>> you made a great point, proc >> exactly. there's only two, michael. there's only two major procedures to come down in the last ten years, plastic surgery and lasik because there's competition, because the insurance companies are reimbursed and the individual has to pay for it, therefore it's individual choice. competition, individual choice and incentive. that's what it's all about. >> other inching areas is in vitro fertilization where in most parts of the country you have to pay. there's been dramatic improvement in terms of ability to get pregnant. >> it really works. >> you need a market but you need the right market that's competing on the wrong things. >> sure. >> what we probably had is we had a competition in health care that's on the wrong thing. we've been shifting costs and excluding sick people. >> you guys have been fantastic. you feel better about this? >> i do. i almost feel like we could solve all of this, i do, if we

could get away from all the stuff. >> fred, professor, thanks so both of you. join us tomorrow. "squawk on the street" is coming up next. new plans for unemployment insurance fell by 12,000 last week to a lower than expected 545,000. small increase had been expected. housing starts gain 1 1/2% in august. that increase is less than expected. and shares of american airlines parent is higher ahead of the open. the company has raised 3$300 billion in new funding. that's cnbc.com news now. i'm courtney reagan. live from the financial capital of the world. and good friends of canada, this is "squawk on the street." good morning, everybody. i'm mark haines. two critical pieces of data hitting the tape just minutes ago. jobless claims, unexpectedly

falling by 12,000 in the latest league. still a high number. 545? >> 545, right. >> and housing starts and permits rising in augusto their highest level since november. >> and good morning, everyone. i'm erin burnett. 30 minutes away from the opening bell. futures off of their highs. doesn't look like we have enough hiring. i want to emphasize the jobless claim are 130,000 off of their highs. >> yeah. >> you can't go from that many job losses to just job gains. at slow process. the bulls are going to try to keep that at the top of the agenda today to get their momentum back. dow is 200 points and change, 10,000. mark, do you remember the day we had the hats for 14? >> oh, yeah. >> yeah. >> i remember the hats for six. >> ten. >> seven, eight. interest right now as erin mentioned, a little weak. down the 210. call 2 1/2 below fair value.

not a biggie. >> let's get to all the data. housing starts and the jobs numbers. steve liesman has more. steve? >> yeah, erin, i call it more gradual improvement on both fronts. jobless claims front and the housing front. we're going to look really in debt to some of these numbers but look at the overall numbers. claims were down 12,000. revised up the prior week, 545,000 is the number. erin is right, it's better than it was. you probably need to get down to the 400,000, call it 450,000 range on a weekly basis to see improvement. continuing claims also coming down to 6.23 million. now let's look at total claims, which adds up all the extra programs that were out there. 9.07 million is the number if you add in extended benefits and the unemployment claims -- the extended unemployment claims -- the emergency claims. that's down from 9.22 million. what we see right tlu is we're not leaving claims and going to

another government program that's not picked up. it's the total of government programs coming down. and that's been going on for several weeks now. let's look at housing starts. up not as much as expected. if you look at the tear that we've been on in terms of housing you could also call it a housing boon. calling for more july revidsed down 0.2%. and permits were up 2.7% in august. this number has been north of 5% for almost five months now. i went back and i looked. if you look at the housing gains there, by the way, july was down 1.1%. but you look at the housing boom that's been going on, you only find this kind of activity in permits right after recessions end. there in '02, '91, '82, you see again that surge in permits. mark, it's from a very low level but it's what happens when recession ends, permits boom and housing starts to follow. mark? >> thank you very much, steve

liesman. let's see how all of this is playing out pre-market action. bob pisani here at the big board. >> mark, twisting just a little bit lower, a few points since that mixed economic data come out. bottom line, we're still firing. it looked like the bottoming some particular kind of way. the important thing is no real signs of an upswing in hiring. perhaps early. shares of fedex down a little bit. earnings in line with the preannouncement last week. in line with that. remember, earnings are still more than 50% below what they were at this time last year. they are raising prices 6% beginning in 2010 on express shipment. amr is flying. up 20% this morning they announced they raised 2.9 billion in new funding to enable them to repair their balance sheet and perhaps keep that very important alliance with japan airlines. eastman kodak down a little bit. offering 300 million in a private placement of convertible notes. that's going to be important for them. pier 1 imports is up a little

bit after reporting an lower than expected second quarter loss. brian, how are we at the nasdaq? >> weak, thank you very much. gained yesterday. oracle, it was sell on the rumor, sell on the news. earnings came up. met on the bottom line. a little light on the top line. goid dance was on the low end. let's not forget this is a company with 46% margin. very strong. a lot of analysts saying there was buying, a lot of products in the pipeline, maybe some companies were waiting to purchase those. lazard analyst came on "squawk box" this morning with $26 price target. still up. palm, it's the next in line, reports after the closing bell today. doesn't give guidance. first call is looking for a loss of 24 cents a share. another firm came out and said, listen, the presells might disappoint. amazon.com, huge day yesterday. still in positive territories. it's official. in the uk, canada, u.s., dan brown's new novel, 1 million hard cover sales on the first

day. new record. they discount it 46%. google, reports are there they're back in talks with the fed about the digital book deal. they might renegotiate that. express scripps, buy with $90 price target. independent survey says oil find is good, up 27%. dress barn, good earnings but guidance was on the low end, 5%. let's go to sharon epperson at the nymex. >> hugo chavez wants to reduce their dependence on the u.s. oil. they want to invest $16 billion to increase oil production in venezuela. this is on top of what they said, ven sezuela is done with russia. keep in mind the euro still over 147, though it is slightly weaker. and the dollar up a little bit, though it's still very close to a one-year low. something that traders are keeping a close eye on. also keeping an eye on what is happening with gold because gold

prices did hit 1025 overnight. dropped off quite a bit. we are still edging closer to that 1033 march 2008 high for an active contract. natural gas is going to be part of the complex to watch closely at 10:30 when we get those storage figures out. expecting to see another increase in storage. the natural gas prices has risen 50% from the beginning of the month. we're down about 50% from last year. that means a lot of homeowners are going to take a lot less for natural gas this winter. rick santelli, to you in chicago. >> thank you very much, erin. if i look in treasury yields, whether it's a two-year note hovering around 1% or a ten-year yield hovering just below 3 1/2%, they are highly unchanged. before, during, even after the number, not a lot of rotation. we all know the dynamic of initial and continuing claims. indeed, they're all off of their worse levels p. but how much of that drop is actually due to the drop in the benefits programs running out

versus giving us some real clues that we're going to see positive hiring? that is the issue. as far as the dollar, it's up a minuscule amount in the dollar index. look at the components, we rejected getting under the 90 level on the dollar/yen several times above 91. that's the currency traders say to pay close attention to. >> rick santelli, thank you very much. let's look at asia, what happened there while we slept. japan's nikkei, jumped 173 points. that's 1.7%. hong kong hang seng up 1.7%, as well. 13-month closing high there. china shanghai composite added 2%. highest closing level since october 2000 8. south korea and taiwan both had their best finishes of 2009. everyone, i guess, inspired by the 100 points or so we gained on the dow yesterday. guy johnson in london, what's happening where you are? >> mark, we're fairly flat at

the moment. a decent pop yesterday. today we're just marking time. european leaders are meeting in brussels to get their story straight in advance of the pittsburgh summit. there's talk coming out of the french and german camps, serious split with washington, bonuses and capital requirements. there's talk that the eu might go it alone on these issues. the other banks are indicating that would put them at a considerable disadvantage with their u.s. peers. lets me talk you through what's happening. we're getting down to session lows at the moment. the stoxx 600 up 0.1 of 1%. big news yesterday in ireland, the toxic asset scheme, details were unveiled. far more lenient than anticipated. the irish banks are absolutely flying. up by 21.6% on allied irish.

another stock is eads, airbus is upgraded today, quite strongly on the back of that. watch out for the next few minutes. airbus is going to be unveiling the annual outlook for the next year. that could have an impact on boeing. mark and erin, back over to you. >> thank you, guy johnson. up next, shares of ge gaining more than 45% over the past two months. wow. today the company is hosting its global research analyst meeting. mary thompson is monitoring the developments. >> 45% to 16. and then the faber report. wi will avendi exercise their rights in buying universal? david faber with details rchlt and the word on the street and the buzz beyond on the trading floor. we'll be back. %%%%%%%%%

general electric is the parent company of this net work. and ge owns a whole lot of other things, from turbines to green technology, is hosting a global research analyst meeting. ge shares are up 42% over the past two months, at 1690. mary thompson monitoring the meeting for us today. good morning. >> erin, this is the chance for

the parent of nbc to talk about this. mark little telling analyst even through the economic downturn ge has made in investing in research a priority, topping outside resources, including the government, this in order to fund the efforts. >> we continue to focus on great programs, not only but principally with the u.s. government across all its agencies and in this time when stimulus money is available we are aggressively after great programs. >> with ge research centers speeding businesses including energy, aviation, water and health care, little noted the projects that ge is working on, including making bigger blades for wind turbines, cutting costs to decelerating water, cutting them this half hopefully, and developing new material systems for airplane parts to drive out costs of alloy. what's outlined is ge long-term vision. in the year term, they have had

a good run. analyst comments and research investor interest pushing the stock up 14 1/2% in the last week. so at $16.90 a share, still down $12 below the 52-week high and down over 28% in the last year. concerns about his finance arm plaguing the stock in the course of the credit crisis. with the global economy showing signs of economy, some feel that ge within global reach and swap of business cess a way to play this. i'm going to toss it to david faber with news about another part of g,e, nbc universal. >> there's has been chatter and whether vivendi will sell 20% stake in nbc universal, parent of cnbc and owned by ge. yesterday at an investment conference in new york the vivendi ceo said they will not exit a partnership it's been in since it sold nbc the universal

sta studio and assets in 1993. they will notify the plan to sell the stake between november 15th and december 7th of this year. and why vivendi may not yet have decided if it will exit its ownership, ge is fully preparing for that exit. every signal is that vivendi will say it wants out. though it has yet to inform ge of any decision, according to people familiar with the situation. in recent weeks investment bankers have begun gearing up for what they are calling a dual path process in which they prepare nbc universal for an ipo and test the market for a partner that would be willing to preplace vivendi. vivendi has a right to register shares for an ipo and. vivendi could be willing to sell to a third party if the price of of its liking and ge approves of that partner. right now, say people close to this developing story, ge is highly unlikely to purchase vivendi stake, $5 billion.

ipo, they say, is currently the most likely of outcomes. in the ipo would not occur until at the least the middle of 2010 but it would be a significant change for nbc universal. ipo would put a firm value on the company and allow it to use a new found currency to pursue acquisitions rather than rely on ge to pay cash. it brought in private ivate equ partners, the acquisition of the weather channel. there have been no discussions of a sale by ge to universal. that is not expected to become a consideration. still, there is a possible when vivendi put is exercised, it will buy the 20% stake, despite the complete lack of control that comes along with that stake. those parties could include a large investor such as a sovereign fupd and more likely an operating company that want more exposure to media content. comcast officials are not

commenting but that company is almost certain to consider buying vivendi stake. it's a price that would exceed the proceeds of the public offering while also reaching a deal with the ge to become its new partner in nbc universal. it's possible that the structure of the partnership could be altered to confirm more rights to the 20% owner if that purchaser is willing to pay for the privilege. the same applies to any other partners that might at least consider the stake. vivendi may advise ge of its plans in the next few weeks prior to the official window. and it may decide to hold on for another year. regardless, ge is getting ready for a process that at this point appears likely to add another media giant to the ranks of the public markets. ge, of course, is cnbc parent. nbc officials declined all comment. mary mentioned that enormous move up in the stock, mark and erin. i don't know if it is this chatter at all that's having any effect. it wouldn't seem to really be significant in terms of the effect in the overall value at this point.

although i said ipo in nbc universal would give view into the overall value of the company. >> quick follow on that. when you just think about, we had an analyst on yesterday who said media companies are at greater risk than others of bankruptcy. what was the funding costs of nbc universal be if we didn't have ge? significantly higher, right? >> the funding cost in terms of its borrowing, you mean? >> yes. >> pay for the borrowing? given that it would still be 80% owned by ge, it's not clear it would change at all. fully public company, that might be a bit different, erin. i don't believe if this were to go to an ipo you would still have 80% of it controlled by ge that the bor rowing costs would be any different. up next, the word on the street and the buzz beyond. >> later, inside the numbers from fedex. last week they came out, everything is better than expected. remember the pop? now they're warning conditions are challenging. are they hedging? what's really going on? we're going to go inside the numbers from the analysts at

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we're down on the floor with our pal warren meyers, hardest working man on the floor, cnbc contributor, pepperdine, all of those things. good morning. >> good morning. good to be here. >> it's working. >> i'm sick and tired of using the word but i keep saying

resilient, resilient, resilient. it certainly has been. >> willing to fight the tape? >> a little bit. i think today is going to be a little struggle to at least get out of the gate. if you look every day and we end up strong, i think that's a lot of mutual found money. peep have been sitting on the sidelines. until that trend changes, i think you've got to still be bullish here. >> when you look at the numbers, $4 trillion on the sidelines, that's a lot of firepower. >> it's an awful lot of firepower. it's tough to fight that right now. >> all right. so, you know, let's say viewer wants to get long. is there a sector in the market you think will at least be comfortable in? >> a couple things i like right now, natural gas, i think, is something that looks like it's bottomed out and may have a shot to rise. i think the vix, which is a contraryian point of view to this, the fact that that's down so low. and maybe continue to dabble in the energy stocks, some of the ag, some of the commodities and maybe a little financials, delicately right now. they keep going higher. >> all right, warren meyers, thank you very much. have a great day.

back up stairs to erin. >> okay, mark. let's get the buzz from beyond the big board. joining us to do that, the managing director at wells fargo joining us from st. louis. good morning, brian. >> erin, how are you? >> how do you feel about the market today, today, overall, optimistic or a little bit nervous? >> i think the market has been kind of building offen this pessimism. it's been short covering opportunities. and you've been living on this steady diet of positive economic data. you know, kicked off this week with the retail sales numbers, followed through with benign ppi and cpi. look the building, housing numbers this morning. getting less bad and trying to turn the corner towards recovery. all that done, you have a market that wants to scale this wall of pessimism and that's giving you support to that resilient comment you made before. big picture though, as you take a step back, take stock of the rally that we've had, sizable. a-typical kind of year.

september is typically a bad month. big picture as we push forward, we are constructive in the market, looking in the industrials, warping up to discretionary. also, seeing some opportunities here in dividend growth names. areas that may not have moved as much now. >> several people over the past few days are mentioned on this show dividend. and you're saying dividend growth. can you give any examples? these are xaeps that you think are going to raise their give depd or you just mean they're growing with their profits? >> interesting, erin. as we look out later this year you see a lot of heed lines talking about this is the worse year in dividend growth in history. arguably, it will be looking back at 1950s and the financials have taken it on the chin. but there are other areas in the markets, more staply in the consumer staply area that have strong balance sheets of resilience and have gotten hit just because the market has gotten hit over the last 12 months. that's creating opportunities. they're not exactly sexy areas

of the market an they're not as si cycle lly sorroriented. >> thank you very much, bryan. we have a final countdown to the opening coming up on the other side of the break. and slightly lower open. but that means nothing in terms of the close. >> now, come on, we're almost at 10,000. give back a few points no, biggie. you're watching cnbc's "squawk on the street." we are live at the new york stock exchange.

all right. we're back. and you are watching cnbc's "squawk on the street." we are live at the new york stock exchange where the opening bell is going to ring in 20 seconds. futures are pointing to a modestly lower open. 10 15rks points on the dow. whatever. what is this?

oh, -- oh. >> a beer on our -- >> brito from yesterday sent us a beer because he heard we wanted to try the bud light with lime. i would like to emphasize for the record the beer is not open and it's not cold, so it's not going to be opened. >> i wonder if it goes with cheerios. >> it does, actually. >> anyway, here at the big board, what is that? crexus? >> crexus. >> crexus investment corporation, ticker cxs, celebrating ipo today. at the nasdaq, tessera technologies, ticker tsra, making of electronics. >> market reporters are standing by. down about four. let's go down to mr. pisani. bob? >> we've been up eight of the last nine trading sessions. it's been a tremendous rally. laszlo just had a note saying

that the s&p is 20% above the 200-day moving average. it's very rarery in that territory. that means we've been going straight up for a while now. we're a little over-stretched. is that negative? no, not necessarily. it can be a sign of real strength here. so this rally likely still is not showing any signs of fading out here. let's talk about federal express right around the corner here. down a little bit here preopen here. earnings were in line with the expectation. they have preannounced last week, just opened, open down 2% here. the important thing is they're going to be raising prices. a little bit about 6%. some 2010. they did similar things last year. so no big surprise. amr is the big story, up nearly 20%. raised 2.9 billion in new funding including selling frequent flier miles to citi group. they're going to try to repair their balance sheet. there's a let of competition with japan airline. eastman kodak down 2%. talk about the need to raise $700 million in capital. announced selling notes. separately 300 million in a

private placement as well. a little bit complicated. finally, pier one also up a little bit. they reported hour than expected quarterly loss. we're weak at the nasdaq. down five points. good for 0.2 of 1%. oracle is against the rally yesterday, down again today. disappointing on the top line, met on the bottom line. they are saying that issues in europe, notwithstanding that sun microdeal should close at the end of this year, early next. i want to check on companies that hit 5 2-week highs. apple, google up 0.4 of 1%. tessara upgraded, up 2.3%. today i want to point out the chips, laggers yesterday, checking in on intel. up half a percent. qualcomm is down 0.7 of 1%.

earnings, palm, they are after the bell no, guidance here. the range is really wide. i will tell you in consecutive days a firm has come out and said sales of the prewill be disappointing. 0.6 of 1%. they had a huge 7% plus run-up yesterday. still a lot of good buzz, even though they discounted dan brown's novel. it smashed adult fiction records in one day sales, more than 1 million hard cover copies. let's go down to sharon epperson at the nymex. >> amazing number of sales, brian. we're talking to traders about what's happening to natural gas and the volatility in the contract, over 100%. that means that we could have a 20 to 25% run on natural gas in either direction when that number comes out. we are going to get storage report coming out at 10:30. the expectation is for another injection somewhere around 73 bcf. keep in mind it looks like the place to go over that trillion

bcs level. that is significant. a lot of folks wondering where the storage is going to go. we have seen slightly less of an increase in the injections in the last couple of weeks. that has caused the rally that we've seen in natural gas prices over the last few weeks. and, in fact, just in the last week, it's up about 15%. that is why we're looking at a little bit of weakness here going into the number. we're also looking at oil prices that are up about $4 since mob. so again, seeing a little bit of profit taking there. if there's so much attention, of course, on gold staying above that $1,000 mark with silver continues on the percentage term to outpace gold and once again, silver has reached a 13-month peak. rick santelli, to you in chicago. >> thank you, sharon. interest rates haven't had wild ranges but where they're sitting is quite important. with a fed meeting next week and the notion that maybe, according to news letters out, a couple of fmoc members are going to be aggressive in the tightening mode. many in the marketplace say if

there is a lot of substance behind that notion, you would see a show up in the more aggressive selling of euro dollars which, of course, are another way to look at potentially pricing libor rates moving higher. i don't know if the market is buying it. i will tell you two-year notes hover around 1%. a little bit elevated at this point. of course, a lot of talk about china. we've now moved from tires to steel. but talking in traders, they don't think it's a key point to linger on. they're going to be looking at philly fed coming out in less than a half hour. mark haines, back to you. >> thank you, rick santelli. inching up eight of the last nine trading sessions, very pleasant. up more than 7% during that time. despite opening flat this morning, we're up again. up by five points. poked in the high with a sharp stick. so will stocks rally through today? joining us, david flieser, chief operating officer at first nnl resources and maury, chief invest chlt officer at relative value partners. i'll start with maury. why are we rallying?

>> well, i think there's a great deal of skepticism in this market. and sentiment continues to be somewhat negative and i think that as you look at things like mutual fund inflows, which are running 10-1 in favor of bond funds over equity funds. the retail investor has not really bought into this rally. >> wait a minute. we're going up because no one believes it? >> well, we're going up because there is some money chasing this, but it is still a very much of a very narrow rally as far as the overall -- the retail investor. we're keep hearing about the fear of the market's going to crash and the correction. and i think the more that talk feeds at the same time we have continued positive economic news and more positive earnings news, the market will grind higher. we think potentially 5% to 10% between now and the end of the year. >> david, what do you figure? >> mark, you need to quote from something he told our producers.

david says, march's haines bottom is an extreme in which investors should not obsess. >> meaning? >> just that investors, not mark. >> mark, you can't ask him to stop. >> very few people are obsessed with my bottom. >> well, what does that mean? don't worry about going back? >> we're talking about the up or the -- probably that. but so many people are fixated on their high watermark. sure, when you take a look at statements from 2007 we could all play, could have, should have, right? we shouldn't fixate on where we were. just setting the plat, of course, for the future. at the same time, the fear of what was 6500 in the dow should not also be the motivating factor. in the issue of mutual fund inflows historically retail investors have been swimming upstream and have tended to swim in the wrong direction of the market. so i would agree that that could be one indicating factor of the average retail investor being slow to get back -- to get back into the game. but let's say we don't. a 10% decline in the market

would not be a reason to lose your lunch over the side of the vote, right? it could be a healthy opportunity to rebalance, great opportunity tort investor who went to cash some months ago and looking for an affordable entry point. so i think the positive sentiment seems to be winning out. but at the same time, a reasonable correction would not be the end of the world. >> still putting -- you look like you're worried about inflation. you have a waiting in treasury and protective securities and also to international. >> right. >> more than you would ordinarily be? >> let's say a little bit more than normal. a combination of the falling dollar would help part of the domestic holdings of, say, our holdings here of foreign securities. now as far as inflation, we don't know if it's three months, six months, or if that's going to be longer to get out of the box. but we don't want to be caught flatfooted. slightly higher in position in tips and slightly higher position in commodities as a decent hitch.

>> what's your bigger concern in terms of where you're putting your money? inflation or deflation? >> we think deflation is still the story. and deflation is what the fed's fighting and it's going to be the story potentially for the next nine to 12 months. the excess slack in the economy is a concern. and it's got to be absorbed first before we really see inflationary pressures. i really think it's more of a 2011 concern at this point in time. >> what is this defensive beta that you seek? >> well, i'm trying -- we've had a market that's obviously rallied a lot and we're not going up another 55% in the near term, at least. so i'ming looking for areas where i can capture the upside of the market and not -- and have a little downside protection. and right now, in the closed end fun universe and equity fund, there are still funds trading at 15% and 20% discounts in net asset value. the one fund to give you an example, alpha growth fund fgf,

top ten picks of barren, a legendary growth manager. trading at 17% discount to last night's net asset value. i can buy their great pick, 17% discount. the fact that it's owned by aig is an added kicker because this is a unit they're trying to sell. if they sell it, the shareholders of this fund have to prove the change of control. when that happens, general li offered some type of opportunity to get out in net asset values. we think that's a good way of putting new money into the market at this stage. >> all right, sir, thank you very much, maury fertig, david, appreciate you sharing your thoughts with us. up next, my favorite, the kahuna and the brain. >> together. >> tackling ge and vivendi. >> general motors jumping back into the leasing game after a year hiatus. those are the signs things are getting better. credit markets are easing, or is it an act, mark, of desperation? we'll be back.

chilly here at the stock exchange. maybe it's chilly because a little bit of our company might be hanging out there in the wind. >> it is a bit chilly. >> faber? >> but it's about to get much warmer. >> oh, because of the love in the room? >> because of the love from joe and david. >> what is that battle there? >> that is a bottle -- the ceo of inbev, we interviewed him yesterday. he was kind enough to us a few bottle of os this bud light lime. >> it's not open. >> it's weird because i thought it was a corona that you put a lime in but it's not. it's a knockoff corona. >> you put a lime in the corona? i thought you put a lime in the

coconut. >> that's true. >> i like that guy. >> yeah. >> anyway, the gentleman was very nice to send us some samplles. >> this and glasses. mark got stella glasses. >> really? stella artois. it was a belgian brewer. >> sounds like we're buying time delaying things because we don't have anything to talk about. >> what do you mean, we don't have anything to talk about? i haven't talked to you since the s&p, you know, was up 1 1/2% yesterday. >> yeah. >> new highs. >> eight out of nine. >> 58% from the march lows. >> what we haven't talked about is -- what we have talked about is what most people are saying that none of this was justified and that there's a day of reckoning coming. they've been saying it for four months every dayed. and they watched it go up. these are seasoned people that have said that. that in the past have known that, you know, waiting for a calling for a correction is a dangerous game because you can wait forever.

anybody who has missed the last 2,000 points, i want them to just say, now, it's definitely over. i was dead wrong. it wasn't over-valued 2,000 points ago. but now i'm renewing my bearish stance. i don't want to hear them say i'm going to be right eventually because they have not been right. they've been dead wrong. >> right. >> and what i don't know is whether we're underestimating what the fundamentals will be within the economy six months from now or whether the market at 6,000 had already discounted, you know, 14,000 to 6,000, you know, that discounts an awful lot of -- >> discounts 6,000. >> 6600. >> 6600. >> 6600. >> 10% above 6,000. >> to bounce almost a reflex rally can get you back to 10,000, even without anything good happening. >> if we're underestimating eewe're assuming it's different this time. this recovery is going to be jobless. the consumer's totally dead. everybody is over loaded with debt. we haven't done all the

things -- >> 20, 30 years. >> and you know, none of the things that we needed to do have been done so it's going to be -- that's not to mention, of course, we are paving the way for enormous inflation as a result of federal reserve increasing the ball loons sheet to almost $3 trillion. >> what it's if like every other time and the global economy, n sooner or later, people go back to the ritz carlton and to the mall. >> a lot of people haven't stopped. it's the incremental. the economy is so enormous. when you go out, people are doing those things. they're just not quite as many doing them as in the past. so, yes, more people will go back to doing those things. or already have. i don't know. >> no more of the day when you guys are on the two coats are out of it in the middle of the country and forget which state it was. it's horrible here. it's, you know, this and that. unemployment. what do you suggest with something like that? >> just reminded me of sam kennison. move! they're living in a horrible

place where there's a drought and no food, what should we do? move! no, that doesn't work. you can't move to the coast where things are better. you can't move out of the rest home. >> so are you going to be happy when, i don't know, you can get options in nbc universal? >> i want to know about that. can vivendi do an ipo of its stake? >> yes, that's correct. vivendi has the right to register 20% stake in nbc universal for sell in an ipo. ge also has the right to buy back that stake. and then they each have to get advisers and come to an agreement on the value of the stake to fend off an ipo. as i reported, ge is highly unlikely to pursue a purchase of the vivendi stake making it much more likely when vivendi tells ge of its intentions, an ipo will follow. >> you have heard how many times in the old days when you were thinking about expanding media, how much nbc wished it had a currency to do certain acquisitions.

why would that be a bad thing? >> nobody said it would be. i'm not saying it would be. >> if vivendi did an ipo, it wouldn't be a bad thing? >> not necessarily. you would have reporting requirmentes. zucker would be there. 80 brs controlled by ge. news corp is a public company but it's got a controlling shareholder. viacom is a public company but it's got a controlling shareholder. >> compared to the valuation when vivendi -- that was -- when they sold it. >> don't know. >> it's less. >> it's all over the place. >> is it much less? it. >> may be less. hard to say. >> things haven't gone great in traditional immediaty. >> right. there may be enthusiasm in the future in some ways. cable networks owned by our company are quite strong. generating a lot of cash. >> all right. you know what, erin, you're going to talk about casinos, i know. >> yes. >> our friend larry, what's his

name, hav verity? >> yes. >> he sat by these things at five or six might double or triple. they have. >> indication. we're going to talk about that next, as joe said. betting on a can sin no operator. find out why that you should bet now when they've already tripled. matt nesto has stock on the move coming that way. plus -- >> plus, inside the numbers from fedex. stock is up more than 125% since you know who's bottom, often used as a barometer for the company. you're watching "squawk on the street."

good morning. welcome back to "squawk on the street." i'm matt nesto. looking at the stocks moving here today. i want to look at spirit aerosystems. one of the biggest performers in the russert 8,000 today. 51-week high. on the conviction buy list at goldman sachs this morning. mgm is up 60% this month.

mgm mirage, to buy from hold, up 7 today. really a tug of war. and pitney bowes, up for the tenth consecutive they. they think it has 30% more upside. back to you. fedex shares are trading lower. the company came out in first quarter earnings and they were lackluster. earnings down 53%. but perhaps even more important, the company warning for the rest of its year, fiscal year, profits will remain relatively weak. let's go to the numbers fresh off the conference call. let me just ask you, i'm a little confused because last week that t. headline was fedex said things are better than expected and everybody was all happy and ups went up. they come out today and it sort of sounds like they're saying the opposite. when you get on the call and lieu you look at the numbers, what do you hear? >> i think what we're seeing here, it's a series of

expectations that have been laid out. and as of last week, they raised those expectations. and now they're meeting them. you know, what we're seeing from fedex and seeing from a lot of companies out there is things have gotten less worse here over the last six to eight weeks. and some of it seems throughout the conference call reflected that, both with the international trade and the domestic lines. >> so, it just things are betting less worse. >> right. >> is there anything, i don't know, anything better than that, any improvement, or growth? >> well, i think if you look at a typical freight year, this is the time of year where seasonality picks up and freight picks up. from our contacts and contacts from fedex, things are picking up a little bit better than seasonal. the question is, does that reflect an economic recovery or is it just, you know, lack of the inventory destocking. time will tell. but we're encouraged here over the last six to eight weeks that the freight trends have shown signs of life, which we haven't seen for a couple of years now

in that industry. >> according to a story on reuters, the quarterly earnings were helped by a pick-up in international freight volumes and cost controls. i read between the lines here and conclude that domestic trade volumes are lagging? >> still a very tough market on the domestic side. domestic freight trends in general are down. for fedex, they even show progress there. domestic was positive, help from dhl's exit earlier this year if it was roughly flat year over year. so international certainly had more of an incremental improvement from the first quarter. there are sign tons domestic sides as well. >> tom, thanks so much. >> thanks for having me. >> jon has a neutral on the stock. moments away, the september survey, rick santelli already in the pitts waiting to pounce on that number for us. >> and volume is back.

where is the volatility? especially as we hover around, frankly some crucial levels of the market.

dow tops 9800 after bouncing back from a mildly low we open.

a win today would make it four straight for stocks. cnbc's david faber reports that vivendi sells the 20% stake in nbc universal, it's highly unlikely general electric would buy i. amr rallied 23% on news it raised $2.9 billion in new funding. that leads amr from buying a stake in japan airlines. that's cnbc.com news now. p i'm courtney reagan. rick santelli here. september philly fed sure vai due out any second. and, of course, i'll tap dance a bit because it seems to be late. but i'll throw you a few statistics. last look it was up 4.2 for august. we haven't had back-to-back positive months in november/november of last year. this particular metric just seven months ago was at minus 41 and change. that's been a huge improvement. so we're looking for expectations to double the august look, which was roughly 4%. i hear a big clear.

yes! 14.1, we just made it official. the first two-month positive back-to-back since october of last year. it's a deficit double helping versus expectations, or last look. and indeed, the roar i heard is the late number came out was from the s&p pit. now, i don't see that the prices are moving up a lot. but they're definitely moving up. there's going to be a bit of a lag here. interest rates, well, we're back to equities really having a good showing here with the 98 handle on the dollar and that's pushing rates slightly higher. dollar doing anything here, guys? it's deteriorated towards unchanged in the dollar index. back to you, mark. >> all right. i'll take it. thank you, rick santelli. i'm here with bob pisani. we got the latest data. i know that two months was up, not much market reaction. that's not really the point. the point is we had a feeble attempt to sell and it hold. >> the philly fed really was better than expected. >> the market dropped ten

points. >> 4.1 was last months. 14.1, that's clearly a trend improvement. but you're right, four days in a row we have started the market off immediately they try to set the market off. it drops to just down a little bit or flat. and then it rallies right back. there's no selling pressure. there's no follow through. there's no power by the sellers to bring the market down anything more than a few points. and it just moves right up again. here we're still in positive territory. we are 20% above the 200-day moving average on the s&p 500. laszlo pointed that out this morning. that is a rare occurrence for that -- that means you've got a steep curve upward. we're up now nine out of ten days. >> does that mean, you know, technically that you're in for a little bit of a -- well, it could be -- >> strength. when you get -- i know over extended you think, it's not correct immediately. >> that would be conventional wisdom. >> thgenerally, you stay with t trend. let me mention airlines because again they're up. it's been good news this week, actually. we saw delta earlier in the week. they raise their good dance a

little bit. they had lower fuel cost, a little bit better revenue situation. amr had a $2.9 billion raise. that's excellent. look at these prices here for the airlines so far this month. we've had great moves to the upside here. yes, they're selling their frequent to citi group. they could sell frequent flier miles as well. that's going to help them repair their balance sheet. you can do a lot with them. >> that does not -- you buy frequent flier miles? >> it's a profitable business. >> i'm making a rather smirky comment. >> we should explain how actually the business of buying the frequent fliers work but we can't do that right now. >> we can't. >> the important thing is, they are repairing their balance sheet. >> okay. >> that's really good news. >> we will talk about that more. thank you, bob pisani. i got to get to brian shactman though. you've got two earnings stories. let's start with one you've got reaction to. oracle, shares are lower? >> shares are lower. 3.4%.

actually 6% in two days. joe fishbein came on our air on "squawk box" earlier today and left insight on the bullish side. people are going to look at this and say wow. the bottom line is this. he said their market, 46 % extremely healthy. they have very strong products in terms of buzz coming down the pipeline. maybe a lot of buyers were sitting on their hands waiting for those products to come out. and the third thing i wanted to point out is that, you know, europe not withstanding with the regulations, what they have to go through, the deal with sun mic micro, and he thinks it's got room to run and you might want to buy in the dip. that's what he says. >> the one we're getting ready for after the close today is going to be palm, right? >> yes. palm is down 1.1%. you want some buzz on the stock. they don't give guidance. first call says a loss of 24 cents a share. the range is huge. consecutive days, yesterday was morgan joseph. today, adams coming out and

saying sales of the pre are going to disappoint. they've downgraded their estimate. both companies have a downgrade in the stock. that's how they feel it's going to trend. right now the marketplace is agreed. >> thanks so much, brian shactman. let's send it up so senor haines. >> 3m, one of the most searched stocks on cnbc.com. down 80% since the march low, recently hitting a 52-week high. joining us with his insight and analysis on 3m, because you clicked, senior investors analyst, fdr capital markets. dean, good morning. thanks for being with us. >> good morning. thanks for having me. >> you had an out perform on 3m still, why? >> we think 3m is uniquely position fled this rkt what as a defensive early cycle. it's trading even with the multiindustry group. at least 11% upside from here the way they're positioned. >> i'm reading some of your

notes. you think the company's early cycle exposure in retail consumer generating interest. what does that mean, early cycle exposure? >> a third of the business of 3m is considered early cycle. these are the iconic brands that you and i know. they are scotch tape, post-it notes, overall 15% of the business is consumer. beyond that, they've got 12% in automotive, both oe and after market. you roll that up and those are the types of businesses that are most levered to early stages op an economic recovery. >> 12-month price target of 80 on the stock. how do you arrive at that number? >> what we look for is a relative valuation. we think today 3m has the ability to trade towards the up der end of that range. it's basically at a 1% discount now. we see at least 11% upside on the stock from here. >> and you have confidence in the management, obviously? >> sure. mark, one of the things you want to look at is how did they act

in the downturn. last quarter they had volumes down minus 13%. but they still posted almost 23% operating margins and return on invested capital was over 20%. that's sign of a well-run company. >> are they in good shape overseas, in your opinion? >> yes. i'm glad you brought that up, mark. 63 % of 3m revenues come from outside the u.s. they're gaining greater share in china and emerging markets. so with the weaker dollar, they're also have the ability to prosper there. >> so out perform on 3m still in effect. >> lots of room to run in 3m, mark. thank you. >> thank you, deane. love 3m. up next, why is there not more volatility to match the resurgence of volume we have seen? and you know, i mean, think about it. we've gained about 8, 9, almost 1,000 points in the last few

weeks but it's been very steady if the volatility is kind of gone. is this the calm before the storm, or what? we'll look at that with our panel of experts. then, darren rovell doing a little drifters action from the wrigley field rooftops. talking to one of the owners on paying the cubs 16%. the sky high view and how the economy affects his seats. and chrysler and gm jumping back into leasing. is it a sign credit is easing or is it a sign they're getting desperate? "squawk on the street" coming right back. ♪ today ♪ must have been one of the strangest days ♪ everyone may face the same uncertainty. ♪ some would say that you won't find ♪ protecting yourself, however, requires good decisions. find strength and stability with mass mutual,

a company owned by its policyholders. ask your advisor or visit massmutual.com.

we're back. the month of september set to be a bad one. actually that's not quite true. if you add together all of the septembers and compare it to all of the octobers, all of the februarys, september is the worst. but it's not bad every year. the dow, s&p, and nasdaq are all up so far this month. volume seems to be picking up there is a noticeable lack of volatility. what does that mean? how should we be playing this current environment? is it a calm before the storm? is it a sign that things are settling down and the rally is for real? joining us from greenville, south carolina, jeffrey south, chief investment strategist with raymond james. and from the cboe, dan deming, stuckland equities trader. he trades from the cbov vix

options. dan, what's going on with volatility? >> well, i think, you know, what mark we're seeing is decline in volatility, seeing more confidence coming back in the market. we're seeing tremendous demand for stocks and other commodities, that any drop in the market, there's so much money in the fixed income, any drop, we're seeing huge demand on the market. that's keeping volatility under pressure. the vix now trading down in the 23 handle. historically around 20. normalized situation in volatility. similar to small craft advisory being create by more boats or smaller or medium size boats are willing to go it of the hasher and calmer waters and explore for opportunities. >> jeff do, you agree that it's a good, not a bad sign? >> yeah, i do. i think there's more at work than that as well. i think that there's still enough money on the sidelines in zero maturity funds, if you will, mzm, and the underinvested and underplayed portfolio

managers staring at their fiscal year end. a lot of them close their books in october. i think that's why the dips have been shallow. these guys are starting to weight up into stocks. >> and, jeff, it sounds like, you're making a technical case. people missed it so they want to get in. they could make a market go higher. you want it to go higher because profits are growing and people think the world is growing, right? that's not why you're optimistic. >> yeah, i have avered ever since march 2nd on your show, as a matter of fact, when we said the market bottoming process completes this week and we're all in. that the recovery was going to be stronger than most people thought. and if you saw the ecri's report last week, it was the strongest qu economic pop if the history that goes back a couple of generations. >> so, you're saying people might be getting in because they missed it, but you believe in the underlying fundamentals of the economy that would keep it going higher? >> yes. i think that's exactly right. i think when you look at the earnings in the third and fourth

quarters, compared to the awful earnings last year, that's going to continue to the carrot in front of the horse. >> dan, you've been focused a lot on etfs. that's something mark always talks about. for so many regular people starting to use etfs and professional traders use them as well. >> sure. >> how can you trade volatility through an etf? >> well, i mean, there's a couple of different ways. the thing is that i want to point out, there are some etfs, or etns in the volatility space. >> exchange traded notes, right? >> exactly. the vxx and vxe, those are short and medium-term notes that are based off the vix. so there's opportunities there where you could use those notes and trade them against the options in the vix pit here at the cboe as opposed to using the futures. one thing to point out there with those etn, i think it's cheaper for, you know, small investors to use the epns as a edging vehicle to trade vex options as opposed to the

futures because a a lot of the house won't let you hold futures. the expense or the overhead, the margins are much greater. >> well, it's not clear to me, should we be betting the volatility is going to increase from here or continue to decrease? >> well, you know, i don't know if i had a crystal ball, mark, i wish i had that answer, but i think right now if you look at the overall market, you'll see a historic or realized volatility is actually trading around 16 or 17. the vix which measures future expected volatility trading around 23. so historical volatility -- excows me, realized volatility still a little bit lower. that would put pressure on the vix moving into the fall. as long as we're seeing this market, you know, fall off and huge demand on the need, you're seeing money coming out of the money market, coming into the marketplace, i think that right now the volatility is going to be under pressure moving into the end of the year.

>> jeff, dan, thanks to both of you. >> you're welcome. a particularly peculiar reaction in stocks to the philly fed number. rick santelli can explain it. the particularly peculiar, huh, rick? >> yes, say that three times fast. you know what, even though it was the best headline numbers since november of '07, if you dug into the subtext, traders have alerted me to, what you see is new orders deteriorated, number of employees really deteriorated. if you're a business, you want to charge more and pay less for materials, it was the other way around. prices went up. receive one down. subtext not friendly to the market. back to you guys. >> all right, thanks, rick. up next, readying your money for new regulation. with our cnbc adviser network. >> and darren rovell in chicago on a roof above, wow, that looks glorious there. >> we are on the roof. we're here to talk about the

business of the wrigley field rooftops right across from wrigley field. it's a great story. that's coming up next on "squawk on the street." so you can be a disciplined trader. by selecting from eight advanced triggers, your order gets executed, even when you're busy. and with trailing stops to help you lock in profits and minimize risk, you can be confident in your strategy, no matter which way the market moves. find out why more and more active traders are turning to fidelity for a smarter way to trade online. trade like a pro. trade with fidelity.

let's get straight to our adviser network and find out how to deal with the new regulation that is certainly coming. we are joined by dv root and company. good to have you with us, ter prip and we're waiting a comment from the president here, so i apologize for the brevity. how do you regulation proof a portfolio? >> well, there are a lot of things you need to do. and as you well know, next week we have the g-20 meeting here in pittsburgh and we're very excited about that. what we're looking for is what the stance is going to be on financial regulation and how they may be exiting all this stimulus. so for individual investors, they need to be aware of the types of investments that they're investing in. and understand that a change in financial regulation may impact some of these investments, such as etfs.

>> carrie, i apologize. at least we got you on. let's go straight to the president here. he's talking about the missile defense shield. >> i'm going everything in my power to help, that includes strengthening defenses to any and all threats to our people, troops shs and friends and allies around the world. one of those threats is the danger posed by ballistic missiles. as i said during the campaign, president bush was right that iran's ballistic missile program poses a significant threat. that's why i'm committed to deploying strong missile defense systems which are adaptable to the threats of the 21st century. the best way to responsibly advance our security and the security of our allies is to deploy a missile defense system that best responds to the threats that we face and that utilizes technology that is both proven and cost effective. in keeping with that commitment,

and a congressionally mandated review, i ordered a comprehensive assessment of our missile defense program in europe. and after an extensive process, i have approved the unanimous recommendations that my secretary of defense and my joint chiefs of staff to strengthen america's defenses against ballistic missile attacks. this new approach will provide capabilities sooner, build on proven systems, and offer greater defenses against the threat of missile attack than the 2007 european missile defense program. this decision was guided by two principle factors. first, we have updated our intelligence assessment of iran's missile programs, which emphasizes the threat posed by iran's short- and medium-range missiles which are capable of reaching europe. there's no substitute for iran complying with its international obligations regarding its nuclear program. and we, along with our allies and partners, will continue to

pursue strong diplomacy to ensure that iran lives up to these international obligations. but, this new ballistic missile defense program will best address the threat posed by iran's ongoing ballistic missile defense program. second, we have made specific and proven advances n. our missile defense technology. particularly with regard to land and sea-based interceptors and the sensors that support them. our new approach would therefore deploy technologies that are proven and cost effective and to counter the current threat and do so sooner than the previous program. because our approach will be phased and adaptive, we will retain the flexibility to adjust and enhance our defenses at the threat and technology continue to evolve. to put it simply, our new missile defense architecture in europe will provide stronger, smarter, and swifter defenses of american forces and america's

allies. it is more comprehensive than the previous program. it deploys capabilities that are proven and cost effective, and it sustains and builds upon our commitment to protect the u.s. homeland against long-range ballistic missile threats, and it ensures and enhances the protection of all our nato allies. now, this approach is also consistent with nato missile -- nato's missile defense efforts and provides opportunities for enhanced international collaboration going forward. we will continue to work cooperatively with our close friends and allies, the czech republic and poland, who had agreed to host elements of the previous program. i've spoken to the prime ministers of both the czech republic and poland about this decision and reaffirmed our deep and close ties. together, we are committed to a broad range and cooperative efforts to strengthen our collective defense and we are bound by the solemn commitment of nato's article v that an attack on one is an attack on

all. we've also repeatedly made clear to russia that its concerns about our previous missile defense programs were entirely unfounded. our clear and consistent focus has been the threat posed by iran's ballistic missile program and that continues to be our focus and the basis for the program that we're announcing today. in confront that threat, we welcome russians cooperation to bring its missile defense capabilities into a broader defense of our common strategic interests, even as we continue to -- we continue our shared efforts to end iran's illicit nuclear program. going forward my administration will continue to consult closely with congress and with our allies as we deploy this system and we will rigorously evaluate the threat posed by ball list tick missiles and the technology we are developing to counter it. i'm confident that with the steps we have taken today we have trent thenned america's

nash national security and enhanced our capacity to confront 21st century threats. thank you very much, everybody. >> and that was the president talking about the strategic missile defense shield. obviously one of the most crucial points of debate, particularly between the united states and russia. chicago cubs haven't won the world series in more than a century, but who cares. fans show up no matter how bad it is. talk about loyalty. darren rovell is live from the rooftop overlooking wrigley field with a special guest. darren? >> that's right. it's absolutely beautiful here, erin. they not only do 97% capacity to chicago cubs do in wrigley field, but they also, fans also come up to the rooftops here. and we're at a gorgeous rooftop today. and joining me now is dean bravos who is the general manager, manager here at wrigley dunright. amazing rooftop. you've got to tell me about the cubs. why do people show up in the middle of the week midday to fill this place and to fill

rooftops here? >> well, the rooftops are completely different. it's a shared social experience. it holds 200 people. everybody is together. and it's a completely different experience. >> tell me about the business of the rooftops. how long has these existed as they are with the bleacher style seating and filling, you know, 150, 200 people. how long have they existed? what do people typically pay to get up here? >> well, they typically pay, it depends on -- dynamic, how the cubs are doing, what time of season, the weather. 60 to $400 per person. and you know, the business professionalized or evolved as i would say the late 90s. it went from lawn chairs and barbecues to bleacher style seating and really unbelievable corporate entertainment venues. >> there are 15 operational rooftops. how big would you say this business is today? >> it ranges, i would estimate it could be between, you know,

20, 25 million to $40 million per season. >> okay. and then how much is dependent on how the cubs are doing versus how the economy is doing? people have said if will is a team in sports, maybe the red sox as well, but this is the smallest capacity in the majors. if there's a team in sports that is recession proof, this would be it. close, or has it been more recession resistant? but what have you seen here on the rooftops? they say 97% is sold out in there. what's been the rooftop business this year? >> i would say compared to last year, about a 15% falloff. and that's due to a variety of reasons. but i think that, you know, during the day, the corporate customers are a little bit, you know, they're tightening their belts a bit. and so that's probably impacted the business a bit. and last year's run obviously had an impact. you know, how well they did. >> how tough is this business? there are 15 rooftops. it's basically these buildings that the rooftop is on the top of the building and you're looking over the field.

there's 15 of these. how competitive is the business? i know that you currently have a lawsuit against one of the rooftop owners who advertises his rooftop and then brings to another -- bring people to another rooftop. how tough is this business? >> it's the greatest business in the world at one point but the other side of things, it can be an ugly business. and so, you know, we decided when we launched this wrigley done right because it's pretty straightforward. you want to fill capacity, have a great price, and everyone has a great time. and they tell their friends and come back. and so it's highly competitive. there's been a lack of collaboration to the extent that we had to even start our own website to have a depiction of where the rooftops actually exist because there was no way to do that and the link provided to the rooftop association that we were involved with doesn't do that. so we had to put up our own site. >> dean, thanks so much for joining us. it's an absolutely wonderful

view. we'll be here all day kind of talking about the business of the wrigley rooftops and we're here because it seems like the cubs are going to have another season where they won't win the world series, if they don't make the playoffs. that's the way it looks right now. and still, business is down like everywhere else, but it's pretty good. erin, back to you. >> thank you very much, darren rovell. we'll have another special report from darren coming on "street signs." now, breaking news on inventory data. i believe it's going to be natgas, sharon? >> that's right. we're waiting for the natural gas storage report to come out. we're expecting to see an increase around 73 bcf according to reuters survey of analysts. increase in natural gas storage at 66 bcf. as a result, we are seeing -- what we have seen for the past two weeks, a little bit less of an ejection cause a rally in natural gas prices. we're up five cents or so right now. around 380. right now i'm joined by randy who is a vet van trader in the natural gas. randy, we've seen about a 50%

move higher since september 4th in natural gas. even though right now we're looking at storage levels well above the five-year average. what's going on here? >> i think there was some bargain buying down at the $2.50 level and i think there's been a fair amount of short covering that's gone on over extended. we were at seven-year lows when you were looking at crude prices over $70. we obviously were very cheap relative to the other energies. >> right now we're at 3.83, it looks like nor natural gas. going to $4 or over? >> i'm struggling with the idea of $4 handle given that we have so much in change. >> erin, back to you. we have a rally going on once again in natural gas futures. >> okay. thank you very much. we've been talking about that for months, whether that would happen. we'll see. right now, oil is about flat. right now oil is in here and natural gas coming up. next, private equity coming to the rescue? really. david faber takes a look. maybe hey will come to the rescue of that 20% stake floating in the wind, nbc

universal. anyway, you're watching cnbc "squawk on the street." don't go away.

let's take a look at the market and the internals. we have gotten back in the positive territory. the little market that could, i guess. dow doing investment in the major average is up 15. let's look at the internals.

remember yesterday, even though we were very modestly higher, the internals were very strong. today, not so strong. modestly higher, modest internals. same story on the nasdaq. only 300 more, up and down. and now let's get back to the fabled one. how are you? >> i'm all right. how are you? >> doing all right. >> yeah? >> a little chilly here. mark came in early from his break because it was a little too cold. it's first day we've felt that. >> we had the windows open at home, too, this morning. it was chilly. talk about eastman kodak. mentioned private equity m coming to the rescue. kodak stock price not showing much of anything today that would indicate anybody coming to its rescue. that is because the company is in the position of diluting itself substantially as a result of raising a good deal of money that will enable it to pay back bonds on which the holders of

those bonds have a put option very, very soon. there had been concern that kodak might not be in a position to repay that money. but now it will be. but you can see the stock is down. it actually has been down a good deal more than that on news that kkr is stepping up to be one of the larger buyers of newly issued debt from eastman kodak. and, in fact, the notes that kodak will then be using with the proceeds of that deal have soared to a new high. they traded as low as 60 on the dollar. 60 cents on the dollar back in march when everything, of course, is trading as low as it probably has in some time. they're back up to to what you would expect, 98, almost, par. coback is cokodak is many n. a position to make it good. kkr is stepping up to $400 million in senior secured notes through 2017. annual interest rate of between what we're told is 10% to

10 1/2%. that's not bad. that's kind of -- that's buffett money. that's buffett rates there. that's a lot. and it also will give them the right to convert or i should say warrants, come along with the deal, which could enable kkr to convert into what would be 53 million kodak shares. roughly 16 1/2% of the company. interesting story in some ways for kodak, which seems to avoid a liquidity crunch. and an interesting story as well giving us a sense, by the way, they need to raise another $300 million from various investors. more of a note offering. interesting window into what's going to be i would argue probably the rule rather than exception. namably, these kinds of investments as opposed to ones in which a kkr would step up and make a, oh, $30 billion acquisition or 20 or 10. you're not going to see that quite some time.

financing is not there. perhaps a billion or 2 billion or more likely stepping up for deals like that. some ways acting more like a sovereign fund than an lbo shop. mark, back to you. >> thank you, david faber. up next, stocks on the move, including a refiner and a steel producer. mike huckman has an interview, the ceo of a biotech that just cleared a major hurdle. it will give us, quote, helping hand to the world's biggest drug company. you're watching "squawk on the street." we're still higher and we'll be back.

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saw the inventory data yesterday. that's part of the picture. clearly people are buying the stock in size. new corp., the hottest stock in the hottest sector here today, that's materials. upgraded from buy to hold at citi group. they like the improving fundamentals and the lean inventory. that stock is up 4 1/2%. medco cut from neutral to buy at goldman sachs. they see limited upside even if the company to follows through with a widely talked about acquisition in the pharmacy benefit management space. and kroger is weaker here today. down to equal weight from overweight at morgan stanley. they have been having all kinds of problems lately. that has been hurting the entire super or not so supermarket sector. erin, back to you. >> thank you, matt. let's get a check on what's making news outside our world. good morning, monica. >> hi, there. good morning, erin. yale university lab technician

has been charged with the murder of annie le. he has been taken into custody this morning. bail has been set at $3 million. clark was questioned earlier this week in anniele's death. her body was found on sunday in a building she and clark both worked. deadly blast in afghanistan has killed ten si criminalians and six italian soldiers. it happened when a suicide car bomb hit nato vehicles in kabul. the taliban is claiming responsibility for that attack. president obama continues his push for health care reform today. he's set to hold a rally at the university of maryland in just one hour from now. and of course, make sure that everyone gets the message, the president will be making various television appearances over the next several days, including a visit to the "slalate show with david letterman" and "meet the press" on sunday. next, mike huckman, interview with a ceo of auxilium. somebody just cleared a major

hurdle, mark. but first, oh, trish. >> the only other person who can sing as well as you can. >> i have not had the privilege, actually of hearing mark haines sing. we've got to do that sometime, mark. >> we'll sing a duet. >> there you go. okay. coming up at the top of the hour, packed show for you. another cnbc exclusive. we're going to talk live with dream works animation ceo jeffrey cassenberg. are they the next media company here in dream works to be acquired? plus, president obama is holding a health care rally at the university of maryland. we're going to go there live and talk about whether or not he can regain this health care initiative. all that, plus the latest market news from right here on the floor of the exchange. all coming up grour at the top of the hour. but first, mark and erin are back after this break.

welcome back to "squawk on the street" on cnbc. i'm mike hawk man. most people have never heard of this. in plain english, this is the bending of the fingers toward

the palm and it can be debilitating. auctionly yum has a drug on the market winning a panel vote in favor of approving it yesterday. joining me live now first on cnbc from washington, d.c. is auxilium ceo. sir, good morning and thank you for being here. >> good morning, mike. how are you today in. >> i'm good, thanks. since most people i presume are unfamiliar with this problem, can you briefly explain it, who it strikes and how your drug appears to treat it? >> yes. actually the contract chur is a condition that actually affects about 3% to 6% of theed edadult caution caucasian population. our product is an enzyme that will breakdown the collagen cord that forms that actually causes the ultimate contracture of the hand. >> your stock had a huge spike earlier this week ahead of this fda panel meeting. clearly, there's a little bit of

selling on the news and some profit taking going on now. many analysts are indeed raising their price targets on your stock this morning. at least a couple of them remain bearish and they're raising lingering safety concerns and also about the overall market potential for this indication. what's your response to that? >> you know, mike, we're very thrilled with where they are and the panel yesterday was phenomenal. 12-0 vote that the product is safe and effect shious. i think it will add value once approved here in the united states. >> there are a couple of other potential markets that you're working on as well. you're also testing it on something called frozen shoulder enzy enzyme. i need to approach this as delicately as possible. you're also testing it on curvature of another body part, that is particularly to men. please tell me about that. >> sure. the other condition is parone's

disease, it affects men predominantly as they get older. it's collagen deposition that affects the penis and causes a significant curvature. it's collagen that does cause the plaque to form and collagen plaque to form and with an enzyme, it may have a chance to break it down. we're currently in phase to be testing right now and should have results on that by the end of the year. >> i don't want to turn this into an episode of ask dr. ruth, but i think people are going to be curious about the invexs and does it hurt. >> it's administered directly into the cord and then into the plaque area. >> ouch. >> it really does have you know, minimal affect in terms of the pain of it, but you know, it is

pretty local reactions. you will get bruising and swelling, but if you avoid surgery, i think that actually, most men and most folks that are afflicted, would go to xiaflex. >> and are you going to get more money from pfizer soon? >> they signed a deal for us for europe. for both conditions. 46 counties including europe and eurasian countries. they provided us with $75 million last year and will provide us additional milestones and royalty payments as the product gets commercialized. >> very interesting. thanks again. for more, check out the blog at cnbc.com and follow me on twitter. back to you. >> interesting.

mark was also -- >> certainly learned something. any way. up next -- chrysler gets back into leasing. gm doing the same. a sign the credit markets are -- we'll be right back. >> we'll be back. 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.

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we're back. as david fab earlier, a series of financing transactions. amr is raising 2.9 billion in press funding and its stock is up 20% today. other signs the credit markets may be easing, chrysler's following gm to get back into the leezing business. is this a sign things are getting back to normal or just a sign of desperation? here to weigh in, senior auto analyst at ihs and paul taylor.

we all remember back when ending leasing wasn't a sign of doom or not and we asked the question and things got worse. i guess maybe it was a sign of doom. with them bringing it back, is it a sign of bringing things back to normal or an act of weakness. >> it's one step of correction in the credit markets. we're making slow progress with credit availability to the customers. this is an important choice to customers who want the conve convenience of leasing. also to customers who want the cash flow that leasing provides. >> where are they getting money? is this reliant in some way on some of the government programs that are supposed to encourage auto financing? are the markets healthy enough? >> i think they can finance it. we're probably not going to see the rates of leasing that we saw

before the situation occurred last year, but it will be coming bam and as i had said earlier, the presence of leasing is very popular, particularly with luxury cars. >> are the lease terms going to be as favorable as they have been in the past? because for quite some time, the automakers have been on the wrong side of the residual value calculations. >> yeah, that's the problem right now. particularly for chrysler. chrysler's residual values are lower than they have been. gm's are better, but not as good as the best. some of these leases are going to have to be subsidized by the

manufactures. >> you agree? >> the general trend of used car prices has been up the first eight months of the year according to data, and that's important to making the residual forecast that you have. things are likely to be better in pricing at the end of the lease rather than worse, because there's 5 million unit shortage of used cars in there. so the timing is very smart on this for automakers in general to offer more leasing. >> so the automakers have been burned repeatedly in the past on residual value. seems to me they're going to be very conservative and the leases might not be great deals. >> you should always price the lease against the purchase. interest rates are low. >> a lot of people don't do that. most people just say, what's the monthly and make their decision based on that. >> every time i get a chance, i