and wind is just another way of doing that. they don't want to be the dirtiest kid on the block. so they are cleaning up their act vis-a-vis pollution. and they've caught on that pollution is reducing the productivity of their workforce. finally, they also see wind turbines manufactured 234 n. china as an export business and they're going after that aggressively right now. they want the lead in this, and they're doing all the right things. and again, my company's benefiting. so hoora for them. but i think the united states has a way of keeping a leadership position here.. but we have to act more quickly than we have been. >> and what can we do? do we have the policies in place and we're just not enforcing them or do we need to do something specifically right now to make this next technology leadership be here in america?a? >> well, i think some of the policies are in place. there's a production tax credit that is in place. the economy, africa, the downturn in the economy has held everything back. there's not the financing to allow wind farm developers to put up their wind farms. boone pickens was the most

recent one that said i'm not going forward until i can get financing. so i think the economy has to come back. all the predictions are that in 2010 the wind industry in the united states will start to come back. but even so it's quite clear from all the numbers and all the efforts going on that china's going to overtake the united states within a couple of years and be the market leader in producing wind turbines and wind-generated electricity. >> and in terms of technology to do that, right? production is one thing, but they're buying some of it from you. but in terms of the new technology in the future, that's also coming there, from there? >> well, that's right. we sell wind turbine designs to leading manufacturers in china. they're in the business of manufacturing these turbines. and part of the deal is the contract we have with them is they have to buy the brains from us. so we're teelg selling the components, the brains that make these wind turbines work and hook up to the power grid and so forth. so we have the technology that makes them successful. and i think that's a partnership that's going to continue for a good number of years going forward. >> well, greg, thank you for taking the time and for your

patience. i know obviously we had a lot going on this hour with the former treasury secretary testifying. greg yurek, the ceo as we said of american superconductor. an interesting thing to think about as we talk about our future. thanks for watching the show. it's time for the final hour of trade and "the closing bell." and there's a live picture on wall street, the floor of the new york stock exchange. we are approaching the final stretch. stocks posting gains. the benchmark s&p up about 6% for the week. and the dow jones industrial average at the highs of the afternoon. up 74. hi, everybody. welcome to "the closing bell." i'm maria bartiromo along with scott wapner today. we're looking at a market that is very strong. money moving into technology. the banking sector. the oils pretty much mixed. exxon is negative. and i should point out that bank of america is also negative nutt in the financial services sector. for the most part money moving into financials and tech stocks. >> seven days in a row for that tech trade working. as you mentioned we're at the highs of the day. perhaps some comments as well from the biggest bear on the

street, nouriel roubini moving the market. moved a little bit and started to pick up steam as the afternoon has progressed. >> everyone's been waiting to see when neural roubini, often called dr. doom. he was one of the first to predict that we could see a very, very harsh and severe downturn. when he would turn positive. and he said that the worst is behind. this is a big story. it immediately moved the market. and i think it's because people were anticipate whg he would actually show some positive sentiment. >> talked about a second stimulus possibly being needed by the end of the year.ç but no doubt, when roubini speaks, the market moves, maria, and that's clearly what happened. >> we've got the numbers for you as we approach this final stretch. dow industrials as you see high of the afternoon with a 75-point rally back above that 8,600 mark, inching toward 8,700 actually. and we are waiting on ibm and google. those are the key numbers coming out after the close tonight. google is higher today ahead of the numbers. scott, nasdaq up 17 points and the s&p also stronger as we take a look there also at the high of the afternoon.

>> and our team is covering the markets at the nyse, the nasdaq, and the nymex, but first of course we we start with bob pisani who's our eye on the floor of the new york stock exchange. hey, bob. >> what an interesting day it has been, scott. let's take a look at our midday rally. and folks, maria and scott are absolutely right because at 1:20 p.m. eastern time headlines came out from nouriel roubini. and here's all they said. the worst is behind us in terms of economic and financial conditions. now, you might scratch your head and say you've got to be kidding me, we've got a rally on that? believe it or not, the dow jones industrial average has rallied essentially 100 points since that comment came out. so there's a clear relationship. we had particularly moves up in industrials, techs, and materials. and those are our leadership stocks right now. that's important.. but the biggest stock of the day actually happened earlier in the morning. it really had nothing to do with this. that is cit. you know the basic story of what's going on here. the government has essentially walked away from the possibility of bailing them out. bankruptcy is now a real possibility. so here's what's essentially

happened. the government has decided that further investment is too risky. they've already got $2.3 billion into it. there was talk they would need 4 billion. i even heard $6 billion more the government walked away and decide they were not systemically important. the street doesn't seem to care that much about this. they seem to think it's not systemically important either.r. but who gets hurt here if they actually do file for bankruptcy at this point? number one is obviously their bondholders, and there's a lot of life insurance companies there. but that may be a minor issue here. here's an interesting point that was brought up to me by several traders. small manufacturers, not really retailers. small manufacturers could get hurt. because cit is big in the factoring business. cit collects money from big retailers. for example, walmart, for example. then sends the payment on to the small vendors, the people who actually manufacture the goods. now, here's an interesting point. that money is right there. if there actually would be a bankruptcy, what happens? is the money frozen? do all the small manufacturers

essentially get in line as creditors at this point? is this going to affect or disrupt the retail sales business? we don't really know the answer to that. one question is whether this could all be frozen and everybody gets their money at this point. there's other people in this business too and the hope-s at least people i talked to, that other big players will step into the factoring business as well. take a look at cit on the week here, and you can see obviously what happens here. bottom line is on the lesson it's very simple. the model that they have does not really work at all. you cannot borrow short and lend long. you need depositors, and they don't have enough of them right now. that's the important thing. just take a quick look at the financial stocks here. obviously, jpmorgan important. good news, they blew out the numbers. the bad news, credit still very much an issue. but you can see very modest moves to the down side here for most of the financials and the companies that are in their area. brian schactman is standing by at the nasdaq, and brian, modest move to the up side in the nasdaq and it was negative earlier in the day. >> whether it's the nouriel

nudge or what have you, we've completely turned it around. we're up about .9%. we're all looking forward to this little bitty company with this little bitty search engine that's reporting earnings after the bell. google pretty flat, only up .3% in advance of that. $5.09 a share is the consensus on $4 billion in earnings.. they're going to have to really hit it out of the park to get this market going even higher.. but they might do it.. let's look at some of the stories here. dell computer right now up 3.3%. a report came out that said globally pc sales are down but not by as much as expected.. their market share, they're number two globally with about 13.6%. about six percentage points behind hpq. research in motion has to pay about $260 million in a patent litigation suit with vista, but it won't affect their bottom line till q2 of 2010. and they're done with it. they're up 2.9%. a lot of strength in the chip. semiconductor, intel. look at nvidia up more than 5%. i also want to touch on palm

because if you look at the intraday they were actually down for a while. the reports are that the pre isn't compatible with itunes. and they were down. but they're actually up with the rest of the market now. and i just want to point out biogen idec good earnings on the top and bottom line. let's see how the oil and commodity trade is down at the nymex with sharon. >> i'm not sure what nouriel roubini would say about the next move in oil prices, but we know that oil got a bit of a nudge higher from his comments about what is happening with the economy and what that did to the stock market because when stocks turned around we saw oil turn positive and climb above $62 a barrel. we're also looking at the stabilization of the dollar a bit. that may have helped a bit as well. but keep in mind we also had the crude options expiration for the august contract today. and that may have added to some of the volatility toward the end of the trading session. we have oil up over $62 a barrel. that helped to take gasoline and heating oil futures higher as well. but the big spike today actually came in the form of natural gas. natural gas futures were up as

much as 12% on the session. it wasn't like we got this extremely bullish report on storage levels. in fact, it was basically neutral, in line with many of the expectations but slightly less than what we saw a year ago. and a lot of traders are saying that perhaps it points to the fact that we are looking at natural gas production, declines of four months in a row. the output for june was -- the recounts are down about 50%. those might have been some of the bullish factors but mainly a lot of folks are saying it's just short covering. after all, we have seen natural gas prices over the past month slip more than 10% over the past month. and at this level short covering coming into play in this very volatile market has sent natural gas prices up almost 40 cents in a day, maria. back to you. >> sharon, thanks very much. we look at this market and how to invest in this market right now. joining us, daniel frishberg, chief investment strategist with laffer frisch berk. along with alec young with standard & poor's.

gentlemen, it is nice to have you on the program. bernard, let me kick this off with you. you're look forget a 10% to 15% move to the up side in stocks by year end. >> the 40% rally we've had since mid march has gained over 20%. 30% away from where we were. 15% to get to within 25%. >> what stocks do you want to own to participate in that? what's going to be the leadership group there taking us higher? >> i still think consumer discretionries and i like the enterprise software and hardware. huge consolidation with cisco and hp and ibm working. >> real technology. >> alec, do you get the feeling here that the bulls have wrestled the market back away from the bears? everybody's been coming on overt last couple weeks saying we're going lower, we're going lower.. yesterday the dow was up 250 and right now the dow is up about 70 points. do you buy that? >> i think the market may continue to kind the climb the wall. i think there's a higher risk to being short the market than maybe there was a few weeks ago. one thing twheer keying on is what happens by the fourth

quarter. earnings are still pretty weak.. they're supposed to be flat year over year and really rebound in the fourth quarter. we're watching the dollar.r. we just got some data on s&p 500 sales. nearly half of sales in '308 cae from overseas. if we do see the dollar weaken against the euro, pound, yen, the second half that could be a nice tailwind for corporate america's earnings at a time when investors are expecting a big boost in profits. a weak dollar could help us get a strong -- >> perhaps. but what about the idea that the international economies are perhaps weaker than the u.s.? >> well, the great thing about the dollar trade is you don't't have to sell more product. so if the economies in europe and canada-f they remain weak in the second half and bite same weak amount of gooz they're falling now if the dollar falls against those currencies you still have more earnings for the same amount of sales. that's the beauty. >> and daniel, do you believe as nouriel roubini was saying today

that emerging markets are going to perform better than more established ones like the u.s.? >> eventually, they absolutely are. but right at beginning i think they're going to have -- i just heard the most profitable 13-word sequence in the english language over the last couple of months. it is first the fed's lowering rates and it isn't working.. and the other one is let's put america back to work. when you hear those togetherish which is only every five years or so, you always make money. they're pouring money into the economy. people are doubting that it's working. right now only 1 out of 8 people say that they believe in a recovery. two months from now 8 out of 8 are going to be very excited and that process is going to be very profitable. you may be even a little -- maybe more than 15% rally. >> sow think bernard's on the low side? >> on the low side but correct. >> but 15% up side from here.. are the banks going to be part of that, do you think, bernard,

as far as leadership? what do you want to be avoiding as some of your technology names take the lead as what you're expecting? >> well, i like the banks right now because from a competitive standpoint they cleaned off a lot of the weak players and now they can raise margins.s. that's why morgan stanley, for example. as the economy picks up, we'll see how it reports tonight. >> and is that how you're investing as well? >> yeah, actually financials, i like blackstone and blackrock and those guys. and i believe that people will be able to buy and sell that maybe five times over the rest of their lives and make a fortune.e. those companies are right -- and goldman sachs. smartest guys in the room, and they're right in the right environment. so yes, i think those are the plays. >> all right. gentlemen, great conversation. we appreciate it. daniel, alec, bernard, thank you very much. we'll see you soon. thanks very much. we've got really the final stretch here. 45 minutes before the closing bell sounds on wall street. we are right at the highs of the

afternoon. 76 points higher. when i mentioned earlier the financials, it really is the investment banks that are really rallying today. but bob made a good point. the money center banks, the cities, jpmorgans, bank of americas of the world are actually lower. >> and those are the ones that give you a better picture of what's really happening in the financial center. the. >> when it comes to lending of course. >> health care and small business. a look at how health care reform could put a squeeze on small business. we look at the impact on jobs and profits as well. >> we're going to take a look at the two names that are going to be reporting after the close tonight. google and ibm. we'll give you the estimates. >> and after the bell former california treasurer phil angelides joins us to discuss the new financial crisis commission he's heading in the details of its new probe into the ongoing crisis. >> but first here's where the action is on the street today. the most heavily traded names on the nyse. you're watching "the closing bell." we'll be back in a moment. taking its rightful place

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claims fell 47,000 to 522,000. analysts had been looking for the number to be 565,000. continuing claims falling by a record 642,000 to just over 6.2 million. that is the lowest level since april 11. meanwhile, the philadelphia federal reserve survey posting a worse than expected decline in july. manufacturing activity in the region shrunk for the tenth consecutive month to a reading of minus 7.5. analysts had been looking for a reading of minus 5. and rates on fixed rate mortgages falling for the third straight week. average rates for a 30-year fixed fell to 5.14%. that's down from last weekend. it's more than a full percent lower from where rates stood a year ago. the average rate for a 15-year fixed also coming in lower at 4.69%. maria? >> well, scott, house members are aiming to tax the wealthiest americans, a move opponents say would unfairly hit small business. we cut through the politics now

and look at the realities of what the bill would look like and how investors will be impacted. dan clefton, director and heaved policy research with strategicus research partners. and andrew parmentier. good to have you on the program. welcome. dan, let me kick this off with you. some people are taken aback by the house democrats' bill.. they came out with their tax plan on the wealthy to pay for health care. 5 1/2% tax. were the figures put out there meant as a starting point or do you think this is what we'll likely see at the end of the day? >> i think the house really was waiting for the senate to do their bill. they essentially put this tax increase as a placeholder and said it would be easy just to throw something in there that raises taxes on the wealthy. we're getting word they may want to reduce the size of that tax increase, but really we don't believe it's going to be signed into law and it's really what is going to be a 2010 story when they have to deal with the deficit and the middle-class tax cut extension. >> so andrew, who really gets hit here? is it wealthy individuals?

the wealthiest individuals? or is it small business? >> well, maria, as a newly formed small business llc, obviously my net worth is tied up in my company, and to the extent that we do distributions we get taxed on those dividends, we get taxed on the general income and so i think it does disproportionately impact small businesses. i agree with dan that some of these tax proposals are not going to happen the way that they're currently constructed. i think the reality of the situation is that we're going to get a scaled down wiese of legislation maybe by the end of the fourth quarter and what we're really working with our clients on right now, to understand and really make the case why this isn't going to be as bad for the united health and aetnas of the world and perhaps some of the hospitals, just given the composition of the cuts. you have to remember the other half of the cuts don't come from taxes, they come from cutting medicare and medicaid. >> well, what are the alternatives, right?t?

if the biggest problem here in terms of health care legislation is meeting the expense of soaring health care costs, what options do the president and congress have at this point in terms of how you pay for it? >> i'm sorry, andrew, go. >> maria, you need a trillion dollars. and so by our estimation the most that they're going to get from the tax side is about 200 billion. the most that they're going to cut from cutting medicare and medicaid is about 600 billion.n. so now you're 200 billion short. and that's very, very optimistic. so what's going to end up happening, i think, is that they'll phase is th in. the program won't even start until three years down the road. but they're going to have to do these little maneuvers to effectively lower the costs because i really don't think congress in this economic environment where we've seen savings go from 0 to 5% and raising taxes on consumers right now, it doesn't make sense. so we're going to see a scaled-back plan that's going to be phased in over a long period of time. >> let's talk about some of the

alternatives and terms of cutting spending. obviously, you're not going to get a trillion dollars just by raising taxes. the numbers just don't add up. so what are the programs right now that perhaps could be cut in order to meet this incredible expense? >> one option they're looking at is medicare advantage, which goes to private providers such as the humanas of the world.d. the hospitals have cut a deal for $150 billion on their reimbursement rate. but that's the easy money. as you go further and further in, it gets harder and harder. and that's why we believe that they're going to have to scale back the proposed spending such as the medicaid expansion or the subsidies within the insurance exchange to get the costs down so that the financing actually meets the amount that's being spent. >> so let's talk about the investing side of this 37 based on all of the politicking out there, what should i be thinking from an investment standpoint? how is my money going to be treated best in an environment where we know we're facing this enormous expense and we know

that the president is adamant in terms of getting this done immediately? >> well, we think there's going to be a deal. it's a question of how it's going to be structured. the hospitals are trying to get it structured so it's not -- the cuts are not detrimental to them. but i would even add that these health care costs always exceed what the government initially forecast. and i think that's going to raise some issues in the debt market when the spending starts exceeding the amount of revenue and cuts that are coming in. >> what do you think, andrew? >> well, i would just say on the medicare monetization act in '03 when we added the drug benefit that's actually come in to be less expensive than what was originally thought. but it really matters to get into the specifics here on hospitals. the whole value proposition here on hospitals, when somebody walks into the emergency room the hospital -- and they don't have insurance, the hospital has to retain part of that bad debt. so they want to bleed that bad debt off of the balance sheet by getting people who come in with health insurance. so the 150-plus billion dollars in cuts to hospitals really has

to be looked at in terms of how quickly they can bleed that bad debt off the balance sheet and what comes first. with managed care i think the bigger network providers like the unhs, the wellpoints, the aetnas, they're very close to government pricing in traditional medicare. it's the humanas of the world that are more levered to more expensive areas of medicare advantage. and a final point. i think pharmaceutical companies are probably going to get hit a little bit harder than was originally anticipated, having to give up 100-plus billion dollars. and there are questions about the sustainability of those business models anyway and how innovative they are. so i think that's kind of how we're parsing it right now. and obviously, you know, we'll see how things develop over the summer. >> do you agree with that? >> yeah, i generally agree with all that. we're now digging in deeper and saying okay, how's home health care going to be treated?

and when you get into a situation where congress is shorted on money, at the end of the process -- essentially overnight those cuts could be a little bit larger than anybody indicated. as congress goes to look -- seal the final deal. you've got to be watching this all the way up to that final moment before the votes start being cast. >> all right, gentlemen.n. great conversation. we so appreciate it. thanks very much. be sure to join us in the next hour when republican senator chris dodd talks about congress's efforts to get the health care reform bill passed before that august recess. that's at 4:50 tonight on "closing bell." meanwhile, tonight this market continues on fire. 35 minutes before the closing bell sounds. we've got the dow up 75 points.. nasdaq holding on to some pretty good gains. and earnings after the close. ibm and google. that may very well set the tone for tomorrow. >> ibm's up nicely ahead of the earnings. up ahead why two of the most embattled banks in the financial crisis may have been operating under a cloak of secrecy. charlie gasparino explains next. but first a look at today's bond prices. bond prices rallying a bit after

a three-day losing streak. money's been flowing into equities because the market was up big yesterday and is up again today. here's a look at the 3, 5, 10, and the 30. back in a second. companies on the planet speak one financial language. the language of exchanging. together, we're helping to shape the exchanging world. nyse euronext. powering the exchanging world. i felt amazingly boxed in. (announcer) joe uses the contour meter from bayer. (joe) my meter absolutely adapts to me and my lifestyle.

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with the "closing bell" realtime flash, as in flash memory. i want to show you the hottest stock in the s&p 500. ladies and gentlemen, get to know sandisk, sndk. you know the ticker. you know the company. the world leader in flash memory. jim cramer talking it up last night. the market pushing it up here again for the sixth consecutive day. look at that jump, baby. 30% in six days. if you take a look at the one-year chart, you'll see this thing is now trading at a nine-month high. they'll report earnings next wednesday. after the close 22 cents on 700 million. a 22-cent loss on 700 million is the forecast, with jc upstairs thinking, they could probably come in with a better than expected result based on what we've been hearing in the flash memory space for lack of a better term. so flash and san disk, loving it right now. back to you guys. >> all right, matt. thanks so much. giving a nice lift, by the way, to the semiconductor index, which is up just shy of 2% today

as well. after some strong upward momentum in the markets over the last three days, does this rally have more room to run? time now for the "fast money" final call with jared levy. he is senior derivatives specialist at peak 6 investments. jared, it's good to see you this afternoon. make something of this move we've seen today on the back of what we saw yesterday. look, this market had every reason with the cit news out overnight and then after yesterday's 250-point move on the dow to be lower today, and yet it's bucking that trend. >> it really is. look at -- i think we need to look at a couple of things here. first of all, earnings. init will giving some real positive guidance, right? a couple other companies also moving higher as well. i think this afternoon that's going to be the big telltale. we had goldman, jpmorgan, that was good. we've got bank of america and we've got citigroup coming up. one other stock i think is going to be a big bellwether this afternoon is google which reports after the close. i've got to be honest with you, i'm a little nervous going into tomorrow, especially with friday's expiration. >> well, what do you expect to hear out of google and ibm? ibm shares are getting a nice

bump up ahead of earnings after the bell as is google. >> i think ibm does well. i think they actually report a real nice earnings report. i feel that ibm has done very well this quarter. they're quite diversified and people don't realize the breadth ibm has as a company. google, this is a tough one to call. i think it's really going to gauge the barometer of not only that sector but really what's happening in the market. google needs to produce here, and the stock is up over 10% here in the past five days. if i were trading google, i'd be taking some profits here or taking a moderately bullish position by selling out of the money puts.. i think google comes off a little bit tomorrow. >> jared, where is this market going in the short term?? a lot of people coming on the network over the past several weeks saying, look, we're going lower, and it seems like the bulls, as i said earlier, have sort of wrestled it away from the bears. >> they have for now. my stance -- the tough part for me is i'm an options trader and i try to approach everything with a balanced view, not too bullish, not too bearish, i'm kind of like goldi lox with her porridge because at this point i think we go sideways.

i do believe we're reaching more the top range of the marketplace, and i also believe that without energy this market cannot continue higher. and maybe that comes from a a weaker dollar, but energy comprises a large part of the s&p, and without them i think we have a problem moving higher here. >> if you look at a scenario where the dollar continues to weaken as you move into let's say more risky assets, the market deepz going higher, people are willing to take some risks, move away from the dollar, then the scenario of the dollar weakening oil moving higher, oil right now up to 62 bucks. do you see that continuing? >> slightly. it's tough to call. one positive for oil i believe is hurricane season. and obviously i hate to say it that way. but hurricane season -- by the way, that peaks out there in august. you've got august, you've got september. we see a couple hurricanes roll through the golf and you'll begin to get that fear volatility moving into oil, which again could drive other energy higher. companies like first solar, companies like monsanto tend to multiply what oil does. so again, that could be one factor contributing. and i do see the dollar

continuing to slide lower here, but inflationary pressures i think that's a little ways off still. >> how important do you look at the bank of america and citi results this week? give us a clear picture from the financials on certainly lending, what's happening in the greater economy when you talk about credit cards and the like.. and certainly comments we got out of jpmorgan today about their credit card business not making money even next year. >> we got that picture. and i think if we get that same picture from bank of america and city dwrooup, that they're still not lending, they're having trouble with credit cards, that may send rape'll down. i liked your point there. bank of america and citigroup both need to show there is some strength or the consumer is -- they're beginning to lend to the consumer. if we don't see that, again, this market has given a lot of pretty bullish activity to both those names. if we don't see it those names will love lower. >> you mentioned you're looking for bearish options activity, suggesting that some investors are looking at that same thing. what is your take on the expiration coming tomorrow? >> tomorrow's expiration, what

you'll typically see is added volatility in the market. nothing to speak of. it's not like it used to be because of the advent of technology. what that means to thege everyday investor is this. as market makers and retail investors are realigning their positions going into the close, in other words-f you're short options you don't know if you're going to be long stock or short stock come monday so, you're constantly buying and selling to offset your position. it means added vol tilts, and typically, this is just typically, it's a bearish day in the market. that's statistically speaking. >> jared, thanks so much. we'll leave it there. jared levy, one of the "fast money" guys. and coming up on "fast money" on the way with google and ibm post-market profit reports. plus the story charlie gasparino is saving just for is "fast money." it's all coming up at 5:00 with melissa and the traders. >> the high just about 30 minutes before the close. dow industrials up nearly 90 points. it is led by technology once again. >> up next, we get you set up for your share of big financial

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technology leads the way. check it out. dow jones industrial average up 86 points right here. better than 1%. and that has a lot to do with ibm because ibm ahead of its earnings is up, actually, 3%. back above $110 a share at 110.50. nasdaq also strong. and you've got the likes of google up 2%, ebay up 5%. amazon up 1 1/2%.. s&p 500 is higher though we do see limitations here because the financials are mixed. the likes of jpmorgan, citi, and bank of america lower. and the oils a very much mixed situation as well. exxon is lower because even though oil is still above $62 a barrel right here, scott. >> all right, maria, how closely are vikram pandit and ken lewis being watched by regulators? charlie gasparino has the latest on their double secret probation. charlie, what's going on here? >> dean warmer. wasn't that -- >> dean warmer from "animal

house." >> bernanke is dean wormer. right now they're on double secret probation. they have basically the fed has put them on notice, the fed and the treasury and the regulators more or less have put them on notice, scott, you have to perform, you have to perform in the short run, i think in the next three months, next quarter, you have to show some improvement in your operations or else there's going to be changes at the top of both citigroup and bank of america. and we're getting this from senior government officials, they've confirmed that to cnbc. if you read some of the press today, they've been given the sort of memorandums of understanding, which talk about how to basically move the banks forward. and that is essentially the sort of windup to the gun to the head saying listen, guys, it's make or break time, you have to show improvement. i will say this. i think right now lewis is more on the hot seat than pandit. i think at some level that the feds believe, and i say the feds, meaning broadly the

treasury department, the federal reserve, the fdic, the feds believe that, you know, as crummy of a place as citigroup is, and this isn't like -- this is a very troubled company, citigroup, that it at least has stabilized. they don't see the run on the bank scenario developing there. different with bank of america. not that they see a run on the bank. they just think that, listen, bank of america has got legitimate businesses that are very, very important in terms of the way the markets work. you have merrill lynch there now. you have countrywide. but bank of america is i believe the biggest bank in terms of deposits clearly and market cap. and that's why they're really worried about what's going on down in charlotte and whether ken lewis has got his hands around the situation. kind of interesting today. you've heard hank paulson, right? he'd be grilled by that house committee over the b of a merrill lynch deal. right? was there proper disclosures?

did he twist lewis's arm in doing the deal? now, here's the kind of interesting part of this, which is not being spoken about, is how lewis went about and bought merrill lynch. he did it with 36 hours, i believe, of due diligence, and he missed stuff in the due diligence. at least his guys missed stuff in the due diligence that they should have found. >> they had to do it in a really quick time frame, right, charlie? >> but still, you have a book of business. you know what type of assets they are. and it doesn't take a rocket scientist to figure out okay, tomorrow lehman brothers is going bankrupt and there's a good chance those assets would have to be marked down dramatically. and i think that's the problem. when lewis goes to hank paulson and says, listen, we can't go through with this deal, we're going to invoke the material adverse conditions clause, we're going to get out of it. first he makes the call to paulson, then he does it to bernanke. and then the feds start commiserating with each other. you know what they're saying? they're saying, listen, this guy is nuts. he -- >> charlie, i have a question for you. >> let me just make this one point. this is what they said. that's not what i said.

they say, listen, he's the guy that lusted over merrill for so many years and he couldn't figure out that they were going to lose a lot of money this quarter? and i think that's the problem that ken lewis has. he's lost a lot of respect and credibility with policy makers. >> so fast-forward to today. why is it that the government won't allow b of a to pay the tarp money back? i heard that they want to pay it back. they're being told by regulators we don't want -- we do not accept the money, we don't want you to pay it back right now. why is that? >> you know, my only guess, and i've heard that too, that they want to pay it back, that they don't believe -- and i tell you, you have to put everything you've been reading together to kind of answer this question. put everything together. is they don't believe that b of a is strong enough to pay it back. now, if you take the government at their word, i mean -- >> what happens to the stress test? weren't they supposed to make that assessment with the stress test? >> i agree. but i always thought the stress tests were feather tests. but i think in this context, maria, you have to look at what's going on at both banks. if you read some of the stories today about this memorandum of

understanding, if you hear some of the stuff that i'm reporting about the way they feel about ken lewis and what's going on there, they still think that bank of america has issues. and they still think citigroup has irks. now, there is a conspiracy theory out there that the government wants to control these banks, that this government, this obama administration, you know, is the most socialist administration we've had. i think that's pretty clear. that they want to control the banks. they can't -- they don't have a good case to control goldman sachs, as you know, because they're making a lot of money, but ones they can make a case they want to control. so that's the conspiracy theory. the other theory is they're just not healthy enough. >> charlie, thanks, man. >> all right. >> we are in the final stretch here, scott. we've got a market that is on fire. continuing to go up. you do not want to be short in this market. over the last couple of days the momentum is strong, up 100 points on the dow, led by technology. ibm up 3 1/4% right now. >> big earnings after the bell obviously with google and ibm.

they're set to report their results shortly he tried to say. >> have you been up since 2:00 a.m.? >> who said that? >> what to expect and how it could impact the markets tomorrow and beyond. >> and then after the bell a new panel is now responsible for examining the cause of the financial crisis. the head of the panel joins. former california treasurer phil aj looed yo aj leedese. my guest in the next hour. psps

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welcome back. earnings season in full swing. 2/3 of the companies that have reported so far have beaten their targets. later today we get a pair of big technology earnings likely to set the tone for tomorrow. >> absolutely. >> google and ibm. then we've got two financial giants as well tomorrow, citi and bank of america reporting their quarterly numbers. >> cnbc's jim goldman and matt nesto with here with a preview. jim, let's look at you first here and talk about what's on tap here with google and ibm. what do we expect? >> yeah, you know, some pretty good news generally. the expectations for google are so low right now, $5.05 a share, about $4 billion excluding when

you're talking about the top line. if google comes in at $5.05 on eps that's going to be three straight quarters of dlieng eps. nonetheless people still believe this company is positioned well even with an advertising decline. and ibm doing well with services around the world. what this company's commentary is as far as global enterprise customers is going to be watched very closely as well. >> ibm and google. what about the financials? are we likely, matt, to see a similar quarter as jpmorgan as it relates to b of a and citi? >> it's possible. i mean, probably unlikely in the case of citigroup. maybe you'll see a beat with bank of america. but it's going to be probably similar in many ways as we saw with jpmorgan. these have all diversified financials. we're going to see a lot of numbers in terms of the trend, in terms of the delinquency rate

for credit cards and mortgages. we'll hear a lot of discussion about the economy and how it's affecting things. and then we'll see just how good their trading desks are. nobody trades typically quite as well as goldman sachs.s. jpmorgan didn't have the real estate exposure. they talked up the regional banks.s. the commercial real estate exposure. that will be worth looking at. and we would be remiss if we didn't talk about that other financial company called general electric. of course they do a lot of business in other places but they're still in many ways a financial company. and they will be out tomorrow morning as well. the spin on them is that the ge capital arm actually is poised for a surprise possibly as well as the industrial. goldman sachs out with a positive note just a couple of days ago. there's a three-month chart for ge. pretty much there and back over that period of time. >> jim, quickly, seven up days in a row for tech. ibm more important for the near-term direction of technology than google, right? >> i would think so. i think that's a really good

point. ibm is still such a key bellwether so, diversified, hits so many different industries. we've got really good news ofshlgs, fr, obviously, from intel earlier in the week. there's every indication, i don't want to jinx it but every indication ibm should continue that. but it's going to come down to outlook and as long as this company can reaffirm in not raise the $9.20 eps we're talking about continuing good times to come. >> jim goldman, matt nesto, thanks very much. >> you got it. >> look at this market, scott. up 113. and when you look at the internals of the market as far as what is driving things, you've got the likes of ibm up 3 1/4%. that has been stable. but other technology names have also gained ground like cisco and intel. within the dow oils are turning around to the up side, exxon is now in positive territory. ge and boeing also real highlights on the up side. >> keep an eye on the s&p as well. steve grasso e-mailing me. 946 is the highest close for the year for the s&p. and the s&p right now is sitting

at 942. that's an interesting number to watch as we approach the close. >> we've got the trader's view of the market. we'll go downstairs on the floor of the exchange, tell you what's on the traders' radar, how they're setting up. look for after the bell numbers from google and ibm.se ts, 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.

welcome back. we went right to the source. the guys watching the flow with the market up better than 100 points. arthur cash-in director of floor operations at ubs financial services.. peter costa president of empire executions and a cnbc market analyst. gentlemen, good to see you. what's behind this move, art? >> well, it's a carryover from three good days. turning the charts to napkins. the technicals better. but they really got a little bit of a boost later on. nouriel roubini, who has been very negative throughout, has been credited with many people with having called this and seen how severe it was going to be, at a seminar somewhere said that he thought the recession could be over by the end of the year.

that's a big uptick from him and that gave some life to this rally. >> peter, 946 we mentioned is the highest level of the year for the s&p 500. we're on the cusp of that. how important is it for this market to close above that? >> i'd like to see it close above it, number one. number two, i'd like to see a little more volume, and i think we're not getting that kind of volume you need to build that confidence. but i do think 945, 950 level could be very significant. i'd like to see, as i said, more volume. ibm's earnings coming out, that should be helpful. hopefully they'll come in a little stronger than expected. and we'll see where we go from there. >> art, do you get the feeling as though the bulls have taken this thing back from the bears? people were sneth, saying this market was going to go lower.r. lo and behold better than expected earnings, the data was pretty decent, fed minutes pretty decent as well. >> no, i think that's dead right. as i discussed with maria yesterday, you know, yogi berra's old line, nobody goes there, it's too crowded. well, that's how the short side became. everybody was so sure the head and shoulders was going to break

down, the average investor was negative. the market does whatever it needs to do to embarrass the most people. >> here's another yogi berraism. it ain't over till it's over. right? >> that's right. i tell you what.. i've been saying for two weeks by friday's close we'll know a great deal. i'm going to extend that one week to the following friday in honor of yogi. >> is it because you're waiting for fundamental evidence that in fact -- that the economic -- the corporate earnings back up this momentum? >> well, two things. i'm looking for a little bit more earnings to give me more confidence. and number two, you're going to think i'm putting on a aluminum foil hat, but we also have a big eclipse coming up next week. and that sometimes springs up around both geelogic things, we've seen earthquakes and whatever. i want to be cautious going through it. but it also changes the ionization of the atmosphere. >> you're getting psychological on us and geological.

>> his finger on the pulse of the market, astrology, and everything else. >> an eclipse next week. >> peter, when you take a look -- >> how aim going to follow that up? >> you can't follow. >> i'd try something, but i'm not going to be able to follow that one. >> when we look for the results out of bank of america and citi could be critically important along with jpmorgan, give us a better idea of what's really happening in the financial sector beyond what goldman says. >> i think with bankamerica it is critical. at citibank as far as i'm concerned over the last nine months it's almost like i'm taking it out of the equation but i do like to know what's going on with bank of america. it's an extremely viable stock, extremely viable company.y. if their earnings come in stronger than expected, and people are talking like these earnings, it's going to be a real bang-up quarter for everybody. you know, we'll see. but you have to look at what bank is. not so much citibank. i think bank of america say little more indicative of the -- >> do you see headwinds when it comes to financials? very much a short term --

>> they're cautious still.l. i think everyone's still licking their wounds from what happened last year. our customers are very, very cautious on this still. >> art, peter, thank you so much for your insights. always great. appreciate it.t. thanks very much. the closing countdown coming up right after this short break. >> after the bell two tech giants are set to report their results. we'll have the numbers from ibm and google. first and fast along with instant analysis from earnings central today at 4:00 p.m. eastern.

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