>> hopefully not, john, hopefully not.t. >> let's get to the market action. gaming, autos, metals, and mining. all trading to the plus side. bertha? >> well, it's been a great day when it comes to manufacturing data, starting out in china, really strong numbers for the fourth straight number and the euros and then here this morning. and boy that recovery trade is on strong.. you take a look over the last n few months. things were moving okay when it came to the cyclicals, the consumers, the more defensive consumer stocks but over the last month or so, we've seen those early cycle cyclicals really outperform, ford definitely leading the charts today with the better numbers coming up for the july sales, but we're also seeing the railroads doing well and the metals and miners are on fire again with those strong tmi numbers coming out of china overnight. the consumer stocks are the drag. clorox and tysons are lower.

but that prop line still looks kind of cloudy. also the fact that the commodity prices are moving higher, energy prices moving high, that doesn't help them either.. the consumer is still the big issue here. we do have a number of brokerages upgrading retail stocks ahead of retail numbers on thursday.. but there's still a lot of caution about the consumer and of course, we do have that big unemployment number expected on friday with a july jobs report. brian over at the nasdaq. >> thank you, i'm watching as we tick ever so close to 2000 here, we're up 1%, we have not closed above 2,000 since september 25th, 2008. talk about psychological, both apple and google getting a nice pop today, we know the story, google ceo eric schmidt stepping down from the apple board. we'll see what happened, of course, late last week the sec looking into why apple rejected

google app for the iphone app store. more on that. i want to talk about the semiconductor industry association. they said that chip sales up 17% in q-2 over q 1, still down about 20% year-over-year, but a net positive. take a look at a couple of names in the sector. intel, underperforming just a little bit, but i will say when they reported in mid-july, they said the same thing, and nasdaq has rallied 10% since then. finally i want to touch down quickly, ebay up. they might have 30% in the next year, and cisco reports ubs says expect a big number. >> i'm in the nymex pit, but really today it's all about the dollar, the dollar index at the low of the day right now and oil prices here at the nymex are up $2. we're looking at prices have posted their highest level for 2009 and the weak dollar is the reason why commodities are on fire across the board. we are looking at also some

strong economic data coming out of china that has helped oil and commodities, as well. but it really is the dollar, helping not only oil prices but also natural gas because natural gas is getting a lift from the rise we're seeing in oil and equities, as well. a nice spike in natural gas prices, a very short market, mind you, over $4 right now, 8% spike there in natural gas futures and copper, copper's really on a tear, as well, strong demand seen there, based on what's happening out of china. again the weaker dollar a place there, as well, and copper's up over 4%. rick santelli in chicago. >> good job, sharon, it is all about the green back, but let's start with interest rates, look at a two-day chart of notes and they reversed all of the end of the month rally, a 10-year note is right now about 15 to 16 basis points higher in yield. there's a ground we've never seen before? no, it's somewhat at the top to upper third of a yield range, but remember, its buoyancy of

how it keeps snapping back to the higher yields is something to pay attention to. now let's look at that same dollar index sharon was talking about. a two-day tear that was unaffected by the first trading day of a new month, it was down big friday, down big today, and even though this is an index that represents a basket of currencies stronger, the winner for the strongest currency the last couple of days is the british pound, which is the next chart, while the dollar index was hovering at what? eight month lows? this is a 10-month high against the dollar as we approach. yes, we approach the 170 mark hovering in the 169 area. back to you, bill. >> lovely. just in time for all of those americans who want to go to the uk for holiday. thanks, rick. and there's more, that slew of earnings out so far this morning. everything from cleaning to casinos to crude, mary thompson is at earnings central, some of the highlights, mary. >> thank you, bill, we're going to start with the cleaning crew,

you heard bertha mention it. clorox beating estimates by a penny, helping to offset the impact of a stronger dollar. the stock off 3%, though, investors are disappointed with the full year guidance for 2010, it wasn't increased with some pressure there. like other oil and gas firms, marathon's tumbling. earnings fell 47%, revenue dropped 40%, but still beat expectations, giving a boost to the stock up about 2%. humana, under actually a little bit higher now, up 4.5% to help insure stronger than expected second quarter profits of $1.67 a share, held by an improved performance in the medicare segment. this offset a decline. low earnings is 78 cents a share, missed estimates by 20 cents, shares of the conglomerate are higher thanks to operating earnings that its majority owned insurance firm cma. mga reported larger than expected loss. right now up almost 5% as revenue dropped 20%, but still

topped forecasts coming in at $1.66 billion. ford reporting sales jumping more than 2% last month. the first monthly increase in nearly two years.s. ford shares year-to-date up more than 270%. 272.5% almost.. phil lebeau here to take us inside the numbers and much more.. hi, phil. >> good news monday for the automakers because you're going to see positive news, maybe not positive sales, but positive news for all of the automakers, a gain of 2.3% in july, the company's first year-over-year monthly sales increase in two years and the company now is at a point where it's got to assess whether or not it's time to increase production.

>> reporter: now, when you look at the cash for clunkers program, clearly that's what drove better sales in the month of august or the month of july for ford, expect this to congress unless there is no more funding for this program. the $2 billion extension that's being considered by the senate, that needs to be voted on in the matter of the next couple of days otherwise no more money left for the program, but the transportation secretary is optimistic the senate will come through with more money. ray lahood is one of many people in washington who believes that you cannot kill cash for clunkers now. it has been a success for the automakers, for the auto dealers, so bill and sue and michelle, when you take a look at cash for clunkers, the expectation amongst most in washington is that it will continue at least for the next month, they're looking for another $2 billion, and that vote, again we expect to have

some kind of a vote from the senate in the next couple of days. >> stay with us, and our policies, i think there were some problems with your sound bites there and we're going to try and remedy those.. let's talk more about, though, whether or not this bump up in ford and other sales figures is sustainable. director of the autos group at ihs global insight. nice to see you again.. >> thanks for having me on again. >> that's the key question, if we are getting this boost, is the worst over? and is this kind of a slight sales increase sustainable? >> well, it'll be interesting to see how many of these deals have hit in july and how many could potentially hit for august sales also. because there is a significant backlog still at the dealerships. it's a little bit of a wait and see, and of course, whether this really is momentum, we'll find out as we move in through august and into september sales, but it definitely hit at a great time and the industry really needs these sales.s. >> what do you make of the crazy cash for clunker story and the impact it is having on sales? net net?

is that positive for the industry? >> well, you know, bill, it's interesting because there still isn't actually proof that we ran out of money like everyone is fearing. and so there's -- >> you're more cynical than we are. >> oh, i know, i'm dreadfully cynical. >> they haven't finished processing the paperwork? >> exactly. they haven't finished processing the paperwork. and so we're hearing some kind of horror stories that as few as 10% of the transactions are actually valid, which is sort of the worst-case scenario and i don't want to be spreading rumors here, but we are not hearing that everything's going smoothly and that all of these transactions are valid. so -- >> are you hearing the same thing? >> we're pretty conservative here. >> reporter: i've heard those comments out there, yet i've not heard anybody document that. so it's one of those things. the concern is that you had so many dealers knowing that the money was going to be there at a

certain point in july, july 23rd, that they put a lot of orders essentially stuffed the pipeline and then they rushed them through once the money was allocated, it was freed up on the 23rd of july. so far i've heard some of those comments i've not heard anybody come forward and say, listen, i've got proof here that things are messed up. >> you know, rebecca. >> we haven't seen proof that the transactions have gone through yet either and that all of this paperwork. and so we still are at a point where we're still waiting to hear, waiting to see what really has happened. we definitely have seen an increase in sales, there's no doubt. >> and that speaks to demand at a specific prices, does it not? >> it does. and you know, the nice thing that this seems to be incremental demand. people that weren't necessarily in the market this year or even next year. so this really could be a big shot in the arm for the industry because this isn't necessarily pull ahead demand. it's sort of the best-case

scenario. >> are we talking about 11 million run rate, 12 million run rate? what you think? >> reporter: i think george pipas said we could see close to a 12 million run rate. even if that is a one-time shot in the arm, you know, sort of that taste of honey that the consumers got out there from the federal government, keep in mind there's a churning of the market. i've talked to some dealers who have said at least 35% or 40% of the people came in knowing they didn't have a clunker, knowing they couldn't qualify in the program, but interested in getting back into the market. that's the optimism.. >> thank you, phil, we'll see you later. thanks for joining us. >> thank you so much for having me on. as you probably know, we're coming off the best july for markets in 20 years, the best month since october of 2002, now here we are, new month, august, what are the best plays for the dog days of summer time? our task force will tackle that coming up. then, a fascinating story, a battle of tech titans, what exactly is behind eric schmidt's

departure from the apple board? and then, of course, get ready for the "fast money" halftime report. we are back in two minutes.

the manufacturing data out of china and lots of optimism right now in commodities. higher by $4.50, a gain of 7%,

82 cents a share. so for the most part, stocks are marching higher on this first trading day of august. one of the reasons, more signs the recession appears to be ending with some of the data we got out this morning. so is this summer rally going to keep steaming ahead? during the dog days of august? joining us in our task force today, strategist at bkb wells advisers, and v finance in new york joining us, as well. what are your expectations for august? >> well, coming off a really strong july, had a nice rebound from march 9th lows. our expectation is this will be one of the key things that we think will have to start happening going forward is the news flow actually starting to show improvements in various parts of the economy and not just the rate of decline slowing, and we're starting to see that in some areas. >> reporter: what are the options markets anticipating? >> you can take advantage of them.

i'll give you some examples. a couple of weeks ago, isrg, which is intuitive surgical came out with earnings, stock was trading at about 165, the stock today is about 230, that's about a two-week play. and what happened there if you bought the 200 options for about $1, right before they came out with earnings, today they're worth about $40. >> and you're seeing that a lot right now, you're saying? >> a lot of that. look at mastercard, look at spss last week was a $35 stock, ibm, took they will over, $50. you're starting to see mergers again. >> jeff, what opportunities do you recommend here? first day of august, saw that huge rise, what would you tell people to be doing right now? >> well, we first of all have taken more of an international focus with the portfolios we run, but within the u.s., one of our favorite sectors is the technology area, and this is really based on several things.. first of all, the valuations are very reasonable relative to growth rates. these companies typically have

low debt loads, which we think is real important not to be dependent on the banker and the availability of financing to do business and they're very lean in that respect. and then the other thing is is that most of these companies have more than 50% of sales coming from abroad, which we think that that theme plays out well. we think that's where the net incremental growth comes as was the case in intel's report back in july. >> bill, you also cite cisco as something you're watching. but the first line in my notes i found fascinating, this could be one of the greatest times since the '87 crash where you have a chance to make a ton of money. >> because people are so fearful, there are great opportunities out there. i don't remember apple being down two days in a row for about a month, or a month and a half right now. that stock's gone from 130, today it's over 165.. >> people would argue that perhaps that run is down, you know. we had a very solid extended period of time for a market that's been struggling. >> that could be true, but if you take a look at apple, it's

been coming back -- they didn't really see the recession that everyone's speaking about out there. so if you can identify the specific companies that are doing well, caterpillar's now picking up business, you could go on and on. look at mastercard, these companies if you can find the ones doing well in this kind of economy as the economy gets better, they should continue to go up. regarding cisco, the options are relatively cheap. the stock's trading at about 22 1/2, they're coming out with earnings this wednesday and they have 23 options for about 45 cents. so there's another play for a person to take a shot. again, they have to make sure that they're comfortable that they believe in cisco. >> very good. bill, good to see you. thanks for joining us. coming up next, not so civil war in the technology sector, apple rejecting the google apps of the iphone and eric schmidt is suddenly off the board. are they now enemies?s? what does this mean for your money? here's how some of the

shares of those companies are doing right now. apple up better than 1%, almost 1.5%. google is up almost 1.75%. we're back in a minute. want before they're gone. u get a fuel efficient 2009 pontiac vibe for $13,708. and, now at participating dealers, check out the cars rebate system, better known as "cash for clunkers." if your trade-in qualifies, you can get $3500 to $4500 on top of current pontiac offers on 10 pontiac models. plus get the best coverage in america. now, during the pontiac summer closeout.

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higher by 85 points, alcoa's up 6%, broad based rally, but a lot of the materials doing very well as we see a lot of the commodities rally today. google ceo, eric schmidt stepping down from the board of directors. jim goldman has the details on what's a juicy story here, jim. >> yeah, shaping up to a good one. he joined apple's board about three years ago, and back then it seemed to make sense, trying to figure out ways to better compete with the microsoft jugg juggerna juggernaut. they've been competing with one another, and while the steve jobs eric schmidt relationship may have become strained, the businesses were falling apart. the two companies sharing two board members already which ultimately launched a federal inquiry. and joking comments like this from schmidt two years ago certainly didn't help.

>> steve, you know, i had the privilege of joining the board and there's a lot of relationships between the board, and i thought that we could just sort of merge the company, we could call them apple -- >> well, as google works its way into the mobile world with the g-1 google phone with t-mobile and the chrome operating system, it's clear the company is going after apple's key markets. just this past friday with apple banning google voice from the popular app store, it's painfully clear these once allies are now staunch competitors, you have to wonder with these trends developing over some time what took these guys this long to make up this kind of decision?? >> and is the story really over? it seems like there's more to it than this. that this isn't just going to disappear over night, jim. >> no, i think these two are going to be increasingly competing with one another. i think google is becoming this integrated tech company, the

likes we haven't seen before. apple is doing much the same with all things digital media, hardware and software, what google is trying to basically create, apple's kind of already there. so it's going to be a very interesting couple of years and we'll see if these two become more apart than they are today.. and it could become apple-google the way it has always been apple-microsoft. >> good to see you as always. the president's top two economic advisers leaving the door open to tax hikes, even on the middle class. republicans say obamanomics is about tax and spend, is that fair or a bad wrap? sparks are going to fly. >> back in the spotlight again. we are minutes away from the "fast money" halftime report. michelle, when did you go over there? >> because melissa's off today so you're stuck with me. signs of healing, the banking sector giving investors a new reason to rally as the s&p 500 breaks 1,000 for the first time

since november 2008. where is the best place to ride this sweetened summer rally? plus china's economy showing signs of life for the fourth h month in a row. how can you play their economic turn around? all that coming on on the "fast money" halftime report just a few minutes away. more "power lunch" after this. five co-workers are working from the road using a mifi, a mobile hotspot that provides up to five shared wifi connections. two are downloading the final final revised final presentation. - one just got an e-mail. - what?! - huh? - it's being revised again. the co-pilot is on mapquest. - ( rock music playing ) - and tom is streaming meeting psych-up music from meltedmetal.com. that's happening now with the new mifi from sprint, the mobile hotspot that fits in your pocket. sprint. the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com.

welcome back to "power lunch," everybody, in the headlines at this hour, shares of ford up more than 6% after reporting a sales increase of 2.3% last month, the first year-over-year sales increase we've seen from ford in more than two years. ford shares as we said up about 6%. factory sector making a slow, but steady climb out of recession. the ism manufacturing index rose by 4 points from june's number beating expectations, construction spending also rose last month. and the white house says unless the senate approves the $2 billion extension in additional funding for the cash for clunkers program that the house did on friday, that program grind to a halt tomorrow.

>> meantime a big percentage mover, bill, is cit group which is up 13%, off the high of the trading session. basically that's because the company is citing after a trade halt earlier this month, constructive resolution to the tender offer and as a result of that, the stock was halted news pending now it's reopened and we're up about 13% on cit. michelle? >> take a listen to larry summers, what he had to say this weekend on the weekend talk shows. >> we're going to keep working to strengthen the foundation -- >> no, no -- >> the foundation -- >> for middle income america. >> there's a lot that can happen over time. >> did you hear bob schieffer's question, no increases for -- on the middle class? and that's when larry summers basically didn't answer, we've got to see how the rest of the year goes. is president obama just another tax and spend democrat? let's fire up the power grid.

you've got 20 seconds to make your case, greg, i'm going to throw you the softball.. is president obama a tax and spend democrat? >> well, i'm shocked, shocked that obama's looking to raise taxes, come on. the people who knew that are people who can do simple math. you cannot do everything he's promised to do and not raise taxes on people who make less than $250,000 a year. it's just simple math, he's already done it with cigarette taxes, talking about a soda tax, value-added tax, cap and trade tax, and with this spending, taxes have to go up. >> wow, right on the money. david, you get 20 seconds on why you disagree. >> greg has not been paying attention to this program on cnbc, all indicators are moving up, that's a great development. this administration cut taxes for 95% of americans, $800 per family in the make work pay provision. look at the facts, don't listen to the blow hards on the right.. this administration is helping this economy and tax cuts are a part of it. >> you're going to do just fine

in this segment. >> boy, that $800 a year for a family, $12 every paycheck, let's go to europe. >> i guess you're too rich to understand what money means to most americans. >> most americans are excited about that. listen, here's the thing, if you look at what is coming down the pike. look, i always bet long on america, we're going to recover. whether or not obama hurts it. but these tax increases that are coming down the line are going to -- >> what tax increases? >> the ones they talked about this sunday, are you listening?? >> hold on. >> i apologize, but i want to highlight for people who are maybe not watching us but listening to us, the sec right now is charging bank of america with making materially false misleading statements. >> reference the merrill lynch acquisition? >> i'm going to assume so, but i don't know officially but mary thompson is working on that and more details any moment now. the stock is up 4%, but it is coming off the highs where it had been enjoying for the last hour or so here. i'm sorry, go ahead. >> that'd be huge news if that

were true. >> i was wondering if the obama administration might be charged that way eventually because if you look back and they said we will not raise taxes on anyone who makes less than $250,000, not their payroll tax, not their income tax, if you look at these things they're talking about from cigarette tax, to soda tax, to value tax, that's breaking the promise. >> when larry summers is asked directly, no increases on the middle class? and he can't give a definitive answer. what are we supposed to take away from that? >> i disagree, he says we have not raised taxes on the middle class. >> hold on, wait a minute. replay that, can we replay this sound bite. that is not what he said. replay this sound bite. >> we're going to keep working to strengthen the foundation -- >> no, no -- tax increases for middle income america. >> there's a lot that can happen over time. >> there's a lot that can happen over time when asked very specifically about increases on middle income americans, david.

>> what he was talking about is there's a lot that can happen in the economy over time, this administration has said over and over again, we have not, we will not raise taxes on people earning less. >> david, there's no way you can do it. use math. plain math. >> here's simple math right now, the bush tax cuts for the richest in america ballooned our deficit beyond all recognition. >> wrong. wrong. david -- you're saying things that aren't true. hold on a second. >> i'm sorry, we've got to cut you off. we've got to get to this news. mary thompson has been able to confirm a lot of this stuff. david, greg, thanks very much, we'll have you back. these are the headlines that are crossing right now. first of all the sec charging them with making material, false, ands misleading statements in the merrill lynch acquisition. keep in mind, bank of america acquiring merrill lynch last december. although the sec says bank of america said merrill had agreed not to pay year-end performance

bonuses before the closing of the merger but no such agreement had been reached, there's been a lot of controversies over the $3.6 billion in bonuses paid out by merrill lynch even as the company lost $15 billion, and all of this happening before the deal was finalized between merrill lynch and bank of america. lastly the sec saying that bank of america said merrill had quote agreed not to pay year-end performance bonuses -- that's the wrong one. this is the last one. sec said bank of america had agreed to pay up to $5.8 billion in merrill bonuses contrary to statements in the merger agreement. all of this according to court documents. those are the headlines right now. once we get a chance, we'll look through the court's documents and have more details for you on this. again, the sec charging bank of america with using making materially false and misleading statements in the merrill lynch acquisition. >> ken lewis' day just got really bad. this is huge. >> and the stock was up 6%, now

up less than that by a great degree by about 2.5% and moving lower from here. >> after all of that testimony in front of congress. paulson, everybody involved. >> i wonder what your traders think of that in "fast money" too. we will see. >> good question. battle over health care, that bill is is still raging, the controversy over it, the dems bashing the insurance companies while the republicans are bashing the plan itself. john harwood will handicap the fight on the other side. check out how some of the health insurers have been trading so far today, a mixed day, aetna, lower today, metlife up $1.40 at this hour. back after this. 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,

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the health care debate is heating up again, lobbyists on both sides have ramped up the spending and the attacks. our chief washington correspondent john harwood has the latest on the state of play. john? >> reporter: since the house and senate are not going to pass health care before this august recess, this month is going to be about selling it to the public and it's not going to be easy, arlen specter found that out when he got booed over the weekend. think about the heavy ammunition being spent by the lobbyists on all sides just for the first six months of this year, the health care industry spent $263 million on lobbying, another $222 million from finance, insurance, real estate, that includes

health insurers, of course the cap and trade is hanging fire now. insurance plays very big in this debate because democrats in search of traction are beginning to hammer insurance companies, which are not popular with a public for turning down people on coverage and all the sort of denials that they make the people are used to. and the insurance company is hitting back with another powerful argument, which is that the democrats are in favor of government takeover of health care, they're opposing that public option, so there's a lot of play in this debate, but we don't know yet how it's going to come out. >> the administration went into a void, that's why they wanted to get this taken care of before the august recess. have you heard anything regarding cash for clunkers? >> well, i have, they're strong in sentiment for proceeding on that, but john mccain is is standing up, he's been very much opposed to pork and special interest spending. he's saying no, and remember the democratic leadership staff told me that there may be other senators joining john mccain. my bet would be that $2 billion will go through the senate, but

there's some doubt about it, bill. >> all right, john, thank you very much. see you later. still ahead, are things better than you think, steve liesman will tell you why economists are revising their estimates upward. michelle and the "fast money" gang and you will be dealing with new charges from the bank of america. we'll have that when we come back with the halftime report.  , traders learn from the pros. say you want to backtest an entire portfolio of stocks. 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. trade like a pro. trade with fidelity.

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welcome to the "fast money" halftime report, getting to the heart of the action as it's happening. august ticking off with this rally as the s&p 500 breaks above 1,000 for the first time in nine months. like having a baby. how is the smart money riding the renewed optimism? let's get the word on the street. and before that, joe, zach of river twice research, and straight from nepal, mike gerka of global funds. good to see you, before we get to the market, we want to recap this bank of america story. the sec charging bank of america with making misleading and false statements in connection with its acquisition of merrill l lynch. joe terranova, this is not about the material adverse change clause, this is about the whole bonus issue, about disclosing whether or not they were going

to pay the bonuses. what do you do with bank of america here? it's come off its highs as a result of this news. >> well, i think if you have bank of america here, you're looking for bank of america longer term. it's come off the highs, but it has not come off that much. michelle, what it makes me think right here, two things. number one, i want to own jpmorgan all that much more, and we have a very strong tape today and if this bank of america news does not make the tape move lower, then that's a great indication of the fundamental strength of this rally. >> mike gerka, i see you nodding your head. >> i could not agree more, but at the same time, it's all abou transparency and confidence in  this market and news like this with big government is like standing in front of a train and it's a big light, you've got to be careful here. i couldn't agree more with that statement. >> zach, what about if it turns out they've got ken lewis lying because that's what this is implying, does that mean he goes? and what does that mean for the stock? is there risk there? >> i guess bank of america's too big to fail, but not too big to indict. look, no matter what happens,

it's not as if government action against bank of america is going to break up bank of america, and i don't think ken lewis' tenure is why anyone's investing in the stock in the first place. >> is it despite him? >> yeah. this is a totally separate attack, like the settlement in 2002, didn't relieve any trading or valuation change, i don't think expect this to have any material effect of how people view this bank because it's old news. >> would it be worse if it was -- remember, the big issue was we knew that ken lewis went to the feds and said i want to invoke the material adverse change clause and not do this deal and they told them no, you can't do that, but he never told the shareholders, that was the big issue. this is about when bonuses got paid and who said what, does that make it less important, brian? >> not so much at this point, i think, for the stock. i've been long in the stock since we started to turn the market. i think as the market moves higher, banks still pull higher. when you get a little rally in the stock like bank of america,

you've got to look to sell some calls, sell the 17 1/2 call, sell the 20 call, there is up side cap to this stock, a lot of underlying material, things going on with it as we've seen today that's some of the risk issues with that stock. as joe pointed out, you've got to look to be in some of these banks, bank of america, i still like, just watch the up side. >> joe, before we got this news, what did you think of this rally? was there enough volume? did you believe it, is it going to hold above 1,000?0? >> well, i think the rally is strong, this fundamental strength behind it and this ism number, that was a great tell and i think, michelle, on the ism number tells you third quarter gdp, no doubt about it, we are going to return to growth. >> brian, what are you seeing in terms of option activity? anything bullish or bearish? >> well, certainly on friday, a huge bullish set being made on the s&p 500. the august 1,000 calls were traded. outlying $32 million.. their belief was the market should move another 2% to 3%

higher on this type of bet, that's why you're seeing the vix stay remain elevated. yet another day where the vix stays high because people are out there buying options to give themselves protection against an adverse move down. limiting their downside risk and gaining upside potential in that situation and i think that's a tell that the market still continues to move up towards the 1,050 level on s&p. >> got it. topping the tape, as well today, the material and energy names, both sectors among the best performers as the dollar hits the lowest level of the year, oil soaring above $71 a barrel. zachary, how are you playing the sector right now? >> one, separate the oil story from the raw material, copper based metal story. >> the base metal story is being driven by that incremental demand of china. really powerful. >> and oil isn't? >> oil is not being driven by china demand. they do not rely on oil. it's the best car market in the world, its automobile usage and truck usage is minimal compared to europe and the united states. oil is one aspect of it.

and people trade them together, oil oil goes up and people think it's good for commodities. the price with things like copper and the other metals likp iron ore. >> what are is your trade? >> absolutely. i think you buy what china bias. i have been say together for years and it's true even in the eight months. it would have been great to buy at 16 rather than 64, but even so these are not back to the highs a year ago and i think we have demand increasing over the coming months. >> sorry, i understand you are coming into a seasonably weak period for the dollar. you have to expect them to remain weak as we move into the fall. that will benefit the commodities and resources. >> you are nodding your head up and down. >> when are the market goes the other way, everyone is on one side of the vote and one of the ways i look is i want to be  short on what i'm doing. i am looking below the market a

the december five months out an they are 90 cents. the risk in what you pay and it's a dollar stabilizer mid-month and they will do a  retreat and crude will be a benefactor and rick santelli doesn't want to hear this. the other very steep moves have started to happen against the dollar and i think this is one of the ways i will play it. >> good actual play. ford is trading higher by 7%. posting its first year over year increase in almost two years. other automakers expected to show a boost. this is because of the cash for clunkers program. what is the trade in the auto space. brian? >> one thing i have been watching for is it's volatile and looks like it's breaking out to the upside. if you get in and play this, you can go out and buy calls on ford. you look at the $7 strike and between there and $10.

stock continues to move and if you get the failure in the cash for clunkers, you only out lie the risk that you do for calls. you have protection to the downside in that sense and play it to the upside. i like ford and i have long gm bonds when they were trading at $7. >> he disagrees. >> michelle, i'm going to take the other side. true have to trade the reaction and the not news. what happened to fort since the news came out. it has gone down. you move to the sidelines and reload at lower levels. >> one thing on this, this is not the organic demand and people said cool, i will buy ford cars. >> bring of bank of america's charts. she will run the global wealth and investment unit. see if i got the title right. >> more power to her. >> we were ready to jump off the bank of america boat. a reason not to get off.

you look at the cape and the balance sheet. bank of america will be fine. >> does that job come with a free ford? >> a $dollar 4500 rebate maybe. >> does she add a boost to the stock? agree? disagree? inconsequential? >> she is adding a boost right now. you are reporting that news and the street likes it. >> don't move. see you on the other side of the break. don't miss the first interview. the ceo talks earnings and outlook. up next, a "power lunch" debate is flash traying bad for investors. after this, the fast money halftime report continues. >> fast money as we go to mols on coors as to whether profits will keep going. they know when to hold them and when to fold them. beautiful baby buys live from the strip on america's most

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we want to recap breaking news for you. the "wall street journal" reporting that sally is going to bank of america to run the global wealth and investment management unit. she is the former cfo of citigroup. there is a lot of news about bank of america.a. it is up 3% on the news. it had dropped and the sec was charging the company with violations revealing whether or not they would pay bonuses and it has been topsy curvy and tune in to fast money tonight. china in the spotlight as they showed the strongest growth in a year and demand within the country rather than through exports. how can you play the growth. on the line is the ambassador,

tim seymore. do they surprise you in. >> they don't and you have the commodity rally going back in january. all the way back to may of 0ate. it's driven by the domestic economy and this is just a story that has to have the growth behind it. this is important and the trickle to commodities is profound. the thing i would underscore is look at where the index is. we are essentially write where we were in 03 on the edge of the biggest bull market. >> can you believe the story? >> it's to continue to buy the domestic economy and the resource names of flying. look at aluminum and copper. buy the u.s. steel names that. is a great place to get advantage on the trade. >> lots of breaking news and that does it for us.

the ceo of mgm will join us and the negotiator is live from the strip with his favorite vegas plays. up next on "power lunch," a look at how wall street may be profiting from the federal reserve and what else? >> you will rejoin us and continue following this bank of america story. the many facets of it. and flash trading. it's a hot button issue to tell us if this is another case for the small guy getting the short end of the stick. as stocks continue their summer rally, is it a sign that sentiment is starting to turn the corner. a look at the top 10 business hotels around the world. back in a moment. >> changing bank of america with making false and misleading statements about the acquisitions. we will have more on the the top of the hour. general motors said 6,000 workers were short of 15,500

workers. former met life ceo has been chosen as the new ceo of aig. i'm courtney reagan. >> welcome back. a lot of breaking news to get to here on "power lunch". bank of america being accused of making false statements about the bonuses. mary thochlson is working the story and others are joining us. >> stocks basically still soiledly in the plus side. alcoa and du pont. can this make all of us feel better? >> mary thompson is trying to

get more information on the charges. >> the sec is suing bank of america for making the false and misleading statements concerning the merger that focuses on bonuses according to the headlines. b of a agreed to bay in bonuses which were contrary to statements and news was not part of the merger agreement between the two. it ended up $3.6 billion in bonuses paid to merrill rinch employees in 2008 when the company lost $15 billion.n. all of this raises questions about what the future is of ken lewis. this is in the wake of the directors of the company's board resigning last friday. there is a revamping and the have the wound in the progrekt

and we haven't heard about their twealth management. this raises kweaz about another official. what is the future for brian a lot of news concerning b of a. management changes and being sued by the sec. >> the bonus issue is did merrill pay early and bank of america said they had no idea and they said yes, they did. we already talked about it. that's the issue right now. we have been trying to access them. >> this is not about the change clause where ken lewis went in and said i didn't know about the

losses and i can't do the deal and never told the shareholders. >> that was the focus of the hearings held earlier this year. was he or did he fail in his duty by not disclosing the losses about merrill lynch. was he strong armed by officials to not disclose the losses. the concern that the deal has fallen apart and it adds stress to a fragile system at the time. >> when you think about it, in these statement that is the ceo makes would not be to prove you anyway. what they are looking at is the proxy statement that was filed by b of a which is in their prefew and made the false and misleading statements about the disposition of the $5.8 billion in bonuses paid to employees. >> that's right. steve leesman joins us as well. >> i am looking for a direct quote and i will take a minute here. ken lewis in the frontline

documentary that was done was asked specifically about the bonuses that night. my recollection is that he called them unseemly. it was a rude awakening for ken lewis about what was going on on wall street. they went that sunday night to finish the deal and the merger being bank of america and merrill lynch that somebody said there is one other thing out there and it was the 3.5 or $5 billion in bonuses that were due. how are you going to pay us for selling you this company on this evening? it was one of the things that you got to be -- the mergers and this was an emergency situation. i'm trying to figure out what the fed and the treasury may have known about this. my understanding from my reporting previously is they were not involved in the final negotiations. they were told the broad outlines and not the specific outlines of the deal that would have said the fed knew about the bonuses and charging. >> we have the ft as well.

what do you make of this? an interesting new wrinkle. >> it is a fascinating wrinkle. a lot of people would say has ken lewis done a good job? no. what is important is if he does leave, it should not appear as a vendetta from the regulators. i think we are in danger of seeing a lot of changes on wall street appearing to be the result of regulators rather than an effort to establish accountability. >> you have more, mary? >> a release from bank of america that settled the charges without admitting or denying allegations. i am reading from the press release. bank of america consenting to the entry of a judgment that joins them from violating the proxy solicitation rules of the exchange act of 1934. the settlement is subject to court approval. while it has been accused by the

sec or charged by the bank of america, it is settling it. i want to go over something that you brought up earlier. this is reading from the press release. essentially they allege that bank of america stated that merrill agreed it would not pay year end performance bonuses or compensation to the executives prior to the closing of the merger without bank of america's consent. they contracturally authorized merrill to pay up to $5.8 billion to merrill for 2008. these are the allegations. as they were put forth in the press release by bank of america and the company settling with the sec as they are made public. >> that was fast. i don't know how that came about. >> sorry ken lewis's job at risk and that pushes him out of a job? >> there is a likelihood that that will be the outback.

. >> charlie on the news line, is that true? >> a cut and dry case and everybody that followed this merger know that is the bonuses were written in stone. that was a clear condition of the merger. he was ready to back out if ken lewis didn't agree to that. number two, i think ken lewis is finished. here's the thing. they were about to announce the next coming day a plan as it was. they were going to basically put up a couple of people and they fired sally. she is in the running clearly. brian is in the running. maybe one more. succession was definitely on the table for the board. i think that combined with this will be very hard for ken lewis to stay on much longer. in his dream, he would love to stay where he was returning to profitability and making what

they made before. it would be very difficult. you can't deny this case. think about it. that was written in stone. the bonuses. >> you have something. >> i found something that lewis said about the bonuses. we have the right to advise them and we didn't advise them down. whatever was paid that $3.5 billion, the 5.8, they did advise them down. i have the memorandum here. >> that's not the case. unless i'm missing something. they stated something specifically in the proxy it was subject to negotiation. the bonuses were not subject to negotiation. >> b of a approval. what lewis said -- we could advise them -- >> they were in the deal contract. to do that deal, they would have to agree to -- whatever the number was for bonuses. the number came down at some point and john was embarrassed,

but let me tell you, that was baked in. to say anything otherwise is a false statement. >> what he said in the interview, they were separate public companies and we could advise them, but not dictate. >> that's the sleeving. when they were doing the deal, this came up. the final hours. this actually came up. john wanted a bonus. billion was dollars. i think it was $5 billion plus. ken lewis thought about walking away and did not. he agreed to the bonus because he wanted to do the merrill lynch deal. >> charlie, john had no leverage at that time. >> let me point out that the sec is announcing they will pay a penalty as part of this settlement. go ahead. >> i was going point out that at

that weekend, john had zero leverage. we can't get together in the time frame you want. >> ken lieis admitted this. i hate to timeout someone else supporting, but look at the specials. they talk about in that special, ken lewis is asked about the bonuses and said something along the lines of if we weren't popping champagne corks because the bonus issue came up at the end and we didn't want to lose merrill. i'm paraphrasing. they knew up until the last minute. >> here's the exact words. >> bank of america could have gone with lehman and merrill was a better price. they had no other choices. >> let me read you the exact words. i will rehash the whole weekend. hold on, hold on. >> it was baked in. >> hold on, charlie. >> here's the question.

someone told me that champagne was going and everybody was waiting to do the toast and there were the bumpy things at the end. it's probably more the norm than not to have the things crop up at the end. it extends things to the point that i never really have been happy by the time that champagne pours. you are mad at each other and drink it lightly. obviously with the announcement. that was how i felt and not different from other deals. it happens all the time. >> he admitted the bonuses, correct? that's what i'm saying. no doubt he can do it and he had to pay bonuses. i am not saying he handled himself well. i'm not saying that maybe he thought he could talk them down, but to say there was any wiggle room and paying bonuses is wrong. that was baked into the deal.

by the way, this is something that is fascinating about the deal. as much as merrill lynch was in trouble, ken lewis would have done anything. >> he wanted to do this, but if this pushes him out, you have it in and this reduces some of his duties. handicap what happens next with him having less power. >> obviously the big question for the board is if ken lewis goes, who replaces him? what are our choices? don't we have to look outside? >> we will see what happens. thanks for joining us. let's get back to the exercise bicycle or wherever we caught you there. >> he was talking down the street i'm sure. >> we are coming off the best point gain for any july in history. we will round up the all-stars and take a pulse of the market

says as the s&p moves above 1,000 and the nasdaq above 2,000. >> what are about gold? despite record investment and a weaker dollar, gold is stuck hovering below the $1,000 an ounce mark. we are back in a minute.

compared to june, up 30%. you are seeing a similar rebound and when you look at sales, 11.2 million cars sold. chrysler is down 9%, from a year ago, but up 30% from last month. >> helping to push and the price of gold is higher, but despite the index being at the lowest level of the year, gold has not managed to get back above the $1,000 an ounce level. what is moving gold in either direction? phil newman is the research director and joins us from london. good to see you. thanks for joining us. >> good to be here. >> your sense is that our perception of gold as an investment and as an asset class is misplaced or not enough of a perception here? is that right?

>> in terms of the gold, but in terms of the biggest use, people don't see it for investment. the lower demand for jewelry is having an impact. counter balancing. we don't look for jewelry to push as high, but it's important to provide a floor. when you have the support in place, that encouraging investors to come in and push

higher. >> when it comes to jewelry, people are selling. women in india is the best place to look. that's when you know the crieses have topped out. we have all this money rolling in and we can't get to $1,000. >> earlier in the year, we had levels of skraps being liqu liquidated. it's pretty hard and fast and that was in the first call. now it moves up and it's pretty slow. investment is off as well. investment is there and what you need now is another wave of

investment coming in to push prices higher. >> for those who are interested in stepping into the precious metals and the imf sale as well. would you recommend that? do you view it topping the $1,000 mark? >> the gold market is really quite tiny. the investments are pushing in and it's possible to push it beyond that level. they are pushing at the market and inflation to really start in a big way. they could see investment coming and $1,000 is possible. >> thanks for joining us. appreciate it. >> we have a strong market performance and let's get to the reporter beginning with bertha coombs. >> we have the great manufacturing number today. better than expected.d. we have the s&p above 1,000. a lot of people wanting to see if they can hold the range. you talk to every trader and

they are on the fundamentals. part of it is the big numbers out of ford. the increase in sales and that will be an effect within the s&p. 3 m because of the exposures. good year and goodrich among the s&p. the media and advertising getting a boost. if you bought tvs, you may have seen a lot of car ads. >> what about 2,000?0? we have not closed above 2000 for that. there is your perspective. everybody is talking about apple and google and going off the board. people are making bets and saying this is a net positive for each of these companies. it's going to be interesting to see if the arenas will fight for them.

chips today, the semiconductor industry quarter over quarter, 17% rise and year over year is down. intel and qualcomm is up 1.7%. we don't talk enough about the bank. they are all strong stays. just want to point out when oil is up, so is alternative energy. with that i bring it to sharon at the nymex. >> we are looking at the dollar index and oil prices rallying over $2. when you look at the drop from friday and today, it is at the lowest levels of 2009 and the lowest since last fall. oliver points out when the look at the correlation, we should have oil close to $89 a barrel.

it continues to rise significantly. when you look at the commodities, it's not the oil, but sugar at a record high and also copper. all of the commodities from the dollar trade. back to you. >> thank you very much. something that we talked about earlier on the power grid and whether or not taxes will go up on the middle class. the white house said it would not make sense to raise taxes and the president's commitment is pretty clear on that. >> forced to say that in the wake of timothy guidener and larry summers. >> if his commitment was clear, theirs wasn't. >> they are both economists? could be. >> hot money maker for traders and the companies, but the controversy is boiling. are individual investors getting the short end of the stick? we will talk to somebody in the thick of it that provides the action. the ceo of direct edge.

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>> the sec changing with making false statements and not paying merrill lynch bonuses. they had already approve and b of a paying a $33 million settlement as part of that. mary thompson has more on that. >> they would neither confirm or deny allegations.

we received a statement from the b of a spokesman and saying mr. lewis has the support of the board.d. of course all of this raising questions about mr. lewis's future. you may recall the annual meeting in april, she was stripped as a chairman title and a lot of them angry about the price of the merrill deal and the nondisclosure about the bonuses. a spokesman saying that mr. lewis has full support of the board which is a reconstutd board on b of a's board over the last six months or so. >> everyone is he has the support of the board. >> it raises all these questions. >> a lot of jockeying going o. of course they are watching

"power lunch". something else is controversial. flash order trade suggest under scrutiny by regulators on giving traders an unfair advantage over others. direct edge is coown bide goldman sacks and defends the practice, calling it a among exchanges for trading volume. the ceo o'brien provides that. good to have you here. >> great to be here. >> allow me to be didactic. high frequency trading from the computer-driven algo rhythm trading and speed measured in millionths of a second. this is a technique by some exchanges like yours that lets traders expose them to other players in the market. this was controversial because people say some traders are getting an advanced look at

others. what do you say? >> high frequency trading have been jumbled together. when we pioneered in the stock market, we did that and reaction to the fact that the market it gotten more automated. a lot of liquidity is outside exchanges and didn't have access to. let's take advantage of the automation in a way that allows the regular investor access to the forms of liquidity for the first time by exposure to them. >> this is the average investor. is it the ordinary? >> absolutely. >> the claim that it's only certain investors that managed to have access. >> it's a powerful computer. >> it's optional to everybody. both sides of the trade and both can be winners.s. there is not a zero sum gain. the people who are responding to flashes are not high frequency traders, but more of the dark pools that you heard a lot about and whether institution to institution run by large

brokers. what you have the flash orders being used by retail, institutional and other investors that choose to use it. they are optional and they are a broker and the customer can choose to use it or not. the ones that choose to do so see better prices and our data shows that investors have their orders splash and get the larger size. >> this seems to me ripe for front running. >> you flash an order and you bring stuff forward and negate the trade which is an option under the program and you get ahead of whatever it is that's out there. >> let's be clear. front run suggest illegal and it doesn't happen on the market and we could coordinate to provide the information. that could cause the market to move and having the order slashed. the order is not going to happen, but because it's an

optional program, they can choose to use this on an rt by order basis.. what's the likelihood of getting a better price and associated with doing that. >> is the little guy forced to pay more than he otherwise would? >> no, the little guy is getting better prices and larger sizes when the broker thinks it's appropriate. what about colocation fees? this is the ability to put your server right next to the exchange servers. are you providing that? how does that work? >> we don't provide it and we use a third party. that is an issue that i think while high frequency trading has been good for the market, it warrants further examination. many exchanges have. >> unless you provided it. >> it's less about them doing it

and it's a legitimate thing to do. many exchanges are spending a lot of money on datacenters and selling and some of them make tens of millions. >> for will build a huge new facility and get an advantage. >> and the real problem is, it's the exchanges that don't tell you how much it costs. they don't regulate the services. what that does is even though these are legitimate businesses, it creates the perception that someone can be this advantaged. >> this is so complex. when we went through the program training in the 1980s and a lot of people didn't understand what it was. in some ways they led to the demise of the market at that time. the debacle we have been through because nobody understood what it was all about. does it have to be that complicated to trade in the market? do you have to squeeze milliseconds out of the market to get a rebate or a fee paid to traders?

>> milliseconds can matter and we move from fractions to pennies. the high frequency traders stepped in in a way without closing a lot of capital and provide a lot of liquidity. as a result there is more volume and a tider spread than ever and that benefits everybody. >> thank you for coming in. good to see you. viewers should know about the battle. he doesn't like the colocation fees and doesn't like this flash trading. >> the middle guy is wondering, what about me? >> charley is going to come back and he has breaking news right now. we will get to that when we continue on "power lunch" after this.

>> more breaking news on b of a. part of the news on succession planning. >> this is hitting the tape. we talked about it early when i

was doing my phone walk down the street. they will announce a plan soon, imend inially and they did it by unveiling a management reorganization. we have the names and we should put them up there. from what i understand, do we have the names? we will have to read it off of my pad. the pool has been expanded to five. the head of the mortgage company is in the list. as you see, what began as the two popular replacements has been expanded to 5 1k3 those are the three other names. that is hitting the tape right now. there is a plan which is interesting. the plan gets announced on the days of this settlement which in

a sense is bizarre. this is b of a's side of the story. i got off the phone with them. listen. we didn't lie. what we didn't do is put the bonus information in there. he knew he had to pay bonuses and talk them down from 5-3. he had to pay it. we have to see what he said in the proxy if it contradicted that. that's a problem. they omitted it because that's the way they did things in the past. we am get to the bottom of that and i am getting this from senior people close to lewis.

this is those five names are the the plan or the group. they are barring that and one name will replace ken lewis. lewis wants to stick around and wants to pay back the t.a.r.p. money and don't think they will put this roadblock in. who knows what happened when he start discussing this. i have to see what they did wrong. they are claiming they didn't put it is pone us number in the proximatey and they would have to be lie 1/2 not to be the case. it seems kind of a petty charge. that's something that

shareholders really wanted to know. they were happy that they were getting what they wanted. the losses would be more problematic if they knew about losses and put that into documents. that to me is a very big material event. this doesn't seem like a huge event. we will have to see what happens. the big news on top of that, is the succession plan, one of the five people will -- according to b of a, they will replace ken lewis. when i have seen rates, it's bloody and messy. that's how stan o'neal fot to be head of merrill lynch and they were beating each other for a year and a half and stan o'neal beat everyone else. he became the sfo. >> see you later. >> let's go to the floor of the

new york stock exchange and talk about the really. the market is doing well. >> it's doing well, yes. >> this is your level. >> you kept talking about t. this is the watch point. >> it's anti-climactic. it's at 1100. there is a short couple of hiccups, but that's where the majority thinks we are going. 1014 is the level they are look at. it's around the corner here. if you look at the way people have focused on future earnings, it will be 1100. >> that's my favorite flavor. >> what's interesting is it's a pr trick.

if you have bad news, you better reveal good news. i don't think it's a coincidence that the story gets out at the same time as the sec settlement. >> i agree totally, but when they come out saying they are investigating and settle it, it's weird if you sold the stock at 50. i truly don't think we need every single data point to be strong. >> the jobs are going higher. >> they were wrong when they started with 8%. 8.9 and i think people are discounting to a certain extent.

>> solid signs the recession may be ending. what about investor psychology. after two years of paying, is hope triumph? >> can it hold for the close? more than one% today.

>> per brian who is kurply the head of global corporate and global wealth management is the head of consumer banking. thomas montag who is running on investment banking. former cfo at city and they are running business and now run b of a's global management business. david darnell who runs global commercial banking will report to mr. lewis and join the management team as well. back to you. >> thank you very much. >> a spectacular july for stocks.

more signs that the recession might be ending.. this is all hope beating mere into the ground. joining us is the favorite trading coach and the man we call dr. hope. dr. doug, welcome back.. what do you make of psychology in the market?? a very strong month of july. >> people are people. doesn't matter if you are a in a bull market or a bear market. human behavior is constant. those are the best places where people go back to behaviors. >> what do you mean? >> on the coseeno floor, people make bad decisions. that's why people are in business. there all these rallies and dates, but the higher we go up and the more days, psychologically there is a fear

that said you know what, what goes up, must come down. it's not going to last forever. before that is the fear of getting left out of this. i think that can drive the markets higher in the shorter term. >> yes. what i am seeing more and more is as more days pass, maybe i missed it and maybe if i stayed in more. now it's got to end sometime soon. what i tell people is there is a psychology and the decision. stop trying to speculate. look at the objective data right now and say to yourself, if you walked in and never traded before, what would i do right now. would i go long or short? don't think about where it has been. >> that's very difficult to do. to factor all of that out. >> that's why few people are able to be successful.. they have the develop to make optimal decisions. >> and the economic data.

what do you make for the cash for clunkers. is that driving the market or are they doing well because of that? >> the brightest thing is there people who are no longer afraid they will lose their jobs. we will have a bigger growth than people realize. it's poised for a positive third quarter. >> we set ourselves up with a fear factor that eats at us, but there is a want to be hopeful.l. we are looking for the signs that belabor. we are tired of it.

>> we believe they have hope and focus on the positive and not the negative. what i felt from people is that helps increase the positive. in trading, you have to be realistic with what the data issing you. when they change, you change your opinion and have that flexibility of going one side to the other and stop getting stuck into thinking what might happen. >> take the emotion out of it. >> or go with the emotion. times are getting better and the recession is over and the markets are heading out and the bears, i feel for them. >> you were one of the earliest ones. >> a year ago as well. thanks a lot. >> you have the gm sales out. we have phil on that. how do they look? >> slightly better than expected. general motors reporting a decline of 19.4% in july.

slightly better than the street expectation of 22%. what the focus is now, the monthly sales rate. the expectation from ford is that it comes in at 11.5 or 11.7 million. compare that with last month where the sales pace was 9.7 million and one last stat, ford believes in the last week of july, there was so much demand because of cash for clunkers, the sales pace was $15 to $16 million. >> what's the break even? we want to get to what level? >> 10. $10 million. ford's inventory is at about 50 days and you don't want it below 65. i will not be surprised if i see ford announce a production increase for the and the same from chrysler. they are on lean inventories and

general motors is lean as well. i have been told general motors inventory may be at an all time low as far as people know going back several years. >> when you say a 50-day supply, at the worst moment, we are a 50-day supply, when things were horrendous, what was the supply? >> 134. 140. you would have some models at the $180 day supply. >> this is great news for the automakers. >> yes, indeed. the market continues to really. the markets are full of hope right now. after this. welcome to the now network. population: 49 million.

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phil has been bringing us breaking news for the car makers. we heard about gm and i wanted to ask you. i saw a data point and even though sales were down compared to a year ago, one of the automakers said sales were up

52% compared to a year ago. clearly we are seeing a change in the trend. >> that's the impact. people are coming in and you can trade in a gas guzzler and get another suv. people are saying i don't want it anymore. i couldn't trade it in last year because of low values and i wanted to get rid of it and i couldn't get rid of it and now i can and i'm moving myself into a small car or a mid-size. they want to get out of the truck-based suv. we will be back with more "power lunch" as we get ready for "street signs" after this.

announcer: some people buy a car based on the deal they get. others buy the car of their dreams. during the lexus golden opportunity sales event, you can do both. it's an opportunity today. it's a lexus forever. special lease offers now available on the 2009 is 250.

breaking flews. the new york attorney general commenting on the decision to settle with b of a over false and misleading statements over merrill lynch bonuses and saying our investigation into the bonuses and pursuant matters surrounding the merrill lynch mergers continues.

they are happy the sec settled actions, but again the investigation continues. back to you. >> thank you, mary and the rally continues the first trading day of the month of august. it looks like we wha we went through in july so far. >> steve kept saying watch that level. that was the key level to predict another 100 points. >> it's impressive you have a brought base and the dow and other averages posting significant gains and cannot be underestimated. >> that's it for us. "street signs" with erin burnett is under way in 30 seconds. bank of america will pay $33 million rather the false statement of bonuses. chrysler's sales were down and the company said sales improved by 30% over june levels. the sales fell 19.4% from a year

earlier. we are first in business worldwide. i'm courtney reagan. >> i'm erin burnett. countdown for cash for clunkers, the program dies or gets another few billion dollars. the dealers and the transportation secretary here on "street signs." we will get the latest and an answer on how 15 miles per gallon is fuel-efficient. how much is about being fuel-efficient and how much is it about save something with whether consumers are buying johnson & johnson's higher priced products. plus the crustacean crash. we will explain. that is our show on a monday and it begins now.

we are up triple-digits and the sectors and materials and energy and the only one moving lower is telecom. we will have the speaker for hyundai on in a couple of moments, but sales are up 12% compared to july and 21% from a month before. it is a pattern of outperformance. we will get more on that in a couple of moments. the market is right near the high of the session and you heard the headlines about bank of america and the sec suit. the attorney general of new york just spoke and will give us that part of the story. brian is at the nasdaq. let's start with you and the latest on bank of america. >> the important thing is what you want to watch is the timing of the announcements.. look at