i'm jewulia boorstin. these attacks are a multi-billion problem for companies. i'll tell you what causes the outages and how much it costs to avoid them. all right. let's get right to the market where we do have a modest advance in the dow jones industrial average, despite the fact that tech and industrials are now among the worst performers. energy stocks, though, back on the rise. as the latest oil inventory report has its impact on the market, bob pisani kicks us off with our coverage at the new york stock exchange. hi, bob. >> sue, in fact, those inventory levels did, in fact, move the market, moved energy stocks. but first i want to show you the s&p 500 here very quickly. we hit 990 on the s&p, and it moved up very quickly after that. i think that that was a little area that was very important for a number of traders. that's about where we closed yesterday, and so the bottom line here is, a little more volume here in these exchange-traded funds that track that s&p when it hit 990. remember, the volume is still on the thin side. you look at energy stocks, sue

is right, oil inventory showed a draw down. and energy stocks, which by the way, have been basically going sideways for the last several months, also took off here. of energy stocks are the biggest sector in the s&p 500 moving to the up side. finally, deere earnings out, had the conference call. the story is pretty simple. they're expecting break-even earnings in this quarter. we were expecting a gain of 35 cents. the reason is, sales are going to be down 34%. they still can't get equipment sales up, because demand is weak. good top line, good management for the company. but still, poor sales. we're hearing that a lot. trader talk.cnbc.com. rebecca, how are we looking at the nasdaq? >> looking into positive territory, still dragging the overall markets, about 3/10 of a percent to the up side. a couple stocks in focus. dell, first off, down 3/10 of a percent right now, hp out with earnings yesterday after the bell. they said they see the market stabilizing. that was potentially a positive for dell, but the big question

is does stabilization mean growth or a flat line existence? meantime, not a flat line existence for the last five years for google. those shares to the down side today. 6/10 of a percent, but five years ago today, when that company went public, it was up 18% on day one. meantime, perry ellis, 9.6% to the up side. one of the few names that's been in positive territory throughout today's trade. it is a small cap name, but it's an apar rely maker and they came out with a similar story to a lot of these retailers. basically, manage their costs, managing their inventories, ask is that's translate to go bottom line beats as far as profits go. lastly, necessarily, their shares higher by 4.4%. the important thing to note here, they're saying it's not only digital this company will remain strong in, but in their core dvd business, the one that sends dvds out to people, they say there are increases potentially on the way there, as well. brian shackman, over to you at the nymex. >> thanks, rebecca. an hour ago, i was going to say forget about storm stocks and the dollar.

that's not the case anymore. you can get rid of sterms for a moment, but stocks definitely have an impact right now. we were down overnight when it came to the china worries, up a bit when we were into those numbers, and spiked based a little bit and up even further. look at the numbers now, pisani mentioned it. we had a drawdown of $8 million, and expected a bill of at least a million. that is the key one right there. the other two really honestly, secondary right now. the rest of the complex, a little bit of a mixed picture. i want to point out that nat gas trying to break a nine-day losing streak. ask bill, i want to point out, many traders who i have a lot of respect for saying to me, you know what, oil could have turned around the he could market today, because you have seen the strength there. and we went up after the numbers and paused and went up again after the equity market started to up trend once again. >> it has happened before, brian, where the energy prices go, the commodity prices moving higher, as well. it takes some of the

commodity-based stocks with them and that seems to be what is leading this market right now. thank you, brian. let's talk about this resilience in the market here, lately, gathering our task force. we've got with us today, jamie cox, managing partner at harris financial group and ira harris. jamie, this is a resillient market? >> it's typical. the theme on the year has been buy on the dips. it's working right now. of i was glad to see the inventory reduction on oil. that turned things around. you can't have oil without seeing an increase in industrial production. this is fantastic news. empire manufacturing data on monday was very good. i think philly fed tomorrow is going to show that maybe, just maybe, we're going to get out of this thing quicker than what everybody thinks. >> a thinly-traded market, ira. should we be suspect about this? >> always be suspect. of always be suspect. because you know, it's an issue of cheap money. and we saw it out of england

this morning, and i think this is helping to drive this. because you see the brits are going to keep it under pressure, relative to the other currencies, and i think it's been good for the markets. >> is it that simple, though, you know, jamie, that it's cheap money, or is there more to it than that? obviously, the dollar factors into it, and the interest rate scenario factors into it, but you like industrials, you like materials at this point. so there must be more to it than just a cheap money scenario. >> seems to be a race to the bottom in trying to devalue ones currency these days. we're trying to do it, the brits trying to do it, but i believe that economic activity is getting ready to pick up. and i think that's the real story here. i think we have been discounting it a little bit too much. i think the opportunity is definitely up to the up side on economic activity. of i think that's the story. >> at what point does all that printing of money start to bite us you know where, ira? bill, do you have the full screen? warren buffett's op-ed this morning in the "new york times" where he speaks to this whole idea of okay, you're printing money right now, but at some point, you have to withdraw.

the united states economy is now to the emergency room, appears to be a slow path to recovery. but before long, we will need to deal with side effects of monetary medicine. how soon, ira, before we have to do that? >> that is the ultimate question. and if charlie monger had written a piece, i would have given it more credibility when it comes to the macro picture. i know that's a heretic view. but nobody knows that answer, and we're still in the throes of this credit crisis, and it is a credit crisis, it's a global credit crisis. so when will that happen? i don't know, when he doesn't know. of course, it's easy to warn about. i know he makes the al gory to the melting of the icebergs, too much green gas versus green money. nobody knows the answer. but i think you have to stick to the program, and i think he would agree with that, that if you you don't stem the down side, it's all -- the rest of it is moot anyway. >> but jamie, brings up the point that eventually, the fed is going to have to start tightening at some point. >> it is, bill. i had a hard time getting past

the first paragraph where you said belching carbon dioxide into the atmosphere. once you got beyond that, i believe we're going to have to restore some fiscal discipline. i think if you get spending down, i think that gives the fed room to move up. so i think he is more talking about, you know, congress, hey, guys, you know, get with the program, stop spending so much money, restore discipline. >> jamie, ira, good to see you both. thanks for your time today. >> thanks. >> before we go to commercial, we need your help with something. the bbc is working on a tv movie about the demise last year of lehman brothers. and let me just say that the staff of "power lunch" spent an inordinate amount of time this morning testing this motion picture. but we need your help. who do you think, for example, should play lehman's now former ceo dick fuld? how about treasury secretary tim geithner, who back then was the head of the new york fed when all of this was coming down? how about ben bernanke?

who would you cast in the role of the fed chairman? >> we have a lot of discussion about that one. >> that one is a tough one, as well. "power lunch" at cnbc.com is the e-mail address. at the end of today's "power lunch" we'll read some of your e-mail on who you would cast in those three key roles in the upcoming movie about the demise of lehman brothers. when we come back, china's stocks slammed again. the shanghai composite index down 20% in these past two weeks. china was supposed to be the leader in the world out of this recession. so what's going on here and what does it mean for your money? >> also this hour, we go inside the ipo pipeline to find out what the next hot stock might be. plus, president obama says he wants to cut health care costs, but is rationing care to save money at the heart of the plan. >> and the "fast money" halftime report. we are back in two minutes. i'm racing cross country in this small sidecar, but i've still got room for the internet. with my new netbook from at&t.

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as you know, the last couple days the focus has been on asia's markets and china's mark entered bear market territory today, down nearly 20% since august 4th. is the recent market activity a blip or a sign of perhaps more to come? joining us now is cnbc contributor peter navarro and

amanda drury. peter, i'll start with you. you know, the market and also as you know, peter is also the author of "always a winner." the market had run pretty far, pretty fast, and china has been extremely aggressive on internal stimulus. does this mean, however, that china's bull market run is over? or is this just a temporary move to sidelines? >> well, look, china fundamentally is an export-driven economy, and nothing has changed. the fiscal stimulus was great, but the export-driven question really is whether the u.s. and europe and the rest of asia are going to recover enough to drive china in the next leg of their recovery. the markets clearly say no. the other problem with the fiscal stimulus is it's created essentially an internal bubble, both in the stock market and in real assets, and there is a lot of concern in china that a lot of money has gone into nonproductive capacity. and so the market's reflecting this now.

of it's really a good time both in china and maybe elsewhere to take profits off the table, get the cash, and watch what happens. >> amanda? our viewers obviously know who you are, but just in case they don't, you host australia "squawk box" here for a couple weeks. australia's economy so driven what happens in the economy, because they buy so much when it comes to resources. what are you hearing on the ground there in terms of what's going on in the economy. are you hearing these same concerns like peter is talking about? >> yes, certainly hearing the same concerns. and i guess the problem is, things have been so great in the first half in terms of the massive run up we have seen in commodity prices and so much of that, of course, was built on the fact that china's economy was recovering, and also because commodities were so cheap at the beginning of the year. naturally, would want to stockpile these commodities. so they have done a huge amount of stockpiling. but stockpiling can't go on forever. so the big question mark, all of the big boys are asking to what degree will there be further stockpiling in the second half. to what degree will the demand continue? >> you know, peter, do we have

to lump together the stock market with the chinese economy? i mean, if, indeed, the -- you know, stock market continues to decline, does that necessarily mean that the economic recovery in quotes in china is derailed, as well? >> that's really an astute question, because in the past, we have seen how that particular market is more like las vegas than the speculators' market. in the past, we have had people literally pawning their houses and getting into the market. so i do think that that stock market is not the classic leading indicator of the chinese economy, because of the speculative bubble that goes on there. the other thing that the australian thing is really fascinate to go me, because if you match the australian currency with the s&p 500 over the last year, you'll see that they went up in lockstep, which reflects kind of the weakness of the dollar and the strength of

the australian economy, which is based totally, of course, on china. >> i think you made an excellent point when you talked about the speculative aspect of the chinese stock market, because obviously everyone is trying to work out how strong is the connection between what's happening in the chinese stock market right now, and whether or not that is a leading indicator here. but just remember, china's stock market is quite immature. >> little. little, little, little! compared to the fastest population. >> and also -- hot money. it's very liquidity-driven, very sentiments driven, very volatile. >> and only for the chinese, right? if you're trading shanghai, you must live in the main land, right? i cannot invest in shanghai directly. it's very difficult for me, or anybody who lives outside -- >> it's also separate classes, but largely, its the it's a retail-driven market, to a large degree. >> i'll tell you one thing. i think the best bet over the next five years is going to be a bet on the chinese yun going up. and maybe the best play is in australia. >> so would you take the money

off the table now, peter, if you made money in the last six months? >> if you're a trader, yeah. the technical indicators are pointing down, get out. and by the way, you might be doing that in the u.s. as well market. >> thanks, peter. appreciate it. man mandy, thank you. see you later. >> thank you. it was five years ago today, believe it or not, one of the greatest ipos of all-time. it was google. but what's the state of the market in that particular area ipo specifically right now? are we ready for an ipo-comeback? we give you the inside track. >> and here is a look at some of the year's higher profile numbers are performing today. start with property. mead johnson, solar winds, and avago to the up side, but just a little bit. of their dreams.car during the lexus golden opportunity sales event, you can do both. special lease offers now available on the 2009 es 350.

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the fifth anniversary of google's ipo. it debuted at $85 a share, and everybody and his brother thought it was overpriced at that point. but it has -- it raised $1.7 billion on its first day alone,! one of 200 ipos that year. and it's the one we're still talking about. three years later, google hit $347 and change. today it's up about 343% from that first day of trading. now, by comparison, this year's largest ipo is starwood properties, which raised $810 million, one of only 22 ipos year-to-date. joining us to talk about the ipo market and how it's faring, richard petersonality standard & poor's, and thompson reuters. good to see you both. thanks for joining us. dan, we owe all remember the google ipo, but it came at a time when the market was receptive to that.

how receptive is the market now to ipos. >> first of all, i was one of those people, apparently including your brother who thought it was overpriced. >> it wasn't though, right? >> it wasn't. and i wrote a stupid column about how the vc should have sold it that day and left it aloechblt but the markets are getting more receptive. part of this is a reflection of the market doing well in general, up again today. but in general, there is just a giant glut of private companies waiting to go public, and it seems that now the bear market has stopped, that the public investors are finally looking at these again, saying, wait a minute, we have some good companies here. not only start-up type companies like google, although we're not going to see another google for a while, but also a lot of companies that got bought, 60 and 67 that want to come back in the private market. >> richard? >> well, i feel like we're waking out of a long, slumbering sleep and seeing more filings, going to about a dozen filings this month. saw some nice pricings. the best performing ipo this

year i think is open table, up near 50%. hiring out of goldman sachs to run some ipos. so there are signs of positive -- not really a resurgence, but a recovery. and a lot of damage in private companies. private equity firms have a slew of companies in their portfolios, looking to maybe jettison or bring something back to the public and talking about dollar in general for one. >> but you know, richard, you look at a row set astone which did very well initially and has basically fallen apart. is that a concern? >> well, there is always a concern. obviously, the companies have to meet their expectations. i mean, there is a company, ancestry network, another software company that is not -- a language company, per se, but really tracking people's lineage. >> they were highly anticipated. a number of the companies were highly anticipated, well capitalized, et cetera, et cetera, et cetera, and it hasn't played out. >> yeah, you know, there's risk

involving these. they're highly speculative offerings that the investors have to do due diligence on and homework on. >> i want to point out quickly on rosetta stone, because they overestimated where they were going to be, but the stock is still 16% higher than where it came out, which was already at the top of its price. they perform well. the typical ipo is up over 20%. >> why do you think that is? is that a lack of supply? are they quality offerings that only quality can come forward in a market like this? what's making that performance come true? >> i think the quality is a part of it. look, when there hasn't been an ipo market for years and suddenly some come out, chances are the best ones will come out first. and you can see, of almost all of ones coming out, you can see quarter over quarter growth in a bad economy, q2 over q1 or q1 over q4. >> you're not going to have college students who pay their employees with pizza coming to market right now. >> how did that happen?

>> real companies here. >> probably so. much although, look, you know, if a facebook was to become public, and i don't think it will, and it clearly doesn't have the kind of revenue google had, that would get a lot of attention, although there is no evidence that is coming. >> is there anything either of you is looking at right now coming down the road. >> we have ford and network protections, a fab writ security company, a company that does radiation detection. that could be on the calendar. the fact that you have deals to talk about is a positive sign in the marketplace. >> one more, too, a123, the company making the batteries for the chevy volt. nch>> dole food has gone public. how many times? >> a lot. >> you're watching health care and phrma, which i think is fascinating given the environment we have going on right now. >> i am. it's been almost two years since there was a phrma ipo at all, so something called cumberland phrma went a couple weeks ago, down 1 or 2% from its offering

price. but the reality is, on venture capital side, you have an enormous number desperate to go public. remember, they don't view ipos as exits, but the final financing event to get them through fda approval. and they really, really need an ipo mark, and so just the fact that cumberland price, even though the performance isn't great, is a big deal in the health care circle. >> thanks, guys. good to see you both. >> thank you. >> so cutting costs is one of the hot buttons in the health care firestorm. is rationing care to save money at the very heart of the obama plan? we're going to have sparks flying in our "power grid" debate coming up. >> yes, and about 15 minutes, get ready for the "fast money" halftime report, melissa. >> hey, guys, market turn around on our hands being brought by the rise in oil. we'll tell you where the opportunities are in the integrated and oil services names. and all eyes on china. we have the man who called for a bottom. actually, he said that you should sell shanghai on july

28th. we'll have him on the "fast money" halftime report and get his thoughts on where china is headed next. first, more "power lunch" after this. much ú

welcome back. we're almost halfway through the trading sessions. stocks are struggling on concern's about china's ability to act as a catalyst. the shanghai index down 20% from its peak in early august, now officially in bear market territory, but our market has come back with a rally in oil today. one of the drags early on this morning was alcoa, the aluminum giant getting downgraded from neutral to buy at goldman sachs. it is a valuation call based on a $13 price target. of goldman also says inventory is at historically high levels right now. and profit at b.j.'s wholesale club slipped in the second quarter because of weak sales and lower gasoline prices. but managed to top wall street estimates. the retailer also raised its outlook for the rest of the

year, but did trim its sales forecasts. so sales are coming down, but profits are going up. so they're cutting costs. >> so we're getting a lot of responses to our lehman inquiry. of. >> so if you've just join's us, bbc is working on a tv movie about the demise of lehman brothers last year, and we were asking who you would cast in the lead role of dick fuld, former ceo of the company, tim geithner who at the time was the new york fed president. now, of course, treasury secretary. and ben bernanke, the fed chairman. and we've gotten some inspired e-mail. we knew this was going to happen, and it got the imagination of our staff. they have been spending a little while on -- >> way too much time. >> and so have you. >> but it's so much fun. >> do we have one of them? okay. so we'll save it for later. >> we're not going to tell people? >> i don't want to influence anybody. >> we could say that a number of the viewers agreed with some of the picks that we all came up with this morning. >> it's amazing the names we

came up with. and maybe you did. >> great minds think alike? leave it at that. of. >> so "power lunch" at cnbc.com is the e-mail address. send us your thoughts and we'll show you at the end of today's program on "power lunch" some of your inspired casting calls. much michelle. >> another hot topic, bill. health care, noted economist martin sellstein glass in an op-ed in today's "wall street journal" says obama care is all about rationing. earlier on "squawk on the street" on cnbc, he told us his key sticking point. >> what they describe in this white house report is what they call comparative effectiveness research. in other words, their studies will say whether a particular kind of treatment is worth the money. and that's what concerns me. >> is the president's health reform rationing or not? firing off on the "power grid" our former staffer, david goodfriend and mallory factor,

president of mallory factor. guys, good to see you. you each get 20 seconds. tell me why obama care is not about rationing. >> it's not about rationing. what's going on right now is rationing. 47 million people shut out of the system, that's rationing. preexisting condition, you don't get coverage, that's rationing. a cap on coverage you thought you got through your employer, that's rationing, too. the fact of the married matter is the current system is broken because health care is being neededed out by a bunch of insurance companies that will tell your doctor what he or she can or cannot do. >> mallory, 20 seconds. >> of course it's rationing. it's class warfare, redistribution of health care away from the middle class and the elderly. the ugly truth is that obama is using health care to build a larger democrat base to create more people who are dependent on government programs at the expe of working americans. >> how -- i still don't understand how it becomes

rationing. >> it is rationing. >> how? >> it's completely rationing. well, how does it become rationing? >> yeah. >> you're going to be -- first of all, you're going to be cutting back medicare by $500 billion over ten years, with 30% more people. you don't call that rationing? >> all right. can i respond to that? >> yeah, david, go ahead. >> when you say rationing, here's what the republicans are trying to get you to think of. they're trying to get you to think of a faceless government bureaucrat who says you may not get that medical treatment. none of the plans currently before congress out of any of the committees call for that. here's what they do call for. >> david, i'm going to interrupt you, and here's why. because actually, we're not talking about any of the plans being discussed right now. we're talking about comparative effectiveness research, of which already a billion dollars of taxpayer money has been put toward it in the stimulus bill. and comparative effectiveness research, one of the questions that they asked, how many quality years are added to your life? and when you plug in the answer

when you're 70 versus when you're 30, you get a very different answer. we have rationing, it happens right now, with kidneys. older people don't get them, younger people do. that's what they're talking about. >> this is a business channel. >> they're trying to get rid of high-cost, low value treatment. that's rationing. getting rid of high-cost, low-value treatment. >> hold on, i think the question went to me. this network is being viewed by business people. what do businesses do every day? they take a look at a dollar, and they say, where is does this dollar get the most bang for its buck? there is nothing wrong in a free, competitive marketplace, with understanding -- just understanding what happens when a dollar is spent in health care. now, you all can paint a terrible fear portrait and try to get people ginned up, but the people who watch this network are smarter than that. they're not going to get hoodwinked by some right-wing fear heart fear monger. >> mallory, he brings up a good point, because in the end, we all ration. we all have unlimited wants, but limited means.

the question really becomes who is going to do the rationing, is it going to be us as individuals or is it going to be the government? >> it's going to be a government czar. you look at page 136 of the bill of which half our congress hasn't even read --. that's not what we're not talking about the bill. >> 136 of the bill, because there is going to be a czar, 18 months after the bill is passed, it's going to tell you what the government design plan is going to be. >> really? >> and if one of your plans change -- look at the bill. >> playing the music, guys. >> it's a public option. you can subscribe to private insurance if you want and keep your own doctor. >> thank you. we'll talk during the break. that's how we usually solve this. >> thanks, mallory. >> i feel satisfied after that one, don't you? coming up, swiss bank ubs, spilling the beans to the u.s. government on thousands of american clients who have accounts with them. mary thompson has the follow-up for us coming up. >> and at the top of the hour, business and the swine flu. what is the plan? we go head-to-head with the secretaries of commerce and health of human services to talk about that. much.

>>

we have been getting more information today about the swiss government handing over details about thousands of bank accounts to u.s. authorities, all part of the tax deal struck with washington over ubs. mary thompson was listening in on the conference call, and tell us what you heard. >> willing, of course, the

agreement was signed this morning, and basically it's going to give the irs what it called "unprecedented information" about ubs clients that it believes were hiding money off shore, all to avoid paying u.s. taxes. here is irs commissioner douglas schulman. >> this is just the beginning. international tax evasion will continue to be a top priority. this is not going away. and people hiding assets and income off shore will find themselves increasingly at risk, due to our efforts in this area. >> now, the irs says the 4,450 client can names bean handed over are the ones most likely involved in off-shore tax evasion. the accounts said to at one point hold a total of $18 billion in assets. the irs declining to give many details about the accounts, saying they varied in size and type and include bank accounts, custody accounts, as well as sham trusts. schulman says the settlement provides a template for the irs to probe other off-shore

accounts and the banks where they're held. the irs, though, declining to say it's probing other banks, though did t did say the swiss government is working with it with others having similar operations with ubs. it solves one of the banks' most pressing issue, without paying a fine the bigger issue what it means to swiss world banking, where clients' data was fiercely protect. in one night, saying the names were handed over within the confines of swiss banking laws. there were questions as to -- >> we've got to go. still ahead, health care stocks coming on strong. order your best plays of the sector. smart money picks for you. plus, what are the september fashion magazines telling us about the economy?er stick around and find out. >> "fast money" coming up. well, maybe not every cereal. but every stem. every stitch. every tune. every toy. pretty much everything you buy

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welcome to the "fast money" halftime report, we're getting to the heart of the action as it is happening. the stock market fighting back at this hour, shaking off fallout from a china bear market. oil stocks leading the comeback as krutd sprints higher, can the bulls carry the day? let's get to the word on the street. the "fast money" crew of the day, tim seymour, eugene profit of profit investment management. much let's talk about the sprint higher in oil. tim, you saw the drawdowns in the inventories and that helped us. we were seeing the equities advance. where do you see the opportunities? >> well, i do think oil and commodities are definitely leading the charts here.

you know, 992 on the s&p, we have seen we're basically at the lows of average of the last two weeks. oil wants to take us higher between 1130 and 12, points on the s&p. so if you look at the dollar weak e commodity stronger, it's a theme we have seen before and china is part of that reason, ironically. oil is pulling us out. >> eugene profit, oil services, do you play the commodity itself or an etf? >> i think we would be an -- we always look for diversification. we think that the drawdown kind of indicates that the market might be coming back. that's going to look at it a little bit of extra demand. we don't think that's all intact, but we would look more towards drillers. >> oil becomes a drag on the u.s. stock market. according to your charts, before we head to add son arm strong waiting for us on the fast line, where do you see oil heading? >> the data was actually quite poor. inventories up 15%, year over

year. imports are collapsing. we think it's stuck. i mean, it's been here now, sort of 60 to 70 for two months we think it will be here next month, looking out in october and november, same thing. >> so if it is stuck, gerard levi, where the opportunities based on oil remaining around 70 bucks a barrel? >> i agree there. china demand is up 4.2% over last year, something we didn't look at earlier. but option traders can sell calls on the uso, just collect income as it sits still. i also would look at what's called doing an iron condor outside of the range. >> basically, what does that mean, jerad levi, iron condor? >> out of the money put spread and collecting income as an index or as an underlier like the uso. it's a great option strategy to learn about. >> steve, i don't think you're doing iron condors, but looking at the integrated. >> i can barely fly with sea gulls. >> let's move on.

i think we have got addison armstrong, we'll get to him later in the show. we are seeing energy stocks higher. the breadth of this market rally, though, is it necessarily there? and that leads to the question of whether or not there is quality here. >> sure. the breadth is celebrity. in fact, i think the best way to measure it is a very old index called the value line index, which takes accounts for stock by stock on an equal-weighted basis. the value line is up 37% year-to-date, let's say versus the s&p up 910. so the breadth is there. at some point, though, it's a case of ripe, riper, ripest and rotten. the breadth is almost so good, it implies the following. the large caps needs to come to life here, otherwise the whole thing is sort of suspicious. >> what does that mean then, eugene profit, do you gear more toward the smaller or mid cap or an equal-weighted s&p 500 versus the actual index which is market cap weighted? >> i'm going to agree with what

was just stated. i think that large cap is the place to be in this market in the first place, down side protection because of the integrated operations. in the second place, you've had quite a run-up in the small cap names in the early part of the rally, and as we're kind of getting long in the tooth there, and you see money begin to leave the market, i think you're going to get protection of large caps and performance to the balance of the year, looking at large cap names. >> let's move to the next trade here. all eyes on china, the shanghai index officially in a bear market. it is still up, though, by the way, 53% for the year, even though it is down by 20% since its august 4th. carter worth, you are the man who said to sell shanghai on july 28th. you seemed to hit it right on the button there. what is the direction here? >> sure. so far, so good. i think this -- the main take-away is that this is healthy. of it needs to have done this. if china had continued at that rate of assent, that steep an angle, then something really bad in principle would be in the offering. by virtue of this giveback, it takes a lot of the froth out,

you could say the overbought condition has been worked off. so we would use the following parameters, the 100 per day moving average comes in at 2600 in change, and at 2700 and change now coming off as you say into play at 2600 and change or 2700 and change now having come off 20% from 34.75. we would say 34.75 sets the rarng now looking out to the end of the year. >> melissa? >> go ahead. >> making great points. what's interesting about shanghai, most people are not invested in market, not institutions there and barrelly institutions in china. 20% pull back in the shanghai is really more kind of tale. this is not the dog. the chinese economy is the dog and we haven't seen that pulled back the chinese retail market is heavily inflated by bank lending and speculating. i'm surprised at the attention it's getting by the broad

mainstream even though china was an indicator back in '07. >> the fact of the matter in china, it is an immature market, 53% of the investor there's are retail investors. 10% of household wealth is invested in the stock market. it's not an anticipate tri mechanism. >> watch the china data to see how strong it is. everybody is, i think, in universal conviction that china alone can't lead the world out of the current environment. i think the u.s. consumer is very important here. that's why we're struggling. china will still grow 78%. >> let's move to the next trade and talk technology shares. hewlett-packard, a bit of a disappoint there, coming in lower than expected. a lot of analysts are focused on the growth in the margin. what are you seeing in terms of the tech trade and options pit?

>> we saw volatility, bidding higher as hpq, doing nothing today. people taking more longer term bullish bets in tech. names from google to apple. everywhere, from internet to tech, that's been the focus. a lot of protection trades happening here. we're see devergence, people's overwhelming fear versus grade.ú we're seeing even higher and calls come as people are collaring and protecting trades on tech. >> protection trades on what specifically if you can, are you seeing protection being bought on the cubes, specific stocks, where? >> we've seen it in yahoo! hpq a couple of weeks prior and saw it in google and various tech names. a lot in the spy as well.

but i haven't noticed anything in the q's. >> based on what hewlett-packard reported yesterday, does that make you more bullish or bearish in any of the big tech titans? >> i would buy hewlett-packard, the profit margins were down, 19%. you're selling at the lower priced earnings than dell. and we think that hp essentially has kind of indicated that the bottom has been set in technology and there was no commentary about the back to school sales, we think that essentially hp with the printer ribbons and the manufacturers, taken market share from dell. the real issue is they weren't getting as much profitable in europe. >> eugene is a buyer. hold on. on tonight's "fast money"

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welcome back. we promised you add son armstrong, we have him on the

line. where you saw oil heading said you're stuck in range. what do you see? >> a little bit. i think we're starting to look more at the october contract with september expiring tomorrow. that's where all of the volume is. and that october contract is breaking out today above a trend line in place since last august. we have to watch that carefully. if that's able to hold above $73, opens the door to up to $74.50 above that. >> at what point, do you think oil prices go down because there's concern the demand won't be there? >> that demand is certainly in the market. i have to keep going back to this, these figures, these inventory figures are not coming down, even though today we had a big surprise number in crude. the numbers are still high this time of year. and not sure how that's going to improve any now that the chinese have stopped stockpiling and

cash for clunkers will run out of steam. the fundamental picture has been in the market and crude has been trading along with whatever going on with equities in the dollar and i don't see that sort of correlation ending soon. >> that does it for us on the halftime report. as gold demand hits a six-year low, what will it mean for the mine rs? >> power lunche , how businesse can prepare for swine flu. >> we're looking forward to that. and how do you play the health care sector as the health care reform debate rages on. one analyst unveils his top picks. what are business trends telling us about the economy as a whole. new report on the health of

the commercial real estate market and how one major player is faring in this environment. we're back in a moment. oil prices have erased early losses and moved higher after data showed a drop of $8.4 million. the national association of realtors says commercial activity fell to the lowest level in 15 years during the second quarter. a judge has upheld moerk's patent for singulair.  everybody is a casting director. we have the smartest funniest viewers. you people should be on television. we don't get to your casting calls, but we welcome you to "power lunch." stocks continue to move higher

after a sluggish start. kraft, dupont, monday the winners. >> taking steps now to prepare for both seasonal and swine flu. commerce secretary and health and human services kathleen sebelius will join us live. with twitter and facebook getting hit by hackers, what are the best way for businesses to protect themselves online as well. cyber attacks beyond swine flu. look forward to that, very much. >> washington is warning businesses right now that they should begin now preparing for what could be a very active flu season, especially if swine flu rears up once again. joining us one again, commerce secretary gary lock and we welcome health and human services kathleen sebelius. thank you for joining us today. >> thank you. >> secretary sebelius, how

extensive are we expecting this season to be and what role will swine flu play in that? >> we don't know. what we know is seasonal flu kills about 40,000 people a year, has 200,000 people hospitalized in millions of cases. we and that this flu season will be worse because we'll have a mixture of h1n1 with seasonal flu. a couple of steps that we'd like employers to begin to think about, one is get your seasonal flu shot right away. it's available right now, the vaccine is ready to go. we'd like health care workers and elderly americans, younger americans to get the flu shot. >> in addition to the swine flu shot? >> it is. we didn't identify this particular flu virus until mid-april. and seasonal flu vaccine was already in production. if we had identified it earlier,

it would be all combined. >> should people get both? >> yes. >> they should get both. there's a different priority group, what we know h1n1 is a young person's flu, pregnant women, younger americans, six months to 24 years, older, 24 and up with underlying health conditions and certainly health care workers need to be at the front of the line for h1n1 but it will have a big impact on business. >> secretary, if i could turn you to that point, this flu comes at a time which may be very taxing to a lot of businesses that are already under a lot of pressure financially. what is the best advice to employers if indeed we do get a large outbreak of either the seasonal flu or swine flu? >> a couple of key points, number one, they need to plan for potential absences and large absences of their employees. that really means cross training so that if a lot of people are sick, there are other people in

the organization and the business who can continue on so they need to focus on continuity of operations. they need to send a strong and loud message if any of their employees come down sick, that they go home immediately and not try to grin and bear it or come to work sick but go home and stay home. >> a lot of employees are hesitant to do that, especially in an environment right now where they are under financial pressure and worried about losing their jobs and worried about layoffs, do you think that's realistic? >> that's why i think employers need to be flexible in their personnel policies, especially with respect to hourly workers. if they were to terminate their employees for going home sick, it's going to be even more burdensome on the company to find replacements to train them and the people they may be bringing on may also become sick or may actually be sick already. it's really incumbent upon companies to be more toll rant,

don't demand documentation that they have to have a note from the doctor. that will crowd the doctor's offices and health care clinics where they are already going to be taxed trying to treat the sick. >> there's been a lot of discussion about the health care industry and the health care plans on the table within congress. our viewers are so interested in it because it's an important part of how they do business. the public option, is it optional or not? >> well, the president continues to believe and i share his belief that cost control and competition go hand in hand. so having a new marketplace with some competition for private insurers who often have a monopoly in the marketplace, keep the private insurers honest, as well as giving

consumers some choice, probably the best way to do that is a public option. are there other ideas? yeah, there's some discussions out there, but the public option is a definite way to make sure that consumers in a new marketplace who don't have affordable coverage have choices and have competition for the private industry. >> there was some confusion about what you and the president said over the weekend, whether or not it was off the table and the question i have is, if it's not the public option in your view, people were wondering, if the president is not pushing for public option, what will provide the kind of competition for the health insurers out there right now if it's not going to be the federal government? >> i have to tell you, i think maybe the weekend was just a slow news day. i said basically what i've been saying for months, which is in a we need cost control for every

american or a lot of people who have coverage today won't have it next week or next month. and we need choices for consumer which is why in a state like kansas my home state, we set up a public options side by side with private insurers for state employees. one insurance company dominates market in most of our state. >> it is being resisted by the republicans and some oppone opponents -- and democrats. >> if it's not going to be the public option, is there an alternative to that in your view that would provide the similar kind of competition? >> well, we don't know. the senate finance committee is the final of the fifth committees to come up with the draft. the other four bills have a public option as part of their draft component. conrad and others have talked about some sort of co-op structure. there is -- >> it's hard to tell. you tell me what the language

says and i'll tell you if it can provide for cost control and competition and choice for consumers. i think those are the essential elements to make sure, if you have a monopoly and trust the insurers to hold the prices down, that's probably not a good bet to make on the future. >> isn't that part of the problem right now? there is no legislation we can get our arms around and debate. it's still very fuzzy as it goes through the various committees in the senate and house, jet people are rushing to judgment one way or the other as to the merits of helgt care rehealth care reform. should we be patient or just start over as the congressman from florida said the other day, start the thing over again. how should we proceed from here? >> four of the five committees have bill drafts. those are available and easy to read. basically there's a lot of common ground.

the senate health committee bill has probably 80% of it mirrors what the house bills have. we're waiting for the final committee, the senate finance committee to come up with their draft. i don't thing there's any question it's good news that republicans and democrats rolled up their sleeves to tackle this issue. there's general agreement, the status quo doesn't work, unacceptable. >> we buy our own car insurance and life insurance, we get competition if we bought our own health insurance. wouldn't that be more supply to the market and make health care more affordable? >> it will lower prices if you are young and healthy, and if you can guarantee you'll stay that way, you're perfect in the individual market. if you're not, what you really have is not insurance but you're paying your own health cost. you may as well pay it

out-of-pocket. insurance is about balancing risk. you want healthy people and folks who aren't so healthy to share the cost and opportunity. and frankly, the individual market right now where you're in there on your own, if you're 26 and healthy, perfect. if you're 50 and a heart attack survivor or have a precancer condition or have high flood pressure, you are in bad shape. your cost can be skyrocketed. you can be dumped out of the marketplace. that's part of what health reform will do, change the rules for insurance companies. they can't pick and choose who gets coverage and who doesn't. >> as it pertains to the swine flu -- >> you can ask him the tough questions. feel free. come on, weigh in on this. >> we were governors together, we can do this together. >> exactly. >> if i can turn you back to the swine flu and as it pertains to

this discussion about insurance and the burden on employers and employees wharks kind much response have you gotten from businesses, i assume you have talked to businesses about the same thing you're talking to us about, being more accommodative and not being punitive when employees decide to call in sick. what gauge are you getting from employer? >> a lot of employers are concerned because these are tough economic times and they want the workforce to sustain operations and rebounds. that's why it's so important they start planning now for the flu season. and cross train their employees and come up with flexible personnel policies. making sure that people go home immediately, stay home. that they not, for instance, demand verification because they were sick because it will tax the health care system. second of all, really emphasize

cleanliness and personal hygiene. constantly washing people's hands -- >> we got those purell containers. >> here's a tool kit every business can use, available on the internet. www.flu.gov, how businesses can cope with this and continue to operate. >> we know there are other people waiting to talk to you. >> secretary locke, can't get used to saying secretary sebelius, governor sebelius, thanks for joining us. >> in case of rain, seek shelter. >> wash your hands, good idea. >> let's talk about the backlash against health care reform and how you might play it. joining us is tom carroll. welcome, it's nice to have you here. >> thank you. >> you are of the opinion that

ultimately the public option, regardless of the conversation going on now probably will not be in the final legislation. with that in mind, how do you play this particular sector given the flux that is going on? >> yeah, it's an interesting question. health care has been a fun place to be following here this year. every year for that matter. we've been mostly positive on the managed care group which has a big impact and is related to the public plan option and whatever government structure we see out there. earlier the fear was single payer system, the stocks like united and wellpoint and aetna were low point multiples, that a single payer fear would move to the public option fear which will move now to something else, perhaps called a co-op. the wellpoints and united of the world -- >> united health care? >> exactly. >> we're in limbo to some

degree. there's a lot of noise as it relates to reform. in the short term expect to see ups and downs. as your prior guests were talking about the white house changing its tone on the public plan option. >> tom, i want to cut to the choice. what do you do? is all of that priced in. if you're holding those stocks right now, do you sell? do you buy them? >> if you don't hold them yet, didn't buy them in january, you stay put and see what happens. if you have owned the larger names, i'm still happy being in the larger name stocks like united health care. >> that's our only buy. we've recommended wellpoint, took money ahead of the health care debate. >> what if there is a public option? >> all managed care companies would be hurt. those best positioned would be larger players like the wellpoint and united out there in the world to compete on a

more local level and big government competitor out there. the public plan option is not politically pal atable for whatever legislation gets signed. >> tom, thanks. >> let's take a quick break. >> time for the all-stars to take the realtime pulse. >> turning heads and turning pages, what the fashion industry is telling us about the state of the economy. twitter and facebook, they know what is likely to be attacked, some of those places likely to be attacked by hackers. an expert will offer advice on how other businesses can protect themselves. new challenges facing commercial real estate, one of biggest names in the industry feeling the pain. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 i want everything right where i can find it. tdd#: 1-800-345-2550 anything that makes trading easier. tdd#: 1-800-345-2550 i want to be right in the middle of the action-- tdd#: 1-800-345-2550 you know-- i have to see what's going on. tdd#: 1-800-345-2550 and when i pull the trigger... tdd#: 1-800-345-2550 ...i've got to get the best price out there. tdd#: 1-800-345-2550 (announcer) try the new schwab.com

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we've gotten back some of what we lost. back above 9300 here. 9304. nasdaq, 1969, higher by 13 points, s&p less than 2 points from 1,000, 998. here's a look at the quick stories, jp morgan, wells fargo, go check out why. let's get to our market reporters at the new york stock exchange. bob. >> reporter: let's look at the s&p 500, when we hit 990 we saw

volume picking up there. it is very, very thin trading. that's important as we've moved up. we've done quite well. we're now back in the trading range we had be in in the month of august. we were down one day on monday and right back into the middle of the trading range. it's been some mindless speculation that maybe a second stimulus package would be needed. this is just august rumors. the fact is the market is holding up, two days in a row moving to the upside. the dollar index has had one of worst days in a while. energy stocks, oil has been strong all morning as the weekly inventory levels showed a drawdown rather than a build as expected. how are we looking at the nasdaq. >> we're looking good but lagging in the overall markets. a couple of active tech names, intel shares, half a percent.

1.6%. we heard out of hp that things look like their stabilize, dell shares up. most active stock here at the nasdaq, two times the average volume, cell therapeutics up 9%. brian shackman, over to you on oil. >> so many talk about oil, i'm going to talk a little bit about gold. it's a situation where it's up for the day, still well below 950. we talk about correlation. i've got correlation for you. take a look at dollar versus gold. listen. looks pretty much like they are -- expanded out a moxt that's basically like looking at the perfectly clear bod y of water with mountains reflecting. it is almost identical. there are fundamentals in play today, the world goal council says overall demand 9%. investor demand is up, meaning

consumer demand a bit of a drag on price here. even with the oil, we'll tell you storm stuff, not a factor in the trading today. >> that's good to know. and indeed as brian mentioned we continue to keep our eye on weather and hurricane bill. nick walker joins us with an update. >> bad news, good news, the bad news is we do have as you said, a very strong powerful category 4 hurricane on our hands. bill with winds in the center of 135 miles an hour. we don't expect to see any winds like that on any land areas. probably going to feel the most affects from bill in terms of high waves and rip current. bill is a long, long way from the united states but it is expected to strengthen over the next 24 hours then turn more towards the north and weaken a bit as it comes somewhere in

between the coast of the united states and bermuda. both areas will be affected by bill, not necessarily in terms of wind, but definitely in terms of waves. swimmers, you need to stay onshore and fisherman stay away from the jetties and breaking waves. from florida to cape cod, it will be a bad beach day. >> now you are calling me. you said bill there. i was ready to answer you. thank you. >> this one is for real. >> we've been mentioning here today that the bbc working on a tv movie about the last days of lehman brothers, it will be shown this fall. we're wondering who you would cast in three of the key roles, who would you get to play dick fuld, tim geithner and who would you cast in the role of ben bernanke.

we've had a flood of e-mail, a lot of people have a lot of time on your hands, as we did. here's one. just to give you an example, al pacino. i like it. jon heder and george clooney as ben bernanke. >> ben bernanke sent that one in. >> said he should be played by sean conry. >> don't get me wrong, mr. bernanke, he's handsome but george clooney is another -- >> we'll show you more of these thoughts and our staff's thoughts at the end of the hour on power lunch. the september issues of the fashion magazines, this was vogue, the glossy glam imagines this year are skinnier.

what does it say about the economy and the magazine business? we'll tell you coming up.

we are up 91 points on the dow at 9309.24. the s&p is at 998 and change. so a significant move to the upside, almost a full percentage movement. merck is the biggest, up 3 1/3%. what are the september fashion magazines telling us about the state of the economy?

this year it looks like the unfashionably skinny issues sum up the recession. the key thing to look at is that. a couple of years ago it was this it thick. how can they keep luxury retailers from adding up the digital ad spending. peter is strategic consultant for the magazine industry. good to see you, milton, i'll start with you. vogue is thinner this year. is that because of the weak economy or is this a permanent shift? >> it's a little bit of both. the downward shift in the use of print media has been driven by the severe drought the luxury industry is. they look for radical new ideas and online media and marketing is the new idea. >> that becomes a permanent secular shift -- >> yes. what they are finding out is the online media is far more cost

effective and measurable. >> peter, what does this mean for the weaker players? i have to imagine there will be shakeout here? >> the shakeout interestingly enough has been in the marginal title, the ones in the line extensions like cosmo girl and teen vogue and men's vogue. the core title is being protected from this down shift. at the same time, i agree, we're seeing a real flow away from print into new forms of media. online and television. >> when you say they are being protected. how are they being protected? >> i think that their economics are being protected. the cuts are being made by closing down some of the titles which have been opened at the margin, launches that were the intent of which was to extend to a new demographic group. >> i see this as more cycle cal, the fashion magazines are as

much art as they are anything. you're there to look at the pictures and the ads. we know plenty of women who spend all day to read these things. we will see a come back to the days of the phone books when the economy picks up again? >> i personally don't believe so. it is a radical shift. i also think when you look at online media, that's where the consumers are, especially the afluent consumers. what has happened there was a lot of editorial content that really is no longer relevant because it used to be that the luxury fashion magazines in general used to dictate to consumers. now there's a shift where consumers are validating the brands and publications. that any sa move -- >> what does that mean for the

an knee lebowitz's of the world? aren't they going to suffer as well. >> the annie lebowitz's are the stars as well as the celebrities used to be. it's that little edge or major edge that annie might have that makes a difference in terms of photo coverage. but, i want to pick up a point on that. the fashion advertisers have a sim bee otic relationship, they cannot exist without them. there's leakage from print into the new media. how big it's going to be is difficult to say. there's very little that replaces the sensuality of a good magazine. >> especially when you're reading a fashion magazine there's a sensuality. it's a good word. >> thank you, guys. >> we'll take a break and come back. big turn around for the stock

market today. we'll head to the floor of the new york stock exchange. >> or is it that we're old? >> no, it is not. >> in a few minutes. the last day of lehman brothers, the bb krmt is turning it into a made for tv movie. send us an e-mail like many others have and tell us what you think. we're back in a flash.

welcome back to "power lunch" of the here are the stories we're following this year. profits at deere fell 27%. they cut the four-year sales forecast but did stick to earnings guidance. ubs has agreed to give the feds the names of over 4,000 american clients. they are expected of evading taxes by using what had been secret swiss bank accounts. and new survey has investors bullish on the economy, bank of america and merrill lynch poll has investor optimism at the

six-year high. >> teaming up in a prime time special counting down fortune's annual list of fastest growing companies. you have a terrific list. >> it is an interesting list. and lots of different companies in different parts of the economy and what it shows is if you have a good product that people want to buy, you can make money big time in it. and what's been a very difficult year, case in point for the restaurant business, mexican grill has managed to beat the down turn, he has been able to do so not by lowering prices but by raising the standards of fast food. >> chipoltle has a great unit economic model because we're very efficient in other ways. >> the idea of using antibiotic free chickens and beef and organic vegetables seems to res

nature with customers. >> you can always get something that tastes awesome. >> the environmental focus doesn't stop with the food. they care what is used to build and operate their restaurants. >> started looking at low voc paints and adhesives and things like this. we got rid of part cal board that had formaldehyde. >> reporter: the new gas sipping grills cost 2400 a year to operate versus 6,000 a year for the old ones. >> i hope everyone copies. >> we're talking about the burritos, about the size of a football. they are really, really good. ell smt pays attention to every attention from the origin of his ingredients to the exact temperature of the grills.

we have more on other fast growing companies of 2009 tonight. there it is 9:00 p.m. and 10:00 p.m. pacific time on cnbc. >> looks delicious. >> it was very much fun. >> great. who was number one? >> we're going to reveal that at 4:00 today. but i will say this, you probably have one on your desk if it's not in your pocket right now. >> in your pocket or on your desk. >> could be in your purse. >> got my attention. >> probably have one. >> more on today's market action, let's head back down to the flor of the new york stock change, steve grasso, we got back what we lost yesterday. >> reporter: i know it doesn't sound sophisticated, to buy the dips has worked, hasn't it. >> is it going to keep working? >> it has to keep working for the near-term future.

you have a lot of mutual fund money, how much money there was on the sidelines and that money is coming into the market. >> what is the level on the s&p, 990? >> 992 was the level we burst through on the way up and we kind of cleared that. >> now what. >> i think the 1,000 level is what you'll look for now. >> that's only two points away. >> we're here but tomorrow with the jobs number leading indicators we have ability to get disappointed and pop down below the 992. >> is all of this worry about what happens in the asian markets, is that irrelevant to our market? >> reporter: it is always relevant, but the further you look at it, it's more of a, is it a bubble or not? it's people locking in profits ahead of policy changes. that's what mutual fund guys are looking at now. >> do you think we finish strong

today? >> reporter: i do. i think tomorrow it has the real feel that we'll probably be above 1,010, i believe the job numbers will be better, leading indicators better as well. bullish near term. >> thanks, steve. >> we learned today another television pioneer has passed away. a few weeks ago walter cronkite. today don hewitt, goes back to the earliest days of tv news. he was a director on some of edward morrow's earlier broadcast and he and friendly worked as a team producing great television programs for cbs news and "60 minutes as well. >> one of the first people to put the news on television in the form back when they used film. i once heard him speaking, probably 92nd street wire

somewhere. what did 60 minutes do that res natured?to >> he said it quenched people's urge to have someone tell them a story. >> that was his mantra. >> tell me a story. >> people around the campfire, tell me a story. >> built one of the most enduring brands in tv news. still to this day, when you look every week in the paper, quts 60 minutes is up there. >> michael vick. >> they get the big gets and do it with great quality. >> talk about a hands-on guy, paying attention to everything. >> saw every frame of every piece they ever did. i'm told that he actually handwrote the teases that they did for "60 minutes." if you listen back, the way he could tease a story, you won't believe what so and so told me and you just wanted to hear. you really, it was so beautifully positioned.

>> don hewitt, 87 years old. >> a story we've been following, hackers attacked and disrupted twitter and facebook, what can they and many others do to reduce the risk of going down? what is the risk to their businesses? we'll talk about that. >> we'll look at china plays, we mentioned then earlier, all trading higher today, even with the big correction going on in the chinese market. some people buy a car based on the deal they get. others by the car of their dreams.

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right now we are up one full percentage point, market moving

off the best levels of the day, up 86 points and it didn't look like it was going to be that good of a day earlier this morning. the s&p is just a couple ticks away from the 1,000 mark on the s&p 500. wow, what a day. when a denial service attack is more than just a hassle, a multibillion dollar problem for every business online. how can companies protect against them? julia is here with news you can use. >> reporter: they are increasingly common, and they shut down tiny websites all the time. for bigger companies they cannot afford to be offline, they are huge expense. tarlgtsing a russian political blogger slowed down facebook. attack thousands of computers to demand access to a website until

it shuts down. hue tom son they need to spend several million dollars every year to fight attacks. >> the amount of trusts users put in the sites isn't commence sur at with the amount of money they spend on trying to keep the system secure. >> nearly a decade ago attacks shut down ebay, amazon, yahoo! cnn and e trade. they spend up to 8% on internet security. online financial institutions and e tailers spending the most to ensure they stay online. $13.5 billion spent on security software last year. companies spending billions more internally. >> the more instant data you need to provide to the more customers, the more you need backups and need secondary machines and virtualization and kind of specified protection.

>> reporter: social media sites are expected too work all the time. when they don't, it's a crisis. twitter has no choice but to invest in this new security system, otherwise they'll never have a chance at becoming profitable. >> stay there. we'll bring in another voice here, brian cunningham, privacy lawyer at morgan and cunningham. how much do they have to invest? how crucial is it that they defend themselves? >> well, let's do two basic facts here. number one, no matter how much money or resources you throw at the problem, if you're a large site that is widely disbursed over the internet, you cannot entirely stop these kind of denial service attacks. fact two is that the degree to which your customers will feel it will know you were down, be inconvenienced, will have their needs offline is directly proportional to the amount of money you spend on equipment, on software and importantly on

expert personnel to help you manage these problems. so there's no question in my mind and i'm a facebook user and twitter user. if these sites want to survive and get to the profitability stage, they have to invest more resources. >> they can't stop denial of service attacks, can they? >> no, they cannot stop them because the amount of resources that the bad guys can throw at them can overwhelm any system. what you can do is you can make sure you have the systems and people in place to minimize the impact. in july of this year, the number of government sites including treasury, "washington post," new york stock exchange all hit with attempts but their consumers didn't by and large feel it because those institutions had put resources against it to minimize the down time and identify the attackers and shut it down. >> how does a company assess how

much they need to put in place? you just mentioned the fed treasury, things like that. that's completely different, i would assume commitment than some other company. how do they determine it? >> that's the $4 million question. >> i think that is a tough question, this is not a one-time thing, not like you can pay a lot of money to a consultant or buy new systems up front. this is an ongoing process, it sounds like as the attackers get more sophisticated it becomes a more costly investment. one thing that is interesting. companies are cutting back on the it budgets, they are not cutting back on security. this is a very important thing. and they can afford to cut back, if anything they are investing more. >> ron? >> the most important thing for any size business is to have experts do a good risk benefit analysis so you know how much you need to spend against the risk you're going to be attacked and the amount of inconvenience

your customers are willing to deal with. >> thanks, guys, good to see you, bryan cunningham. >> new forecast on the commercial real estate market and a big player in that space is defaulting on the debt of a big portfolio. diana is tracking the story and will be back with it in two minutes. these days, wouldn't it be great

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a new report out from the national association of realtors showing commercial real estate activity falling fast. you don't have to look further than one of biggest to see the damage. diana has the details on that. >> u.s. commercial real estate activity fell to lows not seen in years, blame it on office and retail space from the national association of realtors, commercial leading indicator fell 1.3% to 101.5 in the second quarter. not exactly surprising given tanking occupancy.

in default on debt tied to one of the largest office portfolios in washington, d.c., the property's cash flow is barely covering the debt service and that puts it in violation of could have nents in $2 million in its revofling credit line, expected to increase more than 60% to at least 5, now. here's a fact you might not know. there are more cnbs securities than student loans and auto loans combined. that's big. >> when you say defaults of 5%, i remember when we were talking about early in the crisis, less than 1%, less than 1%, if it doubles -- >> wow, we're getting up there. this is remember what happened in subprimes, only 2%, only 3%,

now we're up at default around 10%, 11%. >> tishman is no slouch, a serious management company, if they are geting into problems, we're seeing problems, aren't we? >> thank you. the fact you're in the studio means the fact the house you stand in front of in maryland is solid? >> or it burnt down. >> we'll come back. "power lunch" casts a lehman brothers movie. >> empty calories on the menu next.

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before we go, the story of lehman brothers's collapse, bbc going to broadcast a made for tv movie to be called "the last days of lehman brothers." set to premiere in october. focusing on lehman's fuld in his last-ditch attempt to save the wall street firm. water cooler chat has been, who

should play which role. we were asking you folks, who should play fuld and tim geithner and ben bernanke. we have plenty of e-mail and some were very funny or jokey. let's get one of those oust way. fuld played by elmer fudd and tim geithner played by beaker. ben bernanke, fozy bear. here are some serious ones, bernanke played by jeremy piven. gijener, tom hanks. >> harrison ford for fuld and daniel day-lewis.

and bernanke, paul gee mattie. >> this one i love, this is inspired, that i think that's it. >> spot on. >> should be him playing ben bernanke. >> they've got bernanke being pl played and ken moreno playing fuld. our own staff came up with their own ideas, they spend hours on this. we need to show these quickly. they have fred thompson playing hank paulson. >> i like that one personally. >> jeff goldblum as fuld. frank langella for ben bernanke and tony goldwyn. >> we'll see you tomorrow. erin burnett coming up next with

"street signs." >> james lockhart has a new job, become vice chairman at w.l. ross. >> red box is suing warner home videos. and stocks erased early losses and rallying led by energy shares. hello, i'm erin burnett. names lie royal caribbean, merck, all on the list today. why trash bags matter for our economy. then, america banking on electric cars, the fear is we're replacing middle east oil with a

lithium addiction and it isn't american either. one company trying to change that today. what if medical school was free? would debt free doctors would better health care and lower cost? the hardest med school to get into is free. we have all of that coming up. the main headline this afternoon, when the left the stock exchange around 11:00 a.m. eastern the dow was down. now two-thirds in the green. let's get to the trading floors and talk about the turnaround. on the credit markets zain brown. bob, you first. what turned it around. >> reporter: dollar weakness, a little bit of speculation in the middle of the day. stocks are not doing what traders want. take a look at the time s&p 500, we hit 990. all of a sudden we saw buying about 11:45 eastern time. this is the second time this