congress passed the eesa, the government of the united states did not have the authority to step in and provide capital. and it was only with that authority, and the subsequent actions by the congress and the president to make sure the additional resources were available, that we really had the broad set of tools that were necessary to help stabilize this thing. but i think you're very right to say that clarity about strategy matched by resources and authority is central to confidence. and this crisis was more damaging, more prolonged in part because of the absence of authority and the constraints they put on the capacity of the government to escalate. and that's something we have to fix. we can't put the country in the position where we go into the next potential risk of crisis recession with that limited tools. that's why resolution authority is so important. >> then i'll take back my time just a little bit to respond. i'm not sure your proposals will do that, actually. i think they also raise other very dangerous issues, especially with this systemic type of regulator and whatnot.

we can debate the authority issue from last year another time. anyway, i'll yield my time. >> we welcome a chance to talk about that stuff in more detail. we don't claim we're a monopoly of wisdom on these things. we expect our proposals to be refined and improved as they work through congress. the important thing to recognize is we can't let the system or the country go back to where things were, with that much risk, and so few tools to help contain the damage. >> mr. secretary, we're down to our last question. superintendent nieman? >> thank you. >> we're listening to timothy geithner today talking about t.a.r.p., making a comment he's not changing the view of not expanding the stress test to smaller banks. welcome to the "closing bell." we will get back to those hearings as news develops. let me give you a sense of the markets right here. in a few moments we'll be talking to elizabeth warren who was at that testimony. she'll talk to us a little about what was most important in terms

of mr. geithner's commentary, as well as the panel. meanwhile, the markets trading higher today. in fact, raising the moves over the last 20 minutes or so. we did have some pretty good news on jobless claims. it was better than expected. and also, proctor and gamble coming out and saying that sales will rebound in the fall. that prediction has that stock up about 4%. p&g, 65 points adding to the gain. let me bring in scott wapner as we chitchat about this market. money moving into technology and industrials. certainly the feeling that we have certainly seen the worst in this economy. >> you said it, absolutely. as money has moved into the cyclical stocks throughout the day, that's where we've seen some of the momentum build into the market. so it's been an interesting story. you mentioned proctor & gamble, with better than expected outlooks. general mills also another staple. proctor & gamble in sales and

earnings guidance, the new information was they expect to return to sales growth in the second quarter. general mills said the first quarter earnings above initial targets. how about the technology story. it just continues. texas instruments hitting a new 52-week high today, raising the outlook, looking for stronger revenue in every segment. corning as well, decline in the third quarter of last quarter. and i was mentioning with maria, the move by cyclical stocks in the middle of the day really propelling this market to take another leg higher. take a look at caterpillar. it's going to give you a perfect example of that. that is an interday of caterpillar. the industrial stocks moving higher yet again. commodities also moving at that trend. really continuing here of dollar weakness, commodity stronger, stock market stronger. look at commodities there. continuing to move. energy and gold stocks moving to the plus side today. gold meantime is down $1. airlines have also been strong throughout the day. gains across the board really.

u.s. airways and united upgrated over at jpmorgan, they assume stable demand and fuel prices there. that has certainly helped to stabilize the market. the transports are up about 79 points on the day. certainly there was a lot of attention, obviously, on the health care stocks. the hmos coming on the back of the speech last evening from president obama. they've actually been moving to the up side. maybe it's on the thought that there's still a long way to go before an actual plan comes out of capitol hill. cigna, health net and humana have also been moving to the up side. the financials, look at some of the financial stocks today. moodies, talking about mon santo as well. it was a drag throughout the day today, seeing earnings at the lowest end of its range. that's the story here. our team, of course, is covering the markets. we begin with bertha up at the

nasdaq. we've been talking about the technology story as a dominant story today as well. >> it's an interesting story. you've got companies themselves sort of saying they're seeing a little bit of an uptick, we've worked through some inventory, and they're starting to see some demand and a turn in the corner. that's the case in terms of yahoo! saying they're seeing better performance there than they thought. they thought the valuation much more attractive. yahoo! close to the highs of the session, up over 4.5%. ebay getting an upgrade at montgomery scott. scott was talking about new highs. we're seeing them quite a bit in technology. oracle hitting a new high. we're seeing money come into these stocks. seagate technologies. software, staffing, we're seeing that there. and especially in the chips base with texas instruments saying that they're seeing better orders. afml upping their third quarter

and fourth quarter. a number of chip companies including rfmicro hitting new highs. let's move over to the nimex. what happened with natural gas day, sharon? >> it's amazing, bertha. we had the opec meeting. no change there as expected. revising oil demand upward. that's not what the market here is talking about. all the traders are focused on natural gas and more than 16% surge in natural gas prices just today. just about 8% in the last two hours. and what has happened here with natural gas prices, well, it all started at 10:30 a.m. this morning when we got the report from the energy department that natural gas storage levels, yes, they increased, but they didn't increase nearly as much as many analysts expected. the increase was about 69 bcs.

then you look at what happened in the month of august to natural gas prices. they fell about 22%. we're talking about a very oversold market. and so what insued? a traditional short covering rally. the magnitude was immense because we had prices that were down so low, around $270, $275. this is a very volatile market. we saw an 8% gain in just one day. a couple of weeks ago, 10% another week. this is a market that is very liquid and has a lot of momentum trading going on in it. and we are looking at the prices here that are up nearly 50 cents just in one day's time. rick santelli, to you in chicago. >> thank you very much, sharon. we can never talk too much about the dollar. if you look at the following charts, you see obviously we keep going lower. but it's so broad-based. as i look at the futures, remember, futures in cash currency markets don't have the same settlements. a bit of apples and oranges. but the yen is up. the peso's up.

the british bound's up. the european currency's up. the swiss franc's up. this is a little unusual to see so many days where such a wide array of countries and their currencies are doing better against the dollar. something to pay attention to. in terms of interest rates, not only did we have an 8-plus 30-year auction, they were falling over themselves to get into this product. you saw it developing throughout the day. look at interday 1030s, they started buying everything early. over a dozen basis drop in tens. 15 basis drop in 30s. deficits, who cares about deficits. i'm being cynical. but we really are seeing good demand and solid upside in the treasury complex. maria, back to you. >> thanks so much, rick santelli. the ford motor company continues to gain momentum. august auto sales at ford up 17% from a year ago. hybrid sales also up more than 250% on hybrid from the same period. and the company is ramping up production and new technology. we go inside the automakers, and

right now on this interview with the executive chairman, william ford jr. nice to have you on the program. thank you for spending your time. >> hi, maria. thanks for having me. >> good to see you again. let's talk a little about business right here. how would you characterize the car's environment from your standpoint? >> i think, you know, the cash for clunker really worked for us. our industry. and you mentioned august sales, they were up. we feel really good about it. right now there are really no cars on the dealers' lots. they're pretty well sold out. it will take a while to see what the rebound effect is. but we feel really good. >> what do you do to keep the momentum from the cash for clunkers going? what can you do to ensure that that business bump continues? particularly, you know, in the face much some people saying, look, sure the cash for clunkers was a good program and boosted things over the near term. but it's sort of like delaying the, or sec sell rating the ultimate issue anyway. people were going to get new

cars at some point so they do it now as opposed to in three months or a year. how do you keep the momentum going? >> you know, maria, some of those cars were clearly pull-ahead business. but some of them, frankly, were cars people were going to hang on to for three, four, five years until they ran them into the ground. some were not going to be near term customers. clearly there's going to be a little payback. but frankly, we are seeing a little bit of a bump in the market. the last few months, they started to get stronger. and obviously, you know, we go as the general economy goes. and listening to all the news on your program, there seems to be growing confidence in the economy. and that will clearly help us as well. >> so where is the demand coming from now, bill? you're at your new facility, a new green facility, right? i want to hear about that. and that number, 250% higher in terms of hybrid sales. that's pretty impressive. are you seeing actually a shift in mentality on the part of the

consumer? are they actually buying green these days? >> well, they are. you know, maria, you know, i've been at this for a long time. i think for many years people thought i was either crazy or, you know, irrelevant. >> you're right. and you were really the pioneer here. it's finally coming your way. >> it's all happening. and i feel great about it. and what i really feel good about is during the lean years of the, you know, the 2005, '06, '07, '08, now we have all this great stuff coming to the market. we've got hybrids, plug-ins, pure electric vehicles and they're all coming really in the next few years. >> so you are at the new plant here. i know that the governor of michigan and yourself really led the grand opening of the plant. it will be the largest renewable energy park in the united states. tell me what you're expecting out of this new facility. >> what we did is we took a

facility that was an old auto plant that we had closed. had been a great plant for us. but frankly, we did need the capacity and we closed it. we partnered with three companies that are really pioneers in the energy field. and they're opening, with us, a business park here to use this facility. and really turn it into a modern-day green renewable energy facility. it's really cool. and we actually hope and we expect it will be a magnet for other high-tech companies to come to michigan and take what was once a vibrant auto plant that was closed and make it into -- and part of today we're announcing that 4,000 jobs are going to be coming to this as well. it's a great announcement. it's a great use for an old facility. >> it sure is, with that number of jobs. the last time we spoke about green vehicles, particularly as it relates to electric vehicles, we talked a little about the inability or sort of the lack of enthusiasm on the part of

customers, they didn't want to plug in their car. is that what this is all about? you plug in your vehicle? are there enough stations to accommodate, if it's not electric, hybrid? give me the practical playbook here in terms of customers and what you're looking for in terms of the biggest sellers. >> one size doesn't fit all. you've really got three different types. you've got the pure hybrid that you're probably familiar with on the road today. and that's a battery and gasoline engine. and that's the kind of -- the kind of thing people are used to. then you have the pure electric vehicles, no batteries, no gasoline at all. but you've got range limitations on those. those will be great for urban driving. and then you have what you refer to as plug-in hybrids. and those are basically an electric motor, and a conventional gasoline engine.

and those allow you to go wherever you want without worrying about the range. but you ask the important question, how are the customers going to charge that. and that's something that we're working with all the utilities and with the government on to make sure that it's easy to charge your vehicle, whether it's at home, whether it's at work, whether, frankly, it's at the mall. those kind of issues we've got to sort out. because we have to make charging easy for all the customers. >> bill, give me your sense of the competitive landscape right now. you've got the u.s. government owning a huge stake in general motors, of course. your main competitor. you've got chrysler and fiat teaming up. here today we've got news that gm announcing magna international of canada and the russian lender will take a majority stake in the open al unit. what does the competitive landscape look like to you? do you feel you're competing with the u.s. government given they own 80% of gm?

>> yes, they have an ownership structure. all we can do, and this is something we talk about all the time internally, is to continue to bring great products to the market, which by the way you've seen our market shares going up every single month. we love the fact that our products are being well received all around the world. i love where we are competitively. i think we're in a very strong competitive position. frankly, what our competitors are doing or not doing is something that we can't control, but what we can control is our own destiny. and i feel great about where we're headed. >> and you've got a lot of people on your heels, hoping to get a piece of that market share. you've got the chinese coming. you've got india. and of course, i see that you're also considering -- i'm sorry, taking a bigger foothold in india. you've got the japanese already here. how do you view the landscape when you look at a global playing field? >> it's a tough market. but frankly, we've been around the world for a long time. in ford, we do play in all the

major markets. it's one of our great strengths. we've got a great european operation. we're actually second in all of europe. people don't realize that. we're the second largest producer in europe. we've got a very strong asian operation, and it's growing very quickly. of course, we're coming back in north america quite nicely. so we're positioned well globally. that's one of the great strengths of the ford motor company. >>. >> and allen doing a great job. >> allen's doing a great job. not only is he a great ceo, he's just a great guy to be with. and i enjoy working with him every day. >> well, your name is on the vehicles. and we appreciate you spending the time. i know that it's a very proud position for you. and congratulations. bill, good to have you on the program. >> thanks, maria. good to see you. >> i'll see you soon. bill ford joining us from his new green plant in michigan. we'll talk with elizabeth warren, the chair of the congressional oversight panel on t.a.r.p. she'll give us her take on

treasury secretary geithner's testimony that just wrapped up. kathleen sebelius joins me telling us president obama's health care speech will put a bill on his desk. the most heavily stocks at the nyse. financials at the top of the list. could someone toss me an eleven sixteenths wrench over here? here you go. eleven sixteenths... (announcer) from designing some of the world's cleanest and most fuel-efficient jet engines... to building more wind turbines than anyone in the country... the people of ge are working together... creating innovation today for america's tomorrow. thanks! no problem!

welcome back to the floor of the new york stock exchange. the market working on five straight days of gains. we should note, however, those gains chopped in half. up by about 40 points. alec young, equity strategist at standard and poor's. guys, it's good to have you here. five straight days of gin here. alec, what do you make of this market? >> i think people are increasingly realizing that as long as we're in a recovery, people can debate how strong it's going to be, but as long as the economy is faster and stronger next year than it is this year, as long as earnings are up next year, that you can

start to value the market on 2010 earnings. on that basis, the market isn't trading at the excess of 18 times '09 that everyone keeps talking about. it's only trading at about 14 times. i think that's one of the reasons we want to stay long in this market throughout the end of the year. and stop trying to time the correction, the pullback. >> where is the correction? what happened to it? >> i think the lesson is that, you know, it may not come, you know, as aggressively as a lot of people thought. it's not to say we're going to go straight up. i think you can make a very legitimate case for higher stocks. by the end of the year, 12 months out, maybe not as strong as thech's been the last few months, it seems to us there's more risk being out of this market than in it right now. >> greg, do you buy that? >> the last two months the market has been a weebl market. no matter what you throw at it, unemployment, you're looking at housing, it wobbles, it doesn't fall down. >> how much is it a dollar

driven market, alec? we see the string of five days, hitting 52-week low. stock market up. >> it's definitely a positive driver. i don't think it's the single driver. but certainly you've got almost half of s&p 500 sales coming from overseas. so when they bring those more valuable euros and yen and sterling back and convert them into dollars, when they report earnings, they're reporting higher sales and higher earnings to the weak dollar. it's definitely in a trend. we think it's a positive, i wouldn't go as far as to say it's the only positive thing going in the stock market. >> greg, the weak dollar helped crush the correction as commodities helped keep this market up. >> right now it's also getting an opportunity, because we think that the dollar is going to continue to fall at this point. that's an opportunity to add to your commodities holdings in your portfolio. >> i'm looking at gold here, $9.95. now as we talk about gold at the $1,000 an ounce level. do you like it here?

>> we still think it has room to go here. we think the dollar continues to weaken. we think that not many people are talking about is the play, there's not that much gold in the world. so we're talking about a limited supply and demand. you cannot think china is not adding to their gold reserves at this point. >> it's demand, inflation hedge. alec, what do you think about gold? >> it's a great longtime story. unlike a lot of commodities driven by global demand, gold is one of the few things, i call it the sort of counter cyclical commodity. it really provides diversification that a lot of other asset classes don't. we don't even have any inflation yet. we don't have any stock market services. a lot of things can drive it long-term fundamentally, and our technicia technicians tell us if we can get above $1,000 and stay there, we could see $1,200 in the next 12 months. one thing you should say, i do own the ecfgld, standard and

poor's doesn't cover it, i do have a small position there. >> thank you so much for joining us. maria, i'll send it up to you as you'll be speaking with elizabeth warren. >> we will see you in a minute. tim think geithner just wrapped up his testimony to the congressional oversight panel. a signs of increased strength in the economy and the financial system appear. mr. geithner said the government was scaling back many of its special loan and guarantee programs. with reaction to the testimony is elizabeth warren. she's chair of the congressional oversight panel on t.a.r.p. also professor of law at harvard university. so good to have you back on the program, miss warren. thank you for spending the time. >> thank you. >> what was your reaction to secretary geithner's testimony just now? >> well, i was really struck. i think that this crisis is entering a new phase. you know, the oversight board and the department of treasury may have differences about how strong or how weak the economy is, where the dangers still lie ahead. but what kept recurring in this

testimony was secretary geithner's assertion that in effect, if we don't get some regulatory reforms through, if we don't get the rules changed, then we stay at risk for this problem happening again and again. >> interesting point that you made, because i guess recently with so much focus on health care, and overhauling that system, the financial reform has sort of taken a back seat. are we losing momentum on that? >> that is exactly the right question. we're not losing momentum in terms of the need for it. it's just not in the spotlight right now. but if anything, i thought that secretary geithner's answers to our questions made the need for change in the rules clearer than it has ever been before when he has spoken in public. >> yeah, he certainly was received quite well. i agree with you. you raised an important point at the hearing that i heard anyway. you said that the scale and the value of the bank's toxic assets were so critical.

do we have an accurate account of those assets right now? and what's still in the system? >> as you know, that was my very first question, how much is still in the system. and secretary geithner offered reassuring words which he then had to limit to the 20 largest banks. i actually pushed back on that, because he's relying on a stress test that we have some problems with. but we really don't have good data on anything past the 20 largest financial institutions. and that is doubling worrying, a, because they are failing, it's also worrying because their books actually look somewhat different from the way the big ones look. they have more whole loans that put them at risk. they have more commercial-backed real estate mortgage loans. and those seem to be the coming troubles. so we are very concerned about the smaller financial institutions. the ones that we know that treasury and the fdic are not

going to deem too big to fail. >> yes, really good point. and by the way, these are the banks that we continue to see failing. and the fdic acquiring the assets of. >> you know, in fact, maria, that's what really struck me here. do you remember where we were a year ago when we were talking about too big to fail and there were these behemoth banks and then there were these little banks. now where we are is we have shrunk up the number of little banks. some people are estimating we may lose as many as 1,000 small banks before this crisis is over. and the behemoths have gotten even bigger. so if anything, you know, if we were doing a child's drawing of what this crisis has looked like, what we identified as a problem a year ago, is a much worse problem today. >> all at a time when we're talking about too big to fail, needing to go away. and we still have probably too big to fail, correct? >> that's right. and to be fair to secretary geithner, his strongest response on this was to say, that's why

we have to have regulatory reform. he says in effect, i get it. that the bigger getting bigger, and it's only the small that we're willing to kill off. and that that really -- i read him to be saying, i don't want to overstate, but i read him to be saying, i understand the risk that injects into the system. the kind of structural risk that the oversight panel is thinking about. he said, i understand that. that's why we need a way to resolve these big banks. not only in terms of their oversight systemic risk, but what's called resolution authority. a way to be able to say credibly, we're going to break you apart and let you die. >> do you worry that the fdic is taking on too much risk? here we have the fdic, you know, closing down certain banks, taking on the assets of these banks. and we know that publicly the fdic has taurkd about the reserve funds being down substantially. >> you know, the really tough part about this is that the risk

is there. it's the risk in these smaller banks. and i have to say, at least based still on the questions i asked today in this hearing, no one has a really good sense of how big it is. no one has been able to quantify it. and so we've got this unknown risk out there. the fdic is taking it on to the point that, you know, the boat is riding low in the water at this point. i'm not sure how much more capacity we have to take on risk. and it's not clear to me that it's been resolved. spl exactly. which is obviously the word. the government has made money on the investments and certainly some of the banks, certainly, the investments they made like in citigroup, and others. but your panel predicted yesterday that the government would probably lose a substantial portion of its investments in gm and chrysler. can you tell us about that? what's the timeline on that? >> that's the real point. we don't know the time line. but the projections on where the stock would have to go in order

for us to break even are really optimistic projections. we're not going to lose it all. but realistically, we're likely to be somewhere between losing everything and getting everything. somewhere in between. >> that's a pretty big range. miss warren, good to have you on the program. we appreciate your precious time today. thank you. >> thank you. >> elizabeth warren. find out why one wall street firm is turning on time warner. cnbc's exclusive town hall special tonight, banking on geithner. you can submit your video or text question to the treasury secretary direct right now. do it on cnbc.com. e-mail us town hall@cnbc.com. our special event begins at 7:00 p.m. tonight. in these turbulent times, you want a financial partner who promptly gets you... the information you need. at northern trust, our sophisticated technology... puts the most accurate information at your fingertips.

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we have breaking news. we want to go to mary thompson at the breaking news desk with happenings on the endowment. >> another big loss for an ivy league endowment. yale university reporting over the last year, ending june 30th, the endowment lost more than the 25% they predicted back in december. it's at $16 billion.

that is down from $22.9 billion a year ago. again, the 30% decline equalling the decline in harvard's endowment, that that university reported earlier. scott, back to you. >> mary, thanks so much. that's mary thompson with that breaking news on the yale endowment. the tech sector has been on a roll this year.

let's take a look at the markets. about 20 minutes before the closing bell sounds here on wall street. we're just off the highs of the afternoon. we do have some strength in financial services. in particular, the major banks as well as the investment banks. also, you've got strength in a handful of technology names, cisco, for example, up 3% on the session. the oils are doing well. the dow industrials back above 9600 today. we had better than expected news on the job claims report earlier. proctor & gamble saying sales would rebound in the fall. the nasdaq, the weak spots there include intel, among others. we do have, though, mixed markets. because google is doing well, as is amazon. ebay up nearly 4%. s&p 500 is higher.

inching back toward the high of the afternoon. and that has to do with the financials as well as the banking sector. the auto is also doing well today. by the way, ge is down after two days of gains. >> time for the "fast money" "final call." with all this talk about technology, it's been a big mover this day, a big mover this week as well. apple hitting a 52-week high just yesterday. we had the news from texas instruments. today it hit a 52-week high as well. let's zero in on the tech trade with "fast money" contributor, john, co-founder of option monster.com. dr. j, good to see you. >> always great to be with you, judge. another wonderful day in new york city. >> eats's talk about this market. maria just read down some of those stocks. apple, new 52-week high, dell, ibm, and microsoft all to the plus side. and it's had a big run. is there still room to go? >> you bet there is.

i mean, i am, like many people, in the sector waiting for a little bit of a pullback here. and i think we will get it, judge, at the tail end of this, the third quarter. in other words, i think if you're patient over the next ten days to two weeks, you can get a chance to pick up some of these names a little cheaper. but i don't think they go down much. >> what kind of a pullback are you looking for? >> frankly, i'm just looking for them to pull sideways. >> you just want an opportunity to get in. >> full disclosure, i'm long apple. i like that stock. pete's been on it for a long time. and i like these stocks that are going to be impacted by this upgrade cycle. the upgrade, of course, for microsoft operating system 7. so i like sandisk, for instance, sndk. i would like to buy national semi, but unfortunately the chips have really been hot lately. i'm waiting for a little pullback there. >> national semi will be out with earnings after the bell today, right?

>> exactly. over the quarter, the stock's up from basically $11.50, pushing $16. that's one heck of a performance in a quarter. and i love the stock. i know the chairman's going to be on "fast money" tonight. but i'm just thinking that i'd rather see a little bit of a flat -- you know, not down action necessarily. i'd just like it to consolidate a little. if we get that, then i'll be more comfortable buying more. other than that, i think these are a names a little extended at this point. that's why i'm waiting for a little pullback. >> two months, we were looking at that chart of national semi, up over the past two months. i get you on that a little bit. if we could show the apple chart again. coming off the big event yesterday. the stock traded lower yesterday but then hit another 52-week high. centering somewhere around 200 bucks. you think it's going to get there? >> oh, yeah. i have to emphasize what we talked about on the halftime report today. i think that this stock has $200

within its sights. it's going to get there. i think putting that camera with the nanomakes that a must-have item for the holiday season. and i think that's one of the impetuses that they did that, to create a little bit more of a drive into that device. and apple, people said yesterday, oh, it rolled over. did it really? i mean, that's a rollover? i think that was a pretty nice reaction, given that there wasn't a lot of outstanding news. and nothing that wasn't anticipated. you know, no tablet or anything like that. so i think that apple's got plenty of room to move, when they do come out with that little magic in the bottle. >> i should also point out, that's typically what happens with stock, runs up ahead of the event, the event happens, and the stock pulls back a little bit. apple up on another 52-week high. catch you soon. coming up on "fast money," national semi conductor, a first on cnbc interview with the ceo

plus your fall outlook for the casino stalks stocks. melissa and the traders are live at 5:00. >> judge? what is judge? >> judge wapner. come on. where you been? >> up next, an exclusive interview with motorola's co-ceo san jay jha will be us with us. plans to release cell phones. how phones can turn around slumping sales. >> after the bell, we're talking about the futures with scott sperl'ing. that's ahead at 4:00 p.m. eastern. i know you did watch the people's court, maria. >> the judge. i'm here on this tiny little plane, and guess what...

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well, the smart phone wars are heating up. motorola offering its first glimpse of its new android powered smart phone called click. motorola hopes the new line of phone will boost the share in the phone market. we're talking about the road ahead with motorola's co-ceo,

and jim goldman. good to have you on the program, gentlemen. thank you for joining us. >> thank you. >> nice to be here. >> mr. jha, let me kick this off with you, and give us a sense of the reception you've seen. so many choices here for smart phones. what kind of a reception are you getting, and how will your product differentiate itself from what's on the market already? >> well, the reception we've got from our carrier partners has been tremendous. they're excited about the differentiation we offer through the networking service. we aggregate all of the different kind of messaging that our consumers use and put it in front of the -- on the home screen for them. so they love that. the consumer survey that we've done has tested extremely well. we're pretty excited about this, maria. >> jim? >> jim goldman here in the silicon valley. a quick question for you. when you look at cliq and you see the pressure motorola's

handset has been under pressure certainly for the last couple of years, how much of a make-or break device is it for cliq as the palm-free was for that struggling company? >> you see, i think cliq for us is a first step in a long journey back to becoming a mobile internet centric company. we used to be a very voice centric company. voice is still very important. if you use your phone, the voice doesn't work, i don't think you'll like that voice. but increasingly the differentiation is going to be on the basis of what we do with mobile internet, what we do with multimedia and different services that our consumers want. i think with this device, we have started that journey. i don't view this as a make or break device. i think this is a great device, but this is part of a long journey that we've embarked on. >> when you look at where this product is positioned, maria just made an aleutian to this,

that the sector is dominated by apple and research in motion, nokia, samsung. there are so many other players here. how do you gauge the success of this device? how much market share do you cliq and your android powered phones can realistically expect to grab when you have all of this other serious competition with companies already in the marketplace with compelling products of their own? >> there are two points on this. first of all, this is a dramatically growing marketplace. if you look this year, in 2010, people are saying that there will be 300 million smart phones being shipped. that's a dramatic increase from 2009. while this is an extremely competitive marketplace, but there are lots of growth market in this market. and we have to address this market. we have to differential yalt. the first device we decided to work on is a social networking device. we believe this solves social networking problems better than any other device before it. if you look at social

networking, jim, there are 700 million unique users of social networking around the world. so it's probably the fastest growing segment in mobile internet. and the fact that we addressed this segment allows us to compete in the marketplace, i think. >> mr. jha, let me ask you about the road back, as we look at the road ahead. the razor phone was so successful for motorola. and since the razr phone, we really haven't seen a fit since the competition increased. what went wrong over the last couple of years in terms of being able to come out with a real hit since the razr phone? >> you know, i joined the company about a year ago. i'm probably not best positioned to comment on what went wrong. but i can tell you what needs to go right for us to make this work. i think we need to address the smart phone marketplace, because 50% to 60% of the growth margin and profit in the business in smart phone, if you look for the last two years, we really have not had any compelling product of that segment.

with this first product that we're launching, we're starting to address that marketplace. later on, next couple of weeks, next i think few weeks, we will launch our second device in the marketplace for holiday season with another carrier in the united states. and over the next 12 to 18 months, we will deliver multiple tens of smart phones in global marketplaces. if you look at our trajectory, i think we're head tsd the right way here, maria. >> you've got two phones that will be on the market for the holiday season, which is obviously a critical period for when people want to buy these kinds of devices. when we had eric schmidt on from google recently, he talked about capitalizing on serve through devices. if you're out buying a pair of shoes and you take a picture of it on the phone and send it to google, they'll come back to you and say, you know what, mr. jha, you make a right, make a left, go around the block and you can get the same pair of shoes for a cheaper price. that's certainly a positive coming out of the android system

there. but what else differential yates this phone and how much is it going to retail for? >> well, one of the biggest differential yagss we have is a service that we call moto blur. what it does, it ag degree gates your estimates, e-mail, myspace, facebook, flicker, twitter, all of these different ways that people communicate today, ag degree gates it, puts it in a simple wij it in your home screen. so you can touch it and get all of your messages in one feld swoop. and i think that is a fundamental difference yags. all your contacts are put together in one place. the fastest growing segment in messaging is networking. we are addressing that segment extremely well. >> mr. jha, one final question for you. one of the reasons you were brought onboard as co-ceo and ceo of the mobile division is because motorola had plans to spin off the mobile division as its own company, or maybe even possibly be an acquisition

target for some. when does this unit get spun off into its own independence, or are you on the acquisition trail that you're looking for a suitor? there's talk that dell is looking for a wireless partner. >> with regards to spin, what we've said is there are three factors that will govern our timing of spin. first of all is how well the credit markets are doing, secondly how well the mobile devices ws is doing, and how well the handset marketplace is stabilizing and beginning to grow. those three factors will govern or timing. in terms of acquisition, jim, i think we're always open to strategies which lead to better shareholder return. but at the moment, with the launch of some really compelling products, we're making our own way, making -- looking forward to returning this business to profitability in a short period of time. >> san jay jha is the co-koesmt r ceo of motorola and ceo of

motorola's mobile division. maria, back to you. >> thank you. >> thank you very much. we've got this market which continues on the upside. meanwhile, scott, we are in the final stretch. at the highs of the afternoon. >> absolutely. the s&p and the nasdaq are good for almost 1%. the dow just shy of that. we talked about the positive outlook from proctor & gamble. transports higher as well today. why investors are fired up about why investors are fired up about ease help me welcome a long-time friend of glencoe baseball. a man who played second base here some 45 years ago. actually, 47. ladies and gentlemen, mr. larry mccarthy. amidst today's financial turmoil, our sophisticated wealth transfer strategies... and philanthropic expertise ensure your legacy... is passed on to family or your favorite pastime. ♪ northern trust. wealth management. asset management. asset servicing.

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welcome back. breaking news right now on john. right to the breaking nuts. mary thompson. >> we are hearing john mac will step down as the ceo of morgan stanley. he will remain as chairman of the company. he'll be replaced as ceo by james gorman, the co-president of morgan stanley. the management changes are going to be taking effect early next year. so once again, john mack stepping down as ceo of morgan

stanley, or i should say early next year. he'll be replaced by gorman. bill mack will remain as chairman. >> we should point out it was expected that mack would step down next year. as he approaches the end of his contract. and his retirement. and it was also expected that gorman would take his place. not necessarily an upset that we learn this now. but possibly an orderly succession plan here? >> that's right. it certainly gives investors times, and as you said an orderly succession plan in place. it has certainly been suggested that mr. gorman would take his place as ceo. >> morgan stanley shares up about .25%. off of the higher levels, before this news, we've got $28.63 a share on morgan. we've got the closing countdown right after this short break coming next. >> after the bell, moody's on u.s. banks. we'll get an inside look at the health of the banking system from the ceo of bank united, ahead at 4:00 p.m. eastern.

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