experience and our knowledge and our intellectual capital is far superior to those who are younger. so most companies need to understand that if we want to retain that asset, keep those employees working longer, we're going to have to make modifications to the workplace that will accommodate for these physical and physiological deg rah daigsz that occur. >> really quickly, you said people over 45, i think it was that stat, twice as many are highly engaged versus those under 30, i believe it was. how do you define someone who's highly engaged? >> well, it all really depends on the culture. if you have a work culture there at a company that is one that says we want to focus on our younger employees, certainly the older employees are going to be naturally more disenfranchised or disengaged, but if you relz that their assets that they bring to the table are as valuable as the young they will be more involved. >> lance perry, thank you so much for joining us. we appreciate it. >> you bet. bye-bye. >> real quick let's take a look at the market here before we go. on the day we're up 44 points but that doesn't really tell the

whole story because we started down pretty significantly on the day. we've had i atriple-digit snapback. we were above 9,600 a short time ago. tjx, which is t.j. maxx, hitting a 52-week high. i'm melissa francis in for erin burnett. i'll see you here tomorrow as well. up next is "the closing bell" with maria bartiromo. >> announcer: this is cnbc.com "news now." the treasury -- sold $28 billion in seven-year notes. a&e networks is buying lifetime entertainment for an undisclosed amount. the deal gives nbc universal a partner with disney and hearse in a&e, a stake in lifetime which is jointly owned by its two partners. sanford financial cfo james davis has pleaded guilty to three felony counts for his role in the firm's alleged ponzi scheme. that's cnbc.com "news now." first in business worldwide. i'm julia boorstin.

and there's a live picture of the floor of the new york stock exchange, entering the final stretch on a thursday on wall street. the market picking up some steam here as we approach the final stretch. up in the double digits. reversing an earlier sell-off. hi, everybody, welcome to "the closing bell." i'm maria bartiromo on the floor of the new york stock exchange. it's a light summer day in terms of volume down here, but things have reversed once again. we had a pretty good sell-off earlier on. we did good the gdp report out today. didn't give us any information. still a contraction in the economy of about 1%. mixed performances within the major sectors, but still the dow jones industrial average up about 50 points. let me bring in bob pisani, our eye on the floor of the nyse today. bob, what a reversal. >> yeah. and there are really two parts of this rally. we had an earlier part of the day led by financials and then a little later about an hour ago we saw the dollar weaken some of those commodities and industrial stocks really started moving up. all right it's light volume but still it's a perfectly valid move on the up side here, folks. let's take a look at some of the big names going on here. first aig. and of course a lot of discussion. it's a pretty simple story folks. late in the day american international group yesterday, there were rumors floating

around that perhaps mr. greenberg would be invited back at this point. that was just a rumor but then late in the day we did get some confirmation from reuters that mr. benmosche, who is the ceo of aig, was talking to mr. greenbe greenberg. the stock moved up toward the close and again here a fairly javy volume well north of 100 million shares. citigroup, what can you say about citigroup? ever since we had that move away from the preferred shares and into the common shares, they converted the preferred into common there's been big volume. once again we're going to do over 1 billion shares in citigroup. yes, a lot of this is momentum trading. of course it is. nonetheless it's certainly important here because the stock has held up comfortably above $5. fannie mae and freddie mac also getting big volume today. that's the first part of the rally was in financials let's call them the high beta financials. the second part of the rally occurred around 1:30 eastern time when we saw the dollar suddenly just sort of fall off a cliff very slowly and around 2:00 eastern time notably move to the down side. there you see the dollar. that's just about 2:00 eastern time. as a result of that we saw a lot of the commodity names, particularly energy stocks,

which have been laggards ail week move toupt side. an example, and it's just one of all of them. murphy oil, for example, one of the big names in the oil field. all moved up as the dollar strengthened throughout the day. there are some outlying news items like the story about boeing. as boeing announced this morning that they expect the first flight of the 787 dreamliner by the end of 2009, first delivery fourth quarter of 2010, all the aerospace names, particularly the parts supplier around boeing. all moved up. sow see goodrich up. look at precision cast. a supplier for boeing. that stock up almost 9%. our team's covering the markets. nasdaq, nymex and the bond market. you know everybody. let's go to scott wapner standing by at the nasdaq. >> bob, thanks so much. holding on to positive territory here but it's going to be a fight to the finish for technology today because it's a virtually flat market but we have seen certainly some improvement within large cap technology stocks, which just about an hour and a half ago

were all in negative territory. at least by 1% or so. but now apple has fought its way back positive. research in motion, though, still negative, is well off its lows of the day. the stock was off by about 2 1/2%. now it's down about 1 2/3%. but google's down a half perc t percent. cisco's still a little weak. microsoft has gone positive. and that has helped the overall market fight back as well. as has dell. the stock's up just shy of a half percent. reports earnings after the bell today. it's going to be a closely watched report for any commentary about business spending on new computers. remember, there's the thought that coming out of this recovery we appear to be in the very early stages of that businesses are going to spend on technology, new equipment and things like that. chip stocks, meantime, fighting back as well. the semiconductor index is still a bit negative, down a tenth of a percent. within that, negotiation intel has gone positive. an disc is fighting back. another stock is tivo, stock off the worst levels of the day, still down 3%, filing that patent suit against at&t verizon

for that so-called time warping technology. it's really about dvrs. that's what it boils down to. nasdaq just ticking negative, but that is the story in terms of what technology is doing today. let's go to matt nesto down at the nymex. >> hey, scott, thanks so much. one of the big questions here is why. we know the dollar weakened but there's not a clear indication of why it happened. i can tell you what happened when it did. we did see the energy markets and the equity markets taking off. energy traders here have been looking over at the dow all day long, and we're trading almost in line with it. so it looks like the equity belief in the recovery story is at least leading energy markets for now. but as far as belief goes, people's belief in this rally is as tentative and as queasy, if you will, as it is in the strength and the veracity of this recovery. but the truth is nobody wants to get in the way of clearly a momentum trade. if you look at the intraday swing in the price of oil, snapping a three-day losing streak and having almost a $3 intraday swing from the low of the day, which breached 70 and

took us back up to as i said almost $3 on the session, finishing down on the nymex here today at 72.62, a 1 1/2% gain on the session. we also saw heating oil moving higher on the trade as well as gasoline. but the big loser and the lone loser here today is going to be natural gas. we had the weekly inventory data coming out. it was in line with expectations, but it was, again, higher and it's pointing to a build in inventories and a level that's up about 20% from a year ago. rick santelli 20:00% increase in inventories during a recession never a good thing. >> no, never a good thing. and you know what, matt, take i'm talking with the boys in chicago in the pits, and they're telling me who's leading here. they're debating. is it the weak dollar giving equity strength? is the equity strength giving to the weak dollar argument? i can't tell you that. but what i can say is bob showed you the dollar index, now look at one of the big components, and there's news regarding the yen. this is the dollar versus the

yen. it is off a pretty substantial amount. there's talk that maybe a positive for the yen in the bigger picture, not breaking news type scenario but they may be in a mode to repatriate some of their overseas yen profits. we had a similar program in the states a couple years back. you look at the next chart. the s&p. obviously this linkage is strong. many believe it's an equity leading. seven-year. it was a great auction but not a huge amount of volatility in the fixed income markets. maria, back to you. >> all right, rick, thanks very much. and joining bob and me on the floor right now to talk more about investing and really what's ahead, alec young is with us. he of course is equity strategist with standard & poor's along with jordan kotick, national strategist with national securities and author of the new book "the magnet method of investing." what's your method of investing in an environment where we've got stocks up some 50% from the bottom and a lot of confusing

signals as part of an economic recovery? >> maria, i think it's actually easy. tune out the negative, tune out the bad, tune out the average even. forget about diversification. there's always in every market, in every environment the companies blowing out revenue growth. not making it on earnings costs or cost cutting. margin acceleration and of course cash flow. we call them magnet stocks. the small, mid-cap market. this is not a recovery. i think it's already phase two of a bull market. so focus on individual stocks and don't get caught in the bad news because it's always bad news. >> sow just have to be a selective stock picker then. >> exactly. >> speaking of margin acceleration, retailers, there's a good exam pl. cost cutting, lower inventory overall here. they're seeing margin acceleration. they've moved aggressively. they don't have any top line growth. are you saying that's not important now? >> no, i'm not saying that. i bleeb you have to ha i believe you have to have all of them. that's what i mean by ultraselective. the retailers got hammered because they believed there was

no tomorrow. the consumer would never buy again. a lot of that is relief over consumerism's going to happen. none of the retailers show up on my model, interestingly, none of them. it's really a matter of ultraselectivity, not just going with momentum. >> it's interesting to look at the signals of the market. and alec, you just mentioned something during the commercial break in how we're seeing a real divergence in the stock market and what's going on in the bond market, particularly as it relates to ten-year yields, correct? >> absolutely. >> talk to us about that. >> we're seeing obviously a lot of on the mptimism in the stock. i took a look at bond yields not only in the u.s. but germany, japan, canada, and we're seeing long-term interest rates head down. so the bond market is telling us they're worried about this recovery. so you know, i'm not necessarily smart enough to know whether it's the stock market or the bond market who's got it right, but i do know that both can't be right. and i probably wouldn't be as sanguine as jordan about this market going forward. i -- >> so what do you do? >> i think you want to look more at quality, at yields.

dial the risks back a little. i think wall street is kind of littered with the bodies of people that have prematurely called a peak to this rally. i'm not going to join that list. what i would say is i think you may want to stay in the market but dial back that risk a little bit. >> were you astonished at how many -- i had never seen a market where the bulls and the bears want the stock market to go down at the same time. bulls want a 10% correction so they can buy lower. the bears want a correction so they can feel vindicated at least. and nobody's getting it. we were supposed to get a correction in august, and we're up 6% for the month, almost 6% for the month. >> i think one of the problems, so many people have missed the rally that as soon as we get any pullback, even this bhoerng had half a percent pull barks boom, they're in buying. sometimes when everybody's looking for a correction it can actually be bullish at least for a little while. >> i also think people are waiting, though, for september to see some more evidence in terms of the economy and really the legs of this economic recovery. >> absolutely. >> we are churning on light volume still. let's not get too excited 30

points up in the. b but we've had light volume today. if we had churning on huge volume. remember, we have three stocks with 25% of the volume down here. if we had churning on huge volume i'd say i'm getting a little worried here. >> it's okay, bob, if we digest the up move already. people look and think it's a start move. we're not even 50% retraced from where the top of the market really was. so i think what you have to recognize, it's okay to go in baby steps now, churn for a little while and build a bit of a base. but i'll tell you, my opinion is this is only the first stage of the bull market. the second stage comes with a little consumer confidence. i'm not going to lose my job. prices are stabilizing and my home may be even picking up a little bit. so there was a historic a cash on the sidelines. the money just started to move in. and just ask a retail investor if he's ready to move back in. they're still sitting on cash. they don't trust the market. they don't trust institutions yet. >> what do you expect this

summer? obviously summer's winding down, people are taking some vacations, we see that in the volume numbers. what do you expect? >> i think probably because of the reasons we've been talking about, probably more of the same. so many people have missed out it's tough to get any momentum on the down side. any dips are immediately bought aggressively. but i think for the reasons i talked about the hurdle rate goes up a little as we move through the year. we would dial back the risk. and one way to do that, we just launched coverage on etfs at equity research. the great thing about etfs, they let retail investors into things like corporate bands, whether high-yield, investment grade. >> currencies too? >> we're only covering equity etfs, i should mention, but regardless, we think it's a great way to kind of broaden your horizons. and given what's going on in the market right now, i think looking beyond purely equities is probably a good move. >> we'd like to see more of that research. that's terrific to know. because our viewers certainly are very interested in that. thanks very much. al alec, jordan, always good to see you.

we'll see you soon. >> 48 minutes to go before the closing bell. two stages in this rally. earlier in the day financials led. then about an hour and a half we saw signs of commodities as well as strength in industrials. nasdaq also trying to get into positive territory. >> we're going to look at the charts next, bob. the kotick tick by tick as they say. we'll look at the bank index, check out whether this index is signaling an extended market rally or whether a correction is on the horizon. >> plus the tech sector's been a big driver behind the historic rally for the past six months. what's up next for tech, what companies are going to lead the way? we'll give you some answers coming up. >> then after the bell cnbc's your home for earnings central, intimate analysis and reaction to dell's quarter. that's second quarter results, 4:00 p.m. eastern. >> but first the most active stocks. over 1 billion shares trading, changing hands once again today. citigroup. um bill-- why is dick butkus here?

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welcome back, everybody. certain financial stocks have been soaring in recent days, particularly those involved with the government. our on-air editor charlie gasparino joins us now with

more. and charlie, yeah, these stocks are hard to borrow in some cases. but other people are saying there's actually more fundamental stories going on. >> a lot of people are saying doug kass, i spoke to earlier, saying there is actually a long story on aig, fannie, freddie, citi. those are kind of the four problem names. and the four names, as you know, bob, that are spiking dramatically lately in trading and in price. but if you look at the charts on borrowing, on how hard it is to borrow, remember what i short sale-s you borrow shares, right? you sell them. you pay them back later, hopefully when the price is declined, you make the difference. right? that's why you make money going short when prices decline. so you have to borrow the shares and you have to pay something. when you see those types of rates, the negative rates of 30%, 5%, and 20%, 5% for fannie mae, 20% for freddie mac, 30% for aig, what you're talking about is very onerous borrowing rates. it's hard to borrow. that means there's a short squeeze in those stocks.

that's why you're seeing a pop, at least in part-n large part-n those stocks because you have shorts covering because they're not -- they're basically covering their shorts by buying into the market, getting those shorts back, repaying their borrowing, and that's causing the dramatic rise in the stock. and because there's a squeeze, it's hard to borrow, that makes that rise even more dramatic. now, citi, i believe, based on the evidence, bob, is a different story. what you have here, i believe, is less of a squeeze and more of a classic short covering because there is a bit going on in the p market.p you saw the news in the "new york post" today, about john paulson, the hedge fund manager, who called the subprime and banking crisis. he's now, according to the "post," going long citi. you now see a long story developing on citi. and if you look at the chart, i think we have a chart on the borrowing rates for citigroup, they appear very favorable. they basically are in line with

borrowing rates to borrow shares of goldman sachs. so that's what you're seeing in citigroup. tale of two different types of stocks. i mean, and this is important for small investors, bob, because everybody's wondering, you know, should i be investing in aig? this is kind of a bellwether that maybe things are getting better, dramatically better fast. and i would say hold your horses, the run-up in aig, in fannie and freddie is generally a short squeeze because the supply of that stock to cover your short is so thin or almost non-existent that anytime you buy it a little bit it's going to ramp up dramatically. citi is a different story, although i would be cautious with citigroup, too. this is a bank that is obviously not in the throes of implosion right now. vikram pandit stabilized things. let me make this point, bob. citigroup has ties to the consumer. and if we have a very flat recovery, which we have unemployment remaining at 9 1/2% per year, citigroup is not going to make a lot of money. >> yeah. let me just go back to aig. there may be something a little more fundamental going on, and i don't want to push it too far,

but that stock split, that 1 for 20 occurred i think on july 1st. so the stock's been hard to borrow for a couple months now. and yes, it's moved recently, but they did announce earnings that were a little better than expected. that was just about a week ago. then benmosche came out, it was the end of last week, and said he thought there was a good chance they actually would be able to repay all of this debt. and you know the numbers are huge, 130 billion or something on those levels, that they still owe out there. and then of course we heard yesterday about the fact that he is in fact talking to hank greenberg. now, what factor, what play does greenberg get -- >> listen, i've known hank for a long time. i've reported on him. i wrote a pretty long profile of him in "forbes" that sort of detailed his concern. this was in 2007. his concerns for the company. he actually called -- in many respects called the company's implosion, saying it didn't have the management. hank's a smart guy, but i don't think you buy this stock just because hank greenberg is talking to him. this is a fundamentally -- this is a company with a lot of fundamental problems. you know, huge ties to, you

know, toxic mortgages, big problems. and i think if you're -- i'm just giving you caution. i'm just saying listen, there is another reason why these stocks are flying, particularly the three i mentions, fannie, freddie, aig. and it's more of a technical factor than it is a real, real bet that these are companies coming back anytime soon. citigroup, this is a wild card. and i would be cautious with them too, because they're a bank and they're tied to the consumer. and if you believe this is going to be a tepid recovery, which after all of this stimulus spending we still have 9 1/2% unemployment, we're thinking of spending another trillion dollars, you know, on health care and other stuff and that's going to lead to higher interest rates, i mean, you've got to be really careful of dealing with banks, you know, buying into banks. but i will say this. one other technical factor on citi, just to make my point even stronger, is that apparently because they're a $5 stock now you can borrow -- they're what's known as margin eligible. that means you can borrow on margin and buy the stock.

and you can buy the stock on margin, then more people are going to buy it. >> could we put up aig again? because our producer just told me that hank greenberg has said the rumors are around, and it's been on message boards, that he would -- >> he told us that on the air, bob. he told me that in an interview many, many months ago, that he wanted to get involved and he was considering putting together -- >> but you know, guys -- >> obviously, hank greenberg has a long history with aig and is -- has been incredibly intimate in terms of understanding the company -- >> let me ask you this -- >> he told us a long time ago. >> is he now coming back saying he wants to do it once again? >> no, he doesn't want to be the ceo again, charlie. >> he never wanted to be the ceo. see, here's the thing about hank. this was in my "forbes" article, which came out in november 2007. what hank wanted to dos with replace the management. he didn't want to run it. he wanted to replace the management, maybe have board members that he helped replace that would basically speak his

mind since he's such a big shareholder. and i think that's the question, does hank want a say in the running of the company? he clearly doesn't want to run it. why would he? he's got his own business right now. but he's so tied to the company, in many ways hank greenberg built aig. >> in all ways. >> in many ways. >> the key point is charlie, mr. greenberg has told us the stock moved up at the close yesterday. put up a chart of aig. it moved up on rumors on message boards that mr. greenberg perhaps was going to lead an investor group to go back and essentially take over aig. >> well, bob -- >> mr. greenberg has now said that's not true. i want to get that point out. >> he never said he wanted to take it over or run it. he basically wanted say in the management. maybe he likes these guys better than the old guys. i have not asked him that. but i will point out one other thing. if just a message board rumor takes that stock up the way it is, that's another sort of flag of caution on this stock. >> i would agree with that. charlie, thanks very much. maria? >> you know, bob, september has certainly been the cruellest

month for the market, and with september now approaching some investors wonder if the selling is approaching as well. we look at the charts for some answers and analysis on what the technicals tell us. jordan kotick is head of technical analysis with barclays. what can you tell us after this big rally, jordan? >> hi, maria. we're still bullish the market as we have been this month. we think the investor needs to think of september and october specifically like hurricane season. it doesn't mean a hurricane is going to hit but it does mean things are a little more vulnerable. so like the market it doesn't mean the market's going to collapse. we don't think it's going to. but september and october specifically we think another correction is coming. and if we look at some of the seasonality and we flip it to the first chart, what we've done is we've looked historically over five years, six years how did the markets do per month? and one of the things that stand out to us is right out here april where the markets generally bottomed as you can see, was a good time for the stock market. but without question the worst month of the year is september on markets around the world. so this is the historical

returns of the markets around the world, over 50 to 60 years. a lot of people think it's october. it's september. based on seasonality the market is vulnerable. given the run-up we've seen. to some kind of pullback over the next six to eight weeks. >> and so when you look at the seshlths th sectors that may very well drive that, do you have a sense of what it could be that's going to take the market back to the highs we've seen? >> yeah. and let's be clear, we're not looking for a collapse. we're looking for a correction. a lot of people are looking for a collapse. we don't agree. it's a correction. of the sectors the epicenter of all these issues is of course going to be the banking sector. when you look at the banking charts they still look okay but we're starting to see small cracks of vulnerability. what you can see, when the whole credit crisis began the banking sector was going higher but it was underperforming the market. that was a warning sign. now we're starting to see similar signs. we're seeing the banking sector go higher, but it's not outperforming the market like it used to be. that is a pretty important sign. that's a warning sign that the banking sector, while we still think it goes higher-s vulnerable to a correction.

and if banking has a correction in september, october, it looiky will take the rest of the markets with it. >> what are you looking at in terms of interest rates and currencies in that regard, jordan? one of our guests earlier mentioned the fact you're getting different signals if you're looking at the equity market versus the ten-year. >> it's amazing. we would respectfully disagree with that because what you see on the next chart are three different markets. the first one, right here, is sterling-yen, which is an fx market. the second one is the crude oil market. the third is one ten-year yields. and the takeaway from this is all these markets have gone up and now all these markets are stuck in a range. all these different markets are showing the exact same pattern. if you have all these markets showing the exact same pattern, it shows they're very tightly correlated. so if the stock market is going to have some vulnerability, fx, fixed income, commodities, these benchmarks will also show vulnerability. you want to wacht intermarket relationships to difference a sign the stock market is going

to go to the down side. it's one global trade throughout all these asset classes. we would argue a lot of these markets are very tightly correlated. >> all right, jordan, great to have you on as always. thanks so much. we'll see you later. jordan kotick with the latest there. we are 30 minutes away from the closing bell, and this market is higher, although way off the highs of the day. but then again, bob, off the lows as well. >> financials and later industrials led on the dollar drop. up next we're joined by tennis great venus williams. find out how she's preparing for the u.s. open tournament, how her clothing and interior design businesses are holding up in this economic environment. it will be a lot of fun to talk to her. 

welcome back. tennis season kicking off again. my favorite time of the year. that's for sure. it's unlikely we're going to see a rematch of what we saw at wimbledon. you remember the finals where the williams sisters went head to head, facing each other. venus and her sister serena ranked, get this, number three and number two in the world respectively. we are honored to have her with us right now. they were goingfor a possible semifinal. veen sus celebrating her 15th year on the u.s. open circuit by ringing the closing bell today, and venus, it is great to have you on the program. >> thanks for having me. >> thanks very much for joining us. so how are you feeling ahead of

the u.s. open? >> i'm so excited. i love this time of year, being in new york and playing, you know, possibly my best tennis of my life. >> how do you prepare to it? what are you doing beforehand? is there a risk of playing too much before? >> no. my whole life is a preparation for tennis. so it's all i know. and i'm used to the routine and used to getting ready for the open and think i've got it down. >> i think so too. >> how about the clothing line you? got a lot of businesses going. >> my clothing line, i wear it on the court. it's about being better than your best, it's one better than a 10. i have a lot of fun wearing tonight court and wearing actually graphics, which is kind of different for tennis. >> when we're watching you, and i mean certainly in wimbledon when you're facing off against your sister, you've got your family in the stands. your dad there is. it's got to be so tough for you. how does that feel, playing against your sister in the finals? >> you know, we're living our dream. >> i know. >> on the court. living our dreams off the court.

and that's really -- it's so exciting each and every day, we realize that it's a once-in-a-lifetime opportunity. >> what do you want to do as a complement to tennis? bob's mentioning all the business that's you're involved in. where else is your heart in terms of business? >> yeah. i actually have a design company called b style interiors. we're actually looking currently for a business development manager. you know, hey everyone, apply. but also, you know, a lot of great partners. doing a lot of great things with them. it's very exciting for me. >> why are all the female athletes that are prominent in tennis, for example? there's a few in golf but you don't hear about many. in basketball. but there's great female athletes playing basketball, there's great female athletes doing other things, soccer, for example, but you never hear about them. >> you know, i have a simple answer for you. it's because tennis is the best sport in the world. so of course everyone wants to watch. and that's not a biased opinion. >> of course. no self-serving answers here. >> not at all. >> but you and your sister

single-handedly revitalized the sport. that's for sure. thanks so much. >> thank you. >> we'll be watching you ring the closing bell, venus. and of course we'll be watching and you rooting you on on the court. >> thank you. >> thank you. venus williams joining us. >> dow jones industrial average just off the highs for the day here. important thing is two rallies, two separate rallies on the day, financials, and then the dollar drop helping commodities as well as industrials here. the nasdaq now just in negative territory here. >> we're going take a look at aig up next. once again, the stock has been on a tear. look at 47.86 with a 30% rally under way. stay with us for that story. why ford? why now?"

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welcome back, everybody. aig one of the hottest stocks on the s&p 500 today. but there's a real debate on whether that run can continue. and a battle over fundamentals versus technicals. my next guest says be careful. jared levy. he's the senior derivatives specialist at peak six investments. what do you think is going on here in the past couple of days? >> bob, i was listening to your guest a couple segments ago and he talked about a short squeeze. and that's part of what's happening. the fact the stock is hard to borrow plays a key role here. you can't get short shares. couple that with the fact the s.e.c. now mandates you can't naked short anything, and you have to cover those positions in

three to six days, that makes it even more difficult. the bottom line-s bob, i think there's a couple things working here. the short squeeze, yes, that's a big part of it. the second part is you've got a little bit of a fundamental long-term story here with their balance sheet. if you look at their assets, they've got $830 billion in assets. you know, who knows if those valuations are really going to be. but people are bet potentially that these assets, if they're marked higher, are going to mean a big gain for aig. >> well, there's a good point. it's not -- my point, and we were talking to charlie about this, is it may not just be a short squeeze going on. it may not be that simple here. if you look at the history of it, we had that stock split in the beginning of july, that 1 for 20 stock split. their earnings were better than expected. dham up on what was it, august 7th or 8th. >> august 7th. >> i believe so. it seas there the 9th but i think it was the 7th. mr. benmosche, who's the new ceo came out and said we might be able to repay all the federal debt, that was rather startling. most people assumed no chance for decades. and then we find out yesterday

mr. benmosche is indeed in talks with mr. greenberg, although i hope you heard this news, we just reported that mr. greenberg says there is no truth to some of those rumors that he was trying to lead a special group to go in and buy aig, that that is not true. >> i did hear that. i also want to add in on august 3rd they did not make their dividend payment to the u.s. government. but the beautiful part is those preferred shares, they're non-cumulative. in other words, they don't have to make up those payments. that's another positive for aig. they got a pretty sweet deal there in terms of the tarp fund. but here's the deal, bob. the stock's at 275-plus percent. as an options trader i try to be like a casino. i don't know where the roulette table's going to land. but if i'm going to play this thing for me in my own account i'm a little nervous going long. for the retail trader if they want to be greedy, if they feel like they missed the boat, they can go out and sell a put, something like the october 40 put, they get paid $6 to do that. they are obligating themselves to buy aig at 40 bucks, they are

giving themselves $6 to do it. it gives them a basis of $34. that's not bad considering the stock's trading at 50 bucks now. foote stock comes down $10 they'll still be in the green. the bottom line is whatever happens to aig there's going to be more volatility to come. they've given away 95 -- or reduced 95% of their float. when they did that 20 for 1 reverse stock split, 95% of their shares outstanding gone, which basically means more shares out there, much more volatility in the stock 37 so we're going to continue to see this. >> so we've got -- the bottom line here is they borrowed what, 180 billion -- the government gave them something on the order of $180 billion. they still owe billions of dollars. not that much. the real question is could this company ever actually repay that money, come out of its debt, and re-emerge in some real form as a true going concern? that's the fundamental question. >> that is. and if the stars align, bob, properly, maybe that could happen. obviously, they're looking to pay off a lot of this debt with the sale of their assets. the problem is right now the sale of the assets has been

slow, credit's tight. it's not the best place to be selling your assets or the best marketplace right now. if things change, that could also certainly change. but again, i'm a shorter-term window type trader. for the near term going to october if i was going to go long, and again, i say that very cautiously, i would do that by selling i put, take advantage of the volatility in this issue. >> mr. ben moerk indicated he wasn't in a hurry to sell some of the crown jewels including the asian life insurance unit as well as the aircraft leasing division. these are some of the most highly profitable divisions for the company. the question is how long can they wait before the government wants to get some return on their stment? there are a lot of unknowns. i don't even know how you would value this company right now given all the unknowns. >> it's impossible. and again, i'm not a fundamental guy. and if they default on the payments to the government the government has the right to go in and plant i think two seats on their board, which again creates another issue for aig. there are so many unknowns, bob, you know, for a guy like me, for

the average everyday retail trader it's very hard to valuate this thing long term. what we can do now is take advantage of the volatility or just stay away if you're uncomfortable with it. that's really it. >> that may be the best idea. unless you're a day trader and know how to get in and out very fast. thanks so much. coming up on "fast money" the traders break down all the after-hours action on dell, give you the best play for tomorrow, plus the gang talks to microsoft's xbox division about the company's price cuts and what it could mean for their bottom line. rick santelli is going to be live with the traders tonight at 5:00. >> 20 minutes before the closing bell sounds for the day, the dow jones industrial average up about 40 points right here. nasdaq was negative a little while ago, remains negative by a fraction. definitely technology a laggard today. >> the tech sector easily outperforming the broader market over the past six months. up next we'll discuss whether tech can keep moving higher and which names are the best bets. >> after the bell the impact of financial regulation reform. i'll be talking with the ceo of toronto dominion bank.

ed clark my guest. it's an exclusive unit view. stay with us at 4:00 p.m. eastern.

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welcome back. dell shares flat ahead of the pc maker's second quarter earnings report. c nshs's silicon valley chief jim goldman joins us now with a preview. jim, we're still at the highest levels for dell since september of last year. can it move forward? >> yeah, you've just got to wonder if this is sort of a buy on the rumor kind of rally. flat today but up 23% last quarter and another 10% since that quarter ended. that would indicate a fair amount of optimism headed into tonight's report. the question that will have to be answered, whether that optimism has got aechb head of itself. analysts looking for 23 cents a share on $13 billion in revenue. dell has been right in the netbook frenzy but while that's been good for sales razor-thin margins mean the trend has not been great for the bottom line. netbooks having a big effect on the entire tech sector but while rival hp has been able to tap an improving consumer sentiment in pcs better than 80% of dell's

sales come from corporate clients and as we know i.t. spending has been at a virtual standstill. those numbers just moments away. of course we'll have complete coverage and analysis coming up next hour p. >> jim, thanks so much. and let's get more on dell and the technology sector overall. i'm joined by david pearl co-chief investment officer of epoch investment partners along with rick mounirez at the motley fool. nice to have you on the program. david, i'm going to kick it off with you. what are you expecting? >> dell, whether it misses by some amount, is going to be driven by cost cutting, how much and how fast, rather than revenue growth in their case. it's a company that's lost market share overt years. there's been a move from desktop to laptop that it kind of missed. and so they're revamping the company, and there probably is a decent trade in the stock based on their getting their operations correct. but unless you see revenue growth, it's really urban a long-telorm buy and opportunities likely to see great revenue growth in this

quarter. >> rick, what about that market share loss? we're looking at dell having lost market share to hp. even what is it, acor. you're looking at a lot of competitors starting to come in, take their lunch, eat their lunch, even when we're talking about a long-term time frame at this point. this began when dell started to falter a couple of years ago. can they get it back? >> they don't have to get it back because the stock is trading so low at this point. i can tell you what's going to happen at the other end of the hour, at the other end of the closing bell, and that's revenue is going to be a little soft. they're saying 13 billion. i've read 12.6 billion. the only thing we know is the company said they have sequentially improved on 2.3 billion in the first quarter and that ways few weeks before the quarter ended. i think it's going to be somewhere around 12.4, 12.5, 12.6 billion at the most. they're show improvement on the bottom line. over the next two years it plans to cut $4 billion in annual costs. that's a lot of bread. analysts are expecting 23 cents a share in earnings.

forget about it. the analysts were r. asleep on this one. the company's going to earn 27, 28 cents at the earliest. >> but that's the point david's making, maybe they do beat on the bottom line. the fact is how do they get there, cost cutting, not necessarily end market demand. that's the point david just made. >> exactly. and the company, its revenues aren't going to come back in a while. the only steady part of dell's business right now has been government contracts, and a year from now that stuff's going to dry up too once people start realizing there's no money left in some of these states. so i think what you're looking at right now is a company that's going tore more of a revenue growth story and not an -- >> bottom line do i want to own this stock? david you don't own dell right? you sold it or you're not going to commit any money to it. >> the problem with dell like most of the tech stocks this quarter is the market has assumed an economic rebound that demand's going to increase and it's just not going to happen over at least the next six months if not the twelve months.

you really want to own a stock specifically where there is revenue growth opportunity that can then drive better margeins and profitability, things like apple, smaller company cybase because mobile applications are going. there are stock-specific stories, but i think a lot of the tech sector has moved too much and it's moved on inventory restocking and cost cutting. >> so you like other specific names. rick, what about you? would you commit new money to dell and if not where are the names you would be buying right now? >> yeah, i don't own dell personally but i like it at this level because i see everything that's happening right now, we're two months away from windows releasing vista -- i almost called it vista 2010. i'm not allowed to say vista with microsoft in the same sejts. we're about to see vista 7 come out and hopefully it's not vista 2010. once that comes out we'll start an upgrade cycle with consumers, which is about a quarter of dell's business, and mostly with companies, large and small business that's have held back. i think you're going to see an uptick in the next two quarters, and i think the earnings improvement if it comes in as i

think it will this afternoon you're going to be able to nibble in at dell before the bottom lierngs the bottom line's going to start coming up way before the top line does. >> broadly speaking, rick, this market is up big. technology, nasdaq year to date, and certainly from the march lows. is it justified? where else away from dell would you be putting money? >> i'd be putting in the money in the companies that have earned this rally, which aren't too many companies. a lot of tech companies haven't been growing in this environment. the companies thave, google, sailsforce.com, amazon, even open table. the companies that have taken something like the internet and used it as an advantage to save companies money or make things more efficient for diners or shoppers or enterprises. >> david, final word here. after the run-up we've seen what do you want to sell? what do i avoid? >> i do think you want to take profits in most of the companies that have had the biggest moves, the economic cyclicals, including a lot of tech, but again, there are stock-specific stories. if you like dell for the reasons we just talked about you should love microsoft because they're selling a high margin product, windows, and that's going to

have a product cycle next year. plus they're gaining market share on internet search. >> gentlemen, great conversation. we appreciate your time. thank you. we'll see you soon. ten minutes before the closing bell sounds on wall street. for the day dow industrials up 34 points. but i actually see a fair amount of sell imbalances here. we'll see what happens. >> right at the close here. truck makers broadly lower today, but oshkosh bucking that trend. find out when "the closing bell" returns. carol, when you replaced casual friday with nordic tuesday, was it really for fun, or to save money on heat? why? don't you think nordic tuesday is fun? oh no, it's fun... you know, if you are trying to cut costs, fedex can help. we've got express options, fast ground and freight service-- you can save money and keep the heat on. great idea. that is a great idea. well, if nordic tuesday wasn't so much fun. (announcer) we understand. you need to save money. fedex

let's take a look at some of the most widely held stocks right now, and as you can see, mixed performances here. you do have some strength in a handful of technology names, but it's very much a mixed performance, particularly as it relates to these widely helds. we've got technology also largely lower today. stocks like qualcomm, which of course we had paul jacobs on yesterday talking about the opportunity that he sees in wireless. google also under pressure. although within technology you've got strength in amazon, ebay, apple also higher. palm. microsoft leading the list on the up side along with intel as well as apple computer. overall you do have some gains within the banking sector today. that is one of the highlights on the up side. stocks like jpmorgan, morgan stanley, bank of america, and citigroup all higher today.

citi, by the way, above $5 right now, up 9% on the session for citi at $5.06 a share. >> and the markets may be higher today, but shares of the truck makers are being driven a little lower. there's one exception, though. cnbc's mary thompson joins us now with all the details. mary? >> that's right, bob. as you said, the truck makers in today's sector trading broadly lower as you said with one exception. one of the reasons for the decline is the 54% drop in volvo's truck deliveries for last month. the world's second largest truck maker behind daimler saying that deliveries fell 46% in north america and 62% in europe. nav i star down in sympathy today after s&p took its finance arm off credit watch for a possible downgrade. it did reaffirm the company's junk status noting while its financial results have weakened it has gained market share. s&p saying risks include continued weakness in commercial truck demand, or in commercial truck demand as well as navistar's significant near-term

financing needs. another factor in the stock's decline air-condition win for one of its rivals, that being oshkosh. up 24% today. this on the news it won a $281 million contract to deliver over 2,500 trucks and trailers to the u.s. army. test vehicles are going to be due in the middle of next year with deliveries scheduled for the end of 2010. now, na vichltstar had bid on the contract, so that's putting pressure on the stock. packer's another company, its losses more modest. shares of the firm which makes trucks under the kenworth, peter bilt and daf names down .2% after having come off the lows of the day today. earlier moody's changed the firm and its finance arm to negative. a decision the firm -- a decision given that moody's called -- that was behind at moody's called the severe downturn in the north american and european truck demand. one of the reasons behind moody's decision. so again, the truck makers active and interesting today. bob, back to you. >> thanks very much, mary. up next we'll be right back with

the closing countdown. >> you know, we should point out, bob, that one of the viewers just wrote in that when you strip out boeing the market really is flat. this -- >> the dow. >> this move in the dow is really just about boeing, with boeing shares up about 8% right now above $51. after the bell we have instant analysis and reaction to the dell quarter. second quarter earnings release coming out right after the closing bell.

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