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continuous vw until the fed gets control of flash trading, short selling and overleveraging." tom in carolina had this one to say, this was one of our favorites, tom. "it won't be a w, a v, or a u. it will an o recovery as in oh my goodness, i didn't see that coming." thanks for watching. time for the final hour of trade with maria. >> announcer: this is cnbc.com "news now." the white house is asking the fda to speed up any decisions on approving intravenous formulations of various flu drugs. this comes as a new report warns of possible widespread infections this fall. the bureau of prisons says contrary to published reports bernard madoff is not terminally ill and does not have cancer. bank of america will pay $150 million to settle a class action suit involving the sale of bonds and preferred stock by its merrill lynch unit. that's cnbc.com "news now." i'm julia boorstin. there's a live picture of

the floor of the new york stock exchange. monday afternoon on wall street as we enter the final stretch with the market giving up much of an earlier rally. hi, everybody. welcome to "the closing bell." i'm maria bartiromo on the floor of the new york stock exchange. you've got oil prices at ten-month highs right now. the stock market actually earlier today briefly was in the territory to make new highs for the day. that reversed course as financials really took down the market. we have a mixed performance within the financials, and that is one of the reasons that this market is coming off of the best levels of the afternoon. take a look at where we are as i bring in bob pisani here, our eye on the floor of the nyse. bob, we've got the dow jones industrial average. close but no cigar. holding on to that 9,500 level but only up about 5 3/4. >> we have people who think the momentum can carry us all the way to 10,000 despite the fact september is traditionally not a great month for the stock market, it's the worst performing month overall. energy's been strong, financials have been strong, and theoretically that's the way we should be able to do it, folks. here's the problem. you get little comments from key players that remind us we're

still in a very difficult position and the financials tend to bifurcate. there's our story for the day. take a look at what's going on here. financials in two different positions. there's your outliers there. the important thing is high beta financials. that's your fannies and freddies and citigroup have been up huge today on big volume, and i mean massive volume. i'll show you in a minute here. dick bove had some comments on some of the regional banks they're all down, suntrust's ceo also had some comments. thak a look at what they had to say here. mr. bove, who is at rockdale, came out and said avoid all regional banks. that was a note that came out late last night. suntrust ceo in a speech he gave in atlanta said the bags are still facing major credit losses and commercial real estate could be in difficulty through 2010. take a look at the big names here, fannie, freddie, citigroup, 25% of the volume of the new york stock exchange are three stocks. these three. now, most professional traders i have talked to for the last several weeks have said they don't feel there's any equity value in fannie mae or freddie mac. nonetheless, it's not preventing day traders and momentum traders from having a very fun time in

these stocks. look at big regional banks on the comments made by mr. bove and by the ceo of suntrust, all to the down side here today. pnc financial also had a downgrade as well at bernstein. as for the other side, other sectors, coal and energy stocks in general have been doing well. arch coal had an upgrade over at jpmorgan.y some of the railroads also trading to the up side here today. take a look at the big energy names as oil has remained safely over -- at $75, knocking at the door of $75. right across the board, whether you're looking at refiners like valero, some of the middle-level companies like murphy or the big guys like exxon, all up 1%, 2%, and 3%. our team covering the markets right across the board, let's go to my friend scott wapner first standing by at the nasdaq. >> all right, bob, thanks so much. the market is flat but dell is not and that's the story that i've been following throughout the day today. the stock is up 2% and take a look at the reason why today, because amtech came out and had some very positive comments about the stock. they upgraded it to buy with an $18 price target. and here's what the analyst said

and why i think it's pretty significant not only for dell but for the technology sector in general. he says, "we are now more optimistic on the pc demand outlook and believe the downward mix shift has played out for the most part." interesting commentary there from broad-point amtech. the stock is up as i said about 2 1/2% today. other big moves in stocks today in terms of large cap tech, take a look at oracle. the stock is up better than 1% and it's now trading at nearly a 52-week high. apple, meantime, got the upgrade to its leopard operating system will be available on friday. it's a fractional move to the down side today for apple. but nonetheless an interesting story that people will be following. sears holdings, though, man, this just is a story that continues to eat up this stock price. down 2 1/2%. a negative mention in "barron's" over the weekend. it says cutting costs may not generate enough cash flow to mount a turnaround, a turnaround that was very much in focus, at least the prots prospects of one this past week, when sears

holdings was out with its earnings. remember, it reported a loss and the street was expecting a gain. it was a big negative that was last week. the stock was down double digit percentage points on that move. warner chill cott, meantime-s up 22 1/2%. it's an irish company. it's buying png's pharma unit. $3.1 billion in cash. and that deal is expected to close by the end of the year. again, nasdaq just showing a fractional move to the down side. let's go down to brian shaktman at the nymex. >> thank you, scott. of course oil and the bulls made a run at $75 a barrel. they met some resistance, got as high as 74.81. the positivity coming from equity markets. and hopes of a global recovery as the equity markets waned a little bit. so did oil, but we're still firmly above $74 and a lot of analysts said if they can get above 75 it's a pretty crisp run to 80 and 85. but then you get into the conversation at what point does it hurt the recovery? bob dahl from blackrock said at

$80 it's a problem. all those countries really seem to like prices at this level. the other big story today is natural gas, a big bounce off those seven-year lows we talked a lot today about the spread between crude and nat gas. well, that spread came in quite a bit today. most traders telling me it's short covering, that fundamentals still don't support it, but you have to keep an eye on that $3 mark, whether it will stick around for that.n i want to take a look at the other parts of the complex, to the up side rbob and heating oil, also touching on metals. very interesting story with gold today.da of course the dollar strengthened a bit as the day went on but i'm told there was a big slip late day with gold, mostly on technical selling, although dollar still a factor. so keep an eye on whether it rebounds to make another challenge at 950 or not. ster and copper is interesting, silver weaker as the day went on. copper did get a little bit stronger. but that's where we stand right now. mixed picture in the metals. but rick, "fast money" man, we got pushback at $75 a barrel. how's it going in your world? >> in my world the big talk today is maybe something

different is going on. maybe instead of being a passenger on the equity express, and i'm talking about fixed income, maybe today we saw the ten-year and a slight drop in yields leading the parade. look at this intraday chart. i'm hearing there was some asset allocating. i don't want to make a big deal about this. but we all understand that for a month there are many traders that don't necessarily trust the level of equities but they hold up nonetheless. maybe this is a first sign that more proactive treasury trading, especially in lieu of potential supply. you can see for yourself as you look at the s&ps from a timing vantage point the rally in the fixed income markets happened before we really saw a big drop in giving back some of those gains on the equities side. last but not least, the dollar joined the parade as well. you heard brian talk about how it firmed up. i don't want to make too much of this, but we did see, of course, that we moved higher when treasury prices move higher. that's something to pay close attention to, especially considering the level of equities and the mistrust of its ability to stay up here.

maria, back to you. >> thanks so much. rick santelli in headquarters in new jersey today. love having rick in town. thanks very much. joining bob and i right now on the floor to talk about investing in this environment, charles de gaulle is iva funds portfolio manager along with steve gross, pimco capital markets principal and portfolio manager. along with stephen wood, investment chief, market strategist. gentlemen, it is nice you have to on the program. welcome to you. let's talk a little about this market. you have to even call a one-point move in the dow victory given the fact we have seen such a huge move. would you be putting new money to work in this market right here, charles, or no? >> no. we've been selling -- although on the high yield side. whatever we sold on the equities we replaced by -- we've been buying some of those names. >> why do you like telecom? just from valuation? >> valuation. they have not moved up during this rally. >> what do you think, steve? >> the question really right now is risk reward. even if the markets do go a little higher the risk-reward is not looking very good. the positive expectation of

buying stocks at these levels is not really high and so we're backing off. >> the vix is going nowhere. we're sitting at $25 on the volatility index. why can't people go out if they're nervous about the market dropping, why don't we see people go out and buy protections cheap? options are cheap now. >> that's true. in fact if you you look at the implied probability of a repass, the delta of the out of the money option, it's a 7% probability of the market testing its lows in the next 12 months. so that's extremely low. them engineering markets, it's down to 3%, 4%. that tells you people are not paying enough attention to the potential risk. >> but why aren't they? you supported my thesis but you didn't answer the question. why are they not buying protection? i would think with options cheap i'd be a put buyer here or a call seller. >> well, a lot of people feel like the big risk is off the table and everybody thinks they can buy the pullback. if you're afraid of the pullback you want to buy protection fwu you think the pullback's an opportunity to buy then you're not buying protection you're looking at it as an opportunity to add to your protection. >> stephen, what do you think about this market as we approach

the two months that have typically been tough months for the market, september and october? what are you doing? >> the markets have been trusting everybody on the up side and the down side recently. the last couple months the story has been the retest. it hasn't happened. momentum, you're talking about liquidity provides a momentum between the market. and right now you're seeing us transition from a very clear significant global economic  pullback into one where you're going to rekocover albeit tepid. and i think the important thing pricing in the market before the end of the year is we're moving from that earnings game of the second quarter cutting costs, pulling down inventory with sufficiently that driven story and now it becomes a revenue game, in an environment where the consumer is injured but not dead and where the economy's growing. but tepidly who's got pricing power, the strong balance sheets, who can take out their competition in 2010? to your question, bob, i think it's probably less of a broad market situation than and i think the market's going to be discriminating in favor of the stronger companies. >> what do you think? >> agreed. >> is this just a vacation week,

though? here we have the last two weeks in the summer. i've got to tell you, bob, i don't know how you feel about, it but i'm surprised vochl is above 800 million shares right now. >> yeah. and by the way, a lot of that is citigroup, fannie, and freddie. it's attracting 600 million, 700 million shares. and fannie mae today. >> a late february early march people were panicking they'd lost so much money, now things have stabilized. no one has -- wants to hold cash yielding 0.2%, 0.3%. so everybody's chasing -- is going -- is switching out for yields. >> how about china? the chinese stimulus passenger, $600 billion, clearly influenced the global commodity market. they've got stockpiles of copper and aluminum everywhere in the world now. >> correct. >> can they actually translate to into real momentum in the chinese economy? >> that remains to be seen. i think what they're trying to do is keep their utilization rates up. keep people employed. whether or not that's going to translate into a domestic economy, we're talking a multiple-year phenomenon.

but i think the chinese have been aggressive, they've been creative in their stimulus package as the americans have been so, i think america's cyclical recovery makes most sense. germany and france are doing okay but i think the euros don't solve a lot of issues in terms of economic recovery as well. china is going to be driving i think a lot of the news for a while. >> do you believe the gdp growth we saw in germany and france last week? a lot of people have questioned that. people say that on the ground in europe you're really not seeing a real pickup. >> i'm not sure. so many times i hear this story, well, we america came into this downturn the first so therefore we'll get out of it first. you should remember that many of the countries in europe, france, germany, switzerland, and the netherlands, did not have the same extremes in terms of consumption and credit and -- and credit. so they are in a much stronger position, the households, to start consuming again. so i believe -- >> health care also is an issue that's actually quite positive throughout europe. do you focus on europe?

>> we've been looking at both. china we're very worried about. it's very liquidity driven. and the question is the last, you know, big pullback they had in china two weeks ago and the last week were a sign that maybe the liquidity is being tightened a little bit. and that could lead to a volatility across all capital markets. china's very much interconnected right now. >> so we've got august and september, traditionally weak months. we went into august, everyone was looking for a 10% pullback so they could buy on the dip. even the bulls wanted a 10% pullback, for crying out loud. instead we've got a 4 1/2% move up so far in august and it just keeps quietly -- the liquidity keeps quietly sucking people in at this point. why do you get that correction? is it even desirable? would it happen? >> you know, you make your money when you get in, not when you get out. like buying a house. you make your money when you look in a deal. pullbacks right now are not necessarily as important if you you know what you want to get into. russell, we're much more strategic, long-term investors, looking three, five years out out on the short end.

looking out. i think fixed income there's still traction left in fixed income. you might need to go further down the corporate quality to get some return, but i still think you're seeing it getting fixed in a bond phase. boring, but bonds are -- >> we've got to go. but i just want to ask you about the high beta high volatility names. fannie, freddie, citigroup, 25% of the volume today in the new york stock exchange in three stocks. is this nothing more than a momentum play, than a day trader play, or is there something else going on here? because most traders pfeil feel fannie and freddie have no equity value. >> there are day traders involved, but remember, a lot of people came in very short, and so there's still people that have to cover those shorts all the way down there. so when the markets very low, they're going to be buying a little bit every day. you get that with a little bit of liquidity, a little day trading you've got a 25% move in the stock on a given day. >> huge numbers in terms of volume. gentlemen, we know you're coming back later on in the program. thanks so much for sticking around. we'll see you in a few moments. we are approaching the final stretch here, bob.

>> yeah. we've got 45 minutes to go before the closing bell and we're sitting right near the lows of the day. >> how about those credit card companies? barclays today upgrades three credit card companies talking about improving earnings outlook, stabilizing default rates. up next we're talking about whether you should be looking at these companies and possibly adding them to the portfolio. >> plus the volatility index creeping higher after selling off last week. coming up, the means for the market and your investment. >> after the bell a prominent banking analyst, dick bove, says as many as 200 more banks will fade by the end of the year. is there more fallout for the financial sector on the horizon? some answers 4:00 p.m. eastern. >> some actively traded stocks on the new york stock exchange. what a coincidence. citi, fannie, and freddie. mors are turning to fidelity for a smarter way to trade online.

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welcome back, everybody. taking a look at some of today's research calls. here are the latest upgrades and downgrades. chemical maker ashland upgraded to buy from hold with a $53 price target by key bank because of greater profitability in its

valvo lichlt ne unit and strong outlook for its hercules and water treatment services. radius upgraded citing the performance of its payment processing system and a stronger outlook for its restaurant technology market. the firm also raising its price target to $13 from $10. gun maker smith & wesson downgraded to neutral are from outperform by wedbush morgan on the belief firearm sales will decline later this year after seeing a big surge following the presidential election. maria? >> well, bob, credit scoring agency fico reports that 50 million credit card customers had their limits cut in the 12 months ending in april. even as credit tightened, though, consumers cut back on spending and recent new data shows delinquencies are actually improving. today barclays upgraded companies in the group baased on an improved outlook for earnings in the next three to five years. we gauge the industry with senior vice president at kbw and craig moorer, director and equity analyst with aclsa.

nice to have you on the program, gentlemen, welcome. >> thank you. >> thank you, maria. >> let's talk about the business here. sanjay, what has changed for the credit card companies? do you think the health of the consumer and the ability to pay back debt on their credit cards is improving? >> i think we saw a couple trends. at the company level delinquency rates slowing for the past three or four months. and then the other thing we've looked at is kind of the leading indicators on the macro front which is jobless claims, which have been on the decline as well. i think we were as high as 650,000 a week and we're down about 100,000 since that point. i think that's a positive leading indicator as well. >> do you agree, then, with the report that we saw today out of barclays? craig, you agree with that notion? >> i definitely think the leading indicators seem to point us that direction. i'm just not sure we're there yet. but it's obviously encouraging that we're going toward an improving trend. >> craig, what about you? >> well, i agree. i'm not sure that analysts aren't getting a little overzealous on their move to

high numbers for normalized earnings. but clsa recently held events with american express and capital one management team. and i think that it's a little hard to make a statement that looks at the entire industry. i think management teams are really beginning to separate themselves in the card industry. when you have a portfolio like washington mutual, which is now owned by jpmorgan, that's going to a 20-plus charge-off rate and you have american express's chargeoffs actually declining and capital one stabilizing, you have to be careful that you're clearly investing in the quality portfolios versus those that might have continued problems. >> so where do you want to invest, then, craig? what are the quality portfolios and how do i benefit as an investor? >> well, in my opinion, american express has clearly shown an excellent ability to cull their portfolio and trim what were clearly some troublesome loans. but at this point where you're getting to valuations that are getting a little bit guy you have to ask yourself do you believe the companies can expand

valuations now or are you making a bet on market momentum? we upgraded american express around 14 and capital one in the high teens, and now we're coming to an inflection point. we absolutely believe the stocks could still move higher, but can capital one go to 60? can american express go to 50 right now? we're not sure. we could still -- we would still value higher companies like mastercard that have catalysts next year in europe and don't carry credit risk but benefit from a lot of the same drivers that do credit card companies. >> we definitely want to look at catalysts, certainly in 2010. and where they are and which companies will benefit from them. so sanjay, what about you? what credit card issuers are in a best position from your standpoint? >> we upgraded american express last week ahead of this par claiz upgrade just on the improving trends. i agree with craig. i don't think we can call an inflection point yet. but we do think american express

has a number of levers available to them such that they can get to a pretty high earnings power even as early as next year. i do agree with craig. i think we have to kind of wait and see the numbers we get over the next couple of months to see if we can move materially higher from here. but we have outperform ratings on american express as well as discover financial. >> what about the two new rules of the newly passed credit card act going into play last week? you've got the remindaineder of these rules going into effect in february. do you see a big change as far as the regulatory environment and sort of a new handle on consumer protection for these companies? >> in my opinion, in terms of what these companies can do to counteract these moves, you've seen american express make the decision to discontinue overlimit fees. and they've made it clear that you're going to see card fees on the increase and you're going to see interest rates move higher. so in my opinion, the banks will

always find a way to get their pound of flesh, and you have to question whether or not representative frank or many others are going to appreciate when their rates go higher or the cards in their wallets are costing them $600 a year in annual fees. >> what do you think, sanjay? what about those new rules? >> i think the issuers will adjust and make themselves economically whole because they're for-profit entities. i do think certain issuers will feel the impact greater than others. i think private label issuers, which are issuers that tend to rely heavily on repricing, as well as subprime issuers will probably feel a disproportionate impact relative to the higher quality lenders like american express and even discover in our coverage universe. >> what are the red flags here? sanjay, what changes your opinion? what turns you negative in 2010 if in fact we were to see some upsets? what are some upsts you watch for? >> i think obviously to the extent we see a reversal in the delinquency trend upwards by a material amount, i think that

would be a red flag. i think one of the other trends we've noted are the roll rates, which are the amount of delinquencies rolling into the charge-off buckets have been on the decline. to the extent that that reverts back upwards, i think that's a negative as well. and then finally, i mean, our baseline assumption over here at kbw from an economic standpoint assumed the unemployment rate will peak sometime early next year at around 10%, 11%. to the extent that doesn't happen obviously we have to reconsider our investment thesis on these names. >> we'll leave it there. gentlemen, great conversation. we appreciate your time today. we'll see you soon. 35 minutes before the closing bell sounds for the day and the dow industrials right now really down just about 12 points or so. >> hitting lows of the day. material stocks weak. some of the financials off as well. retailers underperforming the rest of the group as well. that's bucking that trend. details when we come back. some people buy a car based on the deal they get.

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welcome back. a top panel of scientists advising president obama releasing a report on how bad the swine flu could be this year. according to that panel, the swine flu may affect 30% to 50% of the u.s. population. it could lead to as many as 1.8 million hospital admissions. and the panel is predicting the swine flu could cause 30,000 to

90,000 deaths, mostly among children and young adults. really scary, bob. >> sears leading the retail industry lower today, maria, but one group within retail is giving investors something to cheer about. cnbc's rebecca jarvis has all the details. rebecca? >> hey, bob. and it's a group that you could say is sort of knocking it out of the park today. we're talking about sporting goods stores. take a look at hibbits sports. based in birmingham, alabama. reported a disaster of a quarter last week. but take a look at stock today. jpmorgan updwragd the stock to an overweight. the firm's feeling more optimistic that things are going to look better in the back half of 2009. most importantly, jpmorgan is talking about sales. they're saying they're looking like they've really turned a corner here. and remember, folks, sales are the make or break ahead for retailers. a lot have come out and said they cut costs, that's good for profitability, but really the question for the future is can they turn a corner on the top line growth horizon?

jpmorgan sthiz that hibbette has. goldman sachs, need hham, they downgraded dick's but investors going with the group, that's up 3%. the optimism also expanding to the greater universe of sporting goods stores. cabela's, big 5. two key unknowns for these retailers, the impact of the big box discounters, we're talking about target, walmart, even costco, they all play in the sports space. plus the overall health of the consumer. that is the big unknown out there. so many analysts are looking at it as the holy grail to this recovery. we're going to get a better look at that with consumer confidence tomorrow. but bob, as i was looking at the story, i'm thinking about the fact that when i started school if i wanted to play a sport and i played soccer and basketball and volleyball, you've got to show up with that equipment. otherwise, you can't play. there's probably going to be a lot of kids who have to dot same. >> thanks very much. dow jones industrial average,

well, we are just in positive territory, just barely. we've been negative throughout most of the 3:00 hour, maria. materials in the weak spot here with financials as well. >> the volatility index something else we've been talking about. heading higher today. fractional move there. but is the fear barometer suggesting the market may start pulling back? we're going to check that out. hey, it's great to see you're back after that accident. well...i couldn't have gotten by without aflac! is that different from health insurance? well yeah... ...aflac pays you cash to help with the bills that health insurance doesn't cover. really?

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welcome back. 30 minutes before the closing bell sounds on wall street. we have a mixed market under way here with the dow back in positive territory really back and forth throughout the session. technology seems to be a laggard, actually. stocks like ibm, which is a dow component, down about a third of a percent. intel and cisco, nasdaq companies, also weaker. in the financial services sector question is under some selling pressure as is american express and jpmorgan. along with some others. although some of the investment banks are doing well like morgan stanley is actually higher today as is bank of america. on to the nasdaq and we see the nasdaq is negative here. 2,019 last trade there. fractional move. you do have some winners like ebay and google on the up side. volume under a billion shares as we approach this close. s&p 500 look like this. and once again you do have some action in the oil stocks. oil prices at a ten-month high today. now it's $74.19 a barrel.

bob. >> maria, it's time for the "fast money" final call. the barometer of fear, the vix heading higher today. is this a sign of a pullback? let's get more on what's going on here. jon najarian, optionmonster.com, co-founder and a "fast money" contributor. jon, it's pretty simple here. the vix is sort of stuck at 25. >> you bet it is, bob. and in fact, even when we were up this morning there were a fair amount of people that were covering. maybe some folks, bob, that had sold the market last week. looking for that pullback that we all keep talking about. they haven't seen a significant pullback yet, and so a lot of those options that were protecting against the up side move when somebody shorts the market, they're worried the market's going up. those options expired on friday. i think a lot of them came in this morning and covered. and will that be a telltale sign? it sure could be, bob. >> but why shouldn't the vix go higher here? i would think a disciplined trader at this point would want -- if you're nervous you would want to buy puts or sell calls if you want to protect your gains. if you don't want to sell out

your positions. why isn't that happening to any great extent? >> well, we've seen an awful lot, bob, of this -- that old expression, climbing the wall of worry. a lot of people keep pulling money off the table with their positions. for instance, today in jpmorgan, options at the september 40 strike were closed, they were sold, and they bought the october 45 strike. the reason they did that was these options nearly doubled in the last three trading days. the september 40 calls. so they pulled that money off the table. and then they rolled it up to the october 40s. they still want to participate in the market, but they want to constantly be managing the risk to the down side. and so they pulled the money off the table. i think you'll see a lot more of that going forward. >> so they made money as the market was moving up? >> made money as the market was moving up and then they basically gave themselves more up side exposure with a smaller amount of risk buying those up side calls. and we see that continuing to play out. i don't see a lot of people

betting on the down side much. and like i said, that could be the telltale sign when we finally catch people leaning a little too long. >> but the vix, jon, measures near-term options for puts and calls. so if buyers were going out -- or traders were going out and buying calls, making bullish moves, the vix would also move up a bit, wouldn't it? >> you bet it would. and that's why i say like this morning when the market was up 60 or 70 points from the dow jones the vix was at the highs of the day. it's not at the highs of the day now. even though the market's at the lows of the day. sort of indicates exactly what the point you're making is, and that is people stepped up, bought calls to protect against their shorts, and that's what lifted up the vix this morning. >> now, let's talk about the vix long term. normally, this kind of indicator, when it's at some kind of extreme-s when it has the most predictive value. a lot of traders have been waiting for months to see some kind of flash that the market at this point is overbought, and yet we seem to be overbought on

several technical levels, including the way you might look at the vix and yet nothing happens. does the vix have less predictive value than it used to have? >> i think it's actually got about the same predictive value but there's a lot more trading of the vix. it didn't used to be, bob, that you could trade options on the vix, a lot of big firms get in there and hedge using the vix. and i think to a certain extent that sort of narrows the volatility back down. doesn't necessarily mean it has to go down. but it means the oscillations, the movements are a little smaller generally. >> but that's a good point, jon. it's not just that you can trade the vix, it's that options trading itself has exploded in the last several years. so when you get much, much more liquidity, you get more efficient pricing, do you not? it might not be impacting how the vix is trading. >> exactly. the reason we got to those xleem levels, bob, back in november of last year or march of this year

was that light of the big firms that frankly were on the other sides of the trarksds the natural risk takers, were taken out of the markets themselves, either because their hedge fund blew up, their firm was limiting the amount of risk they could take and so forth. now with a lot of those firms back in the market there's, like you say, a more efficient market on both sides, bidding and offering. >> i get calls or e-mails from traders -- actually viewers all the time. normal viewers, not professionals, who ask what should they do about buying a stock. i normally recommend if you're buying a stock go in with some kind of stop loss order there. would you not say that's a very important component of anytime you're buying a stock, know when you might want to get out? >> yep. and you just detailed exactly why so many people are trading options. because a stock may correct by 15% or 20% in a day. so that could be a $20,000 or $30,000 loss for the individual. if they buy a $3 option, that's $3,000. that's all they can lose. and that's over the next three

or four weeks. not like that just today. >> i remember bill o'neill, the founder of investor's business daily, 20 years ago when i was first starting i remember he had a rule you would sell a stock loss 8% of its value from where you bought it. even if your uncle was the ceo it didn't matter. because then you always limited your losses. i think that kind of stop loss is still very good advice today. jon najarian, thanks very much. good to see you as always. coming up on "fast money," is the risk of a double dip recession really increasing? it's economists versus traders as rick santelli takes on larry kudlow. plus behind today's failed rally. where should you continue to take profits heading into tomorrow? guest host rick santelli joins the "fast money" gang tonight at 5:00, maria, and that'll be a lot of fun. >> it really will. meanwhile, 20 minutes before the closing bell sounds, dow industrials really flat on the session. nasdaq one of the big stories. it is negative, but of course it's up 28% in 2009. >> quite a move up, outperforming all the other indices. can stocks sustain last week's rally or are we on the verge of a correction? where can you seek safety foote

markets pull back? some answers in just a moment. then after the bell, he accurately predicted the magnitude of the financial crisis. how economist nouriel roubini sees things now, if he thinks there's a big risk of double dip recession. that's his comments in a "financial times" oepd. we'll ta op-ed. we'll talk about that next hour. g the final final revised final presentation. - one just got an email. - woman: what?! hmph. it's being revised again. the copilot is on mapquest. and tom is streaming meeting psych-up music - from meltedmetal.com. - ( heavy metal music playing ) that's happening now with the new mifi from sprint-- the mobile hotspot that fits in your pocket. sprint. the now network. deaf, hard-of-hearing, and people with speech disabilities access www.sprintrelay.com. the mobile hotspot that fits in your pocket. sprint. the now network. ♪ yes, you're lovely... ♪ what do you think? hey, why don't we use our points from chase sapphire and take a break? we can't. sure, we can. the points don't expire... ♪ there is nothing for me... ♪

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welcome back. markets back and forth all day. let's take a look under the radar right here. the shares up 18 1/2% of electroomtical sciences. one of the big winners today. that was on the heels of a "barron's" magazine article. it said shares of the company could rise 50% if the fda approves its device that can detect skin cancer at a very early age. meanwhile, daaliant pharmaceuticals reports its experimental drug that treats post shingles pain failed to meet its goals in a clinical trial. the company says the short duration of the trial could be to blame for the disappointing result and the stock is down 8 1/2%. riverwood holdings has sold nearly 27 million shares of

construction equipment rental company rsc to its limited partners. rsc also says four of its board members have resigned. the stock right now down 7 1/4%, as you can see there. and we bring back our guests for the rest of the hour here. talking about the economy and fundamentals as well as the stock market. charles de vaulx with us. steve gross, principal and co-portfolio manager at pensco capital market. and stephen wood chief investment strategist at russell investments. dow industrials down 13 points. uncertain as we approach the close. do you read anything into that, charles? >> no. i don't do market psychology. sorry, maria, so i have no idea. >> what would you be looking at as far as most important catalysts for this market let's say in the next six months? >> i think the unemployment data will be key. last month seemed to be better. i think one has to be careful. the unemployment rate came down, but it could very well be a case where, you know, people were so discouraged they didn't even bother to register as

unemployed. so they -- labor and unemployment is what we'll be focusing the most on. >> steve, a couple things puzzle me. outside the financials real estate investment trusts, we were talking about this earlier, continue to move up even though the near-term outlook, certainly for the next six to eight months for commercial real estate is pretty poor here. what's behind the move, and do you think -- does it make sense to you? >> sure. there's really a difference between the short term and the long term. the longer term for the reits is actually more problematic because you have a lot of refinancings and things that have to show up. so i think a lot of people are starting to think we got six, eight months of smooth sailing for the reits, given the market up so much, given a lot of short covering, obviously the sector's performed well. the real test is going to be in the summer of 2010 when you start to have a lot of refinancing coming due and the real question will be will it be doable or not? and nobody knows the answer to that yet. >> everybody's waiting on the commercial real estate market to see whether or not we are actually going to have an upset there. steve, what do you believe? do you believe the fundamentals have seen a real change in this

economy or do you think that the stock market is reflecting an overly optimistic view of sort of where we are right now? >> as they said in the econometrics class, it's the world's largest forecasting model, the capital markets. i think we're beginning to see our mix data and the market's forecasting ahead of where the market's going to be and the economy's going to be. i think we're beginning to go from bad news getting less bad being good enough, to actually mixed data. but think what we're looking for and what you're probably looking for as well, know what the data looked like with the capitals and the economy on a life support system. as we go into 2010:00 bernanke's getting together with trichet and the global leaders. they're going to start pulling the plugs out of these capital markets p so who are going to be the winners and losers in that non-life support environment? it's not going to be everybody. so i think we're going to get a lot of chaps but that being said i'm guardedly optimistic. i think we've avoid the armageddon and now we have to adetermine who the winners will be in this new reality. >> let's talk about the bond market. it's amazing that through the rest of this year more money's continuing to go into bonds than

stocks. stock equity funds still are basically flat on the year, bonds have huge inflows. i get a lot of e-mails about the high yield market, some of the more conservative high yield funds still yielding 9% or 10%. despite the fact we've seen a nice moveup, some yielding 10% or 15% in march. is there still opportunities here? >> right. in all fairness, domestic equity funds did not see much in the way of inflows but international funds have. but you're right, high yield funds have benefitted from huge inflows. ourselves over the past month, we've sold a lot of our high yields. we went from 23% of our global fund in high yields to 25%. now, yet the average yield to maturity on the bond we still hold is 8 1/2% which if you think about it is a solid equity type return. the same bond portfolio would have yielded for us 12% three or six months ago. we have had to take some profit. >> you're advising people to take profits at this point? >> in the corporate bond area. >> absolutely. and especially avoid like the plague the junk bonds, the cccs.

there are still many defaults to come. a lot of companies have gone bankrupt already were it not for the fact a lot of lpos were structured with covenant life structure. >> most high yield bond funds don't buy cc. most 3w07bd funds a person will buy would have bbs, more -- slightly safer on the curve there. >> they tend to have a lot better of everything. >> what about other asset classes that you may look at? putting equities and bonds aside, what about commodities? what about real estate? tell me how that works. >> commodity prices have bounced back way vengeance, many of those like copper trading above the replacement cost. so you have to be cautious. i think the big yft commodity is oil, and i have no issue with oil trading at 70 or $34 a barrel. that's in line with replacement cost. we have been happy to hold on to our oil-related equities. >> you think it goes higher before it goes lower? >> in energy? >> yes. >> we're comfortable owning it at what we think is replacement cost. longer term it's hard to find oil. the chinese will need more of it

in the next ten or 15 years. that's why that's a commodity to hold on p to. we won have that comfort level in copper. we sold a lot of our freeport-mcmoran, for example. >> a long-term demand story. do you all agree with that? >> there is a question about whether this oil theory is real. a lot of people are back into it with this economy recovery but the question is is this recovery real? if it's not commodities are going to go where the economy goes. in fact, commodities will probably lead the economy. >> steve, do you agree with that? >> with the commodity story they're not terribly inflationary right now. i don't see inflation short-term being a massive risk. the nice thing is that gives the fed some elbow room in 2010. they'll probably be letting their proactive measure expire. then they can start aggressively moving into quantitative easing. so moving from balance sheet to interest rate world is probably end of 2010. >> gentlemen, thank you. great vacation. charles, steve, stephen, we will see you soon. >> ten minutes to go before the closing bell we're sitting near the lows of the day dow is up as much as 80 points now down 10.

material stocks, financials, some financials also obligate down si on the down side. >> not getting a boost from amd's upgrade. we'll take a look at what's behind the semiconductor move and why we seem to see a slowdown or stagnant position there. back in a moment. carol, when you replaced casual friday with nordic tuesday, was it really for fun, or to save money on heat? why? don't you think nordic tuesday is fun? oh no, it's fun...

you know, if you are trying to cut costs, fedex can help. we've got express options, fast ground and freight service-- you can save money and keep the heat on. great idea. that is a great idea. well, if nordic tuesday wasn't so much fun. (announcer) we understand. you need to save money. fedex

for dealers to file paperwork on those clunker sales until noon tomorrow. remember, the deadline was supposed to be 8:00 tonight. there have been a number of problems with the government website. dealers have been complaining they haven't been able to get the paperwork in. it's now been extended till noon tomorrow. one important note, maria. all sales must be done by 8:00 tonight. so the sale deadline remains the same, 8:00 tonight. but the dealers now have until noon tomorrow to file the paperwork. maria, that's the latest on cash for clunkers. back to you. >> all right, phil, thank very much. phil lebeau there. meanwhile, chipmaker amd was

upgraded today by silti. the stock as a result up better than 8%. it's a different story, though, with the rest of the semiconductor companies. cnbc's rebecca jarvis looking at that angle. >> we're looking at a tale of two chipmakers. advanced micro poised to get an even bigger chunk of intel's chip business. citi upgrading amd to a buy from a hold saying the semi maker could sele even more share in the future. "barron's" agreeing wholeheartedly with that thesis. already amd's won key contracts from its main customer, pc maker hewlett-packard. in fact, hp recently cancelled some of its programs with amd's arch-nemesis intel. meanwhile, citi doesn't think amd can unseat intel for the number one spot just yet. the firm does see room for stabilization there. meantime, much of the se semi landscape also falling short today. cost cuts ahead for texas instruments in their consumer audio business. they announced that today. but that was not enough to steer investors to this stock, down 1 1/2%. and on top of that, maria, what's interesting to look at is the fact that today dell got an

upgrade over at amtech, that could spell more business for all the chipmakers, because what amtech is saying about dell is that business i.t. spend is going to come back in 2010, they anticipate dell among other pc makers is going to get a boost from that. if that's the case, you put chips in these pcs, so they're going to get some business as well. back over to you. >> rebecca jarvis. got the closing countdown coming up next. the bell just about five minutes away. >> and after the bell goldman sachs reportedly saving its best trading tips for its biggest clients. is that really fair to the rest of their clients? some answers 4:00 p.m. eastern time. aquite a controversy over that one.

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