stay with it. >> doc. >> pandora. june 14 calls buying them aggressively today. >> what do you expect from earnings tomorrow? >> i think they'll be good based on the buying today. >> that does it for us. don't catch more at 5:00. follow me on twitter. follow "power lunch" and it starts right now. scott, thank you very much. three hours to go in the trading day. and china is bigger than europe on the wall of worry today. china cutting its growth outlook to the lowest level since 2004. that has investors nervous and pulling back. we'll ask a top gun from jpmorgan what it means for the markets and your money. >> you know, most investors have at least some cash parked in a money market fund. but are they safe? the s.e.c. wants big changes to protect your money. companies like fidelity say those reforms will destroy the business. so who's right? >> and a tale of two techs. apple and possible layoffs coming at yahoo!. details on companies heading in opposite directions, ty.

>> welcome everybody. i'm tyler mathisen along with sue herera and brian shactman. and "power lunch" begins right now. >> good "power lunch" to you on a monday. factory orders declined. service sector expands though. mix in those concerns over growth in china. investors a bit cautious today. dow down about 64 points. s&p almost ten points. and the nasdaq down a full 1%. and below now of course that 3,000 level. take a pulse of the markets, i want to expand and look at the s&p sectors here for a second. only two positive. telecom and consumer staples. midday movers, aig kicking off. and big lots up 3.25%. that on an upgrade. and csc signed letter of intent with britain's department of health. that stock up 1.3%. heels of the slower china growth

selection, all lower. the biggest loser, alpha natural down almost 6%. i want to go to the trading floors. bob pisani at the cnbc post working that screen and the whole floor. >> the weather man for the stock market. i always wanted to do that, brian. thanks very much. again, we're getting these divergences today. put up the screen here and take a look at the major indices. once again the dow transports are underperforming the major indic indices. this is what worries me a little bit down 1.4% with the dow industrials down only .5% there. also we're seeing many of the big name in the tech area particularly interesting midday drop in apple weigh on the tech sectors. in terms of the major indices today, this is that risk-off trade. all this on concern about a slowdown in china. you heard them lowering their growth targets to 7.5%. that always effects material stocks. it's debatable about how much we'll see them drop this year because china's going to ramp up internal production. they're own internal demand. we'll see what happens on that.

meantime, have you seen what's going on with the hedge funds? very interesting reports this month about hedge funds continuing to underperform the stock market. what's everybody paying these returns for -- these fees. s&p 500 in january up 4%, hedge funds up 3% according to barclays hedge. this report out this morning about 11:00 eastern time. we're getting outflows from the hedge funds $15.2 billion. that's nearly 1% of assets. biggest monthly outflow since july of 2009. why do i bring this up? it's interesting because apple dropped just about the same time this report came out. apple widely held by all the big hedge funds. that stock had a very interesting drop. look at that. right about 11:20 eastern time. not clear why that happened. but apple traded nearly 20 million shares, sue. that's almost a full day's volume just in the middle of the day. >> pretty dramatic move there indeed, bob. thank you very much. from stocks to commodities, crude oil was edging higher. it's just started to tick to the

downside. bertha coombs is tracking the action at the nymex. >> hi, sue. crude oil has been on either side of unchanged today. which to a certain extent the bulls say is a bullish sign given we got a lot of bearish data starting with the currents for the oil markets, that china news. that certainly is bearish for folks in terms of demand. then on top of that and on supply, iraq says it is now producing as much oil as it did in 1979, three million barrels a day. they expect to be at 3.5 million barrels a day by the end of the year. that would make up for any shortfall from iran, but those iran jitters continue to be what's holding up this market. as president barack obama meeting with the president says america does indeed have israel's back not taking anything off the table. brent prices higher. bank of america, merrill lynch says they see technically the situation is bullish for oil. particularly with wti. they see it taking out last

year's highs and taking on 2008 highs. remember, that was near $150 a barrel. wti they think will catch up with brent. gasoline today has been under pressure in part because of some profit taking really looking at the rest of the market. but what people continue to worry about is the retail gasoline picture. at oil price information service they say it's now been 39 straight days that we've seen national prices rise. we're now at $3.76, tyler. and that 411 record looks like it's in jeopardy. over to you. >> bertha, thank you very much. let's switch on the "power lunch" power surge and drill down on some of the stories driving the day. it looks like the republican establishment is beginning to line up behind mitt romney, now ahead of super tuesday's voting. our chief washington correspondent, john harwood, joins us. he's in the house with the latest developments on that and the nbc "the wall street journal" poll results, barbara

bush, eric canter coming out this weekend and saying mitt's the one. >> because so many republicans think it's time to shut this thing down. and voters are beginning to gravitate in that direction. look at the numbers in this nbc "the wall street journal" poll, mitt romney with a 6-point lead. santorum was leading earlier before romney won arizona and michigan last week. now romney's up by six. but he's facing a very formidable opponent, and this is related to why republicans want to get the general election going. barack obama is now up to 50% approval. that's very significant number for a president running for re-election. the economy is lifting him. and then if you look at a head-to-head matchup, november matchup between obama and romney, he's still at 50%, the president is. mitt romney's at 44%. mitt romney is very cognizant and told lawrence kudlow earlier today that he's trying to work out how to make up damage independent primary season has caused so far. >> there's an advantage to having done this twice, by the way. the first time through you learn

some lessons. second time through you're also continuing to learn. i think that's one of the reasons i'm better prepare today go after this race. by the way, you are right, independent voters, that's what we have to be able to connect with. >> and, guys, the reason he's got to connect better with independents is that listening to the tone of this campaign, republicans going after republicans, the image of the party has fallen, mitt romney's image has fallen and it's particularly fallen in the center. >> and it's the independents and moderates basically who will determine the general election as opposed to the ones who hold sway generally in the primary. >> two sides to it. one, mitt romney's going to have to get a relatively enthusiastic republican base. and we see in the poll that the enthusiasm gap benefitting republicans so far has now diminished. democrats drawing even there. he does have to do that. but he critically has to reach to independent voters. those were key to barack obama's victory in '08, to the republican victory in congressional elections two years ago. they're going to be the key in november as well. >> president obama just meeting within the last hour with the

israeli prime minister. he spoke to a major israeli backed -- israeli interest group yesterday and republican candidates did so today. what do we know about this and the political stakes here in what's going on between the president and both of them and iran? >> jewish voters, proisrael voters are constituency in american politics, for votes, campaign difference, significance to the conservative movement. conservative christians have been deeply involved in the cause of israel. so the president's been trying to narrow the daylight that republicans have been trying to drive between the united states and israel. he gave the speech to apac yesterday. he says we're not taking anything off the table. we don't bluff, he said in a recent interview. today in his meeting in the white house, it was somber and grave. he looked the president in the eye and said israel has to be the master of its own fate. we will make decisions in our

national security interest, but the president's trying to make the point that it's better for israel and for the united states to do this diplomatically. and he's hoping that by calming that water a little bit, he can prevent some of the uneasiness that's caused gas prices and oil prices to rise. >> the last time he was here it did not go well. >> didn't go as well. >> exactly. >> little bit better this time. >> better this time and the stakes are different. let's tell you about a programming note. larry does have a big interview with republican presidential candidate mitt romney ahead of super tuesday. john just showed you one of the excerpts from that interview. it will air in full tonight on "the kudlow" report. looks like an old shot. >> it does. we'll see him tonight. >> ageless, like you guys. >> thank you, john. i've always loved you. always loved you, john. on a very serious note, very difficult weekend for the midwest. they're trying to pick up the pieces following that weekend of deadly tornadoes. killed dozens of people.

mary thompson is here looking at how much these storms could cost the insurance industry. mary. >> sue, an estimated 80 tornadoes touched down in 11 states in the midwest and south on friday and saturday taking 39 lives. with rescue workers and survivors sifting through the wreckage, it's still too soon to tell the extent of the economic uninsured damage. though we do know the tornado activity started earlier this year with a number of twisters hitting 33% or hitting the u.s. being 33% above the six-year average as of march 1st. this according to the risk mo l modeler eqecat. impacting an estimated 17 million people. but having little impact on insurancer stocks. the final cost is unknown. reserves for these events what hurts the companies if the reserves aren't enough? big losses from tornadoes and thunderstorms are becoming more frequent. and therefore more predictable for insurers. from 2008 through 2010 they

totalled around $10 billion each year spiking to a record $25.8 billion in 2011 when tornadoes leveled joplin, missouri. sue, with tornado season running from march to may in the south and late spring to the summer in the north, the early state of storms as the insurance industry and investors racing for costly springs. >> thank you very much. to media and advertising now. news that two more advertisers are turning their backs on the conservative radio talk show host, rush limbaugh. limbaugh has apologized for his outburst at a georgetown university law student over birth control last week. but the financial damage may already be done. brian shactman back now with a look at the economics of this situation. brian. >> that's right, ty. i'm not going through the details of the battle over birth control and what rush limbaugh called her. that's graced for other networks. what i want to focus on is limbaugh himself. he opened the show fully open on

the aggressive side does not expect morality and intellectual honesty on the left. he said he became like them. he said the terms used were inappropriate and that she is not those two words. regardless there is a financial hit here. the question is how much and how long? he makes about $50 million a year according to most estimates and his premier radio networks makes money both through advertising and from fees through affiliates. here are the dozen or so companies that have pulled advertising from limbaugh's radio show. we just learned just a little bit ago that aol has followed suit. three others are public. carb carbonite, auto zone. it should be noted here people in groups have been trying to derail limbaugh for years to little effect. right now it's not a glenn beck-like ad exdis. the movement against limbaugh dwath gathered steam on facebook

and twitter and most of the companies actually tweeted the news from pulling ads from the show. i guess this one in particular is from dan gilbert from quicken loans, also owns the cleveland cavaliers. sue, i would say who needs media relations when the owner can do it in 140 characters? >> very concise he was indeed. brian, thank you very much. also in the media space we're keeping a close eye on yahoo!. all things d reporting yahoo! is prepare ago "massive restructuring of the company." the report says the shakeup will include layoffs likely to number in the thousands. we'll speak to peter from all things d just a bit later on "power lunch." >> and straight ahead, china lowers its growth outlook and that is giving investors the jitters. what does it mean for the markets and your money? we'll ask the cio for global portfolios at jpmorgan's private bank. all right. here's a look at how some commodities markets are performing. crb index is down primarily because we've had big moves to the downside in the gold market. and also in the nat gas market,

which is down about 4%. corn though is up once again today. back in a moment. [ mujahid ] there was a little bit of trepidation, not quite knowing what the next phase was going to be, you know, because you been, you know, this is what you had been doing. you know, working, working, working, working, working, working. and now you're talking about, well you know, i won't be, and i get the chance to spend more time with my wife and my kids. it's my world.

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welcome back to "power lunch." rick santelli on the floor of the cme group. well -- excuse me, if you look at intraday ten, certainly you can see we're elevated, but not much. still hovering around that 2% level. same pattern for the bund. when you consider all the

stories today about the next countries that are probably going to be in focus, portugal, spain, one would expect maybe more movement than we're actually seeing in treasuries. maybe because it's a big data week with both jobs, adp, one metric and friday from the bls. but something big is going on. we continue to see what started in february lots of corporate issuance. dollar denominated. we see it again. barclays here we are around 180. if you look at the yield on the 618 over for the high yielder jump, maybe more interesting. we see many european names coming in here in droves to tap the junk market probably because the yields are so juicy. right now today look at some of the names coming to the party. we have directv, o mega health care, the low interest rates are a big positive for more corporations domestic and abroad.

tyler, back to you. >> rick santelli, thanks very much. and stocks are slipping after china cut its gdp forecast. the dow, nasdaq and s&p all down. the dow by 44, nasdaq by 27 and the s&p by 7.5. china trimming its economic growth outlook for the year from 8% to 7.5%. and that is an eight-year low. what does it mean for investors? let's bring in our power player, chief investment officer for global access portfolios at jpmorgan private bank. could this, richard, be the trigger that many people say could lead to -- that people think could lead to what many people say is expected and that is a correction. >> i'm going to disappoint on this. i actually think it's a distraction rather than the trigger. so i think the good news is if we get something that slows down the pace of acceleration, we've seen the cross risk assets, that's not a bad fundamental thing. but the reality for chinese growth since 2005 china's been running a forecast of 8% each

and every year. actually went back and looked with our team, we have a senior economist based in hong kong, they've outperformed that number by anywhere between 1.1% and 6% plus. so on average very smart managing down your expectations to beat. the thing i think is critical is the fact they are signaling china does need to slow. so china should not be seeing 8% to 12% growth. there needs to be a pace in terms of relative capacity usage. that's good news. so i guess i'm on the other side of the trade once we get through it. it's nice that it's a distraction. >> are they slowing because they need to slow it? or are they slowing it because the world isn't as fast as they anticipated specifically europe? >> so both, right. there's a capacity utilization issue in china. you're feeding people better, they're earning more money, they're consuming more, relative dynamic of inflation they need to pass through. and also we have a major transition everywhere, globally. china is one. if you're transitioning into a new administration, a way to tee

them up for success and stop the regional bottom up competition in growth is to lower that number. the nuance between 7.5% and 8%, if that's what we're worried about right now, the world's a great place. >> you are worried that perhaps, this market, our market, has gone too far too fast. it's been a steep trajectory. >> the bad joke my twins have independently given me a crystal ball each over the last five years in my office. i'm going to take one to the trading floor when i get back. i wish it would tell me the right direction of this. the reality is you can look at this two ways. you either believe this is vindication for the strength in corporate balance sheets, low default risks and spectacular earnings last year. we weren't paid for those last year. so the good news is we may have been paid for those in the last space of month to month and a half. so we've reset 2011 through february of this year. the trick is where do we go from here? what i don't think we're yet deserving of is the meltup dynamic. part of that's your china question, tyler. part of that is we need to globally slow.

part of it is also markets don't go up in a straight line. seeing a little bit of a pause and some consolidation i think would be good news for everyone here. >> where do you allocate capital? we haven't even touched on the middle east tensions out there. >> oh, yes. >> which could be a big headwind. >> yes. >> but last time you were on you liked asia. >> yep. >> you liked high yield. >> yes. >> and you were very broadly diversified. more so than i remember you being in the past. >> yes. >> does that still hold? >> it does very much. it's funny. flash back to that because one of the debates we had was all equity all the time. and there's this huge bull push going on right now in the markets which is equity is the answer to every question. we've probably been more thoughtfully diversified in a balanced portfolio than we ever have. i was going to pick on bob for a bashing on the hedge funds earlier. they have returned 3% to 3.5% year-to-date. running a beta they're doing exactly what you do with them. we also kidded the last time i was on, it depends on what you're funding them with.

if you're funding them from bonds that have returned you 70 basis points to 1%, that's been a great risk adjusted trade. the answer to your question, we're actually still running underweights in our equity allocations on the margin. we have a lot of risk in portfolios -- sorry. >> excuse me. >> no, sure. >> if the hedge funds are hedging against a decline, if they're at a beta of .3, it must suggest that they're afraid of something. >> so that's a unique conversation. you're going to bring me back and we're going to talk half an hour for this. >> excellent. >> it depends which hedge funds and how you're using them. traditionally you can use as a proxy to what i would think would be extended credit. use that rather than buying high yield. we have a lot of high yield still that is still the highest conviction view. long-short managers end up using as a proxy against long equity allocations. we've done a lot of that in the asian market. there they're running at 5.6 beta. it's tough to throw them all in this and morph this basket of are they all hedge.

i think how we allocate to them markedly has changed in the last five years. >> we've talked about the move up in the market. what has you the most worried? >> oh, lord. we've talked about middle east and oil. middle east taking out the geopolitical dynamic of it, i think just oil looking at brent 125 or 126. rough justice $10 on oil in an increase is a detraction to growth to something like 20 to 30 basis points. we're seeing brent up $30. so we're already looking at a significant drag on global growth anywhere from 50 to 60 basis points. >> is that in the market yet? >> no. it's not. i think a lot is because the interpretation of it is very much more iran and middle east than it is is this just global growth and dynamic. and to close full cycle, good news for china spending 7.5% should help energy well off on this. >> we didn't go to the question of the u.s. political and tax situation doesn't get simpler in the second half of the year.

>> does not. agree. >> come back for that half hour discussion? >> you're on. >> all right. coming up next, hey, big spender, lots of consumers are cautious but still shelling out plenty for luxury goods. we'll tell you who the real super shoppers are. why they're spending millions in new york and paris. >> and in a few minutes making money in energy. we have a fab four of picks in the exploration and production space. you can't afford to miss it. power's back in two. ♪

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request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. welcome back to "power lunch." seema mody here. technology stocks slipping in trade today. take a look at yahoo! down .5%. all things digital reporting that the company may be looking at restructuring the company, which could lead to thousands of layoffs. we'll be sure to keep up on that story. also take a look at zynga. after hitting an all-time high on friday, today retracing those gains being hit by a jpmorgan downgrade. lastly, take a look at pandora. the stock climbing higher on a report indicating that increased popularity of tablets and smartphones will lead to improved subscriptions and profitability for pandora, the stock being the outperformer here at the nasdaq.

tyler. >> seema, thank you very much. let's check in with scott wapner and see which stocks are on his radar. >> ty, i'm watching shares of apple today. i've got my screen behind me. opened at $545. traded low today as $526. we were talking a lot about this on the "fast money" "halftime report" show. the big move the stock saw just after 10:00 this morning, you can see the big dip down on the intraday chart here, there was a huge block trade as well. 17,000 shares traded about 10:06 this morning. that's about $9 million worth of apple stock that was moved today. the stock obviously has since recovered about half of that loss. but nonetheless it's an interesting move just a couple of days now ahead of the big event where apple's expected to unveil the ipad 3. and you really have to figure, if you look at the history of how this stock has traded ahead of those big events, you do tend to have a runup into it and then a sell on the news. so the bar is going to be high now for the ipad 3 to deliver what the market expectations are

because they are very, very high. sue. >> indeed, scott, thanks. we're keeping an eye on luxury retailers today including the likes of coach. it is trading a little off today with the rest of the market, of course. but it's having a pretty great year up nearly 40%. and it's not alone. demand for high-end luxury is soaring. and it's not just here. it's a global phenomenon. courtney reagan reveals the big spenders fueling this boom around the world. >> reporter: there's one country with lots of big spenders responsible for explosive growth. making up more than 20% of global luxury consumption at home and abroad, china. at 39 years old the average chinese millionaire is 15 years younger than in north america. and one-third of them are women. erica. >> the chinese consumer is now accounting for 20% of global

luxury sales. sales in mainland china have been growing at 35% a year. >> reporter: and the buying power of these consumers extends beyond china. according to her in cities like milan and paris, sales to chinese tourists account for up to 50% of all luxury purchases. and 2010 chinese visitors contributed $877 million to the new york city economy. that's nearly $3,297 per person per visit. >> and courtney's with us now on more of china's super shopper. you mentioned 33% are women right now. but who else are the big spenders? >> there's this group of what we're calling newcomers. a group of people who never before spent a penny on any luxury items before the recession. afterwards they're finding this perception of value.

they're not spending frivolously. they're seeing handbags and shoes as investment pieces. they may be making purchases less frequently, but there are more of them. it's a younger crowd than your previous more affluent luxury shopper. >> it's their version of durable goods. >> something like that. >> thanks, courtney. >> thank you. >> it's going to be a great piece tonight. reminder, you can see the whole story on china's super shoppers on the premier of our cnbc original documentary, luxury boom, the big -- the new big spenders tonight at 9:00 p.m. eastern time and pacific. and up next, most investors have some cash stashed in money market funds. it's a $3 trillion business. >> the s.e.c. thinks the funds are at risk and wants some big changes at them. companies like fidelity say those reforms could destroy the industry. is your money market fund safe or not? a "power lunch" debate on deck.

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welcome back to "power lunch." i'm brian shactman. let's reset the market. we have a bit of a spike in the vix about 6.3% but still below 19. and look at the dow down 42 points, about 20 points better than when we started on "power lunch." look at the dow 30 heat map quickly. see the lay of the land there. obviously decliners outpacing advancers who have merck at the top 1.5% to the upside. i want to look at three in

particular to focus on. alcoa, caterpillar, on scaled back expectations for growth in china. ibm by the way back below $200 a share. it did hit an all-time high of $201.19. also want to talk about first solar. continues to hemorrhage. of course the dates for cutting german subsidy seem inconsistent but consistently sold off. just 10 cents above right now. wireless and pcs both on downgrades today. pcs down almost 5% and leap wireless down almost 8%. of course gold and other metals closing the session at the nymex, bertha coombs, at the nymex. hey, bertha. >> thanks, brian. i'm here in the gold pits and they are closing here at sort of midway in the session holding $1,700 an ounce. but traders say right now we're going to watch for the technical downside here. it's a risk-off day with the slower growth outlook coming

from china as it tries to engineer a soft landing. you can see precious metals also have an industrial edge to them like silver and platinum that were the worst performers today. interestingly silver actually went positive early in the open outcry session. but it's been hit hardest today. copper, which is usually your indicator of how people feel about economic growth particularly in china today faired slightly better. tyler, back to you. >> thank you very much. fidelity warning proposed changes by regulators will destroy, destroy their word, $2.7 industry. mary thompson has the fallout. >> proposals the s.e.c. seems for public comment in the next month has the mutual fund industrial up in arms and investors bracing for major changes to these alternatives to checking and savings accounts. here's what the s.e.c.'s proposing. letting the net asset value of a money market fund float. meaning an end to the dollar a share price maintained by many

through an implied guarantee. impose capital buffer to keep the price constant along with limits on timing and amounts of redemptions from money market funds. the s.e.c.'s aiming to end the perception these investments are risk free. and prevent a repeat of what happened during the financial crisis back in 2008 the reserve fund broke a buck. jump in redemptions that others investors feared losing money in these typically safe accounts. mutual fund companies don't want the change. pittsburgh based fedder ated investors writing in a letter the changes would "raise the cost of capital for countless corporate and municipal issuers." retail and sbugsal investor -- float of more concentration of cash in banks put a greater strain on an already overextended federal fund guarantee system. the benefits to these changes given most of their clients already understand the risks of

investing in money market funds. sue, back to you. >> thank you very much, mary. how far should the government go to eliminate risks of the money market funds. should the millions who use this tool have a real reason to worry? >> joining us now president and ceo of investment company institute and associate director with the center for american progress. gentlemen, welcome. paul, i'm going to start with you. the s.e.c. did put in some changes in 2010, but obviously they feel they do not go far enough. why do you think those changes are enough? >> well, actually, money market funds were the first part of the financial system to be reformed after the financial crisis. and we think the changes were awfully comprehensive. they effect virtually every aspect of the money fund's portfolios. it's not the same industry now that it was in 2008. and i think we ought to at least take a hard look at the success that those reforms have had through a very challenging period. remember, we've had the euro crisis, the downgrade in the

u.s. government securities and virtually a no interest rate environment. these funds have come through it very successfully. >> david, i think you would like to see more reform in the mutual fund industry in the money market mutual fund industry in particular. what would you like to see put in place? >> i think the s.e.c. proposed reforms are reasonable. we're talking about having them act less like banks or if they're going to be more like banking, try to impose some capital regulations to prevent the types of runs that we saw in 2008. we knew of course that money market funds are functioning the same as banking. and of course we knew that they're systemically significant, what we didn't know but what the 2008 financial crisis showed is they're vulnerable to the same problems as banking, the big runs and panics. in that environment i think it's absolutely the case we ought to be thinking about more. if they're going to continue acting like banks, we ought to treat them more like banks. i think the floating nav proposal, if they want to be less like banks, they can go that route.

on the other hand if they want to be more like banks, those capital regulations i think are reasonable. by the way, the money market fund industry has given no evidence that these would destroy the industry. given that -- we got to be in a wait and see mode. this is exactly the same claims that banks made back in the 1930s when we first proposed banking-type regulations. >> let me show you gentlemen something from the "the wall street journal." we took several quotes from that. i'm going to go to the first one and then the second one. the first one she says "nothing in financial services is as dangerous as a guarantee without the capital to back it." and then she goes onto say "then there's the argument the further argument that additional regulations may shrink the industry. so be it. if industry growth is built on clients' misunderstanding underpinnings and if industry profitability is built on inherent undercapitalizationiun

better to provide a real transparency ". >> there's an implied guarantee when they keep net asset value constant at a dollar in good times and bad, that to the consumer -- sue. >> is an implied -- >> sue, understand how they do that. >> i do understand how they do that. >> they're not like banks contrary to what david said. they have extrortd narly short-term portfolios if you mark to the value, they deviate from the one dollar per share value and by small increments. these things are not like banks. the other thing -- >> to david's point though, the consumer, when you look at your statement, your money market account goes under the cash side. it is implied that that is cash. it is implied, is it not, david? >> i think in most regulations money market funds are treated as cash. and they're advertised as cash

certainly cash equivalent instruments. >> so when does that implied guarantee become an explicit guarantee, paul? >> it is not. these are investments. and i think our investors understand that. there's something to be added with respect to the s.e.c.'s proposals. and i'm surprised, david, that you hold this at not very much consequence. money market funds today are extraordinarily important as creators of jobs funding a very substantial portion of the commercial paper market. and they support communities because they are a principle source of short-term financing for municipalities and state and local governments throughout the country. if you take them out of the equation, you're going to have very substantial consequences for communities and any economy. that doesn't seem to me to be something we should gamble with right now. >> i think banks serve the same fnks. the only reason they have an advantage is because of the capital arbitrage, i'm not sure what value they're adding. if they surely serve this

purpose, i think they ought to be able to compete with some of the same types of regulations to prevent some of the same problems we soo in banking. >> thank you very much, gentlemen. >> up next on "power lunch," soaring gasoline prices. you're worried about your money fund? >> how about your gas check, yeah. >> your portfolio maybe can profit from those rising prices. we're going to show you four fab ways to play higher energy prices when we come back. [ man ] predicting the future is hard. but i have this new smartphone.

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coming up on "street signs" at the top of the hour, ibm hitting an all-time high s. there still time to buy this big blue chip? and goldman sachs raising its price target on nike. why they're so bullish on the sneaker giant. and the electric slide. are car buyers turned off to electric cars? what this could mean for gm and the auto industry. that's just minutes away on "street signs." please do join me. back to sue and tyler on "power

lunch". >> the fab four. we're going to give you fab four in just a minute. americans continue to feel the pain of rising gas prices. the average at the pump $3.72 a gallon. expected to go higher. i saw some at $3.49 in cliffton, new jersey, this morning. oil up about 40 cents since hitting a one-year low back on october 4th. the s&p energy sector up about 28% since then. a slew, a slew of refining exploration and drilling companies are up more than 40%. joining us with his four fabulous plays, vice president energy research with stern ag. tim, welcome. if these stocks as a group are up 40%, it's easy for me to say, hey, i've missed it. have i? >> no. i think there's a lot of upside. >> why? >> there's a couple disconnects with the companies that we're favoring. some have exposure to the water born such as lls pricing in the gulf coast or the california heavy price points you see on the west coast.

>> you segment the market in terms we're going to look at four here. two from the large cap space. name them and tell me why you like them. >> sure. we like it because they have a good diversified portfolio, lower risk repeatable plays and they have some higher risk international plays focused mostly in the middle east. great balance sheet. a lot of dry powder. >> and pioneer is number two. i note that it's down significantly today. is there any reason for that that you know of? down $3 a share today. >> the company announced a $300 million acquisition of a brown sand manufacturing going to help them vertically integrate their production operations. what we like is they have strong cash flow visibility from a really good hedge portfolio. they're in a number of high profile basings in texas. also horizontally drilling into one of the pioneers and forgive the bad pun there. >> interesting. let's look at a couple small caps you favor again.

who are they? why? where do they do business? >> gulfport energy. they have one of the highest relative exposures to the shale in ohio. another company with a clean balance sheet and they have some other noncore assets they could possible monetize over the next couple years. you see the running room as the play developments we think the company should continue to grow ebitda. >> the gulfport and the other was. >> berry petroleum. thanks for being here. we'll have you back soon. >> thank you. >> sue. >> coming up, take of two techs. yahoo! reportedly planning a massive shakeup. meanwhile apple's app store reaches 25 billion downloads. we'll talk about what's ahead for those two companies. when you have tough pain, do you want fast relief?

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time for three stocks in 30 seconds. pandora catching a bit of a bid out of the box if you will having a nice 2012 upgraded to a

buy with an $18 target. zynga going the other way. some turnover at the top, jpmorgan downgrading it to neutral. molycorp on the move. mcp overweight with an $81 target. it's at $25.36 right now. still down big over the last year. sue, back to you. >> brian, thanks. yahoo! reportedly planning to layoff thousands of workers in a massive restructuring plan. the news comes as apple hits a milestone with its download of the 25th billion app. both companies trading lower today. an overall down day on wall street. joining us senior editor of all things digital which broke the news on yahoo!. peter, good to see you again. welcome back. >> thanks for having me. >> tell us more about yahoo!. are there certain divisions that you think or that you have found out maybe targeted more than others? >> i need to credit my boss here or she'll fire me. she broke the story.

essentially most of yahoo! is going through significant cuts with the exception of sort of core media and advertising business. the new ceo has looked around, he said, all right, we're going to get rid of things that we don't think are core to our business and that's part of the company right now. >> you could argue although painful certainly for those effected that that's what the company needs to do? >> it's part of part of what they need to do. it's got this giant internet presence even though we sort of ignore it now. hundreds of millions visit the site everyday, but it's not growing and even though there's a big media business, it's not top of mind anymore in the way of facebook, google and even apple are. right now wall street essentially says the entire value of this company are its asian internet holdings. it will resolve that at some point or another. if he wants to grow the company, he has to grow the media and advertising business or create a new one. >> we could all say who should be surprised by this after the troubles that they have been

through. i'd like to get your thoughts on something that's always troubled me about yahoo!. when i think of other internet companies, i understand what they stand for. i just don't know what yahoo! stands for. >> this has been a perennial problem for yahoo! for years now. they give us a different answer. when jerry yang was still at the company, this fall we asked him and said something to the effect we want to be a premier media and data company. scott thompson is saying much along the same lines. a lot of eyeballs are coming to us, we can sell them advertising and they're going to generate data and we can use that in some vague way that i'm not going to explain yet. data is a sexy term right now on wall street because it can mean many things. >> let's switch to apple. their 25th billion app and this is before wednesday's launch. it's pretty mind boggling. >> especially when you consider for apple the app business really only started growing four years ago. they introduced the iphone in

2007, but there wasn't really an app business there. you couldn't create an app and distribute through itunes and iphone. really this is a four-year business for them of distributing apps. really the ultimate goal of distributing all these apps so make the iphone and now the ipad that much more of an attractive product. that's certainly working. >> you know, what -- maybe you don't know this and i apologize if you don't, what is the revenue split on apps for apple? out of every dollar that is deri derived, what does apple keep? >> i believe and someone check me on this is they're free. if you do sell generally the split is 70/30. again, apple is primarily interested in having the best supply, best selling, most attractive apps you can have so you're that much more inclined to have an iphone instead of android tablet or phone. >> downloaded the 25th billion

app and received a $10,000 itunes gift card for that. >> that's a great data point. indeed. let us know where you spend it. coming up just over two hours left in the trading day. charts of the day in just a moment. "power lunch" is back in two. ri. but... home security systems can be really expensive. so to save money, we actually just adopted a rescue panther. i think i'm goin-... shhh! we find that we don't need to sleep that much. there's an easier way to save. geico. fifteen minutes could save you fifteen percent or more. ttd#: 1-800-345-2550 let's talk about how some companies like to get between ttd#: 1-800-345-2550 you and your money. ttd#: 1-800-345-2550 at charles schwab, we believe your money should be available ttd#: 1-800-345-2550 to you whenever and wherever you want. ttd#: 1-800-345-2550 which is why we rebate every atm fee worldwide.

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nchtsz. take a look at how the markets are fairing. nasdaq still the laggard down more than 1%. >> we were talking about the movies, i saw "the lorax." it was so loud i hurt my thorax. look at the move in oil. up 27% to $106.80. the question is where does it and when does it start to pinch? >> i looked at the vix. we have a lot of data out this week and the vix has spiked up from last friday about 7% today for one week up 1.23%. culminating on friday with the jobs report. >> i want to look at morgan stanley. not having a great day. financials aren't having a very good day. dick bove upped his price target to 27 on the stock. he sees pretty significant upside on the percentage basis. >> they had a big week last week, though. the financia