we want to show you this live picture on capitol hill as the senate prepares to do a test vote on the financial regulatory reform that's expected in about an hour. the senate -- the senate doing a test vote in just a few minutes. there is the live picture on capitol hill. meanwhile, back on wall street today, no real reaction to that test vote in the senate on financial regulatory reform. we had a quiet day, although the markets were certainly volatile. the dow jones industrial average gave up all of an earlier rally except about a point or so. the nasdaq and the s&p 500 also reversing losses and finished negative today on wall street, as you can see there. tomorrow cnbc's live at the hearing for goldman sachs. lloyd blankfein will be testifyi testifying. and of course mary thompson brought us the testimony today. keep it to cnbc all day beginning at 10:00 a.m. for the coverage of the goldman sachs hearing. "fast money's" up next.

thanks so much for joining us today on "closing bell" live from los angeles. i'll see you tomorrow. >> live from the nasdaq marketsite, this is "fast money." wall street bracing for lloyd blankfein's testimony tomorrow. actually, we've got some breaking news back at headquarters on that very front. mary thompson, what do you have? >> melissa, senator carl levin came out swinging ahead of tomorrow's hearing on the investment bank's role in the financial crisis. goldman will be the case study tomorrow. and at a press briefing earlier levin accused the bank of putting its own interests ahead of its clients'. >> for large fees goldman helped run the conveyor belt that dumped hundreds of billions of dollars of toxic mortgages into the financial system. >> e-mails like this one from ceo lloyd blankfein as evidence goldman kaz was cutting its exposure to the housing market and off-loading its bad assets to customers without telling clients that had gone bearish on housing. in the e-mail he writes,

"could/should we have cleaned up these books before and are we doing enough right now to sell off cats and dogs in other books throughout the division." levin goes on to say contrary to goldman's claims that it didn't make a large directional bet on the housing market its proprietary trading operations profited handsomely in 2007 from betting against residential mortgages. >> the best number that we have is that they made about $3.7 billion. from shorts. okay? that's going short. >> now, in his testimony tomorrow goldman ceo lloyd blankfein will say he didn't have a massive short on housing, claims levin disputes with other executives who talk about a big short. levin wouldn't say if he thinks goldman did anything illegal, but his staff says all of this should raise a question for the future, that question being will it be necessary for potential investors to know the attitude and position of a placement agent like goldman before they do business with them? melissa, back to you. >> thank you very much, mary thompson. you know, levin makes a good

point. we don't know if they did anything legally wrong. but still there's an overhang on this stock which cannot be denied because the technical case on the stock is very negative. even if you believe clients are not in fact leaving goldman sachs for any of these headline reasons. >> i don't think clients are leaving goldman sachs. but the price action in goldman sachs started on that friday when all this came out. i don't think anything has to do with whether they're guilt yoir innocent because i happen to believe they're innocent. i don't think they did anything wrong, frankly. it doesn't matter, though. we said the stock would trade down to 150. here we are within a whisper of that. i think that's your bogey. it has to hold 150. below 147 it gets even more bearish. and learly now sellers are in charge in gs. >> here's the key, though. you said you believe goldman sachs is innocent but you said there's more down side on the stock, and that's exactly what we have on our hands right now. >> we said it at halftime. why would you invest in this name when in fact they are clear l. the bully -- excuse me, they are being bullied or the scapegoat or in fact they are guilty. we don't know any of those things right now. what we do know is there's a lot of attention on them. the tone, we've got some

excerpts from blankfein's speech tomorrow. he's being very penitent. he's indicating that these guys seem to be -- scared is probably not a word goldman ever would attach to their behavior, but i think they actually understand the magnitude of what they're against. the market does too. and you don't want to get in the way of that. >> and i think what you have is uncertainty. right now the financials are faced with a tremendous amount of uncertainty. it is unfortunate after the earnings that we have seen over the last 14 days in financials because they have been very good. now, moving forward, how does that impact the broad market? i don't know necessarily if the financials will continue to look weak if the broad market itself can continue to rally on consumer discretionary strength alone. >> if you're looking at the volatility index right now, i think you can attribute the volatility spike today just directly on the financials themselves. the s&p financials. you look at goldman sachs, morgan stanley, jpmorgan, you have pressure on those big name financials. you look at that indice, that's really starting to press things even higher and that's where the concerns are.

people want some clarity, they never like these types of markets. it's very cloudy right now. i think to guy'spoints point if 150's your bogey you'd better have a lot of guts you'd better want to use some options to either protect yourself or at least use the volatility to give yourself an even further down side protection because the volatilities are creeping by. >> history's repeating itself. we've got breaking news but take a look at the earnings back in january with jpmorgan. basically you have a mirror image of what happened in january to now. great earnings report, stock sells off. you're seeing it again now. >> we got some headlines as guy mentioned, senators lincoln and dodd have in fact reached some sort of deal on the derivatives portion of the financial reform bill. we're getting some details here. they're just sort of trickling in. at some point today we thought that portion of the bill was dead. still, it is viewed as sort of a boon for exchange stocks. cme, for instance, ice, all of them really a nice run-up so far this year on the prospect that there will be some increased transparency and that will in fact drive some of these derivatives trades to these exchanges. joe, you've been on this trade.

>> absolutely. the dodd versionar of this bill is extremely friendly. it's a trillion dollar over-the-counter market we're talking about that would be pushed, cut the phone lines in essence and push it all now to the exchanges, the cme, the ice. those derivative exchanges are well positioned to accept these contracts if they are placed there, these swaps. and then you look at the other side of this trarksd the big five, you're talking about jpmorgan, morgan stanley, goldman sachs. they're going to stand to lose at least 25 billion here in revenue that they would be getting from actually price discovery through the otc market itself. >> the other place maybe derivative of the exchanges is the big clearinghouses or the depositories, the bank of new yorks or the state trees. at some point people are going to have to hold these. at some point when you get more clarity on how they're traded it may be a boon pour those guys. again, in a world where we don't know what's going to happen to financial reform the derivatives discussion is the one thing that on both sides of the aisle i think people -- >> at this point would you be a buyer of the second derivatives trades? because a lot of this has been

baked into the exchange stocks already. >> let's talk about the nasdaq. mr. greifeld was on i believe it was thursday if i'm not mistaken. he said this is all very good for them. i happen to agree, they're in a great position. these stocks were grim death for a lot of the time last year. they finally caught footing back in early february effectively. nasdaq at ten times forward earnings is not expensive even with the run-up we've seen recently. >> the cme itself, that's the one that's been having the most reaction, violent moves to the up side. this stock was starting to plummet, people were getting concerned. a lot of those traders in chicago, they've been watching some of the volumes decrease in other areas. so this would be something that they're definitely going to hook themselves on to because this could be a huge boon later on. >> we should note ice 52-week high in today's session. spoke to rich repetto at sandler o'neill today and he said any of the otc moves going on to the exchanges it's going to be incremental to volumes and revenues at this point. he said the stocks have had a nice run here. that's sort of the sfrut analysts' pits. want to move on to another big story from the financials we're watching today.

citigroup saying they will start -- or actually, the treasury saying it will start selling the 7.7 million shares in citi that it does own. morgan stanley has discretion over those sales. bloomberg was out today regard reporting that those sales could start as early as monday. let's stay they start on monday. would this be your opportunity to buy? >> no, mel, you know, i think what's more interesting than that, frankly, is the five or six trading days we saw about a week or so ago when the stock vacillated around $5, never closed above $5. you had trading volume anywhere from 1.3 billion to 1.8 billion shares a day over a five-day period. that's enormous volume. again, could never close above 5, which has been a bogey for a lot of folks. now it looks like citi wants to trade lower frankly so, we'll see. i don't know if that headline has anything to do with it. but the fact we couldn't close above 5 is pretty meaningful to me. >> there's a billion and a half registered in this shelf registration. there's 7.7 million the government owns. i realize they're going to be selective and smart and not going to tramp on their own market. but it's only 20% of the free float that could get dumped in

the market. think the shares have a lot of pressure against them. i also think it puts rotation pressure on the rest of the sector because guys may be preparing to buy that and they're selling stuff to buy their citi shares and i think everything's trading heavy. that was the other part of today's trade. >> i'm staying with the citi position. the only thing standing in front of citi from advancing beyond the 5 is the stake the treasury has right now. citi is basically the sleeper pick. they are turning around their business right now. they're going a little pure vanilla banking but they are mac the turn here in terms of exposure to consumer loans they are better positioned than some of the other banks like the wells fargos out there. >> i -- >> let me -- so i think removing the treasury stake is the one element that gets you excited about this. and as you move further, deeper and deeper into it, institution wills get excited as well. >> we're so polite here on the desk tonight. >> really laid back for a lengthy finish there. but we've got 7.7 billion shares. there's only a -- you say the treasury's not going to be out of the way. they're going to be hanging over this thing for a long time. and i just think if i'm an investor and as a trader i don't

want to go near that. >> but i like the fact morgan stanley is holding the order. they're professional traders. they'll hold the order in a way that does not knock the stock down and i believe it will get done over time in a manageable way as the improvement at citi's business model occurs also. >> as the unwind occurs that's where you've got to go to the option markets because it makes much more sense p you've got very, very dirt cheap options. if you really believe citi once this unwind starts to occur and all of a sudden there is some up side why not own -- >> so how would you establish position? what sort of trade would you -- >> you can easily go to a five strike in just about any month all the way out to the leaps. you're talking about very incrementally small amounts of money up to put out there. and then you take away a lot of the risk factors you've got with the stock itself because if, to tim's point, there's much more pressure than just the federal government on them right now, then at least you've got yourself into a position with the options where you don't have the same kind of exposure -- >> put some numbers on what pete's talking about. in may 3 to 5 cent premium. in june 6 to 8-cent premium.

>> so there's no premium. these things are pricing as if there's not much down side and there is much more down side. >> it's 3 cents or 4 cents out of a $4.50 stock. on a relative basis you make it sound like it's free, but again, this isn't a $100 stock. this is a $4.50 stock. that's just my other side. people are always saying these things are free. i agree, you're absolutely controlling your down side but on a percentage basis it's not cheap. >> want to move on to a fast message because we do have one in right now. dick from lakeville, connecticut writes, "will legislative constraints on proprietary trading derivatives prove more significant for goldman sachs than the s.e.c. charges quechlts what do you think? >> there's a good chance. i don't know how they're going to monitor proprietary trading. trying town ralph proprietary trading from the rest of goldman sachs is very difficult. it's like trying to get a drop of water out of a bottle of wine. but to his point i think it could be extraordinarily detrimental. >> goldman sachs is trying to guide the market or at least give people an idea -- david

viniar said it's about 10% of their business. he said that recently. i don't know if it's true or not. he has no reason ton tell the truth. however, that's the whole problem because how do you define prop, but goldman's trying to tell you it's a small part of the business. >> let's check in on some of the after-hours action because in addition to all 9 things going on on capitol hill we've also got plain old stock stories. texas instruments coming out beating expectations as everybody had expected. also raising their q2 guidance, which everybody had expected as well. you see the stock move accord g accordingly. radio shack another success story, actually higher in the after-hours session. patty edwards, you're back at the prop december nic englewood cliffs, where you brought the seattle rain, but patty, what are you noticing about the shack earnings? >> the rain was here before i got here, melissa. looking at the radio shack earnings, they are certainly doing what we would . them to be doing. they're cutting down the stores that are not working. they're focusing on the mobile -- i think this is a big deal for any of the mobile

providers they are selling for. they've gotten out of palm. i think this is good for rimm, good for apple obviously. same thing with texas instruments. upping the guidance. you had 20 expect that would be coming based on the fact we have such phenomenal numbers out of apple. but they seem to be doing well across all of their areas. and the tech trade, these have kind of been the dogs of tech. texas instruments trading at roughly 12 times earnings. that's something i'm starting to get a little more interested here. >> petey's been on texas for a while. now it's trading at a 52-week high. if you want to take one negative from the texan, it's gross margins in the first quarter maybe a little light at 52.7%. if you really want to sort of get down to the nitty graty. but again, pete's been on texan for a long time. the stock is probably still okay here although some people might point to -- >> when you look at the revenues they estimated and the earnings going forward, as you mentioned, melissa, they delivered. they want everything and they got everything. that's why i think at least you're seeing a positive reaction right now. we have seen too many times where they didn't deliver on the guidance, they didn't deliver on the numbers, the margins -- i

think people are willing to give up a little bit there as long as those revenue projections which they were and the eps going forward for q2 is as strong as it is. texan, this is a stock that already reacted into to the intel news. this is not a bad reaction -- >> the key fundamental driver when you look at texas is the analog business. the street is underestimating the market share gain they are going to acquire over the next couple years. and i think within this report you could see that that analog market share is coming to texas right now. patty talks about it being cheap. intel's trading about 15 1/2 times. texas trading somewhere around 12. texas looks like the name, the best in breed to own. >> embedded processing and all the rest of it. how about the smart grid? that's an area they continue to push harder. that's an area where we know money will go into that whole field. how much money? i mean, that's something i'd love to hear if jimmy goldman hears that on the call. when are they going to project that? because this is all based upon what's already feeding this animal. how about the smart grid? >> and we will check in with jim

goldman a little later in the show. he's monitoring the conference call which got under way about 45 minutes ago. meantime was merger monday today. let's go someto some of these deals. very interesting reaction on the stocks here. charles river and wushi tim that's one you were watching because this is a way for them to get into china very quickly. >> this is potentially the largest takeover of a chinese company by a foreign national. will china let it happen at a time when -- >> do we know that they've let it happen? >> it's an offer. in fact, the charles river shareholders may hope it doesn't happen because their shares were down dramatically. but this is 30% growth in china. the pharma testing industry is a great place for charles river to be. this is a fantastic place to buy. wux you can buy on the new york stock exchange if you still believe there's more up side on this deal. there are no other obvious plays in china right here, but again -- >> one of the reasons they're so excited about it where did novartis on their last earnings just last week they talked about the growth where was their growth? 34% of it coming from china. that's where they were seeing an incredible amount. and they project that will be

number 2 within the next four or five years to the united states as far as their revenues. a lot of people excited about china. >> hertz and thrifty, another $1.25 billion deal here. hertz raised its guidance for eps as well as 2010. in addition to hertz being higher on the day as the acqu e acquirer all of these stocks in the sector, car -- >> avis, big short interest in avis. you figure another couple days left in that avis run. it's an interesting deal because you maybe believe that business travel's coming back. if you talk to dr. j, pete's brother, he'll tell you he was recently -- i think it was in texas. and he frankly said he could not rent a car. so there's clearly something going on on that front. again, if you want to go to car avis, avis has a day or two left on the up side but i think the ral vaigs is rich. >> if i could get dr. j was trying to rent a cadillac convertible with like the horns on the front. >> it wasn't just hertz. but they were buying kauld calls last week so they were expecting just not a good number, they had no idea how this would affect

the stock. they were buying may 15 calls, that's already on a stock that's gone to 52-week high after 52-week high and today an xloefrs run even more, a greater percentage move than the firm they're acquiring. look at priceline, look at expedia. those are other names that just continue to explode to the up side. priceline absolutely outrageous. >> m&a is very interesting what we're talking about. also look at what sears did taking out a -- ackman's 17% stake up in sears canada. now sears controls 90% of sears canada. so it is just overall interesting the theme of consumer discretionary m&a. >> let's put our ear to the wall. cnbc contributing editor gary kaminsky joins us on the fast line. you've been watching whirlpool and you think washing machines could help us predict what washington and specifically the fed might do next. why? >> hey, melissa, how are you doing? by the way, we're going to have to maybe have malloy get those out of the box graphics because listening to the show i think i'm going to take a different take in terms of what happened with the financials today.

i actually think whirlpool is one of my mentors in the business, mark howell said there are certain companies you can absolutely identify as direct indicators of the economy. whirlpool before the merger with maytag, these are companies you continuity can't fudge the numbers, they are the economy. when the whirlpool numbers came out today you saw this dramatic, dramatic jernlgs of free cash flow above anybody's estimates. what i started thinking about is there's going to be some discussion the fed is falling behind. you don't have that type of unbelievable outperformance without the fed should be starting to tighten. i think today the financials, the headlines were looking at goldman and the noise. the reality is a lot of people were talking about higher interest rates because the fed has got to tighten when you get that type of performance in the economically sensitive names like that. >> gary, let me take the other side of this whirlpool thing here. $300 million in reekbates durin the quarter. that helped. north american sales in line with expectations. and the real up side was in latin america and specifically brazil. can we actually use this as a

good metric for the u.s. economy at this point? >> you can because there's so much globalization that we know, you know, and we've made this point many times. the global growth is what's going to drive the u.s. economy. the conversations today, this morning is the economy is performing better than anybody would have expected. sought conversation is going to move to higher rates. if you look at the new high list today, which i always, do and you look at the xhkly sensitive names, the trade continues to be pate participation in higher interest rate beta names. >> hold on, gary, i want to bring in patty edwards at the prop desk. patty, you dissent. >> i don't total liu dissent, but what i do want to bring up, melissa mentioned the fact we have all those rebates that have come out. it was a big deal for them in the u.s. this quarter. but beyond that a lot of what you're seeing is the foreclosures that are coming through. and eventually that is going to go away. at this point i believe it's $5200 to rehab a house so you

can move into it after it's been foreclosed upon. at some point that's going to wane. do you really think you get into the high beta consumer names at this point based on that? >> no, all i'm saying, patty, is that you can have this type of performance at a company like this without the conversation and the talk about higher rates. if you're going to invest in stocks, you've got to be concerned and you've got to focus on owning the names that will participate in a higher interest rate environment. this will be what people are focuses on that. you cannot have an economic recovery without the fed starting to tighten. watch that. that will be where people will focus on the next several weeks. >> gary kaminsky, ti very much for phoning in. whirlpool, three-decade high on this stock. would you get in on this snoint. >> they're selling whirlpool in south america through cbd. the consumer and housing trade in brazil that's how you play it and in fact whirlpool is on sale in brazil. >> to patty's point home depot

has worked well hp. hd probably works here. >> to your point, tim, south america up 65%. >> it's a fantastic -- >> biggest names in tech brought low on earnings. getting low inning gool, foote your chips on qualcomm. we'll tell you whether to buy on the dips or keep your distance. all that and more when america's post-market show continues. wo j. one: kills weeds to the root. two: forms a barrier, preventing new ones for up to four months. roundup extended control.

live in a rainy times square at the nasdaq marketsite. pete, you've been watching some unusual activity in an online broker and also step, which is a flash drive maker. >> right. absolutely. stec is the symbol for this one. i'll tell you what, very interesting company, the storage space, we've seen what happened last week, western digital. this company's been absolutely on fire over the last three or four or five weeks now, particularly the last week and a half, huge volume, huge volatility, moving to the up side. today buying the may 21 calls, well above the open interest. people expecting even more. they've got earnings out in about a week and a half. keep an eye on this name. e trade by noon traded over 65,000 contracts today. a lot of those moving out to the october 2 strike.

those are just a few pennies out of the money right now. maybe e trade. it hasn't been above $2 in quite a while. maybe now people are looking for e-trade to go to the $2 and go to the up side. >> we have some news here. this is april 26th. that's today. according to goldman sachs, google has been removed from the conviction buy list. the cbl. google has been removed from the conviction buy list. and this is one stock that has fallen on some hard times. >> man. >> since that whole china debacle. tim, what's your initial take on this? >> my initial take is it's going to fall further. i think the conviction list, whatever you want to call goldman right now, people listen to this call. and in fact, google, though, 18 times -- or estimated 2010 is as cheap as you're going to find the stock in recent memory. the earnings were good numbers, the cost margin is higher. >> would you hold your nose and buy at this point? >> i would probably wait for tomorrow and i'd be happy to own it on a valuation call but let this trade through because the market will trade.

it will trade it down. >> i'm obviously glad i got out of my google a couple weeks ago. still rated a buy. i'm looking for a price target change which would be the key on this. timmy's right, the fundamentals clearly are strong for google. guy and i were talking about this in the green room before. if you're in google right now, you have to be concerned with the recent price action. it looks very, very heavy. >> and technologiwise it's been resting on this 200-day and now after a year it looks like if they actually get some follow-through this is going to plunge beneath that. then where's the next stop? >> that's a great point. and google is a proxy stock for the prodder market. again, pete brings up a good point. it's clearly not performed over the last week and a half or so. goldman sachs another proxy stock for the broader market. so today -- one day's not a big deal, but the way the market closed today on a monday has to give you some pause. we'll see what this does tomorrow. >> we should note part of the goldman sachs note is they are maintaining a six-month price target of $680 a share. >> you buy this thing at 525 which is where it looks like it wants to hold, you've got roughly 30% up side.

that's a name at least goldman says on a 12-year base sis going to be -- >> and certainly tomorrow there's going to be a volatility spike in petey's role for google. >> we want to bring you live to washington, take a check on the senate floor. they are having a procedural vote. there are ten votes left. we are keeping on top of the situation here. remember moments ago also we reported that senators dodd and lincoln actually reached a deal on the derivatives portion of the financial reform big which is said to hurt the major brokers the most. jpmorgan recently that's said that about $3 billion in business there. we're on top of the story in the after-hours session. meantime, let us trade the headlines that we will want to be watching tomorrow. ged get ready for a senate media circus. goldman sachs faces congress. all your favorite characters will be there from fab fab all the way up to lloyd blankfein. but holes already being poked in the s.e.c.'s case. will it be smooth sailing for the financials after tomorrow's three-ring circus? on the fast line right now anthony scaramucci of skybridge

capital. anthony, after tomorrow is the coast clear? we're getting some static here. >> i'll tell you i'm not so sure about the coast being clear for goldman. but here is what's going to happen in this slugfest tomorrow, and here's the backdrop. number one, goldman is clearly losing in the court of public opinion. you can see the stock continuing to trade lower. the central thesis being this uncertainty will be a cloud over its stock and other financial services stocks. number two, they have whistleblower rhys many. an angry spouse, somebody in there leaking another bad situation for goldman. and lastly, if they win, it's sort of a pyrrhic victory. look for the s.e.c. to really gear up and continue to look hard at goldman. >> anthony, we're going to leave it there. we have some static on the line here, so it's kind of hard to -- but thanks for calling in. we appreciate it. >> my pushback to anthony is what other types of spouses are there? angry spouses -- >> mrs. adami, guy apologizes. >> good luck getting to the front door tonight. >> that door's locked. >> yeah.

doghouse for you, guy adami. >> with that broken electric blanket maybe. >> good line by me, though. i'll take the line, though. >> he's pretty much on the same page as this desk, saying that goldman sachs has trouble ahead. you know, when we cited john roque of wjb capital saying that $100 was the technical down side for goldman, people sort of were lying what? 100 bucks in it's too much to the down side. but at this point it looks a little more realistic. >> 150 clears your bogey, and then there's a 147.41 level that crops up. a close below, that then it gets extraordinarily interesting. ? and i think a name you could look at is morgan stanley. morgan stanley probably gets taken down as the capital market trade goes down with goldman sachs. however, morgan stanley is clearly reversing a lot of the negativity that it's had over the last six months. they're improving in terms of trading revenue. morgan stanley might be a beneficiary of goldman sachs going down. >> and the positive of morgan stanley is you're looking at something that's been less volatile. so you've got a better opportunity to get yourself protection at a much cheaper rate if you're looking at a

morgan stanley to react the way joe's looking at. >> morgan stanley received the citi mandate to sell all their shares. it's a plum deal as they -- >> if they pull it off. if they pull it off well then that could be -- >> but is that an indication of where they sit with the government right now? maybe as jeff comes on later on the show. who's in the driver's seat? who might actually be the beneficiary of being on the right side of the law sneer i don't know. >> p & maybe that should have been the read-through is why was goldman sachs not picked, why was morgan stanley picked? >> because they knew there was an s.e.c. case coming out? zblae. >> wow, talk about conspiracy theories. that's a good one. >> just saying. >> let's move on to headline number two here. we are calling them the ilosers, google, nokia, qualcomm, and rimm, four tech companies that plummeted after earnings last week. one thing they all have had in common, a common enemy, of course apple, which posted a 90% jump in profits. let's take a check on google because we just reported that goldman sachs removed google from the conviction buy list. also an iloser.

why are you laughing? ♪ loser >> now you see it a little soft in the after-hours session as people start digesting this news. anybody brave tomorrow going to go in the market and buy this one? >> you know, with google i think you really need to see the volume. you need to see that massive liquidation for you to get excited about it. but no, i think google will be under pressure clearly over the next couple days. there will be some people that move to the sidelines. but longer-term i agree with timmy, i agree with goldman, the model's not broken. >> google's trading 530. their six-month price target is what? >> 680. >> that sort of softens the blow of being removed from the conviction buy list. >> if that's not a conviction buy, that's a tremendous percentage movement in six months. >> i wouldn't mind -- >> but understand, they're basically acknowledging the recent underperformance in the market. that's their lead sentence in this report. they're saying given the earnings report they have had google should be performing better, it's not. they're basically playing trader here. >> if you don't believe in this google story and you don't

believe in the valuation story then you don't believe anything that's been happening this earnings season because if you look at where s&p earnings have come in, 9% versus on the guidance on future earnings, people are look at an snap on this year's earnings estimated at 14 times. the s&p's cheap at those levels. google at 18 times this year's coming earnings is cheap by google standards. it's cheap relative to the s&p. so i think that's the call. the other name that we talked about, and there's qualcomm. paul jacobs was punished for saying we're going to do more deals. this is a company that i think has done very well by being smart and spending their money. the stock's down 22% off the highs. they missed revenues by about 6%. but the reality is the smartphone trade of which they are a major part of is here for a long time. so this is the one i'd really be jumping on. >> we had doc on i think thursday talking about it trading down to 38. i think the low today was 37.80 give or take. closed above 38. so here's your entry point. massive volume has been trading in the stock. i think now's the time when you might want to -- >> keep your eye, though, on research in motion. i think that's the name of all these names that talk about an

underperformer, because of what they're launching, the new operating system people are very excited about, there's a lot of reasons to -- why did it durn around today in it's that o.s. system. >> in the next calendar quarter. got to take break but as we go to break let's take a shot of the senate floor. this is a live picture here. we will have the results of this procedural vote on the other side of the break. stay tuned. as having to decide to go for it? at the hartford, we help businesses of all kinds... feel confident doing what they do best. by protecting your business, your property, your people. you've counted on us for 200 years. let's embrace tomorrow. and with the hartford behind you, achieve what's ahead of you. ♪

welcome back to "fast money." and that is a live look at the senate floor. they are voting on financial reform. they're moving. see the lady in the red jacket, she's moving around. this is actually happening. >> someone took his head off the desk. >> anyway, it is widely anticipated this will not be sent to the floor tonight and they will resume debate on the topic. but we will keep you posted on all the developments as they happen. meantime, let's talk citigroup. the treasury announcing today that morgan stanley could come to market with some of the 7.7 billion shares that the government owns, goes to market. jeff hart of sandler o'neill has been bullish on citi for quite some time. jeff, explain to me, if all these shares hilt the market, how does the stock go higher? at what point do you say --

>> jeff harte remains bullish on citigroup. >> ooh, third person. >> that's extremely bullish. >> eight guys on the desk. >> the government's got 7.7 billion shares. >> yeah. >> institutional ownership is less than half what it is for all citigroup's shares. if the institutions, specifically the mutual funds, go to equal weight, that's more than 7.5 billion shares. there's your incremental buyer -- >> do they have to wait till the stock hits and stays above $5? >> no. >> okay. >> hardly at all. in certain cases, yes, that's true. but it's dependent on each fund's mandate. and in most cases more of a function of a total market cap and the volatility. not trading as opposed to the -- >> sought hedge funds stay out of the way the institutions buy it. but if i'm an institution here's a company who gave away their wealth management businesses to smith barney or essentially to the boys at -- >> morgan stanley. >> morgan stanley. sorry about that. and they sell off their oil trading unit, sold off their best most profitable businesses. so why am i buying this company now? >> you've got to ask yourself

two questions. one-r financials investable right now? i would argue with the economy turning historically they definitely are. two, what companies are you going to pick within financials? citigroup is cheap. citigroup has as strong a balance sheet as anyone out there including jpmorgan. they've got exposure to international consumer, which is the one business globally that's really growing -- >> they're probably -- >> -- and doing well. and you've got the catalyst of institutions eventually buying. because if you're short exposure to citigroup and it's up 30% when the market's up 9%, you have a problem. you can't keep that up all year. the stock continues to move up they're going to have to come in. >> want to ask you, jeff-b a development in the after-hours session, and that is senators lincoln and dodd have reached a bill about derivatives and that this part of the bill would force dealers, broker-dealers to spin off their business. what sort of impact would that be? because the conventional wisdom is that it will hit the likes of a goldman and a jpmorgan very hard. >> well, let's -- first, what happened here? dodd decided to let that come into its bill. nothing more. nothing else has passed. it hasn't moved further. my argument would be you can't take the derivatives trading operations out of banks because

it touches every business within an investment bank. the cash trading businesses heng hedge with derivatives. the investment banking operations transactions head with derivatives. i don't think it's possible or faebl feasible they're going to pull that out entirely. if they do it will be catastrophic. but i can't see how that happens. if they do, let's face it, what happens in the business doesn't go away, it goes to ubs, deutsche bank, it goes yaefr seas and the u.s. specifically gets the shaft so to speak as opposed to the market in general. >> jeff, got to leave it there. thanks so much for stopping by. jeff harte is usually in -- both of you. you and jeff harte. >> much more fun not on satellite. >> all right. moving on here. the options market is saying the best of earnings season is over. how do you protect your profits here? to help us do that is mike khouw of cantor fitzgerald, who's also an "options action" contributor. and mike, you're looking specifically at a tech stock, correct? >> i am. i'm looking at broadcom. you know, one of the important things to look at in the options market, early in the earnings season it isn't that uncommon for companies on their earnings to move greater than what the

options market is implying. after the first couple of weeks are over, you start to see that less and less often. but one of the things to keep an eye on are the single stock stories. obviously, we've seen some of the tech results in this earnings season cause pretty big moves to the up side in intel and apple, to the down side in names like qualcomm, which you guys mentioned earlier on the show. so here's a name that's up probably about 35% since the latter part of january. so what i'm looking at here-f you're long this stock, one way you could protect yourself and still maintain some up side is by selling your stock here and purchasing some june 36 calls. one quick point i'd make about this, this is obviously the kind of transaction you're a trader more than a long-term investor. but obviously in a name like this, which has moved as much as 8% on average over the last eight earnings, you might want to look at protecting yourself to the down side just in case it pulls a qualcomm instead of an apple. >> pete, what's your take on? because we're getting a lot of data points ahead of the broadcom earnings such as texas instruments tonight as well as intel before. does that sort of change your strategy on this trade once you get these other data points out

of the way? >> the read-through so far as he's alluding to is those that are performing are performing very, very well but those that have also already performed there might not be much left. i mean, the other possibility would be you could use now the volatility to actually sell some of that $2 premium that he's talking about there and collect that and maybe still hold on and just see if this stock actually just pauses like we're seeing tonight out of texas instruments. then you're going to be able to reap some of the rewards of that volatility that's pumped in. >> quick point i'd make about that is this is a name that does actually see smaller moves when other tech names report first. but it still moves over 6% on average after names like qualcomm report. so keep an eye on it. it might do something. >> mike khouw, thanks very much. and of course you can catch mike and me on "options action" every friday night live at 5:30 p.m. eastern time on cnbc. going to take a break right here but take a look once again at the senate floor. and we promise you it is live because if you look very carefully people are moving in that picture. >> the woman in the orange. >> she was doing the same thing --

>> it's on a loop. >> she was walking -- >> maybe we should wave because i think they're watching us. >> it's like the movie "speed." >> they've got a big screen up there. >> they're almost done voting. we'll have the vote count hopefully on the other side of this break. stay tuned. >> one of the most well-defined moments in markets is when a stock is at a conventional buy juncture. that is, right at past tops, toying with the prospects of breaking out above those tops. lots of stocks are doing this right now. it's where there's a lost bullibullot of bullish momentum. ball corp. two-year charkts 59 chart the 55 point very precise. weekly chart. ur giant-brained, multi-armed, wicked-fast, tireless, robotic trading engine, also known as automated trading from thinkorswim. just drag and drop to program your strategy. there's no code to write. you point and click, thinkorswim hears and obeys. your killer strategy's on-line. automatically, even when you're not.

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and again, this is a live look -- >> oh, come on. now you're kidding around. >> on this story. this is a major story. it will have a huge impact on the financials. consensus, though, is that the democrats do not have the votes. >> they don't have the people. >> that's the problem. >> i wonder why they don't have votes. >> i'm going to have to reel this back in and point out how important it is. >> okay. the democrats will not have the votes, they will go back to the bargaining table and rehash this thing. but we're keeping you updated on

all of the action. lots of action on capitol hill tonight. meantime, a giant breakthrough for diabetes patients could be on the horizon. biotech company is developing a once-a-week version of the drug baa edda. what will it again for their bottom line and its partners on the drug? here to give you the scoop on the biotech breakthrough the ceo himself, richard popz. he rang today's closing bell. great to see you. >> great to be here. thanks. >> want to run through the economics of bidurion, this one-a-week version of baeda. according to jpmorgan they're anticipating a 10% premium in terms of pricing. that could mean $2.6 billion in global sales. is the math kind of there? >> there's a couple different pings going on. first of all is the pricing on the drug itself, the once a week form of the currently once a day drug. that's unknown. am lynn and lilly will set price. for us because our technology is the basis of the drug we get

paid an 8% royalty on the first 40 million units sold a year. and analysts based on their own pricing expectation are deciding how much that is. but that's a blockbuster drug. >> you anticipate, though, it would be at a premium to current prices of byetta? >> there's another drug that has been approved victoza which has been priced at a premium to buyetta. while we don't know i think it's a reasonable expectation but i don't know the answer to that right noup. >> you've got vivitrol is one of your drugs out there for alco l alcoholi alcoholism. how about the opiates? that's an interesting area that potentially has a huge up side but when is the fda going to start to look at that and maybe get some approval? >> why so curious? >> i've got issues. no, no. >> you talk to anybody families are touched by alcohol dependence and opiate dependence in ways you never would have predicted. opiate dependence used to mean heroin. now it means prescription o. ioids like oxycontin and things like that. it's a big problem for kids and a big problem in different

communities. we have a drug vivitrol that we just completed phase there studies on. we'll present the data at next month's american psychiatric association meeting. it's given one a month, blocks the open yoid receptor. instead of take methadone or other drugs that kiep addicted but at at a stepped down form in blocks the recept ovr and allows people to become opioid free. we applied for fda approval so we figure by year end we should have fda action. >> in terms of bidurion, just to go back to that because that's the focus for a lot of investors, when do you anticipate the approval? i spoke to the amylin ceo a couple weeks ago. he said sometime by the end of the year and that would match his expectations. is that your expectations? >> absolutely. when you spoke to dan last time i don't think they'd actually put their final response to the fda's response. that went in last thursday night. so we reckon it's somewhere in the next several weeks to at the outside six months. so it's imminent now. >> at the outside approval in

six months? >> it's up to the fda. that's always the caveat. right? >> of course. richard pops, thanks so much for joining us. >> good to be here. thank you. >> all right, guys. big drug opportunity. pete, what's your trade here? >> if you were looking at the company itself, the question i was curious about is the pipeline. this is one aspect of it and that would be another one. that's a potential blockbuster. that's what you're looking for, are those big hitting drugs. that could really be something for the bottom line. >> got to take a break here. more "fast money's" coming up next. ♪ well, look who's here. it's ellen. hey, mayor white. how you doing?

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look at all the action going on, capitol hill. live picture of the senate floor. >> good lord. >> where they're voting -- i think there are fewer and fewer people. we can count them on one hand at this point. but the fact of the matter is the consensus is dems do not have the votes, they'll go back and have to rehash this whole thing and the saga will continue. >> and the uncertainty will remain around the financials. you talk about morgan stanley being a beneficiary. the other side of that is within the financials who cannot handle some weakness? and that would be the regional banks. if you're long the regional banks to me you move to the sidelines, you have nothing on, maybe you take a small short

position. >> let's also take a xhcheck on texas instruments. beating expectations, raising on the q2. that was largely anticipated. we are seeing the stock actually move higher in the after-hours session, which is pretty good price action for this one considering so much had been baked into these shares. meantime take a check on radio shack. the shack also beating on expectations here. the stock is also higher in the after-hours session. and once again, google being removed from the conviction buy list over at goldman sachs although softening the blow from being removed from that cbl is that google has a $680 six-month price target on the stock. which by my measure is pretty bullish. but that's just me. >> that's easy math. >> that's just me. one data point to dominate the headlines tomorrow morning the first annual home price increase in three years. that's what the case-shiller data is expected to show. patty, it's all over. we're out of the woods. >> right. okay. well, if you believe, that i've got some land in las vegas i'd love to sell you. it's cheap just for you,

melissa. you know, i think that these home builders have had a phenomenal run. we're looking at some of these names. hovnanian is up like 200% year over year. i don't think that's the way to play this. we've got plum creek that reported after the close today. 54 cents, or 47 if you take some of the stuff out versus expectations for mid 30s. when you look at it, you've got lumber prices are starting to pick up. that's going to play well into not only plum creek but someone like home depot. you want to play the derivatives trades here because i don't think that this can continue for that much longer. so don't buy the home builders. look for something else in the same area. >> tood lz to steve grasso who i know is watching right now, but he's been on the similar trades as well the last couple weeks. >> weyerhaeuser. >> way to go, stevie. >> because of osb. >> look at you. >> oriented strand board. trade school. >> and cement. look at cement. earnings tomorrow. the numbers aren't going to be good but it's about the operational levers they have to the u.s. business, and it's going to be strong. >> all right. got the final trade right after this. (announcer) roundup extended control

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time now for the final trade. let's go around the horn. tim? >> dividend play. turk cell. tkc. >> guy. >> more people at shea tonight than the senate floor. nasdaq.

>> stay with the comericaa regional bank short. >> pete. >> mcdonald's still works. 52-week highs. doesn't matter, it's going higher. >> i'm melissa lee. thank you so much for watching. see he you back here tomorrow 5:00 p.m. eastern for more "fast money" on cnbc. >> announcer: tomorrow under the radar. the aerospace company that's strong on defense. plus, straight fight. dennis gartman and the gang brawl over bernanke's next move. "fast money" on cnbc, first in business worldwide. hey can i play with the toys ? sure, but let me get a little information first. for broccoli, say one. for toys, say two. toys ! the system can't process your response at this time. what ? please call back between 8 and 5 central standard time. he's in control. goodbye. even kids know it's wrong to give someone the run around. at ally bank you never have to deal with