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coming up, fed decision 2:15, "street signs" with erin. don't miss it. >> call. >> that's right, "the call" right now. welcome to "the call" i'm trish regan on the floor of the new york stock exchange, 90 minutes into trading. we are up 125 points. the bulls have come roaring back. stocks pouring forward as we see some movement into financials and to tech stocks. but what happens after today's fed meeting? we will discuss. larry. >> you got it, trish. the new bull market. and as the fed concludes it's two-day meeting on interest rates, the big debate. should they begin their exit strategy right now? we are going to have it all. >> and i'm melissa franz en. it has been a tough year for retail with consumers not spending and we'll discuss whether the government should help them out? why not?

it helped the auto industry. why not a cash for clothes program. this is "the call" on cnbc. okay, here's the bottom line. investors not waiting for the fed decision this afternoon. instead coming back into the markets, buying the financials and the chip stocks gaining after applied materials gave an upbeat earnings outlook. don't forget the national association of retailers says median home sales rose 4% from the first quarter, still down, we know, and the dow up 122 points, 9364, the s&p charging higher, as well, up 1.25%. and the nasdaq now trading higher by 1 and 2/3% on the day. trish, a lot of energy on the floor. >> why not? up 125 points right now. really this is being fueled by the financials, a little bit by tech. but what you have going on is

basically everyone very excited about this fed meeting today and the assumption -- the assumption that the fed will kind of keep things as they are. the status quo. and not be raising rates any time soon. they're looking for some language that may indicate some plans to have an exit strategy at some point. but not in the near future. and that's why you're seeing this rally right now. with me on the floor, as always, great to see you again, bob. you know, we're looking at a rally here, quite substantial, especially after yesterday. >> and there is good news today, and we're being led by home builders and financials. toll brothers came out with some very important commentary this morning. and i don't want to make a big thing out of it, but they reported orders increased by 3%. you might think who cares. this is the first year over year increase in orders to buy homes for three years for the company here. and one of the reasons, trish, it was so good was the cancellation race was only 8.5%. heavens, we had 22% in the last quarter, 37% in the quarter after that. that's a big reason things are

improving. and the only quibble here is they didn't give us any guides. but none of these companies are. so i guess we're okay with that. look at these nice moves up on the home builders. remember, there's been a lot of questionable data. here is an unalloyed of good news here. can i get in -- >> i think that's important. >> aster made some comments in thai pai, the third biggest personal computer maker in the world and came out and said that notebook shipments were going to improve. they revised their forecast for notebook shipments rather notably so some of the big hardware companies are doing better today. and aster, of course, has, you know, a lot of clout in the tech world. so that's why we're seeing the techs. >> big question will be whether or not it continues after we see what the fed says today. i want to talk to steve grasso about that. good to see you. >> did you see how natural that was? >> it is very natural. >> hello, bob. >> nice to see you. i've heard so much about you, unbelievable. in the flesh. >> yeah, the big question here. once we hear from the fed, what

is this market looking for, basically, and once you hear something how is it going to affect -- >> in this type of market, people look for a reason to wait. today the reason to wait is the fed. >> but they're not waiting, steve. we're up 125. >> well, definitely the market flow is going to be to the up side for the next, i don't know, let's call it a month or two. i know bob has been worried about september, okctober. i'm not concerned. >> so it's still going higher, as far as you're concerned. >> as far as i'm concerned, this is the new bull market until further notice. how about that? so, you know, i think there is a lot of political issues that i don't agree with that i think that make the rally a little short in the tooth, where -- >> problem later on. >> exactly. but not now. >> quick question for you. >> steve grasso, my friend, they jumped right back in on financials, banks and tech. i think that is incredibly bullish. but i want to get your take down there. >> it's incredibly bullish, and if you look at the short interest on most of these bank

stocks, has dwindled. so guys are not getting their courage up to lay into these short sides as they once were in the financials. but is it high level -- low-levels of shorts is actually a contrairian indicator. >> it's a contrairian indicator, but let's forget everything we know. if we hold it up to market rallies in the past, everyone says this market has been overbought, but they have been saying that for weeks now. >> here is my question. what happens if the fed says today we are looking very hard at an exit strategy. what does that do to this market? >> i think you have to take a stutter step in the market. but look at how they treated them going into it. so i don't think the market is going to be shocked by anything that the fed says. let's look at the positive things. look at the ipos. bob spoke to the ceo of envian today. starwood raised $800 billion. ipos coming to the marketplace,

people waiting for deals to come back, the deals are coming back, investors coming back, we're going higher. >> all right. you heard it from steve. >> they'll keep rates low for an extended period. got to keep that in there. >> no one bets they're going to take that language out. >> great to see you you. larry, over to you. >> all right, steve grasso, thank you very much, bob pisani and trish. and by the way, starwood, that's commercial real estate, extremely bullish to getten ipo no. no one is expecting interest rates to raise after the policy meeting this afternoon. but the big debate is whether they should stop loaning and begin their exit strategy right now. joining us to discuss all this, former fed vice chair and current princeton economics professor allen blinder, cnbc's steve liesman and rick santelli. allen blinder, let me go to you, sir. good to see you again. if you look at the feds' balance sheet, which has not risen in about seven months after the initial stimulus last fall,

allen, to some extent, as the emergency loans go down, it looks like they have started an exit strategy. is that possible? >> well, it depends on terminology. they've -- the banks have started an exit strategy by demanding less credit from these facilities and the fed's attitude was always to be kind of passive about the amounts on these lending facilities to make sure the banks were liquid enough. of as the banks think they need a little less, these facilities will naturally be drawn down, so you can call that an exit strategy, but it's not any action by the federal reserve. >> yeah. >> rick and steve, i mean, my concern is that loose money is kind of how we got here in the first place. now, i'm not saying they should raise rates now, but that is always on the back burner. do you think the fed is concerned about that, or is it too far off in the future, steve? >> i think what the fed is committed to is to keep rates low for an extended period of time. what i would look at, everyone needs to get on board with what's happening here, is that the new interest rate is going to be the interest on reserves. think of that like the damn, a

huge pool of liquidity of excess reserves on the books of the banks. the interest on reserves is the damn that's going to determine how much of that gets out in the system. i believe today they're going to talk very seriously about getting ready to implement some form of interest on reserve programs that would raise the rate at the appropriate time to keep that liquidity back. >> rick santelli, insofar as an exit strategy or not is concerned, it's always a mystery to me what the fed is actually targeting, rick. can you shed any light on that? is it the employment rate, is it reserves, what is it? >> you're asking me to solve the fed's mystery? are you kidding? being mysterious is being kind in this regard. listen. i agree with mr. blinder. i think that, you know, if i cosign a loan for wolfman to go represent an apartment, even though he is gainfully employed and after the third month of the twelve-month lease he hasn't

tapped me or missed a payment, the fact my signature is still on that paper is all that counts and the fed's signature is still undersigning. these programs could be ramped up. i do not see the leveling off of the bloating situation that occurred in the balance sheet. to be the sign of an exit. >> that's a really important point. i don't think, larry, that the fed has been neutral in terms of the size of its balance sheet by choice. i can they haven been incapable to ramp up the talf program or other programs. i think the fed had an expectation, even a desire, to ramp up into the 2.5 to $3 trillion -- >> you see, they could. the question here is -- >> here's the thing -- >> are they going to buy treasuries, are they going to end the treasury buying program when it runs out in september? what are they going to do? -- >> they are most definitely, aren't they? they still have the mortgage-backed program and the talf program. they want to offset this decline in emergency lending with purchases of bonds. >> but here is the thing. bernanke called this a credit

easing program, as in targeting credit to different places where it was needed, not a quantitative program as in terms of sizing the balance sheet. so that would be your idea to solving that problem, by doing it just offsetting the decline of balance sheet. >> allan, is there any chance that ben bernanke doesn't keep his post at this point? he's getting a lot of credit for stabilizing the economy and the financial system. what's your bet? >> i wouldn't call it a lock, but an 80% chance, which is more than good enough for this purpose. that's close to a lock, yeah. i think the negatives of not reappointing ben bernanke so outstrip the positives as to make it in the end a pretty easy decision for the president, i think. >> well, all right, rick. professor blinder has been there, he knows more about it than we do. but rick, after all, bernanke was at greenspan's right hand when this was created at the beginning of decade. and rick, on that point, when you look at the money market spreads, libor, 45 basis points.

if you look at the ted spread between libor and t bills, 28 basis points. we're back to normal, rick. maybe it's time for the fed to acknowledge the credit crisis is over and we do need an exit strategy. is that a thought? is that serious? is this thing really over? look at these spreads, rick santelli. >> i don't know that we're back to normal. we're back to more of a neighborhood that's close to what may be a new normal. and i think the fact that the government and the fed have cosigned means that they're sharing their good credit with the questionable credit and all of the questions left in the credit market. but at the end of the day, toda is a big day. if he goes with more quantitative easing, does that mean he's really less independent and auditioning for the job in that regard? if he takes a stand and starts  to withdraw but sdbtd renew, does that mean he is due not to get reappointed? and all of those issues, how they affect the tenure, we might see if people on the street know what's going to be in the

statement. a fascinating day. >> it gets back to the question is credit for too long. >> you still have your inflationists out there, by the way. we appreciate it, gentlemen. mr. blinder, good to see you again. on a programming note, be sure to tune into cnbc's special coverage on the fed's decision on interest rates. an all-star panel on "street signs" today at 2:00 p.m. eastern. >> okay. a pioneer in the world of micro loans is being awarded the presidential medal of freedom today. we're going to speak live with this nobel laureate. >> also ahead, with cash for clunkers giving the auto industry a big boost, how about cash for clothes, cash for coats, cash for everything? maybe that will cause sales. it's a "call of the wild" debate. it's called "cash for everything." we're going to look at this, "call of the wild." 2550 tdd#: 1-800-345-2550 i always have my eye out for a stock on the move. tdd#: 1-800-345-2550 doesn't matter if a company sells computer chips tdd#: 1-800-345-2550 or, i don't know, fish and chips.

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welcome back, everybody. check out garmin. goldman sachs putting the perm navigation device maker on its conviction sell list, saying the stock is overvalued. so garmin shares have risen 93% in the last six months. but right now, it's off almost, what does that say? 3%? down 80 cents to $31.56, so it's been hit by the goldman switch to the sell list. trish, over to you. >> okay, thanks, larry. our next guest will be awarded america's highest civilian honor, the 2009 presidential medal of freedom in a white house ceremony this afternoon with 16 other individuals.

professor mohamed eunice pie neared the use of microloans to provide credit to individuals without collateral. professor, thank you so much for joining us. >> thank you for inviting me. >> congratulations. >> thank you. thank you very much. >> so i guess the big question here is when you look at the micro loan base, the economy is under so much stress internationally, how does that effect the ability of the poorest of the poor to really access credit? >> it's amazing. while the financial system is in big crisis, the micro credit, the kind of program that we have done is crisis-free. it continues to do the same thing. one reason, perhaps is our work related to real economy. >> so you're saying you're not actually seeing an effect of the overall economic downturn on people's abilities to get micro loans? >> no. we have no problem with that.

and second effect would be coming to the poor people in the election when the bigger economy gets similarly affected and people losing jobs, get demand for the goods declining, then the micro credit that is producing -- the demands of those products will go down. so only that will be the second down effect, not directly affecting the micro credit program itself. their ability to produce, their ability to handle money. repayment rate has not seen any kind of impact anywhere that we are familiar. so it remains very strong. even -- we work in new york city in queens, where we -- in america, we have more than 1,000 borrowers in the program. we have not seen an impact in their activities, either. their repayment has remained same, and they have never complained that we are affected by the job losses or something

happening in our neighborhood. they never mention that. so even in new york city, it's not affected. forget about bangladesh, which is far, far away from the epi center of the crisis. >> so you're saying it's not been affected by the credit crisis, that this is different from subprime loans, you're still solvent. >> very much. we have not seen any impact whatsoever. if you compare the subprime loans, i will say what grameen bank does, micro credit does, it's almost like sub, sub, subprime. it's way, way down. we don't have any gates -- we don't have any lawyers in our system. it's a trust-based banking. it still works. it works much stronger than any other banking form. >> how about this? is it growing at all? >> it's growing. we just -- in bangladesh, we have now 8 million borrowers within grameen bank, but there are many other micro credit

programs in bangladesh. i would say 80% of the poor families with micro credit facilities reach out to them, and we are hoping we will reach 3% in the next three or four years. so our growth has not been impacted at all. >> you know, it's certainly a critical part of helping the developing world to reach the next level of economic status, so congratulations to you on all your hard work, and we really appreciate you joining us today, professor yunus. thank you r. >> thank you very much for inviting me. >> let's go to jim goldman who has breaking news on microsoft and nokia. jim. >> yes, melissa, this has been speculated. microsoft and nokia making official a new global alliance that will help transform nokia's smart phones into the business phone of choice for enterprise customers. nokia says make no mistake, we black to give blackberry a run for its money. microsoft is also trying to fend off google and, of course, its android momentum.

>> this would have been destroyed had it supported the sim bee yum system on its 200 devices but it is a start. and while microsoft and nokia both say symbium will power their phones, you have have got to wonder whether this leads to something bigger down the road. back to you. >> thanks so much. the mid forecast ends higher demand for oil. the watch is on to see how high crude oil prices will go. >> so will king dollar prevent oil prices from hitting the century mark? it's a big question. an energy watcher and a currency strategist are going to face off next, only on "the call." king dollar. imagine that. i'm racing cross country in this small sidecar, but i've still got room for the internet. with my new netbook from at&t. with its built-in 3g network, it's fast and small, so it goes places other laptops can't. i'm bill kurtis, and wherever i go, i've got plenty of room for the internet. and the nation's fastest 3g network. gun it, mick.

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all right. crude oil inventories rising more than expected, according to today's data. that coupled with a surprise fiscal inventories equal bad noise for the oil bulls on the day. it is higher, but not as high as when the data came out. up $1.17 on the day. >> don't these bozos know the difference between supply and demand? >> sharon epperson is going to tell us. >> it should happen, larry. you know, that is the way you would think it would work. and for maybe about 30 seconds, it seemed like fundamentals were in focus right after that data

came out. but now we're back up over $1 for crude prices because really it has everything to do with everything but fundamentals. it's really about the dollar, of course, and about where stocks are at the moment. there are some analysts out there, i've seen commentary that some are saying that oil is like a safe haven, even if you look at the run-up in the s&p 500 up 50% since the march lows, you look at crude, it's near double from where we were in the february lows. but the fact remains, who needs crude right now? we have refinery runs being cut and fuel supplies up, and even though gasoline supplies were lower, they decreased by far less than a year ago. we have a mixed picture there for refined -- in light of that data the international energy agency said oil demand will decline in 2010, and that didn't seem to matter at all. and i have to show this tropical depressi depression we're watching. we could have the first-named

storm of the season coming up. natural gas prices doesn't seem to affect the market. again, not really about fundamentals right now. >> and it's about equities. sharon epperson, thanks so much. oil has been rising in part with equities in part in belief that the economic recovery will increase demand down the road. many are wondering is there anything stop oil from reaching triple digit prices. let's bring in the senior vice president of mf global and andy bush at bimo capital markets, both cnbc contributors. john, we keep asking the fundamental question, basically nothing has changed. speculators, whether you think they're good or bad are still operating essentially under the same rules out there. you know, there's less investment going on because the price of oil is lower. when things recover, what's to stop oil from going above $100 a barrel and beyond? >> i think precious little, and i think it's unremarked that china had rivalling crude oil.

i think they're being tremendously underestimated. i think the system will be strained once again if we get to near normal economic activity and crude oil is not a one-trick bony, not dependent on the dollar's direction one way or the other to rise or fall. >> yeah, but it has an impact. if you look at andy, you look at what is happening in the crude oil market today, watching oil move higher in spite of the fact this should have been a bad day for oil, but as we found more inventory come on the market, it's moving higher with stocks, and dependent on the dollar, right? >> well, it's been trading -- you know, john, overall, to some extent is right. crude depends on the demand picture and the demand picture is supposedly changing with the u.s., you know, coming up from the very low levels in the beginning of march. but john, dollar has been traded with crude and they have been linked at the hip for some time now. so the dollar retraced a lot of its strength yesterday, and then that's another reason why crude went up. i mean, right or wrong, that's what the market is doing right

now. so -- but in reference to bigger question, you know, a stronger dollar can cap commodity gains, clearly. i mean, it will dampen enr inflation expectations, and as far as specific oil goes, it really -- when the dollar strengthens, it obvious ates the need for opec to make higher oil prices and reduce supplies because their nondollar revenues are going higher when the dollar is strong. >> it would if the dollar ever got strong, which is not going to happen. >> john, look, when you go back and look at last year, the oil shock was a big cause of the recession and the credit problems. i mean, the question is, do you deny that a strong dollar wouldn't have a positive impact on moderating oil, and other commodities? the theory -- let's just talk theory. people in the government don't seem to care about the dollar. but if they did, john, wouldn't that moderate your oil price estimates? >> and having been one to use the dollar weakness as a cause for rising oils, it's definitely a factor. it's almost a situation, larry, where the investors or consumers

can't win for losing in that stronger dollar will be on the back of a recovering u.s. economy, and other factors which will then feed right into the demand side of the equation for crude oil, pushing its price higher. >> true. all an argument for the electric car. >> but andy bush, again, in theory, if the american economy is, in fact, getting stronger, if the federal reserve is getting less easy, prohibit printing newer few dollars, then maybe this dollar rally has something behind it and that is good for moderating oil. does that combination work for you, andy bush? >> yes, it does. and today's fed meeting is really going to be important, because if the fed indicates they're going to extend their quantitative easing program which should run out sometime in september, that will be, you know, kind of a death nail for whatever kind of rally we're going to have. the dollar will go lower, because thaelg extend the supply of u.s. dollars, just like the bank of england did.

so in theory, john and larry, i think what's happening here is that for, you know, the commodities right, we have seen speculation that if you want to hedge inflation, if it you want to hedge dollar weakness, you buy commodities and oil is part of that. so that is part of the big program. and that is how they're kind of linked right now. >> i mean, andy, don't consumers love king dollar? come on, it keeps inflation down -- >> our president -- >> no one wants to defend the consumer, john. you always talk about consumers and 70% of the economy. okay, great. so why don't people help the dollar, which would help 70% of the economy? >> i don't get it. i don't get it. >> i mean, really, it's one of those mysterious conundrums. >> it is. >> and here's the thing, larry. >> besides the u.s. post office doesn't do as well as fedex and u.p.s. >> at the end of year, people will be concerned about the u.s. dollar and the amount of treasury. if they don't do something in strengthening the buck, they

risk problems with treasury auctions. >> okay. >> they've got to address it. >> they're not going to, though. we've got to go. >> no, you don't want to buy the dollar, andy. >> trish. >> i'm just going to take over here. all right. melissa, you're so polite. you did that in such -- all right. >> give me 50 cents for your dollar. >> i'm moving on here. in today's "call of the wild," forget clunkers, what about cash for clothes? and larry, we're going to hold you to this one here, because i know you did a 180 on cash for clunkers. >> i know. . i'm in trouble. going to be hoisted on my own on this one. is it time to bail out the retailers? bail out everybody. that debate is straight ahead only here on "the call." i'm for a stronger dollar.

welcome back to "the call." i'm trish regan. take a peek, the dow up triple digits, 123 points right now, ahead of the fed's statement today. the expectation being that the fed is pretty much going to keep the status quo. interest rates will remain lower for some time. and that's leading to this rally. we're seeing it especially in financials and tech. you can see s&p up 1.2 -- 1.25%, nasdaq composite trading up a gain of 1.6. and brian shackman has more from

the nasdaq for us. hey, brian. >> trish, about 2000, 3 to 1 advances to decline. let's talk about some of the names. big names up above with the market. 3.3%. materials, loss less than expected. they expect to return to profitability in q4. microsoft, talked about the nokia deal, of course. that is bullish for the stock. could be a bigger deal long-term. we'll see what happens. the competitor doing well, apple up, research in motion, oracle, 2.2%. and i want to point out the power of goldman sachs. the stock is up 9.2%. there are some negatives on the other side of the ledger, though, got to deal with the red a little bit. palm down 2.2%, even though they have said they're going to return to profitability in 2010. also, amgen down 1%, and finally, mr. kudlow, solar under a little pressure. ge solar, weak on the bottom

line, down 12.8%, but generally speaking, extremely strong across the board. back to you, larry. >> all right, thanks, brian. macy's is the first of the major retailers to report quarterly results this week. the department store chain announced this morning better than expected earnings and raising full-year guidance. the stock is trading up about 3%, almost 16 bucks. rebecca jarvis has been monitoring macy's. conference call. and joins us with the highlights. hello, rebecca. >> hey, larry, the first retailer, but hearing a very similar song out of macy's as we have heard from a number of companies this earning season. they are cutting costs, watching inventories, and they hope that that will make the difference between earnings in the future and potential losses in the future. right now, that sales picture at macy's is still looking somewhat weak. where they are seeing the biggest uptick in sales is with this new concept called my macy's, a much more regional approach to the way they do business. they're following regional tastes and watching what people

in particular regions want. it's amounting to about a 2.6% gain versus the other regions, which have yet to implement the my macy's concept. in terms of the merchandise itself. what is not doing well are the furniture, mattresses and handbags, and where they are seeing the best out performance in terms of region is in the midwest. the worst is coming from california. and also the southeast part of the country. and lastly, trish, i just want to make a point about what they said in terms of the breakdown of their businesses, where they are not seeing things as great as at the bloomingdales side of the business. the macy's side, on the other hand, is where they say they're seeing more stability. back over to you. >> okay, rebecca jarvis, thank you so much. so with consumers not spending and retailers hurting got us wondering whether or not we can bail out the retail sector, just like we did the auto industry with that cash for clunkers. what about having something like cash for clothes? that's today's "call of the wild." we're going to ask michelle bernstein for the national retail federation and john

carney, managing editor for businessinsider.com. michelle, kick it off with you. what do you say? would something like that work? >> the chinese actually have put into effect a program that sounds somewhat similar. they handed out vouchers to their populous to get them spending more. and i understand that it has been some pretty successful in helping their economy right now. we certainly need something with the consumer being 70% of gdp to help them get out there again. so it's conceivable that type of program could work. >> okay. there is another type you could talk about. tax incentives. just over the weekend, we saw about ten states come out and say there would be no sales tax for back to school shopping. so sure enough, you had lines outside the doors of apple in kansas city this weekend for people to cash in on this opportunity. john carney, what about something like that, like maybe having a nationwide tax holiday on some of these items? >> look, i'm for cutting everybody's taxes. that's never a bad idea.

but having our economy propped up on gimmicks is a bad idea. there is a secret here, and it's that capital as it works. macy's sales were down, but their profits actually beat expectations. which means that when these guys can plan what's going to happen in the economy, when people who run businesses are let alone to do their work, they can actually still make money even though sales are decreasing. what screws things up is when the government steps in and starts putting in a cash for clunkers or cash for clothes. it's a really bad idea. >> richelle, how about keep cutting prices and retailers have been doing a great job there. you keep discounting the prices, you're going to attract a big surge for september, october. >> there's only so far you can go on price cutting. and some of these retailers are selling things for below their cost at this point in time. so the retail margin is very, very slim, and you can't go much farther. you've been talking about how much -- what a good job they're doing on cutting costs, but we've got to get the consumer

back out there, or there is just -- >> are you in the federation actually lobbying for a cash for clothes? are you actually out there? have you made a proposal, submitted legislation, visited president obama and so forth? >> no, i thought that was your proposal. but if you were out there with us, then maybe we could come in -- >> hey, larry, i said i wasn't going to let you off the hook here. you did a 180 and came out in favor of cash for clunkers. so hey, why not take this to the next step? >> and i know john carney is coming at me, and john is going to be right. this is only fiscal stimulus plan i've ever supported. but reason i supported cash for clunkers is they were bound and determined to do it. and my point was, go ahead, finish it off. it will help sales and production. but the reality is, lower tax rates across the board would be a much better form of stimulus. let the market work. i can't keep picking winners -- >> that's absolutely right. larry, one of the things that's happened with cash for clunkers, and i will hold you responsible for this, is that they really --

it actually took money out of the retail sector. >> i know. >> so these guys got hurt. and it's a serial bailout. >> and i don't like it. all i'm saying is they started it. i just said go ahead and finish it for consumer spirit. but there is a risk here. and richelle, did you register a protest that you were -- these cash for clunkers were diverting money from retailers into autos? did you register a protest? >> we did not register a protest, but we are somewhat concerned about that into the future if people are now committed with a $400 a month or $200 a month payment into the future, there is some concern about what that's going to do for retail sales in the future. >> just lower the personal tax rate across the board or have a flat tax reform. that's the way to do it. that's the way to do it. >> richelle, what do you think about that? >> don't pick winners and losers. permanent reduction in marginal tax rate. >> we have always supported lower tax rates and broader base for both corporations and vu individuals. we would be supportive. but we do think we need something to get the consumer moving a little more quickly right now.

the checks they sent out in 2008 to consumers, the payroll tax holiday that they did earlier this year did not get the consumers spending. we would like to see that married with something that's going to get the consumers back into the stores and feeling comfortsable. >> for example, like the ones we saw over the weekend, the back to school tax incentives in ten different states where there was no sales tax. . >> we think that's a great incentive, already getting reports back after this weekend, and chair very positive. we find it does drive consumers into stores and buy more than they intended to. and given what so much is going on with the consumer, that is psychological, we think it's helpful. >> thanks, good to have you bac on the program. >> thanks, john. go easy on me, john, i'm recovering from cash for clunkers. >> up next, the stock you need to awatch for the remain dir of the trading day. >> and matt nesto. >> i want a cash for me program.

everybody spend it how it suits their needs. and look at the crazy market today. we are on a bull market on a day when we nourmly want to circle laguardia waiting for a clear landing making sure the fed doesn't do anything funky. i have five key market-moving themes to show you when we get back. i'm bob pisani. just like stocks, etfs can be shorteded. when shorting, you borrow a security from a broker and quickly sell. at a later date you buy the security back and return it to the broker you borrowed from. to profit from this strategy, you hope the price falls so the cost of buying back the security is lower than your initial selling price. you buy low, sell high. but be aware when shorting the stock or an etf, you must pay the dividends to both the person you sold the security to and the broker you borrowed it from. that's this week's etf 101' 23 y! - oh, come on. - enough! you get half and you get half.

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...or if you lose your job. your health insurance shouldn't either. so let's fix health care. if everyone's covered, we can make health care as affordable as possible. and the words "pre-existing condition" become a thing of the past... we're america's health insurance companies. supporting bipartisan reform that congress can build on. welcome back to "the call," look at the big board up 123. we have financials and tech stocks fuelling this rally today. of course, it all comes ahead of the fed. so stay tuned for this afternoon to find out exactly what the fed says. could change the market, but so far, so good. melissa. >> all right. time for our call to action.

the stocks you need to watch for the rest of trading day. cnbc's matt nephewo is here with a look at a hot market that most expected to be in a holding pattern this morning. amazing here, we have this big rally going ahead of the fed. >> that's right. you've really got to to buy stocks to go ahead of a fed decision and you don't know how it's going to be taken. and we're seeing broad-based advanced decline ratios very strong in 80% level. trish mentioned the techs and financials, those two sectors combined accounting for 65% of this bull market today alone. if you take a look into the financials, well, you can be sure you -- you can don't be so sure. but they're working,man. jen worth up 900%. now almost 9 bucks. allstate to buy at merrill, they think they're going to have portfolio gains close to $2 billion. and hartford financial again very, very strong. that stock is one of the best

performers since this rally began in the middle of july. on those semiconductor side, cree is being eclipsed by the ama amet news, but has a forecasting increase for its coming fiscal first quarter. maxim in the semiconductor index. the semiconductors are now fully conductors. we also have this ipo aroma in the air. two ipos out there today, in a secondary, which is very interesting story in and of itself. much emdian, we spoke to the ceo, up 13% right now. this is a medical processing company, starwood properties going to use their cash to get into the commercial real estate space in a bigger way. of and american dairy, that's actually a chinese company, believe it or not. they make powdered milk and infant formula. yes, my friends, ady is the ticker.

private placement to sequoia. and the final theme i want to bring you is called raise roof. we talked about toll brothers. look at that one on the bottom, another china play. e-house, ticker ej on the new york stock exchange with a big, big move. one more china play if i can bear it. wx is a cayman-based company. the hottest stock in new york today worth more than $5 per share. there you go. >> all right. thanks, matt. appreciate it. "power lunch" is coming up at the top of the hour, and we have bill griffith to give us a rundown. >> hello, larry. coming up as the fed meeting wraps up, we're wondering if we're at a turning point in the economy, and the markets. and whether or not the fed's statement will reflect that. larry, your favorite genre of music, hip-hop, we're looking at whether or not the hip-hop world

is calling a bottom to this recession. we'll explain. and dennis kneale checks in live from another health care town hall meeting that will be going on today. we'll hear about the anger that's coming from that meeting and whether or not this is a real grass roots movement or manufactured. see you at the top of the hour on power lunch. >> looking forward to it. coming up next, a west coast showdown between two states jockeying for your business. >> jane wells tells the story from the coast. >> hey, larry, calling politicians monkeys? putting lipstick on a pig? seeing the lengths las vegas is going to to lure your dollars. and i'm not talking bachelor parties or hangovers in the morning. that story after the break. taking its rightful place

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well, as struggle continues, it's still trying to take advantage of its neighbors' problems. telling california businesses it's a bear better place to do business than the golden state. question is, are the folks in nevada actually right? jane wells is in los angeles with answers to this one, and it's surprising to me, jane, because i kind of would have thought with their tax policy they would have had the advantage. >> well, you would think so. but, you know, we do have an ocean breeze. but anyhow, it goes beyond that.

gun slinging died out in the west to be replaced, apparently, to be shot from the hip. here is one trying to lure businesses from the golden state to the silver state. >> so the california legislature is monkeying around with small business again. get your iou yet? but don't worry, you know they love you. they just don't want you to relocate to las vegas, where there is no corporate income tax. no personal income tax. and low worker's comp fees. if the legislature keeps monkeying around, you can kiss your assets goodbye. >> an ad campaign from the nevada development authority also includes lipstick on a pig, so to speak, it secures business climate. why go to nevada beyond the taxes? land and labor are cheap, compared to california. for manufacturers relocating, the important southern california market is still close by. the nevada development authority has been making ads like this

since the gray davis era, but its revamped its website with a new name, "move to vegas.biz." and it's spending a million bucks a year on what it calls its edgiest campaigning so far, targeting radio and print in southern california, its major feeder market and depending on viral marketing, that is free publicity from news outlets like us. >> it's got to be, because you've got 49 other states here soliciting business. nobody called anybody a monkey, nobody called anybody a pig, and we tried to get some california legislators to be in the commercial, but since they refused, we could only afford the orangutan. >> all right. is it really better in nevada? in this cnbc study of america top states for business, nevada came in 47th overall. 49th in its economy and didn't break the top ten in any category. california, however, came in 32nd overall. 49th, though, in the cost of business. though number one in access to

capital. now, one economist in l.a. says nevada is actually threatening to cannibalize its number one market by doing this in southern california. and melissa, the local abc station is refuse to go run the ads here in los angeles, even in these lean advertising times. back to you. >> okay. jane wells, i love it. thanks so much. i have a lot of questions for you, but i can't ask them, because we're going to david faber who has some important breaking news. david, what do you have? >> reporter: thanks, melissa. some developments on the s.e.c.'s investigation into pequot capital management, and that company's trading in the stock of microsoft in the spring of 2001. i can now tell you that the s.e.c. has issued a wells notice to pequot capital management and its long-time founder and long-time manager arthur sand burying. it was issued a month ago, and solely focuses on the firm's trading in the stock of microsoft in the spring of 2001,

alleging that the firm traded on material nonpublic information at that point. given that the wells notes was issued as much as a month ago, people close to this investigation indicate to me that the s.e.c. might take action in a civil complaint filed against pequot and sandberg in the very near term. pequot has notified investors in the last couple days. the firm itself, you may recall, once one of the largest hedge funds in the world is in the process of winding down operations. in may, mr. sandberg alerted investors that given the cloud of an s.e.c. investigation over his firm he decided to pack it in. being 68 years old. but again, one of the leaders in the hedge fund industry. that federal investigation is solely focused, from what i understand, on that trading in microsoft stock. there is not a belief that there is an additional investigation at this point from the u.s. attorney's office. so if, in fact, a civil complaint is filed, they would

either go to court or of course mr. sandberg might ultimately settle. given he has already dissolving his firm, the fact that he probably would be barred from search serving as an officer or director of the company. nonethele nonetheless, a very important investigation. back to you. >> all right, david faber, thank you so much for bringing us that breaking news. look at the market there, up 124 points. what a day. that is it for "the call." >> i'm trish regan. >> and aim larry kudlow see yous tonight on "the kudlow report." and now "power lunch" is up next. offers an epa estimated 33 mpg highway? they never heard that. which is better than a comparable toyota camry or honda accord? they're stunned. they can't believe it. they need a minute. i had a feeling they would.