tv Closing Bell CNBC February 14, 2012 3:00pm-4:00pm EST
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i'll return it if you want. >> five games lin. >> there you go. happy val-lin tine days. >> the lin of the street signs. >> winning! >> that was bad. today on the closing bell, holding on to 1350. can the s&p withstand retail figures and more downgrades of european countries. logging on to zinga, the gaming jie reports after the ball. what effect will facebook's ipo have on the stock. we'll have analysis and investor reaction. uncovering the volcker rule, a comprehensive break down is
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straight ahead. live in the new york stocks exchange, this is the final and most important hour of the trading day. >> i'll bill griffith at the new york stocks exchange. >> i'm maria bartiromo. stocks near the lows of the day on renewed fears about the greek bailout and weaker than expected u.s. retail sales. that sent the s&p 500 below the 1350. it's raising new concerns this afternoon that the rally may not be sustainable. >> yahoo, shares lower after reports confirmed the company has broken off talks over the sale of the asian assets, to china and japan, we have that coming up. much more on the developing story on yahoo. let's see if you can tell -- you can. i thought it would be more evident. around 1:00 eastern time they announced the e u finance miss
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ministers meeting was delayed or down-graded, that sent shares lower. down 63 points on the dow off the lows, down 75 at the low, now at 12,810. nasdaq down 15 points, down half a percent trading at 2916. s&p 500 down 8 points now at 1343. here is bob pisani to lay it out for us. when the word got out. >> many acts to the greek drama, this act is starting to come to a close. the reason is there is march 20th deadline to repay this bond, this 14.5 billion dollar bond. that is the drop dead date for this part of the drama. so they have to get together, the psi, they have to get together an agreement on the debt restructuring. >> it's done, right? >> at least for this part, this is why there is a little bit of a drama going on today. so it looks like the euro zone finance minister supposed to be
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set tomorrow going to nominally approve the $130 billion hur oh bail out is not going to happen. they will have a teleconference, discuss things again, we still don't have a letter of commitment from the greek leaders say they support their austerity measures, we don't have the firm psi deal, we still don't have all the details to put it together, it will go counsel to the wire and we may be past it already. >> the headline of yesterday, or two days ago that it was sunday that the greeks have agreed on the austerity package, that is an agreement, there was nothing binding, and that is what we're waiting on. >> theoretically it's binding but in the past greek leaders have not implemented laws that they have enacted to go ahead with it. >> whether or not it's enough, eu finance ministers had not gotten enough documentation to tell them they actually had achieved all the mettics they were going after. >> one of the party leaders said
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sunday night that he wanted people to vote for this in the hopes later on they might be able to renegotiate it. that was the most e-mailed comment, that does not make the european leaders more trustful of the greeks. the new drop-dead date, march 1st, another summit meeting, this will be discussed. there may be a euro zone finance minister meeting next week as well. here's the bottom line, loob loa little toppy, most of the big groups, materials and financial, energy all had been leaders since the beginning of the year, that has been rolling over in the last couple days. >> thank you, bob, we'll watch. break down the movers and shakers. brian shachman. >> we were headed toward 100 points but we're not. in terms of leadership, hewlitt
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packard, financials are weak, dupont down 2%. david faber confirming talks breaking down over assets in yahoo. down 5%. other red, masco, first solar down 7 pairs. citi group down 3%. materials week, u.s. steel, down 5%. consumer names getting hit, sonic an example, i put it up there because i like their desserts. in terms of the s&p on top, hasbro 7%, guidance, that is why it's up. fidelity national big dividend,
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micron and netflix up. >> do they have lime-ade at sonic? >> their desserts are fantastic. >> good stuff. i know where the shactmans are going tone. >> happy valentine's day. >> treasury partners on the rise especially after the eu announcement but the january retail sales numbers didn't help the mood. rick santelli has details tchlt. >> before we go to the long where you can see the buying, something strange happened after the january fed meeting, look at august 1st start day on two year note yield, rising ever since, i know it's on the south side of operation twist but about ready to break out of the long term rain, pay close attention. if we look at what is going on in other parts of the curve, i think a ten year note, two week charts especially important, bill said we were looking at higher price, indeed you can see
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that yields have fallen, more than one week and one day low yield should we close here around s1.92, we held at 2.08. a two day shart says it all, we are on our way to 133, we're under 1.31 is some of that kicking the can is taking the toll on the euro currency. if you open it up to december 1st you can see we're about ready to close at 11, we haven't closed that for the entire month of february. bill, maria, back to you. >> thank you, rick. rick santelli. market digesting the data. moody's warning for the downgrades for several countries as well. the news that yahoo's attempt to sell alibaba off has been the surprise news. sue herrera, john fort following
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developments. simon h oftenbs, what can you tell us about the news it's actually breaking off the talks to sell the asian assets to alibaba. >> the talks have been called off not to say some kind of arrangement won't be reached, when i was talking to folks who were close to the negotiations here they were saying they expected them to go on for another month anyway. the issue is we're in a lame duck session of yahoo's board with several members planning not to stand for reelection and trust is frayed between the two sides, unclear whether they will be able to get much done right now. >> stock is down 5.5%. sue, the rest of the market look at quiet volume. economic data digested, i saw you and bill yesterday talk about what the impact has pen to the markets year-to-date, the market is up so much in 2012. >> i think that is true, maria, also a lot of the sideline money
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came in the market in the early part of the year, now everybody is waiting to see exactly how the situation in greece and for that matter the rest of europe unfolds. in addition you have tensions in the middle east, we talked to richard madigan about that on power lunch, there are a lot of cross currents in the market and economic data is looking a little bit better but i don't think anybody would say we're completely out of the woods right now. number of traders we talked to yesterday and also today say if you have decent profits in the market, take a rest, take money off the table you will have opportunities to get in the market again. >> you have to wonder what it that will pull the institution of the individual investor back in the market. what is the catalyst at this point? sure we have better and strong earnings, but with all the insert ti -- uncertainties. >> i'm not sure what the all clear would look like. maybe simon would address that. i think time will heals the wounds from the financial crisis down the road. >> i think we have the exact po
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sit of all clear coming from europe. we had a meeting of the coalition government in greece, and it would happen that from that today, importantly the man that may be the next prime minister of greece, has refused to sign the documentation that was demanded by the rest of the euro zone that he would continue us austerity. they were supposed to sign off, or starting that process that would lead to their debts being paid at the end of march. now we have a crunch, tomorrow they really need to announce on their conference call which will take place instead they are starting the terms of the private sector greek swap, the debt swap. if that doesn't start tomorrow mari maria, the end of the time frame they can get it through before march, that was a pre-cursor to
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getting the money out. a very power full game on the way that if they get it wrong, could have very serious consequences for confidence in the markets. >> simon, i don't know what you're hearing, everyone i speak to is expecting greece to default. the question is will it be orderly or not. >> exactly. >> clear think they can't come to an agreement what the implications are of the austerity and actually getting the money. the dead line is looming, march 22nd, what do you think, do they default or we get dislocation in the market? >> the assumption in the market they get their money in march and we have an orderly default. what is happening now may mean they do not get the money in march and greece cannot pay their bills and there is a disorderly default. >> that is what the bond market is telling you. the bond market in the 30 year and 10 years is telling you that they think it will be a less than orderly -- >> at the moment the belief is
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still there is confidence in the markets enough that it won't spill over in the italian or spanish markets. >> that is the wild card. if the perception of the market, bill, is that okay this is the way european leaders approach this, no bail outs, no aig-style bail outs just default if you can't pay your bills, then the credibility of the bonds of portugal, spain and italy come under scrutiny. >> we are trying to not get the lehman model, they are trying to make it as orderly as possible. >> have you noticed how attentive all the male traders have been? we have a special guest ringing the close egg bell -- closing bell. >> 48 minutes left in the trading day. the dow down 53 points. >> more social networks. zynga, should you be buying
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their stock? we have a stock brawl. >> s&p 500 up 7% is it time to take profits overall right now? we'll look at both side of the issue coming up. peter krauss explaining why the volcker rule could hurt investors. >> actively traded stocks at the new york stock ix change. b of a down 3%, citi group, financials are among the weak links. you're watching cnbc first in business world wide, happy valentine's day everybody. [ male announcer ] the draw of the past is a powerful thing. but we couldn't simply repeat history. we had to create it. introducing the 2013 lexus gs, with leading-edge safety technology, like available blind spot monitor... [ tires screech ] ...night view... and heads-up display.
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they were up, sales were up less than expected. the dow jones pacing second losing session in three, bouncing off the lows hit about 2:30, du pont, alcoa, bank of amere character jp morgan chase losing ground. >> zynga is set to report earnings after the bell. julia joins us with a preview. >> this is zynga's first report as a public company, the social media player is expected to report earnings of 3 cents on $301 million of revenue. the stock is trading higher as wall street expects surging growth over the year ago quarter heading in earnings the stock has been fitted from a licensing agreement with hasbro it signed just last week. in the spotlight today will be the company's efforts to
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diversify the revenue, not so reliant on a small percent of gamers and handful of games. we can expect plenty of questions about zynga's plan to become less reliant on facebook. analysts are sure to ex-trtrapoe what the numbers mean for facebook. bill, over to you. ahead of zynga's earnings, we have both sides on this debate on the stack brawl. on the bullish side, max is optimistic. in the bear ish camp, neutral is ben, analyst, thank you for joining us. ben, why would you only be neutral on a stock that is up 50% this year and tied to the most anticipated ipo in the history of the world? why are you only neutral on zynga right now?
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>> the stock has run quite a bit, a matter of valuation, this is not a bad guy, a lot of interesting things going on, just over valued at this level, the fundamentals will matter. >> you don't think earnings will meet expectations? >> the earnings are not the issue is can they grow in this multiple, we don't think they can. >> max, you're guard edly bull i ish. >> every asset has the price. we're excited for the business model we don't see reliance on the facebook platform as an impediment going forward, reduces the inter-dependence, people thought it was dependence, we saw in the s-1 filing from facebook it's mutually dependent situation, we like the model, the growth prospects and ability to grow back to a profit margin we have been seeing as we followed the company for over a year. we tend to think it is comfortably in a range between $14 and $15 a share, can grow in that with upside surprise more likely than down side
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disappointment. we acknowledge it's a hard company to understand. >> ben, i know some people who knock the company, worry they aren't hitching their wagon to that one wagon being facebook but they want to start their own social network, it will be tied to facebook but isn't that a diversification of sorts for the revenue stream? >> they can do a lot of things to move forward and improve margins and they will. the question what is is the value of the company. the company is a good company, they will diversify, they will move beyond being reliant on facebook, they can drive people on android, to their own website, the prob em too expensive and that is at the end of the day what we're supposed to do figure out how much they are worth. >> all things being equal, what do you think it's equal right now? >> what do i think what? >> how much do you think it should be selling for? >> $9, that is our price target, that makes sense. the market disagrees, but running up on no fund a mental
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news, excitement around facebook, understandable but just gotten too far ahead of itself. >> you would wait for it to come back to be that. max, what do you think zynga is worth right now? >> $9 would be a stretch valuation, we see it as a growth play, dominating a space, like the profit margins and virtual goods, been assisting facebook, in the next two to three years, a rich valuation but one that is likely growth tra jek dori makes reasonable for discussion and for trading. >> very good, ben and max, good see you thank you for joining us, we'll have the numbers after the closing bell rings around 4:00 eastern. >> the market down 70 points inching toward the lows, bill. >> can deere shares plow ahead? we'll break down the charts next in talking numbers. >> later whale watching we have
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times square to battery park at new york mercantile exchange. oil prices are flat on the session but natural gas is the real story in the energy complex, a surge of 4%. broke above the 20 day moving average, a lot of traders say it was a technical trade that caused the surge. shorts getting shaken out of their positions. in the metals complex you might think it was a lackluster day you look at gold until dollar terms. you can look at them in other currencies, euros and yen doing well and the money flowed in ets, particularly gold ets up 1.3 million dollars just so far this year, maria, a lot of money flowing in gold. >> watching that etf, on gold. less than an hour to go in the trading session, investors watching deere, as bill said earlier the machinery giant
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reports earnings after the bell tomorrow. the stock has moved on earnings news, 7% over the last three quarts. do you want to be invested in deere, on the technical side, abigail back with us, on the fundamental side of the story, robert mccarthy covers the name for rw baird. thank you for joining us. abigail, you have been looking at the chart of deere, what does it tell us? >> when we look at the near-term of deere shares have room to run toward the upside on a confirmed bullish inverse head and shoulder patterns. carries a target of 98. supporting that is an ascending triangle, trying to confirm, it looks like deere could run 10% in the near-term lirking in the background are bearish signals, 50 day moving average through a sagging 2 hunz day moving average, that is a weak golden
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cross, second when we look at the longer term weekly chart, shares of deere, if they pop on earnings will trade in potential double top pattern that supports confirmed bearish wedge pattern. talking numbers on the pattern, a target of 35, another extreme target, 50% decline, rather than taking that target too seriously the bigger takeaway the longer term risks really overshadow any near term reward. >> near term it could have a pop, long term going lower? >> yes. >> rob, what is the company's chart or fundamentals tell you, shares up 14%, what is behind the rally? >> i think investors have become more confident about sustainability of the u.s. economic recovery, machinery stocks are one of the most
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econom economically sensitive groups. >> this is a stock you want to own? >> because we have seen in the market, we have seen large equipment sales to production agriculture reach levels we haven't seen in 15 years, i think there is growing concern about the sustainability of demand in the farm sector. >> leave it there, good to have you on the program, thank you so much. abigail, great to see you. bill, over to you. maria heading toward the close. with the dow now down 74 points and another leg lower, stocks are up big so far this year but are the markets getting up for a big pullback? experts weigh in. as we head to the break here is how each member of the dow has been trading so far today. back after this.
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concerned the greeks won't be able to deliver on the terms they have demanded as part that $130 billion bail-out package. let's call it that. things are in flux and uncertain. the markets look toppy, s&p near five day lows, euro near five-day low. lowest number of new highs in a long time. so the big leadership groups, material stocks, financials, technology stocks all that led since the beginning of the year have been the weakest in the last couple days and again they are the ones looking the most toppy right now. guys, back to you. bob, thank you so much. as you just mentioned the market is under pressure as we approach the final stretch. 30 minutes until the closing bell sounds. the weaker than expected u.s. sales number on top of the delayed eu finance minister news, hurt the market. investors are rethinking the rally, one of our next guest is optimist tk.
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today raising trading range for st. and p 500. >> should investors took mon fee to work or take profits? john manley at wells fargo and john at gfi group. good to see you both. if we knew how the greek drama would unfold we would know whether to put more money to work or take profits, right? >> tragedy or comedy, one or the other. >> that is calling the shots again. >> it's sort of misdirecting people's attention, should be focused on other things. once this is fixed one way or the other, we have other things to worry about. i think we work through them. >> you're the one that raised the target. >> we brought it up to 1375, was 1350. i think probably more the upper end of a trading range but longer term it does work out. >> what are you doing in this environment, john, when you see the red flags? >> we said last week we were taking greeks off the table can
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expected the vote to go well, we think the ltro compressed spreads and bring those down, greece is on the back burner for us, will be a concern but being the size of los angeles, in terms of population and the budget is about as big as philadelphia the global effects of that default is not going to impact what we're going to do. we think actually the levels 1350 you raise yours to 1375, 1400 is where the street is, we're at 1350 and it's february -- >> 14th. valentine's day i wouldn't forget that. >> those things will have to be raised quite soon. and this week we have a muted response because option expiration is on friday. a lot of of big strikes in play right now. the s&p is sitting at 1350, after that option expiration, after some of the reports of troika and other events we think
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we will start to go higher. >> as you raise your target -- >> we did it a couple days ago, 1350 is up to 1375. >> did you change the mix of what you would be buying? >> a few weeks ago, we added, took industrile yeahs down, i think financials will play out, we like technology and het care. >> what do you want to avoid? john you mentioned something important the ltr. the lending facility that the ecb put in place, that did remove funding issues for the european banks. for three years. would you buy in that or do you want to aindividual that group still zm. >> i think one of the things that is helping the european banks or will help they did away with the short selling ban in europe. country by country is tarting to decrease short selling bans, seeing more and more money come in those stocks. and on the other side you have the fact they did take the ltro
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did take some of the risk off the table that was the fact everybody was concerned about european banks because they were holding a lot of stock on paper if there won't be any default in italy, spain or some of the other countries, those banks balance sheets won't be impacted. >> you would buy those banks if there is no default? >> no, i think the banks are safe now. because of what the ecb did. >> last year a trader's dream, because of the volatility, do you expect it to return? >> as we get toward the election, a lot of elections around the world, volatile lee will pick up a little bit. new york times has a different lead, on the republican side every day, santorum, gingrich, romney, until we get a republican candidate which i expect by the summer, could happen after we get to super tuesday, once we get to super tuesday, things will calm down. >> thank you for joining us.
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john manley see new 15 minutes. >> thank you, guys. in the final stretch, 20 minutes until the closing bell sounds, a market down. >> get ready to trade the close, find out why the next guest says investors should be staying long, the u.s. dollar, the ultimate safe haven right now. >> after the bell the s&p 500 falling from 1350 level, we'll show you what history says that level could be hard to hold on to. >> if you first, a look at some of the stand-up performers among the s an p 500 stocks today. we're back after this.
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on the down day there are a few stocks getting quite a bit of love. express strips, couple concerns that maybe acquisition of medco would not be approved by the ftc now the feeling is maybe it will the stock is back at five month high. among the best gainers. also in terms of relationships, possible breakup, talks between yahoo and alibaba have broken up you can see what happened with the stock this afternoon, fell off of a cliff. investors very concerned about that. >> lundberg new highs as we have a down day on the nasdaq, apple set to close about $500 for the second day in a row. ulta the rival to sephora. >> we're 20 minutes away from the closing bell, a quick market
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check on nasdaq. composite giving back some of yesterday's 26 point gain, volume on the light side today. the nasdaq down 10.5 points, that is off the worst levels which was down 20. cboe climbing as stocks, take out the vics, up 7.5%. settled above 20 on friday, first time that happened since mid-january. over to you b bill. market is coming back, maria. two weeks ago paul richard said buy the dollar, yen, target of 78, we hit that and more as you can see, what do do you take profits or keep this trade going here? and what about euro dollar right now, as it continues? paul richards will talk about how to trade it. bottom line you like the dollar. >> i do, bill. the dollar yen trade works, boj surprised us overnight, inflation at 1%, increases assets by 10 trillion yen.
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target inflation at 1%, average minus point 3%. for my money, i think they will tie and dollar yen trades above 80. >> hang on to that one. now what about the euro dollar situation, 1.30 as it continues to move lower because what is going on in athens and brussels, what is your trade there? >> i think greece is not going away, bill. look, the eu ministers are very frustrated with the politicians in agregreece. i think the market has greek fatigue. you have to be long the dollar. when you see uncertainty u.s. dollar is the place to be, you have a fed you can trust, economic growth, you have political stability. that is where i would want to have my money the dollar is the safest place for money. the euro is going to steadily take out 1.30 and head over
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toward 1.28. >> 1.28 you said? >> that would be my target for the next two to three weeks. regardless of the successful ltro the market is getting fatigued with europe. >> as a trader you have to anticipate what could happen, i'm not saying it will, we don't want to it happen what if there is a disorderly default there, what could you see doing with the euro dollar? >> the market is starting to prize that, i think the market is realizing social unrest could lead to say 50-50 chance of withdrawal of greece from the euro. who knows, by year end next year, i don't know. now that the market is factors, if that were to occur the break-up could mean 1.15 to 1.18 on the euro, i think by the time they get to that point it would be more orderly than perhaps the market is thinking now. still it would be a sub 1.20 move. >> good to see you maul -- paul. >> what is the hoopla?
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>> let's see what it is. >> somebody is ringing the closing bell i forget. >> you want to tell everybody? >> i'm not. >> take a short break then we'll tell you who is running the closing bell. the market is coming back, little excitement in the room, down about 30 points on the dow. february has broken the hearts of investors historically, stocks that tend to show investors love during the mon. take a look at the major currencies and how they are trading, you're watching the "closing bell" we're back in 2:00 time.
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out of agent lathens, the leadet be the next greek prime minister is bowing to pressure from the international community, samaras will sign a letter tomorrow that will insure that greece continues with austerity after the election. one of the two major pre-conditions for tomorrow, those euro zone finance ministers hopefully signing off on a, the public sector -- private sector debt swap and secondly, moving toward 130 billion euros or thereabouts toward greece and paying of those bills potentially at the end of march, maria. >> simon, thank you so much. i'm coming to you from the post of the new york stock exchange we are at the post of the gap. gap stores, the retail he seeing high volume, jumping in volume after an upgrade from citigroup. citi raising the rating from buy to neutral. now going up to 26 up from 24. the analysts there is expecting
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the gap to top expectations. calls for 16% growth this year, in revenue, the analyst says it's benefits from a shift in its sourcing strategy, lean year inventories, ample cash to support another year of aggressive stock buy-backs at the gap. the volume is about seven million shares, volume of ten million. much heavier. company is posting fourth quarter earnings next week, a lot of action ahead of the numbers. stock posted modest gains over the last year running well ahead of aeropostale one of the competitors, lagging behind tgx companies on the gap. bill, over to you. maria, thank you. february has historically been a bad month for investors in equities, but on this valentine's day, we dug up stocks that are apparently every investor can love, courtney reagan has details for us. >> february may be a stellar month for couples, it hasn't
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been as kind to bullish investors, february is the second worst month for the dow and the s&p 500 and fourth for the nasdaq. it isn't a total heart breaker, our team did digging found stocks worth swooning over. impressive returns over the last five februarys, cf industries, priceline, yahoo taking hit today for the last five februarys, they gained more than 14%. if investing in love is more your style, we have ideas there, too. the national retail federation forecasts 17.6 billion dollars will be spent today. how do you trade it? if you went in on more than the $4 billion expected to be spent on jewelry, blue nile and tiffany are options. if candy is your style, hershey, shares down 2% year-to-date, trending higher for the week. 3.5 billion dollars expected to
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be spent on an evening out, opentable.com could be a winner, up 14% year-to-date. some pressures, cocoa prices could hurt hershey, prices of diamonds are expected to rise potentially cutting in margins for tiffany. bill, back to you. courtney, thank you. while you were talking the markets were coming back, the dow almost turned positive, coming back a little bit. later on the closing bell top retail analysts give is their picks for valentine's day's winners and losers. when we come back, a crazy closing countdown as we try to recap what has been a volatile day. why the volcker rule would drive up costs. all that coming you. first how the major averages are trading, try to go neutral you're watching cnbc, first in
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. >> coming up on the 4:00 mark, this is why i watch the markets to tell me if something significant and what has been going on negotiations continue between athens and bruissels we may still get an e u finance ministers meeting after all. as we stood here we were thinking this would be the second time stocks are lower. probably going to happen but not by much this time around. and the euro fell to a 1.30 something for a time but that has now come back above that level, 1.31 as we watch the negotiations continue at this hour. look at the euro right now, it comes back, as we learn about the new concessions simon hobs told us about to try to win the approval of the eu finance ministers and maybe get that meeting off the ground tomorrow, we'll wait and see the market is hopeful. for a time the yield on the 30
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year bond had come down to about the 3.07 range, now 3.08, yield come back up, not as much of a safe haven. price of crude oil was down $100, pinned there now it has come back and at $101.08. that spread there for between crude and wti was widening, let's see, yesterday was at 17 plus, still right about where it was yesterday at this time. price of gold coming down, it was down, it was at 1718, now back to 182 -- 1721. vics was above 20, now below that level as well, waiting for zynga's report earning after the bell this will be the first report after coming public in december up 50% and right now up
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another 7%, trading. john manley, we had the kind of market yesterday the utilities were the worst performers among the s&p sectors, among the best today. sort of on a day-to-day basis, erratic trading. >> nobody knows what they want but stocks really have held in there. they haven't gone down after moving up an awful lot i have to say that is impressive. >> you raised your target i don't want to make too much of that, it what's nt a whole lot but people's risk appetites, this is something we talk about risk appetites are growing, do you think that will continue here? >> i'm not sure in a straight line, there are all sorts of things to worry about. i like it when we worry about a lot of things, i like it when a lot of things can go wrong. the market has to act a disciplinarian, anybody lags getting things done, the market will enforce it. i'm impressed. >> what is the riskiest sector you like? >> that is a good point, probably would be health care at
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this point in time i think a great story, longer term, you always have the politics in an election year. >> good to see you. >> bob pisani, we have zynga, more importantly the people ringing the closing bell. >> the sports illustrated swim suit models are here. there is a huge crowd. >> i have no idea why. i can't figure it out. >> you will see them in a few minutes. they are lovely people. zynga would be out with the earnings, first one after the report up 7% in anticipation right now. >> very interesting business because these companies have been coming out in the last few months, new ipo's by and large have been fair. the bottom line is a lot of these companies have metrics that say they can improve. thank you, bob pisani. if you don't recognize them, they are overdressed compared how
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