer out of the government. gentlemen, thank you. great discussion. we appreciate it. we'll talk with you soon on this very important topic. president obama steps up the

push for health care overhaul, meanwhile. we will have the latest on that. we're breaking down the real cost of reform on taxpayers. your money. back in a moment.

welcome back. president obama setting his sights on health care again today. the president headlining an event today at the white house aimed at pushing congress into passing a bill before the august recess. cnbc's john harwood in washington now with the story. john. >> reporter: maria, things are starting to pop in this debate.

you had the house lay out their plan yesterday. the senate's beginning to move forward, although the finance committee still hasn't come up with how it's going to pay for its plan. but republicans are already attacking, saying the democrats want to raise taxes that will hurt small business without doing anything about the health care inflation they say is bankrupting the country. >> this does nothing about the cost of health care in america. and if we're serious about fixing our health care system, we've got to go to the cost. >> reporter: so president obama surrounded himself with nurses at the white house today for a little protection, and he tried to rally the troops within the democratic party and the advocacy community, saying what we have to do at this moment of crisis is be strong. >> 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 make decisions. in other words, we can lead. >> reporter: sought word from the president is buck up. and also buckle up, maria. because this ride's going to get more interesting. it loogz like the senate finance committee may roll out their bill tomorrow or the next day. aides tell me they have shrunk down the taxes they have proposaled to pay for this plan. instead of $500 billion now $300 billion with a bunch of small tax increases, no big broad takts tax increase like the tax the wealthy plan we saw in the house yesterday. we'll see how the conversation develops. >> we'll see about that. buck up, john. thanks so much. john harwood at the white house. the latest on the challenges facing cit group meanwhile is up next. i spoke with analysts today as well as money managers. sources are telling me about their ongoing round-the-clock discussions with financial regulators. the stock was halted today. we will have the latest developments on cit next.

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welcome back. cnbc has learned we will likely have a resolution on cit's funding crisis over the next day. the information is imminent. sources are telling cnbc that lender cit is in round-the-clock discussions with all three financial regulators. that's the fdic, the treasury, and the federal reserve. at issue, when and if cit will have access to the fdic's temporary liquidity guarantee program. or the tlgp, which was supposed to be a component of cit becoming a bank holding company last october. to refresh your memory, this program allows all of the banks to roll over maturities. it allows the company to buy the guarantee of the fdic and issue bonds up to three years in maturity. you pay for that 100 basis points a year. cit so far the only institution that got significant tarp money, $2.3 billion in tarp funding,

and has yet to have access to those programs. regulators are mulling a solution while the company is doing extraordinary things to keep meeting payroll. but sources say a package needs to be finalized soon or the company will struggle severely. some say possibly declaring chapter 11 and leaving 1 million snaul businesses unable to meet payroll. sources say the application was filed from cit last year and italian initially was asking for $10 billion and then an additional 5 billion. devoted to serving the middle e market by assets. cit is the 120th largest bank but when measuring lending and lease to the business community the company is the fifth largest bank. now, the debate is out on what the impact would be if in fact cit were to go away. some people say it is the only company serving that middle market. others say community and regional banks could pick up the slack if not some of the larger lenders. that's what we're getting into right now. we have more on the situation at

cit and what's likely ahead for the company, what kind of an yes, ma'am pact this is all going to have from samir gokle, senior vice president of specialty equity research with kbw.w. also with us vince farrell, chief investment officer of soleil securities. great to have you on the program, gentlemen. samir, let me begin with you. do you have any new information on cit? where are we right now? >> unfortunately the information flow is very limited. we're expecting to hear something within the next 24 hours but what kind of resolution the situation already is extremely unclear at this point. so really we're in the dark about many things. we do know that the three agencies as you point out are working toward a solution here, but we just don't know what that solution is just yet. >> vince, at a time when the obama administration is saying that it wants to have small and mid cap companies, particularly given that this is a part of the economy that really is the job creators, if you will, would they allow cit to go down? >> i can't imagine it, maria. i think this is absolutely insane. what we're doing to small

business recently is crazy. the surtax proposed on the house health bill right now, 6 out of 10 people that would pay that surtax are small business owners. and we're talking about hitting small businesses with an 8% penalty if they don't provide health care. and now we're going to take away the primary lender to those small businesses. earlier in the show you had a guest who says there's 8,000 small banks, community banks that could pick up the slack. well, that's absurd. they've not done it for the past 100 years. why would they do it now? it would take them a very long time to get up to speed. cit has not run its business incorrectly. what cit is is in a liquidity crunch because they can't roll their paper. what happened when the commercial paper market earlier this year froze the federal government stepped in sfablize td and lo and behold it worked and they're exiting that market. i think the same thing would happen here. just let them roll their paper, continue the business of lending to small businesses and the situation will stabilize itself before long. >> and it's a vicious cycle because sheila bair at the fdic saying this is too risky a

situation and then the company gets downgraded and obviously the risk increases. >> it becomes a spiral. now, this company got tarp money, got an investment from goldman sachs, was allowed to become a bank, and everything was on track. so what political game, i think, is being played here that all of a sudden they have decided that cit is the ping-pong ball between the two. in the meantime, 1 million small businesses are at risk. i believe that failure should be part of the capitalistic system, but these guys have not done anything wrong. i should disclose the chairman's been a friend of mine for many years. and that notwithstanding, i think that these guys run a good business, what they need is some help getting their paper rolled and we ought to step up and do it. >> sameer are they in the middle of a fight between tim geithner and sheila bair? you've got politics playing a role here. >> i don't know about a fight but there do seem to be politics at play. i think one of the issues here is there are different agendas. the treasury has invested $3.2 billion of tarp money in the company. so i think they have an interest in trying to recoup that money over time. the fdic on the other hand may

have a different agenda. sheila bair might be saying why should we take on this rix of the company and guaranteeing 10 or $15 billion of debt when essentially this is not our problem, you the treasury invested this moirn and our job is to protect the fdic's funds.. there are different agendas here but certainly cit does seem to be caught in between the two different agendas. >> let me ask you this.. if the company is a bank holding company and the idea is that i they'll have access to the fdic temporary lending programs how come it hasn't been allowed to do so? >> that's the million-dollar question. i think you've hit the key issue. at the end of last year when the company did receive bank status and the company did receive the tarp money this almost seemed to have to be a given that they would be given access to the tlgp and we're sitting here in july they haven't received access yet meanwhile other companies like ge capital for example that don't have the bank holding company status have received the freebies because they're supposedly too big to fail.. it's a good question and i goebt know if the fdic had any options

why those objections weren't raised by the end last year before the company got tarp and holding company status. >> the fdic wants to trump one on the treasury and cit is the pawn in the game, and i think that's a disgrace. >> let me ask you this. what happens if the government fails to act? the stock was halted midday today on news pending. my sources were telling me a decision is imminent, that we're going to know within 12 hours what happens, whether the government allows this new aid to happen or if it makes the company deal with it and ultimately that would mean obviously the worst case scenario. what is the worst case scenario, vince, if in fact the government fails to act here? >> you're going to find an awful lot of small businesses unable to meet payroll because they need liquidity, which cit provides, and you're going to see a big jump in the unemployment rate at exactly the wrong time because some of these green shoots we're seeing are starting to sprout. today, for example, the credit card news was somewhat on the better side. so why you would allow for the

sake of when what really is tag ends in terms of money when you cull right down to it for what's been done, we're allowing goldman sachs and jpmorgan to issue government-guaranteed debt, and they're the last group that needs it. and this is a company that could have 1 million small businesses in a liquidity crunch with an awful lot of people on the unemployment rolls, and we're driving down a road on a political confrontation that need not be done, and they ought to do the right thing, and in the next 12 hours i think you'll see that. but it would be a very bad outcome if they allowed this company to go bankrupt.. >> sameer, what about that? a lot of people saying look, we don't want any more too big to fail, we don't want all this government action, they let lehman go but they didn't let aig go and they didn't let others go. so how do you make the argument that they should let cit get funded? >> well, i think that the main argument is something along the lines of what vince is saying, this is a company lending and providing liquidity to small and medium sized businesses. they have the largest factoring business in north america.

so they help retailers. the largest lender to small businesses. so i think if those businesses don't get funding then you have unemployment increasing. so this is in a certain sense a public policy issue. i don't think cit's big enough to pose a systemic risk to the financial vichl. but you've got all the elements in place. they've got bank holding company status. they have the taxpayer money, $2.3 billion. it's the obligation of the officials to figure out a way to recoup that money back over time. so ply letting the company go into bankruptcy and potentially logs the investment, those taxpayer dollars, is not the right way to go. i think you can solve this situation by giving the company some near-term liquidity and helping them work through these issues. and keeping it as a viable entity and then over time i think the treasury will be able to get its money back and all parties involved should be satisfied. i don't think it's an optimum solution to let this company go bankrupt because of all the various constituencies here. >> particularly at a moment in time when we're looking at small business to spend money and invest and we think the obama

administration is trying tone courage that, although we're waiting on those incentives.s. gentlemen, thank you. we'll speak to you soon. vince, sameer, thanks for that discussion. are the bulls back in tech?? we're going to take a look next. we've got some more indications as two more heavyweights get set to report their quarterly results.s. that's tomorrow. we'll preview google and ibm's numbers. should you be getting in ahead of these numbers and investing in tech? back in a moment. could someone toss me an eleven sixteenths wrench over here? here you go. eleven sixteenths... (announcer) from designing some of the world's cleanest and most fuel-efficient jet engines... to building more wind turbines than anyone in the country... the people of ge are working together... creating innovation today for america's tomorrow. thanks! no problem!

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welcome back. yesterday we saw strong numbers from intel. tomorrow two more big technology names report their quarterly numbers. cnbc's matt nesto at earnings central right now with a prevow of ibm and google.e. >> maria, man, these guys are so big. how big are they? they're the number two and three position holders in the i.t. index behind microsoft. monstersoft is about 50% bigger than both ibm and google. each with a market cap that's hovering around $140 billion. but combined, folks, we're talking about almost $300 billion worth of market cap power reporting tomorrow. that's more -- that's a 3% weighting of the s&p 500. that's more than the smallest 100 members of that index combined, from two little stocks, so to speak. there's the performance,

outperformance, if you will, 2-1 since they last reported. going to google. ibm is actually a market underperformer. the s&p up about 9% during that period of time. let's start with ibm. take a glance here. there's the estimate. a 2% increase in the per share. the sales would be down 12 at 23.5. remember, big blue is a services company. now 60% of their revenues will come from services. look for software to do about 120%. then the systems and technology in the balance there and a little scraper for financial services. they beat the street at least three years running. so they do get it done on the bottom line up there in white plains. another one to look at at a glance is going to be google. $5.08 a share. the revenue figure always sends us scrambling. pick your house. some want the total revenue figure. some want it x. traffic acquisition costs. we like to go with that. because if you pay for money to make money, 4.1 billion is the

number. and that would be actually up 4%. halftime revenues at google are coming from overseas. and also worth a peak, the company's actually missed three out of the past eight quarters. so heavyweights, maria. heavyweights. 3% of the s&p 500 all reporting after the close manana.a. >> absolutely. and we'll see how those numbers look. if we get some better numbers, we probably will see this number have legs in terms of the rally. it's all dictated by the earnings. matt, thanks. stocks, meanwhile, surging as the major players in the tech sector prepare to release those numbers. will technology lead the next bull snarkt we tack t bull market? we tackle the question with brian marshall and dave hilal at fbr capital markets. gentlemen, nice to have you on the program. >> thanks, maria. >> brian, what kind of quarter are you looking at for technology? >> we think the bottom is behind us. we think that the second half recovery is going to come in nice and slowly.

we expect a return to normalcy next year, calendar year 2010. and the companies have reduced their op ex quite a bit, their operating expenses. we expect earnings numbers to be pretty impressive next year. >> can you look within the serktsz of technology and tell me where you think the biggest or the best growth is? >> sure. i think the best growth right now is in the smartphone space. so we cover apple. we currently have a buy rating on the stock. my numbers are street high. i think my numbers are conservative. i think the company's going to report a great quarter next tuesday. and i think the stock's going to go to $175 here in the second half of the year. >> i guess you want to be buying that now is your recommendation. dave, do you agree with that? mobility certainly an area where a lot of poom belieeople believ growth of technology. >> i think in the near term i certainly agree with that. i think we're seeing consumer spending possibly coming back a little bit within enterprise spending. meft most of our companies with

the exception of microsoft are more geared toward enterprises.. i agree with brian in the sense that i think the worst is behind us, but i'm not sure we're going to get a meaningful recovery, at least until the back half of next year. i think a lot of investors think the worst is over, and i agree, but i think they're also hoping that things get better in the near-term and i tend to disagree with that, i think we could bounce along the bottom for some time. >> as far as putting money to work in the tech sector, then, david, what's your best idea right here?? what do you think is the area or the specific name that is going to treat my money best? >> yeah, so within enterprise software probably our favorite name is microsoft. the stock has done well. i think that's going to continue for two specific reasons. one, from a product cycle standpoint there's major refreshes across the platform. so not just windows 7, which everybody's talking about, but if you look across the different business lines we have major new releases coming out across the board. secondly, the company's online

strategy has been a major brunt of everybody's jokes. and arguably they haven't had a good online strategy historically. i think that's changing now. i think with the combination of azure and bing and some of the office web apps they actually have a legitimate shot at competing in the online world. time will tell. but i think the investors will stop penalizing the company for not having clarity to an online strategy. >> brian, what about that? do you agree with that? what do you want to be buying in this environment? >> we do agree with that. in fact, our analyst that covers google has a buy rating, he continues to think that the stock's going to perform well. he likes it in the future. i cover enterprise infrastructure as well as apple. i like a mid-cap enterprise storage name, net app, ticker ntap. think they're gaining share in enterprise storage, which is a very important leg to the enterprise infrastructure segment. so we'd be watching that name. we currently have a neutral on emc. they're scheduled to report next thursday. but we think that's a pretty

interesting company as well. we'd be looking at enterprise infrastructure gaining some mind share and some investment dollars from the community.. >> so let's talk about the bellwethers, brian, just tomorrow. we've got ibm and google. do you want to be owning these stocks going into the numbers? >> i don't think ibm.m. i think ibm's fairly priced. we currently have a neutral rating on the stock. we're looking at recovery to come in a little slower for them. obviously they do about $100 billion a year in annual revenue. that's the world's largest i.t. company out there. it's going to take a lot to move the needle there. we think it's fairly priced. google, on the other hand, we do have a buy rating there. we think that's an attractive asset, obviously market leader in a growing space.. we'd put our money on google. >> gentlemen, we'll leave it there. great to have you on the program. thanks so much. we appreciate it. we'll be watching those numbers and have you back to weigh in. a ray of light in the newspaper business? yeah. find out why gannett was a big mover today. then some late-breaking developments regarding bernard madoff. and we're watching a very, very

serious situation for cit group. back in a moment. 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.

welcome back. we have more information now involving the madoff saga. cnbc's scott cohn at the breaking news desk right now. >> maria, this could be a breaking turn in to who else knew about bernie madoff's fraud. the auditor for more than 15 years is apparently about to plead guilty to criminal charges. they charged him with six counts with a criminal account back in march. they have until this friday to indict him, but today they filed papers that indicate freeling is about to enter a guilty plea. they intend to file a criminal information upon his indictment. that's normally a precursor to a guilty plea. we should point out even if he does plead guilty it doesn't mean that freeling has agreed to cooperate in the investigation, but if he does, it could help lead prosecutors to the accomplices they've been looking

for and investors they've been looking for. sources have told cnbc as many as ten other people could be charged with the madoff investigation which is intensifying even though the man at the top, bernie madoff, checked into his new prison home in north carolina yesterday. >> thanks very much. scott cohn has been following the madoff story from the get-go. and the other stories on the "closing bell" ticker. alcatel-lucent making a big move on wednesday after merrill lynch raised its rating to a buy up from a neutral. the analyst telling clients that the stock is oversold. he's expecting improved margins through the rest of the year, so the brokerage told clients also the upgrade is not a call on the quarter. taking a look at the stock's performance, up 14.3%, $2.47 a share on alcatel. gannett shares among the day's big winners after the company posted a profit in the second quarter despite pressure on revenue coming from the weak economy. the nation's largest newspaper publisher cut operating expenses by 67% for the quarter. it announced that earnings came

in at 30 cents a share when you strip out items that was enough to beat analysts' expectations.. shares spiked on the day. take a look, 30% higher. now at $4.53. just ahead, we break down some of the events tomorrow, what could move your money in the markets. stay with us. g b

here's what to watch for tomorrow -- aim mary thompson and this is what we're watching tomorrow. jpmorgan reports its earnings. profits of four cents a share are expected. look for strengths in its capital markets and weakness in some of the consumer areas including credit cards. i'm hampton pearson in washington. tomorrow we look at the dark k side of the housing market. an update on mortgage foreclosures for the first half of the year from realtytrac. i'm rebecca jarvis at cnbc global headquarters. today the fed predicting unemployment will hit 10.1%. we'll get a better look at the labor market tomorrow with jobless claims data. finally tonight, piracy has hurt hollywood for years, but now it's hitting the other hollywood, the world of pornography is facing the very same challenges that hollywood has faced. is dealing with content being put on the int