all righty. street poll, here's what we asked. would you buy goldman sachs shares today at $157? wow. didn't expect that. almost two-thirds say no way, jose. a little better than one-third

said, yeah. time for six in 60. six stocks, 60 seconds. earn gets three. i get three. it's kind of a race. dollar general, downgraded to neutral from buy at mkm partners. air products upgraded to buy from hold at ar gus research. firm siting the company's second quarter results and the outlook. dell downgraded to hold from buy at standpoint research. >> and tractor supply upgraded to neutral from underweight at jp morgan. it's up 2%. taubman centers downgraded. and starwood hotels, ticker hot, upgraded to buy from hold. we both did well. we both did more quickly than -- >> well, under the limit. fortunately, we don't have that much more time anyway. okay. so the saudi arabia thing is

coming up on "street signs" at 2:00. i will see you again tomorrow morning at 9:00. >> all right. we'll look forward to that. in the meantime, i'll see you with that special story. we'll be talking about an inside story of women in dubai on tomorrow. so it continues. but now it's "the call." >> good morning, everyone. welcome to "the call." i am trish regan here at the new york stock exchange. we're 90 minutes into trading on this monday morning. we see stocks getting a boost from a flurry of m and a activity. we're going to discuss whether big caps or small caps happen to be the best place for your investments right now. good morning, larry. >> i'm larry kudlow. as the senate gets ready to vote on fin regul legislation, we'll talk live with senator merkley and discuss what your investment strategy would be. >> live to athens on the latest to the bailout for greece. plus review texas instruments earnings which are coming up after the bell. this is "the call" on cnbc.

stocks getting a boost from strong earnings from the likes of caterpillar, whirlpool and humana. take a look at how the s&p 500 is trading so far on the day. it's essentially flat on the session. it's up less than one-tenth of 1 #%. take a look at the dow, positive on the day. up better than 35 points. three-tenths of a percent. finally the nasdaq, see how that's trading. also in positive territory although it's essentially flat on the session. trish, what's happening on the floor? >> you do have a lot of m and a ak at this time out there, also strong earnings. people reacting to that positively this morning. up 34 right now on the dow. i want to bring in bob. we want to talk about what's going on in the financial sector as a result of these concerns about financial regulation reform. >> the amazing thing, we still don't know what's going to be in this bill. they're taking things in and taking things out even as we

talk. >> it's a 1,300 page bill. >> we're going to see, of course, comments coming in the middle of the afternoon if we get some kind of procedural vote to close debate on it. financials are weak ahead of that. citigroup is down. of course, the government starting that billion and a half share plan. that's very good news overall. the government thinks it's strong enough to hold in. citigroup down as much as everybody else. i can't say that announcement is damaging the financials of citigroup. because they're all to the downside. goldman has been weak. goldman was $180 a few days ago. morgan stanley is holding up all right. jp morgan, that stock was $48 a few day ago. we're clearly seeing some pressure. these are the biggest names that are out there, the ones that would be the most affected by financial regulatory reform. remember that bill that came out of agriculture last week essentially prohibiting these guys from acting as swaps dealers, that's still in there right now. >> definitely causing some prep dags within t-- trepidation within the financial sector.

>> when you look at the whirlpool number and see what's going on with the raising of estimates, how rare it is when you get a company that has 6.50 to $7 for the year, now whirlpool is talking $8 to $8.50. when you get unit growth rate of north american up 11% when that was the weakest area for them, that's a sign that things are getting better. >> isn't it part that things were so bad that things are now looking so good? >> yes. that kind of earnings beat, that kind of raise is sufficient to move the stock dramatically here. if you say, well, gee, is it all priced in, the answer is no. not that kind of numbers. look at this thing. the stock is at a historic high. $114 was the old historic high for whirlpool. i said historic high. those kinds of numbers is what

you can get with stocks moving forward. on hertz and dollar thrifty, they bought it for $1.50. it was $1.99 a year ago. >> bob pisani. >> you're not impressed? >> thank you so much. we really appreciate it. i'm going to send it back to larry. >> all right. let's get straight to steve liesman. he's got some breaking news on the financial regulation showdown on capitol hill. hi, steve. >> i'm afraid i'm just going to complicate things now, larry. all the focus is on the senate side and reaching a deal between republicans and democrats on fin reg. cnbc is getting interesting and conflicting signals this hour about another key issue for banks. will there be a bank tax added perhaps in the house in the financial reform bill. several sources saying that is possible that a bank tax could be added to the financial reform bill in the house. but others aren't so sure. they suggest that adding a bank tax they understand would complicate the politics of this

enough to a different debate. politico reporting earlier today senate finance committee max baucus said there's little doubt there will be a bank tax. he does not however, in the story, mention when it would be proposed. what cnbc has been told that a bank tax is more likely if the liquidation fund in the -- if the banks don't have to prepay the bank tax fee, there is more scope for a bank tax. apparently this is what treasury secretary tim geithner wants. the obama administration has previously discussed this ten-year, $90 billion tax on the nondeposit liabilities of the banks. the u.s. would like to do a bank tax in sync with other countries. take a look here at how the financials are trading on this news discussion of the bank tax. they are down. however, i will tell you that just before i came on, guys, morgan stanley sent out a note from its research analysts

saying, stay long banks. they think the credit improvement is more important than whatever is happening on the regulation side. from what i can tell from a quick read they're not mentioning regulatory reform and the effect on bank stocks from what's going on in congress right now. >> seems a little self-serving, that call. what can you do? steve, thanks so much. >> there is an interest there. >> lawmakers on capitol hill gearing up to tackle financial regulation today with a vote to begin debate set for 5:00 p.m. eastern in the senate. senator jeff merkley is a democrat from oregon and a member of the senate banking committee. he joins us from capitol hill with more on tonight's vote and his proprietary trading bill to limit high risk speculation. thank you so much for joining us. senator, you know, what concern is that there is so much focus on the prop trading desk. in my mind no focus on fannie and freddie which caused a huge part of this problem. right now we're heading towards having dumped about $200 billion into this bailout. you know, it's going to go a lot

higher than that, we all know. why isn't there more focus on that? >> fannie and freddie purchased about 20% of the securities of subprime instruments. so they were a piece of the problem. but they were a small piece. furthermore, at the heart of that was the issue of the design of the subprime loans in 2003 when they went to a two-year teaser rate and in a lock in with the prepayment penalty, those prepayment penalties on subprime are ruled out. we've taken the heart out of that particular challenge. >> senator merkley, do you want to spin off the derivative trading and proprietary trading from the banks into separate subsidiaries of holding companies? tell me about your thinking, sir. >> well, senator lincoln has been putting forward the spin-off of the derivative trading. my emphasis has really been on the proprietary trading. that is taking your own position. there are two reasons it should be spun off and it should be outside the holding company. not just in a separate subsidiary. and the reason why are if you have access to the discount

window and if you have access to citizen insured deposits, those -- that access, those subsidies, if you will, are designed to provide more affordable lending to small businesses and families, not to be diverted to high risk investments. that's one reason. the second is if you have fireworks and fireworks are fine, you don't store them in your living room. you don't put the high risk investing inside of your lending banks. you want those banks to keep providing liquidity even when the economy turns down and some financial houses blow up. >> the criticism of that point of view is, of course, proprietary trading may be good or bad but it's not what contributed to this specific problem and this specific crisis. does that matter to you? >> it's simply wrong. if you look at merrill lynch, look at bear stearns, look at citi bank, bank of america, proprietary trading was at the heart of huge losses in their positions. i would just argue the presumption is an error. >> senator, you talk a lot about cracking down on conflicts of interest regarding wall street

trading. okay. fair thuf. let me just ask you, though, with respect to goldman sachs in these e-mails where they went short and they hedged their mortgage position, isn't that the business they're in? i mean, don't they owe that to their shareholders? isn't that what they should have done as a prudent business decision? >> well, if you're hedging your own position, that's one thing. but if you are selling securities and recommending it to your client while internally you're betting that those will go down, that is enormous conflict of interest that can lead to the design of products basically mislead your customer. that should be off the table. that shouldn't be happening. the goldman discussion highlights that. >> there's an issue of the timing. when they started buying them, they didn't realize the housing market was headed south. then they changed their opinion. and then they decided to hedge to protect their own capital position. don't you think that was the right deal? i mean, in 2006 they seemed bullish. in 2007 they turned bearish on housing. they owned a lot of stuff, and then they had to hedge it in 2007 when they changed their

view. i'm not sure why do you think that's not correct or why do you think that should be banned? >> you bet. listen, the details about goldman will keep unfolding as we learn more. but set aside goldman and whether the legal issue is there or not, the courts will figure out. but in terms of the principle of shoot you be designing securities, recommending them to clients at the same time that you're betting against those internally, that is a conflict of interest. >> you know what, senator? i basically agree with that point of view. always have. >> i'm glad to have your support on that. >> it may not be illegal. i'm not smart enough to know. but i think there's a certain une unethical tinge to it. >> and the securities firm should be able to decide if it wants to recommend to their clients one position or another and design the securities -- >> maybe if they disclose they're also short that. in any case, can i ask you about

the news steve liesman our reporter was talking about just before you came on, where he was talking about the potential bank tax, whether or not that will be included or won't? what do you think is going to happen or won't? >> the discussion has come up ov over the weekend. i'd like to learn more about it. i haven't heard the details about where the discussion is headed now. >> senator, let me clarify your earlier point about prop trading so we can understand it better. you're saying spin it off, but it's got to be separate from the holding company. so you'd have x, y, z trading hub cap company trading derivatives and trading whatever, but it would be a set -- we'd know that it's owned, wooet know that it's owned by the bank, but we'd know that it's separate from the bank holding company? does that work or is that -- >> what difference does that make? >> is that too clever by one? >> if it's separate from the holding company it is outside that legal structure. it should not be a subsidiary. if it's a subsidiary and goes down it's still the fireworks in

the leaving room. it's going to take the lending bank down with it. >> that would make it easier for the authorities to close it down if they had to? is that your thinking? in other words those things would certainly not be too big to fail. >> in addition what carl levin and i have in our bill is to say if you are a financial house, distinguishing it from a lending bank, and you are in this business, which it's a good thing to be in, then as you become a bigger player in the market there should be additional capital requirements so you don't -- so you have an ability for regulators to control the systemic risk. >> senator, thank you so much for joining us. we really appreciate it. trish? >> when we come back, we're going to show you the smart way to invest in financial regulation reform. >> all right. plus, caterpillar, humana and black rock all out with earnings. we're going to head over to earnings central for a breakdown of their results. you're watching cnbc first in business worldwide. gecko: uh, you wanted to see me sir?

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i'm matt nesto tracking shares of devry. the worth perfost performer in right now. they have nervousness after gainful employment legislation

kind of stocking its way from the white house through congress. what that means is that some of these for profit education companies could actually face pressure from the government because of the debt levels that students who graduate from them are carrying. so that has credit suisse and other firms nervous here today. devry down about 7% on the news. >> mr. nesto, thank you very much. with financial regulation, legislation coming down into the home stretch here, we are asking what should your investment plays be once the legislation is actually passed? how do you invest in all this with this new landscape. we want to ask managing director at formula capital and mark hague, president of hague capital management. who wins, who loses? mark, how do i play this right now? >> i think you're going to see a huge increase in volatility in the financial markets. and i think you're going to see a huge increase -- or decrease

in earning power from the depository banks. and then you'll see some political manipulation. and i can get into the reason for all that. but i'm a contrarian. so i look at the stuff people don't like right now. and goldman sachs is top on my list. >> a ha. >> mark, why is that? why is goldman sachs at the top of your list? i noticed that. you think it's too beaten down at this point? >> the numbers are just very compelling. price to book value is very low. 1.3 times. this is a company that makes over 20% return on equity year end, year out. i'm expecting about 25 -- >> the question is will they be able to still make it. let's throw it over to james. will goldman sachs will able to continue to rake in the kind of profits they've seen in the past given that there's going to be, perhaps, some new limitations on their earnings potential as a result of fin reg. >> the only thing we know is that we don't know. there's so much debate that's going to happen. >> that's one way to put it. >> one thing we don't know, we don't know if prop trading is

going to stay at goldman. that's 80% of their profits. we don't know if custom derivatives are going to stay there. these are huge sources of earnings for goldman. i don't know if we can really project what their earnings power is going to be. that said, goldman sachs is always good at pulling a rabbit out of a hat. i wouldn't necessarily bet against them. i would, though, bet for the exchanges. >> why is that? >> if everybody moving -- if this regulation moves the custom derivatives in the market, making of those derivatives to the exchanges out of the banks, i think exchanges are going to benefit. you have i.c.e., cme, the nasdaq will all benefit. they're all fairly cheap right now even though they've started to run. >> james, that certainly makes sense. what about the rest of the financial sector? we highlighted goldman sachs. what about some of these other big bold bracket banks, james? >> whether you're looking at jp morgan or city bai bank, a lot these banks make earnings from

constructing customer derivatives and -- also we don't know about what effect the bank tax is going to have, what effect the raising of capital requirements is going to have. there's too much uncertainty. i think i'd rather wait until things got a little more settled. >> back on goldman sachs, though, they're not really a depository bank. they make no money off -- their depository base is very low. there's no purpose for them to be depository bank. they could easily get rid of that if they felt like it. >> they make a lot of money trading these custom derivatives. >> that would be their core business, do you think, mark? >> they would stop being a bank. they would go back to being a broker dealer or hedge fund. whatever they feel like. they're not going to stop making money. >> i'm not sure they want to do that. >> mark, what do you think of the exchanges. they're all higher today. would you buy them on a day like today. >> i like the foreign exchanges, the australian stock exchange, london stock exchange, new york stock exchange possibly, but

nasdaq i think is more interesting. the pans in this situation, by the way, are the depository banks. stay away. there's going to be massive earnings power drain there. >> why? >> i like the nonbank financials. all right? stocks like kfn, kkr financial group which is a collateralized loan obligation company. and another one called tetrigon financial group. the stocks i would stay away from are large insurance companies like berkshire hathaway, which is way overvalued. and companies that really are going to get their head handed to them in this like small banks as well. >> mark, we've seen a tremendous rally. earlier in the program you said you were concerned about volatility returning to the marketplace. do you think as a result of fin reg we're going to see a dent here in this market that's been on quite a tear over the course of the last year? >> a lot of people haven't really thought this through. this financial stability oversight council and the liquidation authority panel is going to make it way easier for

bear rates to occur. because all you have to do now is just start putting a lot of pressure on an overleveraged stock or some kind of stock with a hiccup. and try to get the two panels, two groups to basically take it over. prior to this all you had to do -- you had to try to force the board of directors and all kinds of other shareholders. the reason why lehman fell was because -- not because of their balance sheet. it was because of their inability to pay their bills. and that was -- >> that's not quite true, but -- >> there was a lot of problems with their balance sheet as well. >> there was. but they didn't have a -- they didn't have on the books, it wasn't insolvent, quote, unquote. that's the major issue. but they couldn't pay their bills because of the repo market and their lack of confidence. what you'll start seeing now is both with listed derivatives, you'll see a lot more players in the credit default swap arena and you'll see a lot more pressure on, you know, whoever is the pan of the day. it's going to be way easier to force companies into

liquidation. >> it's an interesting viewpoint. certainly going to be a whole new world out there. we appreciate you joining us. thanks, guys. >> thanks. all right, thanks very much. when we come back, another big week of earnings. caterpillar gets it going for the s&p 500 companies. and we're going to head to earnings central to break down its results. plus, small cap stocks posting double digit returns this year, beating big cap. we'll tell you whether small caps still have room to run. national car rental knows i'm picky.

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hertz plans to acquire dollar thrifty automoltive group. the deal will increase its locations outside airports and push deeper into europe. here's how both are trading now. both higher on the news. hertz up 17.5% on the day. hertz' ceo will be a live guest on "street signs" today at 2:00 p.m. eastern. now let's go to larry and tyler mathisen at earnings central. >> thanks very much. caterpillar, humana and black rock out with earnings this morning. i'm joined by tiler mathisen who has all the earnings inside his head. did i hear a v shaped recovery from cat? >> you want to bet on a recovery, you want to bet on caterpillar which right now is the leading stock in the dow.

they came in a little light in revenues in the trailing quarter. what they said about the remainder of 2010 is why this stock is on fire right now. they raised their guidance for revenues in a big time way. and they raised their eps guidance. they say they're going to make 38 to $42 billion in revenue over the course of this year. that compares with a range of $36 billion to $40 billion previously. eps raised to 250 to 325 a share. earlier they were saying 250 was the mac they were going to make. a good story for caterpillar. again, largest gainer in the dow. humana a pretty good quarter as well. the stock doesn't seem to be showing it so well. the eps $1.19 a share versus $1.14 estimates. they raised their earnings view on humana there. that stock down $1.09 at this hour, as you can see. they raised their earnings from 5.55 to $5.65 a share. the revenue target also higher. the market kind of taking a h

ho-hum look at this. >> back to caterpillar, the big criticism of the v-shaped recovery was that corporations would get profitable by slashing costs including people and jobs. it turns out in this quarter we are seeing much better top line sales revenues. is that a fair statement? >> that is a fair statement. their trailing quarter they did some cost cutting and it showed up. as you move into q 2, 3 and 4 of this year they are saying watch out. we're growing in asia. we're growing in latin america. we're moving ahead in the united states. a lot of the mining equipment that they're selling, doing very, very well. so this is a revenue story. you're exactly right about that. >> i think that's very, very important. >> let's give you a quick look at blackrock. the market not liking what it's seeing, the world's largest asset manager. look at that, larry. down 7%, almost 8% here. it's hard to figure out why the market is so negative on it.

their profits tripled or something like that. net income quinn tup ld. eps tripled even though it was a little short of what the street expected. revenues a little light. i wonder whether they expected more in assets under management. assets under management in the first quarter basically sort of flattish. they still got more than $3 trillion under management. they are the biggest cat on the block. doing very nicely. >> i wonder if that's affected by the bank bill, by the bank regulation bill? i wonder if there's stuff in there we don't know about. >> could be. i'm not sure. but the revenues were a little light. the assets under management someone flattish i would have to say. larry? >> thank you. a programming note, caterpillar's ceo, jim owens. he joins us first on cnbc to give us his outlook for profits and the economy. that's today on "power lunch." jim owens of cat. it's going to be 1:00 p.m. eastern time. trish, over to you. >> thanks so much. when we come back, we're going to talk about small cap

stocks, they're rack of double digit gain. do these tiny little titans still have room to run? plus the euro taking a hit as germany drags its feet over aid for greece. we're going to head live to athens for the latest. with fidelity, you can take your trading around the world, because now you can trade u.s. and foreign stocks online, in 12 markets, 24 hours a day, all from the same account, and settle in u.s. dollars or the local currency. plus, we'll guide you with international research and realtime quotes, so you can diversify your portfolio, wherever -- whenever. and we'll be on call around the clock, while you trade around the globe. fidelity investments. turn here.

welcome back to "the call." i want to get you caught up on these markets. still in positive territory. barely there.

pretty much a flat line on the s&p 500. investigators are taking a little heart in watching the dow up 40. a little heart in the m and a activity we're hearing about, also good news on the earnings front. meanwhile over on the nasdaq also in green. up two points or so. european markets all closed higher. green right across the board. the dax up 78. looking good really across the globe at this hour. it has certainly been a remarkable run for small cap stocks. we're asking the question here on "the call" whether or not these tiny titans as we have dubbed them still have room to run or whether you should be investing in large caps going forward. joining us for discussion, kent kroft, cio of the kroft funds and comanager of the kroft value fund. also bill mcvail, lead manager of the turner small cap growth fund. to share their thoughts here on how investors should be playing this recovery. bill, i'll start with you. it seems to me pretty much this

is a good rule of thumb you hear about any time you're coming out of a downturn in the market, downturn in the economy, often see the small caps take off first. you run a small caps fund. it's something you're probably very, very familiar with. explain the reasons why behind this often typical trend? >> first of all, you tend to get very, very nice earnings leverage from small cap companies that have very easy leverage to pull to reduce costs. when the top line comes back, these stocks -- earnings temp to ramp very quickly. one of the other things that benefit small caps is is they tend to be very, very u.s. centric as opposed to large caps that which can have a multinational component. if you want to play the u.s., small caps oftentimes are better way. you've got a lot of demand for small caps, not a lot of supply. that tends to play in investors' favor as well. >> kent, does it lead you to the thinking that you're really better off in these small caps

right now as opposed to some of the larger, bigger names? >> actually, the way we look at things is that we're trying to find what would we own today and hold for the next three to five years. and if you look at really across all capitalization, lately we've been looking at some of the bigger, steadier names that we think that have good visibility of growth, owing to the unfolding of the global economic recove recovery, the recovery here. we don't think you're paying that much for those earnings as you maybe had in the past. so that's an area right now we like. >> so, bill, basically year to date the small caps have outperformed by about twice in percentage terms the big caps. you've got your v-shaped recovery. you've got your v-shaped profits recovery. you've got your free money from the fed. all that's going to go on for a while. >> sounds great. >> we've got a million negative things out there in the future. i can't really live in the future. i can only live in the day. why not just buy, shall we say,

all caps. >> well, you can. there's certainly nothing wrong with that. the one other thing i should say about the market right now is that, you know, for years small cap have taken a backseat to emerging markets, hedge funds, a lot of other alpha generating vehicles. i think that right now people are coming back to those small cap growth stocks. when i grew up, that was the way you played. the valuations are great. the dynamics in terms of the market are wonderful. i mean, you can probably find value anywhere in the market. for me, small caps the most upside leverage to earnings going forward. >> to that end, bill, i want to talk about some of these picks you have. h.h. greg. you say this is a good play off of very good news out of whirlpool this morning. >> absolutely. a very fine mix of -- they're filling of space that was left when circuit city went out of business. a lot of square footage growth there. again, we really like that whirlpool number. hh greg like twice the square

footage for appliances versus a best buy. we really like that one. >> kent, in this discussion, let me ask, maybe this is a goofy question. are there small cap banks that you buy and sell, and are they going to be affected positively or negative by all of this washington fin reg rig ma roll? >> you really need to get down each and every one. we think there's more opportunities really elsewhere, you know, in the market. >> such as? >> maybe financials, maybe in the -- >> such as? run down your faves. >> right now, i said, some of the bigger names, whether it be a cisco, a lowe's, these were companies that were able during the downturn to take advantage of their balance sheets, their size to pick up market share and emerge out of this even stronger. and they have a global presence. those are two names we like. >> can we run back to larry's question with bill?

because bank of the ozarks is one of your picks. now, that isn't a small bank, i don't know what is. back to larry's question, how is it affected by fin reg? >> i think the banks -- in the small cap world the banks that are left standing, great underwriting, strong balance sheets, those are the ones that are going to do well. in the case of bank of the oz k ozar ozarks, yes, it's a little rock bank. may not be wells fargo. they're great underwriters. strong balance sheets. these guys are in a great position to add very, very profitable assets. we've got several names like that in our portfolio. bank of the ozarks just one of them. >> bill, is there one single piece of news, event, that would turn your around and say, okay, it's time to get out of dodge. we've had this amazing run since early march of 2009. the run continues. everybody seems to be optimistic. is there something that would turn you around and get you to be a seller? >> well, larry, if you go back to the first quarter of 2009,

people were throwing the kitchen sink. terrible top line, bad earnings, the stocks weren't going anywhere. the reverse would be the top. that things are great. numbers going up. nothing better. stocks sell off. >> how do i know? how would you know, more importantly? >> we'll know when the market tells us. that's an important dynamic. we don't want to step off this train right now. right now earnings are great and stocks are being rewarded. that's a great environment for us. we're going to watch reactions like a hawk. at the end of the day it all comes down to earnings. >> day by day. thanks so much. we appreciate it. when we come back, the euro getting whacked as pressure grows on greece to sort out its finances. live to athens for the latest. texas instruments kicking off another important week for tech earnings. we're going to get you ahead of those numbers.

welcome back, lorillard, maker of new port cigarettes posted a better than expected profits. looks like more people are smoking these day. take a look where it's trading, up 1.5%. >> the euro taking a little bit

of a hit today over confusion about the timing and amount of emergency aid for greece. meanwhile the imf is speeding up its efforts to help the country. take a look at how the greek two-year note is trading. so far on the day a little rebound. what is the latest, guy? >> reporter: melissa, the latest is coming from a number of different corner. over the weekend in washington, the greek finance minister warned that anybody in the market that decided to bet on a greek default would lose their shirts. it certainly seems as you've just been showing us the market decided to take that bet today. the real reason for it is there is some reticence in germany about signing on the dotted line for this aid package. it's down to a number of reasons. but the primary one is that the germans are about to go to the polls on the 9th of may. all of the political talk, therefore, is directed towards that election.

the germans by and large don't want to hand over money for greece, so the politicians are playing up for that. wednesday we're going to be seeing the head of the imf, the head of the ecb, germany's finance minister himself briefing parliamentarians to try to convince them that they should go along with this aid package. if they don't, there's a big problem. germany's in a bit of a catch .22. its banks are some of the biggest holders of greek debt. if there is a default or restructuring, therefore, germany's on the hook either way, really. avoiding it probably is the best course of action. angela merkel speaking today, saying she sees the need for solidarity, the need to protect the euro. the market remains unconvinced. they want to see hard cash. they want to see the deal done. they want to get on with it. what we're hearing as well from people in the room in negotiations, it's interesting, it's not coming from the greek side, is that the aid package could be significantly larger than the $60 billion originally talked about. they've talked about 80 billion

euros being the ultimate size. >> larry and i were just talking about this. the euro taking a little bit of a hit today. not really that much. it seems like maybe potentially there's been a bottom put in. is there a sense in europe we've seen a bottom in the euro? >> reporter: i have to say, talking to people in the foreign exchange markets on the desks in london, that's not what i'm hearing. there is a certain sense of surprise that maybe we're not seeing a downside for the euro. it's interesting. they're saying you shouldn't play the euro downside against the dollar. play it against things like sterileling where we've also got an election cycle coming into play as well. they are still talking about the fact that you could see weakness farther down the road. if that does happen, just from a different perspective, it could be quite interesting. because obviously what we've seen in the past over the last couple of years is u.s. companies benefiting from the weak dollar. maybe now you could potentially see some of those big

multinational european companies starting to benefit potentially from a weaker euro. >> interesting. some interesting insight there. thanks so much, guy johnson. imf managing director john lipsky will on "street signs" today. "power lunch" is coming up at the top of the hour. sue herera, what is on your plate? >> we have a terrific show for you today, larry. a number of heavy hitters. caterpill caterpillar's up beat earnings, an outlook making it today's biggest dow gainer. maria bartiromo talks with ceo jim owens live and first on cnbc. also a "power lunch" exclusive with one of the latin america's richest and most powerful and influential businessmen. ricardo is a lee nas joins us live to talk about a variety of things including financial regulation, immigration reform and much more. on the day full of merger activity, shares of thomas weiser, we'll speak with the ceo

and shares of both of those companies. is bigger better when it comes to merger and acquisition activity with these two partners? when we come back, chip giant texas instruments set to report earnings today. we'll give you the numbers. the market call as we head into this afternoon's trading session. so far, so good. we're going to talk about whether it keeps up. obby noises] how well are you diversified? what do you mean? well, i've got stocks in every sector, but that didn't seem to help when they all dipped, and keeping my money in the bank is getting me nowhere. look at commodities. they're a different asset class altogether. there can be better tax benefits than stocks, too. really? really. how did you get started? talk to lind-waldock. call lind-waldock, the premier futures broker, at 800-445-2000 and see if commodities are right for you.

welcome back to "the call" with your daily realty check, i'm diana olick in washington. the number of vacant homes in the u.s. rose as the nation's homeownership rate declined. the homeownership rate stands at 67.1% in q 1, down from its peak of 69.2% in 2004. that all the from the u.s. census. national home prices were flat in february. up just 0.3% from a year ago. that according to first american core logic. the states with the best price apreachuation, north dakota, hawaii and right here in d.c. the worst, nevada, michigan and florida. heavy demand for the first private residential mortgage backed security bond in over two years pushed the yield down.

redwood trust's $222 million bond priced at an interest rate of 3.75% p. a quarter point below the market rate. it is certainly a huge week for earnings. we've got more than 160 s&p 500 companies getting ready to report the results. big week, indeed. texas instruments gets it going in the tech sector. ti shares take a look there, already up 1.4%. 27.$27.04 a share the latest tr. jim goldman is joining us now with a look at what the street is expecting to hear from this chip giant. take it away, jim. >> hey, trish. good morning to you. talk about a weird earnings suicide. save from apple which had a blow outquarter and stock reaction to match, other tech stalwarts have had good news to report but took it on the chin as far as investor reaction was concerned. that's what makes ti's report so intriguing tonight. the street looking for 51 cents a share and about $3.13 billion in revenue. both categories up sharply from

the same period a year ago. ti hit a big bump in the road following earnings last time around and shares have been on the mend ever since. now, we already know from other big cap tech with gold things to say about consumer and enterprise spending that pc and smart phone sales are measurably improving around the world. balanced against the less than stellar guidance from qualcomm last week which certainly took their toll, the pressure will be on texas instruments to justify the company's recent rally. ti reports at 4:30 eastern and of course we'll have the numbers as soon as they cross the tape. this is going to be an interesting one, trish. >> it's certainly going to be an interesting one. you know, we all know that tech is very much a cyclical business. given that the economy is on this upswing, given that we should anticipate there should be more investment on behalf of business spending, is there a sense that -- that ti is going to come through with some good stuff? i know you said the pressure is on. >> you know, i'm talking to a few analysts this morning. several more last week. and there's kind of a mixed

picture with this one. ti is hitting on all the key markets right now. analog is very big. the smart phone market is picking up. the enterprise is beginning to spend again. pc sales are obviously improving. that all bodes well for ti. but the qualcomm thing, everybody wants to know now, is qualcomm's problems its own or does this reflect something broader in the market. we'll get that answer tonight when ti reports. all indications are that this should be pretty good news. and measured against what this company did in the same period last year, it should be dramatically good news. we'll see if the company's -- >> it adds more pressure on qualcomm. >> absolutely. >> thank you very much. we're going to be watching very intensely this afternoon. a quick break and we're back with this morning's market action. >> and the list of stocks to watch as we head into afternoon trading.

the rshry department announcing its first sale of citigroup stock will cover up to 1.5 billion shares. the government purchased the shares as compensation for its sporlt during the financial

crisis at $3.25 a share. right now doing better than that on the investment. it's trading at 4.69%. that's down 3.5% today. trish? >> time for call to action. you need to be watching these stocks as we head into the afternoon. >> i got a ham strung market. forget about the dow. it's all about caterpillar keeping the dow positive today. look at the s&p, we have plenty of reasons to push the market higher here today except for the doggone financials which are kind of holding us back here today. particularly if big diversified financials and some of the banks. collectively, the financials, the standout laggard in this marketplace. you can see the discretionary group being led higher by whirlpool as well as kodak. more on that in a minute. you might have missed it, but in europe the european confederation of iron and steel industries out with a quasi bullish european forecast. looking for order growth, delivery growth and a mild recovery in that part of the

field. that has steel stocks and materials strong here. the net result, the bottom line is an s&p that is stalled as we wait and see what the lawmakers are going to do to financials. the mini m and a boom, this is probably not the last that we've seen. we've talked a lot about dollar thrifty. wuxi. i'm sticking with that. funnest stock to pronounce. a shame to see wx going by the wayside with the acquisition. interesting, cke also down, and the stocks up 50% since the speculation came in. thomas weisel with a huge partnering up with stifel on the soaring monday for m and a here today. ahead of earnings after the close here today, all on extraordinarily big volume right now. doing more than half a day's volume at this juncture. texas instruments,