bob? okay. we've got a mike problem, i guess with bob. we'll go to huckster at the nasdaq. mike? >> i guess it's contagious because the same thing happened to me on friday. the nasdaq is coming off a two-week losing streak over which time it's down, get this, 4%. it could get an assist today. right now up fractionally in fre market. it could get an assist today, especially in tech, in particular from communication os than "wall street journal" report that the company is for sale. and that oracle could be one of the interested buyer there's. you also had barron's reporting over weekend that netapp could be for sale for pill. brocade up 13% in premarket. in banking, goldman sachs keeps fifth third off the buy rating. not much moving in that stock if we have a whole bunch of stocks in baby bio pharma that are on the move this morning on mixed

drug study results. more on that coming up later. farmersmarket.cnbc.com. where are we going, to sharon or to bob? sharon, to you. >> looking at oil prices that are under $69 a barrel. of course, all of the economic data include that jobs report we got on friday, that weakness there and the concerns about recovery hopes that has weighed on oil prices. but keep in mind we are also looking at a situation in nigeria which may have pulled down quite a bit here. nigerian militants have accepted the government's offer of amnesty taking so of that geopolitical risk premium out of the market. the dollar is weaker. the dollar weaker after the ministers did not mention the dollar weakness this weekend. we're seeing the dollar drop again. back of currencies and the euro rise. that may cause oil prices to come off the lows quickly. we're also looking at gold prices. gold prices over $1,000 an ounce. deutsche bank out with a note over the weekend saying they believe that the dollar weakness

will continue to contribute to gold's rise in 2010. in fact, they see gold rising to 1100 in 2010. rick santelli, to you in chicago. >> thank you very much. we all know we've come off the end of the quarter and half year in japan. oskt is another interesting month in terms of redemptions and many in fund industries calendar year ends in october. many stories out today that there's a bit of a snag. some of the funds, of course, due to liquidity ish shus cansu give liquidity back. something to pay attention to. we have supply all week. we start out with bills and ten-year tips today. and just note, one-month bills are under five basis pace. three-month, under ten. options the six-month bills are under. we auction those today. maybe the tips auction won't go extremely well. why? even though inflation on the back side is an issue, say many,

doesn't seem to be an issue when you have a ten-year note at 3.19. let's go back to the nyse. bob now has that mike cooking. >> rick, so good to see you. the g-7 meeting supplies didn't provide any support for the dollar. no strong comment there. the result, dollar is weaker. stock is stronger here. a lot of the talk here is the nonfarm payrolls report is a game changer since the u.s. may not recover as fast as europe or even as emerging markets here. let's talk about some of the big events on the week here. big thing today, large cap banks up 2%. goldman had aggressive, upgrading the whole sector and wells fargo in particular. there were a lot more cautious about the regional banks though, although they did upgrade co-america. everybody seems to like the banks this morning. ubs talking about a stronger fourth quarter. barclays, royal bank of scotland, for example. elsewhere, the big event this week. the brazil ipo. that will be in the middle of the week. biggest one of the year.

second biggest one of the year globally. retail sales will be the key report on thursday. tradertouk.cnbc.com. back to you. >> thank you, bob pisani. let's check out asia overnight. kind of a mixed bag. tokyo was down, but hong kong was up about the same amount. south korea was down a little. shanghai was up. mixed. louisa, haven't seen you in a while. what's going on in london? >> i've been hiding from you, mark. i don't want an ooh from it was when you come to me for reaction? i can show you markets are europe in slight to higher. we're looking at the ftse what wavering. creeping in from greece as well. looking at that ipo from viva. viva trading lower. ipo of the deutsche unit. i just heard bob talking about

that ipo as well. the south american one. that of course leading to some gains for the banking sector. that region being higher. jpmorgan lifting their share price target on this one giving it a 19% upside on the back of this brazilian ipo. on the data front, you'euro zon data out giving an inkraes. return for growth for the first time in 16 months for the month of september. and if we continue on this track, it just means that you're going to be looking at some more positive figures coming through, especially in this second half of next year is what we're hearing from a number of the commentators out there. european sector, looking at sector gainers being let by telecom basic resources. loser, health care and oil and gas. back to you guys. >> thank you, louislouisa. we do want to bring in scott

chief strategic officer. the 50-day moving average on the s&p 500. what do you see in the charts right now? >> well, we came into friday very over sold. when that jobs number hit the streets, it was a disappointing one. but it was already priced in. so being oversold with a 50 day was important for us to hold there temporarily. what trader rsz looking for right now is what type of balance are we going to have off the 50 day. choppy, low-volume bounce, or buying, zip buyers that we've had since the march low has come back in, stabilize us and bring us to new highs. this week is a very important week technically for the markets. >> n. right now we're looking at a higher open, scott. you know, of course, we'll know in terms of the volume and choppiness, et cetera. what are the levels on the upside? >> the accelerated up trend in july was broken at 1042. technical traders are going to watch to see if the market can get back if if the market can't get back to 1040 and reverse and put in another lower high, we do feel the 50-day might get taken

out and that will give us a bigger retracement than we've had since the beginning of the up trend. 4% to 5% has been the norm. we haven't had the 10% correction. we will measure next week and get that 9%, 10%, 11% correction that some are calling for. >> scott, i don't want to get too complicated, but are we going up or down? >> this week it's choppy upside but we do see technical damage to take us lower coming into the earning season within the next week or so. >> i'll take that as a yes. >> thanks, scott. scott redler. up next, the faber report. see what goldman sachs stands to gain if a major financial institution goes down the old tubes. and we've got the word on the street and the buzz beyond as we count you down to the opening bell on this monday morning on "squawk on the street." ( inspiring music playing ) someday, cars will be engineered

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welcome back to "squawk on the street." i'm david faber. cit, exchange offer that was launched last week were announced late last week. we told you about it earlier last week. but over the weekend, the number

of the different classes of debt holders starting to get together and talk amongst themselves about strategy, forming committees and the like. and speaking to a few of the bondholders at the junior level it does appear that, a, they're performing their committees. but more importantly, perhaps, the idea that, hey, they want a little bit of a better offer. but it's not too late to hope that there might be some chance to amend this exchange offer to improve the terms for the more junior holders, so to speak. we'll see what develops here over time. it's that dual path that cit is pursuing, both the exchange offer and the prepack. one or the other. and in some ways, you know, certainly cit might benefit more from, in some ways a prepackaged bankruptcy, namely through what would be increased ability to increase a lot more or do a lot equitization, reduce a lot more debt than conceivably under the

exchange offer for which they've said we've got to at least reduce 5.7 billion. we'll see. again, early days here in some ways. we'll have this move quite quickly unless we do get some sort of amendment to the exchange offer, to try and offer the junior holders offer something that will allow them or make it more likely that they will come on board. as well there are incentives to bondholders to sign up now, to get a potentially a piece of the dip at a discounted rate. so a lot of interesting things going on here. and then we've got other news out there about cit's restructuring. the fact that goldman sachs may stand to make a billion dollars if cit fails. listen, goldman is -- it's in business to make money. i hope people understand that. yes, it probably would have been out of business like every other large financial institution in this country had the u.s. government not come to the aid of the financial markets

overall. the fact is we are where we are. that ability of goldman to earn that billion dollars is a nunks to extend that cit a financing some time back for $3 billion. that's what goldman does. it also holds cvs. they may play a hold right now because the number of bondholders would pay off in full if there was a bankruptcy. hence, they may be more reluctant to participate in the exchange offer and make that success, preferring instead a prepackaged bankruptcy. for cit part of the challenge for ceo has been to convince his board and shareholders and, well, just constituencies that bankruptcy is not that bad, that it's not a bad word any longer. perhaps gm helped with that effort given how quickly that company went in and out. there is still some stigma attached to it. mark, back to you. >> thank you very much. david faber. up next, word on the street and the buzz beyond the street.

>> and later, five-star approach the stepping lightly through the small cap financial mine field. you're watching "squawk on the street" right here on cnbc. welcome to the now network. population: 49 million. right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sales conference from the road. eight are wearing bathrobes. two... less. - 154 people are tracking shipments on a train. - ( train whistles ) 33 are im'ing on a ferry. and 1300 are secretly checking email... - on a vacation. - hmm? ( groans ) that's happening now. america's most dependable 3g network. bringing you the first and only wireless 4g network. sprint. the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com.

let's check those futures for you right now. the s&ps are up 360. that is, as we see, a little bit above fair value. so, i don't know, we're good for about 20, 30 points on the dow at the open, you know. things can change. we don't always follow the lead

of the global but most of the time it works out that way. art cash season here from ubs. you know, i have a specific question i want to ask. i've been gone for a week. so i'm a little behind the curve here. before i left we were seeing weakness every afternoon. has that ended now? >> no, not at all. we got away from it initially on friday but then they came back a little bit. they were able to turn around friday on a couple of things. the sell-off was so sharp that we had the greatest -- sorry, the smallest number of stocks trading above their ten-day moving average than we've had throughout this whole rally. so once we got that oversold, they could take in that bad payroll news and, of course, the dollar reversal helped them but they couldn't sustain it enough to get to the plus side. >> so, where do we go from here? >> well, as i said friday, i think the next five to ten trading days are going to be critical. you're going to do one of two

things. complete the sell-off, turn around rally to new highs which would be the optimist side. other side was we could turn and crack open like an egg. and -- >> lighten up, dude! >> well, you know, it's not that i'm going to give you halfway up and halfway down. it's going to be halfway up and a flight and a half down. >> all right. well, you know, we have to deal with probabilities here. what's the most probable outcome? >> we don't know yet. we've got to run the race. handicap, look, this is real life. it's not the twilight zone. i don't have tomorrow's newspaper. >> i wish we did. all right. gi given what you feel about this market, where would you feel most comfortable in the equities? >> the most vulnerable -- i shouldn't say it that way. the clearest signal may come from nasdaq. it's right on a trend line. it's in a couple other technical positions. if nasdaq sells off and particularly if it sells off and increase volume, get out of the

way. >> so that's primarily tech, so we need to be watching tech. >> yeah, i think you already seeing people getting defensive. they're going into consumer nondiscretionary to going into health. it says to me that the money out there is somewhat nervous. also, the amount of cash on hand at mutual funds is at the lowest it's been since the high of the market in '07. >> how likely is the sell-off ahead of earning season, which is just around the corner? >> well, only if it comes of something technical, like a sudden sharp rally in the dollar, some massagist event because i do think people would like to hold on for earnings but they may not have the chance. >> art cashin from ubs, thank you. let's get the buzz beyond the big board. at the cme group, as well as nbc options action contributor. james, always nice to see you.

>> what did you see? >> always nice to see you. >> you, too. >> on friday, we had the jobs report, but it seemed like when the dollar turned, that's when the markets turned. today we're seeing the dollar mostly lower against most of the currencies. >> two things. one, it's the dollar. the dollar is the only thing that can break the corrective phase. two is the corrective phase. seven months of a huge rally. the only thing we've got in terms of correction, 9% correction in couple months ago. to say we're due is an understatement. the negative over this market for a week and a half. ever since the f-1-c, that was a reversal, a signal to sell. even if you just look at today. there's reasons why we should be high ferp financial upgrades from goldman. europe which had good news. the dollar was weaker and we still only have a hair of a rally. i don't think it's good enough. i think the data right now over the last week and a half has been disappointing. i think that's the signal we need to correct this. this is a rotation into the

defensive names that were big back when the market was in a tizy a year ago. tanagrom i'm looking at, beat earnings a couple weeks ago. that's a gutsy move. >> right. we've seen the volatility go higher in the past few sessions but historically low levels. where are you seeing in put buying and where are you seeing it right now? do we still continue to see it. >> we haven't seen the big pop in the volatility. what i'd still like to do is establish the positions and cover the positions with puts, especially in a name like kanagra where you own the shares and volatility is two-thirds of where it usually is. own the shares and structure put buying to protect you on the downside. i do think when we start the cascade lower and 970 is my objective. i think we see a pop-up in the vick, at that time it might be better to buy the shares and call again. >> thanks so much.

why are our guests all raising this possibility of cascading lower? i mean, art cashin talked about we could just crack open like an egg and he just said if we cascade low ir. >> we're only down 4 1/2% since the september highs, the '09 highs. if you even believe in a correction within a bull market, it is more than 4 1/2% historically. >> yes. >> hence, the cascade lower talk. >> okay. >> make sense? >> bumming me out. the final countdown to the opening bell coming right up. don't go away.

you, that's right, you, you, the one on the treadmill right

over there. >> brushing your teeth. >> the guy over there eating the to nut. come on, get on the treadmill the other guy. you're watching "squawk on the street." we're live where the opening bell is set to ring in what have we got, a little less than three minutes. so -- >> futures are higher. >> futures are higher. >> yeah. >> we're going to -- 20, 30 points on the dow if all the technical people, everyone is saying that we're kind of on -- at an inflexion point. no one is willing to procrastinate whether we're going to go up or down. i don't know how helpful it is. >> well, you know, in today's session it is important. it will be important to know that a couple of major sectors, a lot of positive chatter. goldman sachs getting positive on the large banks, adding capital one financial on the conviction buy list. and in technology, the m and a buzz continues. of course, these, you know,

conventional wisdom is that m and a activity is good on the street. look at the street brocade saying that it's putting itself up for sale. in the pre market we are seeing a nice pop on that. it's about 3.2 million -- billion dollar market cap kean. this follows a parade of tech deals lately. dell, perot, xerox, acs, sis korks and look at the ceo also says selling the company may make sense at some point in the future. a lot of buzz out there. people say that's the sort of buzz supportive of a market, that is going higher. >> well, i hope you haven't stolen matt nesto's thunder. >> i know. >> he is in charge of the what's going up and what's going down department. matt nesto. >> yes, pete peterson, the department of reredundancy department, that's me. you're talking about the big two sect upgrades, technology and banks here today. it's interesting what's not happening. we haven't seen any value or any

bargain hunting come into the worst performing. i'm talking about the material and industrial. that points really to jitters about the global recovery. take a look at their two-week giveback, you talk about 6% and 7% respectively for the industrials and the materials sectors. about 50% worse than the 4% giveback that we've seen. modest in line expected for the run-up that we've had. also, with are not seeing the staples in the telecoms whole huge amount of flight into those two sectors. the best performing over that period of time. as i look through the upgrades and downgrades. i've not seen anybody doing anything on the industrials. i did see the kroger and the staples, the super market chain was added to the focus list on credit suisse. also, caterpillar sees the price target go up at morgan stanley. bumping back the estimates as well. no real chasing of the industrial story yet. that's what i'm going to be watching today. back to you guys.

>> thank you, matthew. all right. here we go. ready to swing the opening bell right now. here at the big board, a brazil electric company, eletrobras, ticker edr, celebrating the investor day here. at the nasdaq, china auto logistics, ticker call. >> market reporters standing by everywhere you want to be this morning. we kick it off with bob pisani here at the stock exchange. bob? >> the g-7ing, all week last week talking about a stronger dollar but no real policy statement coming out saying they supported a stronger dollar, just orderly movement in the currencies. that nonfarm payroll support may have been a big game changer. u.s. recovery may be slower than europe as well as emerging markets. talk about the big banks, doing well. 2%, 3% of the big names. because goldman sachs upgraded the higher sector and that's kind of important because they don't usually do big sector upgrades.

they especially upgraded wells fargo. they did say they were cautious on regional banks, for example, saying the earnings power of the big banks is going to be better than the regional banks. that's interesting. we have a number of comments as well on the european banks. ubs talked about barclays royal bank of scotland. upgraded them through a better funding environment. the chip sector, down here this morning. i think the ree come is fbr came out downgraded them because the launch of windows in october may have pulled some of the production to the third quarter and effected fourth quarter numbers. interesting option. windows 7 probably the end of october. finally, want to note the big event this week, the ipo of brazil will be the second writi biggest worldwide retail sales. tradertalk.cnbc.com. mike huckman, at the nasdaq? >> we're not looking bad. the nasdaq at the moment is bouncing back to the tune of ten points, half a percentage points after the biggest weekly

percentage and point drop in months last week. helping things out here today is tech, of course, with the report out of the "wall street journal." but brocade may be up for sale. 13%. oracle may be an interested buyer up a fraction. bear is reporting over the weekend that netapp could be for sell as well. up 2 1/2% at the moment. maybe they know i'm about to get a new puppy but jenny montgomery scott says that petsmart is a smart investment. up 4 1/2%, putting a $27 price target on that stock. goldman sachs is pulling fifth third off of the conviction buy list but still keeping a buy rating an $11 price target. i wanted to point out a handful of baby bio pharma groups on this morning, based on drug data and really small company, avi bio pharma is up 21% because barron's did a very bullish full-page takeout over the weekend. farmersmarket@cnbc.com. follow me on twitter at

mhuckman. sharon? >> the weaker dollar here helping to lift oil prices off the lowe's of this session. we are still right around $69 a barrel. right firmly in that range that we've been in for the past several months. barclays is saying that it believes that oil prices will move to a higher range, deutsche bank has lifted its price target for 2010 to average $65 a barrel. keep in mind though we are still fumbling in this range. we're also looking at economic concerns that continue to weigh on prices. natural gas prices are the only part of the complex that is higher this morning. and that may be due to n. some part to the ungetf and natural gas etf started issuing new shares today for the first time since july. this is a $4 billion fund. some traders note that natural gas futures prices started to take. we're looking at them doing so right now. they will be back by total return flop. rick santelli, to you in chicago. >> the dynamic continues,

sharon, as the day progresses. yields which started out a little bit higher or close to unchanged, i should say, have moderated again. so we've gone from 320ish to 318 and the ten-year doesn't sound big but it is a large move considering, of course, that today kicks off this week's every other week supply scenario. at 11:00 eastern we get an announcement to drive by option tomorrow. 11:0030 eastern, total of $60 billion. and then at 1:00 eastern, the official coupon options begin. but in this case, it is a tips auction, treasury inflation protected securities, 7 billion of those ten-year tips. the you're look agent the dollar, clinging close to unchange after a slightly higher week. erin isn't in. it's mark, back to you. >> yeah, i came back from vacation. erin's gone. didn't leave a note or a forwarding address. i assume she'll show up sooner

or later. the major indices opening higher. jim paulson, chief investment strategist at wells capital management and chief investment strategist. jim, where are you? >> minneapolis. >> you're in new york, right? >> no, i'm in toronto, mark. >> toronto, minneapolis, okay. minneapolis farther west. jim paulson, you lead it off. what do you think of this market? are you going to tell us the same thing everyone else is saying? we're at an inflexion point here? >> we did this just a few months back. we had a bad june employment report and early july. we lost 463,000 jobs. the market sort of faded going into that report and then after it came out it fell a little further for a few days. it bottomed july 10th and went up the rest of the month and through august in new highs. i think this is nothing more

than a remind their nothing is is straight line. the economic data, the markets. i think the vast majority of the evidence continues to support the economy has turned a corner. we're going to post the first positive corner growth. i think we're going to continue to exceed expectations more l e likely than disappointment as we go forward. i still think there's quite a bit of upside in the to the market. >> jim raises a good point. june to july flight in the market was a decline of 7%. right now we're off the '09 highs. i think a lot of people on the sidelines want to know if there will be another opportunity to get into the market, at a cheaper price because so many people have been caught on the sidelines in this. >> yes, i think there will be because i think what we've seen so far despite including the period will be more pulled backs and not corrections. but what are the things that could cause a 10% krekds even if the economy is improving? and i think that the three great reconciliations i call them that

need to be done. one is long treasuries are rallies even though stock has gone up. yield has gone low. the second is that the growth is in asia but the asian markets and consolidating whereas u.s. and european markets are moved up in equality. between the asian markets and the advanced market. and last but not least, i think when you have unemployment at 10% or there abouts and the kind of jobless claims numbers we got, those are too high to dismiss them as lagging indicators. other markets need to reconcile this. >> jim where are you putting your money right now? i'm interested in the testimonies. there is a call today moving the stocks, goldman sachs on the banks raising it to an attractive. mostly the large cap banks. yet, this is after a quarter which has seen the financials go up by about 25%. >> i like financials, melissa. it's not necessarily the favorite sector but i would be overweighted there. what you've got at least in the

large cap financials, you've got a great operating environment. steep yield curve, wide spreads. lending volumes are down but probably, i think, as the economy recovers they're going to improve to go into next year as well. on top of that you've got, i think, a calming down of, you know, this massive chargeoffs that we've had, even though we're going to have more. probably less than what they've been. and then last, i think you're starting to see financial institutions ride up toxic assets. some of these are bond markets improve, leverage loan prices come back. you're starting to see some write-ups. i think there's going to be another upward move in the relative performance of financials. i do like those. i think my favorite sector right now is tech in the second quarter gdp report is the level of net cash flow to cap spending among corporations is at a 50-year high. and i just think that that is just power to drive a capital spending program a lot of which probably fells on new era tech stocks. i think that's my favorite sector at the moment. >> very, very quickly here.

subodh,you are, i don't know, you're slightly bearish. you think we need consolidation. where is the safest place to be right now? >> the place that interest me to most, marks, right here is health care. i don't know what's going on in washington but it's very rare at m and a that you see both the requirer and requiree both doing that. the restructuring of pharma and buyouts of biotech and so on. >> gentlemen, thank you very much. jim paulson and subodh kamar. up next, small cap fund manager tackling the state of recent small bank closings and targets the next names poised to give out stronger -- come out stronger than before. >> plus, as we go to break, your widely held stock tons move this morning.

in this morning's street cap, former federal reserve chairman alan greenspan predicts the nation's job can't stay with that beat. it will likely hit 10% in the coming months. but the maestro argues the second economic stimulus is not called for because less than half of the current stimulus is not in effect yet. chief financial finance minister is warning against come place sense si as global economy struggles to pull itself out of recession. in a closing statement, the minister says government spending elf for thes have work effords have worked but it's too soon to wind down.

three more investment firms getting the okay to buy toxic assets. treasury says bernstein, black rock and welli ininwellington m have raised the minimum to participate in the ppip. >> don't go into rapping, mark. my word of advice. >> ki tried but i couldn't stay with that. kicking off our series, small cap financials, guest small, fbr funds president and cio. dave, good to have you with us. 20% is the third quarter performance? >> i guess. i'm happy to be there. at least it's positive. >> are financials in the third quarter up by about 25%. what was with small caps? why the difference in the performance? >> well, i think it's, you know, there's been not as quid as bad news there. i think the smaller cap names that a lot of them have avoided

the bad assets and now they're benefiting from good lending spreads, decent loan volumes and good capital. there's only eight or ten large cap names that everybody talks about on these programs. there are probably 300 or 400 small cap names to choose from. it's's terri easier to find the names. i think we'll continue to do so. >> right. i think most people, you know, when they think about the smaller cap names, regional banks, they tend to have more of the exposure to commercial real estate that everybody is concerned about for the fourth quarter and might have exposure to the consumer and small businesses. how do you strike out which names are the better to own? >> well, it's just simple research. remember, there's a lot of choices. you can avoid the flames that have exposure to commercial real estate in certain markets that are in trouble. you can avoid the construction banks that have lent a lot of money to construction companies around the country. primarily rest additional.

a lot of failures that you see are primarily in the markets that are the weakest. and so it's easy to identify those markets and, of course, it's easy to obviously call these companies and talk about what they're doing to get better, talk about what they're doing to improve the conditions of the operating earnings that they have. so it's not hard. it's a lot of work. i mean, i think i've done it for 26 years. it's just a pattern that what i've done for many, many years. i just continue to do that. >> as i look at this list of financials, it looks like what you like is conservatives that never got in trouble in the first place. >> well, i think that's the bulk of the portfolio now. and i think it's what i've also got in there is a bunch of names that have got into trouble that have a very, very low valuation to what i view to be recovery earnings. so it's a little bit of both right now because, remember, the financial service industry is a very unique position to be in right now because the industry is under so much stress. we're going from ugly to okay to good to great fundamentally the

next five to ten years. and that's what you want to play. you don't usually get that kind of environment. >> you have to have faith in the management though, don't you? >> well, yeah, that's why you use the telephone and talk to these guys. >> you can do that and investors can't. >> that's why we have the mutual funds offered to the public every day. you can buy them every day and sell them every day. that's what the mutual fund is for. hopefully they find people like me who understand the industry, that can give them a reasonably good representation of the industry and the recovery that is on going now in the industry. >> in doing your research, david, there are certain geographies and areas where there is the most trouble and you try and stay away from the banks. what areas in your view are in the troubled areas? >> great question. i think the areas of the country that are in the most trouble economically or actually were some of the best opportunities are. you can buy the best managed bank or thrift in that market that hasn't made the mistakes, they're going to, in a sense, be

able to take over from the fdic all these deposit franchises for free. and that creates a tremendous amount of value for the investor, hopefully like many of the people who own the fund. it's a little bit of both. you can buy the safe markets but if you want to get five, six, seven, ten times on your money you've got to own the best banks in the worse markets. >> can you give us one example of that. one bank operating perhaps in a troubled environment poised to take over others? >> the one that i gave you the put up on the screen was washington federal. they just raised about, oh, 300 or $400 million. that is a seattle based thrift that is hoping to take advantage of what's happening that the troubles in the pacific northwest. >> david, great to talk to you. david ellison, manager of the fbr small cap financial funds. coming up next, stock tons move as trading begins. we are just minutes into the trading day, of course. >> yes. indeed. plus, charlie gasparino on bank of america's search or a

emergency ceo. you're watching cnbc's "squawk on the street."

happy monday morning. "squawk on the street" viewers. are you having your best monday you've had in seven months? well, they say it's hottest stock in the s&p 500 this morning, ets it's up 7 1/2%. hasn't had a day like this since the depths of march. raised from buy from hold at citi group. they think the stock has another 20% upside on top of what's getting done here today. raised the buy from hold at citi. data processing company. nordstrom's up 6% this morning to accumulate from neutral at buckingham. up 300% since the trough. you're up 130% year to date. southwest airlines, one of the worst performers in the s&p this morning, cut from market perform

to out perform. bargain hunting coming into that. general dynamics, one of many industrials rebounding here today to overweight from equal weight at morgan stanley. guys, back to you. >> thank you very much, matt necessa nesto. sally will be on "power lunch" today at 1:00 p.m. eastern time today. good interview. >> sallie. here's the stock right now. up better than 2 1/2%. 1677. the board feeling pressure to find a replacement sooner rather than later for out going ceo ken lewis. on-air editor charlie gasparino, author of "the sellout" broke the story over the weekend and joins us on the phone with more. charlie, what are you hearing? >> you know, mark, thanks for the little plug for the book, by the way. >> i even got a picture of the book for you.

>> you're the best. you know, the pressure is not just to pick someone soon but the pressure is to get someone from outside the company. remember, we had about six names we throw up on the board every time we do one of these hits. sal sallie is among the names of people considered to be the grooming for the ceo jop. on this i'm, i think, will get it. i think the simple reason is that most analysts believe that none of those six names includes sallie or charles montag or brian or a few others. numb of them really have the chops to run it. >> charlie, sorry to interrupt. get what? we're talking about the emergency ceo position. >> excuse me. i'm not done what with i'm saying i just want to clarify for the viewers. >> what are you talking about? now you've got me confused. get what? >> get the ceo job or the emergency ceo position.

>> forget about the energy ceo. i'm not talking about that. whenever you have the potential as we discuss a million times on these shows to -- that your ceo is going to be indicted or charged, i'm not saying he is. i think it's likely that ken lewis is going to get charged. you have someone step in in the interim. the real issue here is who do we have that's going to take over this job, when are they going to find it. and from what i understand the permanent, the name that they're going to pick will be named sometime, you know, before the end of the month. and which makes, if they do this sooner rather than later, which makes this whole notion of an emergency ceo moot because you'll have the guy picked already, or the woman picked. the question is who is it going to be. will it be inside the company or outside the company? and i think based on what i'm hearing from analysts, investors, they want somebody that is not part of that six that they named. even if it's someone older who is going to keep it for a year.

i mean, we talked about this last week. interim ceo, that's what they're looking for. they're looking for someone with chops. larry fink, i spoke with him a couple times about this. i said, larry, remember, merle lynch owns or -- bank of america owns 49% of blackrock. i asked him, he said no, he doesn't want the job. my gut is at some point that f. they really need a good ceo and they go to him, i bet you he'll take it. but that's my -- that's my bet. he's telling me he doesn't want it. investors are clamoring for a ceo with experience. and those names just don't have that experience, not yet. >> charlie, what's your best guess on the time line here? over what period of time is this going to play out? >> you you know, what we're telling me is before the end of the month which makes this whole notion of the, you know, the emergency ceo kind of moot.

you know what i'm saying? they're going to pick him and then i guess that person steps in and does what he has to do or she has to do. but, you know, this is a very fluid situation. >> charlie, we got to go. sorry. you know the game. >> you got it. >> commercial, got to go. we'll be right back.

welcome back to "squawk." seconds away from september. it hasn't been above 50 in a year. guess what, it is now 50.9. the last time we saw that boundary, that 50 that expansion contraction marker was indeed september of '08. so as we look at this, we consider that the service sector is the largest portion of the economy. and this number goes along way to pushing stocks better as you can see the run. interest rates moving a bit higher as the price comes down. we're still only at 320, 321 in terms of a ten-year. we have supply coming out along with a lot of data this week. bill options first. melissa, back to you. >> rick santelli on the back of

the news we moved up a little bit. >> it's about in line. 51 was the estimate. >> 50 in fact, i think. >> yeah. so that's good. at least we're expanding. the fusion index over 50. >> and, of course, in today's market, some support being seen from the goldman sachs call. although the move to an attra attractive from a neutral after a third quarter we saw the financials up 25%. all due respect goldman sachs. >> yeah. >> but sounds late to the game to me. >> mixed. after we saw that huge move up, it makes you wonder a little bit. but none the less, financials are up on this news, out performing the rest of the market. if ice kaur wondering what goldman says specifically they noted that the big national banks, their earnings picture will be better than the regional bank. in their opinion, the stock price performance of the big banks versus the reenlg nap banks is not reflecting that differential, the fact that the big banks will have a better earnings performance. that's the reason for upgrading the entire sector. specifically, upgraded wells fargo. it's out performing.

capital one was upgraded as well. in case you're wondering, the company upgrades don't mean anything. those two stocks are out performing the seasonal sector today. this is a simple way of saying sometimes upgrades really do move the markets here. finally, i want to note the dollar, i was surprised. i don't know about you, melissa, the g-7 didn't say anything about supporting the dollar. none of this millie mouth we want everything to be orderly comments but the dollar has been weaker here throughout the day. as markets opened, the dollar moved down again providing support for the stock market. >> exactly. >> that has been mattel in the market the past few markets, the direction of the dollar. >> the best trade in the quarter, short the dollar, long the market any time that trend started to reveal itself. >> working today. all right. bob pisani, thank you so much. let's go over to the nasdaq. mike huckman, a lot of tech fuels of late. today the tech chatter continues. >> yeah, melissa, that's right. we got the nasdaq making up a little bit of ground after falling about 4% over the past two weeks or so.

but in reference to what you were mentioning, yes, there's m and a talk in tech. that's moving the market here today. we have brocade communications systems up 13% on the wall street report that it could be for sale. oracle might be one of the interested buyers there. and the not to be left out, we've got netapp, melissa, up more than 2% because barron's over the weekend said that it, too, might be for sale, quoting the ceo, and this is the quote, melissa, everything has its price and at some point it might make sense. that's that stock is up 2 1/2%. >> how are the potential acquirers doing? ploorly when it comes to bro paid because there are a couple of companies that mention potential acquirers, oracle and hewlett-packard. >> hewlett-packard doesn't trade here but oracle is down 2%. it's behaving like you might expect a rumored acquirer to behave, i guess. >> all right. thank you.

>> i think we're going to -- well, i thought we were going to melissa on energy, but i'll do it. let's check on the energy markets. oil right now, sharon epperson is live at the new york merc. >> saudi arabia is cutting their prices on u.s. buyers in november by $1.75. keep in mind though that saudi arabia is no longer the world's largest oil producer and this is likely a reason that they are using to keep their market share. russia is now the world's largest oil producer, producing in september over 10 million barrels per day. and so as the saudis make this move, they are, again, trying to preserve their market share. also continuing to watch that development as well as a what is happening in nigeria where the militants have agreed to accept the government's amnesty offer. these factors are bearish for oil prices. add to the fact that we are looking at the economic data that we continue to get. somewhat weaker except for today's ism data.

we are off the lows for the session there. the dollar impact is not as great on crude prices but helping to keep up gold here above that $1,000 mark. mark, back to you. >> all right, thank you very much. the supreme court starts its new term today. dominated by cases that could have big implications for the whey america does business. break news on that right now. cnbc hampton pearson outside the nation's highest court. hampton? >> mark, before we get to the upcoming caseload, we do have news, the supreme court just issuing ruling denying the repeal of former quest ceo. no further details. but that specific headline. now as to the upcoming agenda, the first monday in october, we've got a supreme court that begins a new term with a new business savvy justice and a business-heavy docket. more than two dozen cases

involving issues like intelle intellectual property, executive pay. opening the door in one base with repeal of sarbanes-oxley. the top business case, bilsk, at issue, can a unique business method be patented? the question before the justices is a commodity heading strategy, for instance, worthy of a patent. >> the lower court said it was not. you needed to have the process needed to have some sort of application through a machine or some sort of physical transformation had to go through. that would have an impact on a lot of different technologies like software as well as business methods such as financial instruments. >> executive pay and shfd rights collide in jones v. harris associates if hi court must decide whether mutual fund shareholders can charge excessive fees. congressional regulatory reform could be impacted by a high court decision in free ber surprise firm and public accounting oversight board. it was the centerpiece of sarbanes-oxley enacted after the

enron crisis. independent agency, opponents argue they should be appointed by the president. legal experts say it is the most important separation of powers case in the last 20 years. now when justice sonia sotomayor takes her case, she brings a business savvy background and comes from an appeals court that handles a lot of business cases. so she will be both watched and challenged very closely. again, repeating our headline from the high court, denying the appeal of former quest ceo spairks nacchio. >> other stories we want to bring to your attention this morning. saudi princealwaleed to boost investor confidence. the emerging market magazine, he caution test it should not be done in a way that hurts the

prices of u.s. banking stocks. goldman sachs is going to receive $1 billion, cit group files for bankruptcy. financial times reports the payment results from the structure of a $3 billion rescue finance package, goldman gave cit back in june. but goldman would reportedly be likely to agree to postpone payment on part of that amount. we want to go back to our headquarters, scott cohn with the breaking news desk with news. scott? >> more insight. more on the supreme court's decision not to hear joseph nacchio's appeal, former ceo of quest. the question they were looking at is what constitutes insider trading. nacchio's attorneys were hoping they would get clarification on that. nacchio claimed that some of the things that he -- the supposed material information he had was

much more information than any ceo should be required to disclose. he also was appealing whether an expert witness that the defense could have exonerated him should have been allowed to a hear. but the high court not hearing that case. the other ceo case that we are waiting to hear word about is the case of former enron ceo jeffrey skichilling, which the justices considered to hear the case considered last week and we thought we might get a ruling on that today as to whether they would hear that. jeff schilling is appearing on whether what might be considered an esoteric issue here. but pretty important, and that's the question on whether he denied enron shareholders his honest services. this is something that every ceo ought to look at. was he trying to enrich himself? he claims he was not. this question of what constitutes denying shareholders honor service is something they are hoping the high court will

hear. guys? >> thank you, scottie. up next, is the obama white house secretly considering a second stimulus? handsome john harwood will tell you what he's been hearing. and did you know the average family gives the agricultural department $1,000 a year? and according to the kato institute, it's practically functional. your report on your tax dollars at work, or maybe not at work. plus if you had a million dollars would you let it all ride on retail or technology? and as we head to break, a look at widely held stocks are fairing a mixed bag. two up, two are down.

disa pointing jobs report friday may bb a gahave been a game char the white house. president obama's economic advisers are considering options for a new package of tax cuts and other job krcreation measur. john harwood is here along with jon hilsenrath. harwood and hilsenrathilsenrath ring to it.

>> law firm. >> high-priced lobbying firm. >> or h and h, a bagel firm. >> that's true, too. all right, harwood, why don't you lead it off what what's going on? is obama going to get stampeded by the republicans? >> well, look, they're feeling a lot of pressure because these jobs numbers are bad. and they're going to get woirs if everybo worse. everybody knows it. the obama economic teams believe their plan is working. they see things in the economy that things are turning around. as we've said many times on our air, the unemployment is a lagging indicator. they tell me it's going to go to 5.5% peaking in june. the economic advisers and political advisers are talking about how to come up with some sort of package that would try to accelerate job creation, and they roll it out in the state of the union address next year but also may feel enough pressure that they've got to do it earlier than that. that's what we're all going to be watching for. the trick, of course, is what is a tax cut package you could design that could actually add

jobs on top of what otherwise would be done as opposed to convincing employers to play games with their payrolls. >> john, i can throw something out there that part of the political problem for the obama people, i think, is the disconnect between the job picture for men and for women. if you look at the unemployment rate for men, it's over 10%. it's higher than it's ever been since the great depression. for women, it's still in the 8%. if you look at the job approval ratings of obama, it's ticking a lot faster for men than women. i think he's got a gender gap he's got to deal with. >> jon, what do you have the second stimulus or jobs creating package, anything like that, i when the stimulus money hasn't been sent? >> there's certainly, melissa, not appetite for calling it stimulus because the white house knows and republicans know as well that that's become associated in the public mind with big spending, with money

for general motors, money for big banks, pork projects, all of those things have sort of tarred that idea. so whatever they roll out, it's not going to be called stimulus. and there's a real challenge because if you're trying to design a package with some real umph to it, it's going to cost money and they have major concerns about budget deficits. and so it's not an easy situation for the obama economic team. one of the things we'll be watching for is is this a cosmetic package designed to make people think they're doing something or is this something really with some kick to it? >> wouldn't it also put the republican tons spot? >> yes. >> on the one hand, they would -- they could oppose it on the grounds it's too much spending. but they don't want to seem like the grinch refusing to help. >> yes. and if it's tax cuts, as opposed to stimulus spending, it's doubly hard for them to oppose it because republicans are so identified with the tax cut idea

that they would look good op foesing it and they may not want to oppose it. so it is a potential bipartisan enterprise. if the team can get democrats on board as well. >> john, if it's going to happen it seems to me it has to be an unemployment or business tax cut. >> yeah. >> income tax cuts we've seen before and payroll tax cuts, they don't work. they don't get consumer spending going very much. the spending has got really tarnished politically and it takes too slow to -- it doesn't kick in fast enough. >> if that's the case, john harwood, it seems like then the republicans could be in the position of saying we should have done that in the first place. >> yes, they could say that and they could attack the design of the program. remember one of the things considered during the stimulus debate swas some sort of a tax credit for new hires. what happened was people decided it was going to cause employers to jury shuffle around their payroll rather than actually add

jobs. >> harwood and hilsenrath, thank you very much. >> thanks. all right. speaking of taxpayer dollars, kato releasing reports this morning detailing where all of our money is going and what is being done with it. steve liesman is back at hk pouring over this report and he has a special guest. steve? >> thank you, melissa. interesting report. the higher federal spending goes the loud ter call toos rein it in. kato out with a new website offering a series of suggestions to reduce the public fix by hundreds of billions of dollars. joining me now is chris edwards at the kato institute. talk about this new fancy website they have called downsizi downsizinggovernment.org. walk through the suggestions on the website. >> thanks for having me, steve. the website, everyone knows we need to cut the federal budget. it's completely out of control. federal spending has doubled this decade from 1.8 trillion to $3.6 trillion this year. the deficit is over a trillion

dollars and rising. we all know something needs to be done. so in this website i go through every photo department, i find the programs that are wasteful and unneeded. and to educate the general public about where they should be applying pressure. >> chris, let's go get to some of the suggestions. among them, you don't have to spend very long at your website to see that you say get rid of august ral a agricultural and the education department. >> that's right. we spend $30 billion a year on agriculture subsidies. damaged the economy. it's sort of like reverse robin hood. we take money from average taxpayers and we give it to wealthy corporate firms. it makes no sense. with the department of education, spending under president bush. the department has doubled in size from about $40 billion to $80 billion. academic student achievement has not risen with all the federal intervention. it's time to give education spending back to state and local governments where it belongs.

>> chris, a lot of these issues to put it mildly, are political bombshells. and probably not going to happen under at least this administration. are there things right now that you think are political tenable that are suggested on your website? >> it's true that congress does not have an appetite for spending cuts right now. the purpose of this website is long-term public education. we saw this summer with the tea party protests and, you know, polling data, that the public is frustrated with the federal government. they know that spending is out of control. they know that trillion dollar deaf certains are unsustainable. we have to cut the budget going down the road. the public doesn't have a stomach for gigantic tax increases that we would otherwise need to get rid of the deficit. you know, what i'm trying to do here is provide general education for the public -- >> let me add quick, the website, very quickly, chris, the idea that's been floated of a second stimulus in washington.

>> i would support the idea of pairing spending cuts, cutting wasteful spending programs like farm subsidies with a corporate tax cut. i differ from your last guest. i think the best possible tax cut now would be a corporate tax cut. if you look at the gdp data, it's private business investment that has plunged. it has gone through the floor over the last year. we need to get private business investment back. how you do that is a corporate tax cut. >> chris, thank you very much. chris edwards, downsizinggovernment.org. back to mark and melissa and m&m, by the the way. >> yes, h and h, now, m&m. >> there you go. all right, still to come, a handful of stocks making some big moves this morning, including a dow component and a retailer. plus, walmart up just 3% since the haines bottom. one of the worst performing -- >> that's all? that's pathetic. >> it is, in fact, one of the worst performing dow stocks over

that time frame. what is ahead? we are looking for answers because you clicked.

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now, that's a good call. go national. go like a pro. stocks on the move, for that we go to matt nesto back at mq. >> it's so real, melissa. it's a three-way fight to see who can claim the gold medal for the dow today. it's between bank of america, jpmorgan and caterpillar. yeah.

one of the worst performers here in the industrial spaces nighting its way back. almost 3% higher. morgan stanley raising the price target to 44, even though they're cautious, even though their 2010 estimate is below consensus and even though they have bumped back their cycle repurchasing estimate for 2011 to 2012. so caterpillar very strong here today. manotowac, up 14%. here today rebounding sharply. mentioned retail games. nordstroms with a big move and big up great. limited brand very strong. one of the top five performers in the s&p 500. price target to 22 from 17. they keep a positive. lastly, whole foods and unique position of being the best of the worse, the best performing stock in the worse performing sector. back to you. >> thank you. walmart one of the most searched stocks on cnbc.com,

only seeing slight gains since the march low. selling off 5% for one month. but with most consumers continuing to like the idea of saving money in this economy. what lit mean for walmart? here to break it down because you clicked, john lawrence, morgan keegan senior analyst. pretty much walmart for the year has been dead money. what is it going to take to move this off? >> first of all, i think that sales have to improve. certainly for the tough comparison in the second quarter and having a down 1 1/2% comp at the walmart division one was certainly has been a challenge for the stock. and comparisons get easier and the second half and i think we'll see better performance in the second half. >> if we're going to see better performance in the second half, when would you recommend getting into the stock? you say you have fresh capital, you don't own walmart. what's the buying opportunity? >> we just -- we've always looked at the stock on a long-term basis. they worked well last year. everything the company is doing fundamentally, they're gaining share in all of the categories.

they're working in apparel, home is getting better. electronics, made a major stride there. mike said he wants to cut expenses. a lot of leverage on the expense side. cut 100 million out of sg and a every quarter it would be three or four cents. a lot of leverage, he said he will do that. i think we'll see better numbers on november 12th when they report. >> i'm curious. when you talk to your clients, are they concerned the stock really hasn't been able to gain much traction even though the management team seems to be doing the right things? >> certainly the stock, i think the other side is the stock had a early run. went ahead of everything else, good year last year, sort of stalled out a little bit. and then when walmart has a down 1 1/2 comp, certainly it's a concern. but at the same time, you know, the refresh program, people trading down, i think you'll see some benefits from that. and the new store program over the next several quarters. >> at the same time, what is your topic in this space, john?

be we just continue to like walmart and we also the other name that has done somewhat the same thing, auto zone, azo, made a lot of investments. businesses really strong. stock is not participating. >> john, great to have you with us. >> great. thank you. >> john lawrence of morgan keegan. still to come if you had a million dollars to invest, would you let it all ride on retail stocks or perhaps technology? plus, as we go to break, stocks on the move, manitowoc and wells fargo. not long ago, this man had limited mobility.

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jpmorgan leading the dow higher. petsmart is a winner over at the nasdaq. pinnacle west capital, unusual volume, trading 50% of the ten-day moving average. let's take a look at the markets and the internals. as you just saw, dow up 0.4%. and on the big board, real nice market. about 3-1 positive. that's real good when you're only up 40. on the nasdaq, again, a very strong advance/decline ratio, about 2 1/2-1.

so that looks good. we are five days into the fourth quarter. one of the questions we've been asking is if i had a million dollars, which sector would i buy? today we're asking what has more potential, retail or tech? tech out performing retail so far this year by roughly 20%. from the retail cap, patty edwards, chief investment officer, talking up tech, bob, principle analyst with the underly group. patty, where are you? >> i'm the retail queen. >> no, where are you physically? >> i'm in seattle. >> definitely the winner. yeah. we always start with the west coast. so go ahead. >> well, you know, i believe that retail is going to be a tough space to be in. there are a lot of really good gems that you can go towards. when you look at retail right now you have to look at the consumer. the consumer is hurting but the consumer is still going to spend. they're going to spend in some interesting ways. i really like home shopping network at this point. they have an easy pay program

and i think the consumer is going to respond to that. i like big lots because the consumer is going to go to them for christmas gifts that are going to be unusual. it's really the t.j. maxx of the nonapparel side. i like walmart and kohl's. they're going to do well and i think you can make money there. >> okay. better than tech. >> well, the other piece of it, though, is that it's kind of a test retail play. best place to be probably apple. i'm going to claim it for retail. >> oh, but rob is trying to claim it for tech as well. >> i'm earlier. >> best bye for -- what the heck? >> yeah. you guys are going on each other's turf. rob, lay out the case for apple, less say, the price target on the street keeps getting bumped higher. this is a stock that just seems to have a lot of momentum at this point. up two levels, might be scary for some out there. >> well, that's the only problem, is apple is getting probably up a little bit too

high. the bottom line is this tech is looking strong. we've got the windows 7 launch in the fourth quarter with nearly a billion dollars worth of marketing pointed directly at the pc industry and preference peripherals that surround that product. as good aztek has been it's likely to get better in the fourth quarter because there's so much money pointed at it. that isn't an apple argument. the bottom line it's going to bring so many people in stores apple will benbenefit. 245i6 steve jobs is back. this company is looking good. i still think it's got head room ahead of it. as you mentioned, the one retail store they like is best buy just released report against walmart indicate that they not only have stronger customer loyalty and the more lucrative segments but they've been offering stronger price advantage as well. getting ahead of the curve and prepping themselves for this big tech wave and to be the retailer for tech. i think it's a good move for them. and so on tech, generally the

folks focused on the consumers are strongest. the corporate still not coming back. and best buy. >> do you think consumer is going to be strong, huh? >> right now the consumers actually looking fairly strong. the incentives to come back and buy are good. the disincentives, the cash for clunkers program is gone away. through the cash for clunkers program shifted money out of the segment. >> and the reason i -- the reason i sound a little skeptical is i think i read that -- about half of american households now own a big screen tv or high def tv of some size. and, of course, everybody has got a cell phone. so i'm wondering where the consumer strength -- what are they going to buy? >> the windows 7 launch exists outside of television and cell phones. cell phones tend to be a little bit cyclical. so i'm not real strong on televisions either. that segment is pretty much saturated. we've got way too much

manufacturing capacity for the available customer. so i'm not strong on television. sony has issues but that wasn't one of the companies i was focused on. >> patty, best buy, rob likes it. do you, as the retail queen? >> you know, i like the apple side of that piece. but i think best buy sells way too many things that are not going to be picked up. like you said, tvs aren't going to be strong. i really think that when the consumer spends, if they're going to spend on tech they're going to spend on the small handheld gadgets. that's what we've seen time and time again. >> petty edwaratty edwards, rob you. we have breaking must news with general motors. >> melissa, rewith going to give you an update on general motors board meeting as we speak. beginning of a two-day meeting. the board getting an update on where general motors stands with the turn around plan. it's hard to believe that we're coming up on 90 days since general motors exited from bankruptcy so the board is getting an update right now on

how fritz henderson and bob lutz and the rest of the executives are doing with the turn around plan. '09 shares for general motors remains under 20%. at the end of september they came in at 19.7% market share. buyer consideration, however, it is up. that is one encouraging sign. again, the board will be meeting over the next couple of days. we're not expecting major news to come from the board. later this week we'll get an upt date on where, gm stands from fritz henderson. >> thank you, phil lebeau. coming up, the faber report. >> and can a motorcycle be both exhilarating and eco friendly at the same time? we'll talk to an entrepreneur who is betting yes, mass producing the first electric motorcycle in the united states. as we head to break, take a look at the widely held stocks which may be in your portfolio.

welcome back to "squawk on the street." i'm david faber. just going through goldman sachs' call on the banks this morning. you know, i'd like to follow some of the research out there when it comes to the banks. certainly we've done that for the last two years. goldman has done a lot of decent work on that in terms of statistics and just things that they have available to look at. but it doesn't mean you necessarily should be following it the advice of any analysts when it comes to buying or selling. use it as yet another tool to help you make your own decisions. that being said this morning, goldman has gotten more positive on the big bainks, citing a number of things including

primarily what hey see as an improvement in their earning power. certainly versus the regional banks. they say tangible assets per share are up 29% for large banks versus a 25% decline for the regionals. and preprovision, that is provisions prior to adding to reserves for bad loans, are earnings per asset has increased 7% while it is down 14% for the regional banks. what are we talking about here? well, let's start off with just showing you right here, big banks versus the regionals in terms of return on assets. there is a third bankss are in yellow. the regional banks are in blue. none the less, that's basically a return on assets. that's going up for the large bank. going down for the regional banks right now. and that is a key consideration that goldman points to at least in their decision to upgrade, i believe it was wells fargo and capital one. but they're also quite positive on jpmorgan and bank america just talking about the earnings

power of the big banks when you normalize it. normalizing it is a key thing here. and it's anybody's guess what provision truly will be. none the less, goldman has not been particularly positive on a number of big banks, or at least in the past. now, the large banks, as i said, will generate higher preprovision earnings. here's one reason, also, loans are down but securities are up. securities ownership by the big banks up 12% while their loans are down 4%. but they're going to do just fine there because in this cycle, the difference, they say, is the yield on securities is the same as yield on loans. so despite shrinking loan preprovisions, loan preprovision earnings are not shrinking, which you already saw earlier. we'll see. all the banks in question are up, varying degrees of 2% or 3% or 4% here for many of the big banks, given, in part, this note

this morning from goldman sachs. all right. straight ahead this morning, we will meet the entrepreneur who is doing all he can to make gas guzzlers a thing of the past. but first, trish regan is here with what you can expect only on "the call." trish? >> coming up at the top of the hour with 263,000 more jobs lost than the unemployment rate nearing 10%, we will discuss just exactly what needs to be done to create jobs and create them now. and the spotlight, of course, on brazil now that brazil is going to be hosting the olympic games. we're doing to take a close look at where to invest in that emerging south american economic power house. and are you worried about retirement? we're going to tell you how to protect your 401(k). all ahead only on "the call" at the top of the hour. but first, "squawk on the street" is back right after this break.

welcome back to "squawk on the street." you're taking a look at brocade commune tagss. it's telling the wall street journal it is up for sale. potential buyers include oracle and hewlett-packard.

meantime, let's check in on the day's movers. for that we go to matt nesto back at hq. >> thanks so much. we're checking on this marketplace and seeing a sharp rebound in financials. we talked about the upgrade of that group and some of the key names at goldman sachs here today. check out dow chemical. this is the best performer in the materials group, worst performer sector since the sell-off began 2 1/2 weeks ago here today. so dow chemical very, very strong. leading the materials. interesting, if you look though at who really held up in the material space during that three-week period of intense pressure and selling, the laurels with a px. something the military thinks that px stands for something else. but praxair is strong, up 1%. interesting h interestingly, it's the only positive stock in that period of time in the materials space. also worth a note here today topping all of the upgraded banks, all of the regional banks

is the credit card king capital one financial. one of the best performers of the s&p 500 here today. i guess just to be fair, i mentioned whole foods earlier the best of the worst. wouldn't you really want to know what the worst of the worst was here today? folks, not to spam you. but i'm going to. it's hormel. hrl is the ticker. not getting killed, but it is the worst performing stock in the worst performing sector here today. down just a bit here today. about 1.9%. but, still, not getting the defensive buy that you want to see. let's get to the outdoor duo at the nyse. there they are. take it away. >> we needed a little fresh air, bob. thank you very much. our small wonders series continues with a look at the first u.s. companies to mass produce an electric motorcycle. the energy-efficient vehicle qualifies for a 10% federal income tax credit. the founder and ceo of ramo, the

oregon-based company under production of the motorcycle. thanks for being with us. >> thanks for having me. >> we've got the bike right here in front of us. why don't we go over some of the specks. top speed? >> 60 mile answer hour. >> how far on a charge? >> about 45 miles. >> can you just plug it into a wall? >> it's actually got the charging station on board. we don't have to wait for infrastructure. any place you can plug in a laptop, you can plug in this bike. >> plug it into a starbucks? >> exactly. >> how much does it save a consumer. if they had the equivalent bike that had to be fueled on regular fuel? >> you pay $800 in fuel for the year, you'd pay about $32 for the electricity. so it's dramatically less expensive in terms of fuel cost. batteries are still a little bit expensive. as you've probably seen from the a 123 ipo, technology is making big advances. >> can you compare it in terms

of ccs? is this the equivalent of a 350? 450? >> it's hard to compare. electric motors are different. this is about a 450 cc once it's under way. >> how much does this cost? afraid you were going to ask that, right? >> right now it's $11,995 at best buy stoeres. after the tax credit it's about 10,000. >> i can get it at best buy right now? >> that's it. at least in oregon. we're working our way east. >> okay. tell us your ramp up schedule. how long before you're nationwide? how long before you're full production? >> well, we're in full production. >> have you sold any yet? >> yeah, we have. we've sold just under $1 millionover thmillion of them just out of the gate. we're opening up california stores next week. we go from there after the holidays. we're also looking international. i just got back from a trip across europe. france, italy, switzerland all

very excited about the clean-tech products. >> is there anyone overseas who makes one of these? >> there's nobody that makes an electric motorcycle. there's a lot of electric scooters and inexpensive products out of china, battery powered, that tend to fail pretty quickly. this is the first kind of serious production motorcycle style, throw your leg over it and go. >> are you looking to go public? >> we'd like to. it's something that depending on what happens over the next few years, it's something we're very interested in looking at. >> okay. craig, thank you very much for your time. >> thanks very having me. >> maybe next time we can take a test drive. >> i thought you were going to ride off into the sunset right now. because i'm not. >> i'm not either. all right. i guess the market is up on the day. i will be back at 3:00 on "street signs." you will be back -- >> on the "halftime report." but we're not done yet. >> i'm sorry.

>> where are you going? i'm going to be here. >> we'll be right back. please help me welcome a long-time friend of glencoe baseball.

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you turned a blighted area into a drithriving city. what was your strategy? >> it was a team effort. it was the result of partnerships across many sectors. it was also the result of harnessing technology. we partnered with the business community, with the local neighborhood watches, with metropolitan police, with the police services, and we really brought in visible policing, tv cameras, and constant vigilance on the streets. and violent contact crimes were brought down in the city center by 90% during that period. >> that is a small take from "the business of innovation." tonight on cnbc. we're watching a lot of things as the day unfolds. let's check in. >> thanks, mark. i always like to focus on all things media. interesting to note today, private company, of course, one

of the largest owners of magazines in this country, closing "gourmet," "modern bride", "elegant bride" and "cookie." they are taking those four names off the newsstands, so to speak, and out of people's mailboxes. larger questions here, of course. this always begs about the future of magazines. the future of book publishing. the future of newspapers. digitization changing the business model for everybody. back to you guys. >> hey, david. on the other thing, on the comcast nbc, is there any sort of timetable? can we expect a resolution in

any period of time? >> on friday, mark, i reported according to people close to this deal and the negotiations, there's the hope that they can reach some sort of an agreement within two to three weeks. i know that is different than what some others are reporting. but i'm very confident in that, at least that that is the hope. whether or not they can get there, one way or the other, we'll see. keep an eye on comcast stock price. that is key here. if it continues to decline at the rate it did last week, it will make things more difficult. >> i assume we don't yet know what kind of structure it might be? whether they issue a stock? >> there are a lot of questions. got to leave it there. >> there are questions, we've given people the outlines of the deal. >> i'm back at 3:00 on "street signs." >> 12:45 for "the halftime report." up next, "the call." the institute for supply management's monthly manufacturing index comes in at 50.9 for september indicating an

expanding services sector. stocks maintain their gain after falling for seven of the past eight sessions. financials are among today's early leading gainers after goldman sachs upgraded its evaluation of large u.s. banks to attract them from neutral. i'm courtney reagan. good morning. welcome to "the call." i am trish regan. 90 minutes into the trading day. stocks moving higher as investors look to bargains from the recent selloff. we'll discuss whether a correction is coming. >> larry kudlow is off today. creating jobs and creating them now. we'll discuss what needs to be done to reduce the high unemployment rate and get the economy humming again. this is "the call" on cnbc. welcome to "the call." stocks moving higher as investors look for those bargains. the bulls also getting a boost from the institute of supply management report which showed the service