970 level. now you have a technical level of 985, as one that traders down here, at least, are talking about. that's the story. you have an economic report out here as diana olick was mentioning on the housing front. existing home sales kicking up and inventories kicking down. so a significant move not only in the home building stocks, but in the market as a whole. here is the home builders, as i said, across the board. telecoms, one of the strongest groups today, really on the back of a stronger than expected report from at&t, the wirelesses sector there. very strong, record low. and finally, let me mechanics the transports here, because it's a significant story. up 94 points or so. u.p.s., rider and union pacific all higher today. either in line or exceeded expectations, even though there still is weakness across the board. and i think "power lunch" is going to speak to the ceo of rider coming up. so you want to pay attention to that. as i send it up to the nasdaq and brian shackman. >> we're at levels we have not seen since 1992.

we're up 2% here. better than 3 to 1. i mean, i always like to go back. cosby show was still on the air, johnnie carson on the air. this is a winning streak that we have not seen in a long, long time. let's take a look at what's working. ebay, dell, research in motion, google and on the heels of earnings. amazon and microsoft will be the big names after the bell. they, of course, report -- when we close today. amazon gets zappos.com. and microsoft on target to launch windows 7 on time. celgene, solid earnings and a multiple my homa test was stopped for good reason, and that is 15% up side. and earnings up 36 bucks. med red sox being taken out by bristol-myers, and up close to the $16 mark. and the one negative, by the way, chips, qualcomm, and sandi sandisk 12.7% to the down side. sharon at the nymex.

>> the way wall street is reading the reports, we have the housing data and that is certainly helping oil prices, which is pushing toward $67 a barrel. but the other factor helping oil is gasoline. we're seeing a nice rally here in gasoline futures. and that has been brought on by the fact that refinery runs continue to be cut. they're down about 2% in the past week. and that means a lot of refiners not making much money on their margins, and so they are cutting production. and that leaves a lot of folks to believe there is going to be less product out there on the market. both gasoline and heating oil. we're looking at heating oil cracks also rally strongly today. the heating oil prices also higher. but natural gas, not so much. the industrial demand that folks need to see for natural gas to heat back up, well, that is not happening right now. and that is weighing on natural gas prices. we get the report from the energy department about supply basically in line about expectations and we continue to watch what is happening with weather. but you have to remember what diamond off shore ceo said

today, and that is that rig counts are down to about 15 from about 100 two or three years ago in the gulf of mexico. rick santelli, to you in chicago. >> thank you, sharon. before we get to the big rise in yields, let's talk about the big supply scene that's coming up next week. you know, monday and tuesday, we're going to have an assortment of t-bills. now, we know most of them. we know with the three, six and one-year bills are going to total. $90 billion. but what we don't know is the drive-by that will get announced on monday for the one-month bill to be auctioned tuesday. so $90 billion we know of in t-bills. then we have 2s, 5s and 7s. combination there of 42, 39 and $28 billion. that comes out to $109 billion. now you have to add in 20-year tips, and reopen the issue that will be early in the week. that's for $6 billion. so let's get this all added together. there is going to be $115 billion, including the tips on the coupon supply. $90 billion in bills without the

one-month bill for a grand total of $205 billion next week. so that, of course, as you look at the charts, may be a factor pushing rates up. but the big one-up in stocks is also a huge contributing factor, as we are now at 363, right back getting close to that 370 that we visited briefly on monday. back to you. >> thanks, rick. that's a big move today in the ten-year. a flood of big names out with earnings today. mcdomds among them. mary thompson at earnings central listen in on the conference call. analysts are loving it. >> good news. the giant is expecting commodity price increases to moderate in the second half of the year, and they say that's expected to contribute to improving margins for mcdonald's. the illinois-based company also sees a modest impact, 4 cents a share from currently see translation, down from the 17.7% negative we saw in the first half. mcdonald's is seeing some trade down on products, but that is

being offset by improved traffic at stores. and the firm isn't expecting to push prices much higher on its menus over the next couple years. sales were decent over the u.s. and in europe. and in asia-pacific, australia was a standout, but china weaker. same-store sales declining, especially in the south because of factory closures there. on products, it says its premium copy sales are on track, with coffee sales accounting for 12% of total sales, and also in the launch base of the premium angus burger, which is forecasting to be accretive to its earnings. mcdonald's reporting second quarter earnings that were in line of 95 cents a share, but revenue missed estimates. we want to touch on two other dow components. 3m handily beating estimates by 26 cents, helped by cost cuts. the company also raising its full-year forecast. and at&t is beat by 3 cents. and the telecom giant's land line business and after the bell, microsoft and american

express. sue, back to you. >> thank you so much, mary. on the back of his prime time news conference, president obama today holding a town hall meeting to push his health care agenda. is the president pushing the needle on his health care plan, or is it stuck? our chief washington correspondent, john harwood, joins us from the white house with more. and john, some are saying the rally in stocks today is partly because the market thinks he's going to have a much tougher time pushing this through than originally thought. >> he is having a tough time, sue. before i get to that, can i ask you, how come i don't get the cool bj's dance music? >> that's easily arranged. i promise, next time around. >> call it health care central, and it will work. look, guys, one of the reasons why health care is so complicated, and so difficult to do, sue, is that there are so many issues involved, it's extremely complex. hard even for the policy wonks to follow. and so what you saw president obama doing last night was to try to raise the stakes, cast out on the motives of the

enemies. it was no accident before he took questions from reporters, he said his goal in defeating health care, his goal was to break the president. >> this isn't about me. i have great health insurance, and so does every member of congress. this is about the letters i read when i sit in the oval office every day. and the stories i hear at town hall meetings. this is about every family, every business and every taxpayer who continues to shoulder the burden of a problem that washington has failed to solve for decades. >> now, of course, the president is taking that message on the road today to cleveland, where he is going to appear at the cleveland clinic, and try that public aim again. but the private game is really what counts, and we can see from the president's emphasis last night on cost control, it's moving to the right, and we're going to see this legislation evolve to the right. the question is, can you maintain critical mass among democrats, get a few republicans, and keep the ball moving forward, even though they're not going to meet that august deadline for the recess to have legislation passed in

both houses? i still believe, sue, they're on track to get something done by the end of the year. >> john, thanks very much. coming up next, ford literally blew past earnings estimates. so first on cnbc, he's ready to go, ceo allen mulally will talk to us about how they did it and what the road looks like for ford. >> and coming up, a lot of positive news on earnings, so can they keep fueling the rally? plus, president obama planning a millionaire tax to pay for his health care plan. is it fair? and get ready for the "fast money" halftime report coming up at the quarter of the hour. taking its rightful place

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all right. look at your screen. dow jones industrial average above 9000. you haven't seen that since january 6th. we've got existing home sales data that was positive. we've got weekly jobless numbers that people seem to think pain points to an ending of the recession. and maybe, is health care dead? these are all of the reasons being toss out. a big sell off in treasuries, we'll talk about that, as well. >> and earnings, too. >> and earnings, too. >> that's right. which leads us to ford, because the market is going through its earnings numbers with a fine-toothed comb, and it appears they're getting back on track. the stock is up almost 10% on this trading session. the company reporting a profit more than $2 billion in the

second quarter. it expects third quarter production to grow, as well. the stock is now trading at almost 7 bucks. phil lebeau joins us from deerborn, michigan with allen mulal mulally, a first on cnbc interview. >> hi, a big day in deer born, at the headquarters of the company is within spitting distance of turning a profit when you strip out one time items in the second quarter compared with the street expecting a loss of 48 cents. ford ceo's allen mulally joins me live. allen, you know that everybody is now saying, don't wait until 2011 to turn a profit. when can we expect ford to be profitable? can you do it by the fauourth quarter? >> clearly as we shared this morning, with everything going on in the market and coming back slowly, that we reaffirmed our guidance we would be profitable in 2011 with positive free cash flow also. >> therefore, you're not going to move up the guidance. >> no, with everything we know right now, it looks like it's going to be a slow recovery, and so i think our guidance is appropriate at this time. >> i want to show the cash burn

rate, because if you go back to the third quarter of last year, you were essentially losing, in cash burn, $83 million a day. you cut that do you to a billion dollars this most recent quarter, $11 million a day. do you finally get cash flow positive in the third quarter? >> we haven't given guidance on cash flow in the second half of the year. outside of the fact that we believe, with the plans that we have in place, we'll actually burn less cash in the second half of the year than we are in the first half. and as you pointed out, our -- very important objective was to take the 3.7 in the fishing and reduce it in the second quarter, which we reduced to one so our plan now is to reduce that in the second half. >> but not to give guidance on being cash flow positive. >> in our best guidance right now with everything we know -- >> i'm trying to get this out of you. >> the product and the production system. >> why not do another equity offering? i know there is speculation, you want to pay down as much of the debt as possible. you raise $3.6 billion with one equity offering. why not do another one? >> well, clearly, there are lots of ways to improve the balance sheet, and our commitment has been that we over time will

continue to improve the balance sheet. in the last quarter, we raised $1.6 billion in equity, and we also paid down $10.1 billion of the debt. so people believe in ford, we have those options and so we'll continue to improve the balance sheet going forward. >> if we go back to the beginning of 2007, since then ford has essentially cut 50,000 jobs in north america. and it brings up the question. you are looking at a company now that is on the verge of getting back to profitability. will those jobs be gone for good? is there any chance of bringing back some of those 50,000 jobs, or are we essentially looking at productivity the way it goes? from here on out, we're going to be profitable with productivity. >> i think there is a real chance with our plan to go forward, they're going to be able to offer opportunity for employment again. and the real reason is, and you've covered it very well, the strength of our product line. because we are committed to have a full product line, small, medium, large, cars, utilities and trucks, and every one of them being best in class, in quality, efficiency, safety and

value. and we're delivering that promise with every vehicle, and so bouncing along the bottom. but i think over time, you're going to start to see us grow and provide a lot of opportunities. >> rolisticly how many of those 50,000 jobs might be coming back. >> it depends on the market and how fast it comes back. but our most important objective is to get ford back to profitability, and growing. based on the strength of these great products. >> you have an application to have an industrial bank status. and there is a call that you put into senator mcconnell asking about that. it brings up the question whether or not gm and chrysler -- with gmac providing their financing, have an unfair competitive advantage. do you believe that they do, because of the gmac status? is. >> at the present time, we see no indications that we're being disadvantaged. now, clearly, that's an area that we want to watch, because we -- you know, we know the government wants to have an equal playing field. we are very supportive of the u.s. government temporarily helping gm and chrysler for the good of the industry and the good of the economy. so right now, we don't think

we're going disadvantaged. but it's something we all want to keep our eye on. >> your stock is up 200% since the beginning of the year and we talked with one analyst this morning on "squawk box" who said, risen, if these guys continue at this trajectory with breaking even, we see the industry going up 11 to 11.5 units, there is a chance we could see a 15, $16 stock. what's your perspective? >> well, again, the stock price is a result of all of the actions we're taking. so the most important thing we do is stay on our plan, keep restructuring, production is a real demand. keep accelerating the development of these new products, continually improve the balance sheet and leverage our assets worldwide. if we keep doing that, then people will be rewarded appropriately. >> it's a plan that's working. ford ceo allen muscle al mulally. there you have it, try as you might to get better guidance to whether or not they're going to be profitable any time soon. he is sticking to the conservative nature that ford --

and the future they have laid out there. >> keeping his options open. phil, thank you. >> you bet. let's show you a picture of a live news conference going on at the u.s. attorneys office in if newark, new jersey. about to get under way. stay with us here. this one is complicated, but fascinating. the mayors of two major new jersey cities -- now we're up to three, arrested today along with several rabbi as part of a major corruption in international money laundering conspiracy probe. the u.s. attorneys office says approximately 44 arrests have been made. they have arrested so many people, they had to rent a bus. and you thought the soprano was fiction. and there may be organ selling involved? >> it may be connected. it's a separate tract, but they think some of this may be connected to the international money laundering or at least the corruption and kickback, and this is from jonathan deans from nbc news. >> and selling kidneys, et cetera and having to launder

that money. and it is just -- a scale that -- keep reading the details, and it's unbelievable. >> you guys are making this up. >> it sounds like a movie, doesn't it? >> unbelievable. >> or a thriller, a book, certainly. it's going on a short ways away from where we are. and we're going to follow that -- >> for those who live in new jersey, are we surprised? >> unfortunately, no. >> let me go from that story to this. but still exciting stories, 3m, mcdonald's beating, at&t beating, bristol-myers beating and another solid day for earnings. but revenue is still light. so can these numbers keep fueling a rally? it's task force time. and i know that's not as good as the other story. >> you did a really good job. and then we go out to the hamptons. take a look at that. well, if you would like to buy this house, it's for sale. details on home prices in the east coast playground of the rich and famous. how much have they come down? we'll talk about that in just a few minutes. back in a minute. we're above 9000 on the dow. welcome to the now network. population 49 million.

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. and welcome back to "power lunch," i'm darren rivell, lance armstrong currently third in the tour de france after 18 stages will be back for 2010. he will be sponsored by radioshack that will sponsor his new cycling team. interestingly enough, radioshack will also sponsor him as a psychist, a runner and a try athlete in 2010. and we'll have more on this deal in street signs. >> a jump in existing home sales, along with better than expected earnings helping to lift stocks today. but will earnings continue to hope fuel the rally? joining me now, jamie cox, managing partner of harris financial group.

and ira, are you surprised by this rally? >> no. i think it's been coming. now we're getting people who are getting long in this market. the shorts have been really laid aside. and people are afraid that they're going to miss now what we've seen as better earnings going forward, and yes, it's the early part of it, and they're all starting to jump in, because there is a lot of money sitting on the sidelines. so this part does not surprise me at the time. >> can help but notice the selloff in bonds today, leading to the question is money coming out of bonds or fixed income generally in stocks and equities? >> i think so. i think there's two contributing factors. one is the supply of treasuries. it keeps coming and coming and coming. in addition, yield spreads continue to compress, and that money has to find a home somewhere. it's going into equities. so, yeah, i think that trend is going to continue, probably for the remainder of the year. >> ira, one of the things spo spooking the market early on, was the aggressive agenda by the administration, whether you were talking about financial

services, whether you were talking about health care. some of that is being scaled back. partly against the president's best wishes, perhaps. but does that factor into the type of move that we've seen just the day after his prime time news conference? >> no, i don't think that has anything to do with it. you know, of course, the financial markets always level when things get bogged down, because the more they bog, the better the legislation gets. >> but, ira, if we think health care reform isn't going to happen, is that good for the markets? >> i think health care reform in its present state, the rush through -- i think the market will view that as a positive, because longer it drags on, the more -- the better policy will get. >> jamie, any sense that you think that maybe the president didn't make his case when the cbo comes out more than a week ago and says these bills don't achieve any of the mission? did that essentially help slow down health care and is that part of why we're seeing a rally in the markets? >> i watched the press conference last night, and i

didn't really learn anything. i mean, the president is certainly shooting three pointers, he ought to try with lay-ups. following chairman bernanke's call and focus on cost savings first, and worry about longer range issues down the road, instead of trying to dive into this thing, head-first. and i think the democratic blue dogs in the senate are definitely putting up road blocks to him. and i think he's going to have to take this in pieces and i think that's positive. i think that's -- that's what i dwle glean from the news conference last night. he doesn't have it yet. i think we do need health care reform. obviously, cost is important to control. but you can't just ask the richest americans to subsidize it. you can't tax an economy that is in recession. you just can't do that. so that doesn't make any sense. so i think if we focused on the things we could do, like cut costs, then down the road we could worry about how to pay for other long-range issues like coverage and things like that. >> gentlemen, thank you so much. appreciate it very much. we're going to talk more about what we were just discussing there, obama raising the stacks, backing a plan to pay for health

care, by slapping a surtax on millionaires. is that fair? and here's another question we're going to keep following. today's wall street rally, the health care overhaul is dead? sparks are going to fly in our "power grid" debate. >> and coming up at 12:45 eastern, get ready for the "fast money" halftime report. >> it's a special rally edition. we'll go to chicago to see what the options kits are betting in terms of where this rally goes next. and also what's working in this market and what's not working. mcdonald's, the only dow component trading lower in this session. we'll give you the trade on the halftime report. but first, more "power lunch" right after this. oof!

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welcome back. for those of you on radio, 2% gain on the dow, and better than 2% gain in the nasdaq and halfway through the trading day. bristol-myers jumped almost 30% in the second quarter, thanks to higher sales of several key products and lots of cost-cutting. kimberly-clark posting a slight dip in quarterly profits, weighed down by cost-related job

cuts. still, the consumer goods company managed to beat analysts' estimates. northrop grumman missing the street. profits fell in the second quarter due to pension costs and recent results in shift building. president obama slapping a surtax on families making over a million dollars. of take a listen. >> the house suggesting a surcharge on wealthy americans, and my understanding, although i haven't seen the final versions, is that there has been talk about making that basically only apply to families whose joint income is a million dollars. >> is that fair? given today's rally, what message is wall street sending in wash? do they think this is really going to happen? a "power grid" debate now. guys, you know the rules. you each get 30 seconds to state your case, because we have two questions today. julie, let's start with you.

the clock starts right now. >> well, first of all, i think you see the wall street rally right after the president gave his speech, so i don't think one effects the other, except to say that hopefully businesses understand that in the long-term this helps them, doesn't hurt them. secondly, look, the bush tax cuts provided more than twice for the top 1%. people making over a million dollars than they did for the middle class. so i think it's time we bring it back. >> greg knapp, is it fair, and do you think wall street will rally today because maybe think think this is dead? >> absolutely not fair. will not help the economy. i think wall street is rallying because they know this bill in its its current form is not going to go through. the house plan is for people making $280,000 or $350,000 as a couple. only nancy pelosi said a millionaire tax. they're already paying almost double their fair share of taxes. >> julie, response to that? nancy pelosi has said it, but it doesn't necessarily mean their

going to change the bill. >> of course they're going to change the bill. i don't know if greg ever worked on the hill. i have and if the senate passes a bill. they try to reconcile those two and the president has to sign. we are very far away from what the final piece of legislation looks like. obama has come out and said what he supports, which is not what the house supports. he supports a surtax only on people making over a million dollars. it's a far cry from what nancy pelosi is suggests and for greg to say otherwise is capricious. >> there is not a single bill that says what obama said, julie. look at the actual bill. >> i haven't seen a bill out of the senate finance committee, greg. >> i know, but look at the ones already written. obama won't give details, because obama knows he can't get what he wants. >> he just did! did you not watch the press conference yesterday? >> i watched it. >> well? a million dollars. >> everything he says, actually a lot of it sounds like it's going to be conservative. the government won't get involved with your decisions. you will get to keep your plan. but if you read the bill, julie, no. >> what about the argument that when you go after the high-end

incomes, whenever you have one of these really progressive tax structures, what you end up with is really uneven revenue, because that end of the tax structure jumps up and down, constantly, depending on whether or not we're in a recession. california is in trouble, because they have such a progressive structure, wealthy leave or lose money, they lose money. >> let me point you to the bill clinton tax structure which provided us with a balanced budget and growth. the highest growth we have had since world war ii. so i would say to you progressive tax structure does work and incentivizes people. and the bottom line what the bush administration did is provide an exorbitant tax cut to the same 1% and as a result, we have a huge budget deficit. >> first of all, a tax cut let's people keep their own money, doesn't give you anything. it let's you keep your own money. >> come on. how do you want to fund operations? >> hold on a second, now. and this bill -- also, the house bill says they're going to put a payroll tax on employers who don't provide this insurance.

so we're actually going to penalize companies for growing, because the tax goes up to 8% of their payroll. talk about -- i'm going to outsource. i'm going to move my company. >> how many people are growing -- how are you going to penalize -- you know the reason i provide? >> that's a penalty for growth. >> greg, i don't know if you have employees, i do. and the reason i have health care is two reasons, one it's great morally, and the other is i'm better off if they show up to work. >> we've got to wrap that up. >> let the free market open it up. >> free market has failed on this issue. >> we never had had it! >> all right, guys. the suspense is killing me. what is the top state for business in america? scott cohn has the next state in our exclusive cnbc countdown. meantime, a rally on wall street, a triple digit advance, above 9000, a 2% gain in the nasdaq. sell off in bonds and the dollar. back in a moment. (announcer) this is nine generations of the world's most revered luxury sedan.

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all right. dow is up 170 points. look at the nasdaq, up 2 1/4 points, up 1968 on the nasdaq. last time the nasdaq closed above the 1960 mark was on october 2, 2008. if this would make it, it would be 12 straight days of a winning streak for the nasdaq. >> we're looking at the top states for business. we continue the countdown of the top five from our mystery location.

cnbc's senior correspondent scott cohn joins us with number three state for business. scott. >> hi, steve. where are we? well, you'll find that out in due course. but let's continue with our countdown as we rask all 50 states in ten categories of competitiveness. we know utah was number five, iowa number four, and here is state number three. nch>> colorado, the centennial state, makes a return appearance in our top five. number three up from number five last year. colorado scored 1405 out of a possible 2500 points. this state makes its strongest showing in the economy category. number five, up from number eleven last year, as well as business-friendliness where it repeats its performance on legal requirements. colorado is bucking economic slow down with its two-year push toward green jobs. including wind and solar energy.

which now account for as many as 91,000 jobs in the state. unemployment is still rising, but at 7.6%, holding below the national average. and colorado is rebounding from the real estate crisis, while the rest of the country suffers. foreclosures are down, 11% from last year. colorado's corporate and individual income tax rates, a flat 4.63%. the state sales tax, 2. 9%. colorado's largest employers, allstate insurance, and lockheed martin space systems, the largest industry, professional and business services. okay. so where am i? here is this hour's hint for state number one. look at the screen closely as we tell you this place is for real. think about that. next hour on "power lunch," we'll give you the runner up in america's top states for business. you can read more about our study and find out conveniently eventually how your state stacks

up at topstatesforbusiness at cnbc.com. >> you should get that. >> of course he means reel, r-e-e-l. >> not california. we know that. >> what about wyoming? >> we'll find out. scott is going to tell us. in a couple of hours. >> still ahead, rider system is a major transport company. first on cnbc, the ceo. >> and we head to the hamptons to see how the high-end homes are holding up. >> up next, the dow blasting >> up next, the dow blasting through 9000. see you on the other side. market experts show you how through fidelity's extensive trading knowledge center. and fidelity gives you free research from 15 independent firms, with accuracy scores... to help you decide which analysts to trust. find out why more and more active traders are turning to fidelity for a smarter way to trade online.

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welcome to the "fast money" halftime report, we're getting to the heart of the action as it is happening. the market is in full rally mode, better than expected e send the dow above 9000 for the first time since january. where should you put your money? let's get to the word on the street. our "fast money" crew today, joe terranova, and brian sulton an option action trader and patricia edwards of store house participants. let's talk about this. joe, i don't want to be the downer here. it does look good. >> melissa, this is exactly what we have been talking about on the show. and this is about asset allocati allocation, about money managers having to chase performance, and i think we have caught a worth on the show tonight. i want to talk to carter, because i truly believe is a

breakout. >> option trade others are agree with joe. definitely playing in a breakout to the up side. all week long, we saw up side call buying in the s&p 500 options. the 980 strike up to the 1000 stroik. i think the premiums are overdone. i don't know that we continue to rally going forward. we even saw goldman sachs firm trader take the opposite side, and sell that type of stuff. we know how good goldman has been in trading the last couple quarters. i wouldn't bet against them. but people have gotten the technical analysis right. the next stop is probably at the s&p. just not gapping. >> john, you know what strikes me is the areas that had been the trouble spots of this market, the home builders, they are up on existing home sales data out for the month of june. also, the iyr, that is also trading sharply higher. all these concerns off table, as far as you're concerned at this point? >> no. and, in fact, i think you're ç about to get all those concerns

back into focus, because as we get to big numbers like 9000 is for the dow, we end up getting folks that now switch over and say maybe i'm going to protect a little more of my gains. we have certainly seen a fair amount of call selling, put buying going into this higher number for the dow. and i think that's why we're seeing the vix also move up. >> so patty edwards, you would expect sas the dow approaches or s&p approaches the benchmark numbers, you're going to see the switch from the high back seat beat atoday back to the more safer areas of the market? >> absolutely. you know, i really believe that the market can be re -- remain irrational longer than you can remain solvent. so i don't think you go short, but watch it. we've got a breakout, but we don't have the earnings power to support this, in my opinion. and i think we're going to have a bit of of euphoria followed by a real cold shock of reality. >> all right. let's move on here. i know, joe, you're shaking your head. but we've got to move on here. and i think patty's point is a

good one, though, actually, joe, because the earnings have been coming in, but as you have talked on the desk yourself, joe terranova, it is cost-cutting, not the revenue growth we are seeing from the company. so the quality of the earnings are in question. but let's move on to the nasdaq. that's another area of the market certainly surging, shooting for its twelfth straight gain. ebay contributing significantly to the nasdaq's gains up more than 10% following its earnings release last night. and the big question, of course, microsoft is on deck. jon najarian, can microsoft keep this tech love going? >> i think they could. i question a little bit whether amazon can, because the move has been so exaggerated. but joe, you're sitting next to mr. terranova who has been pounding the table for binge bing. i won't be surprised if we hear from microsoft about whether or not they are indeed taking a look atia who.

we're expecting to hear something today about that. >> i'm sorry -- microsoft story is bing, it's more about bing, it's windows 7, it is the entire strategy where they are getting far more aggressive and going back to amazon and ebay, last night ebay give you a great look inside at what you're going to see and amazon is above 90. we talked on the show, once it gets above that 9 number, usually goes to 10. looks strong. i expect strong earnings from amazon tonight. >> 7 and 8 and 10s, joe, but where we are doubters out here in general about the levels and whether or not we can sustain this, does 10 necessarily follow 9 in this case or 9 following 8 for amazon? >> well, you know, certainly -- on a technical basis, 10 usually does follow 9. when you see the 9 hit, it goes to 10. it's just a psychological feeling out there. a euphoria. tech is in play, and it's been in play over the last few weeks, outperformed and done phenomenal. we mentioned microsoft. not only are they innovating,

creating innovating, creating new products, they are cash heavy right now. microsoft is actually almost becoming a bank right now even. they're lending out to vendors, lending and financing people that need the money as long as they're promising to use their software. there's no bank that can even compete with that. they're going to collect 5% and sell their software to them. it's going to be that way going forward. >> let's talk about consumer shares, rallying strongly with the homebuilders, retailer, staples, all higher. patty edwards, it's a great move by the sector but i want to ask you about with mart. walmart is not participating as strongly as the rest of the retailers. do you have any doubt here about walmart's future, especially on the heels of the citigroup note that said that walmart will basically tread water for now. >> you know, i think that walmart is the play once we realize the economy is not as on fire as everyone believes it is. a being said, you know, it is the biggest thing in retail. and it takes a lot to move that

stock. i think that they are going to be the long-term winner. and i continue to hold it myself, but i'm not sure that you're going to get the quick pop out of it because it's just not a high beta stock. >> i'm going to cheat a little bit here and go to the sort of retail/technology stock. i'm talking about palm. palm is down by a little bit more than 2%. is this any more of an opportunity? we had strong results out of apple there. and rim is higher by 4% today. why is not palm not participating, in your opinion, and is this a buying opportunity? >> i don't know necessarily i like palm. i agreed back in options action on our show, dan talked about selling palm and he was more of a believer in apple and rim. i like that idea. i like those time of names going forward versus palm. i think apple and rim are in a better position to do what they need to do. they've already gotten to a point researchwise they need to be. palm is trying to catch up. they're creating a new, innovative product but i like the apple/rim play over the palm play. >> let's go to the fast line here, despite today's rally we

do have one dow component trading lower. we are talking about mcdonald's. they're recording second quarter lower. pete, the pit boss is on the fast line for us. pit boss, i know you love the mccafe. you're drinking a mclatte probably as we speak. is this a buying opportunity here? >> i do. and to patty's point and some of the other folks out there, you know, you're talking about beta plays right now. and mcdonald's has certainly been a play where it's been based upon a weaker consumer and folks may be trading down a little bit. i still go back to what we've been talking about for a long time, the explosive growth potential they've got going into china. i think that's an area that you still have to look at from the emerging market standpoint. now that you've got a pullback, i think that gives you an opportunity. people are looking for other areas for beta. they're not getting it out of mcdonald's or walmart but i still think walmart/mcdonald's are great play because i don't think the volatile si done in this session or the next couple

of months. >> topic change, but quick touch on biotech. bristol-myers buying med vex today. we have to have extreme value. how do you play this if you know that a ceo like the bmy ceo is talking about acquisitions already? >> the clear point here is the fact that they missed out on imclo imclone, outbid by lilly. they needed to build out that whole pipeline. this is what they're doing. all the different big pharma names are trying to build on the pipeline and find ways. they can't always do it organically. they've all got cash. i think you can continue to look at those names and as they build in the biotech space, i think that does give you the explosiveness you mike looking for for more upside, whether it's merck or pfizer or bristol-myers or lilly or any of those names. >> pete, see you tonight. time now for fast and furious heading into the close today. american express reporting after the bell. do you buy, joe?

>> long, i'm staying long. love american express. >> ford is higher. 10% today, better than expected earnings. what's the play? >> i think that ford is the long-term winner out of the american car companies. i love what mulally is doing. today's move is a little bit extreme but if you buy today you're still going to be happy with it a long time from now. >> highest levels on ford in a year. amazon reporting after the buy. john, do you buy? >> i sold out my entire amazon position now. if we get an unusual call activity, i'll jump on it. for now, i'm on the sideline. >> buffett favorite, burlington northrop today? >> i'd like to wait and see what their earnings are like. fit gets up more than 4%, then i get it. >> that's fast and furious. on tonight's quat fast money" don't not miss an interview with john donahue. but first, up 12% today on better than expected results. carolyn talked to the company's ceo in the next hour. but first qu"fast money" contins

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welcome back to the "fast money" hour. do you buy or sell. patty, kick it off. >> you know, you can't fight the tape. i still am very confident that i would buy with a finger on the trigger to sell. >> i would actually be a seller at this level with a finger to buy. i think it's trend is still to play. >> dr. j?ñ >> microsoft strengthen, then i'm an aggressive buyer to the close. >> joe? >> melissa, let me point out oil, pressing up above 67 bucks near the highs.

that's important. that keeps the s&p strong. >> good point there. that does it for us here. don't miss tonight "fast money." we'll have instant analysis and reaction to both conference calls. up next, "power lunch" takes the housing market live from the hamptons. see what else you are working on. >> watching this rally on wall street because partly we're getting more upbeat economic data, except in one key area. that, of course, is jobs. can you have an economic recovery without job growth? plus, the ceo of ryder systems will join us. first on cnbc interview to talk us to about the latest earnings and outlook for their business. and amazon reports earnings after the bell. we'll take the online retailers, too. all of that when we come back. a rally for stocks as the major averages so far headed for their highest closes of 2009. the dow is above 9,000 for the first time since early january. ford ceo al mulally tells cnbc

they remain on track to return to profitability in 2011. ben bernanke will testify before congress for the third time this week. he'll talk to the house financial services committee tomorrow tomorrow about financial regulation form. that's cnbc.com news now. i'm courtney reagan. welcome back, everybody, to the second hour of "power lunch." bulls in charge today. dow is above the 9,000 mark for the first time since january. alcoa, 3-m and a number of key dow components are winners. the nasdaq meanwhile on track to make it 12 straight days. >> i'm michelle caruso-cabrera. should investors being going along for the ride? we have a first on cnbc interview with the ceo of rooitder system coming up. >> i'm steve liesman. samamazon.com announces a major deal yesterday. is the online retailer a buy, a

sell, or a hold? we're going to ask an internet analyst. >> let's talk about the markets because we have the dow back above the 9,000 mark. scott wapner is at the new york stock exchange. we named aponents that are moving through. >> right now we're at the highs of the day. dow is up 190. i saw a headline before i came down here. i know you were talking about whether the health care situation was lending to this market rally. there was a headline move that harry reid, the top democrat in the senate saying that tl wouldn't be any vote on this plan until after august. it's not going to be on obama time line. the market seemed to move a little bit higher. can't say for sure if it was on that news, but none the less, it's a story the market is digesting with earnings and the economic report we got out on the housing front, housing stocks, the homebuilders were noticeably higher today as well. look at the d.r. horton, k.b. holmes, at&t was well ahead

offest mitts. wireless business at at&t surprisingly strong in that record low churn rate. and 3-m has been another standout today as well as they easily beat expectations. sue, you're looking at the headline right there. let me point out here the dow was up about 180 or so as we started to get that news out of reid, out of the senate. right now it's still sticking 184. >> a little confusion because, you know, the basically initially one of the headlines came out saying that they would act on it before the august are cess. and then as you mentioned, there was a clarification saying they would not be able to act on it before the august recess. the market is getting two different stories. it's definitely reacting to that. thank you so much. >> yeah. >> appreciate it. >> i was going to tell you that i can tell you that look, it's not a secret the plan wasn't all that popular down here. i haven't heard very many people talking about it as being a huge catalyst to the move today. it's more of an earning story that economic report and the technical move higher that we've seen. >> thank you, scott.

and, of course, one of the key components to the market and they're watching is jobs. perhaps better said, the lack of them. so as we talk about the economy, we are getting some positive sign, certainly, about recovery, but the job market is still in a deep slump. so can we have economic growth without job growth? steve joins us again. he's looking at what some people are telling him using the telestrator. >> you can expect a jobless recovery and the reason is because if you look at recession before and recessions now, there has been a change. jobs don't come back necessarily when growth comes back. take a look here. what we did is relooked at the average recession. that's right here. over the 69 to 82 period. what you see here is the decline in jobs is much shallower. now let's go to the more recent period. 1990 to 2008 period. what you see here is much deeper declines in jobs. and then you look just real quickly, what we have here is

the 2008 recession. this is rather incredible. here 5.8%, sorry, 4.67% decline from the peak. now, let's take a quick look at the payroll change. you can see it show up right there. what we will show you is, look, big expansion in jobs, big expanse in jobs. get to 1990, kind of lame. and then, sorry, 2000, kind of lame relative to the other ones here. but one of the reasons might be because of surging productivity. we did the same comparison on productivity. these recent recessions versus the other one. what you see here is productivity drops during the recession but not nearly as much as it did in the prior recessions. of so what does that mean for profits? it means in general, profits during the more recent recessions tend to stay higher than they did not prior recessions. michelle? >> that's a good laying out of the issues, steve. how long is it going to take for jobs to recover? what impact will it have on the economy? company spring loaded to profit from this environment once it

gets spending on track. let's talk to wells fargo senior economist joining us from charlotte, north carolina, this afternoon. god good to see you, mark. what do you think? are we going to see a jobless recovery, recovery in gdp without recovery with the jobs numbers? >> i think we're almost going to see a jobless recovery. there have been a lot of changes since the earlier expansions. we have the notification law where you have to give employees advance notification of layoffs. i think that's tended to spread layoffs a little bit further along than they were. they were more immediate in previous business cycles. and so the inventory swings and swings in demand did not produce that immediate. >> mark, here's what i don't understand. if our economy is so consumer driven, how do you get a recovery in gdp if you don't have the consumer coming back because of the the labor situation? does it all come down to inventory? >> most people are still working.

most of the labor force is any employed. even though the unemployment rate gets a lot of attention and jobs numbers get a lot of attention. among the people still working, they're working less and learning less. so what first happens is that the folks are still on payroll, that are still employed start working longer hours, start earning more commission. and that gives us that lift in demand. and it takes longer to generate a recovery in employment today than it did in previous business cycles. >> mark, productivity has to be another part of it. i want to ask you this. there is some sense out there that there was a panic and panic firing that went on among employers in, say, the post-lehman era, period. is there a possibility that they cut too many jobs and then you could actually have, contrary to what i just showed on the telestrator there, something of a "v" shaped recovery as workers, the substance of the workforce is brought back to work? >> i think it's certainly possible. i think it's also possible it would be a "w." apparently what's happened is

companies cut inventories and production, even well below the underlying growth in demand. and now we're getting a little bit of a bounceback in production back to where demand is. we haven't seen demand pick up. look at retail sales or look at car sales. they really haven't picked up. but production is set to rebound pretty significantly in the third quarter. if we don't get any improvement in demand, after we get that initial rebound and output and maybe employment, it's likely to give way a little bit. >> so-called double dip. mark, thank you so much. >> michelle, worried about the double part before they get the first part. i mean, i understand that. but a guy says, oh, the dow is going to rise. they're excited about that. >> but then it's going to fall. >> the economy is going to rebound but then it's going to fall. >> i think that's -- that's human nature, i think. human nature. speaking of worrying -- >> human nature is the time period. human nature is up the other way, it's never going to fall. >> you know what? people are worried.

that's human nature, which brings us to small business and health care reform because despite the president's push for health care reform, there are some signs that many employers, especially small business owners, are worried, as i mentioned, about the cost. according to our next guest, the 8% proposed payroll penalty directly impacts over 30% of all small firms in retail, manufacturing, and construction sectors. here now is brian hamilton, president and ceo of sage works, leader provider of private company data. thank you for joining us. >> super. great to be here. >> give us a thumbnail sketch of the -- i know et cetera still being form late, the health care reform package. but what type of bottom line impact would it have on the smaller businessperson? >> let's take a global look. there's 26 million businesses in the u.s., right? only 8,000 of them are publicly traded. there's a tidal wave of small privately held companies. many of these businesses are going to be effected. >> by how much? can you quantify what kind of

bottom line hit an average small business would take? >> sure. let's look at the average small business. let's say these guys were selling one dollar. 80 cents is payroll if you impose an 8% tax on that, it's going to directly affect the bottom line. remember, sue, too, these guys are only generally making about 2 cents to 4 cents on every sales dollar. so it's definitely going to have an impact no, doubt about it. >> i saw you work and i thought it was very interesting and the comment here that the 8% payroll tax represents 30% of annual profits. but isn't that something, in a static world, where the small business does not pass along the cost of health care? >> what a question. unbelievable. right. here's what's going to happen. there's going to be an increased cost. these companies are going to have an impact on their profit. we hope over the long run that they will be able to pass those costs to everybody. and that means all of us. by the way, guys, remember if you are running a company and

you hit a certain threshold, and you're growing your business and you are about to go over that next threshold, you're probably going to think, should i hire those additional employees? so remember, there could have an impact on unemployment. i heard you talking about that before. >> thank you so much, brian, for joining us. we appreciate it. we've got breaking news from john harwood. >> thank you. >> he's got more on what's going on. headlines coming out of senator harry reid. what's the bottom line here? there's been some confusion, john. >> the bottom line, michelle, is that the president, to try to get the negotiations in the conference have been insisting on for passage by each chamber individually before the august recess. it's always been up hill for the senate to do. it's very easy to stop things in the senate. now you have harry reid taking the pressure off by some degree saying, look, right now, we're not spending the next two weeks sweating over the possibility we'll do this this. we're not going to do it. >> so the headline here is

they're going to do this after the august recess, that's the bottom line? >> yes. and i would csay this does not represent a material change in the prospects for health reform, but you never know what's going to happen when the house members and senators both go home and meet with their constituents about this subject. >> i think the big push from the white house to get it done before august is because they thought if they waited the chances of passage were lower. >> well, my interpretation of -- yes, you're correct. but my interpretation of waiting means kicking over into 2010. if we get into the fall and senator reid comes out again and says, you know what, we're not going to do this until 2010, then i would say that the ances for passage of taking a huge hit. they want to keep it out of the election season. this is a step along the way. it's a mistarget. >> interesting. >> thanks, john. >> thanks. mary thompson joins us now with breaking news.

mary, over to you. >> a group of kuwaiti investors have been charge with violating securities law. you might recall on monday there was a big pop in the stock of harmon international after a press release was on issued saying a company called the rabian peninsula group was looking at buying the stock, or the company, i should say, for about $49.50 a share. the company came out and said that is false. evidently the u.s. district of the southern -- excuse me, the u.s. southern district of new york is charging this group of investors with basically profiting from these trades ahead of this false news being issued to the markets. and then profiting prior to the sell-off. this also evidently happened with another stock, textron, back in april when there were reports a consortium of united arab emirates was requiring it for $21 a share. you see the sudden move in the stock. this group evidently selling as the stock rose, et cetera. the group includes, apologize

for the pronunciation here, zaeem, kalib. again, evidently they were t. reports were false and all of them profited on those false reports, knowing they were, indeed, false. back to you. >> international version of a boiler room, basically. >> sounds like it. >> thanks, mary. shares of ryder systems higher today. company reported lower profits but it still beat the streetst mate. what does their performance tell us about their economy? first on cnbc we talk to the ceo. amazon, is it the walmart of online retail? the day after the big buy of p zappos, the zoo company.

down into the nasdaq 100, some of the leading movers. take a look, intuitive surgical higher. ryder systems, posting better than expected second quarter results. excluding one-time item, the company posted a gain of 43 cents a share. beat the estimate of 37 cents per share. the stock is up 12%, almost 13% at $31.08. joining me now is greg, the chairman and ceo of reyder system. thanks for being here. you beat the street. that's a nice day to come on tv

and talk about your results. but i'm interested, obviously the results were better than wall street expected. but overall, how is business? you do a lot of long. terl leasing and you have your pulse on a key component of the economy. how is business doing in general compared to last year? >> i think compared to last year, clearly down significantly. i think sentiment from commercial customers, which is who we serve, considerably different from a year ago. and even though, as you say, we beat the street estimates, it's certainly premature to be exubera exuberant. since we serve 15,000 customers over many industries, i think for the most part our customers are being extremely conservative and cautious and we don't think we've come out of this yet. >> you disagree with those who say we've hit bottom that the worst is over? >> i'm hoping that we hit bottom, but we certainly haven't seen any recovery. i think it would be great if this is as bad as it got? but we don't have evidence from our customers yet that things

are improving. they're still being very cautious. >> what are you using in your industry or company for forward looking indicators. can you talk about what that looks like right now? >> yes. a big indicator is how our lease sales are going because that's an indicator of long-terl commit ms. as we said on "the call" today, the pipeline is fairly strong. there's a lot on the order book. but customers are waiting as long as they possibly can to make a decision. they want to be certain that they're going to have the business and the volume and the freight to move before they make those commitments. so those are being stretched. those commitments to sign up for a lease that will run for four, five, six plus years, customers are waiting to make those calls. >> greg no, pun intended. i'm going force you to make a hard right turn here. we've been talking about health care, with reforming health care help your business, hurt it? what would you like to see for health care reform? >> well, clearly we provide health care for our employees

now. but my concern is, depending on what is in the detail of those sorts of bills, just like in many others, if they put a burden on many other customers or many of the people we do business with, and they cut into their ability to hire and to make a profit and do business, i don't think that's good for the economy in general. >> do the current bills do that? do you think the current bill s do that right now? >> probably like everyone else in congress, i haven't read every page. but i'm concerned about the details. >> thank you very much, greg. appreciate you being here. >> you're welcome. happy to be here. let's check back with scott wapner. >> sue, that's our week lie guide to inveszing, certainly a lot of talk about this major move we've had in the nasdaq over the past 12 days or so. it's, again, sharply today. take a look at the semiconductor index. it's a good indication of how far the nasdaq has moved. this is the semiconductor since this the stock, since the november low, it's up 80%. question then become, do you think it's going to continue or are the chips overbought if so

we've got a couple of etfs that play into that. if you're bullish there's a s i semiconductor holder's trust, smh. that's regular long etf for the semiconductors or the pro share ultrasemiconductors, ufd, which is two times the long but it's on the daily return. the bearish side of all of this is the pro shares, ultrashort, semiconductor etf, which is two times the inverse of the daily move there. and, sue, let me point out one quick thing because i know we're talking a lot about health care. so we walked around here. art cashin is faszing comments around that while health care isn't the catalyst to the move today, it's none the less, you know, a supporting, you know, factor is why the market is higher. i think pretty much what we expected and what we have seen throughout the day. wanted to point that out to you. >> thank you very much. up 181 points now on the dow. straight ahead, signs of life. existing home sales are up for the third straight month. maybe one of the reasons we see

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right now the dow is up 182 points. the nasdaq is one we're paying a lot of attention to. better the 2%.

it's on a multi-day winning streak. we may on a closing basis reach levels we haven't seen in some time. right now the dow is posting a strong gain. a number of key components contributing to that based on higher earnings. >> headlines from richard fisher who is saying he started a faint recovery, warn that we won't see return of the former growth rates for a long time. he says he's opposed to extending or expanding the treasury purchase program, which is interesting for the bond market. >> the bond market selling off dramatically. >> along with all that supply coming next week. existing home sales indicating a stabilization in sales. if not in prices, it's somewhat disjoint eed though. they listed at under a quarter of a million. just six-month supply. historically that is good. that supply is based on number of homes. the supply of homes at over a mall? that's 20 months. mostly because the sales pace at that level is so very slow.

not much moving when you're above a million. >> can i jump, michelle? i think it's normally going to be a big spend there. >> i bet you're right. >> more expensive home takes longer to sell. >> these are from diana olick. >> i'm sure she's right. it's worse there. >> and then, nowhere is all that more clear than out in the hamptons that is long island. new report out today showing that sales volume fell 34 .4% in the hamptons this spring from a year ago and prices fell 20.6%. in the priciest areas, as they say, south of the highway, that's what it's called. the medium home price fell year over year to just under $1 million. imagine that, average price. let's bring in paul brennan, realtor with prudential douglas elliman. those stats make sense to you? do you see any signs of recovery? we're starting to see it maybe

on the low end. >> well, things are beginning to improve, let's put it that way. we were a little frightened when january rolled along. but now things seem to be coming back. >> in what way? i mean, are you talking about in the number of sales or improvement in pricing? >> for instance, reynolds, i would say rentals this year, we had a 15% increase in the number of rentals. but 25% down in revenue. january, february, march were very, very slow, saleswise. but april, may, june, especially, have been very good. june, for instance, we've done more this year than we did last. >> so, sir, the house that is behind you, as i understand it, is listed at about $7.5 million. is that correct? >> correct. >> all right. >> that's correct. >> how much wiggle room if you

will, is in that type of price point? i mean, if someone is really anxious to buy that house, how much wiggle room do they have? >> well, it's very interesting. the reason that we chose this house is because we felt it was a good value. we have 12 acres here north of the highway, not south. and it was -- we priced it, we think, at around where it should sale. somewhere between $6.5 million and $7.5 million. >> why should anybody care about the hamptons? is there something broader here on the national level or is this just new york being new york sentric? >> having been born and raised in the hamptons, i can tell you there's something special about it. >> anyone living in los angeles, should they care about the hamptons? >> i think it certainly does for the luxury market. it certainly does for people who

live in luxurious. it tells what's going on as far as the wealthy people in the country are concerned. >> how long has the house been on the market, sir? >> this house, two weeks. >> two weeks. >> we've had ten showings. yes, ten showings. one coming at 2:00 and hopefully we'll have it sold in the next week or so. >> you let us know. thanks for joining us, sir. >> okay. thank you. >> $7.5 million. >> do you want to check it out? 12 acres. >> 12 acres, we could share. right. >> rent it. >> we work in cable. we're not the network side. we're the cable side. all right, coming up, another solid rally with the dow powering past the 9,000 mark. that's why he feels wealthier today. does the rally have legs? we're going to go to the floor of the big board and get the real pulse of the market. and charlie gasparino yesterday touched a little nerve with blogger blasting.

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another huge move in the nasdaq now. welcome back. here are the stories we're following. ford shares are higher after reporting a $2 billion profit in the last quarter, when you exclude certain items. the ceo alan mulally telling cnbc that ford will burn less cash in the second half of the year. shares are up 10%. newspaper business is struggling to survive but "the new york times" surprising investors by reporting 85% jump in earnings. analysts were looking for a loss. ups reporting earnings in line with wall street estimates but given a lower than expected outlook for the current quarter. shares are slightly higher. just a short time ago harry reid cast considerable doubt on the idea of passing a health care reform bill before the august recess. >> the decision was made to give them more time for the finance committee part of what we're trying to do. i don't think it's unreasonable.

it's better to have a product that is one that's based on quality and thoughtfulness, rather than trying to jam something through. >> so, is part of today's rally being fueled by the health care proposal being stalled a bit if you will? let's head back down to the floor of the new york stock exchange and talk about that with steve grasso. what do you think? we've heard from some people it's an issue. other people say, no, it's not. >> i think it's a small issue. i think that was probably a little bit leading into this whole market rally. if you look at levels we've been approaching and breaking through, 976 in the s&p, yesterday was 956, was the real level people were focusing in on. now that we're above that, we've heard nothing but time after time positive statements from ceo of ford, ceo of potash. we heard the bank of canada saying the recession is coming to and. i think it's nothing but good news out there in the past week, let's say.

>> okay. >> if i'm not mistaken, michelle caruso-cabrera, i think she said a positive story on newspapers. if that's where we are right now, then maybe things are a little better than we thought. >> a positive story on newspapers. that is excellent, leading right up to amazon. i would think that newspapers are probably a dig breed, as we all know, right? and the amazon kendle, i hear you. >> thanks, steve. >> thanks, guys. >> steve grasso. cnbc's third annual look at the top business states. top five from our mystery location. cnbc senior correspondent joins us with the number two top state for business. hey, scott? scott, just quietly, scott, can you give me the number one before anybody knows? >> why didn't you ask me. i'll tell you. no. you're not going to get me that way. where are we? we're going to to wait another hour to find that out. let's recap where we've been

thus far as we countdown. number five, utah. number four, iowa. number three, colorado. here we go with the runner-up, state number two. a perennial power among top states for business and economic juggernaut even now with an infrastructure second to none. but the lone star state, texas, could not repeat last year's number one performance. missed it by just four points. texas scored 1474 out of a possible 2500 points. even now with the price of oil less than half what it was last year, and a growing real estate crisis, texas still boasts the best economy in the nation by far for the third year in a row. its transportation and train structure top our rankings for a second straight year. but texas lost just enough ground in the key cost of doing business and quality of life categories to fall from the top spot overall.

unemployment in texas has risen to 7.5%, but foreclosures have r. down slightly from a year ago. no state has more members of the fortune 500, 56 call texas home. it helps that the state has no state income tax and no corporate tax. the state does impose a franchise tax on business of up to 1% and the state sales tax of 6.25%. texas's largest employer is the heb grocery store chain with 70,000 employees. the largest industry, energy. >> interesting how the economy really has shaken up our rankings and you'll be able to see a lot more about that and find out next hour who the number one state is. here's another hint. the last of our diabolical hints. it is, cross that bridge when you get to it. cross that bridge when you get to it. you'll get to it next hour on "street signs." we are unveil the number one state. we'll talk with this state's

governor and remember that you can read all about our study and after we reveal the top state next hour, you can see where your state stacks up. topstatesforbusiness.cnbc.com. >> i thought i had it but now with the bridge clue, i don't have it. >> we're puzzling here. charlie gasparino and i caused an online storm yesterday. those moranic bloggers have come out swinging. charlie, are we inflating these guys and girls to be on their relevance by mentioning them? >> it's kind of like child abuse on our part. >> how? >> because they are like -- not -- listen, i think we are inflating them a little bit in terms of their importance. that's why i mean it's like child abuse. beating up on the semi defenseless. here's the thing. what i find interesting about this, you know, people get a lot of their information off the web, and you know, here are a group of people constantly opining. take us out of it. but here are a group of people constantly opining with aliases.

there was one blogger that attacked me for making fun of the one guy's name that is an ailey asiehing george elliott was an alias for a woman, too. the point is they're pining and critiquing and explaining things and in a semi factual way or allegedly factual way with aliases, i think we are doing a service by pointing out that these are people with huge ax toes grind. list these guys all invest. you don't know who they are. they are out there saying all sorts of stuff. much of it is b.s. the stuff some of these guys said about me without putting their name to it has been outrageous. some of them have me causing the internet bubble. others have me destroying bear stearns. i think in the context of what they are, which they're semi important, they're out there, people get a at of their information from the internet. it's just a words to the wise of investors. i'm a free market advocate. they can say whatever they want. >> and they do.

>> it's fun making fun of them. but the reality is that there should be some disclosures here. and you know, if the men were really men, they should put their name to it. >> or the women. >> or the women. listen, there's a difference between these guys and, say, responsible bloggers. i think doug casts blogs very responsible. his name is on it. levin, she's wonderful. i think she's brilliant. her name is on it. john connery. but that is the problem, a lot of these people just say stuff and never call you. they give credence to lies. i'm getting a wrap here. >> that's why they call them bloggers and not reporters, charlie. >> steve, that's a good point. here's what's interesting about that, is that there's a confluence here which is a sdcay thing. >> rolling the music, you know what that means. >> guys, if you're real men, put your name to it. >> got it. >> 209. >> 209, baby. up next, solid sales, a big

deal for zappos yesterday. earnings after the bell today. is there any question that amazon is the best in online retailer. >> amazon shares, meanwhile, in this rally, up. $94.32. at 155 miles per hour, andy roddick has the fastest serve in the history of professional tennis. so i've come to this court to challenge his speed. ...on the internet. i'll be using the 3g at&t laptopconnect card. he won't so i can book travel plans faster, check my account balances faster. all on the go. i'm bill kurtis and i'm faster than andy roddick. (announcer) "switch to the nations fastest 3g network" "and get the at&t laptopconnect card for free".

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with a 209 point gain in the dow jones industrial average, some of the old reliables, old school industrials coming on strong today. alcoa is up, 3-m, dupont, caterpillar one of the leaders to the downside just the other day, reverse, of course, up $1.76, michelle. >> wait for amazon.com set to report earnings later today

after announcing a major deal to buy a. zappos. let's bring in cnbc silicon valley bureau chief jim goldman and john aiken. he's looking for amazon to post $4.73 billion in net sales. that's a bit higher than the street consensus of $4.68 billion. thank you so much, guys. let me start with you, john. what do you think of this deal with zappos, the zoo company? is this a good move on the part of amazon? >> very consistent with the strategy of category expansion. zappos fits well into the continuing focus on the consumer with the one-day free shipping and the easy exchanges. so it fits very well in the category expansion strategy. >> jim goldman, what are they saying about this deal? >> this is a great deal. both companies have a great reputation for customerer is cyst. zappos has seen an enormous amount of revenue in the last few years. essentially makes this deal, you know, really, really affordable

for amazon. it makes a lot of sense, extending the category. and it really goes after ebay in a much different way. these two company, ebay and amazon, are approaching the market from different vantage points. amazon's model appears to be more compelling. >> best in breed, that's the way we're describing them? is that the way to describe it? >> very fair statement. >> john, where have i heard this story before? a major internet retailer buys a -- pays top dollar or good price for another internet retailer and forgets about the ease of entry for competition and ends up taking a bath? we've heard this story time and again. why is this not a repeat of history here? >> i think this is different because you have to remember back with the history here. amazon did try the zoo category with endless.com a few years ago and it didn't work. this is buying an established player with brand recognition. >> why can't someone else come in and compete? is there any entry to barrier here other than the fact that zappos is number one now. next week it could be a

different story? >> i think there is one key difference. with things you're buying online where you want to touch and feel them and try them on, having trust that you're going to be able to return that item is important. zappos has done that. >> are we taking too much to? where is zappos going to fit in compared to the kendle. >> it may be in a few years. zappos is bigger right now. selling 650,000 of them now in a run rate basis. average price at $350. doing less revenue from kendle than zappos. >> is the price in, the stock has had a tremendous run. jim, what have you heard from analysts, even today, from numbers? >> is this more of a sign to come in the technology world? >> really good question. amazon is up 67% so far this year. the company's second quarter, what they'll be reporting today is typically slowest. i don't think we're looking for blockbuster news here. they did beat handedly last quarter ebay's numbers yesterday

suggested amazon could do it again today. it's all going to come down to margins. m and a, there is so much cash on the balance sheet right now. when you see the dow up 200 points today and the nasdaq up 40 or 50. you wonder if the m and a strategies of the companies are passing us by as this rally begins to gain traction on the street. >> good discussion. good to see you, john. ebay's ceo will join melissa lee and the online climate. right now, that's today 5:00 p.m. eastern time. coming up next, thousands of kids are in camp. but will swine flu keep them in the infirmary instead of in the lake.

travel can be a pain. and even though saber holdings which owns travelocity.com is in the business of travel, the company's making work as pain free as possible. >> right in there. >> sam is care chairman and ceo of saber. he's part of a larger wellness program. >> i'm able to start the healing process. allows me to get back into my fitness regimen very quickly. >> reporter: an avenue individual marathoner, he claims his weekly 15-minute sessions not only keep him running, they help trim costs. >> for every dollar we've invested we've saved about $3. >> reporter: for jennifer, a paraplegic, whose arms and shoulders are often over-worked, the savings run deeper. >> although i've been in a wheelchair for 26 years, i think that it has helped me stay off of the operating table. >> reporter: as for gilliland, he plans to run a marathon at the end of the month.

welcome back. we just want to remark here that the strong day we've had in stock and weak day comes with a dollar essentially neutral.

it's back to almost unchanged op the euro after having sold off. look at then, it's having a huge day against the yen here with the dollar strength thenning by& $1.68. up almost 2%. on net, the dxy, overall basket, is unchanged. up just a little bit. movers have and stocks and bonds, but no weakness really at all in the currency. >> that's very interesting. to camp, my little ones are in day camp. yours is in sleep-he way camp. it seems that kids at summer camp are coming down in droves with swine flu. also in the news today tests will soon begin on a new swine flu vaccine. the back to school season is just around the corner. how concerned should we be about the swine flu at this point? joining me us, chairman of feed tricks at the brooklyn hospital center. he also directs the vaccine research center as well. doctor, it's a pleasure to have you here. thank you for joining us.

you know, how come some of these summer camps have been hits so hard? swine flu has been out there, certainly, was everybody kind of asleep at the wheel here or is there something more to it? >> no, i think they were home. when they all congregated together, as we frequently see with flu and other infectious diseases, they manage to give it to each other. i think health departments were aware of this possibility and the surveillance just picked up all of these infections. >> is it because they're all living in bunks together and in the same room? >> yep, it's the close quarters, that's one of the things that flu likes. it likes to spread. >> doctor bromberg, talk to parents, including this parent here. do i need to get on a plane and go out to wisconsin and take my kid out of camp? >> i'm about to take my kid up to camp in connecticut. >> up to camp. >> up to camp this weekend. the good news is that this flu is not particularly deadly. there is a baseline fatality associated with the flu in kids.

i would say that it's under 1 per 100,000 cases for flu. it's more with older people and people with various risk conditions. the bad news is there's a possibility, annoying and i can relate to it that people have to go back up to camp and yank their kids out of camp if it becomes a big situation in the camp. >> should steve's son be wearing the masks that we're showing people wearing right now in the video or in some of the pictures in the paper with the kids in the canoe, with the masks on their face? >> i think it depends on the camp and the health department. i think they should work together. i think camps are doing something which the airlines were doing, checking people's temperature. and i think that's an effective way. masks may be useful but i think it's a case-by-case situation. i'm not bringing masks with me to camp. >> you are not, okay. what about back to school season? i mean, how worried are you about the back to school season, which is literally six to eight weeks away? >> well, i'm worried about the

problem of using a weak weapon, which is tamiflu. i'm encouraged by your statement that the vaccine treatment and evaluation centers will be looking a t swine flu vaccine. that's a strong statement. i'm hoping to have that sooner rather than later. >> doctor, thank you very much. we appreciate it. and if you want more on the swine flu outbreak, you can go to cnbc.com. read more about it. they have extensive coverage there on our website. we, of course, are going to find the business angle when it comes to this scam going on in new jersey with more than 44 people arrested, including three mayors and several rabbis and international drama going on. coming up after this. as the dow is up 191 points. back above 9,000. welcome to the now network. population 49 million.

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you're looking at a live shot of president obama set to hold a town hall meeting in cleveland, ohio.

he's trying to sell his health care plan. other big news, there's a huge bust going on in new jersey. when we started drilling down into the details, we heard about this situation? >> money laundering and corruption charges president 44 people involved in this ring. >> one of the details is apparently they were buying and selling kidneys. they were trafficking. here's the data point we found interesting. if you were selling your kidney, $10,000. if you were buying a kidney, $160,000. a spread that was so enormous, unbelievable. >> information asymmetry, right? the guy doing $160,000, the guy selling it for $10,000 had no idea. >> sick. significant gain, a sell-off in the bond market. the nasdaq is on a winning streak that we haven't seen in quite a few years. >> and not bothered by this huge rise here in bond yields up nine tick there's. but then take a look at the eb ten-year, which is worse. that's 14. this is a big steepener.

this is a sign from the bond market of improved economic outlook. >> or, are they worried about supp supply? >> worried about supply but not worried by the bonds. the stock market seems to be okay with it. as we talked a minute ago about the dollar. the dollar is flat on the day. >> 2% gain. nasdaq and s&p, that's it for us on "power lunch." "street signs" with rebecca jarvis starts in 30 seconds. >> coming up in this coming hour. >> scott will reveal the state to do business. >> wisconsin? >> maybe. you never know. this is cnbc.com news now. >> president richard fisher says the outlook is improving but the engines have sustained growth are absent. senate majority leader harry reid says they will not take up the health care reform bill until after recess. stocks are surging with the dourks s&p and nasdaq all on pace to finish a 2009 highs. nasdaq is up for the 12th straight session. that's cnbc.com news now, first

in business worldwide. i'm mary thompson. hello. i'm rebecca jarvis in for erin burnett. the president getting dissed by congress. health care on hold, at least for now. the markets seem pretty happy about that. the dow back in the black at new highs for the year. we've got the story. then the citizens of one state are also about to be very happy coming up. they're happy right now. we'll reveal the best state for business. it is a cnbc exclusive. and investors are living la individual vita loco, ricky martin, the country's largest private company. that's our show and it starts right now. all right. check on the markets, they have been trending to the upside. we are near the session highs. what a rally we have going here. stock is up 2%. dow now above 9,000.

the first time since january. leading the charge, telecom and material stock, even the worse performing sector consumer staples. that is trading higher. you see it on your screen. the dow right now read 9063 the number. meantime, what's money talking about at this hour? when you also see oil right there, that, too, is up for the day's session. $1.50. here now straight from the trading floor, scott wapner from the floor of the ncse. rick santelli from the bond pits in chicago. brian shactman at the nasdaq. scott, kick things off. >> it's apropos that you show what oil is doing. commodity stocks are followed suit as well. that's one of the points of strength today along with, as you pension mentioned, material and homebuilders. i wanted to focus on at&t because it's one of a number of stocks out today with better than expected earnings. the story is interesting because it was strong on the wireless side. that's an area which we heard from both nokia and