year-over-year. >> but less and less. >> beating the expectations, but lowered, and we're still not seeing the revenue growth a that we've seen in past years. pete, what do you make of the market? >> people are chasing. steve and i were in agreement on the "halftime report," 12:45 every day, except today was 1:15. absolutely incredible the fact that people right now just don't want to miss this market. they use every pullback as an opportunity to get themselves back into the marketplace. great example today, i know we got the ceo on later, but juniper, this is the stock that came out. they had a huge run-in to their earnings. stock got crushed today, because they just didn't live up to everybody's expectations. the stock was down to $25. do you know where it finished? up on the day and almost $27 a share. giving you the idea that people are waiting for stocks where they've missed them, they want those opportunities. now, amazon today, you didn't see that. and part of the reason likely, karen addressed this last night, when you look at the p/e level of amazon, it's concerning

versus ebay. ebay's were great and amazon more conservative. you didn't get people rushing in for amazon at a $50 p/e. but they click on the upside. >> we will be speaking to the ceo of juniper net works with "first on fast." let's look at american express, yesterday after the close sold off along with capital one financial, but today both of them finished higher on the session. why is it that all of a sudden we can over look it? >> you cannot overlook the consumer concerns, because they're still there. i tell you what, next week use whatever you get, the market as an opportunity to scale out of things. because you know what's coming, august unemployment. go back one second, american express, capital one, what are you seeing there? a handoff with credit quality. the concern is moving from the consumer loans to the commercial loans. wells fargo was clearly highlighted in the earnings release.

if you look at the nonperforming asset growth for wells fargo, it was up about 50%. that is way above what jpmorgan, bank of america are showing. if you are holding commercial loans or jumbo loans, the exposure to commercial real estate, that's the concern. that's why american express and capital one look good. >> and you are also seeing short coverage. you look at the way the stocks traded. they thought the numbers would knock the guys to their butts and it didn't. i hate to be a broken record, but it is money chasing or underweight or guys short that got scared. if you look at capital one's numbers, back to the fundamental side, year-over-year, up, that's second quarter '08 before they fell into the teeth of this problem. that's not a bad number. with these guys it's about the loan quality. not that bad. >> can we back it up? for american express, this is a name up 59% so far this year. you're saying that perhaps there are players out here that were short this name anticipating that finally the concerns about concerns about consumer credit and losses would catch up. they fell off a cliff in the

after-hours session and then they -- >> the guys had probably missed some of this rally, or the other side. but either way there wasn't a lot of weakness once they got confirmation. no big surprise on the default. no big surprise. once you got that, you saw there wasn't something more, you jumped in and you bought it. >> once you came off of goldman sachs earnings, they were short covering across the board. forget micro names in particular, everyone started covering short. it was led by shorts and over the past couple of days, mutual funds tried to get back in. >> there's no reason to go after the credit companies. it doesn't make any sense. why would you chase the stocks, american express and all the rest of them? go after visa. did you see the performance? transactions continue to work. ma as well, mastercard, still looks fantastic and why not go after those that have zero exposure, i mean just zero, transactions, when you have debt and credit. i love it. >> take the other side and i'll ask you a question.

>> the reason why you go after american express and capital one and the whole short-short covering conversation, i think there's a whole name behind this thing. it's after the stress test, let's not forget, that was all short covering. if you look at american express and capital one, this is about getting back to normalized earnings which it looks like they will be a lot sooner than the market anticipated. >> i totally disagree. >> let's see how confident you are in this conviction. if it is the case that perhaps we should not be -- >> liking to get very long? >> no, no, no. is the corollary to the argument that you start to get long and constructive in the retail names because all of a sudden you're not as concerned by the credit losses about the consumers, does that make you more constructive about the consumers and be able to go in the stores and buy? >> no, because the difference is when i look at those retailers names, i don't know that the federal government is behind their business model, which basically the financial sector, the government, is supporting as we see with goldman sachs.

it's supporting their business model. they are not doing that with the retailers. >> do you buy that? >> well, look, i think the banks that did well this week were the ones that actually took a little bit of risk and the ones that the were actually using government money, and that was goldman and morgan stanley which did not, which was the number we saw this week. i think the consumer through the labor numbers is very wounded. i don't think you'll see a strong retail-led recovery but we're talking about the banks and their balance sheet and if we're talking about american express capital one because those are encouraging because we see stabilization. >> american express did say third quarter and fourth quarter write-offs were better than what analysts were forecasting. let's go to the chart of the day, this will shed light as to whether we should believe in the rally. if you take a look at advancers versus decliners on the s&p 500, whenever we spike up to the area here, if i can get this gray area. >> nice job. >> i tried to telestrate it here, it doesn't -- there it is! once you get up to the levels, once you advance to that level, we usually see a pullback on the market. steve grasso, you're on the

floor, the line is up on the board all the time. is this an argument that you actually put money behind? >> it has been an argument. >> uh-huh. >> i have never seen a market like we've seen this week. it is unbelievable. for the last two books, you watched these hedge funds lay them out, lay them out, lay them out. even from the beginning of the week, they tried to break the market. they couldn't. i was 5-1 sells to buys. i reversed that yesterday and today. >> so, what does that mean? >> it just means that it's different from any market that we've ever seen. it means at this point i don't think you'll see the pullback. the shorts that we've been talking about, the hedge funds, half said they believe the market is going to cave 70 points ago. >> and look at microsoft between the number last night, before we went to numbers at 3:00 yesterday and where it traded down to premarket, it was an 11% move. i jumped in premarket because the numbers weren't that ugly. they were second quarter numbers. we know all the good stuff

happening with microsoft with the third and fourth quarter with the xbox and the rest. >> it hasn't done well the past decade. >> the cash flow and the balance sheet. they continue -- >> the stock, the stock performance. take a look at the chart and it hasn't done that much. why does win 7 all of a sudden move the higher for microsoft. >> because they've been stuck in the vista vortex. they haven't been innovative on the product side and they haven't broken out. that stock has broken out this year. i would argue it has broken out and it has responded to the exciting product launch cycle, that's why you can buy it. >> this to me, i don't know. >> in 12 hours that's the stock you buy. >> i tell you what we need to be careful of, we need to be careful of getting the pompoms out and it's okay. you are talking about the credit cards. the consumer is not okay. we've had a tremendous run. we had a big lift in the market. we wanted this catalyst. we wondered who would lead us this earnings season. it was goldman sachs and jpmorgan. and we've gotten good numbers from cat and all the rest of them, but as you get to the next level of earnings, i think you

will have concerns out there. that's why you are seeing the kind of activity that you are seeing in the options pits, where you are seeing the puts. they are trying to get closer to the marketplace and buying the puts and getting the protection at the cheap volatility levels. we start to get to a pullback and you start to accelerate to the downside, steve, you will have guys selling, selling, selling. and that's the kind of market we could face over the next couple of weeks, so let's be careful of the consumers buying. >> pete is right, it's not only about the consumer. what would take us higher is the corporate balance sheet. they are strong. go back to microsoft, i told you last night, you know my feelings on microsoft. you have to reduce your position. >> how do you define strong? >> the goal was to reduce the position in microsoft. when you look at microsoft they are still sitting with $30 billion in cash. what do you do now? july 30th is the financial analysts meeting. listen intently. pete likes to listen to the guidance. i agree. listen on july 30th and see what they will do.

at some point microsoft will come in and you may even see a stock buyback from microsoft. >> absolutely. there's no doubt in my mind that you'll see that. we talked about that on "halftime report" as well. but i still think you got to be concerned. microsoft still has to produce. windows 7 all suddenly the focus is on windows 7, windows 7. if this ends up being an egg, we got a problem. >> it is. and we've talked a although about it. but the entertainment side of the business has gone from 7% to 13%, the server side and the enterprise side is a big part of it, the corporate side. nobody on the desk is saying the consumers are the great place. what i would point to, microsoft that's a rear view mirror look at it, and if i wanted to own the stock an hour before the news came out, i was disappointed about the revenues and the businesses are good looking forward, why would i care about the second quarter revenue number when i'm excited? >> you wanted a pullback. we talked about it last night. i bought some today, too, on the pullback would you buy it? i still like it.

but you know what? performance-wise, going back to what you said, melissa, the performance of microsoft has been lackluster. we had a great move recently. you look at the last several years, that chart is not -- >> that is why technology is leading us higher. because the technology balance sheets are so strong. everyone wanted to sell intel. everyone wanted to sell qualcomm, but look at google, it came back after earnings and could not get back, and technology is remaining there. >> the leadership is name specific. because even though some guys have been buying microsoft, i haven't seen my funds buy it. i saw them buy amazon on the dip. i didn't see them buy microsoft. but i have seen in the space they gobbled them up today. >> the specific exactly it. whether it's the storage space or whether it's specific chips, it's not like every chip maker out there is suddenly great. intel is king. >> take a look at qualcomm numbers. down 90% on the profit side for the second quarter. >> there are differences out there. there are absolutely black and

white. >> samsung reported today in korea, that does not trade over here, it trades in london. but they are the second number semi macher. they are huge. the second largest semiconductor producer in korea was also up, sending you a positive message going forward. i mean, it's not dire straits. >> quickly on this tech discussion here. before we have wrap this up. apple a major event. at what level would you recommend people get in if they have not been in the stock? if they have fresh money and they want to catch apple. at what level? >> apple is clearly running away from everyone right now. what i'm looking for right now is, again, going back to august unemployment, i think going into that you are going to see the market soften. i think it would be prudent for people to take names that have run up so much off the table, heading into august unemployment. august unemployment, though, that may just be your opportunity to jump back into all these and reload. >> that's the biggest point. that's what knocked us off on the first rally. we were up above 900 and as soon as the unemployment came out, we rallied on goldman.

>> suddenly they remembered. >> august 7th, that's the date. >> i think the takeaway here is don't chase it. don't chase apple. you might love apple. i love apple. i don't own it right now, because you can't chase these names. you always get a second opportunity in this market. we see it almost every single day. somewhere down the line, you got great opportunities to get back into research in motion. underneath $70 a share. every one of these stocks will give you a second chance. >> we know the labor market will not improve until the middle part of next year even though we're pulling out of a recession. everyone will tell you don't have to wait until the numbers turn around before you start buying into the markets. i'm not worried about the labor numbers on august 7. i'm not that excited about the better than expected numbers. >> if you are trading this market, it behooves you to buy the dip. >> what the unemployment report does for you it probably provides a little bit of a

pullback in the market. >> it's your opportunity to get in. >> and if the number comes out better, because soften it up. this could just add a little bit more conviction to the bulls here. so, i don't think it's going to, but certainly there is the possibility. >> get the giddyap out of pete najarian. >> let's move on. just before bernie madoff was arrested in palm beach, where was he arrested? here in new york. bernie replied i've got to know what time it is in my london office. >> it says something about the math. >> it says something about the brain, man, he needs two watches, come on? >> he doesn't have to worry about time in london anymore. coming up next, the ceo of

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welcome back to "fast money," live at the nasdaq market site. a leading reporting second quarter earnings with revenues down from last year. does the company that controls the internet's backbone detect improving in the second half of '09? juniper networks ceo kevin johnson. thanks for joining us. >> hi, melissa. >> a gross margins were an area of disappointment according to wall street. and they say that's mainly because you were trying to keep competitive on price in order to keep the business spending coming into you. i'm curious because you're cautious on your outlook, what is your outlook for gross margins given that the

environment, according to what you're seeing isn't looking like it's going to be improving significantly in the near term? >> well, certainly we saw quarter on quarter revenue growth at 3%, we expanded operating margins, and as you point out, gross margins were down about a point or so. and that was primarily three things. number one was product mix. and if we have a mix of products, have different gross margins, we invested with the set of new products in the market on more spares to help ensure we're delivering great customer satisfaction and there was some discounting, and that discounting was mainly in the service provider segment. i think as we guided for the next quarter, we believe we'll be back within our range on gross margin. >> okay. bernstein today came out with a note about your spending in general. saying that juniper is at a near trough in earnings, but necessary to cause an acceleration is one to two quarters away. would you say bernstein's pretty much on the mark when it comes to what it sees for your

earnings being at a trust and what it sees for spending? >> well, we in this last quarter, we saw service provider revenue decline by about 1 percentage point. i think we're bouncing on the bottom with service providers. our enterprise revenue grew by about 12% quarter on quarter. so we're seeing good demand and strong growth in the enterprise. the sense is that, you know, over time service providers as internet traffic continues to double every two years have got to make some capital investments to help handle that traffic. so it's just a matter of -- a matter of when not if. and we're continuing to manage to a set of principles we outlined at the beginning of the year. one of which was to assume challenging economic conditions ahead. and we're operating against those principles. >> well, goldman today talked about share bottoming. i'm curious about the ibm story. can you give us anymore light between yourselves and ibm? >> well, certainly we've had a long relationship with ibm. over the years we've worked with them on things related to

silicon. most recently started doing joint work around the architecture of the future with cloud based computing. and this week we announced a relationship where ibm will be sending ibm branded switches and routers through juniper networks. and that really is about our route to market in the enterprise. ibm has a phenomenal sales force and great relationships in the data center, the joint r & d work makes sense to provide those products through the ibm channel. they continue to resell juniper networks products, but for us to achieve scale on the enterprise, ibm is one of our key partners helping us do that. >> kevin johnson, the ceo of juniper networks. this is a stock with quite a run so far this year. any buyers of this stock? >> goldman sachs just put it on the conviction buy list. not the conviction buy list, they put a buy on it, you're going to get a lot of hundred money chasing this. >> i like what they're doing internationally. their growth has gone from 16% to 25% to 30%.

you heard earnings today talked about 338 million internet users in china, a whole lot of infrastructure and systems for them to help out. >> stay tuned, we're back. welcome to the now network. population: 49 million. right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sales conference from the road. eight are wearing bathrobes. two... less. 154 people are tracking shipments on a train. 33 are i.m.'ing on a ferry. and 1300 are secretly checking email on vacation. that's happening now. america's most dependable 3g network. bringing you the first and only wireless 4g network. sprint. the now network. deaf, hard-of-hearing and people with speech disabilities access www.sprintrelay.com.

time to reveal who made the most money this week. we're on tv, everybody. >> sorry. >> warren buffett takes the top spot again. earned a profit of about $2 billion on his goldman sachs options as part of an agreement reached during the credit crisis. buffett has warrants to buy $5 billion of goldman's common stocks for $115 a share. stocks by the way closed at $166, not bad, warren. time now for the final trade. >> we talked about the integrat integrates, they look good. >> chevron, best production growth, reports next week. >> joe? >> on thursday kroger found a bottom, that's what you use of your point of reference, go in, buy kroger. >> these integrated names, one of them total, i love vp, 7%, trading at 9-p. >> give me a giddy-up.

>> giddy-up. >> thanks so much for watching. coming up next "options actions." undefeated professional boxer floyd "money" mayweather has the fastest hands boxing has ever seen. so i've come to this ring to see who's faster... on the internet. i'll be using the 3g at&t laptopconnect card. he won't. so i can browse the web faster, email business plans faster. all on the go. i'm bill kurtis and i'm faster than floyd mayweather. (announcer) switch to the nation's fastest 3g network and get the at&t laptopconnect card for free.

welcome to "options action." i'm melissa lee. here's where the action is tonight. >> the real techs, techs check, energy, not so fast. we'll tell you why the smart money sees fear at the bottom of the barrel when oil stocks report next week. tragic kingdom, why the smart money thinks this mouse house is running low on pixie dust. and the up side call, we told you how to play microsoft earnings. >> i'm more nervous with microsoft on the downside. >> now stacy will give you the next move. "options action" begins right now. welcome to the show, great to have you with us. these are the traders here on the desk and across the nation in chicago, the windy city and in the city of brotherly love,

philadelphia. microsoft to post their best two weeks in about nine years. the dow joining the s&p and nasdaq in positive territory for the year. the partying continuing. let's get in the money right now. tech and financial earnings leave the markets to their highest level all year, another crucial test comes when oil stocks report earnings next week. currently exxon and chevron alone 8% of, i should say 6%, with the biggest weighting in the entire index, both down on the year despite the rally in oil. with both companies set to report next week, could the market be set for a crude awakening? and dan, this is not only a mathematical equation, but we do need to see new leadership groups in this rally. >> no doubt. one of the things you referenced. the best two week since 2000. that makes me a little nervous. because i'll tell you one of the things we saw back in the late '90s into 2000, into the blowoff, a very narrow rally in the market. right now the