also the cost cutters, look at cosco, for example, their sales down 8% in the u.s. overall, that sector really looking at being down somewhere around 6.2 or so percent. i want to bring in bob, who's watching the retailers. >> is that the big topic yesterday. everybody kept e-mailing me, what the heck is going on with aig here? we're also getting titanic volumes and bic moves up and down in aig as well as other financials. here's the important thing for traders yesterday. we ended the day 0140 million shares of aig traded on a day that normally trades 8 million. folks, that gets your attention. >> something to watch. >> some saying what the heck is that all about. we got an earnings report coming out but you don't trade 134 million shares on an earnings report. look for the explanation, and there's only two explanations. one is all of the funds who are big holders decided not to lend the stock anymore. that's the most likely explanation, trish. there was a ban on naked selling

and it's possible they said we will be stingy giving the stock ou out. i know it's not borrowable at this point. it's possible aig decided to cover funds because there would be good news out of the earnings report. and maybe a debt for equity swap or something like that. that's not plausible, even though it might be good news. one fund or two funds will not do 134 million shares. that's the idea that everybody stopped lending the stock or called it in is the most plausible explanation. david, by the washy, also spoke about this earlier. >> i want to get over to fannie and freddie. >> same thing happened yesterday with fannie and freddie. the volume goes through the roof. what's going on? the most likely explanation is the talk about a good bank/bad bank. that was floating around yesterday. "the washington post" had a story on it today and that was out there yesterday. they're going to actually start splitting the assets of these

companies up, that will be incremental positive as well here. >> finally, big trends going on in retail. >> right. rebecca will give you all of the details but the main trends are simple at this point. number one, cost cutting and no revenue growth. number two, incremental earnings, rebecca gave you the details, very good confidence. but demand is poor but inventory is leaner. heck of good news. >> thanks very much. we will go over to rebecca now for more on this retail sector. what can you tell us? >> trish, as we have been discussing here, it wasn't a great, pretty july but the outlooks are what are capturing investor interests. back to school, as we all know, getting into the full swing of things. a number of the bigger names in retailers came out bullish on their expectations. old navy, for example, reported worse-than-expected july sales declines but the forecast for the second quarter earnings is almost three times what analysts were expecting. that's a good sign for them.

jcpenney, the gap, also upped their estimates. aeropostal, they did deliver the best july. retailer still fell short of analyst expectation. jcpenney, they saw sales drop 12.3%. that was in line with expectations. but they raised guidance and originally projected they would see 8 cents to 12 cents in loss. now the department store chain says it will be dramatically smaller in terms of its loss. about a penny there. gap, meantime, saw their sales tumble more than 8%. that still came out of expectations and they upped their guidance. some of the best sales reports came out of the off-price retailers. we talked about them here on "the call" just yesterday. both t.j. max and ross stores higher for the month of july. the biggest surprise, they came out of a handful of retailers that managed to outperform very low or some call modest expectations, the limited, nor strom, zumiez.

they came out with a positive july. half a percent hiker. kohl's. a lot of the same stuff we talked about here still applies. these companies are cutting costs. they're managing inventories, which are down 10% to 20% from last year and looking at slightly better growth margins. they're getting better costs on their goods because goods for them have come down just like goods for us have come down. a couple curveballs to consider. bob has been talking about this. we are looking at this, cash for clunkers. people are putting more money into their cars and, of course, we know people are saving more. back to you. larry? >> thanks very much. what are the chain store sales results mean for consumer spending and especially the stock market? joining us now is rob morgan, market strategist from claremont wells strategy. richard hastings, consumer strategist for global hunter securities and the director of small and mid cap growth strategies for fifth third asset management.

hello, gentlemen. rob, start with you. the stock market is very bullish about an improvement in consumer spending. let me read them again. the index is up 15%, up 55% since early last march. what do you make of this? is it getting better? does the low unemployment claims mean anything? does the economic recovery mean anything? >> larry, i do think it's eventually going to translate through but i think the retail sale sales today show the consumers are the weak link. from home prices, shrinking nest eggs. but as was mentioned earlier, they're giving more bullish guidance down the road. if you look at 2010 earnings for the whole consumer discretionary space, which retailing is part of, it will be one of the biggest positive pops. >> pardon me for a second. i have to butt in. we have to go to jim goldman. he has breaking new on twitter. it's not working. i have been trying to tweet all morning. >> melissa, you know, if you are

a regular user of twitter and there are 45 million of you across the united states, you're having a bad day. as of 9:00 eastern this morning, you probably noticed twitter was down. the company is famous for its outages but the company is now confirming it is completely different. twitter confirming the site is the victim of a denial of service attack which began earlier this morning and twitter is not offering any time frame as to when this site may be up and running. live journal, another popular website s. also down. we have not been able to confirm whether that, too, is the victim of a denial of service attack. earlier this week, properties owned by gawker media were also victims of similar attacks, which sent those sites down for 24 hours. twitter has been down since 9:00 this morning eastern time. as of 10:59 eastern, the company is now confirming this site is the victim of a denial of service attack and the company is offering no time frame as to

when it may be back and up and running. there are a lot of people now wondering what they will do as far as communications are concerned. >> jim, thank you very much. i have been heartbroken by that that all morning and now i have an explanation. let's go back to our discussion. richard, if i could ask you a question, i think we all get the story here, that consumers still have to go out and buy stuff. kids are growing. you have to do something for back to school. they will be trading down to cheaper brands. isn't that already priced in, though? i was looking at the stocks of target and kohl's. they rocketed up from 60% the bottom in march. is there still a way to make money or everybody knows this story? >> pretty much but the sector does have a lot of technology that didn't exist, let's say five, seven, ten years ago. they're able to get productivity improvements on top of a relatively weak consumer environment, and they're discovering new ways of getting protivety gains at a faster rate than the improvement in the consumer economy, which as we know, is improving at a very

slow pace. >> what does that mean? are there stocks to buy there? >> i don't want to see too many comments about free cash flow. that makes me think they're not spending on technology. we want to see confidence about inventory levels. we like to see retailers make comments where we can specify where they are making market share gains by what product and using what tools. we want to see them make comment that's show they're confident about spending on inventory and on technology, and then we take it from there. >> scott, is this a bigger-picture story? i'm struck by the disconnect of the actual reports. sales, i guess were down 5% or 6%. maybe the guidance was a little better going forward. but you got tloo look at the stk market action has been so strong. i want to know, is this a recovery play, or is this just time to get out of retail stocks because they've gotten too far ahead of themselves? they think that's the biggest question here. >> i don't disagree, larry. but i do think the retailers really saw this before everyone.

if you rewind back a year, long before even the credit issues of late last year, the retailers seen some pretty dismal results going into that. so many of these companies and the management teams have been in cost-cutting and cost management and redefining their business models for quite a while now. i think that's one of the encouraging things. because now when we do get some incremental top-line sales, i think there's going to be dramatic earnings leverage in self-of these companies. >> let me just ask another point, rob morgan, can i connect tomorrow's jobs with this retail discussion? we had, okay, the jobs losses are moderating. that's great. we're supposed to lose 350,000 tomorrow supposedly. that's a better number. but the wage and salary numbers, the consumer income numbers are lousy. i want to ask you, how far ahead can you look? the unemployment claims are dropping. there's recovery in the air. but we're not really getting the execution yet. and that's the key point here

between the disconnect of the retail stocks and the actual numbers. jobs, incomes. how do you see this? because that's, after all, at the end of the day, retailers are great marketers, yes. but if consumers don't have income to spend, it ain't going to happen. >> larry, you make it a good point. we're going to end up having a jobless recovery this time, just as we have the last couple of recessions. as you pointed out, income levels aren't rising as rapidly. so it is going to be difficult for that to translate through into consumer spending. at the same time, though, you asked the question a minute ago, do you just get out of the retailers here? i don't think you do. i think you have to have exposure and there are good names to be in. >> give me a good name. >> go ahead. >> at the present. >> one i love is dollar tree. dollar tree sells basically items under a buck, and this is a company that today had 7% growth in same-store sales. their margins are going up. this is a great company. that would be my top pick out of

my three. >> guys, thank you so much for joining us. we appreciate it. >> thank you. coming up -- we have a cnbc exclusive for you. goldman sachs abby coleman will join us on her view of the market, the economy and which sectors will benefit most from a global recovery. first up, newscorp's rupert murdoch said he plans to start charging for awful his company's news on his website. that's a big move. will it backfire? industry experts speak out only here on "the call." if you're taking 8 extra-strength tylenol...

a day on the days that you have arthritis pain, you could end up taking 4 times the number... of pills compared to aleve. choose aleve and you could start taking fewer pills. just 2 aleve have the strength...

crude inventories rose by much higher than expected, 1.7 million barrels last week. you can see right now it is trading lower. front month contracts down more than a buck, 787 the last trade, trish. >> newscorp, which is trying to put a halt in newspaper revenue said it is considering charging for access to all of its web news sites within the fiscal year. take a look at where it is trading. we have a chart for you. we will show you here, up 3%. folks like this news here, $12.59 a share, up 38 cents. julia is in los angeles with rupert murdoch's latest gamble. hey there, julia. >> hi, trish. media companies have been trying to figure out how to compensate for declining ad revenues and shifting to consumers online. rupert murdoch's new strategy to pay for content plan san

unproven one. an idea to charge for access to the company's websites. saying quality journalism is not cheap, in an industry that give as way its content is simply cannibalizing its ability to produce good reporting. it is a rare success story in charging for online content. so there are two major challenges, getting customers to pay for something they get today for free and the fact most newspapers are not differentiated as "the journal" and will have little draw and space as free competitors. >> the ability to charge for online content depends upon the value, meaning the barrier tonightry of creating that content. and i do think "the wall street journal's" content occupies a very unique niche within media. >> and it's not just news content. newscorp recently hired president and chief operating officer carey saying it doesn't work even in broadcast tv. raising the idea of demanding cable distributors pay carriage fees for the fox network. cbs corp. reports its earnings

after the bell of all of the earning giants. cbs is most reliant on advertising. we will have to see if investors will look at any subscription models to balance out its reliance on ads. back to you. >> thank you, julia. we want to bring in the director of global and internet media and michael look, cnbc contributor and author of "the man who owns the news." great to see you both, gentlemen. david, i will start with you. i was telling you earlier during the commercial break, one thing that's always struck me is how difficult this is in general for -- for newspapers that are online in a way -- you can't do this because it could be collusion and monopoly if they all got together and said we're all going to charge, but it's almost as if they socked themselves in the foot in a way because they made everything available for free. has that got to change? >> i think they didn't anticipate the collapse in sort of premium pricing for online advertising that's occurred for some of these -- some of these sites. and i think we have gotten to the point where they actually have to make this work.

the fact is the print business is in a secular decline. it's probably never going to recover to the levels that it was. and over time, online will cannibalize the hard copy. so it's time that they actually move to some sort of a premium pricing strategy. the bigger question that we're talking about is how will you actually implement that? is it a full subscription price? is it a hybrid model? is it a microtransaction? i think rupert is really brilliant at the big picture. that's what we are waiting to figure out. >> we will talk about that more in a second. i want to get over to michael. have you written a book about murdoch. you have a lot of insight into his personality, into how he works. is he going to be sort of a trend-setter here? do you think this is going to be a success, or does he risk falling sort of flat on his face when people say, you know what, i'm not going to pay. i'm going to go to "the new york times" or somewhere else where i can get this news for free? >> he is certainly going to try to be a trend-setter. in some sense this is a hail mary pass. rupert is really up against it.

he's made absolutely counterintuitive bets. he's bet on the newspaper business. this is what he wants. he wants to continue to be the man who owns the news, even as the news business is changing under his feet. the problem with this idea that -- that newspapers now have to -- have to charge for content, that if they could all get together and all agree to do it, that would work, is preposterous. because it goes back to an old idea that news companies monopolize the news. you couldn't possibly get them all together now. there are just too many news outlets. so where rupert -- >> that's a good point. >> -- is at this point is the place he's been many times in his career. he feels that with his -- his determination and with his clarity and with his absolute

refusal to do anything else, he will be able to enforce a standard here. the media business will follow him. >> hang on one second, michael. i want to go back to this issue of what exactly the model is and david was talking about it earlier. david, do we see this as an itunz-type model? i say i want to read that article. i will pay 99 cents or 25 cents to do it? >> what i think rupert hasn't really articulated in this strategy is ultimately, the way the process has gone is when some of these companies have made their online content paid. what they have done is handed it off to someone else, who then controls the customer and advertising surrounding that. i think what's really interesting about this is that he -- he kind of has a vision when he retains control of the customer rather than going through an itunes or an amazon. we don't know if that will work. >> i think there's a couple of important points to make here about rupert's vision, not least

of all that rupert knows nothing about technology. certainly the last time i saw rupert was a year ago and he still had never been on the internet without someone else's assistance. also, broadly speaking throughout newscorp, you nope, newscorp is -- without a doubt, the most retarded media company when it comes to technology. even if they own myspace. it has more reporters than any other news company in the world but they all have older computers than any other news company in the world. >> david's grimacing over here. >> i mean, it's a company that really fundamentally doesn't care about technology. doesn't regard it as something of value. >> i think rupert been actually on the forefront of kind of getting into new businesses, harvesting mature ones and try to sell them and invest in new ones. i think a lot of people question the logic of launching sky italia or the eastern european investments. >> that's true but it doesn't really fundamentally address the

specifics. if you do not know about the internet business, if you do not know about technology, what we know is you fail at it. >> we shall wait and see. michael, great to see you. thank you for coming on and pleasure to have you here at th whether you're a bull or bear, what our next guest has to say is worthy to your attention. >> we will talk exclusionively to goldman sachs' abby joseph cohen. where does the economy fit into her picture? keep it here on "the call."st see in the history of professional tennis. so i've come to this court to challenge his speed. ...on the internet. i'll be using the 3g at&t laptopconnect card. he won't so i can book travel plans faster, check my account balances faster. all on the go. i'm bill kurtis and i'm faster than andy roddick. (announcer) "switch to the nations fastest 3g network" "and get the at&t laptopconnect card for free".

shopping online can help save. doing it with bank of america can help save a lot more. up to 20% cash back from over 300 online retailers with our add it up program. just sign up and use your bank of america debit or credit card when you shop online. it's one of the many ways we make saving money in tough times a whole lot easier.

okay, retail sales coming in better than expected. economists raising their forecasts and our hopes, by the way, for the third quarter. now the monthly jobless number is about to hit, all begging the question or questions, is the economy turning? is the rally sustainable? let's ask abby joseph cohen, president of the global market institute and senior investment strategist for goldman sachs. abby, thank you so much for joining us. let's start with the number out

tomorrow. some of the estimates i have seen, a loss of 275,000. that seems light to me. where do you come in? >> whether the number comes in light or unpleasant tomorrow, the real point is this, we are beginning to see improvement, even in the labor market. where it appears that the job losses are slowing and there is some job creation going on. but let's keep in mind that labor markets are unlikely to turn all at once or on a dime. we have many more months of difficult labor situation ahead, even if the recession using gdp or industrial production is almost over. >> you don't want to give us a number for tomorrow, abby? >> the number would come from our economics team. i don't do that number directly. >> abby, i'm going to put up on the xrechb screen -- by the way to see you again. we had a big drop in unemployment claims, unexpected drop in unemployment claims. and it's a leading indicator of employment recovery. a spate of leading indicators

are all pointing to recovery, abby. so i want to ask you, number one, are we in a new bull market for stocks? number two, are you confident we're going to have economic recovery in the second half of the year? >> there were several important questions embedded in that, larry. let me try to do it sequentially. first w. regard to the labor data. one reason i hesitate to spend too much time focusing on a specific number such as the one coming out tomorrow has to do with, yes, labor markets will improve in an erratic way, but also these are data which are seasonally inflicted. these are numbers which are very hard to interpret in the context of, well, it's the end of the summer. are people going back to school and on so? point one. point two, i think more importantly, is we do think that the new bull market has begun, it may prove that it began in march of this year. clearly, many people were looking for better signs on the economy, and we're now getting

them. not every sign is positive but we have seen an upturn in things including business equipment, the labor news is better. it's still not good but it's better than it was. and we believe that inventories will prove to be very important over the next few months. many companies are trying to be very cautious over the last year really squeezed their inventories down to level that's are unsustainable. so even without any notable improvement in current demand, companies just need to have more stuff in the back room to get their business done. >> last time i spoke with you, you were early to say that you thought the third quarter was going to end up being surprisingly better than people thought. now other people have jumped on that bandwagon. are you even more positive on the third quarter? what about the fourth? >> certainly the data for the third quarter leading into it is looking quite good, or the data points are looking quite good. and i think what many people forgot is that in any recovery from recession, those first few

months can be much more energetic than people expect. that doesn't mean that the first few months of recovery in which inventories are rebuilt and you get those easy comparisons, it's not to say those types of numbers are sustainable, and we do think there are some issues in 2010, particularly as it rempts to a high relates to a higher savings for consumers. but our sense is things are coming together not just in the united states but there are other nations, primarily in asia, where economic growth does seem to have resumed. >> abby, as we talk, the s&p 500 is sitting right at about 1,000, right now as we talk. i want to ask you, can we get it to 1050? can we get it to 1100? ultimately, a target might be pre-lehman roughly one year ago when it was close to 1200. how do you see the shape of this bull market? >> strategy team here, larry, do believe the 1050 to 1100 range

is where we should be towards the end of this year. keep in mind that profits are in the process of recovering. a lot of noise in those data because of write-offs and so on. but we believe that a reasonable number for next year is something like $75 per share, and so at 1050 on the s&p 500, that's just about 14 times earnings. we do think that's achievable. doesn't mean we get there in a straight shot. something that we have spoken about before is the staircase pattern of recovery in a -- in an equity market. even if this is the new bull market, don't expect it to look like a v. expect it to look like a series of upward steps. >> what sectors do you think are going to lead us out of here? if you missed the run so far, what do you do? >> our sense is the best performance from this point forward will be those areas that are tied to cyclical improvement, economic recovery. that means stocks should likely perform better than bonds, and within the stock market, we

would be looking for the more cyclically expose td category that's would include energy, technology, and dare i say it, financials. overtime last year or two with all of the different problems in the financial services sector, many of us have lost track of the fact that most of the stocks do follow economic growth. so when the gdp is doing well, financial services tend to do well at the same time. >> not bad to have a zero short rate, abby, and a steep upward curve. for those banks and financials, that's one of my mantras. are you looking for a better-than-expected profits recovery? what we got is better-than-expected profits in terms of losses sometimes, sometimes gains. are companies now lean and mean enough wall of the business cost cutting to give us a lot more torque in profits? and would that really blast the stock market higher? >> larry, you're right on target here. there are two things to be looking at. number one, margins held up remarkably well, even during the

very difficult portion of this recession. companies were being very careful in terms of cost containment and we're seeing that margin improvement really benefiting the underlying growth and the bottom line in the second quarter, and we think it will be shown in spades in the second half of this year. in addition to that, we have a very favorable comparison period. keep in mind that many companies and many investors look at profits not on a quarter-by-quarter sequential basis, but year over year. and of course, the third and fourth quarters of 2008 were dreadful. so we believe that the third and fourth quarters of 2009 will not only be good, they'll look fabulous by comparison. >> wow. >> one final point if i may, many of the underperforming, really strained companies a year ago are no longer in the s&p 500. >> right. >> so that's one more optical illusion on the plus side. >> abby, with this kind of

optimism, you ought to keep talking for another 20, 30 minutes. this is great stuff. it's such a pleasure to see you on the optimistic bull side because you have a great record down through the years. >> thank you, sir. >> thank you for joining us, abby. we appreciate it. trish? what are two prominent democratic senators saying about their party's in-fighting over health care reform? john harlan spoke with them and he's going to fill new, larry. >> but first up, shares of home shopping network parent hsn surging more than 25% today on pretty good earnings knows. ceo mindy grossman joins us first on cnbc to discuss the numbers and what she's seeing on the consumer spending front only here on "the call."fo unkers pro a great deal gets even better. let us recycle your older vehicle, and you could qualify for an additional $3500 or $4500 cash back... on top of all other offers.. on a new, more fuel efficient chevy. your chevy dealer has more eligible models to choose from - more than ford, toyota, or honda.

so save gas... and money... now during the chevy open house. go to chevy.com for details.

welcome back, everyone. home shopping network operator hsn inc. flown into a profit that earned 20 cents a share, compared to the loss the year before. take a look at how the stock is doing just serving today. they're up better than 20%, $1.96 at 1163 a share. we have with us hsn ceo mindy grossman. she joins us for favorite on cnbc interview. good to see you and congrats on a good quarter. >> good morning. thank you. >> mindy, you were able to achieve this strong quarter through what we're hearing from a lot of companies now, and that was by controlling costs. at what point do you start to see the shift from controlling cost to really growing revenues? >> well, if you really think

about it, our performance in the quarter was about leveraging the unique and differentiated aspects of our business model in addition to managing costs and our operating profit. so what we're focused on being live 24 hours a day is our ability through our diverse product categories to manage shifts in consumer demand. and if you look at hsn in particular, we were able to only have a sales decline of 1%, but others rose 15%. it's been a balance of leveraging our models, controlling investment, making strategic investments and gross profit. >> one of the things that aided you in that endeavor is the ability to really control inventory. have you a unique way to control inventory. this is very much a realtime situation. explain that to me. >> well, we're live 24 hours a day. so our ability to immediately

understand shifts in consumer behavior, shifts in spending, we also have such a diverse product portfolio that we're able to adjust to that mix and manage our inventories as lean as possible within the category that's we know the consumer is focused on. and that gives us a very unique capability. our store changes every day. we're not locked into real estate. we're not locked into shelf space. so we can manage that very effectively. >> what are you seeing in terms of trends with the consumer right now? are you seeing any kind of pickup of activity? do you feel like things are going to be better on the horizon? >> well, we certainly hope for improvement but the reality is right now that the ceiling has come down on consumer spending. so what we're trying to focus on is if she is going to spend, what is she going to spend that on? what we have seen is that she's made a determination that there's a difference between a

self-purchase and a selfish purchase. where is she focused? things for her home, things for her family, things that will save her time, money, will enhance her life. so areas like fitness, wellness, cooking, beauty. and then if it's an affordable indulgen indulgence, he's still making that purchase, just less of them. >> so price point is important. >> price point is very important, son is price value. >> mindy, let me ask you on that point, is that bullish or bearish for you? i would think you just want a whole lot of spending and shopping. and one thing caught my eye in the notes, people are buying silver, not gold. i don't want to demean silver, but it all seems so demoralizing. i want them to buy gold. i want them to go out there and buy lots of things they haven't bought the last two years. in terms of your outlook, what does this smart and savvy shopping mean? is it good or bad for you? >> actually, it's good for us if

we can get the share of wallet of what she will spend. we need to focus on determining how we can provide an experience houn and how we can provide product that will make her feel good about spending again. you mentioned jewelry specifically. our jewelry sales actually stabilized in the quarter because we really focused on a combination of fashion jewelry look but we also launched 13 collections and fine jewelry. it's not just about price right now. it's about price value, but it's also, if she is going to spend, it should be unique and differentiated so she's feeling good about what she's spending it on. >> okay. all interesting stuff. mindy grossman, thank you so much. we appreciate it. larry, i think you can do a pretty good search for gold there on the hsn network. >> i just say, silver's nice but i think gold is better. >> larry's selling gold stars. >> go for the gold! go for the gold! >> all right. >> whatever. >> platinum. up next -- the push for

health care reform causing friction among democrats on capitol hill. john horowitz spoke with two of the most powerful senators. what did they say? >> timing is one of the flash points in the health care debate and dirpt senators have different views what it needs to get done. we will talk to chuck schumer and kent conrad right after this break. it made a big splash with the employees yeaaaahhhh! find out more at aflac!... ...forbusiness.com (laughter)

a day on the days that you have arthritis pain, you could end up taking 4 times the number... of pills compared to aleve. choose aleve and you could start taking fewer pills. just 2 aleve have the strength...

check out unilever company, reporting a 4% growth in sales, beating analyst estimates. but the ceo warns of tough conditions ahead in the market. stock is trading up. it's up a point. there it is, 4%. looks good. they beat -- beater is better than losing. >> definitely is. we like beating. >> abby cohen beat everything. that was unbelievably bullish. >> yes. the battle for health care reform is not just between the white house and congressional republicans. there is also division within the democratic party. i'm sure you have noticed. john horowitz sat down with democratic senators chuck schumer earlier this morning and he has more on that. >> one of the things dmgz have been debating is how quick to move. the president wanted a bill by the august recess. of course, he's not going to get that. there are bipartisan negotiations going on in the finance committee but rank and file democrats are beginning to

get impatient with that process and want to either put up or shut up. here's chuck schumer on the timing question. how much time do they have? >> i think the realistic time is mid-september because they've been at it for three, four months. if they can't do it by september 15th, i think the overwhelming view on the democratic side is will be then they will never get it done. there's always a worry that delay, delay, delay, you lose any momentum whatsoever. >> now, that is certainly not the perspective of the so-called gang of six, which is right now meeting at the white house. we talked to one of those members before he went to the white house, kent conrad. he says that you simply can't rush this. let's take a listen. >> first of all, i think any artifi deadlines are just unwise. the most important thing we can do is to get this right. that's what the american people expect. that's really what we need to do. but, obviously, a conversation just can't go on forever.

either we've got to find a way to reach conclusion or we've got to find another way to get the job done. >> there are some things these democrats agree on. one of them is that the congress is not going to be bound by the deal between the white house and drug companies to not permit negotiations on drug prices by medicare. we also talked, melissa, with chuck schumer about the flash trading ban, which he caused the fcc to implement earlier today. he wants to look at other aspects of the trading system that may not create a level training field and he said the s.e.c.'s work is not done on that. >> john, let me ask you. go back to the health issue again. you saw senator envy in "the wall street journal" saying the government insurance plan doesn't work for him. he's part of this so-called bipartisan group. the bipartisan guys, they don't want to spend all of this money. they don't want the taxes. is the government insurance plan still alive, john, or is that going to have to go to get any

reform at all? >> i think it depends entirely, larry, on whether or not you have a bipartisan process in the end. if the bipartisan group, which has been at this for some weeks now, does not come to an agreement, democrats are going to go back to a more robust version of a public option. if they think there is a shot -- and i think obama would prefer this to be the outcome of getting grassley and enzi on this bill and maybe picking up a couple of other republicans on the floor, then you could see a co-opt-type arrangement. and the question is from the standpoint of rank-and-file democrats, how much teeth there is in it. chuck schumer said there's a whole lot of play in the details of what that co-op situation would be. >> that's the change, cooperative exchange, which is different than the public plan. there may be overlap but it's basically different. >> yes. >> got to leave it there. thanks, john harwood. we have "power lunch" at the top of the haur. bill griffeth is standing by to give us a sneak peek. >> we will have more and looking into this attack on twitter.

also, we're going to talk to a lawyer with baker hostetler. they advised executives on what to tweet and what not to tweet. there's a job description. also, we're shopping for retail winners as many of them come out with their latest reports on sales and a cnbc exclusive. we have the ceo of mf global, the big options and futures broker, how they did in the market and what they think about the move to limit poensitions i the futures markets. we will see you at the top of the hour on "power lunch." larry? wall street's look ago head to the much-anticipated july's jobs report. what are the traders saying about that report? >> we are going to speak with them but i can give you a little preview. they're encouraged by today's jobless numbers from today, weekly jobless claims. we will talk about that as well as rick santelli at cme group with the bond market perspective. we have it all for you, equity and bond markets coming up only on "the call." the three of us will be back in two minutes.

giant private equity foirm blackstone out with 16 cents a share, topping estimates. the stock had climbed and right now it's trading a little down on the news. that's why, because they have been rocketing so much. it's down about 2%. trish? >> the big number to be on the lookout for tomorrow is the july employment report. economists are anticipating a loss of 275,000 jobs with an unemployment rate that's going to tick higher from 9.5% to 9.6%. here to preview the numbers from a trader's perspective, we have

steve grasso and stuart frankel on the floor of the nyse. also rick santelli at the cme group in chicago. wonderful to see both of you guys. steve, what are you looking for tomorrow? >> i think the adp number -- >> 9.6, 275? >> can you hear me? >> as long as we are 9.7 and lower than 350 is the number we're looking for. adp allowed for us to widen that number. i think before that we are looking substantial lawyer than that. but i think adp widened the scope a little for us. >> a lot of times we have seen most recently that these numbers are coming in a lot worse than expected. what will that do to the bond market tomorrow, rick santelli? >> before we get to that. i think i have a big bit of news here. i started asking trader what's they thought but i ended up on the phone with charles biedermann from trim taps. there's something unusual going on. larry, listen to this. there could be a benchmark

revision from job loss from january through the end of may to the tune of 500,000 to a million more job losses because -- larry was talking about how income has been falling. well, it's interesting. the bureau of economic analysis, instead of using realtime withholdings data, they use unemployment insurance and sometimes it's six months old as in this case. so they overestimated withholding is huge. while with holdings are much more dramatically lower, which they now know, the only way to get there is less jobs, there could be huge beth mark nchmark revisions tomorrow. this is huge. >> that's a great point. i have seen the biedermann thing. but i don't want to lose site of the adp numbers and especially the unemployment claims. now, the unemployment claims, maybe we will put that chart back on the full screen. today's jobless claims, which fell much more than anybody thought, that doesn't really show up in tomorrow's report, because the canvas is the two

weeks, the middle two weeks of the month. but can you see from that picture the trend line is pretty steadily down. and steve grasso, the adp report is not perfect but it also shows a trend line of lower job losses, fewer job losses. so while i agree with what rick is saying, steve, i don't think will you get a catastrophic number tomorrow like 500,000 or 600,000 or not. what's the buzz on the floor? >> well, the buzz is we're looking for nonpharm to be -- as long as it's south 3506, we're intact. there's a correlation to the numbers coming out tomorrow. >> i have a question here. rick, a lot of people said to me one thing this report is not totally taking into account is that the fact that so many folks have in fact given up all together. is that something that we should be weighing, or is that just, well, you can't quantify it so really why bother?

>> it's a huge issue. but to be objective, most of the research i've seen hasn't been able to prove any really solid fashion that, that is occurring yet. we need to be fair there. the jobless claims drop is very important, larry. once again, we have to differentiate between job loss to zero to job creation. >> the insured -- the insured unemployment rate which comes out has been trending lower. that's another important indicator. i'm not looking -- >> no -- >> i personally think the better, big improvements are coming not tomorrow but in the subsequent months. i think tomorrow is a holding action. >> i think everyone's focused on tomorrow, but my clients are watching jpmorgan, morgan stanley and goldman. everyone's been calling for this 3% correction. those are the stocks that have led, and if they start to get soft here, if they start to get soft, we can come in a little bit. >> on that note -- >> this number tomorrow has a poor handle. >> the market will tank.

we are all talking about knee-jerk reactions. i'm talking longer term. >> thank you very much, guys. we appreciate it. steve, rick santelli. cnbc will be all over this employment report all day tomorrow, beginning on "squawk box" when the number is released at 8:30 a.m. eastern. you have got to tune in. you don't want to miss it. that is it for "the call." >> i'm larry kudlow. see you tonight. >> great to see you, everyone. >> "the kudlow report." "power lunch" is coming up right now. i've been growing algae for 35 years. most people try to get rid of algae, and we're trying to grow it. the algae are very beautiful. they come in blue or red, golden, green. algae could be converted into biofuels... that we could someday run our cars on. in using algae to form biofuels, we're not competing with the food supply. and they absorb co2, so they help solve the greenhouse problem, as well.

we're making a big commitment to finding out... just how much algae can help to meet... the fuel demands of the world. 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. the gold delta skymiles credit card... from american express... it's the official card... of the world's largest airline. and it's the only credit card... that earns miles on delta. miles that take you... to more places than ever before. over 350 destinations worldwide. so switch today.

get up to 25,000 bonus miles-- good for a free flight. call now to apply. there's no annual fee for the first year... and you can redeem... with no blackout dates or seat restrictions. these are just a few of the benefits... of carrying the official card of delta air lines. switch now and you can earn miles... on delta with your purchases: groceries, gas, entertainment, and more. get up to 25,000 bonus miles... with the gold delta skymiles credit card. call 1-800-skymiles to apply. this is the official card... of the world's largest airline.

hello, and hi, but not necessarily in that order. welcome to "power lunch" for a thursday. i'm bill griffeth. sue is off today. we welcome rebecca jarvis here. stocks struggling a bit to hang on some early gains. offsetting positive news on the jobs front, so to speak. energy and health stocks among the big decliners as well today. we have a possible deal on cash for clunkers. progress on health care reform, and calls for a single bank regulator. so senator mark warner is in the middle of all of those issues. he's going to join us first on "power lunch" here on cnbc.

hello, everyone. i'm rebecca jarvis. twitter gets hacked. the attack causing an outage at the online social network, this as law firms begin selling their ceos to be careful about what they say over twitter. we'll look at the fallout. here's what else is on the menu. i'm mary thompson. on the menu, a federal judge puts hearings on ice. the judge wants to know if the $33 million deal matches the seriousness of the allegations? i'm jim goldman is the silicon valley bureau. t-mobile signs an additional 325,000 new customers in the first quarter and says a turnaround is coming but not here yet. but with new handsets this week from google and research in motion, momentum may be finally swinging its way. i'm julia boorstein, can google survive an economic meltdown and the high cost structure? plus, newscorp is planning to charge for its news websit