particular. rick, gosh, prices going down, maybe not something to celebrate anymore? >> no, i mean the prices going down isn't anything to celebrate and the added confusion, of course, is will they continue to go down? if you look at a chart, whether it's of the dollar index or of the crude oil the crb, we know that july was one of those months where we were at loftier -- lowest levels, we've since moved aie bit higher so that may change. the housing starts and permits weren't far from the last look in june, a bit down, but didn't offer any big hopes. there have been some housing numbers that have. but as diana olick has been over. one could say foreclosures could be ramped up as well. so you walk away with the deflationary pressures in the near term, there's still desire s for printing in the long-term. virtually unchanged interest

rate complex, a dollar that's virtually unchanged but holding on its gains and many believe that both those markets are doing better because of the uneasiness that's occurring in the equity markets. by contrast, i'm not sure gd spchgdp is the way to measure the economy. but europe is doing better in that regard. the zoo institute had a big jump in german confidence, so all of this is going to handicap the investor as to where his investing dollar ought to be domiciled. back to you. >> all right, rick santelli. that's find out what's going on premarket. we begin our cavalcade of stars with bob pisani. robert. >> futures are up a little bit here as europe and asia have recovered a little bit. and the retail news as you heard, there a little better than expected. home depot is up the estimate, raises their full year guidance but the top line is still below

expe expectation. big ticket item, again, like lowe's affecting home depot. target up again, beating expectation. saks reported significantly smaller than expected second quarter loss and reaffirmed their sales forecast. here's the bottom line on the e retailers. we cannot to see margin improvement that is mostly due to cost cuts but still no sign of an increase in spending. trader tau, how's it looking at the nasdaq. >> we're up 0.6 of a% right now. improving as we get closer to the bell today. what day makes on a research call, imagine yesterday trying to sell an improving sentiment story with cell phones. china was out with the news. but rbc raises systems on apple, rim and palm this morning. that's from a $100 previous price tag. so that is definitely working in

this marketplace. some of the other battered stocks from yesterday, down 8% with a 2%, almost 3% is huntington bank. a lot of financials. ja solar was down yesterday. then a couple of news notes. geron down 13.5%. they have stopped their drug application for an investigational spinal cord injury trial on, they put hold pending a review on han mall studies. a $50 stock, they came out with better than results. let's get down to brian shactman for the latest on oil. >> the adage down here is like the more army one. they do more before 9:00 a.m. than most people all day. dennis gartman came out and said we're not sure about the sustainability of this uptick, the data comes out and we've had a bit of a shift here.

crude oil right now, up 35 cent when is that data came out 35 minutes ago. down 57 cents. we have a couple of factors involved here. we are trading in the option, the october contract for the first time today, also the api numbers coming out later today. pretty volatile so far. also want to talk about gold. traders telling me. still tracking oil, we've had a little bit of a shift in the dollar. the new range is 930 to 960. news out of india, july imports 68% year over year. exxon mobile and petro china, $41 billion deal for gorgon project in australia. but that is making major news in the gas complex today. mark, back to you. >> a rally in asia overnight. let's check out some numbers. shanghai composite, jumping 1.4% a day after suffering its

biggest loss of the year. bombay sensex up 7%. what's going on in europe, guy? >> we are in positive territory at the moment, but as you can see the cac is off. barely in positive territory. the story remains very, very cautious. volatility is down fractionally but nonetheless looking at a very, very nervous market. let me show because we've done today. the housing data did have a big impact on the markets, dragging us down and stoxx 600 is up by 0.5% at the moment. let me talk about the data points out today. uk inflation is very, very stick y it's still positive, one of the on the advanced economies that still have economy at 1.8.

you strip out mortgages that number goes negative. the survey out of europe very positive as well. making pointing to a positive g3 for the german economy. that's the economy, back to you. >> up next, retail reports from saks, home depot, target, all brighter this morning putting back to school back in the spotlight. rebecca jarvis rounding out the results for us. >> the fabary report, climbing the mountain of debt. the word on the street and buzz beyond volatility tuesday. is the pullback over or we going to fall into a two step down, one step up kind of pattern? we'll be right back.

welcome back. we're seven days into back-to-school prime season, a number of retailers reporting stronger than expected quarterly results. but there's a caveat, one we heard throughout this earnings season. this isn't about sales growth or return of the consumer, instead, it's a matter of cost management, successful allocation of inventories, those are what are driving the bottom line. home depot beating expectation. they raised their guidance for

the year, still sales, the biggest home improvement retailer. they're continuing to suffer there. they fell 5% with the average ticket declining. the number of customer transactions, that is improving. they edged up 0.3%. the hank blake says the softness in the economy, rising unemployment, all of those continue to pressure consumers. similar story out of target. the discounters delivering earnings of 79 cents a share. 13 cents ahead of analysts' estimate, but again, sales there were light. down 6.2%. the story, stronger than anticipated. credit card segment in line with expectations. meantime, luxury department store chain saks, delivering a smaller than expected loss thanks to solid cost controls and the discipline here is the key word we're hearing

throughout these earnings reports. sales, as i mentioned, continue to be sluggish but by keeping inventories lean, they're managing and that is the guidance they're providing for the future. we're continuing to listen to conference calls and bring you that up-to-date information but for now we'll send it over to david faber. >> thanks, rebeck kachlt yesterday's news, interesting. "reader's digest" filing chapter 11. we haven't as many chapter 11s as people might have an dissipated, but in in the case of "reader's digest" couldn't support the debt level that was taken on by the buyout that was led by ripplewood holdings. remember when all those public shareholders were screaming for a piece of lbo? man, where would "reader's digest" be trading today? it might not have been a bankruptcy given the same debt load but it would have been a

lot lower. shareholders very happy for those lbos. not so the private equity firms that did them or in the case of tribune, the employees that participated. that's another one of the large media deals we have seen go bust. that one, of course, going bust so quickly, you barely had time to blink, from what i'm hearing the recovery values on tribune and debt associated with tribune will be as low as we've seen in quite some time. more on that later, not as many chapter 11 filings, many anticipated after the events of last september when it certainly appeared that many companies would be unable to access the capital markets in any significant way and so many of the portfolio companies leveraged buyout funds were thought to be on the edge. instead, what we've seen is a lot of distressed exchanges. we've seen record defaults and s&p came out with a recent report on all of this, but it

isn't resulted in so-called bankruptcies or chapter 11s. instead, we've seen a lot of distressed exchanges where ultimately the debt holders were willing to take a debt claim that was worth less than the present value of their original claim. so you can see, bankruptcies have actually not been as high as many anticipated. that being said, they still are pretty high, defaults are extraordinarily high. we'll see where this all ends up, especially because while access to the capital markets has become a lot easier for so many companies, both investment grade and noninvestment grade, there is an awful lot of debt still coming. i've talked a lot about this, the so-called maturity clip we'll be dealing with. take a look at our bar chart and you get the feeling. '13 and '14 gets ugly.

that's when those lbos will have to refinance the debt they took on. so many companies are trying to get in before that avalanche of matu maturities come due and that still is the larger question mark in terms of future bankruptcies or default. the $83 billion has been reduced from the total loans maturing through 2014 according to s&p. but we've still got $455 billion or 91% of that overall institutional loan market still to come. you can do a number of things. issue high field bond, longer maturities. extend maturities on existing loans or go public or try to go public. we've started to hear a lot of murmurs, the likes of the kkr, taking their portfolio pub lichblgt those are the ones doing fairly well. all of these things still in place, still dependent on the capital markets.

mark, back to you. >> thanks, up next, the word on the street, the buzz beyond the trading floor as we gear up for a bounce, we hope, after yesterday's dive. >> it maybe meager but maybe we'll build on it. later, the federal small bank loan initiative is off it a rather slow start, but one small bank in new york is picking up the slack and aggressively lending. ceo of the park avenue bank joining us next half hour. we'll be right back.

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all right, we're back. we're down here on the floor of the new york stock exchange with bernie mcsherry from cutone and company. >> looks like this should be sold. expected weakness later on in the week. >> bummer, bummer, talking the market down s this the beginning-everyone is saying too far too fast. it's been a great run. >> there isn't a reason to complain. >> is this the beginning of a significant correction? >> define significant? >> well, 10%. >> i think that's reasonable, we've been talking about this for weeks. back-to-school season is coming back. if you talk to folks, we're going back to the hand me down economy. people are wearing their brothers and sister's clothes b. >> but the flip side is if it's only 10, 15% correction, it's a buy opportunity. >> a the lot of money has been

kept on the isidelines still. the question is does that money come in and cushion that and turn into a 4% or 5% correction, don't know. >> what would you recommend? >> i have a little cash on the side myself, i'm hoping for 10% because i am going to get back in with some of that, but you've got to keep your eye on the price. which is long term. >> what looks good to you,? what would be on your shopping list. >> the health care narms still there. receipt form are process is going to take longer than folks thought. they sold off aggressively and there's going to be some great trading headlines coming out of congress. >> all right, thank you very much. back up to erin. >> let's get the buzz beyond the big board. joining us is jim tyrell. jamie, obviously volatility is something we've been honing in on, it doesn't have to mean the market goes down, as anyone who

follows it closely keeps emphasizing. >> correct. we've been seeing an elevated vix level compared to where we've been seeing actual volatile come in at over the last month. we've been seeing it at 18 on the s&p 500 and the vix is still looking about 28 and the future prices up towards 30. so we're certainly seeing a lot of pricing in of more volatility than we've been seeing for the last monchts more than the past month but obviously relative to where we were let's just say last fall or even around the market lows we're not even in that stratosphere, is that something to consider or not even close? >> that is something customers do something. they're looking back to last fall where we went, up to 80. these september and october calls are in the 35, 40 range,

something that would be a significant uptick in volatility in the type of rurps we were seeing last fall. >> so for the next, if you were just looking at the next couple of weeks, coming into september, which we all know is one of the toughest months for the markets, what do you see in terms of volatility? >> we've been honing in on that 30 level up there, so as you move at 18, you're expecting maybe a percent move every day. off 30 year, you're expecting 2% move out of each day. so a lot rockier of a road than we've been seeing over the last month, but still much less than last fall. >> jamie, thank you very much. giving you the levels to look there around 30 potentially over the next few week, but again, i think he gave a real point of contrast when you look at the 80 we were trading at the for the peak of volatility. thanks, jamie. just on the other side of the bring getting ready for a volatile day, we'll see how big that bounce might be. we'll be right back.

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you are watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell is going to ring in, carry the three, 2 1/2 minutes. >> yep. remember, we were talking about the chinese market down nearly 20% over the past couple of weeks. it bounced back today. >> we're talking shanghai. but 20% is not unusual for shanghai it. >> had nearly doubled and raised concern over whether the stock market bubble there was bursting. we were talking about the tenth biggest broker in china was 100 times oversubscribed. we noted was sort of concerning t actually managed to go public today. it ended up more than 30% higher on the investigation, which is

actually being interpreted as a sign of cooling because a lot of ipos have been going up much more than that but mark, this is what may interest you, it was valued at 60 times last year's earnings. >> no kidding? >> yes. yes and the other companies in that industry only valued at 30, which still may seem high, but just to give you some questions as to whether that market may come back, what that means for ours. it went off, but still very high valuation. >> i find it interesting that we had that 180-point air pocket and everyone starts running around screaming that it's over and you know, we're up 50%, 50% from the haines bottom. >> yes. >> you get a 50% run, 10, 50% is absolutely normal. nothing to get excited about and should be treated as a buying opportunity as bernie mcsherry was just telling me on the floor. that's what i'm hearing on the floor. give us a 10% correction because

we want to get into this market. >> you're talking about the haines bottom, for the year, and the dow and s&p actually performed a little bit differently. the dow is only up 4%. so it just gives you some perspective. >> what do you mean only up 4? >> on the year. >> oh, on the year, yeah. >> you had that sharp drop, so makes you realize there's different ways of looking at it. a lot of people say we've come too far, too fast. it depends on the time horizon you choose to focus on. >> that's true, plus the plummet that the market went through leading to the haines bottom in early march was really discounting the end of the world. i mean dow 6600 was discounting just all sorts of horrible things and all that had to happen was for us not to go off the cliff and and you had to have a bounceback. >> yes. >> where is david faber? no.

>> he's not there. >> by the way. >> i am here, but it's time for the bell. >> you know, david, he wanted to be generous and give you three seconds. >> marx what was your one thing? >> i didn't have one thing. >> tomorrow, we'll have one tomorrow. >> shut up, david, it's time for the bell. here at the big board, american dairy sticker ady, american dare vi a chinese milk producer, celebrating stock exchange from nyse arca. my guess is keeps them cachet. >> it is funny that it's called american dairy and they're based in beijing. do their cows live in america? >> they're lovely, i would like to take them home. at the nasdaq, intersil corporate. ticker isil, they make analog and mixed signal semiconductors.

>> our market reporters are standing by. let's get straight to them. bob pisani, take it away. >> -- pricing secondary, a little higher than announced earlier here. we're waiting for this to april and it did just open here. up 67 cents. so that's a secondary from big bank bbp. we've got a positive tone here. asia was positive. you heard about everbright securities in china up 30%. asia is generally higher. europe higher and retailers are generally higher here. they're all reporting better than expected numbers here. so we got home depot they're up nicely here pro-open, they just opened up 4% here. earnings are better than expe expected razes their full year guidance. target up 5% preopen. target should be opening in just a second here. just opened up 6%. the important thing is that the top line again beat, light on

the top line. saks reported much smaller than expected second quarter loss, that opened up 5% here. they reaffirmed their sales forecast here. margins are improving due to cost cuts but still not seeing a dramatic increase in sales from the consumer. trader talk.cnbc.com. how are we looking at the mass dak? >> about a half a percent higher at the open. we got this big callout from rbc this morning from apple, rim and pa palm, all three of the price targets, all going high er here today. also worth a note is pa krchpac goldman takes it off the sell list, now rated neutral. the stock trying to get back to $18 a sha, they posted better than expected second quarter results.

ge geron halted a spinal cord investigational drug test, they're wait iing for the fda t review that first solar just inked a deal with southern california edison to built 550 mega watts via two plants. everything chinese was not working. today you can see ctrip.com from overweight to neutral at piper jaffray. some of the big caps like mic microsoft definitely working here today. let's get to brian shactman at the nymex. >> it's extremely volatile. watching the ticker here when it comes to crude. october contract for the first time today. we were up 45 cents before that data came out. we went down it looked to be trading now. just turned policy tif and we're rallying strongly up 22 cents at the moment when it comes to crude. we did get better expected out of germany.

inflation pretty steady. i want to talk about nat gas, it's got an 8-day losing streak. a push and pull between the storms not having a big impact to hotter than usual weather in the northeast right now. gas also and this is the one i want to send out to rick is because gold is an interesting story because the dollar doesn't know what to do. it's up, down, down a little bit more. gold is respond inging a little in kind. up about $3 but we do have high energy trading in the oil pitts right now as we've had a 30% swing just in the few minutes i've been on the floor. rick, the dollar doesn't know what to do, but now it seems to be making up its mind a little bit. >> there's two ways to look at a market that establishes a down trading range and reverses and that is, a is it holding onto the bulk of its gains? and the answer to that is yes. but on a microbasis, you're right, today it's going in and out of unchanged territory, slipping just a bit. the oil like all dollar

denominated commodities does have a life outside of the fact that it is denominated in dollar. so movement in that currency effects it. but with zboeld up a bit, just the fact that we're under 940 on the future side. more color on that housing number today. i get notes from my traders and economists around the floor, be if you look at that 1% drop in starts to 581,000 there is something good embedded in that over a 13% drop on mull tie dwelling, mull tie family units. 13.3 drop to be exact. if you just looked at single family homes, they were actually up 2%, the best level since october of last year. interest rates are highly unchanged as brian is pointing out, we're all going to watch that carefully. mark haines, back to you. >> all right, thank you, rick santelli, stocks rebounding from monday's losses. joining us is david fleisher,

chief operating officer with first trust financial resource. and in hot atlanta, portfolio manager of tensler equity fund. i'll start with david. where is this market headed? >> i'm trying not to lulled into a false sense of security. we don't know if the correction is going to 10%, 15% or if yesterday was just a hiccup. but clearly not forgetting the past is an important aspect. so people who have been shell shocked a somewhat defensive oppose schur where we are right now. >> but haven't you missed the boat? >> no, the difference in being all cash to 8-20, we might be 50/50 in this market, we're still able to participate on the upside but just being more patient that if we take a step downward we're not hit too hard. >> ted what do you this, pause

that refreshs or are you taking a posture this could drop much more dramatically. >> we're going to stay fully invested regardless, but the market may trade sideways because there is a lack of news because of the economic coming out, but there's a lack of earning news. we have an 1130 target for the end of the year for the s&p 500, we think that the numbers, the estimate for the s&p earnings for is higher than what the market expects right now. we think the market a is going to be up the rest of the year, it might be slow for the next few weeks, but it's definitely going higher, all of the numbers coming up for gdp estimates, that's a good thing. a lot of money on the sideline is going to come back in when the numbers start looking better. >> just make that argument again for the money on the sidelines. mark and i talk about this a little bit. just personally, lot of people could admit they're keeping a lot more money in their checking account, savings account, as opposed to putting it in the market.

but how can you be confident that's not a longer term shift, at least another decade or so? >> well, hey, i mean the consumer clearly isn't dead. you know, but i mean there isn't any kill applications like back in the day when the computer upgrade cycle was so ferocious. but consumers are still going to spend. i think that the key to gdp going forward and also the consumer spending is more jobs. and you know, companies cut 5% of payrolls through this downturn, which is a whole lot hi higher than the contraction of gdp would suggest. i think the estimates are 3.5%. so more jobs later on in the year and further in 2010 i think is going to be the source of some of the consumer spending. >> all right, here's something i do not understand in the notes, david. sector underweight, concerns of the impact of cap and trachltd what does that mean? >> well, when you're talking about how utility companies will

adapt to this. if you throw that with the issue of health care even the regulation of financial services, we are still in an environment where laws are literally being written over weeks or weekends or hopefully more debate than we've seen over the crisis in the last 12 months. but depending how that plays out, that could certainly impact the future which used to be very, very predictable steady earnings in the utility sector that could affect that. >> that makes us cautious on the utility. ted, you like the old industrialsy. >> yeah, mark, those companies are very cyclical, but i think the whole theme around the globe has been there's a lot of stimulus they're pointing towards creating the infrastructure and you know, the industrials take advantage of that. i mean ges, the emersons, the floo, the engineering company, they're in a good biggs

globally, but they have been cyclical and beaten down guite a bit but there's reason to believe there's going to be a lot of spending on infrastructure and that makes the industrials a good place to have money right now. >> commodities thank you are being distorted by hoarding? >> china, it's clear that a lot of the consumption and buying of commodities by china was just to hord hoard. there wasn't any evidence of increase in the usage of commodities in china so it's clearly hoarding. >> okay. t ted, david, thank you both very much for putting in your thoughts. up next, a cnbc exclusive, a small bank bucking the trend saying no to t.a.r.p. and aggressively lending to small businesses. this is the time when the answer to our economy has few places to find capital and a the federal loan program is slow to start. >> then our offbeat indicator of the day, 401(k) contributions actually going up after market

weary investors pulled cash out and a lot of companies at least anecdotally apparently stopped their matching contributions. so does this signal a revival of the individual investors faith in the market. we'll be right back. some people buy a car based on the deal they get.

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all right, in this morning's street cap, roche announcing a study shows its drug avastin increased life expectancy for women with breast cancer without the disease getting worse when compared with common chemotherapy. five facebook users facing a civil lawsuit against a company in california, individuals allege the social networking site violates state privacy law, misleads people about how personal information is used. major league baseball's washington nationals signed

pitcher and top overall draft pick steven strasburg to a more than $15 million deal, that'ses highest in draft history. >> and dwarfed by the new ceo of aig. but separate source, $7 million, but that was like over 125 years. this is $7 million sort of. >> lending continues to slow at bank, different story at the park avenue bank. it's head quart on park avenue. folks on small businesses, it's aggressively lending right now. recapitalizing without the help of the government, they did not take t.a.r.p. money. joining us here is charlie antonucci, we're glad to have you on the show. you didn't take t.a.r.p. >> no. >> an you're aggressively lending. aggressively lending, does that mean you've got creditworthy

borrowers and at economy is stronger than people are giving it credit for? >> well, we have creditworthy borrowers, what's happened with all the confusion and dysfunctionality in the banking system, we're seeing a lot of good quality borrowers that have customers at other banks coming to us because they can't get credit at their current financial institutions. when we say aggressively lending, our credit standards are tighter than they've been in the past because of the economic condition, but we're seeing much better quality loans and there's no shortage of borrowers out there that need credit. >> so when we see yesterday the big survey comes out from the loan officers and one of the take aways was that they said there wasn't as much demand for loans. >> right. >> you're saying maybe to be skeptical, there is demand, just the big banks don't want or can't lend. >> i think it's a combination of two things. you know, in the market that i'm in, the smaller businesses may not be on the radar of the larger banks.

so the small business clients that come to me, your loans are anywhere from $500,000 to $5 million. for citibank or larger bank, that's not even on their radar. so maybe in their arena, there's not much going on. but we have a lot of business. >> how long have you been in business? >> we took control of the bank as 2004. >> it existed previously as a different institution? >> it was a wholesale bank operating out of 460 park. we converted it to a community bank, retail bank. >> you say you're dealing with loans from $500,000 to it $5 million. that's your sweet spot, your bread and butter. >> correct. >> how big are businesses in terms of employees? >> you could be as small as a two or three ememployees to several hundred employees. >> manufacturing, retail? >> all over the scope. we have manufacturer, we have

retail, we're in the food industry, we're in the health care industry. we have i would say predominantly in the combination health care and the food businesses. >> are they -- i'm sorry. >> what has been your experience in terms getting these loans paid back. what do you call it, your detault rate or somethingy. >> right. >> what has been your experience. >> on the commercial business loan, very low default rate. most businesses are performing well, they've slowed down, their receiverables are little higher. one of the things that happens in an economy like this, is wholesalers start to become banks to the retailers because they tend to give them exstebded credit, we have to be more careful and we watch them a little bit more. but overall, the small business portfolio has held up well. >> are they lending for -- you've got to do finance inventories working capital, just basic bread and butter

lending. >> right. >> what is the split between that sort of lending and the lending to expand into businesses or actually grow their operations? >> very little growth going on right now. i would say two years ago, probably about 50% of our lending was for growth and expansion, now it's just for bankly working capital and inventory. a couple of guys are expanding, but not many. >> mr. antonucci, thank you. >> my pleasure. >> things going pretty well on park aenchts although the lack of growth in terms of lending, but you got to start somewhere. stocks on the move are next. >> plus offbeat indicators on the individual investor 401(k) contributions. they're going up. after a severe pullback, they're back around the time of the meltdown a year or so ago. the president of fidelity investments joins us to talk about that. does it indicate more confidence

at least for the long-term? don't go away.

welcome back to "squawk on the street," i'm mary thompson with your real time flash. let's look at stocks on move today starting with cardinal health. those results came in in line with expectation. as you seek the stock is higher at $1.22. the decline in the profits linked to weaker sales and profits with its medical products unit. the rating is being raised on the company to outperform. kbw also sees -- benefiting from any consumer spending. moving to hsbc, goldman expects growth in the firm's share of the chinese banking market, the stock is up $1.00. the chinese firm is to buy millions of tons of liquefied gas from the gorgon project.

down 3 cents. finally, tspc, the drug developer, it's going to be cutting 40% of its workforce after signing a deal with purdue farm are suit cals t calls those job jobs unessential. mark, back to you. fidelity, the nation's number one 401(k) provider. so they know a thing or two about who is saving and who is not. sign of investor confidence is back. they report that for the first time in three quarter, employees increased their savings levels in their 401(k)s. is that a trend or a blip or what? joining us is scott davies, president of workplace investment and life-long buckeye. thanks pour being with us. >> good to be here, mark. >> what do you think, have you people gotten over t there was a lot of speculation, i'm sure you'll recall a year ago that we

had burned out or turned off an entire generation of investors? >> well, i hope that's not the case. in fact, all the data that fidelity analyzes, we've seen some very positive indicators, the first is that the average account balance in 401(k)s in the second quarter actually recovered and appreciated 13.5%. second, is that as you mentioned in your intro, for the first time we're seen more employees raising their contributions into 401(k) plans that were decreasing them. and third, as you would expect, investors are slightly more conservative with their ongoing future contributions in that they're investing 68% in the equity markets compared to the normal historical average of 73 ars. so the point that we're seeing is that investors who took a long-term point of view with their 401(k) account balances are starting to be rewarded by

that. >> there are two things that stood out to me just from the notes we had about the segment. one is all the headlines that came out. i remember when we were talking about these. company after company cutting their match for 401(k)s. you're saying yes, lot of headlines but when you at the g aggregate it was not a big drop. >> that's right. fidelitying wo,z with 70,000 employers across the country and we are just not seeing the data that matches those headlines. in fact, in the second quarter of 2009, only 2% of companies informed us that they were suspending or redusing their match. and in totality through the entire down cycle, we've only seen about 8% of companies that have suspend or redeuced their match or their profit sharing contributions, most of which have stated to their employee groups they are committed to reinstating those matches as the economy recovers. >> let's talk about young workers. you found that less than half

eligible workers in their 20s contribute to 401(k)s. now is that a change? because i remember believe it or not, i still do remember, being in my 20s and i needed every dime i could get, i couldn't afford to contribute. so has this changed. >> clearly, retirement is the last thing on many young workers' mind, however, what we to continue is the process of educating younger workers if they don't start early, they're creating a savings gap they will need to overcome at some point in their careers. so you're right, less than one half of workers aged 20 are actively contributing to a 401(k). but there are tools available to employers to spur that contribution and most powerful is automatically enrolling all employees into their plan and have them opt out. when employers do that. >> is that really the common way now? >> less than 5% of employees actu

actually will opt out. exactly. so you can go from 44% contributing to 95% contributing, just by adopting that feature. and that is very common. we've seen 70% increase in companies that are adopting what's called auto enrollment. >> one thing i want to make sure i heard you at the beginning because we're talking about how much money is on the sidelirngs you said the average contribution to equity is 75%. but right now, we're at 68. >> 68%. >> that's not really that different. >> no and contributions peaked in 2001 at 80%. so you can see there's a tlaz very long-term orientation to 401(k) investor has have served them well during this cycle. >> all right. thank you very much. are you okay, mark? >> i'm flashing back to my 20s. i'm thinking i'm glad i spent all that money. anyway -- >> scott, thank you. >> well, you're only in your 20s

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live from the financial capital of the world, that's right here in the heart of lower manhattan. welcome to the second fun filled, enlighten, elucidating, uplifting hour of "squawk on the street." good morning again, everybody. i'm mark haines. stocks only modestly higher. half an hour into the trading day, book ended by american express and merck on the down side. new orders, calls for capital markets to raise the price order on the stock.

agilent, 10% higher on the s&p. >> mr. pisani is looking at a lot of things. >> home depot, target, saks, what they had in common is they all beat on the bottom line and they were all a little bit light on the top line. that's been the issue for a while now. here's something that home depot had in common with lowe's, its kp competitor yesterday, rather ticket price declined rather notably. the reason that's happening is people are buying less high ticket item, less washing machine, but still buying sma smaller ticket items. this is a sign of the consumer holding back still. when can we see improvement? it's going to happen. you're going to to see pressure on the analysts to moderate into 2010 so you might see a little bit of pressure on these stock, harder for them to move forward here. let's talk about what's going on in the financials. >> this is an interesting one,

because we're talking about a of the second ago, because i think we have a the best ones. >> yesterday, we had very good credit data, credit card data for. >> yes. >> for the big names. bank of america, jpmorgan, bank of america. they're improving month after month. these buckets of delinquencies, 30, 6 okay, 90, 120, 180 p.a.as dues are getting better sequentially. we haven't seen a lot of secondaries in the financials recently. you're going to see a lot of them. if the market holds up in the month or so. you'll see more second ago, more ipos. >> mr. pisani, thank you. let's get to matt nesto at the nasdaq for us. what are you looking aty. >> i'm log at a lot of things here. we've got synchronicity in terms of the big three index all up 0.3, 0. 5% right now.

electronic arts coming back 1.5% still tripling the gain we're seeing in the market. the big call comes from rbc. royal bank of canada. upgrading apple, rim and palm. they think rim at $72 a share is on its way to $150 and apple is on its way to $250 a share. paccar and joy global duking it out for the top spot in the 100 today. both are industrials. both trying to make a comeback. huron is up 14%. the most active stock in the nasdaq today, this after the company with new management, the whole team quick a couple of weeks ago. went from 50 into the teens. came in better than expected results and restated earnings, they're cooperating with an

s.e.c. investigation. geron halts an investigational drug trial for the time being. first solar, also, erin, with a deal for a 55 mega watt dual power plant, building, if you will for southern california edison. back to you. >> all right, now to chicago, rick santelli monitoring the bond markets ahead of another announcement of how much more debt is coming later this week. >> yes. there's a lot of issues in front of us, one that isn't for this week is supply. data, of course, is leaned, no big surprises today. headline inflation was down. maybe the last big down. didn't disappoint badly, missed a little bit, but single family homes improved. if you w we look at interest rates right now is they're virtually unchanged but there's a lot of cyclical and issuing events that are going to make it

very difficult for the rest of the month to be short looking for higher rates. all the questions regarding equities in the dollars and flights to safety, all the supply we had in august shows up in end of the month buying, indeed, many of the global dynamics overseas are improving a bit which puts up in the penalty box in a sort of way and that's showing up in buying and fixed income. we do have $32 billion in one-month bills today, but aaron the excitement isn't here, it's outside of the fixed income markets, they're being viewed strictly as place to hide out how is need to. all right, thank you, rick santelli. despite all the recent volati volatility in the market, our next guest is on the a roll this year since the march bottom. there it is again. do i need to go trademark that phrase. . the small cap fund is up nearly

90%. portfolio manager of the five star morning star rated fund. which you for being with us. >> thanks for having me. >> you know, my incredibly powerful powers of deduction tell me you like small caps. >> yeah. we certainly do. so historically, if you look at small cap performers versus large cap in the u.s., small cap outperform the large cap by 6% a yore over the last 100 years or so. >> so it kind of runs in cycles, doesn't it? >> definitely, these are based on very long time period, most people's investment horizons aren't that long so it is risky. >> in fact, i think you would be hard pressed to find anyone whose investment horizon is 100 years. >> that's right. >> so what can you do for me say over 5 to 10 years? >> so the goal of the tfs small cap fund is to outperform the small cap index, the russell

2,000 index. the way to do that is to find market inefficiencies uncorrelated to the general movements of the markets. we take stores, we use computer model, developed on 10 or 20 years of historical data. >> you're looking for mispriced stocks. what are some of the things you look at to find mispricing? >> the factors we look can be broken down into basically two cat negotiation one is value air, these are things that everybody looks at. how cheap or expensive a stock is, historically value stocks outperform growth and there are different ways to measure value. usually you divide price by book value or earnings or cash flow. so we definitely use those factors, we also use some momentum factor or market sentiment factor, but the important thing is how we use those factors to develop our models. i think the ski to have a very rigorous and objective testing

process and have a long enough test period so that you know how the model performs in different market conditions. >> now, chao, i know you're not going by liking a company or not, you're going off these quantitative measures, but overall what that's led your portfolio to be is overweight in technology and materials. there are a few that stick out. nest technologies, uplink communication, some of these may be new names to people. >> yeah, i want to highlight a few names that are relatively large portion of our holdings, just to illustrate that our investment principles and like you said, it's true, we don't pick stocks individually, rather, we pick stocks based on some characteristics. so these stocks, i picked, first of all, they span a range of sectors and also, but they do share some qualities such as having a low price book multiple

and having good cash flow and so on. but also another key point is that even though these are large holdings compared to the others in our fund, they only compromise about 3% of the fund in total. so the performance of the fund doesn't depend on individual stocks doing well, but really how these strategies perform. >> and how many stocks then, if those five are only 3% of the tot total, how many stocks do you have in the fund? >> between 300 and 400 positions in the fund. if you look at our morning star holdings. you can look at different mutual fund holdings. ed to the other top performing fubd fund, we are diverse fid with maybe 7% of holdings in the top 25 names or so. so you know, other funds will have maybe 90%. so this also points to the facts that we are very different from the way traditional fund management is done. >> all right.

chao chen, thank you very much, sir. >> thank you, mark. up next, the american consum consumer, are we seeing some signs of life. a pulse for an industry still on life supporty making sense of the latest data next. then why the ceo of the new jersey nets wants you to root against his team. details on one of the most controversial sports strategies in history. then rising volatilitvolatility. the big question for anyone this august is it time to get in to this market or hold back? (groans) a lot of people are gonna be kicking themselves for not buying in this market. (woman) visit remax.com where you can see all the listings

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saks. in this morning's sound check, market veterans on how volatilit volatility. plus what might lie ahead? what yesterday was about is you need more balance. yes, don't give up on sick like alongs and quality. you need more blue chips in the portfolio and that mix will do you well.

i think over the next couple of quarters with low inventories and easy comparisons, could you have a 4% or 5% real gdp quarter, which would really get people excited. >> we clearly think we're in the beginning of the cycle, a new bull cycle, for u.s. equity, we favor eck quits over bonds. people are really lacking perspective to see that, you know what? good times are in front of us, the bad news is behind us. >> a positive morning for retailers. with home depot and target both beating estimates. but you heard bob pisani talk about the bottom line which is that was all bottom line. looking at revenue, which really when it all comes down to it,what you've got to have at some point. that's where they all fell short. >> joining us is the chief investment officer, michael laster. as well as option action contributor. good to have you all with us.

let's start with you, michael, just to look through these number, yes, better than expected. still, we're not seeing that revenue growth. is that something at this point to be concerned about or can we be assured that very soon compared to how horrible last year was, we'll get that top line growth and fine? >> it's going to take time, erin. the moment improvement retailers have been at the folk of housing, credit, weak consumer spending. so these companies have been hardest hit during the downturn but should have a bunch of leverage on the upturn. one positive sign is that thank trends are improving. home depot reported this morning that it saw its first positive comp in transactions in five years, which is a positive sign. the issue is that people are spending less. so as people consumers, get more confidence and that spending returns, that should benefit these retailers. >> consumers are spending less,

patty, but i guess the big picture question is what could prompt them to spend more. home prices even if they flatten out aren't going back to where they were, incomes aren't going anywhere, so we're talking about the marginal money they've been choosing to save over the past eight months, is that enough to move the needle and get some kind of retail rebound. >> i actually don't think they're saving as much as they're baying down credit cards. they're paying down credit cards that are their limits slashed and paying down high interest rates. i don't know how anybody can expect the consumer is coming up back to where they were. i think that's just a total fallacy because of all the things you mentioned. unemployment, sure, we're going to have that turn around, but we've been spending like drunken sailors for the last five to seven years, but the bill is due and it's going to take a long time to pay that off. if you look at household spending as a be percentage of

gdp, the only other time it's been this low is the 1930s. this is in the depression but it's going take time to work that off and you've got to start with a new version of normal. >> i'll start with scott. is it true that if we want a healthy economy, wasn't a consumer who saves an therefore we should not expect a strong rebound from the con sunler? it would be long-term bad news? >> way want a consumer who saves, the problem is we just don't want them to save right now. >> yeah, well, that's tough. i know what you're saying, scott, i think you know what i'm saying. >> absolutely. >> for the health of our country, people got it save. >> oh yeah, absolutely. we can't go on spending spending and spending forever and think we're going to spend our way out of t the problem is as we all know right now is the consumer is curled up in the corner in the fetal position, and that played itself out in retail sales last week and a lot of these numbers today, at lot of

these retailer results, as bob pisani said it's really tough for these companies to do well going forward f they continue to miss on the top line and beat on the bottom line. >> so michael, a premium is more than ever on management, righty a retailer's management has to find a way in a very difficult environment, one that's not going to get better for a long time? >> totally agree, mark, the way you'll see that manifest in the stock market is that stock pickings especially in retail will become that much more important moving forward, driven less by cyclical rotations into these name, we'll see a premium paid for the highest quality companies that manage best in this difficult environment. >> is it possible, michael, we'll get a decline in holiday spending this year? and am i incorrect in saying they we should read a lot into that if we do? i moon it was so bad last year. that was the height of the crisis. >> it was bad. and i think there's a couple of

ways to think about it, number one, because it was so bad, comparisons are going to become a lot easier and that's gelg to aid, at least some of the bigger retailers and make their results look that much better. secondly, lot of these companies have prepared much better for this holiday season. they're not going see as precipitous a decline. even if they do, their margins will be much more intact, benefiting their earnings at the least. >> all right, patty, michael, scott, thank you very much. >> thank you. >> boy, does discountsing help the margins. >> i wouldn't want to be a retailer. >> no. >> the world has changed and it's going to be tough. >> but if spending isn't up this year versus last year because that is truly concerning. because the psychology should be better. >> it's concerning for the retailers but longer term it's what the country needs, we can't go on spending money like this. we have to save. i'm sorry for the retailers.

but for the good of the country, we've got to save some money. up next, a handsful of stocks making big moves this morning including delphi financial, real time class after the break. >> and how far one team is willing to go to sell tickets. darren darren rovell is working on that story. >> on one side the nets jersey, on the other, the star opponent and they're giving these away for free, we'll explain why the new jersey nets want you in this new jerseys next on "squawk on the street."

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lose weight. live better. call or click today. . i'm mary thompson with your "squawk on the street" real-time flash. delphi financial selling 3 million shares, it's that going to dilute earnings by 6%. you can see the stock off $2.34.

big move for a small stock. american axle is up after reaching a funding agreement with general motors to cover costs linked to gm bankruptcy, includes a load of $100 million. and the company is expecting sales to double by 2013. agilent is higher as well, the medical equipment company posted a smaller than expected third quarter loss. the stock is up $1.85. sales did decline if all business segments and expects weak in 2010. >> and cke restaurants, stock up 25 cent, the company says it sees some improvement in sales trends. this is the owner of carl's burgers, very hard hit by economic problems in california where it has a very big presence. erin, back to you. >> all right, mary, thank you. the new jersey nets going to great lengths to sell tickets. extraordinary lengths and these lengths are not without

controversy. darren rovell with the chief executive of the new jersey nets. >> that's right. the new jersey nets are offering a 10-game ticket plan called the matchup plan, it includes the teams against the league's best but buy two of them, you get a set of reversible jersey, with the nets star on one side and opposing star on the other. brett, thank you for being here is there a risk here because the hard core nets fan, the buzz has been they're not too happy with this. >> there's only been a few people who unfortunately have not embraced the matchup plan. we're excited about it. we cater to the casual fan, we want to ill fill the building, we think this is the best shot to do so. >> is opponent marketing, this has been going on since michael jordan in the late '80s and the nets started with t opponent marketing, do you do more because of the economy? >> you do whatever you can to survive. we have great players at the

net, we're reintroducing the nets team to our fan base here in new jersey, but the reality is our fans also like the opponents and the star players within the nba, these players that we're featuring on the jerseys stran skrend their own market, they're global icon, we are going to give them their jerseys. >> you self-launched this on your website last week. tell me was coming up and how will you know kind of the indicator on this one? >> so far the fans have truly embraced it, we did a soft launch online. today, we're hosting select a seat where people who want a matchup plan can come out, pick their seat and buy the plan. right after labor day, we'll break a fully integrated marketing campaign, featuring the matchup plan. we're veried about it. >> how challenging is this environment? >> it's challenging. we talk about it every day, we're got it go wide, farther a,

nontraditional sponsors. understand who's spending money and go after them. ive whooef a pretty good offseason. >> 2012, the bark lay center. a huge class coming up at the end of this season, lebron james, dwyane wade, how important is that to the pitch? >> it's critical to the pitch, but it's critical to the entire business of nets basketball, whether it's response, season ticket holder, going to a market like brooklyn, 2.5 million people is a big time move for us, it's transformational for the franchise and we will be breaking ground this fall. >> brett, thanks so much for joining us, this is again a first look, kobe bryant on one side here and courtney lee on the other side. we like this. >> put it. >> i like it. >> you got to put the nets side on first though. but you're not demanding the nets put the nets side on during the game.

>> we encourage them to wear the net, but if they're a pan of the other team, that's okay, too. are we on the cusp of a run-up in economy. find out how the ceo of global investors with over $2 billion under management is play iing tt group right now. we're live from the new york stock exchange where the market is up 45. we'll be right back. introducing the all new chevy equinox.

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welcome back n in the headlines at this hour. pimco's el erian rally hits a wall. and british sterling jumping more than 1% against the u.s. dollar. let's show you oil because commodity is a big part of the question about where we're going for this economy and whether that rally is going to keep going. we're up a little bit today, brian shactman. >> a lot of traders say we're just simply tracking equities right now. it's been very choppy, we were up, and then the data came out at 8:30 a.m. eastern time, we went down, now back to the

upside. it's been very choppy, gold, on the other hand has been very steady. the dollar has been flat to slightly down and at gold tra traders, tepid to slightly higher, but the real conversation is really in natural gas for a couple of reasons. dennis gartman came out and said finally getting hot weather to support prices a little bit. there's no fear in the market in terms of the current storm, you have a situation where bill is strengthening, but not threatening oil or gas platforms. ana could strengthen but not enough to concern a lot of people, although i did have one tra trader just tell me right now, that listen, no one wants to go home short in this market the way the weather is even though the pattern are necessarily bullish in terms of threatening these situations, but friday, you can expect short covering late in the day and friday keep an eye on short cover iing becae no one wants to go home short. i'm no forecaster, i've stood near one of those walls before, but nobody wants to go and not

be covered because you don't know what could happen overnight. >> okay. thank you very much, sir. keeping an eye on oil prices as hurricane season picks up steam. let's send it to adam berg at the weather channel. what's stirring? >> i just heard you talking about ana, we have bill out here as well. extremely busy across the atlantic, and bill is intensifying. we could be talking about a major hurricane later today. already strong at 100 miles an hour. if it gets up to 111 miles an hours, officially makes it a major hurricane. so we're concerned about this. do you see all that bursting right around the middle? that's the sign of a healthy hurricane, moving west-northwest at 17, east of the leeward island, the official forecast takes it just north of the leeward islands, because it's suggest a big system and rapidly intensifying, waves will be a

huge concern for us. as we're missing the island chain, with winds 115, 120, big surf issues for much of the east coast. rip current issues. again 100, really intensifying and a lot of the models agree with our forecast as well. it's taking them all into consideration. you notice, pushing it right up towards the southeast coastline. >> oh, adam, big surf is not an issue, it's a blessing. all right. >> that is true. >> thank you, adam. from hurricane hurricanes and oil to the broader commodities market, our next guest says we should expect another run in commodities heading into the fall. joining us now frank holmes, chief executive, chief investment officer for u.s. global investments. what makes you think this? >> just the continuing demand out of the emerging market, in particular, a lot of government policies that continue out of china, india, tax zoerns creating in india. these are all for infrastructure building programs and they're going to continue. >> but what i hear is something

else. what i hear is they're hoarding, they're stockpiling and there's a limit to that kind of behavior. >> well, there certainly is a limit to how much they can stockpile, loans have been given out and the infrastructure building. we've got pictures of people lining up up to buy condo, government programs to instill competent in the marketplace. there's a huge, huge infrastructure built up for copper wiring through the basically, they build all these power stations and there's not enough electricity getting out to the rural area, so to create josh, they're extending the wiring infrastructure throughout china in addition to building light railways, i think those factors very, very bull issue for the commodity demand. then we have this basically clunk, also seeing the commodities domestically pickup with the turnover for cars. zinc prices are picking up. the demand in china and india, so that's why i think you're going do see stronger commodities. >> how long does that last?

especially were you're linking in cash for clunk, you get a pop, but is this is a short-term trend? >> i think it's going to be more sustainable, because it's to get some traction, get the jobs created. so clunkers creates jobs, then the turnover of money and create more jobs. >> that's what the government is pushing for. >> one thing that the big debate out there is on this whole inflation/deflation, today prices fell more than anyone thought, lending credence perhaps to the inflationary scenario, not using our kpoflt, but inflation is sure to surge. suddenly, maybe six months, a year from now, but sure to surge. which side do you stand on? >> for eight years, my piece has been gold will rise on deflation. and whenever you have extreme deflation or big inflation, gold rises. if there's none like a '97, '98, '99, then gold is a dormant monetary asset, but we have deflation, why do i say that?

because we have negative interest rates, since 2001, 80% of the time, we have had negative interest rates, that's a deflationary cycle, now we have deficit spending, so any country with negative interest rate, coupled with massive deficit spending, gold goes up in that currency. >> so how much do we put in gold? >> well, i always advocated a modest amount of 5% to 10%, you don't buy gold to get rich, you buy it to have for portfolio insurance. >> should we be buying gold stocks? physical gold? burying it in the backyard what? >> well, for your loved one, you can buy 22 or 24 karat jewelry, that's the best, wear the money. is that the highest. >> yes, 24 karat is the highest. that's why india is the lampest consum consumer. there's a few places in new york, you can buy this high quality. it's a less markup, as you go down to the lower grade gold, it's a higher mark up.

but otherwise, yes, 5% in gold stores, 5% into bouillon, you can buy gold coins are or etf. >> gold coin, i just look ed at this last night, because somebody sent me a solicitation offering me two silver eagles for 20 buck, which is way below cost right now. if i looked at some investment pitch or whatever. but then i kind of drifted, i'm looking at different things. are gold coins worth it? because there's a markup there, too. >> yes it depends what types of coins you're buy, if they're canadian or just maple leafs, there's not so much of a markup, it's not so great. >> i'm not talking about n numismatic value. >> yes. the markup is not so great, but it's not humongous, somebody sending a solicitation to you, beware. you shouldn't be able to buy

silver under its price. >> don't go take those parade magazine ads. >> i give those out as tip, silver coins. and people remember me and i f i give out cash, they'll never -- >> you can give them $16 in cash, they forget. you give them a silver eagle which today is worth about $16. >> they remember you. >> i was giving them out when they were $5. >> they're upset, because they have to save, they can't spend it. >> i remember you giving me one. >> comp. >> just kidding. frank holmes, thank you very much for sharing your thoughts with us. coming up, the faber report takes a look at the the fate of cit. >> and the scary month of september. obviously just around the corner. more wild market swings on the horizon. utilities up. we'll be back. @

hey, i'm still here. hour and a half, my last report. how doing? you know, i like to try it and have some consistency here on the faber report on the things that we cover. so to that, let me go back to cit. a month ago, was what everybody was talking about about, but it has faded from the headlines, that company that was on the brink of bankruptcy but managed to pull out a $3 billion loan at the last minute that gave it life. the question is how long will that life continue? will it be enough to enable the company to get to firmer footing in terms of capital structure and its future? why do i mention this? well, 10q from the company's

quarterly came out yesterday showing the financial for the quarter. loss is $4.30. a year ago was worse. net loss, $1.68 billion. their net interest revenue was negative, they're paying more on their borrowings than what people are getting from them. provision for losses went up as well given the deterioration of the assets they have. none of this a big surprise but all goes to the point that yes, cit did save but still has quite a ways to go before it is truly in safe territory. let's call t there's a look at the stock, up a bit today. down sharply. from even where we saw it not that long ago but has a rally. what does the 10 q say? it's always worth reading these document documents. forget earnings, you've got to go to the 10 qs.

retired $1 millionball in outstanding debt as of yesterday, got bondholders to agree to discount and they got that done. now as for the 10q, they say there's substantial doubt about its tooblt continue operating. re, you've got to put in that kind of language. we just jumped way ahead. the unsecured debt funding needs for the company remain significant. 12 months ending next year june 30th, $8 billion. second half of this year, $3 billion. the estimated secured facilities maturity, again $6 billion. so you see what they're up against, they need to make that transition from a capital markets funded lend tore one that can be reliant on gathering deposits and a few top based basic. as for the risks that remain, cit telling us it may be generate capital equities

actions a la asset sale, those might be at prices below the current carrying values of those assets. and we should also point out as well there are material adverse effects if borrowers continue to access lines of credit. remember, they suffered from that a month ago when so many people who had a line of credit pulled down on it, saying, i want to get my money now before perhaps goes away. lots to come on cit, of course, the bankruptcy of which if it were to occur would still be a very significant event. all right, up next, light volume, rising volatility, the question of the month,now the time to get in the game? or how is wait a couple of weeks to make your next big movey but first trish regan with what you can expect only only on "the call". >> absolutely, great to see you, david. we've gate a packed show for you. first of all, we're talking live with iowa senator chuck

grassley, who's entertaining foreign dignitaries in his home state of i were you, also going to ask him about health care reform. in the pc secretary, apple having a board morning while hp reports earnings after the bell. jim goldman and the latest the pc sector ahead of the critical back-to-school shopping season. dow up 52 points right now, all coming up on "the call," but first back to "squawk on the street." click today.

we've got two weeks left in august. a lot of volatility. so the sidelines, should you wait or get in right now? let's get to our market experts for some analysis. joining us now, craig peck ham with jeffries, and vice president of hill yard alliance. expert on everything that goes on in asia. good to have all of you with us. and what do you say, craig? i mean, it's -- we're up 40% from that low, a little bit of a pullback. is this now the time to seize the moment and get in? >> i think people need to be deploying capital, probably a bit more in the short term. what i'm looking at now is a market that had a dispersion performance yesterday. what we saw was the markets that really couldn't rally in the end of the day, finished close to its lows. and right now, seems to be a fair by of skepticism as we move into the fall.

i think the way that i would be attacking the market with that is the back drop, focusing on sectors like health care, and consumer staples in that same vein. >> allen? >> i agree. you saw those numbers today. i mean, they're still less bad, and i think if that's the problem for the rest of the month, not much news coming out. jackson hole this week, but earnings are about done, so play it safe. watch the market real closely every day. >> a-drew. how are you? >> hey-drew. is that supposed to be me? >> that's you. >> okay. i've been renamed. is that all you can come up with? the best you can do? >> a-drew -- which looks better to you, the asian markets or the american markets? >> well, you know, i'm not an analyst, i can't tell you really in great detail. but what i can tell you is that remember when decoupling was a really dirty word when suddenly, you know, the u.s. fell in a heap and then, of course, the asian merkts fell in a heap, and everyone was saying decoupling

was dead? people are now talking about decoupling again, because, you know, over the last five months, while the u.s. markets have been rallying, the asian markets have been rallying even hotter. look at the chinese markets. up until very recently, up 90% year-to-date. some of the other markets up 60, 70, 80% year-to-date. so in terms of magnitude, asian markets are running really hard. so if you're talking about percentage gains, maybe the asian markets outperformed. >> craig, was yesterday a hiccup or the beginning of a correction? >> i think what you have to do is look inside what the indices did and a couple things make me think the caution meter has been raised a bit. specifically, if you look at the movement in the vix, 15% movement in the vix higher, haven't seen anything like that since april. that's a pretty good measure of just how much fear of caution has come back into the marketplace here. the next test of this market will be in the fall, and certainly -- specifically september and october, haven't been great months for the market. but then a fundamental test which is a corporate earnings

coming back into play. and what the market needs to see is real top line growth evidence in the corporate profits stream. and right now, i think there is a little bit of skepticism whether or not that's going to materialize. >> skepticism, but allen, in the third quarter, it's hard to see how which don't get it in the fourth. all you need to have is a pulse to post revenue growth in the fourth quarter. >> yeah, but i think that's winding on people, especially investors. with this -- there is no volume. volume -- even yesterday with that big selloff. we had heavy volume in the selloff, but then it petered out. today, volume pretty light. >> and mandy, one thing we have been focusing on a lot, obviously, is commodities. i know we talked about that briefly yesterday. but what's your sense of what's really going on, whether china is demanding commodities, or things are stockpiling. >> it's a good point you make when you mention the word stockpiling, because we have been getting commentary from some of the big commodity players such as bhp, and their hint on the matter who is the first half, the chinese were taking advantage of the low

commodity prices and with stockpiling really hard and fast to be able to sustain their economic recovery that was just getting under way. the problem is now bhp is starting to say maybe that stockpiling has come to an end. maybe just going to take a breather. they just don't have a real clear sense on whether or not that stockpiling is going to continue at the same magnitude in the second half. and that raises a question as to whether or not the rally sustaining commodity prices might just peter out a little bit. >> thanks very much. mandy will be here all day, and i believe she is on "power lunch" today, as well as many other duties. allen and craig, thanks to you, too. >> thank you. a-drew. i like that. spur of the moment thing. up next, final check -- already? >> yes. >> boy, this show goes by fast. final check on the markets. don't go away.  others by the car of their dreams.

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factories, thanks to rising alleges from the cash for clunkers program. that's from the ap. retailers and target and homo are trading higher after latest earnings. and so one key earnings report comes today with hewlett-packard set to issue its numbers after the closing bell. that's cnbc.com news now. i'm courtney reagan. good morning. and welcome to "the call," everyone, i'm trish regan. we're 920 minutes into the trading day. stocks rebounding up 43 points on the dow. from yesterday's losses. they are boosted by a couple things with results out of retailers like home depot and target certainly looking more positive than the retailers in the past. we're going to discuss whether or not a correction could potentially be in the offering. >> larry kudlow is off today. senator charles grassley hosting dignitaries in iowa to drum up business for its home state. we'll talk to him live and get his take on where health care reform stands right now. this is "the call" on cnbc.

stocks moving higher this morning as home depot and target gave investors some hope for an economic recovery, but limited gains expected for a housing report. right now, how the dow is trading on the morning, up of after yesterday, yesterday up 43 points, about half a percentage point, 917 9 the last trade. the s&p up better than 4 points. the nasdaq trading higher by about 10 points. trish, what's happening down on the floor? >> i'll pick it up. >> oh, sorry, rebecca. >> we'll break it down with what is happening with home depot and targets results. the headline is earnings beats for both, but when you get to target and home depot and how they did t it's the same story. sales are slumping, costs are contained and that is what is translating to the bottom line. frank blake says he doesn't expect to see same-store sales grow