tv Street Signs CNBC February 28, 2012 2:00pm-3:00pm EST
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thought we'd look at the s&p and the shanghai composite over the past five years. both are down. but the shanghai by more. that will do it for "power lunch." thanks for joining us. >> see you tomorrow. "street signs" begins right now. have a great afternoon. welcome to "street signs," everybody. i'm mandy drury. brian is on assignment half a world away. today is all about the hurdles on the street. stocks breaking through a couple of key technical levels earlier. but the question now is, can they close at these lofty heights and can they keep on climbing? a tale of the tape is coming your way. apple at a new all-time high. its market cap closing in on $500 billion. we'll put that number in perspective and tell you if now is the time to i-sell the i-economy. and as oil sits around $108 a barrel, more investors want to know how to add black gold to their portfolio.
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we'll ask if this really is a good idea for the average joe. but first, let's check what else is happening at this hour. here's courtney reagan. >> thank you, mandy. here's what else we're watching at this hour. microsoft and others, reportedly complaining to the eu about google's social networking service, google police. the complaint so far is informal but could prompt an ongoing investigation. and tom lasorda will take the helm at fisker. and bank earnings hit a five-year high in 2011. it shows a drop in the number of troubled banks during the fourth quarter. mandy, back over to you. >> thank you very much. call them hurdles to new highs. the key closing levels on the dow and the s&p 500 that are proving really, really tough to crack and hold. stocks giving up most of their gains today, back below 13,000 already.
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1, 1,370 on the s&p 500, the last close on that was on june 59, 2008. traders are looking for the s&p 500 to close above 1,370. for the dow, though, it's all about the close above 13,000. since passing that level a week ago on an intraday basis, the dow's traded above 13k a number of times, including today. but we're still waiting for the dow to close above 13,000. yesterday on the show, if you were watching, hopefully you were, we showed you some big, bold calls from both warren buffett and jeremy siegel. james reiterates his forecast for the market -- the dow is going to 2,000 by the end of this year. do we finally close today above dow 13k? let's bring in tim holland and
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also our very own bob pisani. tim, 17,000 by the end of next year wouz jereas jeremy siegel'. does 20,000 sound reasonable or crazy to you? >> well, i'm certainly not going to see 20,000 and then raise you. but, mandy, when we look at what we see at the company level and at tamro capital we're stock pickers. it's come in better than expected. companies with great balance sheets, profitability moving higher. and demand is pretty good. if the market follows fundamentals, the expectation is you'll continue to see the broader averages move up. >> but we can't even get to close above 13,000. what's going on there? is there a real commitment phobia out there on the street to actually making certain levels that would give us the catalyst to move to whatever, whether it be 14,000 or 17,000? >> sure. it's sort of funny to me.
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people get fixated on big, round numbers. i remember way back in 2000 when we were trying to get to dow 10,000 and the former head of the nyse, dick grasso, was handing out dow 10,000 hats. we finally got through that. we had a nice move up and two bear markets. i look at that as a market of stocks, not a stock market. the broader average will get above 13,000. the s&p will keep moving higher and hopefully we'll go up from there. >> bob, you are down on the street. what are people telling you about why 13,000 seems to be such a strong glass ceiling? >> i'm not sure it is a glass ceiling. up 9% almost in the s&p 500, close to that for the dow so far this year. we've been up every single day practically since the beginning of the year. i'm not sure if 13,000 is such a magical number. i agree with your guest there that overall the economy is improving. i guess what i would say is corporate america is not really hiring that much. that's really holding it back. what's it going to take to get
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people to get corporate america out there and start bringing people back under the workforce? >> i think that's a great question, bob. i think it comes back to that sort of great umbrella term which is confidence. companies have the cash, the profitability is there. but are they going to just spend it on buybacks and dividends or are they going to invest in they're businesses and hire people again? i think as confidence hopefully continues to gain strength, you'll see that. interestingly enough, we own a company in our equity fund called cintas which is the largest uniform supplier in the country by far. they have more than 30% market share and they just reported sales that were up 70%, earnings that were up 30%. and they raised guidance for the year. and you can't get a better canary in the coal mine. uniforms are driven by job growth and hiring. they're seeing pretty good strength, especially in the energy patch, which gets back to unconventional e & p work, which
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we think is a fantastic forecast for the economy. >> i'd like to know. we've been watching the global market rally ging on. how much of that is due to improving snerngs how much of it is due to the fact that we have accommodative and easing central banks around the world? the b.o.e., the ecb, the fed, i could name lots of central banks doing that. >> the answer is both are a factor. but look at the u.s. stock market versus the european stock market, u.s. stock market outperforms last year by a wide margin. most of the european markets. it is continuing to generally outperform the european markets as well. we have accommodative monetary policy here. we're outperforming because the u.s. economy is looking better than the european economy. >> it's all relative. tim and bob, thank you so much for joining us today. warren buffett telling cnbc that single family homes are a
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very attractive investment. and if he's right, the latest pricing numbers showing that houses were even more of a bargain as we closed out 2011. december's s&p/case-shiller index dropping 4% year over year. and now some bidders are more popular. but not robert shiller who joined the "squawk on the street" gang this morning. have a listen. >> i think the big thing is we have a lot of good news. but it's not strong good news. permits are up but they're still at very low levels. so my guess is that it won't be dramatic. the next year, it will look kind of the same. >> let's get reaction to shiller's comments and the health of the housing market from our very own rick santelli. you follow the data. should we be cautious and say it's going to be more of the same? and the i guess the question is, how many years are we going to have to see more of the same? >> i like that quote. when i look to find the theoretical quantitative side of
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housing, he's the gentleman i would look to. but when i want to know the practical aspects of housing, i think my expert would be sam zell. a couple of weeks ago on cnbc, here's what sam zell -- one thing that stuck in my mind. he said, had we allowed the market to clear without trying to stop reality, we would have had a healthy housing market today. that's my exhibit one, mandy. my exhibit two would be 1.91 ten-year. we've managed interest rates down very low but yet it seems though every program the government tries to put in place to aid housing does anything but. so i think that mr. shiller's comments are probably optimis c optimistic. i think it could be longer than that. but i think the real issue is, warren buffett said if he could, he would buy all these houses. he's a billionaire. why can't he and why doesn't he? if there was money to really be made, i think he'd be doing it. >> pricing certainly shows it's a buyer's market. if you've got billions of
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dollars, go and buy. another big fail for two education stocks. you guessed it. it's herb. he's here with a double "disaster du jour." >> you have the entire group getting whacked today. but the post irchildren for that would be apollo group. giving forecasts for new enrollment on the case of apollo is much less than the street expected. and there are investigations going on. you can see thth from the stocks, investors don't like it. i said the stock would go through a hard reset. it's going through that hard reset. some analysts are continuing to be somewhat bullish on apollo. >> really, really tough slides
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there in apollo and career education. coming up next, some people just can't get i enough of apple. but as the stock hits another all-time high, is it time to take profits and get out? domino's shares are up 12% and over 120% within just the last year alone. jim cramer will join us to give us his spicy take and we promise to not make the hole affair too chee cheesy. tdd# 1-800-345-2550 there are atm fees. tdd# 1-800-345-2550 account service fees. tdd# 1-800-345-2550 and the most dreaded fees of all, hidden fees. tdd# 1-800-345-2550 at charles schwab, you won't pay fees on top of fees. tdd# 1-800-345-2550 no monthly account service fees. tdd# 1-800-345-2550 no hidden fees. tdd# 1-800-345-2550 and we rebate every atm fee. tdd# 1-800-345-2550 so talk to chuck tdd# 1-800-345-2550 because when it comes to talking, there is no fee.
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more than 200 people have been caught trying to smuggle ipads from hong kong into china. one guy was busted with 80 phones strapped to his waist. the iphone 4s is $125 cheaper in hong kong. they've seized over 3,000 cell phones. back here in america, it's an i-sale. best buy cutting the price of the ipad 2 by 50 bucks in an effort to get rid of inventory ahead of the new generation. all this as the stock is hitting yet another all-time high. how much higher can it go? we're sitting at $533. sit time for a little profit-taking on apple. joining us, tony sacinagi and jose lambert. tony, time to take profits and run? >> i think apple's a great, long-term core holding.
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and certainly the stock has had a tremendous run recently. and it's a possibility that certainly with the ipad 3 coming out and an expected dividend to be announced at some point in the next couple of months potentially that the stock could trade sideways for a while. but i would caution investors. apple's returns are very concentrated. if you look over the last couple of years, the maturity of the outperformance has occurred in very small periods. and you don't want to miss them. so i would encourage investors, given what a great secular story this is, to stay long the stock. >> it's really hard to find someone who's bearish on apple. i'm sure there's a bear case out there. unfortunately, i have another bull here. you have a buy and a target of $635. why? >> yeah, some of the reasons that tony mentioned. there's going to be everything -- we think competition is benign. we think there is one way to the estimates. by the time we get towards the end of the year, probably
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looking at $50 per share this year's earnings and $60 per share for next year's earnings. there could be dividends and share buybacks. the combination should get us closer to our price target. >> talking of dividends. i'm wondering how much of your price target of $600 with an outperform rating is based on the fact that you do mrooef there will be a dividend, which might bring in all the people who love hunting for dividends. >> absolutely, i think the dividend has actually -- or speculation about a dividend has actually been a catalyst for the stock. part of the run was great earnings run that apple released in january. part of it is that the company has been pretty forthright in saying, we're in active discussions about our cash. so i do think that the stock is bringing in incremental investors who are more yield focused and more value focused. that's a contributing factor. but nevertheless, i think this is a great secular story. it's still a very reasonable valuation, even at today's price, $530 or so.
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the it's a $4235 enterprise value. they're going to generate $45 plus in free cash flow this year. you're talking about a stock trading at about ten times its free cash flow, which is well below a market multiple. >> they certainly can't sit still because there are others snapping at its heels. but is there a case to split the stock? >> yeah, i think there is a potential for splitting the stock. apple's done that in the past. it's not nothing new for them. that's a possibility. and it will help in the retail participation into the stock when people look at $500 or $600 on the stock, they're hesitant to buy. but if it's $200 or $100 stock, you would see retail participation go up. >> tony, i know that you've written about this and it's potentially one of the bearish arguments for apple stock. i know they get a percentage of their revenue from content providers via itunes. but more publishers are using html 5 to produce their
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contents, bypassing the need to pay a taller fee to apple. what do you think about that? >> absolutely. i think four and five years from now, you may see html 5-based applications as being more prevalent. that said, the contribution that apple gets today from content providers is very modest. we're talking literally less than 1% of earnings. so from a financial perspective, it's not that big a deal. i think the worry would be if application dividers didn't write on apple's platform, it might make it easier for consumers to choose another platform relative to apple's platform today. >> got it. thank you so much for joining us today. apple's market cap closing in now on $500 billion. just how big is that? let's bring in our friend josh brown of fusion analytics. you've been keeping track of
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this on a blog called "things apple is worth more than." what else is out there? >> apple is worth -- the superlatives are endless. this is a company that's just so gigantic and even still 20% of the market cap is cash. but apple is bigger than the nfl times ten. apple is -- it's worth more than all the money spent to build the u.s. interstate highway system. worth all the entire electricity market in the u.s. we started this six months ago. the market cap was only $350 billion then. we've had to update the tagline with each passing week. but it really is astounding, the proportions we're talking about here. >> is it getting too big to fail, to use that well-used phrase? people are starting to say, surely at this stage, it's just getting a little too big for its boots. >> to me, that's the interesting part of it from an investing standpoint because people
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forget -- or they're not always aware of the fact that apple now constitutes, i think, 11% of the s&p, and maybe even bigger in the nasdaq qqqs. but the worry there is if they have a misstep and the stock has a normal correction of 5% or 6%, that could have an you don't do sized impact on these major broad average that is it's a part of just because of mechanics. and that could create some kind of a panic, especially given what this market's done. so i definitely think it bears watching. it's whimsical to list all the things that apple's bigger than. but it's also something that everyone should be aware of because of the way the indices are constructed and how big apple is inside of them. >> absolutely. i'm sure there are many people waiting for a dip or a correction to get in. thanks so much, josh. let's take a quick look at crude, extending its weakness, falling below $107 a barrel. having its worst two-day drop in six weeks. still a very lofty levels. just ahead on "street signs," breakfast, lunch and
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cramer? how pancakes can stack up the profits in your portfolio and why cramer's new nickname might be mr. pepperoni. plus, the newest member of the 600 club priceline now trading over $630 a share and up more than 630%. "street signs" is back in two minutes. "why did i roll over my i.r.a. to scottrade?" "for starters, it didn't cost me anything." "and i got a one-hundred dollar cash bonus for rolling over by april 16th." "i like bonuses." "plus at scottrade, there are thousands of commission-free investments." "and if i need help, i can find it online, by phone or at one of over five-hundred scottrade locations." "it's why more investors with i.r.a.s are saying.."
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are you hungry? i am. how about some pizza and pancakes? first up, it's national pancake day. it's the seventh annual celebration of flapjacks. ihop is giving away free short stacks in exchange for a small donation to charity. meantime, investors have been hungry for ihop's parent company. the stock is up 25% year to date. not in the mood for pancakes? maybe you'd like some pizza. domino's beating estimates as same-store sales rose. the stock hitting a fresh multi-year high, up 8% so far this year. in fact, the domino's ceo is going to be with the madman tonight on "mad money." the madman is himself here with us. >> thank you, mandy. >> i don't think you're mad at all.
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what are you going to ask him? >> first of all, let's set it up. this guy, patrick doyle, came in -- he first approached me. and he said, what do you think of domino's? and i said, domino's? your pizza tastes like cardboard. and he said, i agree! he said, we're not doing our job. he has created a juggernaut based on customer retention and better-tasting pizza. so i'm going to ask him how the new iterations are doing but mostly how are they able to continue these numbers? what a remarkable performance. they're talking about doing recapitalization. they are not going to be able to speak about dividends. this, in keeping with your previous segment, is a technology stock. >> a technology stock? >> it's a technology stock. >> in what way? >> they have the best apple app. it's now 6% of their sales.
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have you ever -- when you order domino's, do you do it through the phone or do you do it online? >> i've never ordered domino's. i live in new york city. there's a slice on every corner. >> so what? doesn't taste as good as domino's. me and the kids, we love domino's. we just love it. one of the reasons we love it is the app. you don't have to speak to anybody. if you get the wrong pizza, it's your own darn fault. >> and since the cardboard conversation, does it taste a lot better and have you tried it? >> it's so much better. and the cheesy bread is good. you can only have a half a one before you have to gorge and purge, frankly. but when i say it's a technology stop, they've reduced labor costs dramatically. >> that's tonight on "mad money." >> he's the greatest, patty doyle. he's a good italian -- not! >> doyle? italian?
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what about the sports trends? what's going on there? >> why are we stalled? because of oil. how do we know it's oil? you take a look at the transports. the transports are the worst combination of airlines and then the downfall of coal, coal shipped by rail, almost all the commodities are shipped by rail. there's a lot of dow theory people saying, i'm not touching that dow if we don't start getting transport confirmation. we don't have it. >> we certainly don't have confirmation. do you think it's one of the reasons we can't get above 13k? >> yes. there's enough traditionalists out there who say, if i don't get a transport confirmation, i'm going to sell every time we get to 13k because it's not going to last without the transports. is that fanciful thinking? no, it's based on history. >> it is. and we're going to talk more about oil later on in the show in the perspective of whether or not the average joe should actually be buying the stuff, not an etf, not the stocks.
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but like the futures -- it's very -- we're going to talk about it. >> you can rent an oil tanker for $10,000 a day. sticking with the food theme for today's sunshine stock, up 3% after the price target was boosted, up to 50.72. coming up next, what does our favorite titan of technicals have to say about the dow 13k mark? we'll try to chart the course for your money after the break. and is there a storm front coming in solar stocks? one top analyst says you bet. he's going to join herb to tell us why. "street signs" is back in two. t. since 1894, ameriprise financial has been working hard for their clients' futures. never taking a bailout. helping generations achieve dreams. buy homes. put their kids through college. retire how they want to. ameriprise. the strength of america's largest financial planning company. the heart of 10,000 advisors working with you, one-to-one.
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together, for your future. ♪ [ woman ] my boyfriend and i were going on vacation, so i used my citi thank you card to pick up some accessories. a new belt. some nylons. and what girl wouldn't need new shoes? we talked about getting a diamond. but with all the thank you points i've been earning... ♪ ...i flew us to the rock i really had in mind.
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thanks for sticking around on "street signs." it is "street talk" time. gunning for a dow 13k close for the first time since may 2008, it looked like a lot this morning. but we are giving up most of the gains from earlier today and under 13,000 as we speak. but the biggest story might be the s&p 500 flirting with a close above 1,370 level for the first time since june 2008. below that key mark right now. let's go inside the numbers. chart the stuff with scott redler.
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scotty, are we going to be able to do it today or tomorrow or in the near future? >> it feels like we keep knocking on that door. a big technological, psychological barrier, it takes a few times to get through it. the rally we've seen since october 4th or even since december 20th, at this point i don't think it's that important that we haven't been able to bust through it. but we keep knocking opt door, i do think we break through it and go higher this year. >> talking of your targets for this year, the last time you came on "street signs" was in december. you said for the year for the s&p, looking for 1,410, 1,440. do you think you're going to have to raise that? >> we might have to. we have to judge the action as we continue. there's been two major trends going along. one slide trend we've been following where we haven't tested the 50-day and the accelerated trend. everyone keeps calling for a market correction. nobody wants to jump in with what could be one of those down moves. what i'm watching is the ten-day
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moving average on the s&p. as long as we keep riding that, you can buy shallow dips. if we close below the ten-day, the next step basketball bwill . traders are getting paid. everyone wants to stay out of this market. i think you have to get in the market and you have to stay with it because we should see higher prices. i might have to up that 1,410, 1,440 price target. >> sounds like over the next three years, say, taking us up to 2015 if they buy the dips, they might be rewarded. you're looking for 1,700? >> two major technical patterns are in front of us. at 1,370, the bears say we could put in a minor double top. we want to see it get above it, close above it and stay above it for a while. if you recall back in 2007, we had two double tops in that 1,570. what we want to do is take out the first one and continue to judge the action. they're saying the s&p earnings,
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we're trading at a five-decade below average p/e. if we do what the fundamental analysts say and we hit 1.04 and get to the average p/e, that's 1,700. at this point in three years, 1,700 is doable. >> we're going to hold you accountable and get you back on in 2015. scott, thanks so much. we're keeping a very close eye on nasdaq 3000. we haven't seen this level, have we, since the year 2000? >> that's right. that seems to be the question. we saw the dow hit 13k. now the question is, can the nasdaq hit 3000? two main drivers helping the index today. apple and sixty stocks. it's outperforming the major indices. further collaboration being announced at that mobile world
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conference in barcelona between intel and micron, both stocks up better than 12% year to date. the deal calls for intel to sell its stake in two wafer factories and buy chips from the company. another chip stock to highlight as well is broadcom, on the rise on that ipad 3 talk. known to be one of the key suppliers for the iphone and the ipad. bottom line, mandy, money continues to flow into tech. i'll make sure to bring out my pompoms when we hit 3000. >> get them ready. thanks a lot, seema. priceline is trading at highs not seen since july 1999. it's coming off a blowout fourth quarter at a 66% boost in its earnings. justin patterson joins us. justin, can it go even further than this? >> we think so. our price target was raised to $730 today. >> why?
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>> priceline has the best international exposure in the group. it grew about 78% last year. we think it can grow 30% over the next three years. >> it's got competitors like expedia and orbitz? >> priceline has done a good job securing the western europe market and extending its presence into asia and now latin america. if you look at a market like western europe, it's a lot more fragmented than the domestic market which is really chain dominated. priceline has a tremendous edge in terms of the number of hotels there. at the end of last quarter, priceline had 195,000 globally. that's multiples greater than any of its xet zblerz what are t -- >> what are the risks to your target? >> we saw pressure from thailand floods but priceline grew through it. europe is a little bit of a fear point right now given the sovereign debt issues. the company pointed out some
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issues in southern europe. but to date, none of that's really slowed down priceline. >> it's enjoyed a low cost structure, hasn't it? i'm wondering whether ewe see any volatility coming into that low cost structure? >> the interesting thing with priceline is it will grow 34% this year for eps. that's an investment year. priceline's actually spending a lot on i.t. infrastructure and sales and marketing. that's really an expense that should start to fade away a little bit come 2013. if you look at priceline's cost structure, the main expense is really online advertising. there's a lot of leverage in the model. >> so just to reiterate, your recommendation is outperform with a price target of # $30. justin, thank you very much for joining us today. viewer, be sure to catch cnbc's exclusive interview with the priceline ceo, jeffrey boyd. that's on "closing bell." shares of first solar trading higher ahead of its
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earnings release after today's close. but your next guest is putting a big sell call on the stock before the company reports. let's bring in gordon johnson. herb, i know you want to weigh in on this as well. this is a sector and a stock you follow very closely. but first of all, why sell before the earnings? >> there's two major issues. first solar pushed out the recognition of their big project from the first quarter to the second quarter. we think there's going to have a huge impact on q1 earnings. the street's at 81 cents. we think they're going to come in at 8 cents. they're idling 50% of their capacity at their facility which is a 500 megawatt facility. they have more fixed costs to spread over less revenues. that wasn't factored into guidance. we think they have to lower their -- >> this is interesting. you have a sell on the stock. but you actually had stepped to the side only, what, a month ago or so saying you didn't know what would happen? now you've come back, you have a $26 target on the stock. the stock was $180 not that long ago.
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$40 now and you're coming out ahead -- that's a gutsy call. >> it is. but december 14th, '11, they're a guidance call. the stock was down 29% over the past two months. everybody said, there's no way it could go lower. we said there was. they came out and look numbers from -- the stock was down 27% the next day. we think it's going to get pressured. >> do you think they can fix their problems? >> absolutely not. we think they lose money next year. without these big projects in their core business, they are losing money. i don't think the street is aware of that. >> in the group, where does this stand of being the best of the worst or the worst of the worst? >> unfortunately, i won't say they're the worst. but it just doesn't make sense right now -- >> and demand in germany is not what it was? >> the fit decision in germany
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was way worse than expected. >> is there no one getting it right? >> not right now, no. >> how much longer is this going to be the situation? >> i think you need to see prices go to cash costs because there's excess in this industry. >> gordon, thank you very much for joining us. gutsy call. still ahead, as the u.s. markets head to their best february since 1998, are the bears also losing their kung fu grip on the asian markets as well? plus, "street signs" alphabet soup. a look at stocks on the move brought to you by the letter "a." [ leanne ] appliance park has been here since the early 50s. my dad and grandfather spent their whole careers here. [ charlie ] we're the heartbeat of this place, the people on the line. we take pride in what we do. when that refrigerator ships out the door, it's us that work out here. [ michael ] we're on the forefront of revitalizing manufacturing.
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i'm bill griffeth here at the new york stock exchange. can the dow finally close above 13,000? we're on dow 13,000 watch again. plus, despite a huge run-up in technology stocks, silver lake's co-ceo glen hutchins tells us where he still sees big opportunities in the high-flying technology sector. and priceline.com's ceo jeffrey boyd tells us whether
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higher gasoline prices are a threat to the company's bottom line. we look forward to seeing you here from the new york stock exchange, our brand-new set on the floor of the big board coming up at the top of the hour on "closing bell." see you in a few minutes, mandy. >> thanks a lot, bill. let's take a look at what the u.s. markets are up to. beer below 13,000 again on the dow. 12,992 is the score right now. the nasdaq is up to 2,976. s&p 500 sitting at 1,368 again. the technical level to watch there is 1,370. we need to close above that. and check out asia, the nikkei, shanghai and the hang seng closing above. speaking of asia, guess who that is? that's our buddy, brian sullivan. he's an assignment. he's out in singapore at the global leadership conference for young business leaders, a group made up of 19,000 ceos from over 110 countries.
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i know that brian is going to try and interview every single one of them. in the meantime, today's "street signs" is brought to you by -- the letter "a." earlier it was all about apple, all about apollo. let's check out a few other "a" stocks on the move today. autozone, the ticker is azo. a very nice boost in same-store sales. keep an eye also on a123. the lithium battery maker reports next week. it's been a rough ride for the stimulus darling. the stock is down more than 70% over the last year. also check out al amera sciences. and then there is abbott labs trading at levels not seen since january of 2010. from sesame street to office space, that wasn't awkward at all, was it? in terms of a segway.
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office supply stocks are really soaring. courtney reagan, what's going on here? >> it's been a strong quarter for officemax and office depot. the street is anticipating similar fate for staples when its earnings are released tomorrow. the demand for office supplies is one of those economic indicators, improving labor conditions are getting credit for office supply retailers earnings strength. office depot shares are up significantly today. but that's just a small gain. remember, this stock trades at under $4. but shares of all three of those major office suppliers are higher today as a result and some are beginning to speculate the office supply retail market has begun to bottom. office depot up 63%. officemax up 30%. and staples gaining 14%. while many domestic factors do seem to be improving, challenges remain for the office supply retailers. the biggest which, weakening economic conditions in europe. we've heard it before.
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international sales account for 20% of staples' revenue and 30% for office depot's top line. >> remember the day when we all started using computers and things and everyone said, oh, my god, technology is going to eradicate the need for pens and paper? what is actually going on in that front? i don't know about you, but i print out more paper than ever before. i use and lose more pens than ever before. >> in a paperless world, we actually use a lot of paper still and a lot of pens. think about how many times you go to this printer and it's out of paper or toner. that's good for these office retailers. but it might not always be like that. the tablet could change that. that's one piece of technology that is a worry for some of these office supply retail zblerz how can an office depot, for example, pete compete with the likes of walmart or costco that was do it in bulk or do it cheaply? >> they're struggling with the consumers. if you're a consumer and you want paper and pens, it's often easier to go to walmart when you're picking up anything else. but for that business, for that
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"b"-to-"b" customer, these office retailers can deliver. that's an advantage they have. at least for now. might only be there for a couple of years. amazon is right an their tails. >> i always throw a stapler in with my bananas when i shop at walmart. getting in on black gold. with oil at $108 a barrel, is there a way to get your hands on a big old barrel of oil and stick it out in the back yard? the best way to trade it or not coming up next. "street signs" is back in two. ♪ oh! [ baby crying ] ♪ what started as a whisper ♪ every day, millions of people choose to do the right thing. ♪ slowly turned to a scream ♪ there's an insurance company that does that, too. liberty mutual insurance.
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as you know, today we've been talking a lot about apple. just to make sure the other stocks are not left out in the cold, let's check out exxon mobil, a company that is number two behind the tech giant. it is moving lower today, down about half a percent. crude moved lower today for a second day in a row. it's below $107 a barrel. let's bring in sharon eppers people are talking about profit taking in the crude market after the recent highs. do you feel that is what's going on?
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>> that's certainly part of it. when you look at the open interest and long positions in the market, the highest since may of last year, certainly have been a lot of bets that prices are going to go higher, so sell now. a lot of those folks are definitely taking profits. but you also have to learn what high prices mean for demand and impact on the global economy. i think a lot of people are thinking about what the consequences are going to do, particularly today when we got the data from mastercard spending polls, showing the demand in this country is down almost 7 #% from where it was a year ago. and that's as gasoline prices rose about 7 cents in the past week. so this is something that's really hurting the consumers, paying 11% more at the pump that you did a year ago, it's causing you to drive less. >> demand destruction of play, thank you very much, sharon, for setting that up. the question now is what is the best wayed to getteded inned onded oiled. weird talkeded gd manded lidded
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heerdedded from the moammar gadhafied and pop, the average investor perspective. number one, can the mom and pop investor play over. my biggest question is, at these levels, shoulded they be doing that. >> first, i guess it's really when you have apple and exxon in the same segment. this is really interesting. for the mom and pop for the longer term investor, can certainly look at the etf, uso. prices of wti stock may be challenged, $1020, as the summer months move forward. i think people are starting to feel it at the pump. mom and pop may be able to play the longer esl. >> it's one of the easiest way for the individual investor to play it. if you look at the past performance over the past four months, uso has been up 5% or 7%. the commodity has been up about
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12%. the etf is significantly underperformed. is there a way you can actually get your hands on oil futures? >> you can't take physical delivery if you're trading on the mercantile exchange. that's something where the local traders, physical brokers, they actually execute that. i think it's a little more unique. everybody talks about buying etfs, maybe buying the exxons of the world. if the crude prices are to move higher, and we think they will significantly move higher -- >> how much higher? >> i think $125 in wti. we can challenge the $150 level we saw in 2008. >> even with demand construction going on at these levels already? >> there's no supply to come into counterpoint with that. we'll have president obama now, no energy policy still on the table, mind you. let's talk about algae, and pond scum to -- it's something that is an intriguing idea. i am quite interested in it, but
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it's at least a decade away. es exxon is actually involved in the algae research. let's look at alternative energy. there is no clear substitute for crude oil in this country. i still think the hybrid policy for energy we have to explore in years to come. >> i want to be driving a pond scum car in the future. >> how do you wax that? that's interesting. >> yeah. i wonder whether, when mom and pops, when your friends, your uncle, auntie call you and say, hey, i can see crude prices going up, everybody seems to be making money hand over fist. how do i get in on that? does that signal a top? >> in some respects, yes. but in some respects, you can make the same argument with gold. many are saying the etf, in that shot to the moon, anded we are still trading to the moon with respect to gold.
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i think you can take jimmy carter economics and everybody might be able to wear a sweater in the winter, but the fact of the matter is, you need energy. it's certainly the vehicle at having a toyota prius effect in 2008, this year it will be the electric vehicle doing that. >> bottom line in terms of what you think, the mom and pop should buy, the oil etf, you mentioned potentially exxon mobil. what else is out there in terms of maybe stocks? >> i like apache. i think the natural gas liquids are something that is really interesting, because the economics of it are actually quite alluring when you see that. look at this morning, you had southwestern energy come out and they cut back their production, because natural gas prices are really too low. i think a lot more companies will be benefiting by diverse population. apache is a name to watch. >> thanks so much. thank you for joining us. coming up next, a tasty news
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in on the action. all the proceeds go to charity. and who doesn't want a mcnugget, 3-year-old manacnugget sitting the wall. microsoft, the best performing stock in the industrials as we speak. as jim mentioned earlier on in the show, transports might hold the key here. to close above that magic mark of 13,000. the transports are struggling just a shade today. we need confirmation and participation, is what jim was telling us a moment ago. also, priceline, the most dominant name of the day on the nasdaq # 00 and s&p. up over $14 a share on blockbuster earnings. microsoft is at a new 52-week high, too. with a fraction of the point from the critical closing level of 1370, as you can see, the s&p is just a fraction, we're not talking one
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