>> it started friday, though, right, bob? because we had that worry over consumer spending and consumer sentiment. >> that's right. and we didn't really do anything there either on that day, too. so here's the important point, folks, whether or not -- the debate's going on whether there's a floor under the market right now. most of the traders insist still be buyers, just below the market levels here. take a look at the big names here. cyclical stocks, weakness all day here. and frankly they went nowhere. there was no rally. alcoa, dupont, caterpillar. the dollar was strong. and anything smacking of a global recovery had a tough time of it. retailers, lowe's not only disappointed on the top and bottom line but their guidance-n particular their same-store e sales guidance for the third quarter was really a problem. analysts are now debating whether or not they'll have to change some of the bullish estimates that they had. home depot will be tomorrow as well as target. if they confirm lowe's comments, then we have a bit of a problem. the hope here from the bulls is there will be slightry different commentary from them. master trust data came out for a number of the big banks, this

simply looks at delinquency rates for credit cards. generally, they were very positive. jpmorgan trends positive for delinquencies for them, didn't help them, though. you can see ending toward the lows of the day. same-store american express. their delinquency data has generally been improving for the least several months. but it too ended near the lows of the day. the hmos, the whole discussion and the essential concession by the president there may be less of a public component to the health care reform issue helping aught of the hmo stocks.s. important thing, maria, that was about the only group, hmos, that did well today. >> sure is. bob pisani, see you a little later. meanwhile we saw a sharp pullback in the nasdaq. that was the big loser on the day. matt nesto manning the shop at nasdaq. >> it's interesting if you look at two-day loss. it's over 3.9%. a two-day decline that we haven't seen since the end of march. interesting also because we've fallen 4 of 6 days. so the weakness in this market place has been pronounced. you can see down 2 3/4% here today at 1,930.

we threw the weekly streak overboard on friday, and now with a negative month to date reading for the nasdaq we are also on track to throw the five consecutive monthly streak overboard as well. names worth looking at here today, erts, electronic arts, the worst performer in the nasdaq down over 7% today. wynn resorts also a terrible day, down 7%. 8% the final print. the interesting there is the second worst performer in the nasdaq 100 today. it's the best performer over the two-month period that started july 1st. also liberty media very weak here today. the only strength as we saw on the list of stocks is health care. we saw names like express scripts up and also ceflon some of the few. in fact, only four stocks in the nasdaq 100 able to make a go of it here today. back to you. >> all right, matt, thanks very

much. well, stocks have been roughed up certainly over the past week. s&p 500 down over a week's time after a huge run-up in 2009. certainly from the bottom in march. but with stocks losing some of their recent momentum the dollar has been mounting a bit of a comeback. we had robert prechter on earlier talking about the dollar making a bottom and beginning on a new rally. how stru is that? we'll look into it. are investors starting to abandon stocks in favor of the greenback? joining me is tony dwyer, equity and market strategist with ftn capital markets. along with jeffrey davis, chief investment officer with lee munder and cnbc's own rick santelli. what is the sentiment as relates to the dollar down in the pits? >> well, i think the sentiment is this, that they believe, traders, that many of the medicinal issues at stake in how the world economy's going to recover aren't going to be dollar-friendly. but the equity correction we're seeing is dollar-friendly, and that is what they're concentrating on. they're not really as bullish

the dollar. they're just quite bearish from these levels, the bounce that we've experienced the last month and a half in equities. >> tony dwyer, are you recommending taking some cash off the table in the face of this decline and looking at currencies, in particular the dollar? how do you see it?? >> no, maria, i think ultimately we're going to be entering a period of probably slower than historical growth, especially relative to the '90s. i do think we will get groebl growt global growth and there's not a single macroeconomic indicator i can find that hasn't kind of hooked positive on a second derivative including last week's utilization. there's never been a time on the capacity utilization rates where it was positive month on month and turned and -- that is going to bolster the dollar. it's going to bolster global growth. today was profit taking. it was a real move into defensive, you know, into cash. you would have yields back in the ten-year down to a 3.26, which we got to in july. and you would have had the dollar up a lot more than half a

percent on the dollar index. >> jeffrey, how are you recommending investors play this? >> well, i'm not as bullish on the dollar, and it's not for a bad reason. it's simply that i think interest rate pressures are probably going to mound first in asia and then in europe. simply because they are now the first to come out of the recession. when they come out of the recession interest rate pressures will occur there. that drives their currencies higher than the dollar. i think it's kind of as simple as that. >> some people might take you to task on the idea they are first to come out of the recession. we had new renewed worries overnight in china, up obviously one of the reasons that we had a 6% sell-off in shanghai. >> yeah, no question. the recovery in china is not based on growth in consumer demand or export growth. it's fiscal stimulus in a different way. so whether that's sustainable or not, i don't know. and that might create some down draft in china. i don't think they have a great

foundation for growing to a higher level. china could sell off a bit.t. >> maria, i think jeff kind of has an interesting point in that we're kind of entering this six-month period where china's suspect. you've got the domestic stimulus that spurred on growth because when a bank tells to you borrow in a communist country they typically borrow and spend it very quickly and that was internal spending. so now we're going to enter this period where you're getting a little tighter monetary policy or government policy in china and at the same time you're e probably six months ahead of actual growth in consumption expenditures in the u.s. so you're going to be in this funny, you know, currency period where you're probably going to be in a trading range and just stability is going to be the name of the game for all asset classes as we try and figure out where we are. >> all right.. we'll leave it there. gentlemen, great conversation as always. we appreciate your time.e. >> thank you, maria. >> we'll see you soon. take a look at some of the other stories we're following on the "closing bell" ticker tonight. regional bank bb & t announcing plans to sell $750 million in new stock to help boost its

equity capital and for use in general corporate purposes. the announcement coming after bb & t agreed to acquire the deposits and assets of colonial bank group, which was shut down by the fdic on saturday. bb & t shares tonight down 6%. according to an s.e.c. filing, william ashman's pershing square capital management has sold its entire stake in wendy's arby's group. as of the end of march. pershing square was the fast food chain's third largest institutional shareholder, owning 32 million shares, about 7% of the outstanding stock. the stock today down 1 1/3%, as you can see. language education software maker rosetta stone had a great ipo, remember. it cut its third quarter and full-year earnings forecasts today due to higher than expected operating expenses. the company also cancelled a proposed stock offering just a week after announcing it. rosetta stone shares tonight down nearly 30%. up next, we're discussing whether we'll see a u, a v, or a w-shaped recovery. what will that recovery look

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welcome back. three letters of the alphabet are dominating the discussion over how an economic recovery will take shape. u, v, or w. our next guests lay out their view on how the recovery will take shape. joining us is steve east, managing director and an economist with pipe analytics. drew kennelly is chairman of kennelly trust. gentlemen, good to have you on the program.. >> good to be here.. >> so steve, let me begin with you. how do you think this recovery looks? we should point out that we've already seen one part of a v and

a w and i guess a u. we're at the bottom of that? either of those letters? >> well, i think that we're at the bottom of a v. i think that the right side of the v is going to look like -- sort of like a gull wing if you're a little kid, you're drawing seagulls over the sea, you know, it kind of swoops up like this. i think with that point in the inventory cycle where demand has come down but demand has stabilized. and production has come down even more. that's how you get inventories down. and i think that for a while production can go up fairly rapidly just to catch up to the new stable level of demand. now, after that for production to go up very quickly demand will have to go up quickly, and i see problems with expecting a really fast pace p demand growth. the biggest problem is i think we're not going to have very much private sector credit creation like we usually do coming out of a recession. so i think it's going to start off looking like a v but then that second side of that v is going to start to not be quite as robust and sort of look like a broken v.

>> so we could basically be staying at the bottom of that v or the bottom of that w for a long time? >> well, we could, but history would suggest and the inventory data i look at suggests to me that we really need to see production go up, that demand has stabilized here and production is going to have to go up or else inventories are going to dwindle to zero. you wanted inventories to come down but you didn't want them to go to zero. i think we are going to at least have the beginnings of what's going to look like a v-shaped recovery. i have my doubts whether we're going to get that whole v. but i think at least for a while it's going to look that way. >> drew, the last thing we want is a w, right? we don't want to be believing we're actually going up and then we come down sharp again the way we did about a year ago. how do you see it? >> we don't want to wish for something that's not going to be true. we want to look and see what's most likely going to be the scenario. and if we look at what's going on out there, we still see unemployment rising. you can monkey with the statistics all you want but we still lost another 225,000 jobs

last month.. so where is the consumer going to come from? where is the consumer growth going to come from? that's the big problem that you're seeing in terms of demand. and it's simply not going to be there because there's no credit being extended because there's no demand for credit because we gagged on credit problems over the last couple of years. so all of this takes a long time, maria, to work through, a long time. that's the situation. >> so a dragged out, slow period. >> this is not a sprint. this is a marathon. and this is going to take time to unwind this big credit bubble. very long time. >> where is the weakest spots, drew? where do you think are the areas that have yet to show really any true signs of stability or even better growth and where are the growth areas of this economy? >> well, you still haven't seen commercial real estate really show its true side on what that's going to look like. >> because you've got loans coming due, right? >> well, yeah, you have all types of loenans that are goingo have to get restructured, , refinanced.

we still have another set of mortgage resets next year and the year after that dwarf the ones we had trouble with in '07. and imagine this. we'll have higher unemployment this reset cycle than we had in '07. so it's very problematic going forward. these are enormous debts we're tasing and the government's doing everything it can to liquefy things. all the stimulus in the world you could want, and this is the bounce we get, we get cash for clunkers that just takes away from our consumer purchases. we just didn't buy any washers and dryers instead. >> in the grand picture cash for clunkers is a shawl program in the face of everything that's going on. let me get your take on the question i just asked drew. where is the growth? if consumers aren't going to lead us out of this, what does? where does the growth come from? >> i think in the here and now the next couple of months the growth is going to come from the manufacturing sector as part of this inventory cycle dynamic that i spoke of earlier. and you're starting to see in

the data already. i mean, last week we saw industrial production was up for the first time in over a year. even ex autos it turned up. if you look at the data from the june inventory in the business sales report that we got just recently, sales have started to hook up a little bit. so i think that the next couple of months where you're going to see it is really in the old smoke stack industrials as production just has to go up to meet the new, albeit lower level of demand. after that it does get a little hard to see where it's going to come from. i mean, consumers are going to be restrained. i think the savings rate will continue to go up. it's in its early days yet but you're starting to see a little glimmer of hope for consumers in the july employment report because the workweek went up a little bit and maybe private sector wages can go up toy little bit and get a little boost from this end of inventory dynamic increase in production.

so no, i agree, we still have problems, and that'sy don't think we're going to get the whole v. i think industrial sector may make it look like it starts out like a v and then there's some disappointment a couple months down the road. >> very quickly what does it mean as an investor? how do i invest in this environment? >> what you should be seeing is demand should come from emerging markets. what scared everybody is you had a little sell-off in china here. you still want to be 30% long. tough a higher percentage of your portfolio long than 30%, then this is probably profit time. if you're underweight stocks still, look for this pullback to be a time to get in and get broadly diversified.. >> all right. we'll leave it there. gentlemen, great conversation. we so appreciate your time. thank you. and you just said it, drew, chinese stocks tumbling to the lowest level in two months today. we're going to take a look at the china story.. could we see more weakness in china in the coming months? we'll look at what it could mean for investors here and abroad. back in a moment. some people buy a car based on the deal they get.

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welcome back. a shocker in shanghai as chinese stocks have their worst one-day loss since november. so is china's bubble about to burst or can this and other emerging markets keep up the recent rally? cnbc asia's amanda drury is with us. she's here this week at cnbc global headquarters with her take. mandy, great to see you. we're fortunate to have you this week. can you give us a sense of what it looks like on the ground right now? >> it's really interesting because i remember only about six weeks ago when the market in china was up about 90% year to date. in fact, the best-performing index around the world year to date. a lot of people were saying, you know, it really feels like the heady, frenzied bubble days back in 2007, when everybody was wanting to get on the bandwagon and throw their money into the stock market regardless of what the valuation was and what the fundamentals of the market were. massive liquidity-driven asset inflation-driven kind of rally. and everyone was wanting to get on board. now we're seeing a minicorrection, maria, and a lot of people are trying to work out

is this the start of a bigger correction to come? is the bubble bursting? what does it mean for the rest of the world? and of course no one's going to know exactly what's going to happen in the future and i can't tell you because i'm not really a market strategist either, but what i can tell you is people are saying this is not necessarily a bad thing because you can't have a market that goes up so fast and so far without some kind of correction because if we did just let this keep on going up the danger is that you might actually have a massive pop of the bubble like of course we already saw and the authorities in china are very, very aware of these. they want to take some heat out of the market as well.. >> you know, mandy, i guess one of the big topics of conversation on this side of the world is the transition that china is going through, transitioning from an export-led economy to a consumer-driven economy. we really haven't seen that consumption in the country. the american consumer remaining the more important consumer when it comes to eating up the products there. so how fast do you think that

transition is moving? do you think that you're seeing a better-than-expected, quicker-than-expected move from an export-led economy to a consumer-led economy?? >> it shows that the crisis has sped this process up, maria, because obviously before the crisis set in that was, you know, priority number one for the chinese government. they essentially did want to beef up domestic demand and not be so vulnerable to external forces by being so reliant essentially on their export economy. but you know, with the crisis and external demand collapsing in so many ways, obviously they've had to switch the engine of growth over to domestic demand. and the stimulus package in china, and trust me they've got trillions of dollars in their reserves at their disposal to stimulate this economy, the stimulus package has certainly helped beef up domestic demand. it's been sort of a transition process that maybe was sped up by the fact we had this global crisis.. >> and that stimulus package a lot of people talk about that it's working so much better than actually the united states's

stimulus package. but we should point out that actually it is a much bigger portion of the gdp in china relative to the united states, a stimulus package. thank you so much. your insights on that, mandy drury. the housing and manufacturing sectors meanwhile seeing signs of stability, but the consumer is seeing a bit of a different story. next up, will this key area of the u.s. economy be a major stumbling block? to a near-term recovery. we've got some answers.s. back in a moment. >> announcer: here's a look at some of today's winners and losers. > > > >>

welcome back. let's take a look at the business headlines on the day. the national association of home builders reporting its housing market index rose one point this month to a reading of 18. that is the highest level since june of '08. the second straight monthly increase in home builder sentiment in large part due to the government's first home buyer tax credit. the trade group warns, however,

that signs of improvement in the housing market could be wiped out if that incentive is not extended past its expiration, which, by the way, is in november. oil prices today under pressure again despite the threat of the year's first hurricane. oil falling 76 cents a barrel.l. about 1%. to close at 66.75 a barrel.. and three men have been indicted in a massive stolen credit card case. the case involves 130 million stolen debit and credit card numbers. where data was taken from heartland payment systems, 7-eleven, and haniford brothers. authorities believe it is the largest identity theft case ever prosecuted. today's weak guidance in earnings from home improvement giant lowe's just the latest evidence that american consumers remain under s uchpressure. joining me is brian levitt, economist at oppenheimer funds along with nariman beravesh.

gentlemen, it is wonderful to have you on the program.m. let me get your take on where the consumer is right now. we're approaching two obviously very important areas of the calendar for consumer spending. that's back to school. and later on the holidays. how strong is the consumer right now, brian? >> you know, it's not a particularly robust picture for the u.s. consumer, but i do think particularly for those that want to make the bear case, the double-dip recession case, they could point to the retail sales numbers or the consumer confidence numbers from last week. i think that overstated some of the weakness. but when you look at the consumer, it really is going to be very much driven by employment. who drives employment? it is the small businesses in this country. the small businesses continue to remain skittish about adding workers. that continues to put pressure on consumers, who are quite concerned about their finances as well. >> nariman, what do you think? how do you see it? >> well, i think the consumer's facing two major headwinds, one of which brian mentioned, which is the employment situation. the other is a lot of households are rebuilding their savings, trying to cut down their debt.

the so-called deleveraging process. so both of these mean basically consumer spending going forward is going to move much more slowly than in the boom years. in the boom years 3 1/2%. going forward we'll be lucky to see 2%. it will grow but it will be very weak growth. >> we've got two important earnings reports coming out tomorrow. target and lowe's missed expectations in its earnings report today.. but i guess the estimates have been rising for some of these companies going into the earnings report. how important is that? >> pwell, i think it's importan in that obviously it's the key players in a key segment of the market, the u.s. economy. 70% of the economy is consumer spending. so this is very important. but i suspect that, you know, while the earnings numbers look better than people thought they still won't look great. largely because, you know, consumers are still a little bit in that retrenchment mode. well, that's such an important point. and also, you know, how much of

this, brian-s really priced into the situation. i mean, if we were expecting that we were going to see a tough economic period for the retailers, that would be one thing. but with the expectations having risen and sort of improved, perhaps that means a sell-off in the market. >> well, certainly you've seen some headwind in the market over the last couple of days. the market does get excited about pent-up demand, and you see if you give consumers some subsidies like we saw in cash for clunkers, they will come back and that will drive some production and hopefully create some jobs and create some real activity in the economy. but remember, that is from a government subsidy. so for the consumer to go out and shop at the levels we saw in the past or to go out and shop beyond what the market had now priced in, i think some of that is overstated for the reasons mentioned. of course, it is the deleveraging process. but one point on that is consumer savings is up pretty significantly. we do have to remember that there are over 100 million americans between the ages of 25 and 54. those are peak earnings years. those are peak spending years.

eventually, life cycle needs do have to be met. now, when the auto cycle was driven by government subsidies so, you don't have the typical replacement cycle-p but for some of the companies like target that sell some of the staples, particularly in a back to school period, you do have to go out and make some of those purchases. >> you make a great point. what other economic factors lead us out of this economic upset? if not the consumer what will it be? nar iyman you think there are other factors that could support the economy even if the consumer stays pretty weak. >> that's right. i think the good news is we can have a recovery, a decent recovery with weak consumer spending, and arguably we should have it in the sense of this global rebalancing you were talking about earlier, which is to say the rest of the world has to have domestic leg growth, we have to have export-led growth. what can compensate for weak consumer spending are exports, a recovery in housing, strong capital spending. so if we have consumer spending,

let's say 2% a year, and the other is growing very strongly, then we can have a decent recovery. but by that i mean 3% annualized growth, 3 1/2% annualized growth. it's entirely possible. >> we'll take it given the fact we're still in contraction mode. brian, what about small business? how critical is a recovery for small business here?? >> small businesses are going to be critical because they are going to be the drivers for hiring in this country. with regards to the large businesses beating expectations you've seen businesses, the larger businesses that have gone quite a way through in terms of scaling back workers and beating expectations not on revenue but on cost cuts. for the smaller businesses it's a little bit of a different picture. the survey continues to points to concerns about revenue, concerns about future capital expenditures or future hiring, and of course that's going to put pressure on the consumer. we have to create over 130,000 jobs per month just to meet population growth in this country. so we have to far surpass that to replace the 6 million jobs that have been lost over the last couple of years. small businesses need to be the

leaders in that. as of right now that is not the picture that the survey data's telling us. >> very important point there. gentlemen, great conversation. we so appreciate it. thank you. we'll see you soon, gentlemen. thanks for your time. up next, a new spin on health care. will the obama administration take the public option off the table? table? what does that mean for the private health care companies?ep we'll take a look at the investment angle. back in a moment. let's ask. when i trade, i want a straightforward price. they lure you in with a $5.99 trade, then charge you 15 bucks. you get a low price, but only if you make a ton of trades. at td ameritrade, every online stock trade is just $9.99. period. no matter how often you trade. no matter how much money you have in the account. i hate those hidden fees buried in the fine print. surprise! it's a maintenance fee! i hate surprises. at td ameritrade, you never pay a maintenance fee. you get low, straightforward pricing, so you always know exactly what you're paying.

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welcome back.. the regulator that was supposed to oversee brokers at the stanford financial group admits it did not follow up on an inside tip about fraud at the company. a tip that came more than five years before the company was actually charged with running a massive ponzi scheme. senior correspondent scott cohn has been on the story from the get-go. he joins us with the latest. scott in. >> reporter: maria, the regulator is finra, the industry's self-regulatory arm. and the tip came in late 2003 from former stanford adviser layla wideler, who told a finra arbitration panel in 2003 that her employer was running a ponzi scheme. that's wideler there. she testified at a senate banking committee field hearing in louisiana today. she lost that arbitration case and apparently her allegations of fraud got lost too. because at that same hearing, which was packed with angry stanford investors, finra acknowledged it didn't follow up on her claim.

why? because the agency's policy at the time was not to investigate fraud claims from employees in employment disputes like layla wideler but instead to focus on complaints from customers. in 2004 wideler took her concerns to the securities and exchange commission. it launched an investigation the following year but didn't charge stanford with fraud until this year. a ponzi scheme, just as she had said five years ago. finra says it has since changed its policy but claims that even if it had followed up it would have run into a brick wall with regulators in antigua, where the alleged pobzi scheme was centered. the agency also said it investigates all complaints and it also did initiate many actions against stanford but did not follow up on that initial one. maria? >> unbelievable. scott, thanks sop.p. we'll see you later. a broad rally meanwhile across the health care sector today. investors taking comfort on what appears to be the obama administration's softening stance on the public option of health care reform. the morgan stanley health care index closed more than 3% higher. take a look. will the development give a

further boost to health care stocks? joining me now to talk more about that is harry rady, ceo with raddy asset management. barbara ryan. good to have you on the program. barbara, let me kick this off with you. can you give us a scenario on who are the winners and who are the losers if in fact we were to see the public option go away and the same situation with a public option on the table? >> well, i think first we can say broadly that health care stocks are the winners because investors have been very reluctant to invest in the space given that the rules of the game are quite uncertain. put simply, if there is major reform and the rules change in the economics change, then obviously nobody wants to buy in front of that. that being said, the public option really had the greatest consequences for the hospital and the managed care organizations, and so it's those stocks that we're seeing bounce most strongly today with the news that we saw over the

weekend. >> so what would you tell an investor as it relates to hmo stocks then?? do you want to be betting that given the latest news you want to be increasing your exposure here? >> well, i cover the pharmaceutical sector.r. so it's difficult for me to give really specific advice on that. i think that what the market is saying and certainly the process in washington seems to be suggesting is that reform is likely if it comes at all to be more moderate and evolutionary than it is to be revolutionary. and given that there was tremendous overhang in these yo that is the way this plays out, then these stocks will outperform the market for a while. >> it's pretty extraordinary, harry, isn't it? the response from the public.. you had an immediate and very adamant response to some of this with those town halls, et cetera. how do you see it? >> we think great companies with

strong patent portfolios and great i.p. will prosper, no matter what happens. so we're not trying to predict the winners. we think that companies -- the commoditized service providers, you know, the hmos, the generic drugmakers, we think that under any scenario that they get squeezed. but companies that have these positions and these patents, they will do well. companies like ceflon. you know, ceflon is trading at nine times earnings growing at 15%. historically, it's traded at 20 times earnings. and we think they're going to -- we think they're going to earn $4 a share. so we think there's 50% up side. stocks like mariagenetics making new 52-week lows today. once a year maybe we see an opportunity like this.s. the stock has grown historically at 50%.

earnings and revenues growing at more than 50%. yet the stock's trading at 15 times earnings. they've got a pristine balance sheet. they've got $3 in n.o.l. carry-forwards. another $4 in cash growing to $6 in cash. we think that this is one of the greatest growth stocks and one of the greatest opportunities we've seen in a long time. myriad genetics we think is a home run. >> so you're really looking at balance sheets and sort of growth potential regardless of what happens in washington, what kind of new policies come out, you really just want to be sticking to your knitting, and that is fundamentals? >> yeah. i mean, you can't invest and try and rely on the government. >> right. >> the government is so unpredictable. >> right. no, i understand that. but at the same time when you do see policy that's actually will impact revenue, you want to be aware of things like that because it actually can change a situation. >> absolutely. but we're contrarian investors. so when stocks are trading at their lows, we get interested.

when stocks are trading at their highs, we start to look at them on the short side. so many of these stocks we talked about, the service providers and the companies that sell commodity-oriented stocks, they've had a big run today and over the last couple of weeks.s. so many of these stocks are trading at their 52-week highs. so many of these stocks are starting to show up on our short screens. >> bar br, lbarbarbara, let me in here on pharmaceuticals. talk about you are why space. give us your favorite picks here. and how you want to be investing in health care if in fact you're an nifrtd out there and you do believe you need exposure to health care, how do i do it? do i want to be in those large pharma companies, and who is best positioned in your view? >> well, i think the last point was obviously, you know, the most important point, and that is that at the end of the day it's all going to come down to fundamentals. our view is that whatever we see out of washington that the fundamental outlook for the major pharmaceutical companies, especially pfizer and merck, because they have done or are in the process of closing on major

transactions, they have enormous earnings power due to the synergies and savings from those deals, and importantly very high visibility to those strong cash flows over the next several years, and they are trading at their historic low valuations with relatively high dividend yields. so those would be our two favorite stocks in the group. and that would hold whether we got health care reform or we did not get health care reform. and in either case, i do not expect that i would change my earnings forecast for either company for either of those outcomes in washington. >> so you do feel, though, that the investment scenario is there? because you could have said that a year ago, right, barbara?a? you could have said that five years ago. and really we haven't seen much movement. >> absolutely. i think what's changed today is companies are tackling their cost structure, so earnings and cash flows are improving. the multiples are a lot lower than they were then.

these mergers are taking excess capacity out of the business, which unequivocally needs to happen, and we also have an uncertain economy. so maybe we're bumping along the bottom. but the question remains, what will the recovery look like? how steep will it, and when will it come? and i think that what we're going to see is strong double-digit earnings growth, specifically at merck and pfizer next year, which probably is going to compare relatively well to the market at a substantial discount in terms of multiples. >> all right. good conversation. we appreciate it. harry, barbara, thanks so much for your time.. we appreciate you joining us today. breaking news right noup. right to l.a., where julia boorstin is there with it. julia? >> that's right, maria. steven spielberg's dreamworks studio has finally secured the financing it needs to be able to start fing on its films. approximately $325 million of senior debt which reliant entertainment an indian company will be matching with its

equity, $325 million in equity. disney, which is committed to relation the steelberg dreamworks film will contribute another up to $175 million. maria, this is big news many, many months in the making. back over to you. >> julia boorstin. technology among the groups under pressure today. nasdaq down sharply. up next we break down the outlook for tech, which means it could see some action this week. back in a moment. access to favorite courses

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will list on the shanghai market today. that's after it raised $1.6 billion in its ipo and becomes only the second chinese brokerage firm to list in shanghai.. we'll track the opening moves for you live. and minutes from the latest central bank meeting will be in focus in australia. investors will be watching for clues on when the next interest rate hike could take place down under. and hong kong released its july unemployment data today. that's after a jobless rate of 5.4% seen in june. since then the territory's economy has emerged from recession, growing 3.3% for the second quarter. tune in to cnbc world to catch all the action overseas.

at cnbc's asian headquarters we're going global with your money. wall street getting ready to celebrate the anniversary of a huge initial public offering five years ago this week. google went public. at an ipo price of $85 a share.. in an atypical auction style. what a ride it's been. take a look. the stock is up more than 300% since ending the first day of trading. and it's up better than 400% since that $85 a share pricing. so how will google shift gears from the past five years to the next five? that's a question i recently posed to ceo eric schmidt.t. >> so where is the growth coming from going forward in the next five or ten years for google? is it more search opportunities? is it mobility? something else? >> probably a combination. it's obvious that the highest growth is in our core business as people get online. and as we get better and better and more targeted ads, those ads become more valuable.

our whole theory about advertising is that advertising that's not targeted, just a random ad that you walk by-s a waste of somebody's money because you're not going to buy, it wasn't relevant to you. we want every ad to be personal and directed to you and has some value to you so we don't just ignore them like we normally ignore ads. >> here's a look at google's top institutional shareholders. capital research and management, the top holder of google, with 18 1/2 million shares. fidelity coming in second with nearly 15 million shares. barclays global investors, the vanguard group, and state street global advisors round out the five top holders of google. meanwhile, the company just one of the big technology names leading that sector and the broad market lower today. what happened to that tech rally and can it stage a comeback? cnbc's silicon valley bureau chief jim goldman now with a closer look on that angle. jim? >> yeah, maria, welcome back to you. indeed google was one of those big names that got crushed to you. i suppose it will all come down to earnings tomorrow from hewlett-packard and we'll see if hp can build on the good news

the sector has already enjoyed from the likes of intel, ibm, apple, and of course cisco. this has been a particularly brutal day from big cap tech but a 2% or 3% move to the down side for the overall nasdaq doesn't necessarily eclipse the big moves many of these names have seen over the past three months. apple, well, they just suffered an absolute drubbing today, and that's going to hurt for those recently adding to their positions. but it's hardly a blip when you look at apple over the past month. cisco's 3% slide, that gives back half of what the company's earned over the past four weeks. ibm's off about 1%. but up sharply still for the past month or so. let's talk about hp ahead of earnings tomorrow.w. trending lower with the rest of the market today by 2%. but it's another one that has been up nicely over the past month. analysts expecting a pretty solid quarter with ongoing cost cutting still helping the economy shape that bottom line.. a positive tone and optimistic outlook are expected as expectes recover and hc starting to see on the top line what the company has enjoyed on the bottom line. and maria, that, of course, is

expansion. >> that's going to be a big one. jim, thanks so much. let's head over to the nasdaq. poli melissa lee is there. >> hey, maria, on a day like today, we will go to our prop desk and see on our traders shopping list. also peter on how deep this correction can go and whether he put money behind that prediction. and a first on cnbc interview, the king pharma ceo on the approval of mbeta. >> thanks, melissa.a. a look at could move the markets tomorrow. we'll be right back.

here's what to watch for tomorrow. >> i'm rick santelli, tune in tomorrow at 8:30 eastern. hey, last look at ppi for june was up 1.8. this time we're looking for a negative number for july, will it be negative? will it be the last negative? as we watch many commodity prices move lower, tune in 8:30 eastern. >> i'm bob pisani at the new york stock exchange, how cautious will the consumer be? earnings will be the focus prior to the open. lowe's has already said that sales will be lower than expected. will home depot and target

follow suit? >> i'm diana o olick in washington, will that translate into new holes in the ground? housing starts and permits tomorrow morning at 8:30. >> and finally today, readers digest association publisher of the magazine saying that it may file for chapter 11 bankruptcy for its u.s. business to cut its debt load. on wall street we begin tomorrow's trading session on the downside to the tune of 2% with the dow beginning the day at 9,135, a decline of 186. nasdaq gave up almost 3% and the s&p 500 down 24 points, 2.5%. i'll see you tomorrow on "closing bell," have a great night, everybody, "fast money's" up next. thanks for being with us. good night. get announce the boost on stronger than expected earnings and a bullish outlook from the company.y. steven spielberg completes the funding for the new dreamworks studios and for the

first time in a month, gas prices fell last week down a penny to $2.64 a gallon. that's cnbcnews.com news now. "fast money" starts now. is it about to become a cruel, cruel summer on the street? you can't afford to miss this show. welcome to "fast money," live from the market site, these are your "fast money" traders, we've got the summer correction covered from all angles. pete will tell you how to protect your profits. karen's got your selloff shopping list, and later peter says how long the correction will last. first, let's get to the word on the street. guys, this is a healthy pullback. the start of a correction. what do you make of it, guy? >> start with something bigger, i believe. we talked about wednesday was the last day here. 30 or 40 s&p points, worth about 40, i think we're going to 970, we'll see what happens at 970. it hate to know where

everybody's talking about fibnaci. 905, a number that timmy's talked about. that's your next level. you get 970, you'll go to 905 faster than you'll brink your eye. >> i think they're shallow, and i think down to 905 might be a couple trips more than people want to go. i think as you look at the data coming through, people are no longer assured that the fourth quarter's going to give us anything more than a pullback to where we were coming into the second quarter, which is a lot of questions on growth. >> what do you mean? percentage wise they seem deep? that's a sharp pullback. >> it is, but not relative to the move we've had. people all over this show tell us 40% move up higher is more than you've ever seen in a recession, i think we've had an extraordinary move, i think a lot of people not in this market that were saying get me back to 950 on the s&p and i will run back in here. >> we didn't see that running back in the last hour of trading we've typically seen, wh