time now for our final trade, phil? >> gld, federal bankers are still buying gold. get it. >> that does it for us. more fast at five. "power lunch" begins right now. >> indeed it does, scott, thanks very much. three hours to go in a very interesting trading day, investors running the numbers big time. nasdaq, up 17% this year. highest point since november of 2000. that goes back a ways. s&p up 17%. dow up 8%. techs, financials, they're soaring. how can you ride this rally, michelle? >> goldman getting gored, goldman sachs exec claims they put making money first, clients second. how big a hit is wall street and goldman's reputation going to take? plus, all in on apple, morgan stanley raises its price target and not just by a little

bit, dividend funds are buying shares, dividend funds! apple doesn't even pay one. should you chase this stock or wait for a pullback? >> michelle ka rules so cabrera with tyler mathisen, "power lunch" begins right now. welcome back, michelle, that's the first point of the day. how about that? markets taking a little bit of a breather today, the nasdaq is higher but the subpoena down a half a point, the industrials up a little bit. stocks consolidating basically as averages hit the new milestones and here's where we stand up to the minute. the dow very comfortably above 13,000 at 13,195. and s&p is speaking up at 1400, even though it's down a big half point at this midway point of the day. but nasdaq solidly above 3000 as we just mentioned, first time it's at that level since 2000.

3000 for 2000. the dollar strong on the belief that the u.s. economy is improving. gold getting hard hit as the dollar rises. gold now 46 bucks an ounce or nearly 3%. and an auction of 30s under way as we speak. the results to that in a minute. midday movers, bank of america higher after it passed the stress test. zion's bancorp, one of the regional banks along for the ride, it's up $21.24, an 8% move. and cliffs natural resources, they don't make the cliff bars, they are not in that business, $70.56, up big, $5.66, about 8% there, it hiked its dividend. downside citi and met life lower, well, as you probably know they failed the banking stress tests and we'll be talking about that a lot during this hour. alpha natural resources, going the other way, falling along with others in the materials group, down 46 cents almost 3%.

let's get to the market action, shall we? the s&p trying for its longest winning streak since december of 2010. nasdaq above 3000, gold getting whacked. bond yield soaring. we got all the coverage you'd ever need. we'll begin with bob pisani at the nyse, bob? >> tyler, the important thing is the stock market is being affected by what's going on in currencies and the bond market. in a sense the stock market is really a peripheral bystander, here is what is important, the dollar index, month to date it's basically straight up, we are at new highs for the dollar index. this is a basket of the dollar, six other currencies. what is that doing, well, it's the sign of an improving economy to a certain extent and better interest rates here in the united states or potentially higher interest rates, but today it's putting pressure on commodity and commodity names like freeport-mcmoran, for example, and gold stocks are down rather notably, in fact, and many of the gold stocks are at 52-week lows.

mining, one of many gold stocks, been a miserable six months and alcoa to the downside, the other factor is the interest rates, the ten 10 and 30-years are higher. this is all affecting thinking in the stock market. finally want to know the big player in the etfs the one that everyone is talking about, the tlt, the long-term bond, the prices moving down here to the lowest levels since we had back in october. that's what's moving the markets today, tyler and michelle, back to you. >> bob pisani, perfect segue to the breaking news, $30 billion of 30-year bonds up for sale. how is it doing? >> the yield, 3.383. it's straight up 1:00, pretty much right there 3.38 that was the high-yield, low price of the day, it came in right where it

was tradele. indirects 39% versus 31% ten auction average. bid to cover a little above average, 2.7 versus the ten auction average of 262. i give this auction a "b," as an aside i'm very surprised it didn't go better and price more aggressively but when you reach a yield buy a 30-year, you might be nervous of the current momentum of the selloff which might explain why it wasn't a little bit more aggressive. >> i was going to ask you about it the two-day selloff that we've seen which has been so strong, could it get even worse from here, rick, what are you thinking? >> you know, i think that it's always shortsighted to underestimate momentum when you pop through an established four-month range which is basically the entire curve beyond the two year, so you're talking five, sevens, tens, and 30s, they broke out. for 10s it was around a 211 yield and you can see we popped through. everything midcurve all the way down is at the highest yield should they close here since

october 28th, so to answer your question quite simply, don't limit your trade based on momentum, stick with it. let's see if this thing on the 30-year makes it close to 345. >> wow, okay. >> rick, great to have you in the house. bond yields moving up, gold getting creamed meanwhile, dropping to two-month lows, share epperson tracking all the commodity action at nymex. >> the winds have changed, that is what is happening in the commodities market, and you can see it quite clearly in the selloff in gold. quantitative easing is off the table and the dollar is strengthening and we are looking at gold prices that fell below the $1640, and also keep in mind we're down 150 bucks since the end of february, so we've seen, of course, this coming off the table for some time as it appears that we're not going to get more quantitative easing. when you look at what is

happening elsewhere, the dollar strength is weighing on other commodities, but oil prices off of their lows. a few minutes ago president obama talking about the fact that they're vowing to put pressure on iran and, of course, that risk premium continues to somewhat support the oil market. but as you look at what is happening in the refined fuels market, yet, we got a decline in refined fuels and heating oil and in gasoline, that was much greater than expectations, but we are also looking at in california some of those refiners coming back online and wholesale gasoline out there dropping quite precipitously, demand also down, that is impacting it as well. i point out california because, of course, that's where the highest prices are right now, and so if we see a drop there, often we see that trend around the rest of the country and the national average hopefully will come off a bit, too, a little bit of good news, bertha, where i hope tech is very strong there at the nasdaq. >> tech very strong and the reason it's strong is apple. a new apple high a day really holds sway when it comes to the tech sector. above 3% at $586 and change off

of its fresh brand-new high and brand-new price targets with a seven handle. this morning, they are saying it has a 12-month price target of $710. morgan stanley goes to $7820 from $500 and change and morgan stanley says they think apple could earn 80 bucks next year which would put their valuation they believe at about $960 in 2013. and even moody's looking at the cash hoard across corporate america thinks they think apple could end the year at $150 billion. apple not the only one with a new high, helping to keep the nasdaq today at above that 3000 level. you've got microsoft, intel, ebay, you combine all of their market caps in that group and it equals apple's market cap right around now. you take out apple, the tech sector not quite as strong in the s&p, only up 15% year to date, michelle. bed bath and beyond at an

all-time high as bernstein ups its targets. >> bed bath and beyond, bertha, thank you. let's drill down on the stories driving the day. investors eye financials on the back of the stress tests from yesterday. the big news the goldman sachs letter and we'll get to it in a moment. but bank of america was supposed to be the bank in a mess, but it pass the stress test. rival citi failed. why did b of a and citi fell short? >> citi asked for too much and b of a didn't ask for anything when submitted capital distribution requests to the federal reserve, and the stress test scenario, with the dividend or buyback, the capital fell below the 5% threshold set by the central bank. b of a's falls to an acceptable 5.7% from 8.7% in the third quarter of last year given it has no plans to distribute

capital at this time. burdened by the fed's refusal to grant it a dividend increase after last year's stress test, b of a didn't request one this year instead focusing on boosting capital over the last six months. citi, it comes in at 5.9% without a dividend decrease or buyback and they are focusing on the in fact that citi's management didn't deliver on a promise repeatedly over the last year vikram pandit claimed he expected to return capital to shareholders this year, but the stress test results making this less likely though in a memo to employees, pandit said the bank will work with the fed to submit another plan for, quote, a meaningful payout, michelle? >> all righty, thank you so much for the clarity there, mary. goldman sachs ceo lloyd blankfein firing back on the up a said piece in "the new york times" by a former executive who is blasting goldman's culture, what did blankfein say? >> well, he's expressing regret over the former executive director greg smith's assertion that the bank's environment is,

quote, toxic and disruptive. in a memo to employees bank fine said it does not reflect our values and the culture a culture that smith said they are doing what is best for goldman's bottom line sometimes at the expense of clients. while blankfein acknowledged in the memo everyone is entitled to an opinion, he called it unfortunate that an individual opinion of goldman sachs is amplified in a newspaper. he and the president go on to tell employees we are far from perspefect but if we've seen a problem we've responded seriously and substantively. back to you. >> thank you very much. another big hot stock to talk about is apple, it looks like everyone wants to take a bite out of that company and as bertha mentioned, shares all-time high since its ipo in 1980, and analysts raising price targets and "the wall street journal" reporting that dividend funds are snapping up the stock even though apple doesn't pay a dividend. is apple too good to pass up or is this the last leg of a big rally? we are joined by the senior

technology analyst at maxim group, welcome back. good to have you with us. >> thank you, tyler. >> do you have any reaction to "the wall street journal" story that many mutual funds including some in the midcap parts of the market and dividend funds that are supposed to concentrate in stokes that pay dividends hold this stock anyway, is that a bad thing necessarily? >> not really. i think in the past i think the accelerated buyback and the special dividend, that idea has been tossed about, but that's unlikely to create lasting value and an ongoing dividend is a possibility given you have the cash per share is $105, we forecast the company would generate $145 in free cash flow this year so that's a possibility. but the capital appreciation by itself has been the justification to hold shares in apple. >> go ahead. >> is it inevitable, though -- so i'm trying to play devil's advocate or justifying the people that run funds that are supposed to have dividend-paying

stocks and apple doesn't, but don't they inevitably have to? they have so much cash, what are they going to do with it? >> michelle, that's a very good appointment. one is the company has only made tactical acquisition and not transformative acquisitions and most of the cash is plowed back and used for strategic supplier relationships and it does make sense given the ongoing investment is fairly modest. >> if they won't go out and buy a manufacturing company, which i can't imagine they're going to do, there's not anything out there they would buy in the way of a transformative acquisition it doesn't seem to me, but at any rate, let's cut to the chase here, is this a stock i should buy, chase, at these levels? >> one is if you look at the sell side the price targets, it's about $600 which is a 14 multiple on current year estimates of about, you know, $44, if you roll the same multiple forward into the next fiscal year and apply 14 multiple then you end up with a

price target of $700, which is not unreasonable. so, the near term drivers are going to be emerging markets, you know, the tablet market expansion, and three, of course, is the iphone share gains. i think those are going to be the three drivers, you know, for top and bottom line for the company. >> they're pretty on short drivers, right? you have two new products coming out, isn't there a lot of room for risk there as well? isn't that the thing that drives growth but at the same time presents the most risk? >> well, absolutely. i think increasingly the iphones are going to be the primary drivers of the company's economics, and the next year forecast revenue growth is 20% or an incremental both of 30, you know, billion dollars, so that's a moderation from the 44% this year and 66% last year. but the drivers of the smartphone are going to be, you know, new carriers and increasing share within existing carriers and, of course, the category growth itself which today they had only 230 carriers on board versus almost 600 for

r.i.m. and that will be the tailwind for the company near term. >> one more time, buy at this level or wait and buy on a pullback or what? >> yeah, i think more of the latter. you have existing positions, you hold on to it, but i think in terms of adding to new positions or initiating new positions, i think you would wait for a pullback. >> thanks very much. straight ahead, riding the rally, the major averages are sharply higher on the year, financials are up more than 18% so far. those sectors and the broad marke markets, do they have room to run? stick around, we'll tell you. this is how the s&p sectors are trading today, let me look over my shoulders, technologies up, health care, industrials, telecom dead flat. the laggards energy and utilities down a third of a percent and 1% respectively. tdd# 1-800-345-2550 let's talk about fees. tdd# 1-800-345-2550 there are atm fees.

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we are always on the lookout for under-the-radar stocks moving big in this market and one to look at today is guide wire software up 16% right now. the insurance software maker, boy, that sounds exciting, topping earnings estimates today, that is exciting, and the stock is up 65% this year. $29.91. guidewir, gwre.

>> technologies leading since the start of the year, higher more than 18%, is it time to get into the sectors and the market in general? joining is the co-portfolio manager of the jenson quality growth fund and good to see you. michael, a lot of viewers saw the paper and turned on the tv and said, wow, the nasdaq's above 3000 again and are watching cnbc, maybe they haven't in a while, maybe they haven't been in the market for a while. should they get in now? >> michael's hair was black last time it was above 3000. >> back to this my salad days, oh, i remember them well! it does feel good in the market today, may west said too much of a good thing could be wonderful, it feels pretty wonderful today. but we're up 24.7% since september 30th and the idea is if you buy low and sell high, doesn't strike me after a 25% run in a few months it would be the time to consider going in

with both feet. i would be building my list. i would certainly consider some real opportunities that i think are out there particularly with good dividends but i don't think i would be plowing in with both feet at these levels. >> robert, how about you? answer michael there? >> i think you have to be a little bit more selective today than maybe you were in the fall, you know, some of the -- some of the performance has been in the loquat stow quality can havstoc. and the rally i think will continue. has been a trickle of a lot of good news that is reflective of the future expectations and on top of that you have a lot of companies that are sitting very well from a position of strength with their balance sheets with a lot of cash and a lot of debt capacity. so -- and taking advantage of the opportunities here. so, i think that overall, being selective is not a bad idea right now things are looking good. >> what about the two specific sectors, though, michael,

talking about the broader market, but what about technology and financials? financials have just been explosive particularly in the last two days. if it really look like the worst could be over for them, isn't there more room to run here or no? >> yes. i think so, probably. yes, i think so. i've been long on the financials in general. i've been cautious. i've owned some of the banks, but i've been light the sector. i've just been too concerned with all of the europe contagion and i'm still not concerned it's over with and i'm concerned that we have a market that is supportive and dependent on every utterance out of the federal reserve. it's operation twist. it's whether we'll keep rates at the end of 2014 as opposed to 2013. >> the recent economic data isn't good enough? >> i think it's okay, but still supported by a lot of fed money and not a whole lot of organic demand. i have gotten the technology rights and our stocks there in that sector are looking pretty good. a couple of the banks i own, i

own goldman sachs, i sure didn't like the article to today. i own jpmorgan and i'm happy with that, i own pnc and i'm happy. i would probably add to those if the prices were right. >> robert, let me turn to you. do you own apple? we were just talking about it here. would you buy it, would you own more of it? >> we don't own apple. it's a great story. if you think about it, less than ten years ago apple was on the verge of bankruptcy and now it's the world's largest company with huge cash hoards and so forth. i think what you have to look for is the future. the starting point is today, and then we take a look in our return on equity and our cash flow for the next ten years and value that out. >> right. >> so, it's had a tremendous impact on the index's return if you look at its impact. and it's a little rich. and i think it's all built around the ability for the company, which has been successful in bringing out new products and continuing to do that for the foreseeable future, so that's a little bit risky in that sense, but no question it's a good company.

>> all right, robert, michael, thank you very much. >> thank you. and up next, the hunt, not for red october, but for yield, with interest rates near zero, plenty of investors are looking for waifs to g s tways to get r cash, and we've got a four star fund manager on with a fix in that sector that you won't want to miss. speaking of rates, look at the yields on 10, and 2, and 30-year beyond, wow, we'll talk more about it coming up later. [ technician ] are you busy? management just sent over these new technical manuals. they need you to translate them into portuguese. by tomorrow. [ male announcer ] ducati knows it's better for xerox

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shares of pacific sun were not so sunny today, lower by 14%, weak guidance due to weaker-than-expected sales, stock is off more than 14%, $2.15 a share. let's check in with scott wapner to see what stock is on his radar. >> a lot of talk about the bank stress test, not a lot of talk today about american express but there should be because take a look at the shares, up about 3%, the bank holding company passing with flying colors, 0.75 for american express. the stock is up today, but it's up 20% year to date. they are planning share buybacks up to $4 billion this year and up to $1 billion in the first quarter of 2013 and they got approved by the federal reserve to raise the dividend, all the

talk about citi, jpmorgan, bank of america, keep your eye on american express today, just shy of $56, up another 0.75 today. the investor appetite for high yield or junk yields continue to grow thanks in part to cheaper paper, wider spreads, higher yields relative to treasuries and broader equities. kevin oversees the tiaa-cref, and a three-year return of more than 21%. you were just saying, kevin, welcome, first of all, that you like to be disciplined and more selective, so your corner of the junk market isn't toxic, it's a little more rarefied, right? >> that's correct. >> like what? >> well, we focus on companies that have good competitive positions. for us the key is free cash flow, so we're looking for companies that regardless of

exactly how the economy performs, they'll generate the cash flow and they'll be able to pay back their debts. that leads us into the bb and "b" part of the market, over a five year period, the bottom tier of the market. the cccs it's closer to 50%. we are looking for the companies that can pay off their debts. >> but in turn you are accepting lower yields i'll bet. how much lower and explain why the difference in return is worth it. >> sure, the broad high-yield market including cccs currently has a yield of 7%. our benchmark as a bb and "b" benchmark is 6%, we are giving that up on the front side but on the front side we have -- >> you have sleep at night factor on the back factor. >> we sleep well. >> give us names in your portfolio, classic choices that you would say represent your

discipline, your style, and what you like today. >> i would start with lamar advertising, it both represents the type of company we invest as well as our style of investing. lamar first came to the high-yield market back in 1996 and we invested with them then. >> are they a billboard company? >> it is. an advertising km. and we've invested with them since 1996. it's still a prominent part of our portfolio. we like both the company management team, their position in the industry as well as the industry. >> their paper, not their equity, right? >> these are their bonds. >> these are their bonds. it's not the equity. >> there are no equities in our high yield funds. >> hca, in light of the decision coming from the supreme court, hca being a hospital company, why that one? >> hca is a defensive company in a defensive industry, so there is some volatility or uncertainty with health care. we think that the hospital space

within health care is the best positioned for that uncertainty. and we think that hca is the best position within the hospital space, so hca operates with about a 19% operating car flow margin. it's large, it's diversified, they generate what we love which is cash flow and they use it to pay down debt. >> what do rising yields in the treasury market mean for you, your fund, your investors? >> it's a great question especially with what we're witnessing today. as we look across the bond markets, we see much better value and credit risk than an interest rate risk. credit risk in high yield market generally its key dermna nan determinant is the economy, as interest rates go up the economy is improving which is good for high yield bonds as opposed to much of the bond market. >> kevin, thank you very much. appreciate it. good luck to you. straight ahead, the story everyone is talking about goldman sachs executives in

europe, rips the firm to shreds in a "new york times" op-ed. some refer to clients as muppets. who knew that miss piggy did debt offerings? >> what is inside the buzz -- what is the buzz inside goldman, i should say, about all this? is it a huge black eye for them or a single disgruntled former employee venting? we're all over it. we're going to talk about it in a flash. [ hermann ] there's always something that's going to have to be done by a certain date.

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welcome back to "power lunch," 2 1/2 hours left in the trading day. let's reset the markets. all three major indexes are in the green, the dow is trading higher by 26 points and the nasdaq above 3000, the vix up better than 4%. the yield on the ten-year note at 2.2%. and the biotech sector while the biotech index is up 15% for the year and outperforming the broader indices, the gap is narrowing. what was an 11% margin in mid-february between the nbi and the s&p 500, that's now down to 5%, so why the pullback? well, some hedge funds i spoke to said that they are simply booking profits.

we also had a series of disappointing data from the top drug makers and weak 2012 guidance from key biotech heavyweights all that pushing some investors to rethink their position in biotech, so we'll be monitoring this space very closely from you. but from biotech to commodities let's switch over to sharon epperson at the nymex with the latest, sharon? >> the latest trades in the close here in the gold markets, we are looking at gold prices that have settled down more than $50 on this session. we are right above the 1640 an ounce level, how low can gold go, whether we'll see 1,600 or below as the next support level. we're seeing a big drob in silver prices. again, the dollar strength and the fact that we'll likely not seeing more kwan quaytive eaqua. and, again, the industrial component there, if we do see continued economic recovery, that will aid that side of the

metals market. back to you. >> sharon, thanks so much. not easy being lloyd blankfein today after a former goldman sachs executive blasted the firm in a "new york times" op-ed piece, greg smith a 12-year veteran in derivative sales said the atmosphere at the bank was toxic and destructive, that's the title, why i'm leaving goldman sachs. smith continued his withering attack with this knock. it makes me ill how callusly people talk about ripping their clients off. over the last 12 months i have seen five different managing directors refer to this their own clients as muppets. not surprisingly twitter was ablaze in response. here's a sample, dear goldman sachs, you're fired, best kermit. anxiously awaiting kermit the frog's response to "the new york times" goldman op-ed piece. and finally, that goldman sachs refers to their clients as muppets is the best explanation of the current crisis. how big of a ding is it to

goldman's reputation, let's ask cnbc's senior editor, john carney. good to see you all. first, what are you hearing from guys inside? they must just be -- john, tell me. is this a cranky guy who should have been managing director by now but isn't and he's leaving, is he a sour apple, what? >> it resonates with a lot of people. the very first person i spoke to at goldman said, you know, this exactly what i feel has happened to the culture inside. this isn't a universal opinion, however. i want to add that some people said this guy is a jerk, he waited until after bonuses to resign and he's blaming us for being greedy? there's a bit of mixed reaction inside goldman. >> how about, susanne, what are you hearing from guys and women presumably? >> the same thing. it resonated, a lot of people are, "a," talking about it, but there's a mixed view from good for him to, you know, what was he thinking and i can't believe, you know, that this happened and he couldn't have taken his views personally to the top ranks of the firm. i mean, everybody has sort of

one view or another and, you know, everybody's reading it from internally to clients to -- >> michelle, one thing i'll say is that i spoke to people who are actually on their own with their family trying to explain, you know, mom, dad, it's not really such a bad place. i'm not a bad guy. but other people are saying it's making them rethink why they are there, they do think something has changed in the past few years. one guy said, look, when i started looking here, i was helping clean up rivers. we turned out the lights when the power grid got a little taxed during the summertime, and he said some of that good citizen spirit that goldman used to have has gone away. >> i don't think any of them will be using the phrase doing god's work today. >> i got to tell you this -- >> let me just get goldman's response out there because i think it's important and i want to get you to react to a couple things. goldman said officially we disagree with the views expressed which we don't think reflect the way we run our business. in our view we will only be successful if our clients are

successful, this fundamental truth lies at the heart of how we conduct ourselves. sue, let me ask you, this has already cost the company about $2 billion in market value, so this is a $2 billion op-ed is one way to look at it, but is this damaging to the business of goldman sachs long run? >> well, i mean, this is a sort of there is no gambling in the house. this is hardly a new situation that goldman has been in, a new allegation that has come forward. this has been debated since even before the financial crisis skill think it heightened during that. i think the issue if i was looking at it from goldman's point of view, you have a guy so angry that he did this, there's clearly a cultural problem inside that despite going through the business standards that they let through, the report that they put out after the financial crisis, after the fraudsis >> but can you really say that? i don't mean to carry their water here at all, because i don't know enough to do that, which you certainly do. but do you say there's clearly a cultural problem there or could this be a cultural problem with this one individual who came in

with expectations that weren't for him met the way he expected them to be? >> i think goldman knows enough to know this isn't one guy in the entire firm that feels this way, and i think when somebody is angry enough to do this, it's one thing to feel it, it's another thing to resign in the morning and put your resignation letter in "the new york times." i mean, this is a problem. and i think that it's sort of something that they have to look at culturally, they may not think they're doing this, they are saying they don't do it with their clients and they need their clients to do business. they obviously have clients that want to do business with them. the fact that employees are doing this is a real problem for the leadership of the firm. >> but, john, bottom line, it does come down to, do you see clients leaving because they believe that they're not getting the best advice that they could? >> one of the things you have to realize, wall street is a much smaller place than it used to be. there's not very many places that clients can flee to. but goldman is worried, they don't like their clients to open up the newspaper and see that we are calling our clients muppets.

he said he heard it from five different managing directors. that's a very bad sign and it does indicate that there's a cultural problem, not just his grievances but the fact that he's pointing to a whole stream of people who are behaving this way within the firm and he's not alone. i talked to people at goldman sachs who say very similar things, and so i don't think -- i think it would be very dumb for goldman to try to say, oh, this is just one guy, because it's not true. >> is it also the fact that if you go back 20, 30 years goldman was an advisory business, right? they did a lot of advisory work, what is advisory now, it's much, much smaller and now it's a trading firm. >> i mean, this is what i mean. this isn't a new issue. but the fact that this cultural -- this lingering concern is going on among your employees, i mean, it's not like they turned into a trading house three years ago, but i think as it has tilted towards more trading, this has gotten worse, and i think despite their efforts, this issue is still hanging around is a huge issue for them. >> i think that's actually one of the biggest problems for

goldman is, remember, a year and a half ago they went through a giant reorganization. they had their business standards committee. they were supposed to be refocusing, communicating to their employees that they were about their clients, that that was going to be their focus and apparently at least where this guy worked, in the london office and from other people i've heard from at the firm, that message hasn't really gotten through. >> will mr. smith ever get a sandwich on wall street? >> do you know wall street -- with what i've seen, he probably will, but i think he'll have tough sledding. >> there's a lot of hedge funds that agree with what -- with what mr. smith just said today, and i wouldn't be surprised if some of them said, do you know what, you have skills, you can come work for us. >> i'll predict this, mr. smith goes to washington. i bet you he gets called in front of some committee fairly soon. folks, thank you very much. >> thanks. up next on "power lunch," housing is still struggling to recover, but the home building stocks are on fire. >> yep, many hitting new highs, up between 20% and 50% this year.

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ttd#: 1-800-345-2550 coming up on "squawk on the street," rising sales, rising prices, the real estate report that's giving the housing recovery a big boost. plus, a big drop for bouillon, has gold really lost its luster? we've got your next move on precious metals. plus the deep fried stocks that could just be the right ingredient to heat up your portfolio, that's all coming up next on "squawk on the streetre top of the hour. home builders on a tear, perhaps surprisingly so, up 30%, dr horton, lennar, pulte, will

the run continue. joining us is a home builder/analyst with deutsche bank. and cnbc's bob pisani is with us as well. what do you say? can these stocks continue to run? it's not just the home builders. a lot of building supply stores had very good sort of retail results. people are coming back a little it seems. >> yeah, you know, if the data continues to come in strong, there are potentially further gains in these stocks and that's what we see unfolding. the question here is you have seen in the anecdotal evidence if you listen to the builders talk about the market, if you talk to private builders, if you look at some of the private sources, the recovery has gained steam. it hasn't shown up yet in the public macrodata, as that comes through, that could drive some further gains. >> bob, you used to cover real estate. what's your point of view on this? >> well, he's right. he's just right. we see spring home buying season, the traffic appears to be pretty good. we see early indications of

orders, oh, 20% to 30% above last year. that's good. but that's about in line with what the expectations have been. we see mortgage applications up a little bit, but still low, and we see jobs improving. overall it's getting better. my question to you is, are these stocks fully priced for this recovery that we're seeing? so far we're at new highs on them. how much further can they go in the current sproirmenvironment? >> the way we think about it is first the market has to convince itself that recovery is even happening at all. by our estimates there have been seven head fakes in home building stocks since the downturn began. this is the eighth run that they've had, so i would say to this date we're only about 75% pricing in that recovery is even happening. so, i would sigh that we've still got another 25% to get to the fully pricing it out. >> your top picks are mdc holdings and d.r. horton, why don't you talk about those and why you have holds on lennar, toll, k.b. home and pulte.

>> yeah, sure, well, the way to look at this is as we go from just pricing in whether recovery is happening at all, the next stage will be much longer. what is the recovery going to look like, what are the year over year growth rates going to look like? you want the builders with quality balance sheets that can invest into the recovery and have less land supply sitting on their books that might be legacy leftover from the boom, and that's why we like mdc and d.r. horton. >> can you explain how you value these stocks? aren't they traditionally valued on book to loan value, they own land and homes, isn't it a mult mall to book value the way you look at it, is it at historically high or low levels, where are we? >> you have to value them on price to book. they aren't normal companies with ongoing earning streams they are like private equity land funds which is why you have to use price to book. the quality names like d.r. horton are trading 1.4 times, that number could go to 1.6 times if the market believes

recovery is happening and you get earnings accretion and even more multiple expansions past there. >> what kind of price cuts have the high-end home builders, toll brothers especially, what kind of price cuts have they had to take to clear their inventories? >> well, the new home inventory has been at historic lows now for well over a year. probably going on two years now. so -- and if you look at the builders' gross margins which tells us what their pricing margin has been like, we've had stability since the home buyer tax credit went ago, even though the case-shiller home indices, we've got more than that. >> thanks for being with us. >> thanks for having me. coming up next on "power lunch," cashing in on the cleansing craze. we don't mean like cleaning your house. we mean cleaning out your system and losing a little weight in the process. we're going to take you inside the booming business of cleanse, self-cleanse. we'll tell you which is number

one when it come to the preferred juices at goldman sachs' cafeteria as well. ♪

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welcome back. time for three stocks in 30

seconds. let's look at endosite, it submitted a request to market their ovarian cancer treatment in europe, which if approved would broaden their customer base. look at drugmaker cyclone pharmaceuticals, surging to a seven-year high after beating street estimates. its fourth quarter profit came in at 20 cents per share. and rad vision moving he'ller on reports that telecom equipment maker avia will buy the israeli company rad vision for $250 million to $300 million, it has faced difficulties after cisco systems previously its largest company acquired rad vision's number one rival. michelle, back to you. >> thanks. a wave of juice sweeping the nation. drinks that cleanse your body and help you lose weight as well, it's becoming such a big business that starbucks and jam ba juice are looking to get a piece of this booming segment. jane wells is in los angeles with more. jane? >> michelle, mother nature in a

glass? beverage industry magazine predicts the smoothty and yogurt drink market will top $1 billion. starbucks has bought evolution fresh to try to do for juices what it's done for coffee, jamba juice has launched a fresh juice initiative with new blended juice drinks minus the sherbet. and taking wall street by storm, blueprint cleanse, a cleanse that costs $65 a day and is selling in whole foods. most of the clients are women, but a lot of men are using it in places like, yes, goldman sachs. >> we do tend to see men specifically in, you know, the banking groups participate in the cleanse as a group. i think there's kind of a sense of, you know, brotherhood, camaraderie, competition, whatever you want to call it, but we do see significant numbers of groups of dudes drinking juice together.

>> and dudes in la-la land, too, press juicery deliver your organic cold pressed cleanse right to your door, $48 a day plus delivery or you can buy one bottle for $6.50, cleansing is expensive and it's tough. >> at my buddhist center people were doing it, just to, like, be healthy and so i tried it, but i only lasted three days because the smell of food would take over and i got, like, faint. >> sometimes people have a hard time wrapping their heads around, well, it's just juice, why is it $6.50. yes, it's just juice but we're talking about unpastueurized juice. >> and the celebs are going for it, and salma hayek got into it

a . >> that's the vernacular, i'm doing a cleanse. i hear yoga women say this. >> how does it taste, jane? that good, huh? >> better than a bacon milk shake. >> all right, jane wells, the all right. with the all-new e-trade 360 investing dashboard. e-trade 360 is the world's first investing homepage that shows you where all your investments are and what they're doing with free streaming quotes, news, analysis and even your trade ticket. everything exactly the way you want it, all on one page. transform your investing with the all-new e-trade 360 investing dashboard.

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all right. we've got negative across the board but not by much considering the very big run we had yesterday. industrials lower by 2 1/2 points, still above 13,000, the nasdaq is lower by nearly seven, but way above 3000, 3033. let's go to the charts here, goldman sachs intraday after the op-ed piece, calling it a $2 billion op-ed because that was roughly earlier in the day what the loss on the market day was for goldman sachs. this is a company that has taken more than a few hits over the past couple of years and there it stands at $120 a share. >> did you ever think that kermit and miss piggy should be insulted? >> i think they should be. >> that muppets should be a pejorative. >> they are high class