handing off for the final hour of trading. we are up just barely. we'll see if we can build on it. get another update from wall street. right now, you've got gold solidly above $1,000. thanks for watching. it's time for the "closing bell." a picture of the new york stock exchange, the three-day winning streak is in jeopardy in the final stretch. but stocks are making a push as we enter the final and most important hour of the trading day. right now, welcome to the new york stock exchange. and the closing bell. i'm scott wapner. maria bartiromo will be on in a few minutes here. this is one of those days of consolidations. had some economic reports out in the morning today. the headlines pretty good. but once you dug a little bit deeper, we started to move around a little bit. negative for much of the afternoon. although the dow pushing

positive territory by about four points. where we stand here now, leaders to the upside for the dow, caterpillar, j and j and bank of america. an interesting story in the nasdaq today. the oracle numbers a bit of a disappointment. certainly on the sales side. nonetheless, you do have some of those technology names hitting new highs today. apple among them. you had google pushing the level of 500 yet again. certainly a closely watched report there. take a look at where the s&p 500 stands as well. a fractional move to the downside today as we, as i said, enter the final and most important hour of the trading day. our team is covering the markets here in new york. and of course, up in chicago. we start it off with our own bob pisani on the floor of the new york stock exchange. >> what's important here is we were down a little bit in the middle of the day. that hasn't happened in quite a while. let's look at where we stand right now. we are off of the lows. remember something, we've had a series of days all throughout

this week where the markets rose throughout the middle of the day. we have come off the lows here lately. the important thing is the leadership groups we've seen, the gold, home builders and even to a certain extent the regional banks are all on the weak side today. those would sell off first if we had some kind of pullback. you think you would see more volume. these events have become more and more non-events as time has gone on. let's look at some of the big names here. first the gold stocks. big, big names. 15, 18, 20%. all of them to the down side here today. gold hit an 18-month high today. down here today. let's talk more about some of the other stocks, the home builders, same situation. 15%, 18%, 120% # # # # # 20%. the same situation in some of the regional banks which have moved up nicely in the last seven or eight trading sessions. again, you see down here, 3%,

4%, 5%. those of you in the big leadership groups, that's where you would see profit taking if you get people nervous about the notable runup. if we're positive, nine out of ten days, right now we're basically flat. tradertalk.cnbc.com. >> look at the internals, it is even steven in terms of 1-1 advance to declines. i have two items that i didn't have in my report. it seemed pretty significant in the evolution of tech. you can judge for yourself. thanks to jim goldman for helping confirm this. microsoft, just up slightly, confirming that they're putting a beta test out on the web for the microsoft office products, to use them on the web. and of course, this is a direct shot at google which does those all throughout the base. perhaps a migration away from the computing and everything else. they are beta testing those products. amazon.com, got word from amazon today on day one of dan browns'

sales for the lost symbols, sales on the kipdle were higher than the actual sales of hard cover versions. that takes out the presell numbers. even that brings that number down a bit, it is significant. the kindle, wave of the future. just take it for what it is. what's working, yahoo!. strong the last week. up about 12%. it stayed that high today. apple, as scott mentioned. and google both touched on 52-week highs. google seeing a little bit of resistance at the high level. the semi conductor index down. oracle, the fall-through from earnings, decent bottom line, light top line, guidance not great. down 2.

>> as far as the markets, we all know that they're going to sunset the guarantees of the government on money funds tomorrow. look at the two-day chart of three-month bill rates. what you notice is everybody seemed to pay a lot of attention yesterday. we saw those rates move lower. but they're creeping backs up. maybe this is a non-event. that's what most are hoping for. the next interday ten-year. listen, domestic accounts, a lot of banking entities now

reportedly buying options versus lending money out. this might be a dynamic that in a very strange way still keeps rates down generically. we need to pay attention there. the last chart, of course, is the currency chart. the dollar yen. it is fighting on this one-month chart to hold the 90 level as it's done several times. the dollar is actually a little bit ahead on the dollar yen today. let's go back to scott wapner. >> all right u rick santelli, thanks. how you should be investing in the environment. and to do that we'll break all the activity down with alec young, and michael lippert. gentlemen, good to have you here today. on what really is somewhat of a quiet day. a little bit of consolidation. this is a good thing that the markets kind of taken a pause. >> we don't focus on day-to-day activities, we're long-term investors. we find businesses that will grow a lot faster than the rest of the market and have markets that have superior growth opportunities, and looking at

what those businesses are going to be worth in four or five years. we find a lot of businesses are still attractively valued. what they'll earn four or five years from now. >> alec, what do you make of today's move? as i said, it's a bit of a breather. that could be a good thing. >> yes, scott, i definitely think it's a good thing. the market can't go up every day. >> it almost has. >> it almost has. but i think it's healthy. there's still a lot of nervous people out there. if they want to cash out, i think it's healthy to give that opportunity. it makes the longer term uptrend sustainable when you have profit taking along the way. >> what sectors do you like, what sectors are you putting money to work? >> companies that are benefiting from innovations in technology, we're innovations not slowing, it's accelerating. technology is infiltrating all of our areas of lives. internet, wireless, software, health care i.t. and areas like that. >> alec, what do you think about the technology trade as well? maybe a disappointment from oracle in terms of their sales numbers. we're going to get palm after the bell tonight.

how about the sector overall tonight which has run a lot? >> it has. we have been overweighted for awhile. about a month ago, six weeks ago we downgraded more of a neutral outlook. we still like cyclicals, but recommending overweight to more of the materials, energy and industrials. we're looking to play a little bit more of that weak dollar, commodity trade and also the global trade. >> i was going to ask you about that. certainly the weak dollar does remain a story, even though gold has pulled back about $4 or so. still at an elevated a level, $1,015 an ounce. do you think that story continues? it's helped pull this rally along, hasn't it? >> the s&p we do expect the dollar weakness to continue. certainly the dollar may be oversold on a day-to-day basis. over any length of time we remain neck tiff on the dollar. we have better growth prospects in other countries. australia likely to be raising rates sooner than in the u.s. that means you earn more interest with those currencies. we think that continues to drive

the dollar lower and that's a positive for spp spp earnings. >> is the weak dollar affecting where you're putting your money? >> not totally. it has in some ways. the weak dollar is certainly helping tech companies. a lot of businesses overseas. we have a number of businesses with more than 50% of the revenues overseas. nextel international operates wireless businesses in brazil and mexico. local currency is growing 20% to 25%. that's been masked by the decline in the peso. that's now reversing. when we get to the fourth quarter, the true growth of that basis is going to emerge. and that business is really growing 20% to 25%. >> alec, just to play off that, the talk of mexico, the peso. how do you feel about emerging markets, china and some of these other companies pulling this along out of this malaise we've been in? and really into a robust recovery. >> i think with all the nervousness of the recovery and the follow-through, you want to go with the most bulletproof stories. i think the emerging markets

still fit the bill. they've got the growth rate. you're seeing their currencies go up against the dollar than the euro or the yen. that's filtering through to your returns if you're an investor in the equities. we're sticking with that. >> i saw that you don't like telecom. we talk about, i like this sector, i like that sector. what do your investors stay away from? >> we're staying away from defensive areas, that tend to do better in recession. they have less earnings leverage to recovery. that is telly com and utilities. the yields are attractive but in a rising market, we don't think a couple extra percentage points in yield are looking at the appreciation in the defensive areas. >> we're pointing out, i saw randall stevenson head of at&t make cautious comments about telecom in general. interesting discussion there. alec, michael, thanks so much. we'll see you guys again soon. we do have about 45 minutes to go here before we close it up. again, we talked about this

tight range that we've been in throughout the day today. it's going to be a fight to the finish to see if we can get into positive territory across the board yet again. the nasdaq a bit of a lager today. also watching the s&p 500 with a fractional move to the downside. two bear stearns hedge fund with a catalyst, of course, of the financial crisis. up next on your editor charlie gasparino updates us on whether the two men who ran those funds are facing any kind of punishment. after the bell, he found two fortune 500 companies. find out if eli broad thinks the economic recovery is for real. and how he thinks the white house has handled the financial crisis. plus, republican senator olympia snowe may be the key lawmaker in health care reform. what will get to take her to sign onto a bill. but first, the most active stocks on the new york stock exchange, led by citigroup, up about 5% on this day.

welcome back to the "closing bell." the housing bubble deflates, causing destruction on a scale the world has never seen. products plummet in value. bear stearns fails. lehman goes bankrupt. freddie, fannie and aig become words of the government and ordinary americans lose. after all the pain, who gets punished. so far, just two hedge fund managers face charges. our on-air editor charlie gasparino joins us now. charlie, it was getting a little depressing running through that long list there. >> you needed to take a breath halfway through. >> no kidding. let's talk about these two guys. one of them i recall, is it tannen and -- >> chaffey and tanner. lots of e-mail traffic that seems to suggest that, you know, they believed one thing they were trying to get people to stay in the hedge funds and subprime mortgages, subprime

debt. while they really believed the subprime market was going south. it did go south. severely south. >> i'll say. >> but the point of this segment, and the column that i wrote today is this, if you look at the damage that ralph and matt did, you know, their hedge fund, even if you believe the worst, their lawyers have alternative splapgss, some of those e-mails would seem to suggest they say one thing and say something else, they're taken out of context. we'll find out about that in a couple of weeks when their trials begin. if you believe the worst of the case, the damage they did was contained to about $1.5 billion, $2 billion. if you look at the damage that we have a full screen of the ceos who i will tell you were pumping up their stock, saying positive things about their stock which later showed the opposite essentially happened. if we have that list, it's just about the ceo just about every major hedge fund. there you go. rick fuld, alan schwartz

specifically went on cnbc to say bear stearns was fully liquid days before it imploded. stan o'neal, john thain. all the ceos were saying the firm didn't need more capital, or everything was great. when ultimately it wasn't so great. you know, there were investigations of these firms. from what i understand, all of these investigations right now are in limbo. and i spent the last couple days talking with people that are, you know, white clar criminal attorneys. they said their bet based on the activity coming from the justice department or s.e.c. if any of these folks will be along the line. now, there may be a case where, you know, you can't prove that these guys did anything wrong. they were just irrationally exuberant.

they were dumb. which is very -- which could very much be the case. they were ill-informed. they were trul believers, and to a point that they had the argument, that may be the case. but i will tell you that the prosecutors spent a lot of time combing through e-mails on two hedge fund managers who, you know, if you think of the dot-com -- think of the bubble that we just expeced that led to the -- maybe the worst financial meltdown, definitely in my lifetime, maybe in the last century or so -- >> i sure as hell hope so. the only one of our lifetime going forward right now, right, charlie? >> but if you look at what they did, the major ceos did and top executives, compared to -- these guys were a bit player. >> charlie, let me just get your reaction to one other thing i saw move earlier. john mack, the outgoing ceo of morgan stanley, out in russia making comments about bonuses where he says banks must, quote unquote, handcuff bonuses.

clearly the industry has not put enough handcuffs on bonuses is what he said in an interview out there. i'm curious as to your reaction to that, given the fact that you sat down with the guy last week. >> i happen to know john mack a long time. i like him a lot. i think john mack, it's interesting he's saying this now as he's stepping down, kind of relinquishing day-to-day operating power, he's going to be the chairman of morgan staenley. you know, listen, all these ceos, as much as i like john mack, this is a political maneuver, because, you know, every wall street firm has to come to terms with the bonus situation in this environment. and i think, you know, the bigger question is goldman sachs, from what i understand is making money hand over fist. how are they going to handle their bonuses. that is really the question going forward. what a lot of people have in mind right now, i know they're giving me the hook -- >> we've got to run. i know you spoke with mack last week. >> the bigger point is what's

going to happen with these ceos and the misdirection, or the sort of different direction they gave the market compared to what happened. remember, there's a real casualty. when you tell people one thing, they buy the stock. and when the firms blow up, they lose a lot of money. >> charlie, thanks. see you soon. >> you got it. about 40 minutes to go before we close it up. again, pretty much where we stand here. going to be a tight race to the finish here to see if across the board we do make it into positive territory. the nasdaq down by about five points or so. fedex first quarter profits falling 53%. the company is seeing signs of improvement in the global economy. ceo fred smith tells us how that will impact the company's bottom line in a first on a cnbc interview. say you want to backtest an entire portfolio of stocks. market experts show you how through fidelity's extensive trading knowledge center. and fidelity gives you free research from 15 independent firms, with accuracy scores...

to help you decide which analysts to trust. 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. when she started forgetting things, i was hoping it was nothing. grandma! what a nice surprise! mom, it's sunday. that's when i knew i couldn't wait. mom's doctor said these were signs of alzheimer's, a type of dementia, and that prescription aricept could help. he said it's the only treatment proven effective... for all stages of alzheimer's. studies showed aricept slows the progression... of alzheimer's symptoms. it improves cognition... and slows the decline of overall function. aricept is well tolerated but not for everyone. people at risk for stomach ulcers... or who take certain other medicines... should tell their doctors... because serious stomach problems... such as bleeding may get worse. some people may experience fainting. some people may have nausea, vomiting, diarrhea, bruising, or not sleep well.

some people may have muscle cramps... or loss of appetite or may feel tired. in studies, these were usually mild and temporary. mom. talk to your doctor about aricept. don't wait. alzheimer's isn't waiting.

it's time for the "fast money" "final call," technology strong in the past six months. could the rally continue or has the sector been overdone? joining me with more is jim, director of tjm institutional services. jim, good to see you this afternoon. >> thank you. >> what do you make of oracle's results after the bell yesterday? sales were a little bit light. is that a story about oracle or a story about the tech sector? >> it's a story about the tech sector. i think people kind of expect

too much out of it. it's led a lot of this move. but the funny thing about tech is that it's the big huge player that leads not only the tech sector, but realistically you can make an argument for the market as a whole. there are such huge market cap at the top with google and microsoft obviously. those are the real stories today. interesting how today is. two hours ago i would have said the market showed clear signs of failure. tried to make new highs. turned around, it was going to close weak. now it's going to be kind of a race to the finish. google, though, look at google. google's come back 50% off the highs exactly. it's come off those a little bit, and coincidentally, the stock market as a whole seems like it's ready for retracement as well. it seems like both apple and google have reached a bit. we've got palm today leading the downside in cell phones. if you look at palm start, since july 1st, it's made a series of lower lows and higher highs. >> here's how i kind of see tech right now. is it fair to say that in

technology across the landscape, that you can get what we may call a disjointed recovery, meaning the tech companies that are more driven along the consumer lines, the apples, for example, which hit a new 52-week high again today, that's when the growth and recovery is really going to be in tech, then when you get on the business-to-business side, oracle struggling today, is that truth in that thesis? >> there's truth in that, too, but there's an element that you're forgetting as well. there's a consumer side and business driven side. the ibms and dells, companies get to the point they're not doing capital expenditures. but they either have to or do close up shop. we're going to see some of those companies start to sell and post okay numbers. tech is different than other things. it also represents hope, too. you've got innovations on the horizon. things like motorola. we're all sitting back here hoping this new product is going to be a blockbuster. it very well could be. tech has the interesting

element, and we've seen it before in our lifetimes where we can rally this whole sector for years and years based on the hopes in the future. tech is a little bit more layered than the other sectors obviously. >> give me quickly your opinion on palm. reporting after the bell today. it's been really hard for palm to keep up with apple and some of the other smart phone makers. >> maybe from a fundamental standpoint, maybe there's just room at the table for three big dogs in this business. maybe the market's telling us motorola is ready to take over that seat. if you look at palm's charts, it doesn't look good since july. >> that's a pretty bold statement. >> no question about it. remember, i cushioned it. i said the market is maybe saying that. i'm like a politician. i'm not making it myself. >> that maybe needs to be in there, i wanted to know if it was in capital letters or small letters. >> if you look at rim and motor roll lo, those are backing up

today. palm has not shown it's a reason to buy yet. >> we'll see what it tells us about the success of the three. see you soon, okay? >> thanks, scott. coming up on "fast money," peter schiff breaks down his bid for a connecticut senator. plus, all the after-hours action following palm's highly anticipated earnings release. what's your first move on the name tomorrow. melissa and the traders are alive at 5:00. fedex ceo fred smith will break down the company's latest quarterly results and outlook for a business in a first on cnbc interview. 

welcome back. we're talking to fedex. good to see you. >> m.b. is in the house. >> sorry for the delay at the top of the show. i just got back from interviewing president clinton. >> if you're going to be late -- >> i was not late. i mean, i was late. >> if you're going to be late, i mean, president clinton. it's not like you were getting a pizza or something. stuck in traffic. but president clinton. >> let's talk about the economy and what we're about to do, scott. federal express was a big story last week. and the stock was actually doing very well. fedex shares today under pressure, after the company

reported a 53% decline in first-quarter net profit. coming in at $181 million. but that number was in line with estimates. and fedex says there are signs that the global economy is recovering, as international shipments increase. breaking down the numbers right now, another cnbc exclusive, fred smith, ceo of fedex. thanks for joining us. always nice to see you. >> glad to be here, maria. >> we had activity around the stock certainly last week and at the end of the week before because people thought that there was optimism ahead, that the company was talking about things stabilizing. can you tell us what you're trying to communicate a week ago and today, how the quarter was, and of course, it is impacting the shares on the down side. >> well, over the course of our first fiscal quarter, which ended on august the 31st, we began to see traffic pick up in a number of sectors. and so we pre-announced earnings of 58 cents a share, which was

considerably above the ranges that we had put out there, or that wall street had. in addition to that, we increased our second fiscal quarter estimates to 65 to 95 cents a share. so i think that's the optimism that you saw. >> and can you tell us about business today? are you still expecting that we're seeing stabilizing, an order pickup? how would you characterize the quarter? >> well, we believe that gdp growth in the third calendar quarter will be 3%. it will go to 4.9% in the fourth calendar quarter. and be about 2.9% for 2010. probably the biggest thing that's going on is that industrial production, which is coming up because inventories need to be replenished, will be positive next year. we estimate at about 4% rather than a negative of 10% this year.

so we definitely believe that the economy has stabilized, and that there's some prospect for modest growth ahead. >> now, when you made the pre-announcement, you talked about an improving situation on a global basis. can you give us a sense of what regions are really leading that growth? what does the world look like? >> i think china is clearly running on all cylinders at the moment compared to where it was several quarters ago. you have strong growth in the asia pacific area, which has become a significant economy off and by itself. you have a lot of increase in traffic across the pacific, and to a lesser degree back to europe. u.s./latin america is reasonably strong. so you're beginning to see business conditions improve in a lot of areas around the world. >> as far as this inventory story, this is a big story,

because, first, companies cut costs. they obviously wanted to cut down all of those inventories. and at some point they are going to have to replenish those inventories. and then perhaps we see a spike in order flow and in business. where specifically would you expect that in terms of sectors, based on the inventory story? >> well, there's a lot of industrial production gk on now that was not taking place earlier in the automotive sector, because of the pick aup in the automotive sales for cash tor clunkers. you're seeing it in the technology sectors as industrial production replenishes inventories that have been bled down. you're seeing it to a lesser degree in the consumer retail sector. although the consumer, i think, is continuing to be very cautious. as you report well on cnbc, the savings rate year over year is up significantly.

and that's money that's not being put into consumption, but that's being salted away. so we definitely are starting from a new plateau, but we do think the prospects are favorable from that plateau going forward. >> that savings story is another really good one, actually. do you think there's been a long-term shift in the mentality of the consumer today? in other words, you know, because they have this new mentality to save and horde cash, how soon do you think that reverses or changes a bit and becomes more of a spending society the way we were? do you think this is a long-term shift that has been changed? >> well, i think it's likely to be a factor for some time to come. i think people realize now that the equity in their homes may or may not be an appreciating asset. i think secondarily, the demographics of our country with

an aging population where people consume traditionally less than in their earlier and middle years, and then finally i think there's a considerable amount of concern about the deficits and the ability of our country to sustain the level of government spending that we've seen the last several quarters. >> sure. let me ask you about the health 6 your own company. you've said that you will red e reducing expense i by $2 billion in 2009 and 2010. does this include job cuts? you said cuts will give you a very significant advantage over the competition. tell us about it. >> we built over many years, maria, a lot of shock absorbers into our system, because we are such a big company and we are tied into the global economy in such a direct correlation. our estimate is, along with u.p.s., we have between us

probably 25% of the country's gdp in or planes and trucks at any one time. so we can't be divorced from those larger macroeconomic trends. we've built in over the years many shock absorbers. we have a loft of our compensation unfortunately in the management, which is variable depending on company performance. that's a good thing, because it aligned our interests with the share owners. unfortunately our hourly folks and pilots have seen their hours decreased. we always have a reserve of depreciated equipment which we can put into play if we need it, or we can park if we don't. we have a lot of creative personnel policies. so we've been able to flex down and cut out a lot of systemic costs through smarter purchasing, and other ways. we've taken a huge amount of

permanent cost out of the enterprise recognizing that we are at this reset plateau based on this new mentality that we have here in the united states. >> sure. we certainly hope the modest uptick in worldwide economic activity prediction is correct. good to have you on the program, mr. smith. thanks very much. >> thank you. >> we'll see you soon. >> so long. >> we've got about 20 minutes left before the closing bell sounds. >> up next, former chicago fed president michael moskow where the economy is heading and if inflation or deflation is a greater concern right now. >> the tremendous story of badu.com. getting an inside account of the company's target plan. where does the growth come from now. and we'll look at the competition. competition. in telecom. ]

well, one year after the height of the financial crisis, the outlook for the economy is significantly more upbeat. the questions remain over how long a recovery will take. what plans the federal reserve has for an exit strategy. we posed those questions right now to michael m ouks skow. now vice chairman and senior fellow on the chicago council. so nice to have you on the program. welcome back. >> it's great to be here again with you, maria. it's been too long since we've seen each other. >> it certainly has. let's talk a little about where we are in this recovery, or recession, however you look at it. a lot of people say that, sure, we are having past the worst, but looking at a recovery that's going to likely bump along the bottom a little while. how do you see it? >> this clearly has been the worst recession that we've had since the 1930s. i think the worst is past now. i think we have bottomed out. and i think we are starting to see economic growth in the economy this quarter that we're

in now, the third quarter. and i think we'll see it again in the fourth quarter. so i think we're on the upswing. but this is not going to be a sharp recovery. because of the nature of the recession. so it's going to be a slow and sluggish recovery. it's going to -- technically we'll be growing, but it's not going to feel good. >> do you think we'll see unemployment get a lot worse? >> i could see unemployment going to the 10% range by the beginning of next year. before we start to see some employment growth next year. as we know, employment tends to lag the economy. the growth of the economy. and i think that's going to happen in this case, too. so we'll see a period where economic growth is expanding. the economy's expanding. but we will not see growth in jobs for some time after that. >> i want to ask you about, really, the flies in the oinltment, or really, the things

that you think might make things worse, or sort of the red flags that you look at. and one of them certainly that has been spoken about quite a bit recently is the exit strategy out of the federal reserve. what would you recommend the best path to take for the fed in terms of unwinding and backing out of some the stimulus that's in place right now. >> this is a very difficult challenge for the federal reserve. they have cut interest rates to essentially zero. and they've had a series of targeted programs. this policy has been appropriate. they've done the right thing. now, as the economy starts to grow again, at some point in the future, we don't know exactly when that's going to be, at some point in the future they're going to have to start removing this accommodation. and that will be a big challenge for them. because the employment will still not be growing as fast as we would like it to be. unemployment rate may still be very high at that point. and there will be a lot of

critics who are going to say, no, no, don't remove the accommodation yet. but the fed has to look out for the overall economy, and they've got to look out for inflation. and they are concerned about that. so that's going to be a very challenging period for them. i personally think that they're up to the task. i know the people, i know the culture of the institution, and i think that they'll handle it appropriately. but it will be very challenging. >> that's interesting, because alan greenspan had some comments about this just recently saying that what he worries about is congress basically getting in the way of the fed. and sort of discouraging unwipeding some of the programs at a time when you do have unemployment at 10%. >> well, that's exactly right. i agree with that completely. and this is a time when the fed has been criticized severely by some members of the congress. there's legislation proposed, i certainly hope it doesn't get enacted, to have audits of the actions of the federal open

market committee. so at a time when they're going to have to be increasing rates, you have this -- these attacks on the fed at the same time. so it makes it even more challenging. >> so what does your gut tell you? when would the economy be ready for higher interest rates? is this a first quarter of 2010 affair? >> well, i'm guessing here, like everyone else, and this is, of course, a subject to a lot of uncertainty at this particular point in time. i personally think it's going to be later than that. i think it will be well into next year. but that could change, depending on the growth of the economy, and other circumstances as well. >> what is the bigger threat right now? is it inflation or is it deflation? >> well, right now, i think that the -- there's no short-term concern about inflation in the economy. i think there is a long-term concern about inflation. short term, it's possible we could get into a period of what we call unwelcome disinflation.

but i think that as we move forward, i think that's less and less likely. so my concern now is really about the long-term inflation outlook, and of course, that ties in with the huge budget deficit that we're running this year. and the forecasts for very significant budget deficits going out over the next decade. >> should the deficit be a bigger priority of the administration? do you worry about some of the spending going on, and the fact that even if we were, which is probably likely, seeing taxes rise across the board in 2010, is that going to be enough revenue to actually put a dent in anything? >> well, it's not actually going to be enough. if you look at the congressional budget office projections, where they build in existing legislation, which means that the bush tax cuts expire next year, even with that, you still see very significant budget deficits going forward. so yes, i am concerned about the level of government spending.

i supported the stimulus package. that's a temporary series of expenditures which are appropriate. but beyond that, i'm concerned about the ongoing rate of government spending. because these programs just go on and on. and there's no one standing up and saying, time-out. we've got to stop. >> right. real quick on the stimulus. do you think it's been effective and do you think we need a second stimulus package? >> well, it's too early to tell exactly how effective it's been. i think it will be effective, projected to increase real gdp this year by about 1.75%, and next year by a percentage point, and actually then starts to detract from the gdp growth. i do think it will be effective. i disagree with the way they were allocated. i would like to see them allocated in a different way. all in all, i agree we should have done it. as far as the second stimulus package, i think it's much too early to even start thinking

about that. i certainly hope we don't get into a position where we need that. >> you mean more money toward infrastructure? >> that's exactly right. i would have liked to see more money toward infrastructure, because you get a double benefit. you get the benefit of hiring people on the one hand and then you get the benefit of increasing our productivity at the same time. >> an important point. always wonderful talking to you on the program. please come back soon. >> great to be with you, maria. >> thank you so much. joining us in shif. meanwhile, we have about nine minutes before the closing bell sounds on wall street. the markets turning negative. dow industrials down 15 points. nasdaq composite also negative. although, scott, the nasdaq is the winner in 2009. >> apple hitting a new high yet again today. google pushing about 500 bucks a share today as well. that tech story still has good prices today, even though the market is pulling back a bit. three industries that stubbornly holding up heil their peers are moving in reverse. %%%%%%%

cnbc's matt nesto has isolated ha he calls mule groups. >> i wanted a little sound effect there, scott. >> i'll leave that to you. >> thank you very little. if you take a look at what's going on here, we're just talking about stubborn stocks that refuse to go in the direction of the market here today. look at all ten sectors trading lower. nothing worse than the 1.2% decline of the telecom service sector here. but within that, there's really only one member that's going higher. look at american tower, the ceo of american tower was on with cramer earlier in the week saying, look, this is an industry that is growing. our company is sometimes confusing because of the way we depreciate our assets. but have a look at this growth stock. you can see the market is taking a look here. mule number two, we'll call it donkey kong, or maybe donkey conk, if you will, the worst of the 24 industry groups. look at the diversified

financials. the best, one of only six that are trading higher of the 24, within it the diversified financials, morgan stanley, bank of america. citi group all on the rise in the diversified financials. mule number three, take a look at the refiners here today. oh, my lord. 5.5% higher. versus decline in energy. energy the second worst performing sector. look within the refiners and you'll see valero, the biggest single-day move we've seen this year. really since back in december. there you go. the mule story. back to you. >> all right. matt nesto, thank you. up next, we're back with the closing down jount. after the closing bell, senator olympia snowe tells us what it will take her to sign on to health care reform. she's with us at 4:00 p.m. eastern.