so we continue to follow that story. expectations that probably the company is going to pay a dividend at some point. that does it for us. don't forget to catch more "fast money" tonight 5:00 p.m. follow me on twitter. and "power lunch" begins right now. three hours to go in the trading day and, yes, as you just heard, there is one word on the lips of every investor. it's apple. shares breaking through $500 this morning. market cap now $460 billion, by far the biggest in the s&p even as scotty said some distant chatter about a dividend. our question, is it the ultimate unstoppable stock? >> meanwhile inch by inch and step by step the markets climbing higher. s&p up by 7%. nasdaq up almost 12%. but is dow 15,000 really on the radar? >> plus the murdoch mess. more news corp. journalists arrested in britain this time on bribery charges. does rupert still have an ironclad grip on the company that he founded?

>> i'm sue herera with simon hobbs and of course brian shactman. and "power lunch" begins right now. >> little bit of risk-on. little bit of greece off. markets relieved but not convinced of greece getting resolved. up 63 in the dow. just a few minutes ago it was up 50. so we improved in just the last three to four minutes. nasdaq .75%. the pulse of the markets, look at oil higher on that risk appetite returning and holding above $100 a barrel. gas creeping higher on supply worries. and we're keeping a careful eye on the euro right now. 1.32 almost even. midday movers, lowered estimates and raised forecast for the eye drug it has; that stock up 13.25%. priceline hitting another all-time high. unbelievable that share price of

$568.52. on the downside first solar sinking after a downgrade. that stock down 5.5%. monster worldwide down 4.5% after citi downgraded it citing competitive pressures from linkedin and career builder. let's get more details, mary thompson. hey there. >> hi, brian. the weakest having no impact on the markets. the dow actually ticked up a bit here up 63 points. although another light volume day. 1.6 billion in consolidated trade. that is fairly low volume. something of course we've seen throughout this year. the s&p is up 7% this year. we've seen this very slow and steady march upwards in the markets even amid very low volume. quick check of the dow movers. the story is financials. these are among the better performing stocks today. telecom, industrials and consumer discretionary. utilities really the only one that's been moving down at all

during today's session. and within the dow components predict bli bank of america and jpmorgan leading the way foll followed by pfizer. united technology up too. reports say the company is thinking about selling its flow and compressors business, something that could fetch about $3.5 billion for that company. quickly we want to point out that the retailing index has hit an all-time high recently helped in gains by home depot and dollar tree contributing to that as we've seen people basically move down from the walmarts. its stock has responded and in turn the retailing index higher of course ahead of the retail sales numbers later this week. simon, back to you. >> thank you very much, mary. that is our cue to switch on the "power lunch" power surge and drill down on the stories driving the market today. clearly the greek government is undermounting pressure to convince skeptical eurozone leaders that it will stick to the tunes of its multibillion

euro bailout despite violent protests over the weekend. julia chatterly is in athens with the latest. >> reporter: the greek government have agreed a deal on reforms, but the next step is addressing that demand from the troika that the two remaining coalition leaders sign a written confirmation that no matter what happens at the next election these reforms continue to be implemented. it's not just an economic problem now for greece, but it's also political problem too. and if you look at the recent polls, the two far left parties and the communist kke party now total more than 40% of the votes polled. so that means nicole ligs that leads on from that election will look very different from what we have here now. and of course that could be a real problem irrespective of whatever agreement gets signed right now. now, of course, we saw that 43 mps were lost or expelled as a result of not agreeing to reforms overnight. the question for the government is they need an immediate cabinet reshuffle. and it's just how quickly they

can implement that going forward. now, people that i'm talking to are saying that this is essential not just to present a semblance of a together face of the people here who have been protesting over the last 48 hours, but it's also essential to prove to the troika that they're committed to these reforms and will continue to follow through with the agreements that have been made here. back to you guys. >> thank you very much, julia. so, simon, you know, if we look at what's coming up for greece, we have meeting upon meeting of either eurozone leaders, g-20 ecb leaders all leading up to that $14 billion bond payment by greece. hopefully they'll be able to make it in mid-march. a lot of hurdles. >> i think the crunch may come sooner than that. julia nailed it there. on the one hand they have to agree to these extra 300 million euros of cuts. and they have to by wednesday night before those euro leaders they have to promise in a way that convinces the leaders that after the election they will continue with austerity. and then if the leaders like it,

will unlock and debt swap to be announced by the end of the week. >> given the violence we saw over the weektd weekend, if you were a betting man, can they pull it off? will ecb leaders be convinced? >> i think the violence is important, but i think in a sense it's a red herring. the problem that you have is this distrust now between the eurozone leaders who do not believe that greece is going to follow through on what it promises. and you've seen the germans and austriaens saying that today. and they do not believe necessarily the bailout is helping them. life is getting worse by the day. >> harder instead of easier. >> so the perception is that everybody's kicking the can down the road. that's the market perception. my concern is that actually that may no longer be the case and the germans will pull them in on a leash and could be spectacular result. >> we will see. there's still optimism following the greek deal and it's leading to new optimism in the markets here at home. check out the headline on the

front cover of "barrons accounts. if the u.s. economy keeps growing we could hit this mark by the end of next year. let's talk about that. joining us is managing director and jack. >> the owner of the article makes a two of three chance we're going to get there and even maybe get to 17,000. i think that's overly optimistic, frankly. look at some of the historical data he references. there's some question about picking the year 1871. first off, if you go 1800, 1871, there isn't enough data to support anything. but then in 1871, that's the emergence of the investment banker, fiscal, jpmorgan comes in. there's some growth there right in the early years. do you pick 1925? what do you pick? if you go back to 1981 dow

around 1500 or so. so we can assume 30-year cycles will have 1200% growth? i just don't like the research. >> first of all, jack, were you impressed by the research or not? and what key levels are you watching that might convince people out of the market get back in and help achieve that 15,000 mark? >> sue, you know, it's a number. and people i think are really confusing this number with valuations. right now we are trading at a very cheap valuation. it's all about multiples expansion. you're talking about a record earnings level right now for the s&p 500. so it's really a question of confidence. it's a question of what multiple do you attach to that market? with a 2% or less 10-year right now, there's no reason we can't see a 15 or 16 multiple. if that's the case, think about it. only 17% away from 15,000.

i think we can probably see it sooner than that article told us. >> jack, what's very interesting is the rally we've had so far this year has been on very low volume. >> yep. >> what does that tell you? >> that tells me there are still a lot of nonbelievers out there, simon. scared money sitting on the sidelines. if you notice any buying coming in is reluctant buying. that tells me this market has a lot more room to the upside. does that mean we won't see a black swan event or something that takes us down? no. that's why my good fellow the najarians always tell you. but this market is poised to go much higher. almost a buy-buy scenario. if the market does well because of economic releases, then if it doesn't do well, you have a fed that's going to absolutely resist this inflationary pressure and air on the side of inflati inflation. you have to buy them. >> the unanswerable question remains this huge amount of money sitting on the sidelines and when and if it will come back into the market. if the market continues to rise

albeit on low volume, presumably at some point the greed will trigger people in. they will have to fight the fear. >> sure. simon, there could also be a squeeze on the guys holding bonds at some point they'll need better performance. look at other data. for example, one of the big problems now is what's going to take this market higher. one of the things is going to be american consumer spending. but american individual debt to income levels are at historic highs. so until we start to get rid of some of the problems both in terms of overall debt, whether it's macro debt or country debt, sovereign debt or individual debt, we still have some issues here domestically that have to be confronted before you can say, hey, it's all clear. we can go. >> all right. gentlemen, thank you. good discussion. appreciate it very much. so, which dow stock do you think would be the biggest winner if the dow does hit the 15,000 mark? we want to know your pick. e-mail us at powerlunch@cnbc.com.

federal spending is the topic of the day in washington. president obama's 2013 budget released a short time ago. and he's already on the road trying to sell it. our chief washington correspondent, john harwood, is tracking that story. john, this was widely leaked over the weekend. are there any surprises in what the president said today? >> reporter: no. although the president does propose in his budget to allow the dividend tax level to rise to 39.6, which is the top marginal personal rate for people making over $250,000. he hasn't proposed that in the past. it was well-known the president would propose $1.5 trillion. that's the key difference between his position and republicans. they did strike a deal last year to avoid a debt limit crisis on the level of discretionary spending. so we knew that coming in. level of deficit for 2012, $1.3 trillion. for 2013, $900 billion. those are points of attack for

republicans as are the absence of significant entitlement reform here. republicans including mitt romney are going after him big time for that. >> john, he's obviously positioning for the election. i mean, does the material -- does the detail of what he announced today stance any chance on capitol hill in the meantime? >> reporter: not most of them. we know the levels on discretionary spending by the u.s. government are pretty well fixed because republicans and ghkts agreed on that. but how money is allocated among accounts and more importantly the long-term picture, what the revenue's going to be, what the priorities are going to be. the president, for example, wants to spend more on infrastructure and transportation than republicans do. all those are subject to fighting all yearlong through the election. >> john harwood in washington. thank you. straight ahead as simon and i continue, apple stock as you know breaking through $500 right out of the open today. talk of a dividend out there as

well. but there's also an aggressive lawsuit against samsung? is this company unstoppable? >> and a thing of beauty. a 10-year chart of apple up almost 4,000%. stay with us. whee! whee! wheeeeeeeee! ah heads up. wheeeeeeeeeeee! everything you love about geico, now mobile. download the new geico app today. on december 21st, polar shifts will reverse the earth's gravitational pull and hurtle us all into space, which would render retirement planning unnecessary. but say the sun rises on december 22nd and you still need to retire,

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welcome back to "power lunch." rick santelli here on the floor of the cme group. there's a lot of news out.

there's a lot of auctions coming up in spain and france tuesday and thursday. we have supply next week. of course, towards the end of the month ltro, that liquidity operation. but look at a chart of 10s, here we are virtually unchanged. once again our path was a bit wild in terms of higher to lower in terms of yield. we've snugged up against top of the range. look at the bund. same pattern except they're a little higher in their yield process but net net a little lower around the rate at five basis points 193 year-to-date. very similar pattern to the u.s. foreign exchange side 24 chart of the euro currency, we were once again looking close to 1.33. now we're back to unchanged. if you open the chart up to december 1st, snugging up to top of the range just like the fixed income markets except for a little bit wider comp going back to early december. sue, back to you. >> thank you, rick. apple breaking through $500 a

share this morning. the stock's off of that a little bit right now. not by much though. but it was higher by more than 2%, about a $10 billion gain in market cap since friday. that's more than a third of the s&p 500 companies. so we're posing a question, is apple unstoppable right now? let's bring in peter, managing director at jefferies and cnbc's jon fortt. gentlemen, welcome. peter, you have a conviction buy on the stock and a higher price target than it is right now. tell us what that target is. it sounds like you think anyway, in the short-term, it's unstoppable. >> sure looks that way. we have a $599 target. we view this here as one of the biggest in apple's product line history. we're going to have an ipad 3, hd refresh in march. we expect an iphone 5 launch end of june. and expect the itv available for the holidays. it's a big year for apple. >> peter, who else will buy in that's not already in the stock to send it higher?

>> that's a great question. i think there's two groups here that are really waiting for an announcement on dividends. we have the income and balance growth group. and then we have a lot of closet indexers who have been holding back either slightly market weight or significantly under market weight because they're worried about what they're going to do with their cash pile, whether they're going to make a ridiculous acquisition or blow it on something without a lot of value. >> jon, closet indexers. do you agree with peter we will see a dividend from apple soon? >> i think so. i think the question is is it a one-time dividend or what else they might do. there are some dangers for apple i think. one, you have to look at this brand stuff. they took the move today of saying they're bringing in external people to look at the fox con factories where apple goods are made. that's very important because apple's brand really drives their results. they can't afford to lose ground there. also in content, they did a great thing with itunes and music. they've done okay in video, but in order to make this tv thing

work, they've got to figure out how to either get the carriers, the cable guys in hollywood on board, or get a way around them. nobody's figured that out yet. if they don't figure that out and sink too much money into it, it could be bad for them. >> will they buy netflix? >> we don't think so. because of all the different conflicts netflix has apple could create them probably for a similar price. netflix would make a great partner though and would compliment what we think would be a verizon and at&t service with itunes and then netflix as well. >> weigh in on the samsung lawsuit and the implications of it. >> from our perspective, it's a huge mess, these patent wars. we think it could get uglier. we're going to see injunctions all over the world. the governments around the world need to do huge patent reform. ultimately who's going to suffer is consumer and innovation.

>> jon. >> for big companies this patent stuff doesn't matter that much. they've got money. they've got lawyers. it's really an impediment to new people trying to get into the space or people who are kind of at the second tier trying to gain traction. so folks like htc in the ecosystem, for apple, i don't think it's a big deal. >> peter, how good are the samsung phone? and do you think we'll wake up one morning and realize that the margins are now forever under pressure in a way we hadn't spotted? >> that's a great question. i think the issue with samsung aside from apple they do build great phones. they have a great technology advantage over apple for now. and they create these great brilliant screens viewable from 180 degrees and consume a lot less power. the big differentiator for us is apple ecosystem. your pictures in icloud, apps and in the future tv shows and video, it will be so hard for

you to move. >> very interesting discussion. thanks a million. appreciate it peter and jon. >> before you head out to buy apple if you don't already own it, here's something you should know. it's up 24% since its first close above $400 july 26th. but here are five other stocks that have actually outperformed apple in that time. motorola mobility soon to be part of google up 60%. novellus up 41%. mastercard up 27%. and f 5 networks up 25% in that time. >> who knew. meanwhile the s&p retail index hitting a new all-time high today. it seems consumers can't get enough of luxury goods with the market at nearly $300 billion in global sales. and if you need anymore proof of the health of the high-end market, the march issue of "vanity fair" is bursting with luxury ads. one indication perhaps of confidence among marketers and spending by affluent workers worldwide.

according to business insider, also a solid stock market indicatoor based on the number total ad pages year over year versus the dow since 1998. and the conclusion "vanity fair"'s pages can be used as a symbol when the market is getting too froth or poised. >> in honor of the westminster, it's best in show day here on cnbc. we're going to sniff out stealth stock winners for you. >> brian shactman is on the case. give him a thread and he'll name names for you. we're back in two. hey, did you ever finish last month's invoices?

sadly, no. oh. but i did pick up your dry cleaning and had your shoes shined. well, i made you a reservation at the sushi place around the corner. well, in that case, i better get back to these invoices... which i'll do right after making your favorite pancakes. you know what? i'm going to tidy up your side of the office. i can't hear you because i'm also making you a smoothie. [ male announcer ] marriott hotels & resorts knows it's better for xerox to automate their global invoice process so they can focus on serving their customers. with xerox, you're ready for real business.

nchs. welcome back to "power lunch." i'm bertha coombs at the nasdaq. three stock stories in 30 seconds. apple not the only at a historical high. all-time high sips going public last may on better than expected traffic for january. dollar tree also historic high here up nearly 1%. it reports earnings next week. and zynga reports earnings tomorrow. this will be one to watch. expected to put in 3 cents a share, but it's going to tell us a lot potentially about facebook, which is the other big company that everyone is watching from silicon valley.

back to you. >> sure, bertha. thank you. the annual westminster dog show kicks off today. cnbc, we're taking a different angle on it. you've heard of the dogs of the dow. today we're releasing the hounds. some of the best stocks you maybe haven't discovered so far. our brian shactman is sniffing them out, if you can with a heavy cold. >> i still can, but i won't do it on air. my hound knows how to find a good investment. his only goal in life to find a hard to find stock for you to consider. there he is. there's my boy. how about this one. in the name of the aifuater, howard hughes corporation, big ackman spun it off when it was in chap 11. the stock in mid-point of 52-week range. off to a good start in 2012. if you don't know the company, real estate deals with planned communities and if housing works itself out, undervalued aselts in beaten up areas and how can you not love the name? now to a seemingly stinky one

with questionable growth prospects. pitny boes, the mail system company wreaks of slow growth, but there's a huge effort to diversify the business. the stock is down 25% in the last year. flat for the year. has a nearly 8% yield. if the stock has bottomed, you can ride preesappreciation and . move along. i don't know what to call him. skip pi. the nose knows. the final pick for our intrepid hound, safeguard scientific. okay, a small cap private equity firm involved in health care and tech up huge in the last three years but slightly down in the past year. could be a pause before another leg up. economic recoveries mean new businesses, sfe has a hand in a whole bunch of them. coming up on "street signs" we're going to have best in breed. that's which sectors are poised to finish the strongest in 2012. sue, it's easy to know what's done well, but what's going to do well moving forward. >> you've talked to an awful lot

of money manage managers, so what's their view especially about the cover over the weekend? >> they were all really bullish. try to find chin ks and bullish everyone says second half of 2012 is going to be better. people disagreed on that. i would say 80% to 85% of the people i talk today, we talked a lot, were bullish. >> that's very interesting. although the contrarians say it's time to take some profit. >> you're right. >> thanks, brian. >> you're welcome. >> quick programming note the 136th annual all breed westminster kennel club dog show starts today. cnbc will carry live the opening night coverage from 9:00 to 11:00 p.m. eastern. >> it's always getting very skoob by doo down here. up next on the program, playing europe. there are many betting you can make money and they will get the

situation under control. how do you make money in europe? we've got a top of the line five-star fund manager next with some ideas. >> and a little bit later on rupert on the run. more news corp. journalists arrested. this time on bribery charges. will murdoch be forced to spin-off his newspapers? does he still have a firm grip on news corp.? "power lunch" is back in two minutes. all in one account. it's powerful, easy to use technology for trading stocks, options, and futures. optionsxpress, the broker smart traders deserve. open an account today at optionsxpress.com. without the stuff that we make here, you wouldn't be able to walk in your house and flip on your lights. [ brad ] at ge we build turbines that power the world. they go into power plants which take some form of energy, harness it, and turn it into more efficient electricity. [ ron ] when i was a kid i wanted to work with my hands, that was my thing. i really enjoy building turbines. it's nice to know that what you're building is gonna do something for the world. when people think of ge, they typically don't think about beer.

a lot of people may not realize that the power needed to keep their budweiser cold and even to make their beer comes from turbines made right here. wait, so you guys make the beer? no, we make the power that makes the beer. so without you there'd be no bud? that's right. well, we like you. [ laughter ] ♪ today on "street signs" coming of age. how to make big money with stocks that are turning 18 and they're all grown up.

welcome back to "power lunch." i'm brian shactman. two and a half hours left in the trading day. i want to point something out that hasn't been talked about too much today. the vix down 7% now back below 20. you have the 10-year note still below 2%. slightly weaker dollar. gold just went flying. we'll talk about that in a minute. and you'll have oil holding above $100 a barrel. the equity markets are almost identical to where we were when we started the show 30 minutes ago. look at the s&p sector heat map. it's not a total risk-on makeup here. you have financials, industrials at the top. you also have names doing okay like telecom, and you have materials and tech at the bottom. still positive, but you don't see all of those risk appetite names on the top.

few wrinkles to talk about. energy in the middle of the pack. refiners taking a bit of a hit. they're all to the downside by a wide margin, but they are still outperforming general markets on a year-to-date basis. another chin k in this risk-on view is tobacco, high-yield offensive doing well. phillip morris international up 1.5%, hit a new high today of $81.69. spun off just from altria just three or four years ago. from tobacco to gold getting ready to close right now. sharon epperson at the nymex. >> hey, brian. gold prices closing right around 1725 an ounce. we're basically holding steady here in the gold market. we're talking gold priced in dollars or in other currencies, but traders are looking ahead to what lies next in the eu and here in the u.s. in terms of on the economic front. we are watching what is happening to gold prices

technically as well. the fact that gold remains firmly above the 1650 support level is key. dennis garman says the greek resolution definitely supported the gold prices and gold just a little below 1730 right now is another sign we could see more upside momentum in gold. longer term, a month ago gold was trading right around 1650. so that is the solid support level and gold prices firmly above that. some traders say make it poise today go towards 1780 or 1800. keep your eye on silver versus gold. silver's outperformed gold so far this year but right now silver's in a rather neutral range, traders are waiting for the fomc minutes on wednesday to determine whether there will be some form of quantitative easing and what that can mean for the precious metals. >> that was a fascinating chart with silver up 21%. thank you very much. >> sure. >> meantime "power lunch" is really interesting this week. "power lunch" is kicking off now an all-star week of power players starting with one of the best european stock pickers around. let's cross to london and meet

stephen peek. he's a lead portfolio manager of the five-star rated european focus fund with over half a billion dollars under management and i read, sir, up 18% year-to-date. congratulations on that. >> thank you very much. >> let's kick off just to cover the bases with what happened last night in greece. we had the parliamentary vote, we had the violence, what is the essential assumption you're making on europe sorting out its trouble as an investor? >> well, i think it's been a very i think complicated journey that europe has been through in the last three years or so. i think we've started to see from probably the end of the third quarter last year more distinct progress. an attempt to really get to the root of the problem. and obviously the events in greece over the weekend with the two-thirds majority again with an election coming up in greece we think probably in april, the

omens are looking reasonably good. they will have to sign up and follow through in terms of sticking to the plan. clearly that's been the weak point of greek politics over many years. and the ability to follow through with a plan. i think it's interesting now because both the greek bond and greek opening market to some extent decoupled the correlation but the rest of europe is now very low. >> yes. >> so i think the markets are ready to move on a little bit. >> that's the major point, isn't it. speaking to hedge funds quite often as i do in europe, you have this very strong performance coming out of last year and into this year. it's quite clear that people are closing some of their underweight positions from around the world. from what you see, are american investors behind that trend to a certain extent? >> i think we're seeing signs already, yes. we've been blessed with, i think, a very good client base who's been very supportive. last year we didn't really lose any assets on the european front and we're starting to see already a pickup in interest

from the u.s. investor who clearly has been conditioned with negative news flow on europe for some time. but with negative news flow comes great deal of opportunity. and we've been making the case that don't get too hung up with gdp in europe. there's a world of stocks out there and the european stock market's seeing tremendous opportunities and we're starting to see that come through in performance. you see that in performance in the fund. >> stephen, you also say you expect m&a activity to pick up. where are you investing? what companies do you think either will be making deals or be acquired by other companies? and if the valuations are compelling, what stocks would you put new capital in? hasn't happened yet. the point i'm trying to make here is i think the first thing the corporate sector's very strong. corporate sector is the balance sheet i think state side and in

europe very strong, certainly better than governments. and i think corporates have been pretty restrained over the past year in terms of they could do things, but that i have held back. a lot of uncertainty in the world in terms of western economies in particular. and i think we're starting to see signs of that changing. there's been a number of smaller deals that we've seen which probably haven't been headline news. we obviously have the big deal happening in london right now. it's very difficult to predict. i certainly don't build my portfolio around m&a prognosis. i tend to look at companies and if a bid speck or m&a is free, that's great. i certainly don't pay for that. i think across the range you are likely to see a high level of m&a activity. >> sure. >> so i think your average investment banker will be smiling a bit more in a year's time than he is now. >> we hope so. we showed on the screen now that bp was your top pick. i mean, have you got anything

that's a little bit -- perhaps a little bit more racy than british petroleum? i'm thinking particularly some of the automotive stocks that have done very well so far this year, stephen, diamler, bmw, french stocks, or would you take us somewhere else in the universe? >> i think there's been moves sicyclically in general. i'm becoming a bit more selective. i think some things which have run, will run more. some things maybe hold back and take some profits. stock selection is crucial right now. the stock i think in that sector which i still think has been great but still has room for growth is reno, the french company. everyone knows the story. u.s. investors probably less familiar or more familiar which runs 41% of. and this has been one of those sleepy values, some of the parts

type story where you add up share holdings and you arrive at a negative value for that core european business, the automotive business in europe. and i think there's some changes with the company in terms of focus, disciplines and expansion outside of europe into emerging markets, russia, south america. just about to open a new plant in north africa. i think it's a stock where if you start from a negative value, that's a pretty good place to start in terms of my book. and i'm starting to see a very strong move in that stock. and i think it can go further from here. >> mr. peak, great to meet you. thank you for joining us on "power lunch." stephen peak there from london. do you know reno? >> i do not in terms of financials, but i certainly know the company. >> oh, i see. okay. >> you were doing so well. >> i know. our week of power players continues tomorrow. we'll have an exclusive conversation with chief investment officer of global ax is portfolios at jpmorgan private bank. >> all right.

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coming up on "street signs," we're betting on recovery all week. and we'll talk about a stock that may be set to pop as america rebounds. how to make big money off stocks that are finally coming of age. all grown up. and the fast food grammy ad that has people scratching their heads. that is next on "street signs." now back to simon on "power lunch." >> thank you very much. let's check in with scott wapner and see what's on his radar as we head into lunch. >> simon, thanks so much. i'm watching shares of nvda. up shy of 2%. we had craig berger on the "fast money" "halftime report," he

says earnings coming up in the week, he's looking for earnings to be soft. he wants to buy that stock, if there's any pullback. also talking about the fact it's cheaper than its peers and looking for the tegra 3 chip to get a leg up over another favorite on wall street and that is qualcomm. if there's any risks here, says it may not sell into the new kindle fire that texas instruments could be the chip of choice there. that obviously would be a big risk, but nonetheless craig berger sees some upside. he has a $20 price target on this stock sitting just north of $15 or so -- actually, $16 or so as i see now. back to you. >> scott, thank you. appreciate it. china's vice president expected to succeed hujt. >> shanghai composite staging a bit of a comeback after last

year's declines. what's the investment environment like in china right now? and what should you be betting on? president of overweiss asset management and mike holland with us as well. nice to see you both. >> pleasure. >> mike, i'm going to start with you because last year was a tough year for china. but you're making the argument that that is really the opportunity that needs to be seized. you're very bullish on china. >> yeah. it's all about valuations, sue. as you pointed out a few minutes ago, the market year over year is down 16% for the best acting economy in the world with mid-teens kind of growth and profitability for the companies. so you now have a market that's 10, 11 times earnings over there. great companies. we all know the problems. and we know the things that might have happened. the hard landing is one thing that did not happen. so we have an opportunity here to buy -- i've been going over there for a long time, this is about as attractive risk/reward

i've seen. >> jim's nodding in agreement. you also think it's about valuation. some are pretty compelling, but what are the risks to the china story? >> the mitigation eliminates a lot of the risk in the last 20 years. we've only cease valuations like this during the financial crisis. and that's it. each other times turned to be best times to buy in china. all the risks you hear about, the falling home prices, inefficient capital allocations and change of leadership, all those are risks. but they're risks everybody understands. the risks you could have read about in the coming collapse in 2001. i think there's much greater propensity for upside at this stage in the game. >> mike, give me -- i know you don't give individual stocks, but do you play china per se? or do you play taiwan as a proxy for china? >> interesting question, sue. i think taiwan is china plus right now because of the

valuation and where they are in the political evolution with china. so really, really attractive there. but within china, back to the 20-year outlook that we just got from jim, you have right now the middle class for the first time in 20 years is exploding in china. so health care, retail, anything to do with the consumer in china, that's where the new leadership at the end of the year they're looking to grow the middle class. they want the employment, infrastructure, all of the things that work for the middle class. the export numbers that came out, they're important, but not that important. >> jim, if i can leave our viewers with the three picks that you gave us, vianet, netqin mobile. why did you pick those? >> two are consumer plays. one's a play on the internet and the second is development of the smartphone.

and the third is a play on environmental cleanup in china and better infrastructure viemplts in china. that's what we do. we try to find great businesses and trading for really cheap valuations, the first two trading for seven times earnings. those are hard to find in the u.s. and frankly anywhere else in the world sdpl on that note, gentlemen, thanks a million. good to see you again. >> thanks. >> simon, i'm going to leave you to close the show because i'm going to co-anchor with bill on "closing bell" today filling in for maria. be good while i'm gone. >> thank you very much, sue, have a pleasant trip. up next on "power lunch," empire under attack. this time over bribery claims. is it time now for rupert to go?

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new arrests made at rupert murdoch's british tabloid, this time over bribery claims. sources say murdoch will now travel to london this week to reassure some employees that he will neither sell nor close the most widely read newspaper in the uk. is it too little, too late? has the time come now for murdoch to step aside?

more on that now cnbc's kayla tausche join us us and sara ellison at the "the wall street journal." murdoch's own people are effectively chopping this and nine arrests to the british police. it's an internal investigation that is throwing this up. >> yeah, well, simon, they established this management and standards committee in july. a lot of this has been expected at the sun as the levinson inquiry. a lot of testimonies pointed fingers at the sun, a lot of these other newspapers that are not named news of the world. so a lot of people expected this probe to reach the sun if not sooner rather than later. so this is largely expected. also remember james murdoch stepped down from the board of the sun and times. you had to know they knew something was afoot. >> nonetheless, sara, how unwise is it in your opinion to anger

journalists at a paper like this from your experience and from writing the book from having looked so carefully at the journal? >> well, i think that what's happening inside news corporation and people have talked about this is that there's sort of a civil war inside the company. you have the internal affairs division of the management and standards committee going after employees, long-time employees, who have essentially been following orders or claim they've been following orders of their superiors. every time you do put one of those people under the microscope, you risk creating a new whistle blower. but i think that has happened already. that this is a train that is left the station so to speak. so i think there's a great amount of risk for the corporation at large. >> yeah. but as of yet of course there is no smoking gun possibly with the e-mail that we so often talk about, but there's no direct link, is there, as yet from the murdoch family to those allegations. that's the important point as we look at news corp., the business

overall. >> right. there's not been a link. obviously there was an e-mail to james murdoch where he was notified of the sort of worst case scenario about the phone hacking situation. and then he responded to the e-mail and later claimed he didn't have any knowledge of the situation. so that is certainly what many people are pointing to as at least an area that's worth further scrutiny. but there's no direct link between the murdoch family and these activities. what's interesting is murdoch -- rupert murdoch's own effort to protect james and the initial efforts to kind of contain this scandal and keep it away from the highest levels of the company is in some ways what is leading and what is spurring on the notion that there's been such a huge cover-up here and that people need to keep digging and digging to find out what actually happened. >> kayla, the real bite, if any comes from this of course will be probably under the u.s. legal system. and it will be about the licenses here in the united states. what's the latest on that front? >> well, simon, under the u.s.

foreign practices act a subsidiary of a global company that has operations here in the u.s. if there is any sort of payment to officials that would be under the fbi's jurisdiction under the fcpa. and that's something that could come to light. one of the lawyers for the hacking victims is expected to come to the u.s. in the coming weeks to explore that idea. so that's definitely something that we could see happen here. >> ladies, we'll leave it there for the moment. thank you both, sarah and kayla. >> thank you. >> just over two hours left in the trading day. our charts of the day and which dow stock will be the biggest winner if the dow does hit 15,000? you sent us your picks. we'll have the names next on "power lunch." tdd# 1-800-345-2550

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if your bank doesn't give you knowledgeable customer service 24/7, you need an ally. ally bank. no nonsense. just people sense. sposht sports illustration has made models with annual swim suit edition. last year's winner joined us in the studio. and tomorrow this year's winner will join us. don't miss that on "power lunch." i can guarantee tyler mathisen will be back from his holiday to host that one. >> it is darren rovell at his best. look at the markets here. dow up 72 points. a little bit of strengthening throughout our time on "power lunch" to the tune of about seven to ten points in the dow

jones industrial average. >> the chart of the day has got to be apple. actually topping through $500. as you know you've been watching the network topping through $500 today and now up for the year 23.5% and hovering above the $500 level. >> remember when that was at $150. a lot of talk today simon about the dow at 1350. so i thought we would look back and see where it's trending. obviously we were in the 1500s at the all-time high. people are wondering do we have room to go? and that's a question obviously i can't answer. >> with dow 15,000 of course on the front cover, we asked which dow stocks you think would be the big winner if we hit that level. we thank you for all of your tweets. we'd like to highlight two of your tweets. first, bank of america. >> that's a popular one with a lot of people. people on the other side of that are pretty adamant about it. a lot of people like it even at 827. >> the other one, caterpillar. caterpillar's interesting because performance so far this