944 the old closing high for the year, back to the highest level since november and the earnings the keys here. the bulls argued the risk is to the upside not the downside, going to see p/e expansion down the road, not just go going to get cost-cut bug top line growth as the whole economy turns around a little bit there is a big fight going on about a that between the bulls and bears now, look at the cyclical stocks, goldman positive comments about the s & p and cyclicals in general this morning. better news from even the and johnson controls, key stocks this week. one of them, caterpillar tomorrow morning, just prior at open here and very simple. caterpillar has to make some kind of noises about top line ex-stand spanneding, got just cost cutting if they do bulls will seize on that finally, steve on cit what we don't have yet is an official announce.about the approval of that $3 billion financing package from bond holders, still weight. trader talk at cnbc.com. how we looking at the nasdaq, scott? >> up nine straight days, up .3

of 1%. led higher by cisco, higher from credit suisse, price target, up higher, $25. cisco up 275%. firms saying that cisco is seeing steady, modest improvement in enterprise business, not sure if it is sustainable, up in theless, lit a fire under the shares, certainly helping the rest of technology, yahoo! is higher, apple higher. jim goldman at the top of the show saying big earnings after the bell for yahoo! and apple. microsoft showing unchanged now, but texas instruments is going to be closely watched with its earnings report after the bell today. give you a real good idea of what is happening in the chip space, advancement on amd there. finally, i know mike huckman will talk about human genome, shares up 200% or so on positive developments related to its lupus drug. more from mike in a few. but down to brian shaktman. >> thank you, scotty. weak dollar, strong equity trade affects oil petered out.

look today, we slipped into negative territory several times, up about a dime right now. basically, a couple of these se sees involved here. we need strong data. other people see a bit of consolidation, pause here before potentially an uptick. i want to point out nat gas, haliburton came out with earnings, slightly beat, on the top line way down in terms of overall year-to-year but the ceo comes outs and basie says listen, i don't see supply demand what it is today nat prices recovering. not going to go anywhere, double digits any time soon. gold, really hovering around that 950 level. the conversation once again, as we go to rick santelli in chicago, can we get to 1,000? >> well, i tell you what mr. shack, i think i would have to say you could you saw the dollar weaken dramatically, sensitive to the weak dollar as it is today with higher prices. hey, three cop sective positive leading indicators. last time that happened was mid

'05. last time you had four in a row was mid '04. so there is a positive there. is it going to be enough? is it going to affect joblessness? that is the issue. today's one-month chart, ten-year rates, hovering at the highest yield above a month on the ten-year, dollar index or the euro currency, you see the dollar sunder pressure. lowest index level in a moment and a half, at least the worst levels of the day earlier. sue, back to you. >> thank you so much, rick. as for the u.s. economy it should stablize in the second half of this year, at least that is according to the national association for business economics but the group also says a robust recovery isn't likely and that job cuts should continue. about half of the companies surveyed said their sales are already bottomed about 40% believe sales will bought tonight second half of this year. the rest don't see sales rising until 2010. steve? also developments in ci it's fate for survival.

markets waiting for the release of the $3 billion financing package come frog from the bondholders. release supposed to be out this morning a source fam a jar with the talks says it in the hands of the lawyers. they approved the package at a meeting last night and hope the funds will stave off up aboutcy. little doubt about the deal, the company's stock chart today, as high as 144. this is is a long-term chart of it. it had been as low as 127, about 134, almost double what it was on the close on friday. the loan company from seven of the company's top ten bond holders a 2 1/2-year term and will be available almost immediately. cnbc also learned that cit is planning a cash tender offer in august as part of a broader recapitalization plan. what remains unclear, the financing is enough for the lenders to survive in the long-term and what role, if any you can the federal government will play. the bondholders are providing financing, not capital what the government needs. this mixes a short-term fix, a bridge to maybe a permanent

solution that could ultimately include some government assistance, regulatory or either way, sue. talk about cit for a little bit. >> what about the government? i mean, what is it going to take to nudge it into this equation? >> what i have heard -- >> eat quag. >> what i've heard since the talks fell apart last week, the government wants to see a permanent solution that means capital, long-term. >> not this? >> a new business model much. >> a business model, a recapitalization plan, a plan of what to do with its existing portfolio, but more than that, michelle, maybe new management. >> that wouldn't surprise me at all. bigger message, steve, these guys got this deal done, right? this is how it is pop up toesed to work go to your bond hold others, try to work something out here. >> a government bailout. >> shouldn't we be thrilled this is how it is played out so far? >> two positive signs. you mentioned one of them this was done in the private sector. the second one, didn't have to go it to the government here. they found a way to get to go around it, but there is a

message here which is that don't come to the government first. >> the third positive is that the market handle it had pretty decently. >> biggest lenders to small business in the market, michelle in the opening, six straight days, you can't count the number of positive days on one hand anymore. >> you there go. >> a long time. >> in my mind. >> that is true. >> something else positive and talk to charlie gasparino, probably the most hated man at 85 broad was actually invited to speak with senior goldman sacks officials today? charlie? the guys at goldman sachs let you in the building? >> well, you know -- >> very impressed by that article over the weekend. very handsome picture, by the way. >> they moved the monitor over there, if i'm looking there for a second, i'm sorry. just not gazing off. listen, they called me, blankfein told a friend of mine i'm a thug. lucas von prague calle ed med m

blow hard a. they called me and they wanted their side of the story raging over goldman sachs and $3 billion i guess record profits in one quarter and doing that as a bank. i was one of the first to opine and rate, daily news, opine on the station first about how -- this is kind of -- the government's subsidizing goldman's risk taking, leff ramming high, 15-1. the value of risk is high, they are talking -- they are taking risk. the question is should the government, by making them a bank which means they have a lower cost of borrowing, should they be somehow subsidizing tha risk? i said. no it seems absurd. goldman sachs gave me their side of the story, i think it is a legitimate case they made. they are saying listen, 90% of the risk that we take is on behalf of customers it is not us being a hedge fund like sap capital, trading on our account, make money from customers. fiddle dell sit one customer,

big mutual funds, pension funds and want us to buy and sell stuff for them n buying and selling that stuff for them, we do take risks, yes, the government is is up sid diocesing that ries buck we are perform ac pretty vital market function, which is liquidity, making sure that people can sell stuff, people can buy stuff that there is -- we are the intermediary to do that take risk in doing that we make money doing that taking that risk, yes, but we are providing that very thing that is needed in the markets which was absent from the markets, in the end of 2008, which is the reason why paulson and bernanke worried about global armageddon, def con 5. >> what about the other 10% they do take on their behalf? >> yes that is. they do take -- they do take -- do proprietary trading have proprietary trading arm. i think it is fair, not just doing this -- i don't care if goldman ever talks to me again, i will be honest with you, still write stuff about them. you know, it they are fun to

write about they are big, everybody -- you know -- >> but charlie, they -- we, the taxpayer are the ultimate back stop, already learned that the government says they are too big to fail. i can't do they even get 10%? >> that is a good point, but i will say this, 'cause everybody gets 10% right now they are not the only one that gets 10%. i think the broad stroke point that they tried to make with me, which i tell you, it is a legitimate point is that they are providing liquidity in the market and, you know, an amorphous concept, liquidity, how do you define it? you can define it but can you place a dollar am on it? what that means? you really can't, but it is something that if you don't have two people looking to trade a bond, you know, that's when prices start going to zero and when the prices fall, like they did at the end of 2008 and some time in 2009, remember, the markets crazy early in the year, that's when you get into a problem where you could really hit the skids, where the markets dysfunction that is the

beginning of a depression, you know what i'm saying. we are not doing so great right now, going to 11% unemployment, but i think the markets are in better shape now than they were then. excuse me? >> special issues exist on the floor of the new york stock exchange that is what we hear on the guys on the floor, provide the liquidity, the ultimate back stop. >> i would agree with the gays on the floor, goldman says knowing their proclivities for electronic trading, you don't need a human being doing it you can get a computer to match a buyer and seller in liquid markets, such as stock. by swi why -- i agree with the guys on the floor. one of the reasons there was so much volatility in the stock markets, i believe, particularly in march, the markets went down 206 and last year, you didn't have a human being following make that market. >> oh, no -- >> a lot of -- >> argue with you, charlie. >> you don't agree with that? >> i do michelle does not. >> no. no nasdaq opens every morning just fine. >> no it doesn't. >> yes, it does. no, it doesn't.

>> another debate. >> thanks, i'm going to send you my ft, you can autograph it. >> i will do that. up 7% last week, the biggest weekly point gain since november, goldman sachs, the is s & p to 1060, very bullish right now. the earnings parade continues. our task force is going to tell us if they think this rally is for real. plus, major news in the dream of lupus and obesity it is sending two pharma stocks literally through the roof. our mike huckman along minutes from now with details on that you cannot afford to miss it. plus, the president has been on the job six months. his poll numbers slipping a bit as his big ticket to do list redoing. is the president in chief biting off more than he can chew? then the fast money "halftime report" is waiting in the wings. this is "power lunch." we are back in two minutes.

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welcome back to "power lunch." so far this earning's season, 71% of the companies reporting results have wasn't the estimates. 20% have missed, 9% were inline. this week, another wave of huge names will report. texas instruments, caterpillar, du pont, coca-cola, merck, yahoo! pfizer, ebay, mcdonald's,

3m, at&t, ford, amazon and microsoft. and keep in mind, these are just some of the hundreds of companies that are reporting this week. as always, we are all over earnings at earnings central, the numbers and analysis that you can get only on cnbc. sue? >> and it is not just earnings that are moving stocks this morning. goldman sachs be as we mentioned, raised its target on the s & p 500 to 1060 by the end of year. what else will propel stocks forward. joining us is bill fer rom louse, and rich berg, capital partners. pleasure top to have you here. bill, i will start with you. profit news is good. you say pay no attention to the perm ma bears out there, you are bullish. >> hate to disappoint. the news is great. >> not disappointed. asking you what evidence you have and how you play it.

>> great recovery is the gun and only a few things that could stop it in our minds. multistrategy approach, where were all these doomers -- >> why do you think the mark let go higher? why do you think the great recovery has begun? >> you have tremendous stimulus in the pipeline, cheap money, overnight rates are zero. complex is off last year. commodities, the cost of labor. >> what do you think of earnings so far? >> so far so good. i think that only continues to build in the next two, three-quarters going ahead. >> rich, one of the things that bill mentions that he is concerned about is what might happen in washington, which i know is something that you share. give us your outlook, are you as

bullish overall on the markets? >> i don't like the fundamentals, the technicals of the stock market are terrific. i don't like the fundamentals, the fact that you still have a lot of subsidies going on t is kind of like a golfer, i got five mulligans, i don't panic over that eight-foot putt but tom watson didn't have a mulligan. we have so many mull ganz out there say, oh, things are better, not as well as we think they are in the credit network and that has to recover, i don't like the fundamentals. a stock price is the present -- the future earnings in a mull pell. could i have it now but what will be the multiple of those earnings, earnings in the future? what is going on in washington with the tinkering of taxes, health care, of stimulus, of massive deficits -- >> okay where would you put -- if you can't be bullish, how are you protect your portfolio? where are you allocating cash or reallocating a portfolio? >> where we are, still in the private mortgages and the credit

sectors because they are a better form of return in our opinion than stocks are. the discount rates on those are still extraordinarily high. we expect those to come down. when they come down, then i become maybe more bullish on stocks but still up too high. >> okay. >> nothing wrong with cash. nothing wrong with cash. >> on that note, thank you very much, gentlemen, appreciate it. steve? >> interest rate's kind of low. >> at least you're -- it's a return on your money and a return of your money. >> right. capital preservation. so where are we in the economy perma bear will join maria bartiromo on the closing bell at 4:15 p.m. eastern today on cnbc. up next, a double dose of data, two drugs, medical conditions two stocks exploding to the upside on the news. mike huckman will have it all for you. just as the president is personally leading his charge for the health care reform plan, a new poll shows support for that is slipping a bit. is he doing too much too soon? a power grid debate just minutes away. d#: 1-800-345-2550 "i'm rethinking everything...

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i think we still have a difficult period. i think in the quarter that we are in right now, the july through september quarter, we are still expecting the industry in north america to be down about 45%, but despite that you know, we have indicated that we believe in our current quarter, we will be able to turn profitable. >> and that was the ceo of johnson controls earlier today on squawk on the street. he was talking about the outlook for the auto parts and heating system's maker. shares are now higher by better than 5%. the company getting back into the black, posting a profitable quarter, thanks to cost-cutting efforts. major breakthroughs in the battle to treat lupus and owe by the as two drug stocks on the move now. cnbc's pharmaceutical reporter mike huckman with more. interesting story this morning? >> yeah, an attempt to kind of tie my coverage universe into the universe as a whole, there hasn't been a new drug approved for lupus since before we put a man on the moon. so today, we are witnessing one small step for biopharma company but a giant leap for medicine.

shares of human genome sciences are up more than 200%. look at that, 213% on huge volume, while its lupus drug partner, glaxosmithkline the biggest dollar partner and percentage gainer in pharma now. they announced the experiment a.m. once a money infusion called benlysta helped 58% of patients better it is a progressive condition with organ damage and joint pain that strikes mostly women in their child-bearing years, many minorities. and if a second big study has similar results in the fall, the companies say they will file for fda approval of this drug in the first half of next year. >> the news here is really great for the million and a half lupus sufferers in the u.s., roughly 5 million worldwide, that there is possibly a drug here within the next few years that could help these. hasn't been a new drug approved for lupus in over 50 years. >> meantime, shares of these

three biocompanies, orexigen, vivus and arena. and leading high aer is orex. that company unveiled this morning a positive test results for contrave, its weight loss pill. 56% of patients lost 5% of their body weight and those are thresholds to get approval for a diet pell. orexigen ceo says it could be on the market in a couple of years but the many time, he is looking for a corporate partner for contrave outside the united states. we are seeking partnership for the broader opportunity in primary care and xus. and for orexigen there is nothing else left to see, we have all the data now and they can carefully examine the opportunity we will have and i'm sure they will be very pleased. >> so, while all the data from orexigen may be out there now, arena and vivus will release key

test results by the end of the year. check out pharmas market.cnbc.com. and follow on twitter f all of the drugs work and there are safe there cob room for them in the diet drug market play, not a question of one being a whipper and the other two being losers. >> terrific. >> so they want to do the deal outside the united states? is it easier to get approval? >> no, no, no. they think they can market themselves to the population of doctors that they are talking about in the united states and that's why everyone -- >> this get accelerated approval from the fda? >> sure. yeah. >> second trial? >> probably no question about it, if that second trial is proved positive because, as he mentioned, there hasn't been a new lupus drug in half a century. >> i know somebody who suffers from that, a terrible disease. >> hopefully they will be success. thanks, mike, very much. >> welcome. six months ago today, the swearing-in president barack obama. on capitol hill and main street,

a different swearing going on. polls against the president. does obama care too much too soon? fire up the power debate. and "halftime report" waiting in the wings. melissa what are you watching today? >> [ inaudible ] essential earnings edition, take our position on texas instruments which is out after the bell, nine-month high, also take a position on a couple of mining stocks that are reporting earnings in the next 24 hours, all that and much more on the "halftime report" but first, more "power lunch" right after this. welcome to the now network. population 49 million.

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welcome back. check the headlines that the hour. cisco shares getting a boost. company getting upgraded to outperform by neutral from credit sweeps n a couple of minute, the hottic tech etfs right now, stay tuned for that. m & t bank shares higher. second quarter profits plunged 75% because of charges relateds to the acquisition of provident bank shares and special payment to the fdic's deposit fund but

m & t easily beat profit forecast despite all those factors. g.i. joe and the transformers giving hasbro shares a boost today. the number two toymaker, steve knows a lot about beat estimates, sales fell short of forecasts. hasbro's ceo will join melissa lee and the fast money gang. you are into transformers, i'm into princesses. >> let me just tell you something, notes from guys in the bond market how think highly of. one telling me that the kind of interest rate that is going to be paid by ci it t says he has seen it before, countrywide, thornburg. >> sure. >> wamu, aig, what happened to all those companies? >> thorn berg out of business, countrywide bought by bank of america. >> all gone, right? unless capital arises, an attempt at controlled liquidation of cit. another person telling me about 2.3 billion of principal comes due or bonds due this year, total debt due, so the 3 million financing they are getting gets

them through this year, a piece of a big nut next year. unless capital, back to the point we made earlier this is not that far from a liquidation. >> first time we have seen a controlled liquiding day. >> guys trying to help themselves. >> rather than sunday night, help themselves. >> it was sunday night. >> i know. >> a different in the bear stearns, lehman brothers. that sunday night. >> i know. >> different than that. >> the government not involved. called it, i don't know, not doing anything. >> that is the good news. >> what about the 23 trillion, talk about that? >> in the next hour, the guy in charge of overseeing t.a.r.p. says end up closer to 23 trillion. we have been trying to go over that, get to that in the next hour. six months ago today, the swearing-in of president barack obama and from day one in office, he has been a whirlwind of activity, taking action on

nearly every issue under the sun. but a new "washington post" -- abc poll shows the president approval rating slipping on key issues, particularly the case of obamacare. critics question whether his juggling act on at nation's health crisis will result in some half-baked policies. here now, julian epstein and conservative radio talk show host, ben ferguson. okay, guys, you know the rules, let's start the clock. julian, i'm going to start with you, you get 20 seconds second. less than 50% now. is he taking on too much? >> the last president, president bush the public didn't like, didn't like his philosophy, execution, thought the iraqi war was badly handled, katrina badly handled. now finally have a president engaged. the economy is starting to come back and concerns about the health care deal with process questions, poll people whether they want reform they want reform. >> ben ferguson, you get 20 second? >> people look at this health

care bill and realize you are going to get subsidies out of this white house for families making $88,000, doesn't gut kut it talk to hillary clinton and said how did it go your first go-around with health care? not working and they can't afford it right now mainly. >> wow, that was 15 seconds. gonna cost too much money, julian, in the end cost too much money that is the argument. >> i'm not so sure but i think are some legitimate concern whether or not the plan will contain spending, the key thing. spending one out of every $5 on health care. we are soon going to be spending one out of every four and one to out of every three on health care that is a big concern the house and senate have to deal more on that the public clearly wants three things, want to stop having the insurance companies making health care decisions which they are making right now. >> because? because on behalf of the corporation whom they serve not the client. >> health insurance companies are the ultimate bureaucrat. >> right about that. >> small businesses want reform.

the public overwhelm leg wants universal health insurance. >> no, they don't. talking about health insurance. >> you are absolutely wrong. even the congressional budget office, which is nonpartisan, said that this plan saves us absolutely no money. more important than that when people start realizing, especially small businesses if they don't mandate and give health insurance to their individuals, they are going to be taxed on their payroll 8%. america can't afford that now with the economy the way it is, i don't know if barack obama goes on with the bill, dose that every time, has a big press conference, send it is over the hill and doesn't have a clue what is going in the bill. look at the last stimulus -- >> thanks, ben, julian, good stuff. >> we buy our own car insurance, buy our own life insurance, why can't we buy our own health insurance? the government and corporations out of the way. >> out of the way? we will see. we will see what happens. a lot of people are focusing on technology this week. >> i heard stocks but no time. i want to bring that up. yes question, no time to answer it. >> keep show on time.

i'm just going right here. trying to plow ahead. >> go ahead. keep plowing ahead. >> technology. >> read it, before i get going. >> find out what should be in your portfolio. >> plus, a ray of sunshine in an otherwise stormy retail environment. we are going to take a trip to miami beach for the international bathing suit show. showing women, not men. i wonder why. $13 billion business holding its own during these tough times. find out how it is supporting the industry. >> when "power lunch" returns.

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>> these two are still arguing about private health insurance. we will focus on earnings but a couple of bits of good news under bellwethers from tech, rising confidential and rebound. our next guest says perhaps one of the best ways for you to play the tech sector is to exchange traded funds. the cnbc's correspondent report joins us from irvine, california. good to see you. to be efficient i put up your picks, i share dow jones technology, iyw, up 22% year-to-date. then technology select sector spiders up 14.8% year-to-date and the power share triple qs. what do those give you? they give you diversification, of course, certainly, but what else intrigues you and makes you want to recommend those particular instruments? >> the idea first, sue, is, you know, technology has been on a tear and we are right in the

middle of earnings season, getting come boarded with news and earnings estimates, rather than the individual investor picking stocks why not diversify among a whole group of good-performing large technology stocks and all of these etfs offer nice choice amongst them. >> what about the fact that especially the dow jones u.s. technology, iyw, already run 22%. are you at all worried that they anticipated the caps and afraid to get into that instrument? >> we are seeing expenses, inventories cut, top line sales to a degree turn around. from a fundamental and technical aspect, all good for technology as opposed to performing sectors that the average investor wants to stay away from. >> we have to leave it there.

thanks very much. >> time to take a quick break, but we are just minutes away from president obama continuing his hard sell for the health care plan, live remarks after the top of the hour. plus a not so sunny sign about the health of the high end and real estate market, a home foreclosure and vacation spot for the rich and famous, martha's vineyard, got to stick around for that. >> next, the fast money "halftime report," see whether or not wall street can hang onto its 71-point gain. we will see you on the other side of fast money.

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welcome to the fast money "halftime report," getting to the heart of the action. the stock market adding to last week's big gains, making a run at a new rally high, even with the flood of earnings out this week. how do you profit off this move? get to the word on the street? right now, fast money crew today, liquidators in the house. let's start off with the markets here a, joe. you know, surprisingly optimistic given that 40% of the s & p 500 is set to report, table set nicely today, upgrade of caterpillar and cisco certainly helping the dow out. >> you had favorable earnings last week and now moved to this week and seeing again favorable earnings coming down the pike, more with cisco. what is the take away on this? highlights technology.

they have a tremendous amount of cash and going to use to continue to be innovative and creative, tech and energy push us higher. >> focus on the industrial mood, ge out to inside softness of the business, but today, an upgrid of caterpillar, gentlemen, from bank of america to a buy saying construction machinery sales hit a cyclical bottom. we connect the dots to goldman's call, goldman said today raising the target to s & p 500, overweight cyclicals, such as this. is there global economic growth and we need machinery and tools to help that along? >> it does. something i would highlight about caterpillar, talking about how things are looking overseas, 60% plus of their revenues come from sales outside north america. probably about 20% or so coming from asia, that is where we look for a lot of the strength to come from and that actually has been, for the last two years, their fastest growing area. if things are strengthing there?

>> we have 40% of the dow reporting this week? >> a conundrum, markets overbaked, people talking about this is a hype in the market, rally for six days but what we are seeing is cheaper options down there down 24% to get leverage, cost you a all right less now what we are seeing is a lot of people substituting their stock using call options or potentially buying to put against it which i think is a great stat jie in this marketplace. >> technology, next here, talked about cisco trading hider today after receiving an upgrade from credit swisse, modest improvement in the north american business, ie, business customers. joe tar ran nova, optimistic on that but the same time, cisco is one of the companies that engaged in tremendous cost cutting in order to do this. >> they are managing the bottom

line phenomenally, look what cisco is talking about google doing this well. you look at microsoft office, 60 billion dollars worth of revenue sales when you look at the os platform. what are we trying to do talk about cisco, talk about google, trying to make it better, bring it in 2009 technology. they want to make it web-based. creativity, innovation, what i want to focus on, they have the cash to do t. >> mike, apple, yahoo! out also this week. what is the best bet in your sfru what sort of trade are you putting on this week in anticipation of earnings in tech land? >> one thing we are seeing every single name, some reduced, earnings stronger, everyone likes the buy coming out of them, stronger names, joe was alluding to this names like apple and google, obviously cisco coming out, things like that intel. these are all good names to be involved n yahoo! harder for me

to get excited. >> move to the next, oil above 64 bucks a barrel, highest level in two weeks before giving up gains, briefly turning negative, now in positive territory. addison armstrong, an august crude contract expiration on tuesday. how much of that does that play into today's session? >> the expiration of the august contract is definitely on everybody's mind but you know, this continues to be a story about crude-falling equities. put up a chart os & ps this morning, middle of the night down to today, right now with oil and they look exactly the same. so, when we saw a little weakness earlier in the s & ps, couldn't hold momentum, oil negative on the day now, back higher along with the s & ps. >> bring us to the chart of the day jared watching the relationship between oil as well as gold and the dixie, ie, the dollar index? >> yeah, par lations is a thing what we need. traders need to look what is core rated with each other.

markets have been leaning another watch the factor here is the dollar a, obviously puts up pressure on gold and oil. one other correlation that comes to fruition is when the markets sell off. we will see a really in gold and they could catch a bid if the market drops off. >> before we leave the complex, one complex saying there will unlikely be a meaningful recovery as well as drilling activities for the rest of the year. what's your forecast given the comments? >> i remained bearish in the near term. they were well oversupplied and no demand coming from the weather-related factors. natural gas is starting to get cheap and you will look at coming out of the kummer when we get through hurricane season, some of them might be too cheap on a relative basis and i'm talking about the calender strip. people start to pick those up. >> have to move on to the next

rate. copper jumping to a nine-month high and southern copper is up with it. releasing earnings before the bell and time to get into the names. joining us on the fast line, tim? always a pleasure to speak with you. what is the trade ahead of the earnings for? >> i think the market is pricing an extraordinary move and a lot of this is not just a move because of the dollar weakness. we are seeing tightness and i think that's the buying, but you had a big follow-through for commodities and copper is the place to do it. cop her a big run and it's 30% in the second quarter and the thing to watch is the revenue growth and we have been watching for everybody and based upon growth and productions. somewhat flat for these guys and we know the chinese are stockpiling and seeing any real revenue growth outside of china. i think the question is, is that something we are all seeing.

i don't see it yet. >> outside of china for north america where they are still in a slump? >> this is a company that has exposure and it's an american company and they are heavy in latin america. they were looking for rebound in construction over here in housing. anything residential. we are getting some build out and the stimulus is a ways out. >> always great to talk to you on the desk. >> time now for the fast and curious leading into the close today. apple trading higher ahead of the release tomorrow. do you buy this name some. >> in market caps for two weeks, i would call it a trade. instead of the 165, buy the august 145 call and that protects me from a major pull back. i'm moderately bullish. >> pile in ahead of the earnings. mike? >> i hate to be caught chasing, but markets are telling us

something with respect to a recovery. gun to my head if you have to buy or sell, i am forced to buy. >> what do you do today some. >> i'm looking at the $65 level. the 50-day moving average at 6510. we get a nice move and you have to be a buyer. >> merck reporting before the bell. do you buy today? >> april 21st. they reaffirmed guidance. i don't know necessarily if you are going to see enough resiliency to buy it today. you want to wait until after the number comes out. >> fast and furious. do not miss an interview as we discuss the seller and the plans for the future. "power lunch" uncovers the business of i can keenies. >> with nearly half of the dow reporting, you will need magic with the busy time of earnings season.

all eyes on apple as it rockets into earnings. we will see jobs keep the groundbreaking coming and will stock keep it going? plus the cheapest toy maker on what transformed his company's growth this quarter. on america's post market show tonight. d#: 1-800-345-2550 "i'm rethinking everything...

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welcome back and time now for the "power lunch" trade to go. you have been liking technology and which way is the best for you to participate. >> i have not been liking technology, i love it. you have to love technology. you will get texas instruments and you might get a mean revergence. up 48% for the year and when you look at technology in terms of the epf, it's up about 23%. keep in mind with texas instruments, it will not move

forward. what you will see again, you look for texas instruments to raise guidance in the third quarter. that will be important. look at apple. you will probably see about five million units sold with the 3 g phone. something is going to come together and they have that and again this goes back to the overall theme of technology and where action happened. >> the "power lunch" trade to go, time now to call the close. do you buy or sell? >> the news is generally favorable and the market seems to like t. i will have to say long here. >> armstrong? >> crude above 65 you are a buyer and below 63 you are a seller. >> i want to be a contrarian and unwind. i am a buyer, but carefully. >> buying any negativity from the narcotic itself. >> on it on 4:15 and on fast money, the top-ranked analyst

sets you up, but next president obama getting set to speak on the health care plan. "power lunch" has instant analysis and reaction. >> coming up on "power lunch," the buzz surrounding goldman sax, r.p. and ben bernanke. two bloggers will tell us what they are hearing and talking b. what is the swimsuit indicator telling us. is it the infrastructure we need? a waterfront property once with $5 million goes on the auction block. back in a minute. president obama will be making a statement on health care reform following the major health care providers. alan krueger said the job market poses severe challenges and spending may take until the end of next year to create a number of new jobs. stocks are rallying with the nasdaq going for the ninth straight positive session. that's the news now. i'm julia boorsten.

>> welcome to the secretary hour of "power lunch". we are all here. i'm sue herrera. stocks on the rise as wall street and caterpillar, alcoa, disney and many, many more. some of the those names are the big winners in the dow. >> shares are texas instruments are rising ahead of the after the bell earnings. yahoo and amazon are posting gains as well. we will preview the profit picture and waiting for president obama who is pulling out the stops on behalf of his health care plan set to issue a statement just minutes from now. we will bring you live coverage on an empty spot. >> he was making calls to treasury about this story. >> neal is in charge of the t.a.r.p. and said ultimately the

federal government could equal $23 trillion. >> i see nothing in here that explains. >> i was sitting here.q >> there you go. >> looks like this is an extremist max muss. >> i would help you, but i would be getting press. >> it include the treasury purchases that the fed will make. >> that are is only $300 billion. we are at trillion. >> that are doesn't increase taxpayer exposure. let me give you another one. >> ultimate government support. unclear. >> 600 built yon for the money market facility. i don't think this program was ever used. not a dollar. i think this guy is over the top. way over the top.

>> look. now matter how you add this stuff up, this is not money spent. this is facilities that will eventually be repaid. >> you have losses in there you have to acknowledge. potential gains. >> you get bailed out by bond holders. >> you get it out. so out of everything and take the worst case scenario and i don't see how you get the trillion. >> he succeeded by getting us to talk about the headline number. it's fear mongering. >> of the money. >> even if it were spent, we are not even close to that. >> the economy would be growing at about 20%. you put it into a $13 trillion economy, you would overwhelm. >> let me give you a trillions here. 6.8 trillion is the exposure.

>> i think we had these guarantees before. >> we did. essentially. maybe there were questions as to how much we had this guarantee. it was there. >> prior to being nationalized, they were responsible for half the mortgages and $5.7 trillion and they existed both before and after the crisis. you can't add the numbers up this way. it's not spending or stimulus or guarantees. >> i worry, ron, about overstating. he is say guy we need to be rock solid and objective point of view here. now it's difficult. >> you don't need to get congress. >> how many cannons do we have here that don't understand them. >> we are waiting for the president who will be out to

make a statement on health care in a few moments, but we want an you update from the market reports. bob dasani, the president will make a 10-minute address about health care reform, but right now a little bit of a gain. >> new highs for the year and here's a simple argument. beating on the bottom line importantly and hopes for improvement on the top line for the third and the fourth quarter. you can see this with the banks. this is a buffalo-based bank. ron's hometown. important here that all the bears are saying we will have a loss down the road. more credit card losses and it will deteriorate. better on the bottom line and they acknowledge commercial real estate will get worse like jpmorgan and the stocks on the upside. because the news wasn't as bad and the commentary was not quite as bad.

good to have you back, rick. i see bonds moving to the upside. >> earlier in the day as you can see from the interday chart, we approached the 371 yield. it moderated dramatically and basically unchanged on the day. this comes at a time where there aren't any new dynamics. three and six month bills and 19 on the three-month. the bids were solid and 3.6 and 3.35 respectively. we still see good demand. the dollar index down on the day not at the worst levels. we continued to monitor a drop for the uk. very interesting developments. >> thanks very much. >> president obama continuing the press for health care reform and scheduled to issue a statement moments from now.

the whole discussion we have been having with government support will be on "squauk box" to consider these very questions. we have been throwing these around and how does he get to $23 trillion. is he exaggerating? he is the t.a.r.p. inspector general. with the president, he is at the president's center attending a round table with health care providers and wait for the president to make his remarks. we will bring in cnbc's john harwood on the day where "the washington post" post shows for the first time less than half of those polls support president obama's attempted health care reform. >> it's a tough moment, but i want to say if leesman agrees this is exaggerated, i think this guy is behind the eight-ball. we will have to see how he justifies that. president obama set a

tremendously ambitious agenda from day and now is the time where he finds out really in the heat of the summer whether he can push this thing through. the house appears to be on track to getting a vary ant of what they laid out last week. you saw last week and maybe you talked about it earlier. nancy pelosi is talking about the tax increases which they laid out, making them only applying to couples earning more than $1 million a year. to reduce the potential for republicans and little class taxpayers from feeling like they are going to get hit. that's one thing in motion. the other thing in motion is the action in the senate. we have a democratic bill moving and a little bit light on cost controls and you have a separate process with republicans and democrats negotiating on the finance committee on something different. we don't know what that's going to produce. i am watching the president putting on a full court press

with remarks and the east room on wednesday night, remarks at the cleveland clinic on thursday and he will be in our face. >> can we assume that the process has been slowed down saying none of these plans achieve the cost controls or full insurance for everybody and seeing the democrats get nervous. >> i think not by the acquiescence, but the reality. the house can get this done by the august recess and they will actually. the senate has been more difficult and with the cost concerns, a lot of people and you have to hold the democrats and republicans. let's think about this longer. >> is there a sense that they messed this up and perhaps have to bring it inside the white

house to control it? >> there is a reason why this hasn't been done. comprehensive health reform for 70 years. it's hard to do it. the white house had an option of whether you lay out a detailed plan the way bill and hillary clinton did it in the 1990s, they got whacked with that approach. the obama administration said let's keep things moving and percolate different options and weigh in at the end. now is the time to weigh in and the test of their strategy is right in front of us. >> john, thank you very much. we are going to take a quick break before the president comes outnd makes his address. we are back with more on "power lunch". introducing one a day women's 2o.

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welcome back as we wait for the president to make comments on health care reform. john harwood joins us and ron ensana has a question for you. >> you had pointed back to the 1993 period when the clintons both in secret talked about various elements of health care reform captation. that was the buzzword at the time and rationing and things like that. presumably this is out in the open and this helped the president when it comes from freshman democrats in the house that came from wealthy districts that used to be control bide republicans. don't worry they will get knocked out in 2010. >> i wouldn't say that the president has been punished severely. his numbers are down, but it is

a fact that they are making more progress infinitely than bill and hillary clinton made with their plan. the ways and means passed something out. i think it will be changed and think the financing mechanism of hitting the millionaires is something that is very much in play if the senate passes a bill and you get into conference. the idea of taxing lavish benefit that is a lot of economists believe both would raise money and bend the cost curve which is what many members want to accomplish. >> the longer this takes, we have seen in the past the longer things drag o the harder it is to get reform through. how much time realistically do you think with the poll numbers slipping the president has? >> by the end of the year and that's the way the white house is thinking. when they talk about a goal of getting action in both chambers of commerce, both chambers of commerce by the august recess, that's to get the ball start and

get them into negotiations that. is a means to an end, the end being acting legislation. if they kick it into 2010 when the democrats are trying to run, it becomes more difficult. there is play and weeks and a couple of months to go. this is the critical time to really get the blast off in both chambers. house is in better shape than the senate. >> can you tell us what's going on with the inspector general? i don't understand. is there a political motivation here? he is talking about the 23.7 trillion of which there is not very much back up in the testimony i'm seeing. he said there is 35 ongoing criminal and civil investigation and one of the things he nodes is an order to stop an internet scam. make homes affordable.gov. how does this play on capitol hill. >> i am as confused as you are.

one of the colleagues asked me about this $23 trillion figure and how do you add up the math? >> we tried. we can't do it. >> i think that's something we will have to do more reporting on and figure out where it's coming from. >> i got something in the mail yesterday talking about home refinancing and making homes affordable. it came from a group that was unidentify and unaffiliated with the government and the programs. >> that's my point. this is not a crime within t.a.r.p. abusing. >> why is this t.a.r.p. inspector general who was supposed to be making sure they were lending it, why is that piece of information that is seemingly so irrelevant to the process -- >> something wrong, assuming there is something wrong. >> somebody leaked this. >> i think he was trying to get that invitation. >> he was probably already on the schedule.

he probably was. it is interesting it was leak and you have to wonder what the motive was. >> if i'm wrong, i own bank of america. did they not say they lent out $211 bill whereon? >> i think they did. banks are making loans. some banks are pulling back from the lending programs and they point out today these programs by nature as credit markets are stabilized are becoming less and less important. that's what they were designed to do. >> you put your finger on the problem. it's separate of what the banks are doing with the t.a.r.p. money. that seems to be something worthy of being thrown into the believe it debate. you can't figure it out. i know the treasury. that's of a different order. 23.7 trillion and one seems like it's right at the purpose of the inspector general and the other seems as if right now they are confusioned about it undermining

the inspector general. >> i would agree. we agree. that's news. i'm speechless. >> on the issue of lending, they say they are not lending enough. you go back to a certain moment in time and say if we hadn't done t.a.r.p. to banks a and b, would they be in business? how much lending would they be doing? zero. of course we are getting lending out. >> go ahead, john. >> that's michelle's point. exactly why it's so difficult for government to be in this business. when washington thinks about those issues and the ones that michelle mentioned, why aren't they lending more, it's out of context and politicians will go and you spent money on and that and why didn't you lend that? the bottom line is the goal is to stabilize the financial system and it's one of the reason yes the administration wants to get out of this. >> we will try to get another

break in. >> the real issue is recapitalizing the banks. they are being recapitalized. if they brought mortgage bonds with the t.a.r.p. money and getting a return of 0% financing, i don't care. they are recapitalizing and they will lend when the time is right. >> the president should be out shortly and make remarks on health care reform. welcome to the now network. currently, thousands of people are enjoying the new palm pre with its revolutionary web os. they're running multiple live applications at the same time. - ( thunder and rain ) - 3 million are using the simply everything plan. each is saving $1200 - over an at&t iphone plan. - ( cash register dings ) together that's over $3 billion. - enough to open a dunkin' donuts in space. - -lkie-talkie sounds ) from america's most dependable 3g network. bringing you the first and only wireless 4g network. get the palm pre from sprint. only on the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com. [ engine powers down ] gentlemen, you booked your hotels on orbitz.

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>> welcome back. dow jones higher by 48 points and we are waiting for barack obama to speak about health care.

let's add another voice to our discussion here. she executive editor at the daily beast. good to see you, edward. we are waiting on health care and you have been blogging about the t.a.r.p. funds that have been used for. we are scratching our heads about the testimony from the tarp inspector general who said it's the ultimate sponsorship to be $23 trillion. not to overstate it. >> we had a bit of a hint of this last week when goldman reported the $3.5 billion profits. we have a column on our site, the daily beast.com by charlie gasparino who compares this use of t.a.r.p. money to giving goldman in this case $100 to go to vegas. making $1,000 and you get your $100. >> we had charlo a little bit earlier. two of the points we were making

earlier and we have heard from a number of banks that we are making loans. we talked to community banker who is say they are lending as well and a number of other larnler institutions. besides who is to say what the t.a.r.p. money ultimately should be used for. what are you hearing from people? >> no question there is a lot of lending going on and this goes back and takes us back nine or 10 months to when t.a.r.p. was being crashed through before the election. nobody -- you are right. those who say it's for lending and those who say it's to inject capital into a system that needed it. >> let me ask you something. what would you like to have seen happened in an environment where real estate loans could not have been made. the t.a.r.p. money was used throughout a variety of mechanisms whether recapital lizing banks and playing interest rates and other banks. they are now much healingier

than they were four short months ago when we thought we were going off a cliff. >> the goal was recapitalization. >> that's right. i think even if you believe that it was about lending, you have to follow the 8-20 rule. we need a lot of help quickly and it stabilized. i agree with that. >> with the "huffington post," you can weigh in. we are discussing this started and there was a leaked report out of the t.a.r.p. inspector general who said the government support for the system could reach $23 trillion. have you heard and do you want to weigh in sna sn. >> i heard about it and read about it and it enhances the reputations of the banks. especially the big banks such as jp and goldman that they already had this reputation as being larger than life and having a close relationship with the government and there is a reason they call the government sacks. this furthers the sense among

the public. >> a lot of the banks didn't want the t.a.r.p. money. they were asked to take the t.a.r.p. money to get rid of the oft ra simple. >> they said they didn't want the money, but having that helped them and help them into the investment. >> it's a burden for a number of the banks and they can't wait to pay it back like a jpmorgan chase. >> they say they can't wait to pay it back. >> they did. >> they have and haven't. what's good for them and good for the bottom line. and their perception. i think they have a real incentive to cushion their own bottom line and to be able to keep making investments they were making before that led us to this. >> if i can go back to the original point and the entire process was designed to recapitalized the financial

system so it did not fall apart on the day the reserve fund almost went broke and broke the bust, we were standing on the precipice of economic crisis in the history of the nation and got pulled back through a variety of programs from the federal reserve. what bothers me is the economics at work. you can make these bold assertions that sound great and sound like everybody is on one side of the trade. if we go over the edge, the big guy and the little guy would be screwed worse. >> get with the revisionist history that we were fine and it's the government that screwed all this up or get out of here. >> i will not give the treasury the current time a lost credit. >> let's go in. par are first of all, i want to

thank the children's hospital for hosting us today. i want to thank the participants, joseph wright and jacobs and johnson and michael kidnap and kathleen kwigly. i just had the opportunity to talk to doctors and nurses and assistants and administrators at this institution. we spoke about the strains on our health care system and the strains we place on parents with sick children. we spoke about the time and money wasted on the bureaucracy and the growing number of americans who are uninsured and underinsured. we spoke about what's wrong with a system where women can't always afford maternity care and parents can't afford check ups for kids and end up seeking treatment in emergency rooms like the ones here at children's. we spoke about the fact that

it's very hard even for families who have health insurance to access primary care figures and pediatricians in a city like washington, d.c. in one half of the city you have many doctors and few in the other half and part of it has to do with the manner in which reimbursement is taking place. the distance for doctors, nurses, and physician assistants in caring for those who are most in need. we spoke about where we are headed if we once again delay and defer health insurance reform. these health care professionals are doing heroic work each day to save the lives of american children. they are being forced to fight through a system that works for drug and insurance companies and for american people that all

these wonderful professionals entered their profession to serve. over the past decade. premiums have doubled in america. out of pocket costs have shot up by a third. deductibles have continued to climb. even as america's families have been battered by spiraling health care cost, health insurance companies and executives reaped windfall profits from a broken system. we talked this problem to death. year after year. unless we act and act now, none of this will change. just a quick statistic i heard about this hospital. just a few years ago there were approximately 50,000 people coming into the emergency room. now they have 85,000, almost a doubling of emergency room care. in a relatively short span of

time. just putting enormous strains on the system as a whole. that's the status quo. it's only going to get worse. if we do nothing, families will spend more and more of their income for less and less care. the number of people who lose insurance because they lost or changed jobs will continue to grow. more children will be denied coverage on account of asthma or a heart condition. jobs will be lost and take home pay will be lower. businesses will shutter and we will continue to waste hundreds of billions of dollars on insurance company inefficiencies that add to financial burdens without making us healthier. the need for reform is urgent and it is indisputable. no one denies we are on an unsustainable path. we know there more efficient ways of doing it. we spoke to the chief

information officer here at the hospital. he talked about wonderful ways in which we can potentially gather up electronic records and for every child not just that comes to this hospital, but the entire region. how much money could be saved and how the health of these kids could be improved. it requires an investment. some are content to perpetuate the status quo and fighting reform on behalf of special interest. others who recognize the problem and believe or perhaps hope that we can put off the hard work of insurance reform for another day. another year. another decade. just the other day, one republican senator said and i'm quoting him now, if we are able to stop obama on this, it will

be his water loop. it will break him. think about that. this is not about me. this is not about politics. this is about a health care system that is breaking america's families. breaking america's businesses and breaking america's economy. we can't afford the politics of delay and defeat when it comes to health care. not this time. not now. there too many lives and livelihoods at stake. too many families who will be crushed if insurance premiums continue to rise three times as fast as wages. too many businesses that will be forced to shed workers. scale back benefits or drop coverage unless we get spiraling health care costs under control. the reforms we seek would bring greater competition, choice, savings, and inefficiencies to the health care system and greater stability and security to america's families and businesses.

for the average american it will mean lower costs, more options and coverage you can count on. it will save you and your family money if we have a more efficient health care system. you won't have to worry about being priced out of the market and one illness leading your family into financial ruin. you won't have to worry that you won't afford treatment for a child to get sick. we can and must make reforms and we can do it in a way that doesn't add to deficits over the next decade. i said this before. let me repeat. the billie sign must reflect my commitment and the commitment of congress to slow the growth of health care costs over the long run. we can ensure that reforms strengthen our nation's fiscal health at the same time. now, we always knew the passing health care reform wouldn't be easy. we always knew that doing what

is right would be hard. there is just a tendency towards inertia in this town. i understand that as well as anybody. we are a country that chooses the harder right over the easier wrong. that's what we have to do this time. once more. let's fight our way through the politics of the moment. let's pass reform by the end of this year. let's commit ourselves to delivering our country a better future and that future will be seen in a place like children's hospital when young people are getting the care they deserve and they need when they need it. we don't have an overcrowded emergency room putting enormous burdens on this excellent institution. i think we can accomplish that. we will have to do work over the next few weeks and the next few

months. thank you very much. president obama at children's national hospital after a round table discussion with various medical professionals at that facility. john harwood is back with us. this struck all of us here as a different address by the president. he was sober and looked a little upset and took on a personal tone as well. how do you read that? >> i think when he said we are a country that has done the harder right over the easier wrong. he was trying to appeal over the people in washington who have a tendency towards inertia and bickering and looking towards the next election. he is chased by what happened over the last few days, but we can't forget that the president is in a decent position to achieve his goals. the house is moving on a more rapid time table than we saw in the clinton administration and

the senate is struggling to come up with something, but it's not like they are near the end of the road. >> i was struck by saying the waterloo to the supporters and reminded me about shakespeare once more and to kind of rally people around him. a very different tone from how he appealed before on a logical level. almost like an emotional level. >> it is so much more difficult to achieve a policy goal in washington than it is to win an election. with president obama you have someone who is the political sensation of our lifetime last year who blew through the electoral process in a way that surprised a lot of people, including hillary clinton and john mccain by the end of the campaign. you campaign in poetry and you govern in prose. the prose is tough. that's what he is trying to fight through and say to all

those people who voted for him and it was a lot of them, we have to put our shoulders to the wheel. >> we have to go once more into the break. >> yes, we do. >> very nicely done. >> the dumb pun of the day. >> you saw the president making that press for his health care plan. we will talk with the white house health reform czar about what's northboundable and not.

♪ hotwire.com you saw it here moments ago on cnbc. the president delivering remarks in the quest for reforming our nation's health care system. joins us now is counsellor to the president and director of the white house office of health reform. welcome and nice to have you here. >> thank you and good to be here. >> one of the issues that came up over the weekend and this morning are points are new yorks that are taking place on the hill. would the plt consider one of the proposals which is perhaps

moving up the level at which the tax would go into effect. in other words, the house speaker put out there perhaps that the taxes would hit the upper upper crust, the millionaires and leave the middle class alone. would you be willing to go along with that? >> i want to congratulate the speaker who moved closer to real health reform that will lower cost and cover all americans. two of three committees have reported out of the house that do those things. we are excited about that. i haven't heard the speaker remarks and obviously most of the savings that are produced to pay for reform are being produced by redirecting money in the system from less efficient uses to this. things like abuse and medicare. >> what about tacks health care benefits. is that on the table for the president? >> that's something that some of

the committees looked at and the president said he is skeptical of that. he wants to make sure he doesn't disrupt the existing arrangements. >> what i haven't seen is we have the cboe statement, the plan is on the stable and do not get everybody insure and do not control cost. i didn't hear from the president and i haven't heard from anybody within congress addressing the very specific points. none of these bills seem to achieve the two goals that were set out in the beginning. >> actually they do and what the president was talking about is meeting with doctors and patients and nurses and talking about the real problems of american families who were struggling to be able to afford health insurance. 14,000 families and people lose health insurance. >> with all due respect, is the cbo wrong? >> first of all, i believe the bills do cover almost everyone. they get to about 97% coverage

and the same thing as covering everyone. i think that's definitely what they would tell you as well. they told you that they are deficit-neutral within the 10 year that is the budget looks at temperature there is real reform that reduces cost and cbo will tell you that in addition the issue is over the long-term outside this 10-year budget window what's happening to contain cost. we believe that the things we are doing and congress is doing like promoting prevention and wellness. the children that the president met today who have asthma f. we can prevent them, i cans don't end up in the hospital. those will produce long-term savings. >> it was just reported that many of the nation's governors got together and had a conversation with the secretary and voiced their concerns about this program becoming an unfunded mandate of medicaid.

if indeed it's deficit-neutral, why would they worry the state would foot the bill for health care coverage? >> i believe the secretary having been a former governor herself was able to allay fears. the bill that the house is working on right now fully federally financed the state share. part of the expansion and coverage is in the medicate program to allow states to cover. i'm sure she was able to allay fears about that. >> thank you very much for joining us. appreciate it. >> thank you. >> thank you for joining us. >> always a pleasure. >> good to see you again. >> i know you will like this next segment. the lipstick indicator, we talked about them all. they are supposedly reads on the economy. we have a new one. the swimsuit indicator. is there support for it in the economy. yes, indeed. we will go live and find out what it tells us.

>> ron will watch it from the newsroom. >> i support swimsuits. >> here's a couple of retailers on the move. >> perhaps swimsuitses are selling at macy's for 6%. jcpenney and nordstrom all up. introducing one a day women's 2o.

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welcome back to "power lunch". here are the stories we are talk bchlth the biofirm saying the experimental treatment for lupus met goals in a late stage trial. upgrading to attractive from inline among the stocks.

cbs, disney and scripps. shares of harley davidson is to neutral from sale saying the expectations have been set way too low. steve? >> your favorite story of the day. as businesses navigate for consumer spending, there is an economic indicator you may not have thought about. the swim wear sector. how is it holding up? michelle joins us live from swimsuit factor week in miami. is it skimpier? i'm just grasping here. >> an endless source of discussion. you should hear the conversations among my crew who were eager to work the runway shows last night. go figure. you think that maybe showing more skin would make people a lot happier, but just the opposite is true. this is the biggest swim wear industry event in the world. we are seeing more and more, over and over again.

retro styles and vintage and one pieces and elegant designs and designer after designer is telling us it is a return to happier times. that means believe it or not in miami beach, more coverage. this is a jansen design created in 1952. they have many of these they are rolling out again this year. again you picture something from a 1950s movie, a lot of coverage. we were at the runway shows last night. the top brazilian designer and the biggest swim wear designer in all of latin america. when you think swim wear, you think how tiny can you create it? not so on the runway. we saw lots of cover ups. pants and shirts and dresses and swimsuits that turn into dresses. more coverage and less skin. that sets the tone for the rest of the world in the industry. they say that's another reason they have been able to expand and do well in the fashion industry. by going out and creating these

cover ups and extras. people buy something else with the bathing suit and use it in another way. here's what jansen told us. >> we also expanded with the cover up business. that has been a great opportunity for us. it's about taking the vintage looks and modernizing them for today's lifestyle. >> last year's fashions took a hit and it was down 8%, but swim wear was up 11%. >> very interesting. >> steve does have a couple of thoughts. >> i do, but i'm trying to think of any gain i can get from voicing that publicly. >> what is the connection between more coverage and the recession? why do they put those two together? >> it's not necessarily a direct -- >> is that what this is? >> some of it goes back to the

1920s and mostly 1950s and 60s. the designers themselves, the people making these things say it's a return to happier times. i guess you think of maybe more elegant styles and something that -- you have to make it different every year and swim wear is selling even in the recession. it locks like the happier times with mom and dad around the pool. your hot brazilian vacation. >> thanks and appreciate it. >> phil just emerged from the meeting with the north american president and he joins us from washington. >> this is the first chance we had to talk since he took the job as the man running north america. he is just getting his feet going in terms of changing things in the u.s. and saleses are down 37.5% in a one-hour briefing. a couple of things that made substantial news, he is assessing along with executives, replanning toyota's north

american plant capacity. what plant dos they need and which do they have to make a decision to get rid of. assessing how the market rebounds the key there. a couple other things and they hope to be profitable in the north american region next year. they see positive signs in the auto market. too soon to say if there will be profitability next year. as far as the auto market, this is an interesting one. michelle wants to see this. we could see sales rebound from 12 to 15 million quickly. perhaps within a year. the auto industry should be prepared for gas prices to move higher. they do not see that coming down and when we see electric vehicles. he said there is no breakthrough yet. just a few comments from the head of north america. >> thank you, phil, very much.

coming up next, getting hammered on the high end. a multimillion-dollar house on martha's vineyard on the auction block. we will tell you what it went for. undefeated professional boxer floyd "money" mayweather has the fastest hands boxing has ever seen. so i've come to this ring to see who's faster... on the internet. i'll be using the 3g at&t laptopconnect card. he won't. so i can browse the web faster, email business plans faster. all on the go. i'm bill kurtis and i'm faster than floyd mayweather.

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>> more evidence the wealthy are not immune to the foreclosure crisis. once valued at $5 million, on the auction block. we have more on that sad story. diana? >> that's the low end of the housing market pushing towards recovery and the high end is hurting. all too clear on a sunny day on the sea by martha's vineyard. >> this this is a spectacular opportunity given the date and the economy. can i get the $5 million. that's what i would love. >> it's not rare to see a foreclosure on martha's vineyard. we have done four in two months. our primary business and responsibility to shareholders is to be in the banking business and not the real estate business. >> there seems to be more demand and the investment value is here. >> have you barbecuing by labor day. >> it indicates the rest of the

economy. everybody is struggling and feeling the pinch. nobody is immune. >> in this market, all the analysis goes out and it's a gut. >> sold. how about a big round of applause for the high bidder. >> i think it was a fair price. the property was valued down, but which bounce back. >> the bidder got a 20% discount, but gets a bill for $28,000 and the unpaid water bill. the only competition this bidder had was the bank. the bank of new england that held the mortgage. nobody else raising their hands. >> what was the $5 million figure from? >> it was owned by a builder who built the home himself in 2004 and later put on the market for $4 to $5 million, but didn't sell. >> i am going to california to

report the crisis with their budget. we will see you tomorrow night. street signs with melissa francis is up next.

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eye i'm martha francis. happy six months to president obama. how he is doing and whether a few freshman democrats derail his health care plan. the 40th anniversary of nasa's proudest day, the day neal armstrong walked on the moon. do we need to spend $100 billion to go back? that's our show and it starts now. >> the best performing is discretionary stocks. the worst is consumer staples. what is money talking about at this hour?

our own bob da sanna is here and rick santelli in chicago and scott wapner from the nasdaq; guys. >> i will tell you what the important thing is. the bulls are continuing to move the market under the theory that pe multiples will expand in the third and fourth quarter not just on cost cutting, but top line growth will enable dramatic earnings growth. we will see. one of the big things the bulls or the bears latch on to is cater pillar. a global construction company, 2/3 is outside of the united states. we will get global commentary. the bulls are hopeful and china's whole program of giving out money around china, you know that stimulus program, dollar 600 billion will help them out. brazil is looking least damaged by the global economic slow down and they are a big buyer. north american sales, don't kid