looking at s&p 1,000. and really it was the home sales, the existing home sales number that really put a fire under this market and took us to where we're standing right now. existing home sales rising, and also inventories dropping slightly. so take a look at the home building stocks, because they were up noticeably. after that, a report came out, 4 to 6% across the board. dr horton and kb homes. telecom is still the best performing sector here, and really you can credit that better than expected report out of at&t. particularly, their wirelesses business was stronger than expected, and that was interesting, just in the current global environment facing a lot of these wirelesses companies. remember, nokia and sony erickson over the last couple weeks gave pretty negative reports, but at&t is doing well. record low churn and it's not just the iphone that was benefitting at&t's bottom line. it was the mid range level, as well. that's critical to note. sprint and verizon getting a lift too. they're reporting next week. it will be interesting to hear from them if they're seeing the

same strength in the overall wireless sector that at&t is seeing. the transports are interesting, as well. transports are up 82 points. you had a number of reports out today. u.p.s., u.n.p., rider pacific, all those companies met or exceeded expectations. and you'll see getting a nice lift out of those stocks as well today. and transports are an interesting place to look, because it gives you a pretty good idea of what's happening in the economy. i mentioned the good news. perhaps if you want to say the bad news, volumes still remain on the light side. you would like to see volumes from the truckers, from the rails, for example, pick up a little bit. goods moving here and there, and also rentals from companies like rider to the upside. let me also mention 3m, because the stock was up 6%, way above expectations, also raised the full-year outlook. and larry, back to you. right now above 9000 on the dow, up 161 points. and also, you know, bill miller over at lake mason was talking about the conditions of being right right now for a new bull

market. let's send it back to you on that. i didn't want to forget what bill miller was saying.p> nch>> great point. bill miller has put out 11 to 1200 on the s&p. i just want to add my two cents, for what it's worth. when you look at the credit spread in the bond markets, we are prelehman, melissa and i looking at the numbers. it was 1248, roughly 20% from here, so it sets up a nice optimistic benchmark. anyway, today more good news in existing home sales, rising at a 3.6% annual pace in june. cnbc's diana olick has the details. hello, diana. i also see distressed sales. distressed sales are coming down. >> reporter: that's right. we're getting to all of that, larry. this is the third straight month of increases in existing home sales, so that shows a real stabilization now in the housing market, but it is something of a disjointed stabilization. take a look at the stats. existing home sales rose 3.6% in

june to 4.89 million units. that's down from may. still down 2.5% from june of 2008. medium home price at $181,000, less worse than last month. inventories fell to a 9.4 months supply. there is concern that there is going to be a shadow inventory. >> i believe there are many banks, including fannie and freddie, who are also holding on to some properties. they are releasing foreclosed property on a measure weights list, so not to flood the market and they feel that perhaps that could lead to even more drastic price cuts. >> reporter: so that inventory issue, we don't know exactly how much shadow inventory there is. on another side of the inventory which shows how disjointed this is, is that inventories for homes of $250,000 or less are only at a six-month supply, which is historically pretty good. but inventories of homes worth

over a million dollars are at a 20-month supply. so you see the difference there. between what's selling and what is not. and a lot of that, of course, has to do with the jumbo loan market. however, the realtors had a good note today, saying that the jumbo loan market seems to be easing up a little bit. still, much more expensive than the conforming loan. but at least they're easier to get than they were, say, even two months ago. we'll see through the summer how that works out and how many of those distressed homes come back on to the market. for the rest go to realtycheck.com. >> it's obviously red day here on cnbc. more on this morning's economic data, new jobless claims rose last week, but the number beat expectations. so can we still have a recovery without as many jobs and how do you profit from a potentially jobless recovery. let's ask michelle girard, and jeff crumpleman from hill yard lines. and steve liesman is with us, as well. steve, it seems like the administration is making a big deal out of this data.

they're at least trying to drive home the point right now that the disparity between gdp growth and how many jobless claims we've seen seems to be saying we're goingtive a jobless recovery or more productive recovery, depending on how you look at it. why do you think they're driving home that point right now, and do you buy it? >> well, you know, beyond the politics, melissa, i would like to concentrate on the economics a little bit. >> okay. do you buy the data? >> the data show very clearly that the average recession since 1990 has been a little bit deeper when it's come to job loss and much slower to come back. if if you look at the comparison here, what that shows is the blue line there is the average recession. the job loss from 1969 to 1982, and then three recessions in there. look at the orange line in there, the average recession, 90 to 2008. and then broke out the 2008 recession. deeper from the peak and is longer to come back. but look at one other thing which i think you were alluding to, melissa, the upside of this is productivity. there is the recession, the average recession, '90 to 2008.

market upward shift there in per hour worker there. you can see we remain more productive through sessions than in the past. >> michelle, i'm going to put the unemployment claims chart up on the screen, the four-week moving average, because we've had an issue with car layoffs, whether they're seasonally adjusted or not. maybe we can get that initial jobless claims up on the full screen. you can see the four-week average has gone from 660,000 to about 560,000, michelle gerard, and i just want to think out loud. maybe this economic jobs recovery is going to come on sooner. maybe businesses cut too many jobs out of fear and panic. maybe they'll hire them back. what do you think? >> one thing we have been speculating, first of all -- they have been high, even though we've had a reduction in the payroll numbers. perhaps we can talk about the

seasonality. auto production has been cut sharply in the second quarter. we're getting layoffs there we don't normally see in the spring. that may be one reason why the claims figures have remained high. so it will be very interesting to see as we come out of this fear, as the automakers ramp back up, where the claims settle out. and i think you're right, larry. one thing clear is the fact we've seen companies cutting payroll numbers to the bone. and you see they're very sort of pessimistic, or certainly companies are not optimistic about where they see the economy is heading. if you get any kind of an upside surprise on demand, you could see companies scrambling to get workers back. >> michelle, i'm sorry. we're having a problem with your audio. we've got to try and get that fixed. i hate to cut you off. but jeff, let's get your opinion on this topic. >> i agree. i think one of the things they underestimate is the operating leverage and we have seen it in johnson controls, and you're talking about break-even levels below the $10 million seasonal run rate in auto sales. you know, if you get modest

recovery and auto sales, that company is going to make a lot of money. i think you see that across corporate america. >> the company is going to make a lot of money, but does this mean we have to put people back to work in a different place? what's the long run implication? >> steve liesman, look at this. we've had really unprecedented revenue losses, because the economy has had this huge hit. you had tremendous credit shocks and housing shocks and stock market shocks and tightening fed shocks until recently. so maybe businesses went overboard. let me make this -- >> i like that theory, larry. >> the corporate ceos are always most bullish at the top of the cycle, and most bearish at the bottom of the recession cycle. and is i think we may be overreacting to some of these statements. >> i think that could be right, larry. i was just looking at the history here, showing these recessions being deeper as far as jobs are concerned. and it may be that inside the number we have here, which as you saw in that previous chart, is practically off the chart if we had drawn it differently, the job losses in this recession,

that there was a panic element to the declines that happened. the question is whether or not, because of the financing problems that are out there, can they, will they be as quick to bring them back as they were to fire them. and i guess there is skepticism there. >> you know, jeff, look, if you go into the credit markets on the spreads, you're back to prelehman levels now. and i think that's terribly, terribly important. when you look at even the housing starts, the leading indicator, plus the jobless claims coming down, plus the whole index of leading indicators. regardless of how bad last june's jobs report was, these indicators are really strong now, all falling into place, including the stock market rally. so what do you think? how are you playing this? because i think this could be a really bullish moment. >> yeah. i would agree with you. i couldn't agree more. when we look at the market or we look at stocks, we look at fundamentals, valuation and technicals. all of the factors that you talked about were fundamental-oriented and becoming less bad, deteriorating

at a slower rate, they're improving. and so that's a positive. valuation is very attractive on normalized earnings relative to cash and bonds, which you're talking about. and then technically, you started to see improvements in price trend, and sentiment was still negative, which is a good thing. the pull-back should have been expected. how are we playing it? >> yeah. >> we were defensively oriented, had a barbell going on the last few years and benefited. we started in mid to late march and said, okay, let's trim the proctors, the telecoms, some in utilities and health care, and let's not heroically, don't make a bold statement, but thoughtfully, gingerly, increase data in the portfolio. so that's technology, which a lot of people are talking about. but i think for some reason -- >> material, cyclicals, retailers. how about banks, how about financials? is i'm still sticking with the financials. i know the asset quality is still weak and i know there is toxic stuff, but there is so much cash flow earnings within a steep yield curve and zero

interest rate, what did bernanke say yesterday and the day before? i ain't gonna tighten, not for some time. maybe not in my lifetime. so let's enjoy this. this is a rebuild. banks can earn their way out of this toxic asset problem on top of all this other positive cyclical stuff. >> yes. not to get off on a tangent, by the way. well, three or four weeks ago, the issue was, oh, my god, is bernanke going to have to put the brakes on. and we saw treasuries back up. and now we're at 340, not at 4, so i think that's one of the reasons why we pierced through the 950 level. with regard to the financials and the banks, what we're seeing is, again, less deterioration first in the consumer interesting credit part of the curve. i think i would play the diversified financials, so the ñ jpmorgans, the market chair takers like goldman.ñ the regional banks worry me still a little bit, because still to be seeing commercial -- >> there is still risk, commercial real estate and also the fact we saw some of the banks not trade so well in this last quarter. and of course, that's a risk in had financials, as well.

>> yeah, so pick your poison. goldman, jpmorgan, the diversified financial attention, the market share takers, ó absolutely. >> it would be more fun to buy the lousier ones, though. the weaker ones that had -- >> they're not as cheap as they were. they ran 105%. >> you're brave. >> you're just really going to -- what do you think of this -- let me hit this. bill miller, 11 to 1200 on the s&p. and pre-lehman, the s&p was 1248. >> 1251. >> all right. so let's round it to 1250. what do you think of those numbers? we're at 980 today, 976, 7 right now. what do you think, is another 20% right in here, between now and year-end. let's spin this thing as positive as we can. what do you make of that? >> the short answer is yes. >> i've lost my mind this morning. >> don't let larry force it out -- >> i could be wrong and i have been wrong. so it's okay. >> we want you to be sincere. >> and i've been worried about

the june jobs report, but all these leading indicators are blowing me away! they just are, how strong they are, including this morning's housing numbers and unemployment claims. >> i don't want to be pollyannaish here, and we recognize the structural secular challenges, but this is a cyclical environment. >> i'm not saying 1500. i'm not there. i'm just saying, this is a recovery move to 1200-plus, maybe. that's all i'm saying. 1500, that's way -- ooh, way down the road. >> we've been saying 1100-plus. >> oh, wow. >> so, you know, but, yeah, i'm with you, larry. >> we're going to leave it there, guys. thanks so much for joining us, and we lost michelle, unfortunately, because of technical reasons, but we'll have her back soon. >> i represented her position. i've known her for 25 years, used to be one of my deputies. coming up, wheeling and is dealing in corporate america. is m&a activity making a comeback in today's "call of the wild." >> but first, ford is showing improvement. shares of the automaker rising on the news of its better than

expected results. is this a sign of things to come for ford? our experts weigh in only right here on "the call." we'll be right back. 

all right, ford motors standing without a government bailout beats the street boasting a loss of 21 points a share. right now, $6.99, up 61 cents. almost a 10% gain. very nice, ford.

we have cnbc's phil lebeau with more on the car maker. hello, phil. bullish news today. >> very bullish, larry. i think everybody expected ford to do better, not sure they expected them to do this much better than the street was forecasting. take a look at the numbers again, you mentioned a loss of 21 cents a share. of the street was expecting a loss of 48 cents a share. revenue, better than expected, coming in nearly $2.5 billion higher $27.2 billion. after the numbers came out this morning, i talked to ford's ceo allen musclallmulally. and he says we are on plan to meet profitability and cash flow targets. typical. underselling, overdelivering. look at the cash burden. this is impressive. compare this with the third quarter of last year, when they were going through roughly $83 million a year. the $1 billion cash outflow in the second quarter is $11 million a day. a huge reduction for ford. that's why when you take a look at shares of ford, up 200% since the beginning of the year.

larry, if you put 10,000 into this company at the beginning of this year, you would have $30,000. don't forget, coming up next, on "power lunch," allen mulally, we're going to talk to him about the greater optimism that ford return to profitability, not by 2011, but sooner, because many on wall street are saying it will happen sooner. we'll talk to him about that and many other things first on cnbc, coming up in about an hour. guys, back to you. >> phil, real quick. musclally was the guy who borrod at the right time and had a stash of cash in order to survive the disastrous downturn. >> and larry -- >> you've got to give him credit. >> well, now, wait a second larry. he did borrow. he leveraged to the hilt. he was fortunate that the credit market had not closed off. he comes into office eight months later and tries to do that, he wouldn't have a chance. doesn't mean -- not taking away from what he is doing. >> that's not what happened.

>> he was fortunate to borrow when the stocks were open. >> the point is when the pullings were blocked for him, he saw his hole and did it, and i always felt that was one of the major differences between ford and gm. hang on, phil, let's bring in peter de lorenzo, give me a quick on the ford story. are we being too bullish on ford? >> no, i don't think so. i think ford has done all of the heavy lifting. their product cadence that's coming in the next 18 months is extraordinary. and very impressive. and i think you're going to see ford build really momentum going forward from this point. >> peter, tell me about gm, because i mean, this just seems to highlight the case once again. i thought gm just needed to go into bankruptcy to clear away some of the legacy costs. but are they going to be able to perform and compete in this environment, and especially in comparison to ford. >> well, they will, because gm also has a very outstanding product portfolio. and they've got great stuff

coming. >> really? >> yes, they do. but they are behind ford by quite a bit. so they are going to have some serious catching up to do. and i don't know -- that's not going to happen overnight. >> well, peter, does ford have -- let's go back to ford. does ford have the right little green go-carts to meet the cafe fuel standards and all of that green revolution stuff? >> yeah, ford will be covered in that, because they're investing heavily in echo boost, which is their term for direct-injected turbo charged engines. their engines will be smaller, more efficient. >> will they be fast? lots of good horsepower? >> yeah, good horsepower and a real punch for the size of the motor. and they're very well-positioned for the green segment. >> phil lebeau, i know you hate that. but, you know, this is the era of little green go-carts. so do you want to comment on ford's little green go-carts versus gm's?

who is going to win the little green go cart race? >> i think you're building up too much about little green go carts. seriously, you are. here is the key with ford's future. this company is modeled to make money where the -- where the base is right now. they're going to break even, even if things do not improve as far as demand. if demand picks up in the second half and continues to build in 2010 and '11, they are leveraged to make a massive amount of money. that's when the profits will really pick up for this company. >> okay. guys, got to leave it there. thanks to both of you for joining us. >> you like horsepower -- >> i like big cars, too. >> that's what worries me about this story. >> up next, more hits than misses from today's earnings report. the details, and what's going on with tech and will it continue? we'll discuss the up coming earnings. >> used to like the excursion. plus, when will m&a make a comeback. we'll break it down with rich

peterson in "the call of the wild." [ engine revving ]

[ engine powers down ] gentlemen, you booked your hotels on orbitz. well, the price went down, so you're all getting a check thanks. for the difference. except for you -- you didn't book with orbitz, so you're not getting a check. well, i think we've all learned a valuable lesson today. good day, gentlemen. thanks a lot. thank you. introducing hotel price assurance, where if another orbitz customer books the same hotel for less, we send you a check for the difference, automatically. all right. got a mini rally going on in oil, 66.5 bucks, up a buck 12. 1.7% gain. melissa francis is directly connected to opec and may wish

to talk about the oil rally. >> nah. >> hi, melissa. >> i think we'll move right on to earnings, larry. why not? >> come on! >> a huge day for earnings, hits and misses, mcdonald's and 3m. the dow component reporting lower quarterly property, lower than expected sales. we're going to talk about the giant. >> 6 cents the results were taken away by currency, and the results weren't bad. matched the estimate. you take out a 1-cent gain and gained share because of the copy line and making a big push into this mccafe concept. but store sales were a bit of a problem. 1.8% growth in the u.s. street wanted 3.3. global growth in same-store sales, 3.6, street wanted nearly double that. so some of the good gains we have been seeing in the past quarters weren't there this time. >> kind of surprising, right, given you would think in tough economic times everybody is going to go to mcdonald's. >> right. and they were confident in the outlook for the year. but you know, guys, larry, too,

yesterday we had chipolte, p.f. changes and mcdonald's. and there are concerns out there about how willing the consumer is to go out and eat, even if it's not the most expensive venue. >> 3m. >> is there is a star today on the earnings front, it's 3m. optical film that covers consumer electronics going ga gangbuste gangbusters. respiratory masks because of the h1n1 virus scare, practically sold out. so they beat the 94 cent estimate. boost their year forecast. down 10 to 13 before it was down 11 to 15. and rei rated their view from april that the recession is at or close to a bottom. so the stock began the year at 59. it's above 68, nearly more than a 10% gain. that's not bad. >> good stuff there, but i want to move on to text, because that's what's coming out after the bell. and it's a big focus.

microsoft and amazon among them as they're on track to post its 12th consecutive gain. if this rally continues, it will be the longest winning streak for the nasdaq since 1992. >> and you can see right there, those are some of the tech components in terms of how we have done so far. the green, all green, except for microsoft. they say if the nas is going to make it 13 straight, it's probably in microsoft's hands. >> joining us is the principle analyst from enderly group, and jim goldman, as well. rob, what do you expect from the big tech names? >> well, i'm actually expecting some really good news in terms of outlook. they just released their windows 7 to manufacturing, which means they're on track to release it by the fourth quarter. and r2, their second yenration of their current generation serves come out, and that's particularly a big revenue generator for the firm. so two big products released on schedule, on time, and both had a chance to ramp. >> jim, do you think the tech

rally is going to continue here? jim, are you with us? >> yes. i am. can you hear me? >> now i can hear you. >> i'm with you. i think that all signs are pointing to a nice tech rally to continue. but, you know, when you look at the estimates on wall street versus what these companies are reporting, we've got to keep in mind that maybe some of these analysts on the street were thinking things were a little worse than they actually were, and maybe that's what's contributing to so many of these big and significant beats. so before we get all excited that these companies are merely beating the socks off of wall street analysis, let's take a look at really what these companies are saying as far as rally toward back half of 2009. it's looking good. it just may not be as good as everybody assumes to be -- >> but they always stand back. they always manage expectations. steve jobs is famous for that, for one. >> yes. >> what about microsoft? can we go back to microsoft for a minute? this is a bullish market, i am bullish this morning, bullish, bullish, bullish. what about microsoft?

these turkeys have done nothing delivered, nothing done for i don't know how long, can't seem to get out of their own way. second division baseball team. >> great company in the world, come on. >> yeah, great. why should we be so optimistic about microsoft. i want to put a dose of reality into this conversation. >> well, as you have pointed out -- i'm here, can you hear me? >> yes, gotcha, buddy. microsoft. tell me why they're not turkeys, gobble, gobble. >> because they have been executing reasonably well in the last couple months, brought out a solid advertising campaign actually measured by ad week -- ad age in line with apple. microsoft is always you said market. now they're marketing well. windows vista which was kind of a turkey now being replaced by windows 7. almost all of the buzz in windows 7 is positive. and then, of course, as mentioned before, their new server just came out on time, on schedule, and that's one of the big engines underneath their revenue. that actually supports exchange,

it supports their database software. >> why should we believe it? all these rollouts and stuff, when we get the drum roll -- jim goldman, you're always drinking the kool-aid out there. why should i believe -- >> no, larry, what are you talking about? he was pretty negative when we went to him a second ago. >> please. no -- >> hard on jim goldman -- >> yeah, i think he was knocking the legs out of the nasdaq rally a minute ago. >> i want to zero in on microsoft, because they had their own brand of kool-aid to drink. go ahead. >> larry, all i will tell you is this. microsoft has been one of the worst-performing dogs of the stock over the past decade. >> right. thank you. >> this is no question about it. >> that's all i'm trying to say. >> well, i agree with you. it all depends on when you got into microsoft and people jump in and out. and the fact is that microsoft now and going back to january when steve bomber told me at ces that this company is now on to something far more aggressive as far as marketing and far more

attune now to paying attention to real quality. and that's what we're seeing with windows 7, getting that with bing. >> jim -- >> this is real interesting -- >> jim, under they statistically under owned now, in terms of big cap portfolio managers? >> maybe with good reason. >> terribly. >> maybe with good reason. >> well, but if money managers are looking for a 10, 15% return with a company that is generating cash the way nobody else is, you know, this might be a nice place to start parking your money. i'm not saying -- >> so in other words -- what i'm hearing from you and rob, you and rob are telling me, the message you guys have on microsoft this morning is this time it will be different. is that right? >> well, the tide is beginning to turn. >> i'm okay with that. i want to be bullish. i just want to be realistic about that gobble, gobble microsoft. thank you, everybody. go ahead. >> we've got -- got to go. >> i like hearing larry say gobble gobble. >> just want to gobble, gobble. thank you. jim goldman has your pitcher of

kool-aid ready for this afternoon and this evening. up next, investors want to know when will the m&a market come back? well, it might be sooner rather than later. find out why in today's "call of the wild." >> i don't know about that. and a ceo who just turned in record profits joins us live for a first on cnbc interview coming up only here on "the call."

okay. take a look at the market here. we have quite a rally under way,

up above 9000 and 173 points on the day, 2%. quite a rally. the s&p right now also is trading to the up side by better than 2%. 2.1%. and the nasdaq is having another winning day if we continue this winning streak, it will be the longest since 1992. so really quite a bit of bullish sentiment out there in the market. larry. >> amazon.com making the deal to acquire online apparel sales success zappos.com. is this a sign they're making a comeback and the economy is turning around? that's today's call of the wild debate. let's bring in rich peterson, director of markets, credit and risk strategies and our great pal dan fitzpatrick, president of stock market mentor. dan, start with you. what do you make of the m&a? it my favorite m&a player so far is the u.s. treasury department. but will there be anything going on in the private sector? >> i've got to tell you, larry.

i love the amazon-zappos deal. if you look up customer service, you'll see a picture of them there. what i'm looking for is big company mergers, acquisitions. the smaller stuff seems to be a little bit of that in the pipeline where credit is a little bit easier to get, just because the deals are smaller. but to me, at this point, it seems like you've got to look at the m&a market as more informative than predictive, because it just tells you that these companies with big war chests are opening up those war chests and putting cash to work. >> rich, dan hit on the point that is a concern in m&a market, which is you may want to do a deal, but do you have to have the cash in place, or is there any credit out there? >> i thinkhat we have seen from capital numbers -- this is the worst for m&a in probably six years, running at a -- run rate about $50 billion per month this year, this month only about $13 million, and that includes

the announcement today by amazon and also the bristol meyer deal, which incidentally was their biggest acquisition in about seven years. but the fact remains, in the period where there is no private equity, acquisitions to speak of, as well as any big mega deals, say for the two large drug deals earlier -- announced earlier this year, it's been really a void. >> right. >> for m&a. >> but rich, we know that. and that's a little bit backward-looking. what we're saying is, is the tide going to turn here? is there anything to make you believe that it might? >> the hope will be that companies that have a large cash holdings will being f ing foini worth coming. and you have regulatory environment. we showed last year where whole foods markets made an -- had to go through a lot of hurtles in terms of divesting a lot of wild oats properties and also the concern is just that, you know,

there is growth elsewhere. a lot of the larger deals are coming outside the u.s. >> hey, rich, just on that last point, real quick. you've got the extreme left wing antitrust whack owes in the justice department now. this crowd is off the charts. they hate businesses and they want to stop any big mergers in acquisitions. so we've got to weigh that. let me go back to dan. on the other hand, dan, money is real loose, right? interest rates are low, zero, corporate credit spreads are way down. p/es are at least recently. what about more phrma deals, more energy deals, how about more bank and financial deals? >> well, let's take the last part first. the bank and financial deals, i would like to see some of these regional banks with the bad balance sheets snapped up by the big guys. i think that would really start freeing up a lot of cash. some of the other -- in energy, for example, let's look at some alternative energy acquisitions and mergers. i think that's really in the sweet spot, and so i'm kind of looking for some of those.

the main thing for me is, and i know we've talk about this a lot, is just the business environment, blending with washington, where there's so much talk about increased taxation that ultimately, the consumer is ultimately going to drive this. but there is no question, m&a is down, what, 86% versus last year? so you can almost say that we've -- we've really hit a trough. but the question is, when exactly are we going to bounce back? and i would look for some mergers in the financial industry, and also check out the commercial real estate business. not in and of itself, but for evidence that the credit market is loosening, and there is more willingness to buy risk. and that's essentially what lenders do. >> but, dan, you have to be confident that the virm is changing, that we're not going to see a double dip recession, that you want to put your cash to work, and you have to be able to get financing for part of the deal, right? there's two major hurtles here we have to get over. >> no, exactly.

and that's why i mentioned, melissa, that this would be more informative than predictive, because frankly, i do think we're going to get a double dip here. i think we've got so much money that's coming in to the market, there's so much -- for equity. >> but in that case, look, the government is -- the government is the biggest m&a player in america. they just had a price -- >> larry likes that joke. >> $24 trillion worth. and may be taking over the energy and health care sectors, let us hope not. i wonder can they compete with uncle sam, just a thought. >> and on that thought, let's leave it there. thanks so much. up next -- >> wackos in the antitrust department. i'm sorry, melissa of the. >> up next, we resume our day-long countdown of america's top states for business. scott cohn is live from the secret number one state. we don't even know what it is. what's next on the list, scott? >> i was worried we were too tough with the hints because after the last hour, the crew came up to me because they're

from here, and they were asking where we are. coming up number four in our countdown of america's top states for business. you're watching "the call."

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okay. today on cnbc, we're counting down our list of america's top states for business. last hour, we told you that utah came in at number five. so which state ranks number four? cnbc's scott cohn is at a very secret location with the answer. scott. >> the rec set location, melissa, is the number one state. we'll give you another hint about that in a moment. we do this every year, rank all 50 states in ten categories of competitivaneness and weigh the based on how often they're cited in marketing materials. so we grade the states on their own score card. let's move ahead with our countdown now on state number four. >> iowa, the hawkeye state, makes its debut in our top five at number four, up from number nine last year. iowa scores 1394 out of a possible 2500 points.

iowa boasts the lowest cost of doing business in the country. and while the national economy was melting down, iowa's mostly agriculture economy surged by comparison. the fourth-best economy in the country. it was number 29 in that category last year. not that iowa is immune to the downturn. unemployment at 6.2% is rising, though still well below the national average. foreclosures are up from last year, but still far below the national rate. the top individual income tax rate is 8.98%. the top corporate rate is 12%. the state sales tax is 6%. would's largest employer is the principal financial group, a financial services giant with $236 millibillion in assets. iowa's biggest industry is agriculture, the nation's top producer of beef, pork and corn. interesting, last year's number four was idaho. it fell to number 22 this year, and it's all about the economy.

so where am i? here's our hint. this hour's hint for business. music city, usa. okay. now even i'm confused. that is our hint. next hour on "power lunch," we'll give you state number three, and you can learn all about our study, how we did the rankings, and later in the day, you'll see where your state stacks up. top states for business.cnbc.com. >> thanks, scott. but i tell you, i always got some seriously high taxes, corporate, individual and sales, man. that sounds a lot like you know where. >> bermuda. >> all right. thanks, scott. "power lunch" at the top of the hour. sue herrera, what's in store? >> we have several first on cnbc's for you falling on our watch. first, ford's ceo, the numbers are ought out and we'll talk to allen mulally. the stock has been outperforming its peers and decidedly so. and rider systems ceo, a very

troubled transportation sector, because of a variety of factors. we'll talk to him. and then amazon, given their latest purchase of zappos, do you buy, sell or hold the stock? back to you, melissa. >> up next, julia boorstin at the foreign brainstorm conference with a first on cnbc interview. >> the economic downturn is proving an opportunity for a lot of the tech companies here at fortune brainstorm. i'll be talking to the c eos of one of the companies, coming up, only on "the call."

heavy hitters in the business world are gathering at the fortune brainstorm tech conference in pass deana, california. and julia boorstin joins us live from there with a special guest. hello, julia. >> hi, larry, i'm joined by john chen. john, thank you so much for joining us. >> thank you. >> earler this week you posted better than expected earnings results, higher revenue from licensing and also higher operating margins. and you also raised your full year guidance for the second time this year. what is driving cybase's growth? >> a few things. we're doing very well in mobility. and i think that's a big driver. we have some traditional

database business that did well, especially in the emerging market and then we have the analytics that really surprised us on the up side. >> now, the data business and anlytic business is really the core of your company. how have you managed to grow that business and grow market share in this economy? >> first of all, it's about 70% of our business. and the other thing it's really product cycle. we're kind of fortunate, because a couple years ago, we made an investment in technology, and it kind of paid off right now. that's a lot of new things in terms of security, in terms of mobilizations for the customers. so they just kind of are upgraded. >> now, some of your competitors are oracle and sap, very big rivals. you managed to gain mark share. how has that come about? >> are if i share with you the secret, then my competitor will know. no, actually, i think it really is focused all on innovations. we just happened to have the innovation cycle right now on our side. i'm sure it goes in cycles. >> speaking of cycles, obviously

we are in this downturned economic cycle, and your clients are businesses. >> yeah. >> based on their spending trends, do you have any sense of a turn around in the economy? >> you know, it's still going to be tough. i think it's going to be slow. people are going to be very cautious. but their needs are out there, you know, so kind of like you hear that all of the time from ceos. the deals are there, it's taking longer to close. so i'm not concerned on the downturn, but i think the next six, twelve months will be challenging. >> mobility is one of the fastest growing parts of your company. how important is mobile computing going to be in the future, and what is the future of your mobile software? >> oh, wow. that's -- it's going to be huge much i mean, you see a conference, there are so many different ways of using mobility. this is going to be a part of corporate life, because it's already a part of consumer life, everyday day. this is so new, so early, it's scary, actually. so we're trying to introduce

that component to the enterprise, and this is why -- how we are doing well at this point. >> great. well, thank you so much for joining us, john. i really appreciate it. we'll look forward to seeing more of those mobile applications. >> thank you for having me. >> melissa, back over to you. >> thank you so much, julia. we'll be right back with "last minutes. i just gave you some at the restaurant. yea i know. i threw them out. they were old so... old! they are rollover minutes. they are as good as new. ya know not everyone gets to keep their unused minutes. and these days we can't afford to be wasteful. saving minutes... ...saves money. yea. (announcer) only at&t's familytalk with rollover saves your family's unused minutes. and saving minutes saves money. for back to school, get the pantech matrix for $29.99 after mail-in rebate. tdd#: 1-800-345-2550 if i'm breathing, i'm thinking about trading. tdd#: 1-800-345-2550 i always have my eye out for a stock on the move. tdd#: 1-800-345-2550 doesn't matter if a company sells computer chips tdd#: 1-800-345-2550 or, i don't know, fish and chips.

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all right. it's time for the "last call." >> look at these markets, the european markets, better than 2%. our own markets are rallying higher. i mean, the dow up at its highest point since early january. the nasdaq is having its best rally, we closed higher today since 1992. what's going on, larry? are they finally listening to you? is it because it's red day here on cnbc? what's the deal? >> are i think it's the the indicators across the board, including today's unemployment claims. i was afraid they were going to rise by 100,000. they didn't. stayed low. housing numbers are good. here is one. the credit spreads which are very important, money market spreads, libor spreads, bonds and yield and investment grade, all of those spreads are lower today than they were with lehman brothers. we are at pre-lehman levels.

lehman was last september. why can't the stock market get back to those levels, which were -- >> 1251 on the s&p, that's what we were looking at, and now we're below a thousand now, at 9 -- >> that's something to think about. that's what you have to think about, whether we can make it back. >> another 20%. >> doesn't mean all-time highs, just a nice erbc dain rauschase terrible market. >> that's it for "the call." >> and now, "power lunch," up next. >> this is cnbc.com news now. >> stocks rallying, the dow rising above 9000 for the first time since early january, the nasdaq on its longest winning streak since 1992. gains after the national association of realtors reported a 3.6% gain in sales of existing homes for june. and the mayors of hobok in new jersey and state assembly men

are among 30 arrested as part of a corruption and international money laundering probe. i'm rebecca jarvis. hello, everyone, and welcome to "power lunch." i'm sue herrera. we're up above the 9,000 level for the first time since the beginning of the year. 3m, one of the dow winners right now, although increasingly, there are many more. the nasdaq on a tear, as well, looking to make 12 straight trading days of gains. >> we're excited. dow 9000. i'm michelle cabrusso-cabrera. ford shares driving higher after they lost less money than feared. ceo allen mulally will join us to talk about the road ahead. >>. president bomb planning to pay for his health care plan by slapping a surtax on families making over a million dollars. is that fair? watch the sparks fly on the power grid. here is what else is on the menu. where do we go for that?

>> i'm mary hatch son. mcdonald's conference call taking place. learn how the fast food giants are impacting second quarter results. >> i'm john harwood. last night the president tried to sell the public on health care reform and now is back behind closed doors trying to get democrats and a few republicans to go along with his plan. i'm diana olick in washington. home sales have risen, prices still down 15%, and sales now all based on homes at or below a quarter million. >> thank you, diana. market action. oils higher, the s&p 500 touching its highest level since early november. the nasdaq going for 12 in a row. scat wapner kicks it off at the new york stock exchange. scott, we're above 9000 for the first time since january. >> and michelle, that's one of the interesting levels that traders are talking about here. the other is on the s&p as w