for the month of october, so yeah. it has dipped negative. but the best performing sector in october, energy. financials are the second worst, but down 2.3%. >> here's hoping. nasa doesn't get the rocket off and it's back tomorrow morning. morning and welcome to "the call." 90 minutes into trading here at the new york stock exchange, we've got stocks weaker down 36 points on that weaker than expected housing number. plus, we're going to discuss what the durable goods number means for the economy and the market. i'm larry kudlow. ken feinberg on capitol hill to talk executive pay. we'll go there live, plus discuss how he has raised the base for for execs who receive t.a.r.p. money. we're going to talk live

with wyndham's ceo and get his take. this is "the call" on cnbc. you might remember that during yesterday's show we were waiting for nasa's ares rocket to take off. we're still waiting. the latest and the launch is scheduled for 11:08 eastern time. the ares rocket is the centerpiece of a $445 pll million project to replace the space shuttle. it is the world's tallest rocket. you like this, larry? >> i love this. >> this has a simulated o ryan crew capsule. we're going to keep an eye on this and let you know whether it's going to take off. there have been many weather delays. >> it has a sharper trajectory than executive base pay.

whoops. i'm sorry. bad crossover. in the meantime, stocks trying to overcome a surprising job in september. right now, the dow is down about 45 points. it's good for about a half a percentage point. the s&p right now is trading down as well by litting better than 11 points. about 1% on the s&p. we are sitting at the lows of the session. the nasdaq is trading to the downside. 2,084 the last trade. >> i'm just impressed. you're such a fountain of knowledge. >> i'm all about the rocket. >> down here, all about some of the economic news that came out today. durable goods orders come ng fairly in line, a little lower than expected. then, the new home sales data, which declined for the first time in six months. the market is now down 50 points on the dow.

i want to bring in bob pisani. >> this is the tough day. the new home sales numbers were very disappointing. >> because we started higher. the market was in fairly good shape and then that new home sales data came out. >> on top of that, we've got generally negative -- you would never know by looking at good year tire, that's not a typo. they gave guidance, that the operating income would be lower. yikes. that's not good. so the fact they beat earnings, does it matter, other tire makers are to the downside. coal demand has been weak. massey said no, they said coal demand remained on the weak side and you can see they're being very unforgiving here.

ing yesterday, there was talk they were going to basically break up the company. some irish banks might face the same situation. they're all weak here today. >> speaking of banks, financials, let's take a look. do you have a board on financials? >> we've been weak throughout the morning, so still about 2, 3, 4%. >> how much can we attribute this to the pay concerns? >> i would go with the latter, feinberg is i believe giving testimony right now at 11:00 eastern time. >> but pretty much a function of this weaker market. thank you so much. we want to head over to capitol hill, mary thompson standing by.

>> we are still waiting the testimony just about to start, but in his prepared remarks, mr. feinberg tells congress his powers should not be expanded beyond the companies whose pay he currently oversees, writing that the federal government should not enter the business beyond these companies by extending by jurisdiction. the seven companies collectively owe the government hundreds of billions of dollars. bank of america, citigroup, aig, general motors, chrysler and the finance arms of both companies. last week, feinberg cut total compensation for the top executives at these firms for this year by 50%. in his testimony, he says he's now working on next year's plans where he anticipated problems working out retention contracts that have been signed by these executives. also working on compensation

plans for the next layer of top executives and his decisions will be due 60 days after the companies submit to him the final details. the hearing is just starting as we speak. i think we're going to hear a lot of questions from congress about the story in the "wall street journal" today that says even as feinberg was cutting compensation in half for these executives, he was raising base pay by an average of 14%. back to you. let's talk more about feinberg's testimony and whether or not the pay czar is getting it right. joining us now is jay brown and cnbc's contributor. jeff, start with you. is it possible that we all want mr. feinberg as our boss because he's giving them pay increases? >> larry, i knew you would come around. you see. he's a pretty good guy. he really is a capitalist who is

going for some degree of sensitivity, but still doesn't want to pay people enormous bonuses just for showing up and breathing and the perks and the other nonsense. for citi -- >> i wouldn't say half a million. i don't mean to be disrespectful, but he's giving everyone a half a million average. citibank's getting good hikes. this guy's a fairly lenient pay master. i guess that's the question i'm asking you. >> he's definitely into performance pay for these -- very high-end earnings. the idea you're not going to have people walking out as he was able to stand down to andrew hall for the hundred million dollar payments. it's taking a look at where the bonuses are going. but this in terms of guaranteed pay for holding on to people, i think it makes a lot of sense.

it was retention bonuses for example at aig and things like that where he was so harsh. he's not trying to expand his powers. he's really very conservative. >> i must say, he's doubling the cash compensation for 13 of 21 employees at citigroup. he said this is only for the seven companies, but is hoping that others will follow suit. do you think other rs going to follow suit? >> absolutely not. i am absolutely astounded when he says don't expand my jurisdiction. all feinberg did was say, let's make the total compensation package be reasonable and have long-term incentives by having the bonuses be paid in stock. he's saying i think doing that to seven companies is enough. >> i have an interesting question about that because you say you want everybody to be paid in stock, but why is that less of an incentive to take

risk? why are we assumes it's to get risk it's to get earnings higher to get the stock price higher. it was a battle for who could make the most money. that's what pushes up the stock prices. >> it's a good question and there's a good answer to that. an excellent question. so many times people have been asking me about that. we have seen people in other industries, retail and health care, where they have tried to reduce the denominator. what's different here is that the payout, we're looking at a long vesting period, five years. it's the longer term incentive. >> but people at lehman were paid in stock. you've heard a lot of people that by virtue of lehman going down the drain, they lost it all.

bear stearns, same story. we had this structure in place. >> it's the long-term piece of it. even at goldman and jpmorgan, they have now made fall backs a lot more easy. with frank reigns, we managed to claw back millions of dollars when it turned out was based on business that collapsed. >> that's the way life ought to be. there are laws. jay brown, you have a certain enthusiasm for this and i want to ask yourks is this the beginning of nicksonian wage controls? >> it's not what i want and i think it's a horrible precedent to have the federal government setting this. >> i misunderstood. >> you know what ken feinberg is doing? he's doing what any good board of director is doing. when he's done, all the limits go away. the question is, why aren't we

fixing the board of directors to make sure all companies do it the same way. >> jay, why do you think jeff, a yale management professor is jumping up and down, he's doing a jig, an irish jig in favor of feinberg when in fact, your point, the corporate board should do this. why doing jeff wants to undermine corporate board govern nancy -- this is a job for the board of directors. one way to fix the board, let shareholders nominate their own directors so they can oversee the compensation progress. >> jeff, first of all -- have you now or did you ever do an

irish jig over this proposal? >> for sure and i will sing for them even. >> what about the board of directors issues that jay brown raises? >> he's completely right, but feinberg can't make that happen. we can't mandate it. these company rs allowed to make stupid product institutions -- >> and you vote by selling stock. >> what's different here is that these companies are like civil servants we're talking about. we want to make sure we have oversight on them. but the rest has to be the board and the majority vote is that jay brown is right. we need to be able to replace boards of directors with simple votes. >> it would be great to have a bunch of gs-14s. is that what you want? i thought the idea was to get them bailed out so we have the best and the brightest to pay the taxpayers down. >> none of us including jay

brown, are calling for the simplistic say on pay. >> no, no, no. >> we've got to go. thank you so much. in the meantime, we did show you a live picture of the house oversight hearing with kenneth feinberg and we'll keep you updated on it. a disappointing snapshot of the housing market. some concerns about economic recovery. we'll have the details for you and discuss whether or not it's really a roadblock for the economy. plus, it's no secret that travel across the globe is sumping, so why is wyndham upping its guidance? the chairman joins us live for an exclusive.

all right, take a look at how crude oil is trading this morning. we saw a build of 800,000 barrels in crude. that was less than expected. it's down about $1.50. looking a little weak there, crude oil. trish? >> thanks. durable goods are up, but new home sales are coming in lower than expected. the question we're asking is

whether or not new home sales are a roadblock for an economic recovery. joining us now, chief economist and diana olick as well as steve liesman. great to see you. thomas, i'll kick it off with you. how important are new home sales, the overall housing market in terms of gdp right now? >> in terms of the new home sales themselves, it's about 10% of overall sales. i think a lot of it is that with the tax credit and the low interest rates that we're experiencing, we borrowed a lot from sales and in 2010, we're likely to see a setback even if they extend the tax credit for new home purposes. i don't think that the rails are forecasted and tomorrow, we're supposed to see something like -- and then 2.5%.

>> so in other words, it's all going to even out. how reliant is this economy? if you had to say home sales in general are a certain percentage of the overall economy, what would that be, thomas? >> in terms of gdp, it's really housing starts we look at and a share of gdp somewhere around 3%, it's fallen from about 5%. not a huge portion of the economy, but it is meaningful and tends to be a good leading indicator of what's going on. >> steve liesman, just a quickie on the economy, with the durable goods cap ex, inventories dropped a lot. i want to ask you is it possible that gdp in the third quarter to be reported tomorrow might be in the 2s, but in the fourth quarter with inventories coming

back, might be higher. in other words, instead of double dip, we're going to have a step up. is that possible? >> absolutely. the rule is that as shipments will follow the orders, right. so they haven't really done as good a job as we would have expected. the orders have been pretty strong, the shipments have not. what you're taking away from the third quarter, you can get back in the fourth. to answer trish's question on housing, it's like a remedial student, trish. we just need -- we don't have high expectations for housing, we just need it to stop detracting -- >> did you call trish a remedial student? >> let's be clear about that. kudlow's trying to stir up the pot. don't let him do it. >> i was ready to step in and defend you, trish. >> i have a question for diana because commercial real estate has been really hanging over

everyone's heads. diana, how significant is commercial real estate? should we be paying attention? >> it's very significant and everyone keeps using this phrase, it's the next shoe to drop. it's already dropping. we are already seeing vacancies rise, rent prices fall. this is across all-s sectors. the mortgage bankers yesterday announced that they have to sell their own building they just moved into a year and a half ago. we have to really watch the commercial market because that will be a drain on the banking sector as well. >> we want to go to scott cohn at the breaking news desk. >> on the bernie madoff case and the effort to recover money for the victims, the bankruptcy trustee is briefing reporters on a conference call right now and the numbers seem encouraging. the corporation trying to give

the victims has passed a major milestone, giving about half a billion dollars in claims. let's take a listen. >> as of noontime eastern time yesterday, the total am of advances given to customers in the proceeding has topped half a billion dollars. >> that is the biggest since sipc was formed in the '70s. here's where it pails. the fraud totalled as much 56 billion, so much of these investors will not be made whole and picard will continue to recover the assets and -- with a number of lawsuits still pending, but as far as is sipc

side is concerned, they're working very hard, going through microfilm records. it is a long and slow process. guys? >> all right. scott, thanks so much. big names out with earnings this morning. we'll span is sectors. and yahoo!'s meeting is underway, the first in three years. we'll have a live report and tell you where in tech you should be investing now. ♪

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welcome back to "the call." breaking news from general motors, the company holding a conference call discussing sales. new sales chief going over what the month looks like and there's encouraging nus. they say the sales rate

expecting to come in at about 10.5 million. last month, it was about 9.4 million. it expects it to be the first month to pick up market share. we're going back a ways here in terms of the last time general motors picked up market share. we'll have more later on. melissa, over to you in earnings central. >> thanks so much. more than half of the s&p 500 companies have reported their earnings including big names out this morning. matt nesto joins us with the details. health care. >> we've got big names in glaxo, interestingly, they're all trading lower here today. we saw strong results at glaxo. the sales were light even though they were up 15%. looking at their top three sells drugs versus the consensus, they

were a little lower than analysts were looking for. wellpoint, one of the biggest. they've been operating under the dark cloud forever. depending on which number you want to use, they beat by a mile or quarter mile. but earnings were very, very strong. >> there was a flu trade in here. >> with all of those. we can back it up if you want to. the flu factor is definitely helping glaxo and will help more in the fourth quarter. rel relenza had almost a 10 fold increase. wellpoint is seeing their medical costs rising. one of the factors is the flu and also unemployment in the u.s. economy as well. >> so, it cuts both ways. let's talk energies. >> they're going to have a benefit because they distribute is drug. it's a busy time for them. >> energy. i'm an energy junkie.

you told me before, this is the best earnings so far. >> going into it, materials and energy were duping it out to be the worst performer, and they still are. that's been a result of not necessarily their results. but today, you can see conoco and massey all down. conoco, better than expected results. they're losing steam because this is going to be closely linked to the economy and not so much on earnings. people looking at earnings, yeah, we have a nice little uptrend here, but the truth of the matter is the price of natural gas continues to be a huge variable as it is with the refining margins and massey is a coal company, they lowered their shipment forecasts for the coming quarter. they cut it by about 4%.

so that's not even necessarily a good indicator. >> and tell me about hess because refiners have been really struggling. >> hess is struggling again today. the stock is down about 2.5%. their earnings were down, but not as much as expected. down 56%. they beat buy like 20 cents, but when you see a company beating by that much, it gives you an idea of how cold the sentiment is on the group that's been holding up well. >> i have to interrupt because we're going to go to trish. >> breaking news. looks like a launch of the ares rocket is about to happen. let's go to a live picture if we have one. it's been delayed multiple times. the mission, if you will, is designed to last about two minutes. the ares rocket program is designed to of course eventually, replace the space shuttle. they've spent nearly a half billion dollars on this project.

the scheduled launch time is in 20 seconds. right at 11:30 straight up. we're going to watch this go off as history happens here. we want to bring in everyone here. larry, melissa, you watch thg? >> i am. what happens here? we're going to get the original lift-off, do we know the process, the game plan? >> today's launch is a short test scheduled to last about two minutes. >> there it is. it's up there and it is going great. it has gone great guns. look at that. look at that. >> my goodness. that was quite a few that you could see right there from the actual, it's back. from the actual craft. >> there is an actual business angle to this. the motor was made by reliant tech systems.

part of a development contract with nasa. this is rocket that is supposed to replace the shuttle. they haven't designed any new rockets since the '70s, but this is supposed to be the prototype. what we're watching here is the future of nasa and the future of the space program. this is of course unmanned. >> what is the future of nasa? >> larry has found a twi make this political. >> people want to -- hang on. people want to defund nasa. there's talk about privatizing nasa. >> interesting. >> why not. what is nasa's future? >> i don't know. i mean -- i don't know if this is the moment. >> all right. >> we'll save that. >> what is wrong with it, do you

think? >> i am in love with privatizing it. i want the united states to take the lead. i love this stuff. i want us to control space and the skies, but the question is that what people want? >> i don't know if people want to see it for profit. i don't know if you want to see a for-profit industry. i don't know if the country is ready for a for-profit industry. >> we have started to see examples of that though guys. with these missions to the moon and the desire to create these rockets and be able to go there and russia as well with flying passengers. we have seen some examples. let's listen in though to the -- i think we're losing -- >> the thing is, trish, what i'm asking is for those of us who love this and want this to succeed, the question i'm asking and i think it's a serious question, what's the best method to do it? can you rely on uncle sam to

finance nasa, which has gotten short tripped in recent years or do we need to supplement it with capital? >> i think that would work well. at heart, i'm like you, larry, very much a believer in the private markets. i think melissa has a good point however in that you know, i don't know as projects this big, a project this large, is ready for a complete private takeover, but having some private money in there might be an advantage. >> in the sense, you have private money. you have private xaps out there competing. >> competing for the contracts part. >> every time we try -- >> they stop talking. >> separation -- >> there he goes. there he goes.

>> well that could just be our control room. just kidding. >> i think that was theirs. >> i was only kidding. >> we should put some of our control guys could go into outer space, but i think this is the real nasa mccoy. now it's just the three of us. >> pretty exciting stuff to watch. >> sense you are now miss nasa today, what's the schedule for this thing? >> i think that was it. it's only a two-minute trajectory. obviously, no one on board. >> it's interesting that this is the first new rocket developed since the '70s. it's pretty amazing. it took that long actually. any way. coming up, we're going to move on to yahoo!. we will have a live report and discuss what big name tech stocks you should be investing in now. and another exclusive,

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yahoo!'s analyst meeting is

underway. 30 minutes ago it did start. this is on the heels of last month's earnings report that beat expectations. the latest meeting was over three years ago. led not by jerry yang, but his pr pred. leaving carol barts with a little explaining to do. jim goldman joins us with all the details on that. >> trish, you know, you talked about jerry, seems like a generation ago. indeed some explaining to do and ceo and carol barts in her painfully candid way, she went right at the exposed way yahoo! went wrong. take a listen. >> we think we have a great opportunity today because of we have kind of lost your respect along the way. whether it's what's happened

over the last couple of years, whether it's our 6% operating margin, which is pathetic. whether it's you being confused and maybe other people being confused about what yahoo! is. today is the beginning of a journey back to respect. >> that journey back to respect comes also with some dampened expectations which the web cast goes on to talk about certainly. this company isn't going to wow wall street today, bartz says, but intrigue them instead. for those wanting to know where the new growth will come from, it's not clear. that will be a disappointment especially as rival google continues to bank billions in profits from add search. despite a stock that can't seem to recover, carl icahn resigned

last week saying the company was in good hands and he has complete faith in bartz. now, she's got the foster that faith from the rest of the base and wall street as well. this is going to be a long day. >> she mentioned some had been confused as to what yahoo! is. when you compare it to google, when it comes to a search engine function, i think yahoo! is a good place to hang out on the page and find things, but when it comes to the search engine function is there anything yahoo! can do to compete with google? >> it's a great question. it's the $64 billion question. this company has tried and tried again to change it's search algorithms, but this is the company behind the 8-ball and google continues to eat its

lunch. >> thank you so much. >> can't pick the sale. >> larry's got an opinion on everything. despite the global slump and weak earnings report, wyndham is raising guidance. the ceo joins us next. and jump-starting our smart grid could help lower utility bills in the future, but could also boost gains in your portfolio. the details are coming up right here on "the call." this week's etf, many strategies to enhance stock returns work for etfs. all options can be trading. buying call options gives you the right, but not the obligation to buy shares within a specific period at the certain price. you're free to exercise the option when shares rise above

the given price. keep in mind there's also a cost to buying options contracts, too, so you'll only profit when shares rise, more than the price you pay for options. all right, when you look at the future

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verizon's droid will go on sale november 6th. the after rebate cost will be 200 bucks with a two-year contract. it's a joint venture between verizon, google and motorola. the ceo will be on closing bell today at 4:00. tough quarter for wyndham worldwide, reporting a 27% decline, but did raise its outlook. wyndham shares have been rocketing higher so far this year. take a look at the chart. they're up 156% year to date. little boost today. joining us now for a cnbc exclusive, stephen holmes. thanks for joining us. we're interested in the future of what's going on next. you raised your guidance. you're seeing stabilization out

there. tell us about that. >> you definned it as a tough quarter. we thought it was a great quarter because we produced at or above where when he thought. we feel very good about what we've accomplished. >> revenues fell -- kind of across the industry, which is that the top line is falling. that's not great for investors, but you cut costs. >> and we're repositioning our business, so when you look at looking forward and seeing stabilization, we have seen stabilization in the hotel business for our business overall, we're transforming more to a fee for service business model. we'll see that grow. >> first of all, business traveling. >> business traveling down. without a doubt. the business traveler has been down in the number of travel and also down in where they're

traveling. >> any sign of improvement in business travel? any? percentage-wise. >> not that we're seeing. >> any signs? >> that's held up better than corporate travel. in europe, we saw leisure hold up. >> why is that? >> on the hotel side, everybody's cutting prices. they've got a deal going whether they're cutting prices or offering three nights for the price of two. they're doing a lot of the promotional things. in europe, our prices on rental products have really held up. we have about 60,000 homes, villas, cottages in europe that we rent and those have held up well. >> so it's not that things are

getti inting better, just not gg worse? >> that's right. the decline in occupancy has stabilized and you need that before you see rate go up. the rooms have to be filled before the owner has the kournlg to raise the price. >> thank you for joining us. trish? "power lunch" is coming up and we've got bill griffeth standing by yet again to tell us. >> this seems to happen every day about this time. >> what do you know. >> we have a triple play of ceos including suzanne lyne, sally smith and the ceo of new alliance. then we are looking for a bottom in the housing market. the latest data, do they suggest

a bottom or not? and here come the earnings from the oil companies. trish? >> thank you so much. we're going to take a break then we are back with a company that has a lot to gain from president obama's multibillion dollar smart grid stimulus. brian shactman is in south carolina with the details on this one. >> the company is itron and they are ramping up production because there's about $8 billion about to come in. the smart play is on smart grids next on "the call."

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welcome back to "the call." new home sales defied expectations and fell for the first time in five months. sales down 3.6% to 402,000 units and august numbers were revised down as well. prices on new construction down 9.1%. mortgage applications for for the third yeek in a row. this as mortgage rates are still over 5%, but slipped from 5.07 to 5.04. and the first time home buyer expension stalled last night.

a new compromise would extend it to april 30th. trish? >> thanks. president obama's announcing $3.4 billion worth of grants to help build a smart electric grid. analysts say itron has the most to gain. you can see it's down 7.5%. down about 79 cents. brian shactman joins us live from the manufacturing plant in west union, south carolina, with more. >> thank you very much. it's about a $2 billion market cap company and the big part of their business are these smart meters. at the point in the near future,

the utility companies will talk to the meters and xwet a lot of insight. we're talking about price changes, if you decide to change your use. can also tell you about potential outages. the hope is it will lower usage and prices. what happens is here, right now, they're ramping up production. over a million right now and it's changing as we speak. >> we expect to be at full capacity probably within the next six months. on that, i would say is the real impact op the stimulus package. without the stimulus package, it's difficult to predict, but we may not have been at full capacity for another year or 18 months. >> president obama committed about 3.4 billion to smart grid technologies. they have to be matched and were, so about 8 billion is going to come into this space. there are two clients getting big benefits.

one is dte energy and the other is centerpoint. that could mean nearly 3 million more smart meters produced here in south carolina. there are other names in this space and there's a real wide range from software to networks, from ge to small caps. in terms of today's trade, it's kind of a classic buy the rumor, sell on the news. itron reports after the closing bell. you're expecting about 52 cents a share, about 400 million in revenue. keep in mind, it's a situation where it's a big growth industry and we'll see what happens movi moving forward. >> thanks very much. a quick break and then we're coming back. >> i thought that arm was going to get him. it was making me very nervous. a list of stocks to watch as

we head to the afternoon.

welcome back. i want to bring your attention to a few stocks to watch. conoco phillips profits down, but still topped. the ceo says they're going to sell off 10% of u.s. and canadian assets. health insurers are under pressure, but a strong quarter from wellpoint, medical loss ratio dropped. and a couple of stocks that say swine flu is really going to be a big driver. one has an exclusive contract with the cdc to distribute vaccine. and glaxo, which sell it should sell about a billion pounds