here's what to watch for tomorrow. >> rick santelli on the floor of the cme group. tune in tomorrow for initial continuing claims. initial claims had their best showing last week going back to july. 530,000 and continuing claims reaching their peak in june. that number close to 7 million. we're getting awful close to 6. which direction? tune in and find out. >> i'm diana olick in washington. after several months of gains, existing home sales took a turn for the worst in august. was it an aberration or the start of a double dip? we'll get more clues tomorrow. pending home sales at 10:00 a.m. >> i'm phil lebeau. tomorrow watch for automakers to report relatively weak numbers for september auto sales, but on the conference call following those reports many are expecting the auto industry to paint a fairly optimistic picture of the future. >> with the market up 15% in the

last quarter. have a great night. see you tomorrow. >> announcer: this is cnbc.com "news now." general motors will wind down its saturn brand and network of about 400 dealers after penske watched away from acquisition talks. shares of unlted yarnlz parent ual down 6% as it announces plans to offer 19 million shares of common stock. the "wall street journal" reports hershey is still stymied in its attempt to assemble a bid for cadbury to rival kraft's. that's cnbc.com "news now." i'm scott cohn. and now "fast money" with melissa lee starts now. live from the nasdaq marketsite, this is "fast money." i'm melissa plee. stocks jumping 15% in the third quarter ending today. did you miss it? these traders have your best ways to catch up for the rest of the year. also tonight the world's largest bond firm gives us the secret to spotting an economic double dip. and a developing story from gm after hours that could shake market confidence in this new quarter. but first let's get to the word on the street today.

we've got a fantastic quarter and a lackluster end to it. not really a surprise, was it? >> to me it was a fascinating day. i thought we were going to completely break down after some of those numbers this morning. the market looked extremely vulnerable. then it came back. you've got to believe when we did that halftime report that now it's going to explode higher and close up 12. and handles and it winds up closing down. so to me it was very interesting. i thought it had every opportunity once it went positive to continue to accelerate, it didn't. but at the end of the day, as you say, nothing. >> and i think the fourth quarter will be just as exciting as the third quarter. here we are, this is basically sudden death. the battle of the bulls and the bears. the hardest thing to do during the course of the third quarter was actually to stay long the market. that was the difficult trade. and as we sit here on september 30th going into october 1st again you're questioning yourself whether to stay long the market or not. >> still bullish. everyone was looking for the same market, 1062 if you were a technical analyst, and we got there at one point.

we even breached it. 1063. but then people moved to the sidelines. and i think you want to see people be very cautious going into october. >> that's what happened in the middle of the afternoon today because around 3:00 you saw the s&p just fall off a cliff there, we just gave up any sort of hope of finishing the day higher. >> all my clients were waiting for that pop at end of the day that everyone thought was going to come at the quarter end. they didn't get it and they were forced to sell whatever they wanted to sell. >> what was your take on the day's trading, karen? especially given the economic data we got. >> i thought the economic data was surprisingly weaker. i had actually hoped and thought it would be maybe even a little more positive than the expectations. and in fact, it was meaningfully weaker. that's just one piece of data. so i don't know that you could fill in the whole story on that. but to me the real question is about asset allocation and about equities in the fourth quarter after such an outstanding quarter normally you'd think maybe a little pause. but i do totally agree with joe that there's a chase on to meet the s&p, which has been so strong that i do think there's still a lot of money that needs

to be put to work and will be put to work in the fourth quarter. so i'm optimistic. >> will they get spooked by snokt i've been seeing -- >> same with september, though. in fact, it was a pretty good month. >> they avoided september. i don't think they want to go back to the well in october. they'll move to the sidelines. that puts the push on november, december could be extremely aggressive to the up side. >> a lot of the economic data points have been positive in the third quarter. durable goods confusing because it was not today. chicago purchasing manager -- >> terrible. >> -- again, confusing. i wouldn't necessarily say terrible. this might just be a one-off. you want to see tomorrow in the ism figure if the strength that you are seeing in the industrial production figures, if the strength that you are seeing in the previous ism numbers, if it's a continuation, if it's there or not. so i'm not ready to say just yet that what we've seen from the chicago pmi and the durable goods that this is horrific. i need to see further validation from these other industrial numbers. then of course on friday you have unemployment.

>> what was really troubling about the pmi numbers according to a lot of analysts on the street is is it unusual to see a decline from august, neutral, 50, a decline into september during a recession? that's what they're saying. they hardly ever see that sort of pattern during a recession. and that's what was so spooky about that pmi number. >> orders and production is down. that is troublesome. >> we want to update you on a breaking news story after hours. gm winding down its sat wurn brand after talks with penske auto fell apart. cnbc's phil lebeau has the latest. phil. >> melissa, 1990. that is the year general motors announced the creation of the saturn brand. it was going to be a different kind of automotive company. no haggle pricing with dealers who were focused on customer service. and for four years it worked. but, well, now it's going to be wound down by general motors. the company announcing today ha it's going to wind down the business and the dealer agreements. they haven't set a time frame for how long the brand will stick around. but at some point they will bring it all down.

and this is because the agreement the company was working on to sell saturn to penske automotive group -- and essentially you're talking about selling the saturn distribution network of about 400 dealerships, that fell apart when saturn could not secure a supplier for vehicles following the end of its agreement with general motors. in other words, penske was going to have gm continue to build saturn models for a period of time. at the end of that period it would have to come up with supply from somewhere else. likely a foreign automaker or perhaps a company like magda automotive, which builds vehicles for companies. couldn't work out a deal with a third party. as a result penske's saying you know, what if i don't know for sure that i'm going to have a supply of vehicles at a certain date it's better off for me to walk away from the deal. that's what's happening. penske walking away from saturn. gm saying we're not going to look for another buyer, we're going to wind down the brand altogether. melissa? >> any sense of workers employed at saturn plants, if they're unionized workers and if they get transferred to other parts

of gm? >> a lot of saturn vehicles are built in springfield, tennessee. but that's not the only vehicle built there. there are other vehicles built at that plant. there's not a dedicated plant where gm will say that plant's going away and therefore those workers don't have a job. it's integrated within the company. as for the corporate structure, there are about 12 saturn employees at gm headquarters. they're either going to be reassigned within the company. something will be determined with those 12 employees. what we're talking about here, melissa, is the saturn distribution network. those dealers, who are considered among the best dealers in the country, those dealers who are saturn dealers, they no longer will be carrying the saturn brand, and obviously some of them have other brands that they're going to be selling, but they're not going to be doing saturn in the future. >> that was my question. how many are solely saturn dealers, and what happens to the inventory of saturn cars now? would you buy one if you knew that they're going away? >> they're basically going away. >> gm will always service them. gm will take care of saturn customers and continue to service saturn vehicles for the future.

they're not saying, hey, listen, after this date you're no longer getting service on your saturn vehicle. i'm not sure how many stand-alone saturn dealers there are. most of the ones i'm familiar with, they have other brands. maybe not on the same lot, maybe not at that actual property, but they have other brands that they can rely on as well. and that was the real key here. that's what saturn wanted, or penske wanted. they wanted those dealers within the penske automotive group. >> all right, phil, thanks so much for that update. we appreciate it. and if we can check on penske automotive shares in the after-hours session. we did see them spike higher initially on the news. we'll see where they are about half an hour after that news did break. there we go. they are in fact lower right now. is there a trade off of this? by not having saturn, does that put gm at a disadvantage and therefore ford or some other car companies at an advantage? >> i'm not sure there is -- frankly there is a trade off this, unless you own penske shares and are looking to buy more, which i have no view about whatsoever. i still think the way joe's playing, to be long forward, trade off an existing long position, it's been up and down,

but i think ford's headed back boff 8. >> let's move on here and talk about oil. that was one area that was topping the tape. surging 6% back above 70 bucks a quarter to end the quarter. significantly outperformed the market overall. we showed you that chart yesterday in terms of the underperformance of oil. what is happening here today, joe? obviously we've got the inventory numbers and there was also a little bit of news about an iranian diplomat in d.c. today. >> well, i think there's a lot to talk about when you're looking at the energy space, when you're looking at commodities. i think money marnlgz will be allocating in the fourth quarter money to commodities, whether it be sugar, which i bought today, whether it be copper, or whether it be oil. if you look at oil, the concern was in the third quarter that forward-looking regulation will restrict buyers of the futures contract. the conversation i've had in the last couple of days is now the president, this concern we have with the situation with the iranians, that kind of removes that argument. you can now say, okay, well, i'm going to be buying futures because i have concerns about the situation in iran, i'm not

really that natural speculator that the government is targeting. toyed in oil guy will tell you this, he told you this last year, gasoline drives the energy complex. gasoline took oil down last year. today after the inventory numbers came out gasoline was as firm as a rock, you should have went out, buy refiners, buy sunoco, buy frontier. and that strength in gasoline was what drove oil futures higher. and i think that reversal in the momentum in the oil contracts, that stays in place -- >> i've got to ask you to back up, joe. i need some clarification. when you said you can go ahead and buy the futures because you're than speculative, you're actually concerned about geopolitical risk there, aren't you speculating that the geopolitical risk is going to cause supply disruptions? >> but you're not going to be the target. you have the explanation. you're not going to be the target of the government saying, okay, well, you're in there speculating on the price of oil, driving the price of oil up to $100. what's reasoning behind this? the reasoning behind it is the concerns that you have going forward, protecting yourself, protecting your portfolio, protecting what you may have in physical assets against the geopolitical concerns that we

have right now in the middle east. and they're very real. >> so the flip side of that is if you are to believe oil futures are a buy, are long here based on that concern, would you then go into an oil etf, which could be impacted? >> absolutely. today the uso performed just as well on a percentage basis as oil futures themselves. >> karen, you've been concerned about the cftc proposed regulations, et cetera, limitations on futures holdings. so therefore, you know, does this geoplith risk remove that sort of concern? does it outweigh it at is this point? >> i don't think it does. even if you take the cftc out and they make no changes at all to the ung or the uso or any of those, it is interesting the contango or backwardation could make the uso either underperform or outperform oil. we saw it underperform last year. you get a big rush to buy oil? i think, joe, you would know this better than i but i think uso would actually outperform. >> and the contango is beginning

to come out of the marketplace right now. the spot contract is only 25 cents below the next month's contract. >> i think the cftc conversation, if you chart oil you could see once that conversation started oil really ran out of gas, pardon the pun, but it did. it started backtracking as soon as that conversation started about regulation. >> let's move on and talk about another commodity today that did nicely in the slow pace. gold back over $1,000 an ounce at the end of the quarter, higher by 8% p joe, i know you overnight bought some gold futures. at what level did you buy? >> i mean, the logic is that i bought gold somewhere below 1,000 bucks, which i was actually fortunate to do. but the logic behind buying gold at this point is look, gold has had every reason in the last seven days to go down and it has not. ranging from the news from barrick gold to the imf selling gold to the federal reserve itself and getting a little bit of a bid in the u.s. dollar. gold just has not gone down. and gold should go down. and when gold goes down, it goes

down violently. and it has not done so. that is why i believe the trade here to the up side. >> listen, and you can make the same argument that it had every opportunity to go up and it didn't. it's definitely a tug of war right now on the gold market. it had a nice reversal today. it should break out from where we are right now. it has no reason to stop going higher. it does scare me, though. >> it's about inflation fears, right? >> i'm going to take a pause because we do have some breaking news here. we have been speculating in the past will ken lewis make it through the year? no better guy to talk about this than charlie gasparino. charlie, what is the latest? >> our long national nightmare is coming to an end. not really. he has notified the board of directors of bank of america that he will step down by the end of the year. sources tell cnbc this was his decision, they're telling me, not the board preb, not regulatory pressure but he thought take one for the team, so to speak. he's come under a lot of pressure stuff, all the bonus stuff, the cuomo investigation. but ken lewis is out. that will be by the end of the year. and what they're telling me inside b of a, and we are

speculate about this all day long, is that it's his decision, he wants to go, he wants to spare the company further turmoil, and he does have a succession team. we have five names we should put up there. these are the guys that are possibly -- do we have those names or do you want me to read them out in. >> why don't you go ahead and -- >> these are five or six names -- by the way, there's no successor named right now. i think that's going to be done in the next couple months. he's note feith the boaifying t now. joe price, the cfo. brian moynihan, the head of the consumer bank. sally krawchuk, the head of brokera brokerage. tom mont ag the head of trading. there we go. barbara desoer, the head of mortgages. greg curl, the -- i think if i were to lay odds he think the guy that have the inside track are moynihan and curl. curl is the head of risk, head of m&a. he put together the merrill lynch deal, which if you think it's a good deal or not it's

going to be good in the future and it's kind of the future of b of a. so that's one sort of positive in his respect. brian moynihan, a positive for him is the fact that simply he's done most of the businesses. a lot of people give him the inside track. i know a lot of people speculate about sally krawchuk but they don't give her the inside track on this. but ken lewis is stepping down. he's notifying the board probably momentarily, or he's done so already, and it's going to be by the end of the year. >> has the company given you a comment on this? even if it's a no comment. >> no comment yet, but my sources on this are impeccable. i will tell you this. he is stepping down by the end of the year. he is telling the board he's stepping down. he's either doing it now or he did it just a few minutes ago. and ken lewis's reign as ceo -- remember, he gave up the chairmanship not too long ago amid the merrill lynch ching thing and all the stuff with the bonuses. he's no longer the chairman. i forget the gentleman who is the chairman. but he will give up the sort of day-to-day operating title, ceo. he'll be essentially out of the company. this is a major thing.

remember, we've been speculating about this for jose. i reported i think last week that, you know, the only way he would go is, a, if he was charged by the s.e.c. >> charles, thank you very much. come back to us if there are some more developments. >> next time we come back show my book, please. if i'm going to break stories i want to see my book. >> which one? >> the sellout? >> the sellout. >> "the sellout." the book. charlie, thank you very much. if we can throw up bank of america shares and see if there's any sort of reaction in the after-hours session. karen, you are an owner of the common as well as preferred. is this a positive? according to the after-hours action it does look like it's taken that way. >> i think it's a mild positive. the timing of the event is what's newsy. i think people thought in the not so distant future, a year or two out, that ken lewis would be

out. i think there is an interesting team there from which to choose. i think given all the noise and all the pressure that's been directed at him this is a positive to sort of try to get that out of the way. >> i'm long the stock as well. it's been an overhang. i agree with karen. it's a positive. short-term knee jerk reaction stock will be bought, maybe it will settle in around these areas but people that are in it think it's going much higher longer term. >> what is the flip side trade? >> that consumer debt is not as strong as people think it is, foreclosures going to hit the market. i agree bank of america is one of the best franchises if not the best franchise out there. karen talks about it all the time. my concern is the businesses they're in hit the floor again. and listen, that could happen. some of the data we get isn't as strong as i would like. >> what does that say about a business like citi? >> exactly the same. i think bank of america's an investable stock. citi to me is just a trading stock at this point. >> going to take a quick break at this point. the news from our own charlie gasparino is ken lewis is

telling the board as we speak that he is stepping down from the ceo post bit end of this year. bank of america shares in response to this news moving higher. we'll keep you posted on all the latest developments. plus we've got more word on the street on the other side of this break. while the stock market's making all the headlines, it's the bond market that will dictate the trading next quarter. one of the biggest names in the biz on what you need to watch. and it's a top concern for government. >> i mean, what is that about? >> and businesses are fearing the worst, too. swine flu making a comeback. are we prepared to weather an outbreak next quarter? plus, guess what? seven straight months of gains. will buy and hold pay off yet? the chairwoman's slow money picks you need to own. when america's post-market show continues.

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welcome back to "fast money." we're live at the nasdaq marketsite. here's the latest on the big news developing after hours. our own charlie gasparino is reporting that bank of america ceo ken lewis has notified the board or is notifying the board as we speak that he will be stepping down as ceo by the end of the year. you take a look at bank of america shares in the after-hours session, we are seeing a bounce for those shares. according to charlie's reporting, lewis was not asked

to step down. the decision was not a result of regulatory action. and no successor has been named yet. although there are a list of six names. all the other wires are catching up to charlie right now, and we'll follow the story and bring you all the developments as it warrants. time now to take your positions. we note at the top of the show today marked the end of a very successful third quarter for the bulls. one strategy that could have worked out, buying the previous quarter's fallen angels, or stocks that have had huge tumbles. case in point, our parent company, general electric, down 39% in the first quarter, up over 50% over the following two quarters. so that worked out nicely. looking forward, which fallen angels could rise again next quarter? jon najarian is one investor who is praying for the resurrection. he's also the co-founder of optionmonster.com. all right, dr. j, enough of being pious. >> okay. that's right. >> that was easy to snap you out of that. give us the fallen angels that

you are looking at. >> sure. well, i look mainly at technology for a whole host of reasons, and i really do follow tech pretty closely. you know pete does too. leap wireless. l-e-a-p. the stock's down 41% in the quarter. that'sy think this one represents a pretty good buy here at about $19 a share. this is jump and cricket. they're in the wireless prepaid space. and i think the competition is immense for that, but i think the stock at less than half the price of the 52-week high is a bargain. so i think that's one of them you'd buy. i think synaptics, syna-s another. also down 35% in the quarter. this is of course touch applications for computers and smartphones. the things like apple, if they ever do come out with a palette or a tablet, i think synaptics is going to be a big part of

that. so with this stock down 35% and the tech cycle starting to pick up with the microsoft o.s. 7 rollout and so forth. even if it's not a tablet, i like these guys. and lastly, memic electronic materials, which is wafer, wfr. down. of course solar stocks have been hammered. but these guys have worked through inventories. that's why one of the reasons i think think get some pricing power back. >> it's karen, dr. j. do you hold them the whole quarter, is this an inherent bet long the market or do you short the market against it and you look for outperformance? what's the strategy? >> yeah. i would basically, karen, look at some of the outperformers, just as we did with general electric buying, you know, a fallen angel. i think you could look at apple and google. i think they trade sideways in the short term. so if you're somebody that has that kind of weighting to a portfolio, i would take the hottest things into the end of the quarter, and i would at least be on the sideline if not short of those names and long

names like this that i think are going to be the value plays that the funds are going to be buying as the fourth quarter begins tomorrow. >> dr. j, specifically for yourself, your strategy, are you actually buying these stocks or are you playing the options? and what did the pricing look like in terms of the options? >> well, volatilities, as you know, have been pushed way down as the market has rallied. so these are also in that relatively cheap volatility time frame. a lot of activity in leap wireless today, too, though, as speculation even of a takeover in the space starts to heat up. and like i say, with the stock down 41%, you can see why. i'm mainly doing a covered right strategy with these. that is, i own the stock and i've written call options -- >> dr. j, sorry to interrupt. we do want to tell our viewers that bank of america has in fact confirmed that ken lewis will be stepping down at the end of the year. they say that he is retiring. he is concluding 40 years of service to bank of america. december 31st, 2009. so again, our own charlie

gasparino brought that story first. bank of america now ten minutes later confirming that story. take a look at the after-hours chart once again if we can because that's what we like to do, see what the reaction of the stock is, and it is still in fact higher. so it wasn't just a knee-jerk reaction so far. karen. we got the confirmation now. >> now the race is on. >> now the race is on. who would you like to see succeed him? >> oh, i don't know. i think maybe what about somebody from the outside? i don't know if that's a possibility at all. i mean, as talented as sally krawchuk is, she's so new to the company that not her. >> mont ag fixed goldman sachs. he probably won't get it. but you know, you want to go out on a flyer. he's the guy that can take them to the next level. >> let's bring in dick bove. he's on the fast line for his analysis and his perspective. dick, is this in fact a positive for bank of america stock as the after-hours action is indicating at this point? >> well, i think the reason why the market thinks it's a positive is because you're

taking this whole corporate governance issue away from bank of america. in other words, since the focus of all of the anger at bank of america has shifted from the company to ken lewis, if you take ken lewis out of the picture, you take away the problem from a corporate government standpoint. but for bank of america this is bad. i mean, ken lewis was a phenomenally good ceo. he's made a series of very strong, positive decisions, including buying merrill lynch and countrywide. and therefore, i think there is a definite loss to bank of america without ken lewis being there. but i understand why the market likes it, because you're taking away an irritant. in terms of who's going to replace him, i would assume brian moynihan would be in the lead because liam mcgee just left to become the ceo of hartford. sally krawchuk isn't in running in any way, shape, or form. and neither are the people who came in from merrill lynch to

head up the investment banking area. so i would guess that brian moynihan would be the number one candidate. >> dick, by saying that, ken lewis stepping down is bad to have bank of america, does that imply they are in fact trading down by taking one of these possible successors and making him or her ceo? >> absolutely. there's no we in my mind about it. ken lewis was one of the most brilliant bank executives in this country. he's proved it over 20 years of making solid decisions. he's created a company which went from a nothing bank in north carolina to being the largest bank in the united states, with 12% of the nation's deposits, a number one position in a whole series of consumer and commercial products. for him to be pushed out on this issue is almost outrageous. >> hey, dick, it's joe. does this change the time frame at all for repayment of the tarp? >> no. i think it would be a mistake for bank of america to repay the tarp at this point in time because the government keeps making these noises as they did last week at the g-20 that

basically they want more capital in the banking industry. and until the government defines clearly what they mean by more capital, it would be a mistake for bank of america to repay the tarp and then go out and sell common equity to further dilute shareholders. so i think that you'll get tarp repaid over a three to four-year period and installments. i don't think that they will repay it back, nor do i think that they should repay it back. >> so dick, given the news and given the fact you that think this is a negative for bank of america, would you then say to investors if you're in bank of america to maybe rotate to another name at this point? does the competitive landscape change for investors? >> well, you know, basically, bank of america has its position, as i mentioned, having the largest amount of deposits as a percentage of total deposits of any bank in the history of the united states, a dominant position in a variety of lending products. the probably that when the economy improves that its loan

losses are going to collapse from 55 billion, which is what they should be this year, to something on the order of 10 billion, which means that the outlook for this company's extraordinarily positive over the next few years. so no, i would not suggest moving out of this stock. >> okay. dick, thank you very much for your time and your analysis on this breaking news story. dick bove. and of course the news here is that bank of america confirms that ken lewis, the ceo, will step down from his post by december 31st. he is in fact retiring. we are seeing a tick higher in the after-hours session for shares of bank of america. we will bring you next the man who broke the story, charlie gasparino with the latest developments. stay tuned.

welcome back to "fast money." of course the story you heard here first on "fast" thanks to our on-air editor charlie gasparino ken lewis is stepping down at bank of america at the end of the year. let's brirng you the man who broke you the story. charlie gasparino. charlie. >> salud. >> yeah. last week you reported if he did resign it would be because he was facing charges by the s.e.c. that is not apparently true at this point as far as you know. >> well, i mean, is it true?

i don't know what's in his brain or what's going on at the s.e.c. i can just tell you what he's saying. and you know, i mean, my sources are pretty impeccable. what they were saying is they thought he can -- his ceoship, his tenure there can withstand a sort sort of charge, a civil charge. obviously cybill everything gets thrown out the window. but criminal i don't think is on the table. they believe it could withstand a civil charge from andrew cuomo's office, the new york attorney general, over this bonus issue and the disclosure matters related to that. they did not think, my sources inside b of a, that he could withstand and remain in place if he was charged civilly by their top regulator, which is the securities and exchange commission. now, do i know right now that the s.e.c.'s ready to charge him or they've concluded they're going to charge him? no, i don't know that. i can just tell you that it was kind of interesting that i reported that last week and this happens now. they are clearly saying that -- the backstory at least according to people close to lewis is

this. he went on vacation, spent a couple weeks on vacation, came back, thought about it, thought about all the stuff that was going on, obviously talked to his family, and decided that enough's enough, he's got the board in place, he's retained part of -- they want to repay part of the tarp money by the end of the year. apparently, they repaid some other government program. from what i understand they've exited the government loan guarantee program. whatever that is. i'm not quite sure. banks have been bailed out so many times it's hard to figure out exactly what they owe the government. but the tarp i know they haven't paid back and they plan on paying it back by the end of the year. and that this is totally his decision. i will say what's interesting about this is how mum he kept it. it's not that i have the greatest sources in the world, but i know he has met with people recently who he does business with and he hasn't said a word about this. not even a blink. not even a head fake. i mean, this guy is obviously -- all these guys are trained to keep their sort of thoughts to themselves at times. >> sure. >> but it was pretty interesting that up until today he was -- i know people that met with him

and he wasn't saying anything. i mean, people outside the company. he didn't say anything -- >> up until 10, 15 minutes ago, charlie, when you came on air with it. this raises a question because the other ceo that everybody is watching in terms of who is next to step down would be vikram pandit. what's going to happen there. >> but you know, vikram isn't is not under -- vikram may get sued because everybody is getting sued. i don't know if there's suits against citigroup. i'm sure chuck prince for some of the disclosure problems or alleged problems is probably getting sued. but you know, vic ram pandit doesn't face regulatory issues. i mean, you know, clearly ken lewis does. whether that's the reason why he resigned -- i'm sorry, i've got a crick in my neck from holding the phone on my neck all day. but if that's -- you're laughing at me. >> you need a bluetooth. get with the program. >> whether that's the exact reason, because of regulatory issues i can't tell you. but clearly the difference between vikram and lewis, ken

lewis is that listen, they both have problematic banks, they've both stabilized their banks. the difference is the regulatory issues which ken lewis faces. i will say this. it was karen who thought maybe an outsider might come. we put those five names up. i think that's pretty interesting. and i think the outsider may be an outsider who's actually an insider. now, two names that i heard that may get it are board members. a guy named bill boardman. i think he was the number two guy at bank one. somebody there knows exactly who he is. i don't know him. but i think the sort of inside candidate that i'm hearing is a guy named chad gifford, who was the ceo of bank of boston. and i've heard his name in the past. so you know, those are -- that's the sort of alleged succession plan. they always tlae that out there because boards need succession plans. and that succession plan was announced when, a month or two

ago? but i hear these two board members have a shot at the top job. >> chuck, we've got to leave it there because we've got to show you the brook. and i wish you the best of luck in selling the book because you need to make enough money so you can buy yourself a bluetooth so you don't get that crick in your neck. >> what is this music? is that church music? >> maybe. all right, chaz. come back to us with developments. charlie gasparino, the man who broke the story of the hour. that of course is ken lewis is stepping down at the end of the year. in the press release, we should note, bank of america is saying that ken lewis is retiring. he was a key architect in building a truly global franchise. and that they are moving in a deliberate and expeditious manner to select a worthy successor to ken lewis. again, we'll track all of the developments of this breaking story as they come in, and we will keep you in touch with them. meantime on the other side of this break we will falk to tony crescenzi of the biggest bond

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welcome back to "fast money." we continue to track the big after-hours news concerning one

of the biggest financial institutions in this country and the world, bank of america. ken lewis is retiring december 31st of 2009. charlie gasparino brought us the story first. bank of america comes out and confirms it. we are seeing the stock move in the after-hours session. we should note according to charlie's reporting as far as he knows this is not the result of any regulatory action taken by the s.e.c. against ken lewis, this was a decision he reached on his own after he took a couple weeks of vacation, decided to step down. it is amazing, karen, we were talking about this earlier, the change in landscape when it comes to the ceos who were in place one year ago and the ones remaining today. because there are really only two, i think -- >> there's two left. >> jamie dimon and -- >> lloyd. >> karen had to mention he's hot. >> and blankfein. >> and lloyd fein. >> chuck prince and stan o'neil. been through a couple of ceos at aig. john thain, of course.

it's really an extraordinary -- >> oh, john mack. john mack-f you're watching. >> that's true. >> he's there. and he still is there. >> it's rather ironic that the news comes basically a year from when we were all discussing tarp. this was the moment for tarp. this was the weekend, actually, that washington was debating tarp. >> it's all perception-reality. when dick bove said are they going to pay back tarp? he said i don't think they will, i don't think they should. they're going to because perception's reality. people see that az source of strength, a sign of strength. and perception-reality again. john thain is only remembered for his wastepaper basket at this point. $40,000? >> and his commode. >> and he was a brilliant man. >> let's move on. if there are any breaking developments we'll bring them to you. but meantime time to take your position on bonds. it has been a great quarter for stocks so, will investors continue to treat bonds as a safe haven in q4? our next guest hails from the world's largest bond fund, pimco. tony crescenzi, market strategist, portfolio manager, friend of cnbc. great to see you. >> hi, melissa.

>> why are you watching the 4% on 30-year? >> we're watching a lot of different yields. that's one of them. >> okay. >> the 30-yeartion right near 4%. the benchmark level in the market tends to focus on these things. i'd say something bigger perhaps would be the ten-year breaking 3%. that would say something about the stabilization we've had in financial and economic conditions. it would probably take some reversal of this for the fall. but the deals are falling because the inflation rate is. it's well antonio inflation rate tends to lag the business cycle and the recession was helt felt foote last few months. it could be a year or two before the inflation rate reaches its trough if we go by history. if we look at yields we have to go beyond the no, ma'amal level and think of what they call the real yield, which is the nominal level minus the inflation rate. and if the inflation rate's expected to fall, these yields don't look as unattractive as some will say, just looking at the number. >> tony, it's karen. so are you saying that you're

going to be -- the bond market is giving you information about the economy or the economy is giving you a foreshadowing of what's going to happen in the bond market? the latter? >> a little circular reasoning there. but the yields are falling because of -- i think in part, as i mentioned, the inflation rate is expected to fall. there's still some doubt about what we call the handover -- or the hand-off between the fiscal-led and inventory-led sources of stimulus to the economy that are now giving us the rebound we're seeing to the economy and the more sustainable sources of demand. consumer spending, for example. we haven't seen any change in the income story. saw adp release very weak figures on employment for the month of september today. and consumer confidence on tuesday was also very weak, suggesting weak employment. so without improvement in income growth, we may not have a very easy hand-off to the consumer from government-led and inventory-led stimulus. so what we should look at, then

is whether income prospects improve and if yields keep falling it might suggest that people are worried about this hand-off. >> tony, we've got to leave it there p sorry for the compressed timeline. we've got a lot of breaking news today. appreciate it. tony crescenzi of pimco. also want to bring you this latest development from the office of the attorney general, andrew cuomo. ken lewis's decision to step down will have no impact on our continuing investigation. so that is the press release, the statement from the attorney general of new york, andrew cuomo. again, we'll keep you abreast of all the developments as they cross. time now for today's edition of "pops and drops." pop here for nike. up 8% today. grasso. >> i think the move's over. i would stay clear of it for now. >> we've got a drop for biogen idec. down 2%. karen. >> you know what goes up must come down. sorry, carl. it's all right. you'll get it. >> we had a pop here for huntington bank shares. they are up 7% today. joe. >> deutsche bank upgraded them from a hold to a buy. i'm not going to get too excited about a regional bank given the current valuations. i would avoid the name.

>> drop for sks. >> the comps have been lousy. nothing looks good right now in this stock. >> and we've got a drop here steve ballmer. the microsoft ceo taking a pay cut this year as the company's sales decline for the first time. he will be taking home about $75,000 less than 2008. but ballmer won't be going hungry. he still has about 408 million shares in the software giant valued at more than $10 billion. >> is that howard dean? it looks just like him, didn't he? >> almost the same. they sound almost alike. a drop here for the hmos today. they were down. grasso? >> i think it's stock specific. i like unh. the rest of the sector i'll steer clear. >> "new york times" today down 8%. karen? >> i guess it was all excited yesterday on the gannett news that maybe there was hope for the "new york times." but maybe there isn't anymore. >> gannett, by the way, finished the day sharply higher. that's interesting. a drop here for disney. down 2%.

joe? >> a little end of quarter profit taking. you could still be long the mouse house. >> we've got a pop here for jefferies. up 1% today. guy? >> want to mention another ceo that's still there. richard handler. i think it goes to 29. >> a pop here for citigroup. according to reuters, the bank will be giving away bob dylan's yet to be released christmas album entitled "christmas in the heart." citi customers enrolled in the rewards program will be able to download tracks off the album a weerk before its release with dylan's proceeds going to charity. >> that would be good for you, but you don't know how to download. >> i don't. i don't want to know. >> you want it on vinyl. citi, send guy vinyl. >> you guys know i still have a record player, the stylus, the whole thing. absolutely. >> coming up next, the sector trade on biopharma into swine flu season. you're watching "fast money" on cnbc, we're first in business worldwide. >> announcer: "squawk box"

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welcome back to "fast money." we do have a statement for the new york attorney general, andrew cuomo, regarding ken lewis stepping down as ceo at the ebbed of the year. the statement reads, "ken lewis's decision to step down will have no impact on our continuing investigation." that is the very latest there. of course charlie gasparino first breaking the story, also saying his decision to step down was not a result of any regulatory action that he knew of. and we are hearing this from the attorney general's office, that the investigation will in fact continue. time now for sector trade in biopharma. the space getting lots of attention this morning on positive results for new drugs from novartis and orexigen and a mounting public concern for a

deeper swine flu outbreak. is this a sector to watch this winter? we bring in mike huckman, our pharmaceuticals reporter, for the very latest. mike. >> yes. so no props except this sheet of paper with some notes on it, and no antics for you, but i do have some news although it pales in comparison to charlie gasparino's scoop. biocrist pharmaceuticals announced a while ago it's moving its anti-viral. it's be a vaccine, it's an anti-viral for the flu. you take it after you get the flu. into two late stage studies. and it's talking to the fed about a request for proposal about making it available on an emergency use. there is that news. on the vaccine side we've got three major vaccine makers, san phi aventis aft rah zeneca and novartis saying they've already started shipping their vaccines. glaxosmithkline waiting for approval of their vaccine. >> is it already baked into the stock prices, swine flu impact? >> i think i heard you guys use the term one-off earlier. vaccines are a one off or two

off. you're looking at one or two quarters, maybe three quarters with a financial benefit. what you're really looking for if you're investing, especially in the major drug companies, are long-term drugs that grow over time, and to that end novartis, coincidentally, today announced positive late stage test results on a new oral pill for multiple sclerosis. and that's why biogen idec, elan, all took a ding today because they already make drugs for m.s. >> how about this diet drug from 56789 rexigen? >> we've talked about how data and deals move biopharma stocks. positive mid-stage data on its second diet drug it's developing. arena and venus. all those companies are in the home stretch of developing new diet pills and they're all looking for corporate partners and we could see those deals happen in the very near future. >> huck, thanks so much for coming in. what's the trade here, joe? are you buying any of those names? >> if you look at them, i like

biotech here, i like abbott labs. a name that's interesting to me is gilead. guy talk about it all the time. the effect of tamiflu here as we enter the h1n1 season. what do you think gilead does right here? >> well, gilead invented tamiflu, if you will. and it kept a royalty from roche. so it sold it to roche, roche pays it a royalty on sales. definite up side there. >> we're going to leave it there. that's your biotech trade for the fourth quarter. final trade right after this.

time now for the "final trade." j.t. >> i like frontier oil. >> guy. >> you know, vertech made some interesting comments after the bell. vrtx. >> karen. >> stock of the day, i'll go with it. bank of america. long. >> teef. >> disney. my daughter emily loves miley cyrus. >> and again the news of the hour, ceo ken lewis of bank of america is stepping down at the end of the year. stay tuned to cnbc throughout the night and we'll bring you the latest developments. i'm melissa lee. thank you so much for watching. see you back here tomorrow 5:00 p.m. eastern time for more "fast money" on cnbc. we're first in business worldwide. >> announcer: tomorrow, guy's charged up with a buy and hold play. terranova's burning energy for slow money. and facing q4. will it be another green season? the charts tell all. "fast money," 5:00 eastern tomorrow on cnbc. first in business worldwide. as you can see, this isn't your typical midwestern farm. the reason lies six thousand miles away... in japan, where a producer of specialty eggs needed corn for feed... grown to precise standards. cargill identified the producer's needs,

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