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tv   Closing Bell  CNBC  August 26, 2009 3:00pm-4:00pm EDT

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non-clunker environment. but again, melissa, when you look across the board, all manufacturers benefited from this program. >> he ya, although those foreign automakers it will be interesting to see if there's a backlash against that. phil lebeau, thanks so much for joining us. and you heard it first on "street signs," the demi-ashton indicate or. sanjay kapoor told us to look to invest in countries that have an older population like demi moore over a younger generation like ashton kutcher. well, it turns out the hollywood power couple watched them and they weighed in on the demi-ashton ratio via twitter. here are the tweets between the couple. ashton says to demi, "i love that we've become the demi-ashton ratio. lmao. you can figure out what that means on your own. it seems that i'm now a control factor in the markets. he goes on to say that -- this is ashton. "i love that i'm described as the beer-drinking party boy with no cash." i guess he feels like he's done a few things recently to make some money, and probably rightly so. but that's pretty funny. they're watching "street signs."
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let's take a look at the markets here as we get into the close. we were just barely in positive territory. at last check the dow has now turned negative just in the past few minutes. it's essentially flat on the session but technically in the red down about six points. the nasdaq right now has turned negative as well. it's down about three points, almost .2%. the s&p 500 as well. thanks for watching "street signs." i'm melissa francis in for erin burnett. "closing bell's" coming up next. >> this is cnbc.com "news now." tropical storm danny has formed in the atlantic, and the national hurricane center says it should become the season's second hurricane later this week. williams-sonoma shares are soaring more than 10% today after the retailer or theed an unexpected profit. and the cash for clunkers program generated nearly 700,000 car sales and almost $2.9 billion in rebate applications. the transportation department says toyota sold the most cars, gm was second. that's cnbc.com "news now." i'm julia boorstin.
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and there's a live picture of the floor of the new york stock exchange. we enter the final stretch on wall street with the markets pulling back after making fresh intraday highs for the year earlier today. hi, everybody. welcome to "the closing bell." i'm maria bartiromo on the floor of the new york stock exchange. we had a pretty good market earlier today and definitely some pretty good support for this market when we had new home sales up nearly 10%, 9.6% for the month of july, fourth straight month of gains. durable goods ordered up 4.9% for july. and of course coming on the heels of a pretty good rally. in fact, the market is up 400 points on the dow in the last six days. today we are looking at a wit bit of a pullback. joining me for the entire hour is our guest host for the hour, paul jacobs, the ceo of qualcomm. nice to have you on the program. >> thanks for having me here. >> and today of course we got some pretty good economic data. from your standpoint do you see that support for this market? do you see the economy turning? >> yeah, actually, if we look out, we really see strength in asia pacific. pretty good strength in north america pape little soft in western europe and japan.
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otherwise, pretty good in the cell phone business. >> asia, that's definitely the key. we're going to get into asia, china, really where the growth is in the world as we continue for the hour. let's take a look at where we stand as we approach this final stretch here. and the numbers are looking like this. 9528 on the dow jones industrial average, down about 1 points, although as i mentioned earlier we did have fresh highs for the year earlier in the day about 10:00 a.m. eastern. down just a fraction on the dow. banks are mixed and the winners on the day actually are the home builders and the retailers. really the groups that are most closely associated with an economic recovery. nasdaq is down today four points lower, about a quarter of a percent on the nasdaq. it too pulling back from the highs reached earlier in the day p and the s&p 500 right now down about two points, sitting right now at 1,026. let's get to aur team covering the market here at the nyse as well as around the horn, and we kick it off of course with bob pisani down here at the big board. bob? >> hey, maria, good to see you as always. i'm a little disappointed, folks. we got great economic news this morning on those new home sales numbers and the durable goods and we've had great economic
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news for the whole week. how come we're not breaking out to decisive new highs here? look what's going on. we should be doing a little better. instead what we're getting, summer leaders that are weak. industrials, commodities, financials, those are the stocks that fd mouse higher in the last six weeks, those are the ones that are lagging today. what's moving up? the ones that were laggards. telecom, consumer. maybe this is sort of normal rotation, maybe something else here. but it has been noticed that they're rotating out of those high better names and into more defensive names here. take a look here. telecom? come on, folks, telecom has lagged all summer here. it's not like there's great news here. they've just lagged. same situation with the consumer staples here. all right. kroger may be a nice safe bet here things are slowing down. but it's certainly not something you would go into if you thought the economic news was decisively getting a lot better. also remember we've had some of the big industrial names that have done fairly with'll well but haven't dramatically broken out this summer. 3m, caterpillar and deere, to decisively break out, we had a
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great chance today they could have done it but they didn't. they just sort of held back here. how about those financials? are you tired of those high beta financial names? finally they're starting to crack a little, i'm talking citi, fannie, and freddie. citi has done effectively a billion shares a day for the last four days. it's not going to make it today. it seems to be running out of steam and they seem to be rotating into those four defensive names. this might make some sense if you think the broader market is going to be going pup p defensive names have outperformed. tradertalk.cnbc.com. for more on that. and scott, tech's helping us either today. >> i was going to say speaking of the leadership group, tech, too. nasdaq's off .2%. it's been in mostly negative territory throughout the day. i have the nasdaq 100 on the wall here and it's one i wanted to focus on because if you take a look at why perhaps the nasdaq is beginning to give a little bit back, since the march low the nasdaq 100 it efl is up about 57%, 58% or so.
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that's the strongest six-month move that we have seen here since april of 2000, just before the tech bubble burst. i'm not suggesting that a bubble bursting is on the horizon. what i am suggesting is we've had a great run in technology and that shows up in the nasdaq 100 over the last six months. take a look at large cap and widely held technology stocks. apple's up, yahoo, e guy is a little weaker as is research in motion. you see losses across the board in those stocks i specifically mentioned by just about 1%. it's the consumer discretionary names, the retailers, the restaurants that are having a pretty good day for the second straight day bed, bath & beyond new 52-week high, the stock's up. expedia a new high today, stock's up about .3%. also a lot of activity in the biospace today. myriad genetics upgrade. up about 17%. also want to pay attention to human genome because there's been a lot of takeover speculation around the stock and you've certainly seen it show up in the options activity around
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it. the stock has got another big gain today of some 7% or so and then broadcom is higher as well here. but the nasdaq is just showing a fractional move to the down side. let's go to brian schactman at the nymex. >> the oil bulls never had a chance today. if you take a look at the intraday chart after those inventory numbers came out we had a bit of a turn but we can't get positive and listen, the inventory numbers were a build but not as much as the api number so it was a bit of a head scratcher. and we had a little best railly late in the day but generally speaking it's 4% to the down side in a two-day span. what maid the bear run into the woods and spooked him? let's teak a look at some of the factors. tropical storm danny, yes, developed but it's not tracking toward anything in terms of trouble spots. also want to point out that inventory build, listen, it was supposed to be a big drawdown. it just wasn't enough to mover it to the up side. and the dollar strength of course was a major factor today as well. i want to point to the rest complex. it was mostly done. nat gas, though, rallied late, still below $3. metals mixed picture, a little stronger than you might expect based on the stronger dollar.
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held up relatively well. silver, though, snapping a four-session winning streak. the busiest man i know, at least at cnbc lately-s mr. santelli. hey, rick. >> hey, busy can be fun, right, brian in it was a pretty good auction today, 39 billion out the door. and even though there's a lot of scrutiny, and i'm talking about options, every cycle, it's praept much been -- tomorrow we have seven years on tap. we'll have to monitor that. many say that's kind of the odd man, it's relatively new back into the primary issuance market. as far as treasury yields go, they've been very stable. as a matter of fact, we see that short maturities moved up a little like a two-year note, but that five-year we auctioned off today, that's the new guy. it will be the old guy tomorrow but it's steady as she goes in the mid 2.40s. the dollar had strength early but it stabilized and it held its strength. maria, back to you. >> all right, rg, thanks so much. rick santelli. and we are looking at this market going back and forth,
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negative, positive territory. not a lot of direction. let's bring in don schreiber, president, ceo of wbi. and of course our guest haute host paul jacobs. you've got more than 300 million under management at this point. how are you investing in this environment? >> high-end dividend paying stocks that are great values. we're looking for values in a market that we think is pretty fully valued at 17 times earnings on the s&p. what we want to do is find those stocks -- maybe take some profits in stocks that we already have made a lot of money in this year and get a little more defensive and find the value. and one of the things we looked at recently and we have a number of them-r defense companies. because the u.s. government's a pretty good consumer right now and we think their revenue and their earnings are going to look really good going forward and those companies haven't moved. so there is some up side potential. >> you also own -- you said defense. you also own utilities because of the dividends sxurks own s ae
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technology. >> pharma. we like some of those areas again because they haven't moved as much as some other names in the market. >> how do you feel about the wireless operators, for example? >> we have a couple of wireless operators, and we don't see the really good value in all of the names, and there's not that many of them that pay a really good dividend that we're looking for but we do have a couple of the names in the world. >> it's interesting, the wire line -- the wireless companies really have been the growth areas. mobility is what it's all about. and that's a trend that qualcomm is also very much right in the center of, correct? >> absolutely. i mean, mobility for us is sort of what the company's been built around, which started out with mobilizing trucks and allowing them to communicate. we moved to cell phones, and now it's smart phones and computers are connected to the internet at all time. >> we talked earlier today, and you said something like 4 billion cell phones is the number that people -- that is so much more than, you know, netbooks and pcs. mobility is really what is the key around the world.
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>> and also, if you look at emerging markets, it's basically the only computer people are going to have in emerging markets. in india a government regulator just put out a report, four times as many people getting on the web on their phones as on their pc. >> what about that? do you buy into some of these trends or are you just literally looking very specifically at dividend plays and value plays? >> well, one of the things that we've seen is the u.s. consumer and consumer around the world is actually continuing to buy stuff, which is great. you would think that with the challenges the consumer has faced over the last year or so in deleveraging and everything else and the job market the way it is the consumers wouldn't be spending. but one of the things that we're hopeful about with the economy is that the consumer's actually out there spending money. >> well, what about the market here? you're talking about a market that's up 50% from the bottom on march 9th or so. >> we think right now we're pretty much as close to a maximum value point for the moment. when third quarter earnings come out, we expect them to be
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pleasing enough that the market may even sprint higher. but we may quet a pause here. september, october are traditionally not good months, and i would think we'd get some kind of a quick pullback on an interim basis and then we'll rush hour toward the end of the year like the typical holiday rally that we have. >> and the seasonality factor is something zon really tapping into right now. do you see a seasonality factor in your business as well? the end of the year is touchily when people are putting their books together for next year. what do september and october look like for tech? >> normally cell phone markets are the biggest months at the end of the year. people buy them for presents and so forth. then you get a little back to school trend there too. but there is definitely a seasonality. we note it in the handsets. >> look at this market. you're talking about the nasdaq up sharply 40% or so from the lows. what do you think about that? what's this market trading on? >> you know, people are confident. i mean, that's the thing about america. we are a very optimistic people,
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which is why i think we shop in the face of even bad economic news. and that's something that's different us from than maybe some of the other markets. i've hear the europeans really bemoan the fact that their consumers don't get out there and shop at a time when they're not feeling as confident. >> what are the red flags to the possibility of dividend cuts? last year we saw all those companies hoarding cash, looking for new revenue when they needed to cut their dividends. if you're a dividend play, guys, how do you make sure your companies aren't going to cut their dividends? >> you've got to look at the short-term debt on the balance sheet and look at the cash flow from operations. and between those two things if we don't have too much short-term debt coming due and we have sufficient cash flow, we think the dividend's secure. so those are the companies we're looking to invest in. and right now, you know, cost cutting will only take you so far. we've got to have increasing revenue to drive earnings long term and to drive any kind of bull market trend, and we're not sure that's there yet. >> i think that's a great point. what about that, paul? because a lot of companies that have actually beaten
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expectation, they've done so because they've actually cut out a lot of the fat. they've cut out, you know, expenses. but how do you feel point to end market demand? you said you see end market demand in asia. what about the u.s. and europe? >> u.s. is actually doing okay. western europe is i'd say a little bit softer. by the way, i want to put a little plug in. we were able to actually raise our dividend in the middle of this economic situation and we also continue to invest in r&d pretty heavily. we did pay for, that though, by cutting our other operating expenses. they were down about 20% year over year. we were focused in on what's important for the long term. >> what's your dividend right now? >> 17 cents a quarter. >> how come you raised the dividend at a time when other people were cutting their dividend and trying to hold cash? >> because our cash flow was very strong, we were up 47% year over year in operating cash flow. >> that's a pretty good story in this environment. don, great to have you on the program. thank you so much. we'll see you soon. don schreiber. paul jacobs joining me for the
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entire hour. dow down about five points. home builders and retailers the big story on the up side. we'll continue to talk about technology and banking. in fact, the top names in the world of golf getting ready to tee off at barclays tournament tomorrow. there's bob diamond, ceo of barclays. we'll talk with him about the health of the financial sector and the state of sports sponsorships. the president of barclays, bob diamond, coming up my special guest. then china has been stockpiling all kinds of commodities. paul jacobs just told us asia is looking good. is all that related to the economy or does china see real value in commodities right now? at 4:00. but first here's the action on the street. citigroup leading the list with a fractional loss. um bill-- why is dick butkus here? i hired him to speak. a lot of fortune 500 companies use him.
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looking to win the fed ex cup for the second time. joining me now from the liberty national golf course in new jersey is robert diamond,
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president of barclays plc along with phil mickelson, professional golfer. great to have you on the program, gentlemen, thanks so much for spending the time. >> thank you. >> so bob, let me kick this off with you. how wonderful. i remember the tournament last year. all very exciting. and the backdrop of this tournament is the manhattan skyline. tell us about the event. >> well, maria, this is the first time any tournament has been played at this venue. the course has only been open for two years. i think you're getting aability of a glimpse of it now. but i think phil will tell you that the course play is very, very tough. but the views of lower manhattan, the views of the statue of liberty are just going to make it an unbelievable event. >> phil, what about you? tell us about it. why -- the sponsorship with barclays, your relationship with bob. >> well, maria, first of all, back to liberty national, you're looking at two members here. so we're biased. we love this golf course. it's a 15-minute ferry ride from
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manhattan. and it's so nice for us to be able to come here and stay in manhattan. and as far as my golf game, i'm trying to get it sharp here because we start our big stretch here with the playoff right here at the barclays. i've been lucky to have a relationship with barclays the last few years, and this event right here is one of the premier events that we have on the pga tour, and i'm proud to be part of it. >> so phil, how do you prepare for this? this is a big event for you, i know. >> yeah, well, we practice hard. i had last week off and went and saw butch harmon in las vegas, who's my swing instructor, and tried to get my golf swing down because ball strikingwise this is one of the most demanding golf courses that we play on tour, yet it's one of the most fun courses that we play. and so i've been working on my game this last week and hopefully i'm ready, maria. >> i'm sure. you've got a lot of fans here at cnbc, phil, we're rooting you on from afar. bob, let me switch to you business for a moment and the economic environment. we're coming up to the first anniversary of the month really that changed wall street when lehman declared bankruptcy and of course it created some opportunities for your firm. how does it feel for you out
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there today? >> you know, it's hard to believe it's a year later, but i think in terms of barclays capital and the acquisition of the lehman brothers business in the u.s., maria, i've said it before. it's been absolutely transformational. we have a big deep client franchise in the u.s. that we just didn't have before and was going to be quite difficult to get to this level arrangically if we ever could. in equities business is very strong. in advisories business is very strong. but most importantly, we got the businesses integrated together and operating as one firm by the 1st of january. so it's been eight months of operating as an integrated firm, and with that transformation is his -- on the business side as well, on the revenue side as well as on the client side. we certainly feel good almost a year on, and i think from a financial markets point of view the financial markets have a lot more confidence today than they had a year ago as well.
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>> yeah, no doubt about it. this market has been quite strong. you know, i wonder, getting phil's comments in here, because it really was a moment in time, bob and phil, that really shook the world, wasn't it? phil, from your standpoint did you get a sense of sort of what was going on in the financial services industry? do you think that was just insular there, or do you think this was something this was impacting a much broader group of people and certainly industry? any impact from where you sit? >> well, it affected everybody. but what was interesting about that was while all of these financial institutions were treading to stay afloat you have a company like barclays who required no national funding and was able to raise capital and take advantage of the opportunities that were out there. hence the lehman acquisition, which has gotten barclays into the nuts areas they never would have been able to get involved in before this opportunity arose. and so those are the companies that i'm proud to be associated with, those that are taking advantage of the opportunities that are out there rather than just struggling to get through. >> so one of the key reasons
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that you're obviously sponsor and sort of partnering, rather, with barclays. bob, do you think at this point that the financial upset is behind us, or are we still sort of in shaky waters, bob? what do you think? >> well, you know, it's always hard to say. we clearly felt that financial stocks had bottomed toward the end of the first quarter. we talked about that. but there's still challenges ahead. i think for smfts larger banks although they're making great progress we all have to continue to work down our legacy assets and i think there's still issues around the smaller regional banks both in the u.s. and across europe. but with a much stronger fundamentals and a much stronger foundation and a lot more confidence in the financial markets. i do think we're past the worst, but that doesn't mean we don't still have challenges ahead. >> so what do you think in terms of the capital raising environment, in terms of the credit markets? you know, bob, a lot of people are sort of looking out to 2010
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and wonder field goal we're going to see an upset in commercial real estate. what are your thoughts? >> well, as we've gone through this year, we've continually been surprised by how much business we're doing with our clients. and we're doing more business with more clients, and i actually think that in this environment the relationships between an organization like barclays or barclays capital and the big clients, whether they're corporate governments, financial institutions, institutional investors, are more strategic than they've ever been before. the business environment is actually quite positive, and i think we've seen it, certainly in our case, with revenues in the first half of this year that are almost double any similar period we've had before. the fundamentals are actually quite strong. >> how would you grade the handling out of washington at this point, bob? can you give us a sense of your expectations of the results of what the obama administration has done, certainly the federal
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reserve, really creative, extraordinary efforts? how have they handled things? >> well, i think two things step out, i would comment on. or i think first of all president obama's reappointment of secretary bernanke, chairman bernanke, excuse me, was a strong, bold decision, bipartisan, and i think it's certainly, by doing it early, took uncertainty out of the market, and i think it was absolutely the right choice. i think he's the right man for the job. i think from -- you know, what's the change with president obama? the one that strikes me, both from a business point of view of running global businesses but also from a personal point of view where most of the last 20 years i've lived outside of the united states, is he has made a material impact on the perception of america and americans by the way he deals with people in other countries around the world. so i think it's been a very,
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very positive impact he's had on the perception of america and americans abroad. >> we've got paul jacobs the ceo of qualcomm here today. we were talking about western europe and we're seeing somewhat of a slow environment there even if asia looks good and the u.s. is sort of stabilizing. you're also all over the world. what can you tell us about europe? should we be reading into the positive gdp we saw oust france and germany? some people are skeptical about that. what is your view right now? >> i think it's probably surprised most of us. i think the positive industrial production as early as may in both france and germany and then what looks like is gdp growth around 3% going into the third quarter, these numbers are stronger than we were expecting. you know, i do think most of us are pleasantly surprised by that, and we'll have to see how it goes. but you know, on the back of a much stronger recovery in china than probably any of us would have expected in the first half of this year, the way that
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that's helped the recovery of the stronger asian nations, now continental europe recovering probably a bit more strongly than we would have thought, i think when we look back in the u.s. we'll see sometime around june or july we move to positive growth in the u.s. economy as well. we won't know for sure until we see third quarter figures. but that would be our expectation. >> all right. great to talk with you both. and i know you're getting ready for the tournament. you're looking good on the course. final question here for phil. phil, we talked all the time about business. how would you characterize his golf game? >> he's got a lot of game. he had some good shots, maria. he hit some net birdies for us, and we only lost by two shots, which is a very close margin. it's not like our partners gave us much help, huh? but we had a good day. now, maria, let me ask you this. are you going to be out here this weekend? because we'd like to host you here. >> oh. well, i'm hoping to get there. we'll see about that. i will let you know.
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but thank you very much. that's a great honor for me. i appreciate that. >> that is a nice way of saying she's busy. thank you, maria. >> believe me, it would be my honor. first time you've caught me off guard. i would love to. thank you very much, both of you gentlemen. have a great tournament. we appreciate you spending the time with us today. >> thanks, maria. >> we'll see you soon. bob diamond, phil mickelson joining us. meantime, qualcomm taking aim at the computer market, taking on intel in the process. ceo paul jacobs is with us, telling us his growth strategy. we'll be right back. some people buy a car based on the deal they get.
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for those people who don't really know exactly how more -- how much more advanced 3g is than 2g, give me a sense of what that means, 3g. >> so it's like going from a slow speed dial-up modem to a high-speed cable modem. you're getting a megabit per second or more on a 3g network, which means the internet comes up much faster, multimedia comes down to your device much faster and all those kinds of things. >> and the big thing is emerging markets in terms of the penetration, right? give me the penetration of smart phones right now. >> so we think in about two years we're going to see 25% of the market be smartphones in terms of shipments. and we're talking right now it's over a billion units a year. so that's a lot of smartphones. >> now, this is largely a consumer product, right? so what can you tell us as far as what the consumer is doing right now? because even though, yeah, i agree this is a huge trend and you've got smartphones in terms of penetration around the world, people aren't spending a lot of
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money right now, right? >> no, actually we are seeing people buy up. so the trend is you either have developed markets where the smartphones are being purchased or you have emerging markets where very, very inexpensive phones are being purchased for, say, rural china and so you see actually both things happening in the world. what are people doing with it? they're doing things like watching youtube videos, which is actually swamping the carriers' networks with that much data. >> that's the thing. some people feel like there's so much sort of demand and pressure on the network that they're not able to access things like that. i mean, youtube is a big contributor, isn't it? >> yeah, it is. so one of the things we've done is actually build a mobile tv service which uses a different spectrum, it uses broadcasting to get cnbc, for example, down to your cell phone. and that's actually been launched around the united states. >> you've got other uses as well which i find fascinating for the very smart and fast chips. it's not just technology. >> that's right. so we're putting it into all sorts of things. we're putting it into health care. we're putting it into smart
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grid. phones are going into thermostats. they're going into electric vehicles. so a whole bunch of different applications. because these things need to be networked. >> so does this change your customer base? >> it adds to our customer base. we're working with traditional telecom manufacturers but now we're also working with laptop manufacturers, working with industrial equipment manufacturers, working with car manufacturers. >> so the biggest two trends right now for your company and for the industry, mobility and emerging markets. >> yeah. and i say also this very high-end move to smartphones. >> and we didn't get in the other uses whether it's health care and energy grids. really fascinating. we're going to talk more about that and we're going to bring on the program todd bradley from hewlett-packard to talk a little about that as well. we're going to look within technology as well as health care coming up on the program. up next here on "the closing bell" the telecom sector has greatly underperformed the s&p 500, actually. find out if telecom can dial up a comeback when we come right
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back. take a look at the year-to-date charts. back in a moment. 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. gun it, mick. (announcer) sign up today and get a netbook for $199.99 after mail-in rebate. with built-in access to the nation's fastest 3g network. only from at&t.
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time for the "fast money" final call. telecom sector has been underperforming the s&p. is it s. there room for a comeback? is this the time for investors to get in on the group?
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here with some answers carter worth chief market technician at oppenheimer asset management inc. always great to see you, carter. what are you looking at today? >> sure. obviously, the big debate is the market overall. a very substantial move. and to some extent as we all well know, small cap has outperformed mid-cap and mid-cap has outperformed large. at what point are the laggards, or so-called defensive stocks likely to have some participation? in a very defensive group, telecom, we like it here. one, it's starting to show the early signs of catching up with the market bottoming out formations. but most importantly its underperformance is fairly extreme. s&p up 13%, 14% year to date. the sector down 5% or 6%. you're talking about 2,000 base points of underperformance. and then of course the kicker, these are nice yield instruments in the con tx of fairly low yield environment, which is specifically this. you for the first time in almost 15 years, you have a yield differential of three times that
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of the s&p 37. >> that's what i was going to say next, you've got a nice dividend yield, not just s&p but treasury when you look at the return. >> just from comparable instruments you're talking about a 6% yield on the sector versus a 2% dividend yield for the s&p. again, charts that are starting to show the signs of bottoming out and a period of such relative underperformance to suggest that this is the time to capture some gains and high beta trades and redeploy back into this part of the market. >> all right. well, we'll look for that. carter, we'll see you on "fast money." thanks so much. we'll see you soon. coming up on "fast money" tonight, rick santelli on the beat going to head to head with bill fleckenstein on how to trade the new bernanke era. plus so, bad they're good. is the rally of low quality stocks a bad sign for the market? rick and the traders are live 5:00 right after "the closing bell." meanwhile, we've got about 20 minutes before the closing bell sounds for the day, the dow jones industrial average down just about ten points. we've got really big moves in a handful of home builders today, off 10% on half nainia, big moves on lennar.
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also dollar tree. that stock is higher by about 5% right now. nasdaq right now is down by a fraction. we're talking about smartphones and netbooks. the netbook market, smartphone market's red hot right now. what's next in the wireless world? hp executive vice president todd bradley will be with us, joining paul jacobs and myself with more on that. after the bell high yield bonds are up more than 30% on the year. sweet returns. can they keep the outperformance going? we've got some answers. 4:00 p.m. eastern on "closing bell." 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... ♪ there's no travel restrictions... we could leave tomorrow. we can't use them for a vacation. you can use the points for just about anything. i know... ♪ the way you look tonight ♪ chase what matters. get your new chase sapphire card at chase.com/sapphire. finally, good news for people with type 2
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welcome back. internet users around the world cutting the cord. accessing the internet increasingly through mobile devices. here in the united states market research website emarketer predicts mobile internet will be used by 43% of the population by 2013. it's a major opportunity for wireless technology companies, and they could have far-reaching effects. not only for consumers but also for the health care industry. joining us now to talk about that is dr. eric topol chief academic officer at scripps health along with tom bradley
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executive vice president for the personal systems group at hewlett-packard. and of course my guest host for the hour, paul jacobs with me, ceo of qualcomm. gentlemen, great to have you on the program. thanks so much for joining us. >> thanks, maria, it's great to be here. topol, let me begin this with you. give me your sense of the potential growth in terms of the smart and fast chips and how it might affect your industry, health care. >> sure. hi, maria and paul. this is an extraordinary time in medicine going forward. and just as smartphones and e-readers changed the way we communicate and read, wireless sensors, really ingenious sensors, are going to change the way medicine goes forward and across all medical disciplines it's really an exceptional opportunity to use for remote monitoring, things like heart failure, heart airrith mias, depression, obesity, and sleep disorders. it just goes on and on. >> how does that work, paul? the chip goes where in terms of monitoring a person? >> so what's going to happen is we're going to build sensors
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that will have a radio link in it that will actually talk to your cell phone and the cell phone will then talk back to a monitoring center. i liken it to the fact that when you have your cell phone with you you can feel like you're connected to your friends and family all the time but you're not necessarily talking to them, you just know you could. same thing will be true with your doctor. your doctor could be looking over you without having to monitor you 100% of the time because it's happening through your cell phone and a wireless sensor. >> that's pretty unbelievable. dr. topol, i guess there are some cases where people have not taken care of themselves and recognized there was a problem and then maybe it was too late. having this regular monitoring obviously changes that. >> it changes everything. the ability to monitor continuously across all the different parameters is something that's quite extraordinary. it really has the potential to change the way we view hospitals, outpatient visits. it's a sea change that could be coming in medicine. >> and what about you, todd? give us a sense of the consumer wireless world right here. obviously, the smart chip, the
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advanced technology has changed your world as well, correct? >> i think it's continuing to change our world. and i think at hewlett-packard we're driving a lot of that change, maria. you and i have talked a lot, and obviously paul and i have talked a lot about how the world's now moved from being mobile to being connected. and that affects us broadly across our business from how people access information, how they communicate, how they keep in touch, frankly how they work. and i think as we look at the next generation of products, be they smart devices in health care, be they basic communication devices for consumers, be they the way you share media, connectivity will be a huge driver to growth. >> todd, we're working a lot on different technologies to provide a very compelling end user experience. tell me what you think about what it's going to be in the next, say, ten years. >> well, we are working closely
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with paul and across our ecosystem of what those next sets of products are. you know, be they the wirelessly enabled slates that are just simple tablets that allow you to communicate, communicate in video. the flow television product that paul talked about earlier i think will revolutionize the way people use their pcs more aggressively. now, when we look at the market dynamics right now, we see great opportunities. the world has installed basically a billion pc users right now. and i think this connectivity, these capabilities we'll be able to connect to, will drive that to about a billion five by 2012. and i would certainly agree with paul's points on the emerging markets. as we look at china and india, frankly latin america, and the opportunities to aggressively kind of stair-step embedded technology with new wireless
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products, it's just an enormous opportunity for the industry and one that hewlett-packard will take, you know, aggressive advantage of. >> what about electronic record keeping in the medical community, dr. topol? obviously, we've been talking about this for a long time. i don't understand why we haven't seen this have more penetration. it seems so obvious that you want all of your information on a chip as opposed to all of these files at your doctor's office. but it's not as penetrated as i would have expected at this point. >> it's a great point, maria. the problem with electronic records is it's like the tower of babel trying to get all the different things to talk, hospitals and clinics. this is a different type of health information technology. and just as you were pointing out, the ability to track, you know, whether it's blood sugar or blood pressure, any of these parameters continuously, for that individual patient can make an enormous ditches independent of whatever we have in electronic records. >> and the cell phone ace very personal device.
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we think with pierls health care you're going to be able to personalize your treatment as well. what do you think about that, dr. topol? >> exactly. there's nothing more beloved than one's mobile phone in terms of this is a consumer-driven movement that's likely to really take hold. when people are empowered using their mobile phones to monitor such things as blood pressure, calories taken in or out, their heart rhythm, all these things pertinent to that individual, that's why this can have such a sweeping, accelerated affect in the medical world. >> todd, we are talking about when you talk about these kinds of chips and these kinds of products, i wanted to ask you about netbooks in particular. we're talking about a consumer business. how much has this economic slowdown sort of put a wrench in things in terms of expectations from your standpoint? >> i think we've been pretty clear at hp that while we aggressively positioned
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ourselves to work through this downturn, you know, we've seen it as an enormous opportunity to really prepare for future growth. if you look at historically, i think some of the best innovations in history have come out of difficult economic times. dupont invented nylon in the depression. bill gates and paul allen created microsoft in 1975. we've really worked hard to position ourselves to be in the lead as the markets recover. >> that's a great point. >> you heard mark say a few weeks ago in our view things have stabilized and we've well prepared ourselves for the growth that's in front of us. and i think today's discussion with paul and dr. topol is a great example of how we have collectively with our partners looked at what are the next big drivers of growth. and how do we best prepare both geographically and technically you to take advantage of that. >> so i know you're traveling a
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lot, todd. and paul talked about china and the asian region, really. seeing tremendous growth. tell me what it's like on the ground there right now. >> well, paul and i were both in china a few weeks ago talking to various partners around asia. and i think it's fair to say that with the investment we hewlett-packard made in china, not just in infrastructure but in people, in products, in really working with the central government to move into western china, we've had pretty good growth. >> i would have to say we were pretty impressed by the kind of infrastructure that was being built out there. when hewlett-packard is working with partners to do some manufacturing there, the sort of support that they got out of the chinese government, which shows the kind of investment chienas making in order to stimulate its economy as well. >> and i'm really pumped up about this whole health care area in terms of one more piece
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of the growth story. dr. topol, what changes the situation? have we seen the kind of innovation you'd like to see come out of, for example, the health care debate? right now everyone's talking about health care reform. you don't hear a lot of talk about technology, do you? >> no. actually, it's kind of amazing. it's really discounted the power of innovation here. and i don't think we've ever seen such high density in terms of wireless medical innovation like this. it's a whole world story. it's not just the u.s. once you have this data over the web you can help the care of patients virtually anywhere. it's been missing so far in the discussion. at the institute here we're trying to validate trials of the new technology, these innovations, to prove that they actually reduce cost and improve better outcomes. and that's really the story going forward. >> great conversation, gentlemen. we so appreciate it. todd bradley, dr. eric topol, two superstars in the business. and by the way, dr. topol, gq
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calling you one of 11 rock stars of science. congratulations on that. >> well, thank you. >> we've got some hot shots on the show today. gentlemen, thank you. we'll see you soon. thanks very much. and as we wrap it up here with you, paul, i want to thank you for being my guest host today. really you added a lot of insight. particularly at a time when the technology stocks are up so much. your stock, for example, up 10% in three months, 38% in six months. 30% for the year. what changes the situation? what red flags do we need to focus on that says you know, what we're seeing a reversal here? >> here's the thing. the effect industry's up because we're innovating in the tech industry and that's creating value. what we need to be very careful about is damaging that in the united states in particular through overregulation by the government, through immigration policy that doesn't allow the best and the brightest to stay in the united states, through poor education policies. we need to fix those things in the united states to continue to make sure that that train continues to run.
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>> are the policies that are coming out of washington threatening that? >> i think we have some questions, and we're certainly keeping on top of that to make sure the taxation policies are done correctly. certainly immigration is something that's been very, very slow and worrisome. >> paul jacobs is the ceo of qualcomm, joining us all for the hour on "closing bell," and we appreciate your time. up next, under the radar stocks. closing bell ten minutes away. find out why share of home decor company kirkland is up 8%. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 anything that makes trading easier. tdd#: 1-800-345-2550 i want to be right in the middle of the action-- tdd#: 1-800-345-2550 you know-- i have to see what's going on. tdd#: 1-800-345-2550 and when i pull the trigger... tdd#: 1-800-345-2550 ...i've got to get the best price out there. tdd#: 1-800-345-2550 (announcer) try the new schwab.com tdd#: 1-800-345-2550 for yourself. tdd#: 1-800-345-2550 call 1-888-4schwab tdd#: 1-800-345-2550 or visit schwab.com/trader today. tdd#: 1-800-345-2550 'course a trade doesn't always work out my way. tdd#: 1-800-345-2550 but when it does... tdd#: 1-800-345-2550 ...man... do i love that feeling.
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welcome back. under the radar we go. let's take a look at those stocks under the radar. security hardware and software maker blue coat systems swinging to a $4 million first quarter profit. a year ago it lost 6 million. excluding charges it beat wall street estimates because of a 13% increase in sales. the stock is up 13% today. home accessories retailer kirkland's earned $3 million in the second quarter. posted a $2 million loss a year ago because of the falling expenses. the company also raised its full-year outlook. got the closing countdown next. we've got the closing bell coming with the dow industrials up now six points. after the bell private equity firms holding on to a lot of capital right now. we'll see if another p/e boom is on the horizon or are these
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