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tv   Closing Bell  CNBC  February 25, 2010 3:00pm-4:00pm EST

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all right just three quick things about that duck, yes the feathers were incredibly soft, it took the tube train and took the subway and yes he's hot. he's used to being outside. it is time for the "closing bell." red arrows on wall street. stocks posting a sharp sell-off on the new fears about the economy and sovereign debt. is america poised for a double-dip recession? live from the new york stock exchange, this is the final and most important hour of the trading day. hi, everybody, there's a live picture of the new york stock exchange. welcome to the "closing bell," i'm maria bartiromo along with simon hobbs. we've got weakness on wall street today but the market, simon, way off of the lows of the afternoon. >> yeah, we've about half of our losses. obviously a concern about the weekly jobless. what is happening there throughout the year, we're not generating jobs and greece of course is still weighing on things. >> i was talking to a trader earlier and he said we're seeing buyers coming in right now when the market was down. >> particularly the industrials. alcoa managed to change
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direction which was interesting. >> for sure. take a look at the charts and show you where we stand as we approach this final stretch here on wall street. you can see right from the chart that we are in fact off of the lows of the session at 10288 on the dow jones industrials, down nearly a percent on the day, off of the 188-point loss seen earlier in the day. the nasdaq composite down 11.5 points, about half of 1%. and the s&p 500 looks like this with select strength in a number of industrial names as simon mentioned to you. >> let's check in with our market team covering the various platforms. we'll kick off with brian shactman down here on the floor. hi, brian. >> reporter: thank you very much, simon. well off of the lows and the best that we can get is the dollar. take a look at the dxy. we hit the lows on the dow around noon. the dollar definitely got a little weaker and stocks rebounded right on the back of that. now, what was behind the dollar move? that's too -- to call. some people say that an analyst report came out saying that the
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eu was not going to let greece fall but you take a look at that chart. take a look at the intraday because commodity names really across the the board i won't say rally but moved off of their lows. alcoa actually went positive and is now the best performer in the dow and that is true with a -- so many commodity names at this hour. in terms of weakness, the weakest sector is financials especially the regionals and the super regionals. take a look at m & t, keycorp, u.s. bancorp, some examples, they are the weakest, doing a little bit worse know that the big banks. i want to touch on retail because retail has shown a fair amount of strength. three names in particular i want to touch on, tjx, touching on an all-time high. kohl's really good numbers and they're gaining despite some tepid guidance so that's going to tell you something. and limited touched a two-year high despite that weather looking very good in terms of comp sales. now you usual lie don't talk about hyatt and heinz in the
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same. why am i mentioning them together? well, they both came out and said their overseas' business is better than their u.s. business. so if you're looking at outlie ars take a look at that one and end on health care. we talked about the health care summit today take a look at some of the hmo names, humana, signa, unitedhealth, three in particular. they're not moving a whole lot. what's the takeaway from an investor's standpoint? well, not much action coming out of d.c. right now when it comes to health care, at least in terms of what we're hearing today. let's hear about the tech sector and what we're hearing today from bertha coombs at the nasdaq. >> reporter: thanks, brian. you know sometimes, it's the analysts get it right, about half a dozen of the analysts this week downgraded palm. this morning in fact, morgan stanley cut the stock just ahead of the company issuing its warning. palm now saying that it's going to come in with sales that are more than 20% below what the street was looking for. they can't sell phones. part of the reason? in this age it's all about the apps and you've got google and
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their hooks developing them for the droid are and obviously the app king is apple itself. take a look at apple sars. part of the reason that we've seen a bit come off of those lows today, as far as tech is concerned, it's because apple, a very big weight on the nasdaq composite. came well off of its lows and coming back above $200 today. this happened over the last hour or so. part of the reason, perhaps some hopes some folks were hoping at the shareholders' meeting might hear something about a stock split or even more a stock dividend. steve jobs coming out and saying that the point he sees no case for a dividend. the company saying they are not splitting the stock. jim goldman will have more on about what happened at the shareholders' meeting at the bottom of the hour, but apple right now is up about -- at $200. i'm not sure if i have any of my other charts here. support other stocks that i wanted to show crow. some strength in chips. triquint among the strongest which does do business with apple is up today after posting better than expected earnings and boosting its outlook saying
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they've already met some key metrics in this quarter for their sales. alterra and sandisk has been flirting with positive. they've got a little bit of momentum but overall we're still negative but seeing these pockets of strength. health care also some pockets of strength. new highs with stocks that came in with better than expected earnings. the pharmacy benefit manager express scripts also getting a new price target over at jeffrey's at $115 a share. mylan labs saying that its generics' business is doing well as was impax labs' generics business as well. both of them pretty in pretty good quarter and retailers also hitting new highs. dollar tree, a day after putting out good earnings, getting upped over at webb, bush, morgan. and children's place at a new high and whole foods among one of the big caps that's trading to the outside. let's head down to the nymex now and sharon epperson. >> reporter: the bright spot in the commodities market today was the precious medals. we saw gold and silver both bucking the trend here even
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though we saw a sell-off in the base metals in oil and in equities. keep in mind that investors may be just looking for a store of value here, an alternative to stocks, an alternative to currencies and as well as concerns continue to mount about the euro zone, particularly greece. , but also looking at what has happened here in the u.s. with those jobless claims' data that we got today. a lot of concerns about the rover here as well. there were some rumors in the russian press about china and the emf gold sales and perhaps china buying the remaining gold from the international monetary fund. those were just rumors. they weren't substantiated anywhere. also traders talking about just a lot of investors wanting to own gold right now and it wasn't just the gld that got a lift today or the -- the two trading gold. numont mining and freeport-mcmoran also getting a boost there. keep in mind as well as we talked about recovery concerns in the dat that that we got yesterday from the energy department about oil and the
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supply levels. we are seeing a big concern here about where demand is going to come from, particularly when you look at those jobless claims numbers, you've got to wonder whether or not folks are going to want to pay close $3 a gallon for gasoline when they are not work. that is something that perhaps has come to the front burner now for many traders. also some traders saying, in light of what has happened in washington, a lot of traders want to take some money off the table right now. we did see oil get on $80 a barrel. perhaps some profit taking going on today. in terms of the natural gas department the energy department showing a big draw from gas supplies in the last week bigger than the five-year average and of course this major snowstorm in the northeast and seeing weakness in the natural gas. weak techically, a lot of traders are looking at that $4 level. we have gdp, consumer sentiment, existing home sales, so much economic data to trade on in the trading days for the currencies and in the commodity's market. over to you. >> reporter: that's right and so many companies in europe yet to trade credit default swaps.
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before we get to the charts we need to consider the following. we've had our auctions. the two-year note right now is at $83. auctioned at $83.50. that's a winner. lower yield, higher price. it's a winner. now the chart intraday seven-year, it was auctioned at 3 3 3078. a chart of the old guy but its new yields on the auction instrument are lower as well. anybody participated in the aul auction they're making money at least this, this point of time. the intraday of the dollar index we've all shown this chart, but what's interesting is it was at $81.13 of the highs of the day. it's traded going back to last summer but it gave up some of the ground. look at the euro. euro closed well above 135. it was in contention for a while, and if you think these issues are straightened out in greece, well, just wait and watch the euro again tomorrow.
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maria, back to you. >> rick, thanks very much. rick santelli in chicago. and of course, this is the worst market performance in several weeks for the major averagies. how to invest in this market in such uncertainty that we're all looking at, stephen wood is joining us, chief market strategist with russell investments. good to have out program as always, david. so what do you think set the tone for this market today? it's amazing that now, once again, we go back to the worries over greece and the debt in europe, when yesterday we were talking about bernanke in how the suggestion that rates will stay low for a long time, it was a positive for this market. >> i think so. i think that you're seeing a lot of sloppiness in a market without a lot of conviction. for my money i think that the two buzz words are exit strategy for 2010 and the sovereign risk and we've seen the risk. the euro gets their own structural problems but i think that the chinese implementing their exit strategy in the beginning of this year has kind of set the tone. bernanke's going to stay liquid, he's going to stay accomodated for a good long time and that's
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a mixed message. the fed's really not going to tighten, not going to make things difficult for us and then again the credit and the economy still needs a little bit support. we kind of grind out 2010, i think that we end up higher on the year but it's going to be a tough road down. >> so, do we end higher overall, you say? >> i think so in the u.s. >> substantially higher? >> i think high single digits will probably be a reasonable expectations. >> and what would be the way given the various factors in china importantly, what is the way to play that? is that a cyclical recovery or something else. >> i think part of it will be cyclical recovery. i think that you want to step into a very global modest story right now. i think that china will continue to grow significantly, i was there last week for nine days, and you cannot have words to describe the frenetic pace. >> what would you take in industrials now. >> i think so, kind of lean forward, into industrials, play that global growth story. i think that you want to look at the u.s. as coming in second, asia, emerging markets first, and obviously europe is a far distant third in the global
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cross story. they may not even break even gdp growth for 2010. >> what are you thinking about commodities and putting that in the overall portfolio, that obviously, the china trade, everything china needs has been going up in price. now we've got uncertainty as far as price hikes in japan as far as coal is concerned. >> correct. >> what are you looking for in terms of exposure in the commodities in the run-up that we've seen in exposeture commodity sectors, first play that people want to look at. >> through equities is what you are saying. >> through equities. and even through multinationals that have equity exposure, i think that the oil, the integrated oils, we've been kind of negative on those for a couple course right now but energy complex in oil services i think makes a lot of sense but i think that commodities to the extent that is t is speculative you don't want to overplay your hand in there, but i think, for right now in terms of an inflation compensation and currency, i think the dollar's probably going to soften up a bit. >> you mentioned the possibility of double dip in europe. >> correct.
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>> rather -- in the united states the weekly job numbers and the consumer confidence that's come out might suggest that god forbid we go back down here as well, would you still be so confident on those commodities if the two major economic blocs, the united states and europe are potentially double dipping? i wouldn't buy in that environment. >> it all depends in what you are getting but in terms double dip i don't think that a double-dip recession is entire high probability right now you are talking about fed. i think that the fed worried about a deflationary like -- >> demand here in america we don't see that coming back strongly, do we. >> i think coming back gradually. that grinding slog, i think looking at the united states doing about you know 3%, 3.5% gdp this year, which is good compared to where we were but given how deep the recession was you should expect 8%, it's good but not great. club med is going to provide some challenges to demand.
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so i think that it depends. >> what do you want to avoid? >> i think right now you want to avoid, treasuries right now, sovereign risk is very great especial especially. sovereign debt right now, you really need to know what you are doing and i think also you want to look at hire end of the consumer, health care right now talking about that earlier, a lot of political risk in health care right now that's very difficult to understand so i think that would be something that i would want to know more about before i get too aggressive. >> steven wood joining us. maria, we continue to cut down our losses now 74 points down on the dow. we were down 187. what's quite interesting on these days is when we do go down in that last hour oftentimes the market comes back which is an indication, they say, that the underlying state of the market may not be as bad as it appears when you first dive in the morning because it's actually institutional money in the end. >> seeing money on the sidelines when it gets to a certain level the money comes back into the market which is of course something that we'll be talking about as we continue on the
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program. also after this short break we're going to take a look at financial religion, what will it looks like? all of the banks and businesses out there are trying to figure out wa their firms will look like once we do get regulation on the table, we'll talk about that and the budget crisis in california with the chairman of the financial crisis inquiry commission phil angeliedes. >> and plus we've got the latest on the apple shareholder meeting. find out what is being said by apple executives and if the analysts see the stock as a buy right now. and plus we'll talk about the inside and outside of wall street. the banking sector. we will speak with one of wall street's big heavyweights, blackrock, chairman and ceo larry fink. my special guest 4:00 p.m. eastern join us for that interview. but first the most active stocks today on the new york stock exchange led by the banks and indeed ge.
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welcome back. with the financial crisis inquiry commission is well now into the seventh month of existence examining the aspects
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of the financial meltdown with the goal of reporting to congress by mid-december with reasons and resolutions of the crisis. tomorrow we'll gather experts who've been researching the crisis for the form in washington. joining me to talk about that and a first on cnbc interview i'm joined by phil angelides. good to have you on the program. >> great to be back with you, maria. >> so who will the commission hear from at this forum being held beginning tomorrow? >> well, we're going to hear from a range of experts around the country who've researched the crisis, people like randal kroszner from the university of chicago, people like dwight jaffe from the university of california-berkeley, people like gary gorton at ual university. we've been talking to a range of experts. joe stig la, sometimon johnson, john taylor throughout our inquiry because what we want to do is look at clearly the big picture. what are the big forces that brought our financial system to its knees, as we also undertake a hard target investigation into
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the practices that unhinged our markets. >> okay so you've spoken with a lot of people already, then, right, phil? i mean, you last joined us after the formation of the committee back in mid-july of last year. in this last six months, what kind of conclusions have you begun to draw? >> well, you know this is a full inquiry. it's an investigation, so we want to make sure we're proper here, but look, we're learning every day, and by the way maria, we have a team of 50 investigators and researchers who are going hard at this every day. and we are literally conducting hundreds of interviews. but, for example, we held our first public hearing in january, and we'll hold a whole host of hearings throughout this is spring and fall. but take our first hearing. we opened up several avenues of inquiry. for example, we heard about the level of mortgage fraud that occurred in this country in 2003-2004. the fbi warned that there was an epidemic of mortgage fraud that if it was unchecked, would lead to a crisis bigger than the s&l crisis, and we want to know who did what about that, what did
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institutions and regulators do to curb fraud? we heard from state and local authorities about their efforts to curb predatory lending while the federal government tried to stop them from doing it. we heard about goldman sachs' practices of selling securities to investors, and then fully betting against those securities. and as you know, more information has been emerging about those practices. so we're following several paths here of investigation to try to look at what were the big causes, big practices that led to the financial meltdown? so it's a big-picture look as well as hard-target investigation. >> and i know last month, the commission met with the heads of the four biggest banks on wall street. were they forthcoming with information and constructive, and also, in your view, why was it that all of the banks took on the same kinds of risk? i mean we were in this moments of time where real estate was obviously soaring in value but it seems one by one they all took on the same kind of risky
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securities. >> i was going to say that was the $64,000 million dollar but it's really the trillion dollar plus question. in terms of forthcoming, we asked, we got some answers but we've also followed up with many more questions in request for documents. so we're going to be digging deep and we'll find out how forthcoming. we are finding that both public agencies and corporations are cooperating in our investigation. we have the power of subpoena, but as yet, we've not had to use it because the power of the subpoena is having the power of the subpoena. so to date, we are getting cooperation from witnesses. they're producing documents. and we've made it clear to everyone that if there is not quick acquiesence, agreement to produce documents, produce witnesses when we need it, we will use the subpoena. >> well, what about this, phil, how much of your examination is looking into the government's role? and what government did or didn't do, in terms of oversierkts versus the private sector and big financial institutions? >> look, we are an equal
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opportunity questionnaire and i think that it is fair to say that both what happened in wall street and in the hauls of government is squarely within our oversight and our questioning. and so, for example, you take an institution like fannie mae. there were a number of reports all along the way about their practices. so there were some legitimate questions, what did the regulators do? what did the government agencies do when they were aware of problems? and so we're looking at this both in terms of policies that were put out as well as what regulators did/didn't do. maria, a whole spade of books out about the financial crisis, of course "too big to fail." hank paulson's book in when which i am read anything is interesting they all start in september 2008 and part of this is the drama of the collapse and what was done to stabilize this system? we're much more interested in the years and months leading up to september 2008 and what were the regulators, the policymakers, and people on wall street doing so that we got to the point that the only choice
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was we either invested a trillion dollars plus to stabilize the market or we there a collapse? that's a great idea. >> that's the book there's not written. >> yeah, that's a great point. what about this, here we are every day talking about fin reg, financial regulation and that the industry is going to change going forward. do you feel that it would be more prudent for the congress and president to wait until after your findings are due on december 15th before putting financial regulation forward? >> look -- >> some people in congress feel this is the only legislation congress is going to be able on get out this year. >> look, the congress and the president were elected. i don't think they ought to sit on their hands based on what they know and intelligently know, they ought to be moving forward. but just remember just because we created a regulatory body or a new box, doesn't mean those regulators will know the right things to do. so if you create a new systemic regulator it's going to be important for them to have our work in front of them to understand what their challenges are. so my view is, we've got to do
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this examination. what's really remarkable is in the wake of 26 million people unemployed or underemployed, millions who have lost their homes, gdp that may not recover to what it would had been without for a cries for a decade that we've almost had no self-examination and nothing has really changed. >> leave it there. phil angelides, nice to have you on the program. still to come here on "closing bell," we're digging deeper in today's sell-off and a late-day rebound seeing 83 on the dow. we'll get trader's takes on today's moves and whether any sign of the upside in the market over the near future. back in a moment on "closing bell."
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welcome back to the floor of the new york stock exchange. we have half of our losses during the course the session but not bane great day, overall, for the bulls. let me get more analysis on what's going on, warren meyers is ceo of walter j. dowd and indeed a cnbc market analyst and jonathan joining us, a senior managing partner at meridian equity partners. what do you think of this marngt, jonathan? >> i think that it continues to be very fragile. everything that we've seen so far. we've gone through earnings season very positive. all of the headlines that are coming out now especially with jobs and especially with what's coming out on greece continues to dictate on the markets. >> do you really think that
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greece is that important to this market? >> i think that psychologically it is very important because what's going on over there in the debt crisis that's there, clearly we've seen it before here. we've played it out before, but what -- how it unfolds is going to be very intrical to everything that circles around that. >> just real quick, is it really that fragile? if i look at the moves, the volume is very light. we're kind in a trading range. if you just looked at it on a daily basis, do you think, wow, what in the hell has happened? particularlyalt the low this morning. actually is it that bad or quite that boring? >> in the back of everyone's mind, it's still there. unemployment number next week is going to be very important to our markets. >> huge. >> the numbers initial this morning dictated where our market's today but if you look at where we are earnings season the positive news reports the m&a that we've seen so far our markets should have had a better news. a positive direction from that so far. >> which means it is not behaving as it should. it is a very, very badly behaving market, very strange price action. >> light volume on the down and the upside. it's hard to get a feel what's
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moving this market. we've just got through pretty much most of the earnings season which came in fair ly -- fairly good. you certainly quarter over quarter, month over month, all of that. and now we get on focus back in on economic data, political data, geopolitical issues. >> is it correct to say that the big institutions are not changing their bets, though? it is basically static going through. >> i don't think that we've seen major bets yet or you'd see bigger volume, bigger moves on one side or the other. we're not seeing that. that's what i've been waiting for. i think that you look at jobs numbers, all of the numbers that came out this week, or most of them, the housing number, the consumer confidence. >> the consumer confidence. >> consumer confidence, were all terrible really. and yet the market is down only -- you know what, what percentage are we down? six cents of a percent right now. >> what are you doing in the market? >> it's very, very tricky. you've got to be, as arthur
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cashin says you have to be extremely nimble. i look for stocks that may be a little defensive play and if you see a drop get in, buy in the dips. >> give me some names. >> some of the drug companies when they get weak. i like fluor, or that apex or that cusp where this thing is teetering or going one way or another. >> how are you positioning. >> like you mentioned bear big pautz in the investment strategies there. everyone's still waiting for that what next catalyst is going to be but like warren said you have to look at opportunities that keep popping up in some of the certain sectors that have been affect by different geopolitical aspects. >> so you're buying on dips. >> yes but more of a trading as far as investing. big difference between the two. >> very big difference. >> fee and that changes in the year. maria, back to you upstairs. we've talked a lot here on cnbc about the ripple effects of the slowing economy and now there is another interesting indicator that maybe music to some people's ears or at least grateful dead fans. cnbc's steve liesman is one of those fans and he joins us wow in that angle.
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>> reporter: maria, thanks. times are tough and one band is responding to the recession in an interesting way. the new incarnation of the grateful dead, a band called further, which includes guitarist from the original group. will go on sale with all tickets at the low price of around just $40. the average ticket price for all concerts in 2009 was $62. and that's the average. so a lot of tickets were much more expensive at the band's recent show of music hall radio. i had a chance to ask bob weir why did they lower the prices? >> what we're trying to do is build an audience and one way to do that is lower your ticket prices. >> reporter: with the economy the way it is, is that a reaction to that as well? >> well it seems to fit. it sometimes make sense in this economy. you know, we don't need to be slamming people. >> reporter: did you and phil promise not to break any speakers own any strings to keep the cost down of the tour? >> you know, we've gotten -- we've gotten real good about
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that. >> reporter: yeah? >> i don't break near as much stuff as i used to. >> reporter: i also had a chance to play a few bars with bob weir, if they have that tape. it was one of the things i wanted to do for a while. ♪ ♪ bob weir was gracious enough to oblige me in one of the things they wanted to do. in fact, guys, concerts have been one of the bright spots in the economy according to "billboard" magazine ticket sales were up in 2009 to $4.4 billion. winter tour for which tickets it range from -- $70 but mostly sold out. we'll have a full interview with bob weir on the business of the dead. >> you're in heaven right now. that was great, steve. really, really great interview. and i know that you're pretty happy right now and feeling pretty cool that you were playing there just then. >> reporter: it only took me an
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economics reporter 20 years in journalism and then i got to play with bobwe sir. >> great stuff. >> reporter: thanks, maria. >> steve liesman. see you later. >> concentration on his face when he was doing it there. >> i know, serious. >> maybe a new career released on itunes. we continue to cut our losses from earlier in the session. volume actually relatively high but nothing to write home about. >> we'll take a short break, all eyes on apple. we're taking you to the company's shareholder meeting for the latest on what's happening there and then we dig deep into the potential of the impact of the new ipad on the company's bottom line.
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okay welcome back. this is a live shot of jersey city. >>. >> and where i'm supposed travel to present can the the kudlow show" tonight which will be an interesting journey. let's hope that the roads are clear. we have 24 minutes to trade on the markets, a look at where we are. we are cutting logses as we mentioned to you throughout the program. down on the dow jones industrial 187 points earlier in the session. the s&p you could see that we're currently trading at --
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incidentally huge excitement here at cnbc. we have a new graphics package that launches on monday. >> it's true but things that get us excited, simon about. >> i know. >> the graphics package. get simon, 10 billion downloads and counting. apple's itunes' store hitting that attention yesterday. cnbc's jim goldman is at cupertino, california, with the latest. jim? >> reporter: maria, good evening to you. yeah the apple shareholders' meeting wrapped up about 90 minutes ago. it was rather volatile day for apple's shares. get do that in a second. this was steve jobs' first opportunity to address his shareholders directly since returning to the company from his medical leave last summer. earlier today, maybe perhaps some investors were hoping for some kind of stock's split. that didn't happen. there was no announcement of any kind as far as a stock's split is concerned. the company did make news, however, as far as this penetration of china is concerned. when asked a direct question the company's executive in charge of retail, ron johnson, said that apple does plan to open as many
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as 25 stores in china over the next two years. but shareholders did have a chance to ask some direct questions of steve jobs. and there was a big focus on the company's $40 billion in cash in the bank regarding a dividend or a stock repurchase. steve jobs gave an emphatic, no, to those questions. we want to take risks, he says, technical risks, and when we jump, we want to know the ground is still beneath us when we land. $40 billion, that is a heck of a safety net. maria, you mentioned the itunes website now downloading 10 billion songs, it is a significant milestone in the history of this particular site even as more competition comes from the likes of google and microsoft. meantime, iphones' success it is taking its toll on one of apple's significant competitors, significant as far as p.r. is concerned. palm is absolutely getting slammed today after the company substantially reduced it's a smartphone revenue outlook for the quarter and the year.
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couple of major resolutions sustainability resolutions very important to a company when you have al gore sitting on your board. both of those shareholder proposals failed. companies said on pay that did pass and we'll see how apple responds to that in the next several weibels and months. >> jim, thank you very much and while apple meets with the shareholders today the company's market cap is approaching the $200 billion mark. can the market for computers and smartphones support that level? is it proving to be a different forum for apple investors? brian marshall's with us, senior analyst with broadpoint amtech. and andy hargreaves, a senior researcher. gentlemen, good to have you on the program. >> thanks. >> brian, would you put new money to work in apple's stock at these levels? >> absolutely, maria. i think at least 30% upside in the near term. i think that the key driver of the stock this year is a continued penetration in the ramp of the international segment of the iphone as well as the catalyst of the ipad launch of march. so we think those two key catalysts are going to drive the stock a lot higher. current price target is $264,
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and that assumes only 2.2 million ipads this year so i think a lot more upside here. >> andy, what about that, $200 billion market cap level is where that stock is approaching right here. any worries in terms of valuation from your standpoint? >> there's always worries, right? if you are not worried you're probably missing something. our biggest i guess worry or the biggest risk to the stock i think is iphone pricing. but we think that there's certainly enough demand and enough fundamental support from the carrier partners to continue to support the pricing right, right now. and as long as that stays intact we think that the stock goes higher as well. >> okay so what do you want to be looking for in terms of growth that the story hasn't chang changed? >> the story doesn't have to change a whole lot at this price. the valuation, it's in inline with most of the large cap. ex-ipad, ex-verizon, a lot of things that could happen it's
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still a lot faster than the rest of the markets so really you just need them to continue the momentum that they have shown. >> brian, in terms of leadership, any issues there? i mean a lot of people feel that steve jobs has done such an unbelievable job that nobody -- you know there's not a real bench there. what about succession? >> yeah, i think, you know, steve is obviously a visionary in the industry. he has phenomenal power when it comes to negotiating with large media companies and clearly that's becoming more and more important to the apple business model as they secure content. you know, but apple, i think, is bigger than any one company now. i think they have a fantastic management team underneath steve, and so i'm not too concerned about succession issues going forward. >> what about a dividend, you guys expecting a dividend from the company? >> i'm not expecting. >> i'm not expecting. >> but it's something that i think they certainly should do. $40 billion especially given the amount of cash that they're generating is kind of a joke to have on the sidelines and say that you need it for strategic
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investments. there's just not that many investments that are that big. >> uh-huh. and what's the likelihood of that though, brian? do you think that we will see a dividend at some point. >> i don't think that we'll see a dividend. i would actually like to see a stock buyback program. you know let's just start with at least a billion dollars a quarter. again $40 billion in net cash, well in advance, in excess of the other large tech juggernauts. cisco, google and microsoft, they all have net cash below $30 billion. so apple, again, in a league of its own. and it just doesn't make sense. i mean they have a security cushion, that would be half that, $20 billion would be a fantastic position to be in so it's just an underoptimized asset and i think that they should use it better. >> what about the ipad? obviously, the latest, you know, a highly hyped products, and the critics were pretty harsh in terms of their -- their look at the ipad. why the overly negative buzz around this product, do you think, brian? >> i think they haven't used it,
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maria. i had the same thoughts until i played it after 15 minutes. until i had that same experience. >> why did you have those thoughts. >> i think it was a stepping stone to get into the living room. but when you have the power of the internet and almost a full-size browser in your hand as well as just a fantastic gaming console, a media player, a video player, it's just a phenomenal device, and i think once the public actually feels the device, plays with it for a few minutes, then they'll realize the real power of the zbhies that's interesting. yeah, that would be obviously another major growth story for the company, apple getting into the living room. gentlemen, great to have you on the program. thank you. >> thank you. >> we'll see you soon, andy, brian, great conversation. that's interesting, ale getting into the living room in terms of having your tv set just computer. >> i already have that. >> you do? >> with the mac mini, with the apple mac mini. >> but how big is the screen. >> it's still my television screen is the computer screen. i have a remote mouse and i'm english.
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>> yeah. >> so, i don't even make them anymore. they don't sell them anymore. we have now 60 minutes still to trade. >> we like, it simon. >> down 48 points. >> 48 points. down what earlier 188. >> 187. >> and now down 48. a tough day for palm stock, though. we'll take a look at that the that we come back, the company cut its new revenue. and after the bell in the wake of obama's six-hour special on capitol hill is it time to start putting your money to work in the health care sector? we'll have a bull/bear wrangle right before your eyes.
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the aflac duck with a hat on. it's time fortunate "fast money" final call. my next guest says that the vix will be stuck in a range for the next few months which is a shame because i can tell you that nothing excites television producers and television news more than the vix that is rising. why the priksz then. >> couple of reasons. number one the vix first of all, talk about what it is, it's a
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30-day forward. it's looking forward in time. a vix is 20 basically means a s&p that moves about 1.2%. simon, i don't see any big catalyst for the s&p to do anything. and there's a couple of reasons why. number one is right now when you talk about valuations, right, want current trailing price to earnings ratio on average on the s&p is about 18.5 according to bloomberg. looking about a year out in time it's about 14. so right now it's a little bit high but looking forward it's pretty much where it needs to be. as we continue to get earnings from these companies, simon, unless somebody's really falling out of line, unless beginning to fall apart -- >> what were you going to say. >> forgive me, i'm very stupid. this often happens, no surprises are expected is what you're saying? i mean what good a prediction? there will be no surprises for which people will suddenly start buying protection, the vix will shoot up because you have no idea. i could list you because i'm so negative in european ten things that could probably bloip in the next three months. how much of a prediction that the vix won't rally which it
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might? >> within reason, and that's the important caveat, within reason. simon, you have to realize, i mean when we're talking volatility and us option's traders we base our lives on this. when we're talking volatility and movement, believe it or not, the s&p has been moving in the past couple of days greater than what the vix is or what implied volatility is. the point i'm trying to make is this, i don't see the vix unless all of europe falls apart, unless things go to heck in the handbasket i don't see the vix breaking above 25%. maybe on a one-day spike, but you know us option's traders and especially peak six idon't think that we see it at least not in the next three to six months. >> how do you trade that in your world? >> covered cost. >> yes. >> the eench investor right now focus on indexes or etfs that have a broad swath of investments. right now and every one of the analysts have said it, it's a stock picker's market but unless you don't want to do that and probably most people don't, you buy the index low and this index rises, days up 100 points,
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that's when you sell your covered call. and you just do it that way. and i think that's the way we trade for the next three to six months. >> let me change the subject. >> yes. >> a lot of people will notice how badly palm did today and i know later on tonight you're going to talk about palm and it's chief competitor. >> apple. >> apple. talk me through -- talk me through of what you think about the revenue warning that we had today. >> palm actually proves my point. in that, the smartphone area the smartphone space, is a tough one to break into. palm was actually one of the originators of the space. if you remember back in the date, the palm trios and all those old phones the bottom line, simon, i think that palm is dead. i hate to say that. i think it's -- one time it was a great company, but at this point moving forward the only thing i feel, and again this is me personally, the only thing i feel palm is good for is about maybe as a buyout candidate which by the way i don't know who would want to buy it. >> someone to move into that space, i suppose. we have to leave it there, jared. people are screaming in my ear.
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coming up on "fast money" the t tick-by-tick moves. plus, jared, as you just saw, will go head-to-head with the traders on who will win the war between apple and rimm over the world's biggest market, china? it's coming up live at 5:00 only on cnbc world. and we've got nine minutes before the closing bell sounds on wall street. the market is down right here about 50 points. 62 points lower on the industrial average, simon. >> and just ahead a closer look at a trio of stocks that could see a lot of action later today. x
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time now for our "ahead of the news" segment. matt nesto joins with us three tradable ideas. stocks set to report earnings just minutes from now. take it away, matt. >> reporter: hey, maria, we'll call this one before the after, this new segment here, but it is aheaded news. couple of stocks that pulled out that could be tradable or look set for some big action. we'll call the first one, go with the mo. check out dryships here today, alongside excel and genco.
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you can see those percentage gains, 12%, 4%, dryships galloping 5% higher ahead of their own report. so watch out there, they might have stolen some of the thunder on the backs of their rival, shipping companies, in their own good news. the second one is the old follow the money, as they said in the watergate situation. and this one has to do with deckers out door. this is a very hot stock. pretty sneaky, no question about it. their shoes are selling. huge volume spike, trip nel what we see in an average day over the ten-day average. the company hasn't missed a quarterly eps in at least eight quarter. they own teva, ugg, simple and green toe shoes and they're quite a little hot stock, if you will. lastly the third one here, is the might miss category. we've talked a lot about live nation and i'm not sure if booking the bob weir tickets with liesman but truth of the matter is they did close the ticketmaster deal but they have
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missed earnings six out of past eight quarters and they missed revenues five in a row. the stock is absolutely exponentially hot. now at 12. keep a look at live nation. they're going to have to deliver pristine results. back to you. >> thanks so much, matt, good stuff there, matt nesto. we've got the closing "count down"and then after the bell, larry fink will get his take on the market the potential ripple effects of the troubles in greece and a whole lot more. that's at 4:00 p.m. eastern. national car rental? that's my choice.
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