and interest rates are getting bigger and bigger. so there's a strong incentive to get that out to the economy. interest on reserve, the distance between what you're getting on the reserves and the other interest rates is much smaller, so there isn't as much of sort of a burst of getting all that stuff out. i think that's going to be a very important tool that the fed hasn't had before. >> i think it's great. i think the key would be, as we've always said, make sure the financial system is up and running and firm when you want to start play that game. but it's going to be a new world. it's a great tool to have once the system is up and running. we're just getting there. >> how healthy do you think the banking system is? when you hear, for example, dick saying that we could see another 200 banks failing. it doesn't sound very healthy. >> it's not. people's balance sheets, institution balance sheets are not being applied in the fashion it used to be.

we're in that process. i think these things are good things to have when the system is ready to fly on its own. >> i agree there's still a lot of fragilities out there. we can't forget that. there's green shoots but a lot of bullions. >> a few weeds in there as well. >> a few weeds, for sure. >> you'll come back? >> sure. >> kevin, as always, thanks. >> thanks for having me. >> join us tomorrow. "squawk on the street" is coming up next. this is cnbc.com news now. >> durable goods orders rose 4.9% last month, the biggest rise in two years. it was also a larger jump than economists had forecast. shares of retailer william sonoma is considerably higher. mortgage applications rose 7 1/2% last week. that's a slight rise in mortgage rates during the week. that's cnbc.com news now. i'm courtney reagan. live from the financial

capital of the world, this is little house on the street. i'm mark haines. >> we're going to start it out that way, are we? >> a volatile morning for your money. futures bouncing around, but -- >> how long were you waiting to let me have that one? >> well-done. right now we are in the red on the futures giving up a. solid durable goods data, orders logging the biggest gain in two years. >> i'm melissa francis. senator ted kennedy passing away, on a much more serious note, at the age of 77 losing his battle to brain cancer. the president expected to comment live less than 30 minutes from now. you didn't set me up very well. >> i'm sorry. didn't know it was coming. let's check the futures. down 1.10. where's fair value? up 0.65. that's what, ten points on the dow? not a biggie. >> let's find out you this morning's other news are playing

out. bob pisani is here at the big board. bob, what you got? >> hello, melissa. good to see you down here. a lot of talk about what's going on in china. see aluminum company over there trading down. posted larger than expected loss than expected here. you see demand weak for aluminum prices have been poor at this point. here's what's important. the company came out and said the chinese government have been an active buyer for aluminum through march. that's when all the commodity prices went up. they recognize they have a glut on their hands. the china's cabinet said they would use enhanced management to curb capacity in several industries. oil hit $75 yesterday. fell apart. energy stocks fell apart. a lot of traders talking about a top in energy. finally, william issonoma up 11. on cost cutting they did raise their guidance for the full year. remember, it's still not much in

the way of top line growth. tradertalk.cnbc.com. scott, how are we looking at the nasdaq? >> a flat open this morning. most technology stocks are large caps are mixed as microsoft and apple are in negative territory. google, intel, dell and yahoo! are positive premarket. bio pharma space, mariad is up. there's chatter out there that glaxosmithkline is considering a takeover bid. there's considerable options action around that stock as well. buffalo wild wings, initiated buy. target, 49. fiserv is on the move today. the nasdaq 100 up 57% since the march lows. the best six-month move since april 2000. that, as you know, was just before the technology bubble burst. let's go to brian shactman at

the ney meymenymex. >> 74.96, the highest. we never actually touched 75 yesterday. of course, resistance was strong there. we continue to slide today. stronger dollar, weaker equity. inventory numbers from the american petroleum institute. conspiracy theorists think the numbers got out. take a look at the numbers. we did have a build in crude stock to 4.3 million. this is after a draw down of eight last week. they did expect a bounceback. gas was a draw down of 1.8 million. and distillates 146,000 barrels. they're at 10:30 a.m. eastern time, we'll have the numbers for you live with trader reaction. quick look at the metals. interesting because the dollar is stronger but gold is up. we're working to find out exactly what's behind that. probably risk aversion elements involved. still copper to the upside as well. melissa, should be another interesting day down here at the

pits. back to you. >> all right. >> all right, thanks so much, brian. in asia overnight, nikkei, hang seng and shanghai composite is trading higher. guy johnson is joining us with what is happening across the pond. guy? >> melissa, we picked up on the back of that. and european markets rallied from the story but it didn't last long. as you can see behind me, we moved into negative territory. we got a brief bounce on the durable goods number. didn't last long. trading down towards session lows. in germany, we have the influential efo number out today. survey of german business. much more positive than anticipated. the german chancellor saying maybe, just maybe the german any is beginning to bottom out. remember, the german economy has already left its recession restatus, post that profit 0.3 number. but maybe things are going to bump along the bottom a little bit. the data is turning a lot more positi positive.

let me show you the session and give you a heads up of what's happening. that was the impact of china. after since then, we have been moving lower. durable goods number not having much of an impact. alcatel-lucent, stock is up. talk of a chinese bid. it's absolutely unconfirmed at the moment but it's certainly got the french very, very excited at the moment. and talking of french story, i want to show you what is happening here. this is one of france's bank, natixis. up 35%. largest shareholder is guaranteeing $50 billion worth of toxic assets. still talking about that. still talking about toxic asset problems here in europe. and we're still having to come out and seek major shareholders, it's a guarantee some of those toxic assets. that is the story from europe. mr. mark haines, back over to you. >> thank you, mr. guy johnson. up next, mary thompson has your premarket stocks to watch, including dollar tree and

charming stocks. >> i don't know what charming shops are, do you? >> i have no idea. >> and the word on the street and the buzz beyond, why didn't durable goods have more of an impact on the market? plus, everybody is all gung-ho on china leading the recovery, except maybe china. that may be because of us. confused? our task force is going to break it down for you. ñ>ñ>

speaking to mary thompson at hq. what's on your radar? >> they're having a impact on the trade. dollar tree is higher than much strocker than expected unexpected results. the discounter coming in at 63 cents a share. stores have been open more than a year. analysts had profits of 54 cents a share. the retailer also raising the full-year view to 3.10 to 3.25 a share. turning to charming shop, it is called lower. the retailer a par real for plus-size women recording profits of three cents a share.

hanes is the largest retailer of organic foods. loweren the outlook for the current fiscal year. earnings excluding that at 28 cents a share. four cents below estimates to $262 million. analysts were looking for sales of $287 million. turning to dsw, the operator of designer shoe warehouses. it is unchanged in the premarket after reporting a 31% decline in second quarter profits. still earnings of 17 cents a share came in six cents ahead of estimate. revenue rose 3%. and kohl's stores named president ceo kevin marshal to the additional post of chairman not not having impact on the stock. he will be replacing larry montgomery who will help in the transition. blue coat systems is up today at 23 cents a share. it was a penny better than expectations. the company also named a new

cfo, gordon brooks. we want to end with citi. it is unchanged in the premarket, though another key management departure in the company's asia pacific unit to note that co-head of citi asia pacific is leaving to join a rival bank. this comes in the wake of citi's former head of the group leaving the company to take the number two post at visa. those are some stocks active in the premarket. mark, back to you. >> okay. political icon senator ted kennedy passing away at the age of 77, losing his battle with brain cancer. spending nearly a half century in the halls of congress, senator kennedy was a champion of health care reform, a well-known voice of civil rights, and an out stone supposspoken supporter of the american class and the poor. nbc news ann thompson with more. ann? >> good morning, mark. the senator passed away late last night here at the family

compound in hyannisport. the kennedy family released a statement calling him the irreplaceable center of their lives and they can't imagine that they are now going to face days without him. senator john kerry may have said it best in a statement this morning when he said, we knew this was coming, but no one wanted it to come. the senator kennedy was diagnosed in may of 2008 with malignant brain cancer. a few weeks after that diagnosis, he traveled down to duke university to have an operation to remove part of that tumor. and then he came back here to hyannisport where he underwent chemotherapy and radiation. he continued to work in the senate showing up famously for a vote on the economic stimulus package and a vote on medicare. and at the democratic national convention just a couple of months after he was diagnosed to rally the troops for barack obama who he endorsed early in

the campaign, saying that he felt that president obama, or then senator obama, represented that new generation to which a torch -- the torch should be passed, echoing the words of his brother john. hyannisport has been a touchstone for the kennedy family for decades now. in november of 1960 this is where the kennedy clan gathered to await the election results from jfk's run against richard nixon in 1960. it is where they have come to celebrate countless weddings and baptisms over the many years. and it is also where they have come to mourn tragedies, most recently ten years ago jfk jr. and just two weeks ago the death of eunice kennedy shriver, senator kennedy's older sister. now they gather again. the extended family started coming here early last evening, we are told. his immediate family was around

his bedside. the immediate family includes vicki, his wife, his sons, teddy jr. and patrick, who is a congressman from rhode island, daughter tara and two stepchildren at caroline and ann. we are waiting on the funeral arrangements. have not been made public yet. mark, back to you. >> ann thompson, nbc news, thank you very much. the fdic holding a board meeting later today and expected to vote on new rules making it easier for private equity firms to buy troubled banks. hampton pearson in washington with more. >> it is really an outside the box proposal for the fdic but the bank closings are relentless and draining the insurance fund. 81 bank closings so far this year costing the insurance fund an estimated $21 billion and the worst pace of bank failures in 17 years. the fdic has already imposed one

emergency fee on healthy banks this year. there could be another one on the way. opening the door or, if you prefer, lowering the bar to allow private equity investors to buy failed institutions is now on the table. this afternoon it is expected the fdic will issue guidelines. the key item, what will be the capital ratio, private equity investors must maintain after buying the bank. the the current one tier is 15%. could drop to 10%. control of the currency and fdic board member john dugan appeared earlier today on "squawk box." >> i think the issue here is the more that private equity bidders come in and bid for these failed banks, the less that the taxpayer may be on the hook and the less that the fdic fund has to pay. that's a good thing. on the other hand, we want to make sure that these buyers bring the same kind of commitment to these new -- to buying these failed banks as traditional banks would be when they buy them. >> now, dugan did not for

obvious reason reveal how he will vote but he said the 30-day comment period with heavy input has helped improve the original draft proposal. but, he said, it all comes down to the question of balance. mark and melissa? >> all right, thanks so much, hampton pearson. that's an interesting story because there's a huge culture clash between private equity and government. >> really? >> to say the least. you stop at that idea, it will be interesting how it works out. private equity obviously all for profit, profit is king, not a lot of transparency. i mean, private, they don't want everyone looking at what they're doing. these are proprietary moves. they're going to manage the business. they're not usually silent partners. they want to go in there and have control. they have a four-five-year time horizon on the types of deal they do. this does not go along with the kind of things that the obama administration has wanted to do. it will be interesting to see if these strange bed fellows will be able to work this out. >> i think if taxpayer money is involved, they're going to have

to get used to a level of transparency that they're not used to. >> yeah. i'm not sure it would be worth it. it's going to be look tempts all of the gates if anyway that will be an interesting theme to watch this. >> it will. up next, the word on the street and the buzz beyond the trading floor. and then later, "because you clicked" las vegas sands up more than 900% since the haines bottom. so should you go all in? when this shoe store added aflac to its employee benefits package at no direct cost to the company... it was a perfect fit. find out more at aflac!... ...forbusiness.com but i've still got room for the internet. with my new netbook from at&t. with its built-in 3g network, it's fast and small, so it goes places other laptops can't. i'm bill kurtis, and i've got plenty of room for the internet. and the nation's fastest 3g network.

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we're back live on the floor of the new york stock exchange. the s&p rz down 1.30. when you factor in fair value you look are looking at, you know, ten points on the dow. just not a big deal. not a big factor in the open. alan valdez joins me now. good morning. good to see you. >> good morning. >> what's up? >> we had that durable goods number. headline number came out and moved the futures up 25 points. when you look into it, core number of spending was down .3. not a great number to write home about. you know, we get the new home sales later on today. we'll be watching them. otherwise, lackluster news day here. >> any rise in the market? >> i think the jobs tomorrow is going to be important. we'll watch that tomorrow. that could definitely drive the market. unemployment is there. >> another read on gdp, but that's kind of old news. >> unless there's a big surprise, right.

tinge jobs undermarket definitely move the market. today is light volume in the trade back and forth. the oil, if you look at oil, oil is down 75 cents this morning. that has a drag on the s&p. 12% on the s&p, oil stocks. >> some people are saying wait until after labor day, the big boys come back. frankly, i've heard that every summer. and a lot of times the big boys come back and september proves to be kind of a rocky road. >> yeah. normally september is a tough month for the market. >> yeah. >> you know, it could prove that. we got congress back. we got the senate back. that's bad news all of the way around. but september is always an interesting month down here on the floor. so, yeah, we don't know which way it goes. >> thank you, alan valdes. back up stairs to melissa. >> thanks, mark. now let's get the buzz beyond the big board. david lutz, managing director, thanks so much for joining us. what are you looking for in today's tratd? >> thank you, melissa. >> melissa, a couple of things the gentleman commented on. at 10:00 the new home sales

data, the street is expected an increase in july from june. now, the last two years, the seasonably strong month has well out performed the street expectation. out performing the s&p by 400 basis points. we need that to continue. and another thing is all factored around crude oil and commodities. we have to continue to watch the dollar. the dollar is very strong this morning which is putting some weakness on some of the underlying commodities. we're going to be getting a t 10:30 the doe inventory data. last night api data came out, melissa, and, you know, street was expecting a 1.1 million barrel draw down. instead they got an increase in stockpiles of over 4 million barrels. you know, oil has been out performing the s&p. oil stocks have bettered the s&p 5% over the last week. we need a good data point at 10:30 to see that continue. and last, i tell you one thing that we really need to keep an eye on is going to be copper. copper is up right now. it's highly correlated to the

s&p. it's the leading indicator of infrastructure in our opinion here at steeple. with copper up with the dollar acting very strong, it's kind of interesting. if copper holds its gains and stoort to build on them today, melis melissa, it's going to give fuel to the bulls out there and continue to see the indices starting to move higher again. >> david, i'm interesting in your take on the oil trade because we bought it up right against the top of the range yesterday. it couldn't even touch 75 exactly. it didn't breakthrough. that's tough. there's a range there in oil. do you think it's going to bust through at any point? >> i'm going to tell you, you know, melissa, if the dollar continues to be stronger, i don't think there's any way that's going to happen. i think we're starting to move into a, you know, probably seasonably weaker period as far as oil consumption is concerned. >> i think so, too. >> yeah. not as many people driving. waiting to find out what telenitelhe el nino effect is going to be. i think 75 is going to be a tough level. i'm focused on $71 because that's what oil touched on last night.

very bearish api data came out. if it will hold above $71, i think it will be okay. if there's a crack below that -- >> give me your long-term outlook on the dollar. >> i tell you, long-term outlook on the dollar, i need to be relatively bullish as far as the dollar is concerned because, you know what, there's a lot of criticisms overall in the marth place about how the united states has handled the bailout. i tell you, looking across the world, i can't see that things are substantially better anywhere. china, it's always difficult to tell what's going on as far as the chinese economic data is concerned. china is humming along. the european country, they're not necessarily that strong. i don't think they're out of the woods sfals the baltic states are concerned. if we start having any kind of pull back in the s&p and a lot of people are starting to think the s&p has gotten ahead of itself here. you could see a flight to safety help the dollar. melissa, i always say, if everybody is on one side of the boat, i want to be on the other

side of the boat. >> you're a brave man. david lutz, thank you for joining us. appreciate it. >> thanks, melissa. and right now, oil at $71.27 just 27 cents above that level as david is watching closely. final countdown to the opening bell on the other side of the break. now to get started.

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announcer: call today to schedule a free investment check-up, or visit a td ameritrade branch. welcome back to cnbc "squawk box," "squawk on the street," whatever. the opening bell is set to ring. when are we going to ring it? one-minute. time for our one thing. my one thing is actually the big picture. i'm trying to be optimistic, but you know, it's still going up and everyone says we'll hit 10%. the budget deficit is still going up, staggering, $1.6

billion. the economy is still not looking good. it's hard to be optimistic. >> i hard to be optimistic, but one point goes to my one thing. i'm looking at new home sales today coming out at 10:00. the housing data yesterday, the index showed prices up 1.4% month over month. i went and i looked back, this is not a month when they generally go up. june compared to may, prices are usually going down. i know it was down like 15% year over year, which is horrendous. maybe if we put a bottom in the housing market, until we do that on prices in the housing market, i think we kind of have no hope. i'm watching that. up 11% last month. monster jump. on the other hand, if it's not good, that's going to be a real bummer. i just sold my own home. >> you sold it? >> yeah, probably the bottom. i probably marked the bottom in the housing market. >> all right. here we go at the big board. actress, sing, and songwriter, jill hennessey. >> and at the nasdaq, whole foods markets, ticker wfmi.

store in manhattan. >> one right near me. i love it. fabulous. all right. our market reporters are standing by at the new york stock exchange, the nasdaq, the nymex, cme group. let's start with bob pisani down on the floor. bob? >> hello, melissa. durable goods didn't really move the market even though it was much better than expected. maybe new home sales at 10:00, prices have helped. the big store roift morning is what they said in china. aluminum corps of china had a poor report. aluminum prices have been weak. demand is poor. it's what they said about the chinese government that is interesting. actively buying aluminum from march to may of this year. what happened at that time? that is when the market bottomed. march through may, aluminum prices went up dramatically. copper prices went up 60%. maybe they are recognizing they have a bit of a glut on their hands. the cabinet said they're going to use enhance management.

hello, we're from the chinese government, we're here to curb excess capacity. very interesting comment. we'll have more on that. william sonoma right here, waiting for that to open. they had interesting comments. the story is simple. comp store sales down 50% if 15%, earnings better than expected. stocks opening up notably. they had lower costs and much lower inventories. that's what's getting to them. they raised their full-year guidance. see the sales guidance, really not much raise. there's the story for most of these traders. finally terks story with oil here. you heard what was going on over at the ney mekz. a lot of people who hit $75 yesterday, energy stocks sold right off because it couldn't get through $75. that's the big talk here today because energy stocks have not participated much in the summer rally. trad tradertalk.cnbc.com. >> the nasdaq is down 6 points, a 30 of a percent here.

mostly mixed across the broeoar. microsoft, apple, google, dell all showing modest declines. lots of news out from the bio pharma sector today. myriad is up 11%, upgraded at adams. human genome is a big mover. up on chatter that glaxo smis cli smith cline could be considering a takeover bid. keep an eye on that one. buffalo wild wings is up 2%. fiserv ticking to the downside by .3 of a percent. it was initiated over at citi. it is up more than 57% from the march lows. the best six-month move since april 2000. that was right before the tech bubble burst. let's go to brian shactman. >> thank you. steven nicholas talked about $71 a barrel. i want to take a look at the intraday because we actually

breached the low and we're off the lows when we have seeb a pretty steady sell-off in the last few minutes. if you want to see that number being defended, look at it and we're battling for it. of course, doing action before the 10:30 a.m. eastern time. inventory numbers from the eia. after the api bill, which was bearish, nobody knows what to expect. they have closely correlated the last couple of weeks. look at the rest of the complex trending down. traders telling me run-up in crude was not supported by the rest of the complex. another bearish sign. awant to look at brent as well. tracking things to the downside. in lock step, another oil minister coming out today. this one in venezuelan saying don't expect a hike in production at opec at next month's meeting. metal, gold is to the upside despite that stronger dollar toward zero from rbo telling me there's a lot of short covering from a light volume by will tell you, rick, from what i see, the

british pound getting taken to the cleaners today, huh? >> i tell you, volatility in the british parliament in the last six weeks has been unbelievable. the fed has a buyback today before we get to the option. they're getting the longer maturities. they're buying 20-26 to 20-29, that's the size of the. efo, the confidence number out of europe. it's up for the fifth straight time. boy, a lot of offificials aroun globe are trying to damp down, tap down expectation. interesting there. the china story bob talked about had dozens of e-mails about it. did they buy too many things? do they have a too big a stockpile? this is key, especially when you look at durable goods orders today. you have to web, build widgets, rebuild inventory. last but not least, the dollar had a nice turn around. we're up close to half a percent

in the dollar index. these are very key, albeit, very low levels. mark haines, back to you. >> thank you, rick santelli. the market is opening moderately lower. earlier on "squawk box," pimco's mohammed el erian sharing his thoughts on what is needed to sustain the rally. >> with the tremendous amount of liquidity on the sideline and a lot of people missed the rally and were entering late into the rally, so we know why we've gotten this sugar high. and the question is can we sustain it. in order to sustain it we need a continuous injection of sugar, we need continuous good news that doesn't just cover the inventory cycle. >> joining us on the cnbc edge, jim, chief economists at hardesty capital management, and in houston, tanglewood wealth management. i'll start with john.

what do you think, is this market going to get enough sugar as el erian said? >> i think so. i think this bull market, as he says, has been fed by a positive news flow and positive money flow, but as i look at the numbers, there's plenty of money left to come. we look at the morningstar's numbers and saw that, yes, we've had 22 weeks of positive money moving back into equities but it's only a fraction of what moved out during the bear market. according to their numbers, $160 billion net came out of domestic equity through february of this year. only $27 billion has gone back in through the end of july. $94 billion came out of international equity funds. only $13 billion has gone back in. so there's plenty of money that is used to being in the market that hasn't migrated back in that direction yet. >> jim hardesty, do you agree? >> i do agree, mark.

i think the economic news though is strengthening every day. and i think that the concerns for double-dip recession are ill advised at this point. >> missing the implications of the sugar analogy the the sugar analogy is a temporary high that goes away quickly. you need vegetables to grow strong. that kind of thing. is there any of that out there on the or rye horizon? >> i think that we're seeing the economy turn rather sharply. the housing market, which is one of the largest components, is evidence in size of recovery, as you mentioned, the inventory rebuilding cycle don't minimize it. this is a big investment part of the economy that is going to stimulate the balance of 2009 and well into 2010. >> john do, you agree with that? >> i agree with 2009. i imagine we have better than expected numbers coming out of banking, coming out of the economy, coming out of corporate earnings. i think that will continue. i look at things like the leading economic indicators

which are amazingly strong. as strong as they've been since 1982. i think that that pretends well for the economic news coming this fall. and that means that revenue growth could be what fuels corporate earnings, not just cost cutting. a lot of this new revenue growth and surprisingly good economic numbers could fall right to the bottom line this fall. >> john, renaming bernanke, good idea? >> you know, i love what carl quintanilla said on "squawk box" yesterday. you want to put the guy that guy that disarms the bomb. i think that says it all. >> thank you for joining us. appreciate it. up next, "because you clicked." las vegas sands. the stock up more than 900% since my bottom. should you bet the farm now, or if you're all in, take your winnings off the table?

all righty. in this morning's street cap, mortgage applications rising 7. 5% last week. the mortgage bankers, even as the 30-year average mortgage rate increased to 5.24. u.s. investigators are looking into how 42 southwest airlines jets wound up with unauthorized parts installed. whoa. that's a confidence builder. "wall street journal" reports the boeing 737 contain hinge

fittings that were not approved. but adds they do not pose an immediate safety issue. >> they're not twist ties or anything like that, duct tape. we don't know, though. >> toyota will cut production as it tries to match capacity to current sales levels. fourth largest carmaker is making 7% of car production. >> all right. las vegas sands is standout performer of late, up over 900% since mark's bottom. the stock also one of the most clicked on cnbc.com. here to take a closer look at what maybe we had for las vegas sands, logic and leisure, financial group. thanks so much for joining us. bob, first of all, what's your guess on why everyone on our website is clicking on this stock? >> well, there's been a very strong recovery in casino stocks, as you know and you indicated. also las vegas sands has a lot

of interesting things going on. there's been a lot of chatter about them doing a potential ipo of some of their macaw assets, the venetian macaw, sands macaw. that's been getting a lot of news flow and creating a lot of interest in the stock. >> are those legitimate interests? do you think that ipo is likely? >> well, they have filed the preliminary paperwork with the hong kong stock exchange. so we would expect to see it. and if that goes off as anticipated, it really solves some of the lingering balance sheet issues that were the original cause of the stock going, you know, down into the $1 and $2 range earlier in the year. >> one of the reasons why it's up 910% since march is because it had fallen so low. does it bring it back to even now? >> we think it's fairly priced right here. it's lad a great run. trading at ten or 11 times eb bit ebita which is fair.

we would wait for a pullback in the stock to get moe construre constructive at this point. >> tough economic environment, ton of debt, vegas recovery not so hot. but on the plus side, you like how things are going if macaw and they are opening in singapore, are they not? >>y yes. they have a very large casino opening in singapore in the first quarter of next year. that's a property that could do over a billion dollars worth of ebita according to their internal projections. we're taking more of a wait and see attitude on that. but it looks to be a very strong market with only two competitors in the market it. >> sounds like you liked management, that you think management is good. >> they do a very good job of running these very large convention oriented casinos. they've been very adept at dealing with the challenges that have been thrown at them with the balance sheet issues. and it's really a bet on their ability to figure this all out and get to some kind of a new normal and move forward

operationally. >> forgive me for not keeping up with the events in las vegas, but i'm curious about something in your notes here. the opening of city center later this year is a challenge. what is city center and what is the challenge? >> city center is a complex of motels owned and developed by mgm in conjunction with dubai world. it's going to add about 7 or 8,000 new hotel rooms on the las vegas strip at a time when operating conditions are extremely challenging and all of the casinos on the strip have had to lower room rates substantially in order to fill up their hotels with a significant negative impact on profitability. >> all right, bob, thank you so much for joining us. >> thank you. up next, stocks on the move, including the isle of capri in new york and company. >> plus, everyone is quick to say that china is going to lead us out of recession, except for china.

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i'm mrry thompson with your realtime flash for keeping watch on isle of capri, lower this morning after the casino posted lower profits. even though the profit there is revenue came in below expectation. new york and company reporting its fourth straight quarterly loss as weak sales continue to offset cost cutting at the retail perp lost eight cents a share at same-store sales tumbled 16.4%. stock slightly higher. dollar tree is higher after reporting stronger than expected second quarter results. earnings coming in at 63 cents a share. nine cents ahead of estimate. the discounter up $3.08.

the company also raising the full year forecast. lgk solar will develop a number of solar projects in china. and canadian solar is higher as it won the development rights for a 500 mega watt solar power plant system in china. mark, back to you. >> okay. much has been made recently over a china-led global recovery. here to date, shanghai composite is up 62%. can china lead us out of a recession without a little help from us, the u.s. consumers? let's get to the experts for some answers. joining us now, sarah johnson, his global insider. managing director and david gordon, head of research. david, i'll start with you. can china do it alone, bring us all out? >> i don't think they can do it alone, mark. i think that china and the growth that china has achieved this year as a result of their stimulus package has certainly

been a major factor in restoring global confidence and beginning to put a bottom on the crisis. so i think that we do have to give china some credit for a return of some degree of optimism in global markets. but china is simply too small a proportion of the world economy, and the import market is not large enough to drive a world recovery. so i think that we've seen a lot of the positive benefit already in terms of sentiment that the china growth story is likely to have on the larger global story. and i think we're still looking at a fairly weak global recovery as long as u.s. consumer confidence remains so low. >> do you think the china recovery -- i'll put that in quotes -- has legs because a lot

of people are worrying about a double dip here, and you point out that a lot of this recovery so far is government stimulus, is private demand picking up? is this going to have legs? >> well, i think that the china government remains committed to economic stimulus, to putting money in the banking system. so i think they are committed and have the capacity at least for the next 6 to 12 months to continue to stimulate their economy. i think they're very worried about what happens if global markets more broadly don't recover. >> yeah. sarah, i mean, the key question it seems like in the china story is, will american consumers go back to buying products. that's one of the biggest problems, isn't it? do you agree with that? do you think they will?> don't they need the american > consumer? >> well, certainly. u.s. consumer spending is about> 17% of worldwide gdp.>

and this is likely to be a subpar recovery for consumers, simply because financial stress remains a dominant theme. households have lost about 14 trillion dollars of net worth. employment continues to decline. households need to increase their savings. >> okay. so what does that mean? do you think that's going to > happen and what does that mean for china?> >> well, i think china's expansion certainly can > continue, but we expect to see more of a "w" shaped growth profile as exports rebound, china will get a bit of a lift. but if the expansion sustainable at rapid growth rates, probably not. >> yeah. >> right now we're seeing 40% plus growth in china's fixed asset investment. that certainly is not sustainable. and a fiscal stimulus can't

carry on indefinitely. >> there's a definite debate going on in china now about whether and how long to keep stimulating the economy. >> right. >> i think that they can do it for another 6 to 12 months. but they don't have the capacity over time to sustain an economy based on fiscal measures. and so -- >> no one does. >> right. and so the keogh oh a -- so the in china is how much of this should they spend on trying to restructure their economy towards more of a domestically driven economy versus how much should they spend on the traditional infrastructure and other support to output. and they've been a very output-oriented economy and they're really grappling now with the dilemma of shifting to a more domestically driven economy. but frankly, this remains an

aspiration for china rather than a set of concrete policies. >> the career thing yesterday, the country faces new economic frobs and stimulus measures will be left in place because the recovery lacks a solid foundation. what do you read into that? >> i read into that that they don't see the world economy recovering substantially in the next 12 months, that they're still very politically worried. remember, in china that growth is a political necessity. the chinese leaders absolutely believe that if they can't achieve 7% or 8% growth per year, that their hold on power is at risk. and so they're absolutely committed as long as they can to sustain fiscal stimulus in order to achieve those growth levels. but they're hoping and praying for a more robust global recovery. >> i'd like to point out that

today, as invest it led expansion is exacerbating things in the economy, namely excess capacity and non-performing loans in the banking system. on top of that, it has created some asset price bubbles this year. we saw it with the run-up in the stock market, in the past month there has been a bit of a correction. but certainly leadership needs to be worried about that. >> i'm sorry. we have to cut this short. president obama is about to make a statement. we go there now. senator edward kennedy. over the past several years, i've had the honor to call teddy a colleague, a counselor, and a friend. and even though we have known this day was coming for some time now, we awaited it with no small amount of dread. since teddy's diagnosis last year, we've seen the courage with which he battled his

illness. while these months have no doubt been difficult for him, they've also let him hear from people from our nation and around the world just how much he meant to all of us. his fight has given us the opportunity we were denied when he's brothers john and robert were taken from us. the blessing of time to say thank you and good-bye. the outpouring of love, gratitude, and fond memories to which we've all born witness is a testament to the way a singular figure in the american history touched so many lives. his ideas and ideals are stamped on scores of laws and reflected in millions of lives. and seniors who know new dignity and families that know new opportunity and children who know education's promise and in all who can pursue their dream in an america that is more equal and more just, including myself. the kennedy name is synonymous

with the democratic party. and at times, ted was the target of partisan campaign attacks, but in the united states senate, i can think of no one who e engenderred greater respect by both sides of aisle. he had warmth and good cheer. he compassionately battled others and do so peerlessly on the senate floor to the causes he held more dear and yet maintained friendship across party lines. that's one reason he became not only one of the greatest senators of our time but one of the most accomplished americans ever to serve our democracy. extraordinary life on this earth has come to an end. an extraordinary good that he did lives on. for his family, he was a guardian. for america, he was defender of a dream. i spoke earlier this morning to

senator kennedy's beloved wife vicki who was to the end such a wonderful source of encouragement and strength. our thoughts and prayers are with her, his children kara, edward and patrick, his stepchildren kiran and caroline. the entire kennedy family, decades worth of his staff, the people of massachusetts, and all americans who, like us, loved ted kennedy. >> the president has made his statement as expected. we now have new home sales data. let's get to rick. >> unbelievable, mark. up 9.6 in july. up 9.1 in june. you know, we could all argue about what it really means. we know that it's been a decimated area in terms of housing. but these aren't good numbers. we've had a stretch of good numbers and there's a lot of anecdotal evidence out there. the market should like this a bit. the dow is trimming its losses

as we speak. and, of course, we want to pay particularly close attention to the fixed income market. we do have supply. but equally on the other side of the line we have a buyback along maturities on the fed side as well. many are wanting to see if the equities can get on the neutral line and the behavior of the dollar, the behavior of the dollar should hope up here. it was a flight to safety trade so long, maybe it will argue and pay a little bit of attention to positive news in terms of, hey, a currency, kind of a stock in a country. mark, back to you. >> thank you, rick santelli. interesting numbers. good numbers. >> yeah. that was a big jump. >> new home sales. >> oh, good, we have diana olick standing by with more color on this. diana, you know, one of the first things that someone said to me when i was talking about being interested in this number is that they want to know about closings not contract sign. this is a contract sign number, right if. >> this is a contract sign

number, not closings. the reason it's important on this number is because of that first-time home buyer tax credit. they play a big part in the new home market. they really have to get the contracts signed now to take advantage of that tax credit that expires in november because they get the credit at closing. so, at that point they need to, you know, if the house hasn't been built yet, how many months it's going to take to built to get to closing to get that tax credit. interesting inside the numbers, i want to add month's supply of inventory went down 20.5-month supply 20to 88-month supply. the median price down from $237,300 one year ago in july. of course, prices are down but that is pushing sales up. but what's most important that i see in these numbers today is that revision in in june, it was a huge jump up and everybody said commerce department doesn't get the numbers quite right. they revise them a lot.

guess what, they revised it up to 395,000. so that is good sign for two months running that we're seeing. big jump up in new home sales. again, is it all based on that first-time home buyer tax credit or can it sustain past that? that's the big question in the months going forward. >> one of the other reasons, is because it's so hard to get financing. that was one of the points, 7.5-month supply of inventory. isn't ten-month or am i wrong, isn't that a balanced market, ten months? >> no. a balanced healthy market is around six-month supply. we were seeing four-months supply during the housing bloom. ten is way over supply. we're getting back down to a healthy supply of home. you generally want to see six months to see competition in the market, etsz. >> okay. thanks for straightening me out. all right. let's see how the housing data is playing out in the pit of the cme. evan warner is a portfolio strategist at pfg best.com. he is standing by.

what did you think of that data sfl. >> amazing numbers. came over several tens of thousands above what the analysts were looking at. especially interesting is how the market reacted. stocks initially popped. we would come back down a bit. if you look at the bonds, bonds have gained. yields have fallen. it's interesting trend where you're looking at it's great info but the market is still discounting it. yesterday when we had great numbers, the market still didn't pop as we should see. >> why do you think that is? >> i'm not sure if people are think that we're at the top of the rally or there aren't that many people participating due to the fact that we're at the end of the summer. >> what do we need here? what will get us going? >> i think what we need here again, is we need some of this cash to come back into the market. we need people to begin to realize, all right, move past the concerns that we've had earlier in the year. we're moving into new concerns now about the jobs numbers and consumer. and as we see those numbers fall

into place, that's when i think we see the actual rally taking place so far continue forward into the latter half of this year. >> so what would you say about the sent tive, it's tentative? what adjective would you use to describe it? >> call it a tug of war. right now we're seeing a tug of war between consumer and investment sentiment. everyone saying, well, great, new home sales are up. is that particular to the fact that you're having this one-time stimulus for new home buyers going through november? can it continue after that's done? i think we really need to see a long longer-term trend opposed to looking at week to week or month to month. it needs to be more of a quarter to quarter focus on it. >> eaven, thank you for joining us. >> thanks for having me. let's get down to bob pisani for more market reaction, such as it is. robert? >> actually, it's not bad considering it's a subdued day. look at homebuilders, pulte,

nice pop at the number at 10:00 eastern time. july numbers, higher in september 2008. we said 7 1/2 months supply. ten months supply of new homes every month for a whole year with the exception of june. that's an excellent inventory number moving in the right direction and the positive revisions in june. i was a real estate reporter a long time ago. boy, my eyes really popped up when i saw that. there's pulte, s&p 500, we were about 10.23 at 10:00. now essentially flat on the day. remember, we started on the downside noticeably. note the three big financial outliers, citi, fannie, freddie, all were down. since that 10:00 number came out they have moved to flattertory. these three stocks for the prior two days, 20% of the volume at the new york stock exchange. scott wapner? >> decent, bob, up 4 1/2 points. fractional move to the upside. big cap technology picture this

morning is decidedly mixed. microsoft and intel are positive. apple, google, yahoo! are negative. i've been mentioning throughout the early moments of trade that bio pharmas were getting a fair amount of activity. myriad is one of them. upgraded to the. it follows earnings ahead of expectations. human genome is a good story as well today. it's up 16%. that's on the shatter that gl o glaxosmithkline was considering a bid. buffalo wild wings up 6% today. initiated buy over at the firm jessup and lamont. target is 41. nasdaq 100 is up 57% since the march lows. that's the biggest six-month move since april of 2000. that's significant because that was right before the tech bubble burst. >> scottie, we are in the red basically with the major key

commodities. we watch closely here. i will tell you when it comes to crude, intraday chart. we had a pop off the housing number. we're not at the lows but pulled back down the inventory numbers and expectation are what is driving a t. market at the moment. let's look at the numbers. this estimate came out before the api numbers. 2.7 million barrels. don't forget ap i-reported late yesterday a build of more than 4 million barrels and has closely correlate with the eia numbers that will come out in 22 minutes which we will have for you live. even if it's a drawdown, less than expected according to plakplak platts, you might see a major price. i want to take a quick look at gold. what's lying in the face of a stronger dollar has turned negative as well but not by a whole lot. keep an eye on that dollar. when it comes to the oil trade, everything is focused on the numbers to see if the expectations were just way off because the api numbers blew it

out of the water. mark, back to you. >> thank you very much. a political icon senator ted kennedy passing away late yesterday. age of 77. president obama calling kennedy a great leader who served nearly 50 years in the senate. our chief washington correspondent john harwood has more. john? >> mark, you know, ted kennedy was a lightening rod in many ways, a polarizing figure in some degree because he was such a staunch liberal but also beloved by many millions of people around the country and by many people in washington who were friends. president obama just a few minutes ago on his vacation at martha's vineyard expressed his grief with those people with a essential resonance of the first african-american president and kennedy's long record of championing civil rights. take a listen. >> the outpouring of love, gratitude and fond memories to which we've all born witness is a testament to the way the singular figure in american history touched so many lives.

his ideas and ideals are stamped on scores of laws and reflected in millions of lives. and seniors who know new dignity, and families that know new opportunity, in children who know education's promise, and in all who can pursue their dream in an america that is more equal and more just, including myself. >> of course, president obama also noted the singular blessing of ted kennedy's situation as compared to that of his brothers who were struck down so tragically by assassination. he got to experience that outpouring of affection and love and respect for his work in the senate, guys. >> john harwood. >> thank you very much, john. up next, signs of life in real estate. but, warning, some say there may be headwinds ahead. is the housing market teetering between recovery and relapse? our task force is on the case.

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with better than expected new home sales data out this morning, wondering if we've finally seen a bottom in house ppg is there a recovery coming our way or are we going to get a relapse?

joining us are joseph, director and economist at moody'seconomy.com and cameron kinly, chief economist at lon n londontree.com. what do you think? in gear or double dip? >> i tend to think more positive. some haven't hit the economy yet, specifically the arm resets in 2010, probably about august of 2010 we expect that is when the peak of those will come through. the other thing to watch is unemployment. and we're closely monitoring front end projected income levels. we're looking at the mortgage debt relative to income. and with unemployment going where it is, unless we see some improvement there, affordability is an issue going down the path. >> all right. joe, what about you? >> well, we like the data we saw this morning. this is a nice pop. we do think that the housing market has found a bottom and it's bouncing along the bottom

quite nicely. there are some risks still out there, specifically the first thing is that the home buyer credit expires at the end of november. we do think that the administration and congress need to look at extend that in the next year to support the housing market into 2010. and that there's still the problem with foreclosures. you know, we're on track this year to have 4 million people, you know, have their homes foreclosed on, which will be an increase of 42%. financial crisis will not end until foreclosures peak, home prices stop falling. there's a good amount of risk out in front of us. >> cameron, one of the things that worries me is that fannie and freddie are out there doing the same thing they were doing before, that they're putting out loans with, you know, 3% down, but they're trying to get the housing market moving again at all costs and we're creating the same kind of bubble at the lower end of the market, maybe getting people into homes that they can't afford even if we're not

necessarily over valuing. does that concern you at all? >> it does. they've done good things on the front end. effective april they put in place additional risk premiums. so i think that's playing in well into the market. in terms of the pricing that's coming in. so investors into the market on the front end are being compensated, if you like, a little bit more in terms of the risk that they're going to take going into that new market. so i think there are steps that are being put into place now that weren't in place prior. and really if i look at the year as a whole, from january to june, essentially it was a period of great volatility in the market. rates were changing all over the place. consumers didn't really know where rates were so it was difficult for them to feel like they're getting a fair price in the market. if i look at from june to let's say today, rates have basically flattened out. once quantitative easing let off a little bit the rates have been between 530 and 560, assuming one point for 30-year fixed mortgage. so that's been really positive

for consumers. it's not a rate discussion anymore, it's a discussion about, you know, now a type of home do we want. >> yeah, joseph, do you agree with that? >> well, i think that one can pick and choose to craft a narrative. you know if you look at what's going on in san jose, california, in some of the micromarkets, there they've got under two months supply. you can contrast that, what's going on in miami-dade county, mul multiyear supply housing. affordability right now is at an all-time high. i think if you're young, you're mobile, and you can move to areas of the economy where jobs are likely to be created, you're going to find some good bargains. the housing market is going to treat you well. let us be honest here. you know, close to one-third of all homes in the country are still under water. we still have some policy steps to take to address that. i think we can't really get too excited about this nice summer bump in the data without realize that there's going to be a problem in the fall and again in

the winter when prices are probably going to go up and inventories rise. >> i don't know if i agree with you that we need policy steps to deal with that. maybe the market needs to clear naturally. we'll leave that for another day. thank you for joining us. from housing to autos, cash for clunker rs program have dealers wait for cash and some car buyers dealing with buyers remorse. phil lebeau is going behind the deal. who is regretting their purchase? >> somebody who now has an auto payment. marketing research surveyed 1,000 people who did the cash for clunkers program, actually took part and signed up and now have a shiny new car and a monthly auto payment. 17% of those surveyed have some or serious doubts about whether or not they should have made the purchase. compare that with what cnw usually sees, which is 6% to 8% in a nonclunker environment, that's how many typically have buyers remorse. the payment of $275 to $350, according to the people surveyed, that monthly payment could negatively impact the

family budget. so while these people are dealing with remorse, the automakers themselves are dealing with ramping up production to restock the lots around the country. and as a result, wall street is split on what happens post-clunker in terms of auto sales. jpmorgan out with a note saying it expects the sales rate to fall sharply between september and december. and that's roughly in line with what most people in the industry are saying. throw out september, throw out october and november, we really need to look at the second half of this year in order to see what the sales rate is going to be for more on the post-clunker sales environment as well as buyers remorse, check out the blog behindthewheel.cnbc.com. they got great deals, but when you tell somebody you now have a monthly auto payment, they changes their perspective in terms of whether or not they think it was a smart thing to do. >> the big surprise, they didn't know they were going to end up with a monthly payment. >> no. no, melissa. >> we're teasing, phil. i know you don't like my teasing. >> no, but i understand what

you're saying. they knew that. that's typical in a lot of big purchases. >> do they have a choice? i guess you can resell it. what happens to that credit that you got? you don't have to hold on to the car for some period of time? >> no, you can turn around and sell it. absolutely, you can. you're not going to get the same money. >> yeah. >> i'm just upset that we got a hunker in the bunker for those clunkers. >> what? >> oh, my gosh. >> thank you, phil. coming up -- i couldn't miss that one. >> narm ormally i have larry. >> oh, you want to feel at home? crude at $71 billion a barrel! we have the names you can buy and sell. >> energy investing game plan is coming up next.

oil recently criming to new highs, that now fell to a seven-year low as oil and natgas continue their divergence. how should you be playing this? joining us now is independent oil trader at the street.com. he's a contributor there. this is incredible. when you and i were standing down to the a the nymex -- i'm

sorry, natural gas got up to 15 buck. what is going on with natural gas? >> i've been on your show a couple of times, i've been here a couple of times. we're talking about the capital market tail, a t. trading tail wagging the crude dog while they're the fundamentals. >> why? that doesn't make any sense. we look at oil. why is this a natural gas trading on fundamentals and oil is trading with the rest of it? >> pretty much. i talk to a lot of hedge fund guys. you should call your energy hedge fund guys, too. they're playing crude oil against the dollar, they're playing crude oil against gold, they're playing crude oil against treasuries. >> why? i have one theory about this, okay? it's only because natural gas is so difficult to store. you know, you have to find a salt cavern, you've got to put it in a drained out well. with oil you have a little bit of more flexibility. then again, it's a paper trade, they're not taking delivery of that. i'm trying to think of any reason to understand logically

why oil is a game, you know, and is bit up by hedge funds and everyone ignores natural gas. >> it's the size of it and the access to it. i think the producers want to talk about how to make money off of it as opposed to taking -- >> back on track. you're very strict with me here this morning. >> producers told me. they want to make money. there are three ways to do it, i outlined them in an article on the street. go buy natural gas and sell crude. that's got problems at tamped to it. number one, the ratio is a little bit dicey. it's somewhere between 3 and 4 contracts of crude to natural gas, but not really sure exactly where. and besides that, again, i've been talk to a lot of energy hedge fund guys. i think they're deep in this trade and getting varied by it. it's a risky trade. the beauty part is if you get it right and stuff goes back to a six time to ten time multiple, historic norm, retire to the bahamas, 20, $30 million. >> tax rest horrible, i don't

know. but is that -- that's the best way of play it? >> no. >> i didn't think so. >> inside sector swap. so for whatever piece of your portfolio is engaged with energy, whatever you have allocated for your energy part of your stock portfolio i suggest a sector swap. getting out of the integrated oil companies, trade in your conoco philips, trade in your exxon, trade in your chevron and trade them in for natural gas companies which will have correlation to natural gas prices, like devin and my favorite is chesapeake. >> do you think you have to know where natural gas is headed and do you think you know where natural gas is headed? i wouldn't have bet this. >> this divergence here is all that you really need in order to do that sector swap. all it does is it makes the bet that this is not going to go on forever. now, i know it goes on long enough to break the wallets of a lot of funds. >> yeah. >> in the meantime. >> didn't pickens get killed in natural gas. >> yeah. you will surely see another

amaron type thing come out on some fund deep into this and got hit with it. >> all right. i like that. we got to go. dan dicker, thanks for keeping me on track. we've got more energy news this minute. weekly oil inventory report is out. the numbers, reaction, analysis on the other side of this break.

welcome back to "squawk on the street." i'm brian shactman on the floor

of the nymex where we have the inventory numbers. fascinating we had a build of 200 something barrels. we'll see what reaction to price is. let's bring in tom reilly. we had a drawdown in gasoline, dit distillates, 100,000. it's a tepid numbers. >> they were looking for a draw. we also did not have the big build we had last night in the api. i think we're going to rally a little bit if here but not much. not get up to spike today. >> with that little decoupling from equities yesterday, down strong before the api numbers in equities. slightly up. are we now focusing a little more on fundamentals? >> i hope so. it was getting tiring following equities blindly. >> based on what we see now on the price, we're down 87 cents. i know it's a classic question, but what's more likely, 60 or 80? >> probably 80, unfortunately. i think we should be around 60, 65. >> tom, thank you very much.

back to you, mark. >> thank you. let's take a look at the markets and internals. we have turned positive. the dow, nasdaq, and s&p are all up about 1/5 of 1%. internally, just a tad to the positive side on the big board. and on the nasdaq, also a tad to the positive side. >> all right. we want to bring your attention to some stocks on the move. ma mary thompson is back with some realtime flash. >> dsw, operator of designer shoe warehouse is up 7% after reporting earnings of 17 cents a share. six cents ahead of estimates. kirkland is higher after the retailer of home goods swung a 17 cent a share profit. company also says it's more positive on the outlook for the rest of the year. shares up 10%. international rectifier also higher, up 7.6% after reporting

the first quarter profit in six quarters. a gain from the sale of a business boosting the bottom line as revenue for the maker of computer chips declined. nokia is higher as well as nirm is getting a boost from the soon to be launched nokia money, financial management and payment service for users. it will allow them to transfer money or pay bills via mobile phone. blue coat systems is higher this morning as the provider of internet security systems up $1.99. now reporting profits of 23 23 cents a share. penny ahead of expectations. mark and melissa, back to you. still to come, the ceo of whole foods speaking his mind on health care. how his customers, or some of them, are staging a boycott, raises the question, should chief executives zip it? and can be controversy stop the stock triple-digit rally? >> fus, the u.s. open is around the corner. our own darren rovell has tracked down the best tennis players for us. we understand you are starting at the very top this morning. >> yeah, we're not only starting

at the number one seed for the u.s. open, this guy might be the best tennis player in the world ever. and nike has built a court in downtown new york, and i'm going to be talking to roger federer coming up next on "squawk on the street." more and more active s are turning to fidelity for a smarter way to trade online. only fidelity lets you back-test your strategies against an entire portfolio of stocks. plus you'll get advanced, customizable trading platforms. and you get the kind of execution you'd expect from fidelity... ...with a dedicated specialist to talk about even your most complex trades. they'll even help expedite the account transfer process. trade like a pro. trade with fidelity.

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nobody sells more real estate than re/max. where do you want to be? this morning's sound check, former federal reserve board and some global president on what needs to be done to get the economy back on track. >> the objective is to make sure we can re-establish stability in the financial markets and the economy overall, to be able to get on a sustainable growth path

without reigniting inflation. i think we're starting on the path there. we have seen no sibs of inflation in the u.s. or abroad, really, and we're starting to see signs of stability and growth coming back. >> the huge issue in the interest of jobs in the u.s. we can't create jobs if the money keeps going out of the country the way it has been. into oil, i mean, one daily barometer is oil at $73 a barrel, doesn't make any sense. >> all right. a significant number of americans will spend labor day holiday weekend staying home. aaa says 39.1 million americans will travel, but that is a record 13.3% drop from a year ago. the economy obviously one factor but aaa says many people are staying home because the weekend falls after many children have already gone back to school. >> it's a weird weekend. >> bad timing. >> bad timing.

>> my kids are back. everybody's back in school. up next, whole food is not only surviving the recession, it's thriving with a stock up over 200% this year. a look at this secret to the company's success coming up. um bill-- why is dick butkus here? i hired him to speak. a lot of fortune 500 companies use him. but-- i'm your only employee. we're gonna start using fedex to ship globally-- that means billions of potential customers. we're gonna be huge. good morning!

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welcome back to "squawk on the street." i'm darren rovell. you know, roger federer's wimbledon grand slam gave him 15 more times, all-time record. he's getting ready to defend his u.s. open championship for the sixth straight time. hard to believe. people think you're the bionic man. you hardly sweat. you don't go for a drink when you're opponent is going or a drink. how hard is it for you to prepare and get ready? >> i mean, it's taken lot of hard work and sweat, believe it or not, for me also to become the champion i am today. you know. but things also seem easy on the court because i have a very fluid technique, i don't sweat as much or show too much emotion tons court because i don't want to give my opponent too much hope, you know. but i love competing out there. it takes a lot of hard work. >> you're here with nike today.

they've given you some pretty fashionable outfits. this is going to be your day outfit. for night, thil reverse it. what is it like wearing this type of outfit, people are talking about tennis and fashion? >> we have a great choice. in tennis and our outfits. we change them 10 do 12 times a year with nike. this time around we also got some shirt as well that should remind people of the subway station here, you know, which i use also sometimes to take to go to the open. and so we always try to come up with something creative, with a little background story. thing is nice. bold colors, black and red for the open. >> people always talk about that jacket. you've had your own logo with nike since 2006. you wear that jacket. it hasn't been at retail. it looks like nike is going to bring it out for the first time ever. >> that's right. that's what we're trying to do with nike, the people can get something more that's linked to me. the r.f. logo on my chest for the last three years now, on my shirt, but also had this beautiful jacket i've been

wearing all the time. for the first time they're going to sell it here at the open and it's only going to get bigger for next year, it's great. >> people talk about endorsing a brand. you help nike, you help wilson, all the brands, gillette, that you have. but how do they help you? they're an example of a brand that helps you in some way? >> well, i mean, i guess nike is obvious because they make good, very lightweight product, you know that makes me feel good on the court and makes me play well. another example, i fly with them throughout the world as well. and one story i can share since i went through the olympics last year, we had a really stuff schedule going from america to china and coming back, and i ended up winning the u.s. open with it and olympic gold doubles medal. that's a competitive advantage i have maybe over some of the other athletes but also thanks to some great sponsors, you know, really helping in a big way, that's great. and then also here, i wouldn't have been able to come to america so early fit weren't for net jet because of the babies

being born, having twin girls. i ended up winning the tournament last week. that's awesome. >> your relationship with tiger is well documented. what do you guys -- you have the gillette deal together but what do you talk about? do you talk about business or do you talk about the mental game? what's the conversation between you two guys? >> like friends, we talk about. we don't talk about what should we do next, like it to the. we try to both be the best athletes we can, you know. we are quite similar in -- how much success we've had and we look at each other as an inspiration, i think. but then when we can't talk or hang out together, we just like to catch up with what's happening in his life. more maybe on a family life because he's got two kids already, now i have two kids, too. we have many similarities, you know. i heard he's in the neighborhood, you know, also playing in new york. so hopefully we can get together and meet up. >> how would you define the state of the game financially just by looking at the crowd and the sponsors? obviously it's been a very tough

year. u.s. open say they might, in fact, set records, beat last year's revenue numbers. >> we have had some tournaments that have had some difficulties with main sponsors. those are the ones more where the main sponsorship sort of ran out last year. this year, and maybe hard to find somebody new. but if you look at in terms of attendance, record numbers all the time. that's a great character in the game. new guys coming up like nadal, we've had such great rivalries in the game, the game is healthy considering the tough times we had. >> roger federer is now the father, of course, of 5-week-old twins and with one victory in the u.s. open, he will surpass $50 million in career earnings. guys, back to you. >> all the good assignments there for darren rovell. time to get a quick check of news outside the business world, he's alex witt from msnbc.

>> i'm sure and viewers know what our lead story is, it is this, the liberal lion of the senate has died. senator ted kennedy passed away last night at his home in hyannisport, massachusetts. this after a year-long battle with brain cancer. president obama spoke just a few moments ago. he called senator kennedy an extraordinary leader who touched many lives. a bit earlier the president thanked kennedy for his life's counsel in the senate. ted kennedy was 77. now in other news, nasa called off the launch of "discovery" for the second day in a row. this time due to faulty fuel valve. next attempt will be made on friday. and, english authorities investigating mass violence that broke out at a soccer match between london rivals. one fan, in fact, was stabbed in the chest during some vicious attacks. several others were a arrested. so that is some of the news we're recovering today. as you can well imagine, mark, we're going to have the bulk of our coverage today devoted to

the the death of senator ted kennedy. back to you. >> thank you, alex witt. whole foods getting ready to open a new store in new york as shares soar up more than 200% while rivals safeway and kroger have fallen 20%. what's the secret to success here? rebecca jarvis takes a look. r.j.? >> hey, mark, we are looking at a store that is as much about what it sells as where it sells it. this one, the new location opening up here tomorrow. they're still stocking some of the shelves behind me. it's just a couple of blocks away from columbia university. and being in a location that's near an educated population has really been central to the business model, a model that's been successfully marketed to changing customer demand. >> one of the reasons that we're seeing, you know, that their sales results are slowly improving is that i think that they began to have an attrition of some of their marginal customers earlier than others

and they hit the bottom and their core customers have stuck with them at this juncture. >> even in the present environment, stores here at whole foods are out-selling the competition in new york city. they're doing $2 million a week in sales per store, whereas the average grocery store is doing $20 million in sales over the course of an entire year. those numbers are pretty staggering. and the core consumer is sticking around. >> this is a company that at first we were somewhat skeptical about, their value campaign. it's been pretty successful at keeping the traffic coming in the stores. >> whole foods is owing so its leader, chairman and ceo john mackey. in recent weeks mackey has come under fire for his views in health care. in an ep odd he pens, however, investors are ignoring a lot of that chatter. in fact, they've bid up the stock 5% in the last week.

m m&m, as i send it back to you, a lot of analysts say they could double their store base here in the united states, but one thing to expect about that growth, it's not going to be the kind of mega stores we're accustomed to. those haven't done as well in some areas. what's doing the best that 30 to 40,000 square foot approach. that's what they expect to see more of into the future. m and m, back over to you. up next, whole food ceo is not the first ceo to take a controversial stance on a hot button issue, but should he be the last? should ceos keep their trap shut and protect the brand? we'll talk about that. but first, amanda drury, what is coming up on "the call"? >> hey, m and m, >> a big debate regarding ben bernanke's second term. will he continue hes loose monetary policy or start tightening it? as larry kudlow says, helicopter ben or king dollar ben? you know about the budget

problems, but a garage sale to pay it off? jane wells tells us about it, and maybe you can go to california and pick up some bargains yourself. all that, and reaction only on "the call." first, "squawk on the street" is back after this break. some people buy a car based on the deal they get. others by the car of their dreams. 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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ler. we want you to get some headlines right now out of the office of thrift supervision, the acting director john bowman says regulators determining what the guidelines will look like and expect a final vote this afternoon. so we'll have more on that going forward, but we want to get you those headlines right now. >> whole foods ceo john macke under fire from some customers and labor unions over a recent op-ed he wrote on health care, saying health care is not a right, and warning against a

government-run plan. so do ceos have the right to speak out on hot-button issues or would they and the companies they run be better served by keeping it shot. psychologist and ceo, dan gross, senior editor and columnist for "news week." susan, what do you think? i mean, he's -- he's entitled to speak. >> well, ceos are the public face of their companies, mark. so their prime responsibility is to protect the company, protect the brand, and whole foods, of course, has established itself as a premium brand, focusing progressively on hemth, organic food, et cetera. so here is mackey violating in some ways, marketing 101, because the principle is, know your customer. so many of whole foods customers really have a progressive attitude and values. and so putting this, you know,

this stake in the sand in terms of his own attitude is really in some ways angering and alienating his customer base. not wise. >> stupid is the word i would think of. dan, what do you think? >> well, i think it's fine for them to have ideas and even to express them. you have to be concerned about the tone and the venue. if you do it in a way that you're just kind of delivering cable news, talking pointsing a he's a socialist, ruining america, et cetera, that's going to tick off the obama devotees who shop at whole foods. rebecca was in columbia university where i would guess there is not a mccain voter within a four-mile radius. on the other hand, when ceos talk about the experience at their company, there's plenty of other ceos have weighed in on health care reform. steve byrd of safeway has britain some intelligent op-ed about how his company is dealing with rising costs and the things they're doing and what conclusions we can draw from

that. walmart's ceo now talking about the need for some sort of national health care type of issue. so it's not the --is not necessarily exactly what you think that the problem or expressing the opinion. it's whether you do it in a thoughtful manner that is somehow useful to the public debate. >> well, i mean, in this case, susan, he did in a thoughtful way, right? it was an op-ed in the "wall street journal" but what he said flew in the face of what customers believe in. i shop whole foods, everybody is bringing the bag from home, they give you a dirty look if you leave with a paper bag. and he is saying the opposite of what his customers thing. is there a lingering impact, or are there protesters out front, but the next week, you still want to get the food from whole foods, don't you? >> this is going to be very interesting in terms of how this plays out. i think the question is, will mackey be best served now by basically being quiet and letting this play out? it's a very good question.

but i think, too, we look at facebook, this past week, there is a do i boi cot whole foods group, over 20,000 members. so whether this gains steam or not, remains to be seen. and one thing about premium brands, and this is critical in terms of ceo effectiveness is people who are really responding and using their discretionary income have an emotional attachment to that brand. and many now of those customers have felt a betrayal of trust. and nowadays, ceos really need to be operating in high definition mode. that is, they need to communicate clearly, consistently, in a way that's congruent with the brand. and this is where i think mackey -- hopefully eyes learned a lesson here. it's a great success, let's hope he learns from it and adjust accordingly. >> doesn't this come down to the person possibility as the ceo of your company, especially a public company, you're out there es