this stock breaks to a 52-week low. i'm on the short side. i own puts. >> dennis. >> i want to buy canadian dollar, hope to sell the euro, i hope the damn thing finally breaks. >> guy. >> yesterday we lost a good friend, rich riziga from goldman sachs passed away after a short illness. our condolences go to his wife and family. he was one of the legends in our business. he will be missed. >> our prayers to him. thanks for watching, everybody. "power lunch" begins right now. halftime's over. the second half of your trading day begins now. >> and get ready because it could be a busy second half. a breaking news tuesday. it's rather like someone just told investors there are some problems over there in europe. sue herera's on the floor in the middle of the sell-off and we'll check in with her. meantime let's check out the sboord you know at 1:00 in the east where we stand. the dow industrials off 176 points, or 1.3%. the s&p 500 down 1.4% at 1,350.

the nasdaq down 1 2/3%, but it is gold. as you see right there, that is really getting whacked. oil falling on fears regarding europe's economy. and check your mail. bank of america giving away money to customers who are holding mortgages. there's outrage from coast to coast, but we'll focus on one guy's thoughts in chicago. but first let's get down to sue herera. sue? >> it's a very tough day down here, ty. thank you very much. if you're long the markets, a dark ugly day. tyler showed you the scoreboard. let's get the details on what's behind those numbers. michelle caruso-cabrera is talking about the thorn in the market's side known as greece. sharon epperson on the big sell-off in gold. but bob pisani's with me. it's debt. the debt worry is back. greece is not necessarily the problem as much as the symptom of a much larger situation. >> and it's boorish to say this but what happened in 2008? excessive debt create aid deflationary spiral and that's when all these q.e. programs came in. and we've never really addressed that. and you're right, greece is a

symptom not a cause. we're seeing concern about the slowing growth due to the excessive debt today. take a look at what we see around the world. much higher volatilities in the stock market recently. i noted the vix and the futures curve a lot higher today than it's been recently. big decline in the commodities. the goldman sachs commodity index is at a new low for the year. this is a big basket of all the commodity stocks we're looking at. sharon will tell you about gold here. we're seeing german bonds. u.s. treasuries at new highs. and we're seeing the aussie dollar moving down and the u.s. dollar moving up. you can call this the risk-off trade but more accurately it's concerns about global debt levels. >> thank you very much, bob. we'll see you again later in the program. sharon epperson is joining us now to talk about gold. and sharon, a lot of people think that the move in gold is counterintuitive, but in essence if you think the debt problems are going to rein in global growth that's why you would sell gold. >> absolutely. it's anti-inflationary. as george from rbc capital markets pointed out you that buy gold for purchasing power, to preserve your purchasing power because you think prices are going to move higher.

that's not going to happen in europe anytime soon with the issues that we're facing. and right now we're looking at traders with about 25 minutes left in the open session even moving even faster here in this marketplace. it's getting really loud behind me. the volume has been increasing today. much more than normal. because we are basically giving up nearly all the gains for 2012. if we close here below 1,605, that would be the lowest close for the year. >> all right, sharon, thank you very much. of course not everyone is getting slammed today. if you put money in these inverse etfs, you are up today. sh is short the s&p. dog is short the dow. ddd is double short the dow. d.u.g. is short oil and gas. and dzz is double short gold. dzz. look at that. up 4%. let's get to jim iuorio of tjm institutional services. apart from those options which can help you on a day like, this

how do you make money on a day like this? >> first off i'm impressed you got all those numbers straight. it made me dizzy listening to it. i am short goldman. there are plenty of reasons for me to like that position and think about adding to short goldman. it's not just the things in europe. it's also i think the campaign rhetoric is going to be brutal on banks going forward. now the current administration is maybe a little defensive about the economy slowing. i'm short goldman. the things i do like and i've liked them in the past, i am long. things like utilities. my particular favorite today is s.o., southern company. m.o., altria. they pay a 5% dividend, and that dividend looks fantastic when you compare it to a 1.8% ten-year treasury yield. and i think people are going to pile into things like that and those o'two are both doing well. another thing i like that is relatively getting hammered today is bristol-myers squibb, getting hammered along with the rest of the market as well. i think you pick up a good health care name like bristol-myers squibb. it does have the dividend and you get a little cheaper today. so i like all those things.

>> all right. thanks very much, jim. let's see how the bond market is reacting. that's one of the places that people have been putting their money, because of the financial mess in europe. we also have the results of the three-year note auction. rick santelli, you're up. how is the demand? >> the demand was very good. the auction 32 billion threes came in at a yield of .362. the w.i. market was right there at 1:00 eastern. it was 36 1/2 bid offered at 36. the bid to cover at 3.65's the best since january. and you're hard pressed to find another one in that region going back through time. 35.7 on indirects. very close to the ten auction average on 37. 11.2 on directs. 11 above the average of 10%. b-plus. dealers took down about 53%. very, very solid auction. back to you, tyler. >> all right, don't go anywhere. you're going to be outraged by what diana olick is reporting. that's about two minutes away. just wait. but first, many are pinning a portion of today's sell-off on remarks by alexis cipiras.

i hope i pronounced that right. and the person who's going to correct me is right here. he is the man who is now trying to form a government in greece. he said today at that time country's previous bailout pledge is null and void, not having any of it. michele caruso-cabrera, you've met him. did i pronounce his name close to right? >> no. cipras. >> what is he like? >> he's about 37 years old. i call him a communist. he says he's not a communist because he's not in favor of the soviet union, to distinguish himself in the other communist party in greece. things are weird in greece than they are here. he is extremely charismatic, charming, but he is an extreme lefti leftist. the title of his party is the coalition of the radical left. oh, you want me to look at this camera. okay. and he has come out today and scared a lot of people, tyler, because he says things. he wants to make the bailout agreement null and void. he wants to nationalize the banks. here's the thing. these are all things that he has said before. he told them to me in an interview back in september. but this is the first time he's

ever had any real power. he's been given the option to try to form a government. actually -- >> it's not happening, though, is it? >> no one believes he's going to be able to do it, but certainly he's gotten a lot more power. the reason we interviewed him way back when when he had so little power is he really us as a potential up-and-comer because he had so much personal charisma and draw. >> charisma can carry you a long, long way. there we've seen that a lot. >> michele, thank you so much. sue? >> now to the housing mess and a widespread but controversial new move by bank of america. the bank is offering to lower mortgage balances for homeowners in trouble. diana olick is live in washington with the details on that one. diana? >> well, that's right, sue. the letters are arriving. 6,000 will come here to troubled borrowers in maryland. bank of america offering 200,000 customers nationwide mortgage principal reduction, about averaging $150,000 each off the loan. it's all part of the $20 billion mortgage servicing settlement. bank of america's cut of that

was $11 billion. but the numbers could go higher. >> anything above that we are prepared for. we've committed to doing every customer in that $22 200,000 whs eligible. we will offer them principal forgiveness. we have that calculated into our earnings and we prepared for it already. >> to be eligible you have to be underwater on your mortgage, that is, owe more than your home is currently worth. you have to have been delinquent already on your loan as of january 31st of this year. that means you cannot start missing payments now to be eligible. and your loan has to be serviced by bank of america and either owned by them or by an investor that allows these modifications. now, is this fair to the 90% of u.s. borrowers who are still making their payments? many of them are underwater as well. >> we get that 10% into a modification, which they can then become a performing loan, so we get them down to a balance level and an interest rate, they can start making their payments, stay in their homes. that'll be actually better for

the borrower. it'll be better for the investor. and it will be better for the community. >> now, bank of america tells us these 200,000 letters will go out throughout the summer. they have to stagger them in order to handle the demand. their biggest concern, though, is that people will think it's some kind of scam and throw the letter away. we've got lots more of this on the block, realtycheck.cnbc.com. sue? >> diana, thank you very much. as promised, rick santelli-u get to put the period or perhaps better said the exclamation point on this story. diana says b of a thinks it will be better for the community, better for the investor, better for the homeowner. i have a feeling you don't agree. >> listen, what bank of america wants to do with their shareholder money or their own money, my hat's off to them. just don't create a cord that ties it back to the taxpayer pockets. just look at what's in disarray where the government has had a hand in throwing mud against the wall to correct the mortgage issue. let's see. ally financial, rescorp. just today is going to be allowed to go through bankruptcy. they were one of those five

institutions, by the way, along with citi, jpmorganchase, bank of america, you know, and ally still owes the taxpayers billions of dollars. and you know, bank of america did take $45 billion from t.a.r.p., but they paid it back. but it doesn't mean they aren't the subject and arm of the federal government in oh, so many ways in this election year. and if it all goes haywire and they're supposed to use their shareholder money and it costs more, where do you think that money's going to come from? especially considering the horrible relationship the federal government now has with all these institutions that t.a.r.p.ed out. there is definitely a link there. and unfortunately, it gets very tough to extract some of those favored treatments. >> all right, rick, thank you very much. "street signs" is going to talk more about this at 2:00 p.m. and they have a street poll. is the move by b of a fair or not? you can go to streetscenes.cnbc.com. brian schactman has a market alert for us. >> thank you, sue. i want to look at shares of

pandora. we of course were talking with the ceo on "power lunch" in our next half hour. the stock up about 4% today. they released some april metrics and with some year-over-year numbers. they had 1.06 billion listener hours. that's up 87% year over year. 51.9 million listeners. they had 34 million a year ago. they have a 6% share of the listening music market, which is about double what it was before. and again, we have the ceo coming up on "power lunch" in just a little bit. back to you. >> all right, brian, thank you very much. the facebook road show goes to boston, and kayla toushy, a zuckerberg groupie clearly-s following along. she is live. kayla? >> well, tyler, facebook served boston investors a new york breakfast in the form of bagels and lox today as a zuckerberg-less management team cut right to the chase. according to one attendee of today's meeting, facebook laid out very clear priorities for itself as a public company saying first it's going to increase its nearly 1 billion

user koint, second it's going to build out he mobile, third it's going to enhance the platform for developers and fourth it's going to try into crease its ad share. and then opting not to show its road show video after negative feedback from the new york meeting it turned to audience questions. one investor started asking why growth and r&d spending outpaced revenue growth and cfo david ebersman said they're still in revenue mode and they run a capital intensive business. there were also doubts over doing business in china, how relevant ads are and cheryl sandberg saying only 13% of ads have social context to users though that percentage was growing. even though the crowd today, sue, was just about a third of the investor circus in new york yesterday, boston investors saying they haven't seen an ipo road show draw a crowd that large since blackstone went public in 2007. take a look at blackstone's performance and investors are saying that in itself is a flag of caution. back to you. >> kayla, thank you very much. in the next half hour, pandora's ceo, joseph kennedy, will be with us. his stock is down 52% in a year.

it is up a little today. we'll get his take on why down and now up. sue? >> boeing's ceo is bullish on the u.s., ty. the shares of boeing right now. last trade in an otherwise down day in the market, down almost 1 1/4% at 75.05. down 5% for the year. phil lebeau speaking first on cnbc with jim mcnerney easterlier this morning and he's live at reagan national airport just outside of washington, d.c. phil? >> and sue, when you talk with jim mcnerney, he will tell you he is bullish on the economy but he is also a realist. so we asked him, how would you rate the economy right now, and he's pretty straightforward. listen. 2/3 of it in his opinion is functioning normally, as it should be. it's the other third that is abnormal and not functioning the way it should be. he says the key to getting the economy to pick up. less regulation which is needed to spur business growth. >> i think it's taking too long. but i think this is a very pragmatic country. i think we're going to come

together. i think it's going to get resolved. it's silly to me that it takes an election before we have a serious discussion. we've wasted a couple of years. but we will get there. and we will grow. >> again, as you take a look at shares of boeing over the last year, down 5%, jim mcnerney says there needs to be a nudge in order for job growth to continue. one thing to keep in mind, sue. you can't look at boeing and say they're not hiring. they've added 12,000 jobs around the world last year. a good chunk of those here in the united states. sue, back to you. >> good point. thank you, phil. another hot topic straight ahead on "power lunch." you know about the arab spring. well, is the investing world about to see its own revolution? we are calling it the shareholder spring. shareholders are mad as hell. they're not taking it anymore in many cases. before the break check out hershey hitting new all-time highs on a down day. the stock is up better than 1% at 67.77 and change. this is "power lunch" on cnbc, the home of the american investor.

investors rebelling in london against the ceo of insurance giant aviva. they don't like his pay. so today they forced ceo andrew moss out. shareholders are letting their voice be heard across the investing world. so is the shareholder spring upon us? mary thompson is on the case for us. mary? >> thanks, sue. halfway through the heart of proxy season some key no votes suggest shareholder clout is

growing. or is it? governance experts saying there is some shift in investors' focus but not necessarily a higher level of engagement. yes, the decision by the ontario teachers pension fund who oppose re-electing ceo dan hest to sprint's board is unusual for a big investor but it follows years of underperformance. a primary reason most investors get vocal. pay their battle cry in the past years but now that it's a permanent part of the proxy landscape firms more willing to talk behind the scenes to iron out differences with investors and avoid embarrassing no votes. this allows investors to focus on other issues that they want on the proxy or to put their efforts elsewhere like the legal action that california's pension fund calpers is taking against walmart because of allegations the retailer's success in mexico has been built on bribes. say on pay still garners attention saz it did at citigroup this year. the bank one of 12 firms so far where investors have voted down compensation plans. a high-profile vote. but the number of no votes this year running very close to where

they were last year during the proxy season. this according to i.s.s. but in a sign of a slight increase maybe and investor concerns about pay or performance the average percent of no votes on pay ticking up to 29% at s&p companies this year. s&p 500 companies this year. that's up from 25% last year. ty, over to you. >> all right, mary, thank you very much. so are we seeing that shareholder spring? let's get the ideas of dennis berman of the "wall street journal." dennis, welcome. good as always to see you. >> hey, tyler, good to see you. >> are we this n. spring here or are we in summer? these things have picked up now it seems but are they having a greater effect than in the past? >> as we remarked earlier today it's really more of a summer than a spring in my mind. when we've seen activists in particular really have command of the board and you see boards fold one after the other, i mean, take for instance allied brands, or fortune brands. they make golf clubs. they make jack daniels whiskey. that company split up because bill ackman of pershing square basically said, you have to do this. and they folded.

across the board companies are not resisting. they are bringing activists into the fold and saying what can we do for you? >> are they having an effect on pay? >> yes. we will see -- >> really? >> we will see in the next few weeks comp data will be coming out in the "wall street journal." you will see boards having more responsibility to their shareholders and having a lot more pay for performance. the performance has to be there. >> we'll come back to you in a little bit. i'm thinking of mesa hawkins and sam with chesapeake. they certainly are in the news in a way they have not been. bad day for gold and for the golden arches. next on "power lunch," mcdonald's shares taking a hit today after disappointing the street. so does that make it a buying opportunity right now for you? also ahead, the ceo of pandora. only on "power lunch." he's bringing the music. [ fe] it's time for the annual shareholders meeting. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced.

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the restaurant stocks in focus today. but fast food is falling flat. mcdonald's missing same store sales estimates and earnings at wendy's falling short as well. wendy's under a lot of pressure today. jane wells driving through with the latest on the food stocks for us. hi, jany. >> i used this as an excuse to go buy a mcmuffin. we got starbucks. we got duncan. any excuse to buy food. restaurant earnings have done well. and some analysts have wanted to credit, wait for it, the weather. but that may moderate now that the weather's supposed to be nice because it's may. but when wendy's missed expectations today and is being

punished even as the number 2 burger chain returned to profitability, wendy's lowered full year guidance and margins are taking a hit on higher beef prices. ubs expects a tough second quarter as burgherer king comes on strong. the king used to be number two. it could impact mcdonald's. opening its first store in india the baskin robbins -- >> jane, i don't mean to interrupt you but we've got some breaking news that we need to go to phil. phil, it concerns ford. >> ford has just announced it's going to be effectively cutting in half its summer shutdown, the traditional two-week shutdown will only be one week. all of this so that they can increase production here in north america. this means they're going to build an additional 40,000 vehicles at a time when they usually would have the plant shut down for the digsal two-week break. all of this coming after we had chrysler saying they're not going to be taking a summer shut down. all of this feeds into what we're seeing in the auto industry, keeping up with demand

for new vehicles, and i wouldn't be surprised at some point if we see some kind of an alteration in the future when it comes to general motors and some of its production. not all but some of its production. ford increasing production by 40,000 vehicles. the summer shutdown will only be one week, not two weeks. sue? >> phil, thank you very much. all right. back to jane wells, who is spoking about the fact that a number of these companies are going into some of the bigger markets. you were talking about india and dunkin' donuts. >> yes, i was. dunkin', its stock is up year to date. well, it's down today. it's up year to date while mcdonald's and wendy's has been down. the company is holding an analysts meeting today. it's under pressure since going public last year, signing lebron james to be a brand ambassador to asia. sue, is that a slam dunkin' move? >> it might be indeed. thank you, jane. appreciate it. >> you bet. next on "power lunch," the metals markets. you know, all of the metals down across the board. they're closing for the day. we'll hit the floor as gold is dropping like a rock.

it is a very difficult day for traders today. today. we have product x and we have product y. we are going to start with product x. the only thing i'll let you know is that it is an, affordable product. oh, i like that. let's move on to product y, which is a far more expensive product. whoaaa. i don't care for that at all.

yuck. you picked x and it was geico car insurance and y was the competitor. is that something you would pay for year after year? i, i like soda a lot but for a change of pace...

welcome back to "power lunch." i'm brian shaktman here at the markets desk. a lot of chatter out there on green mountain. heavy volume trading today.

up about 4%. the chairman actually had a margin call, had to sell 5 million shares, about a third of his holdings. keep in mind when you look at this intraday chart and you see it up 4 1/2%, it's still down, sue, 48% or so in the last week. so it's getting a bit of a bounce at least today. back to you. >> thank you very much, brian. gold, no bounce to be seen there certainly. breaking below key technical levels. hitting four-month lows. prices are closing right now. and sharon epperson is tracking the action at the nymex. and we really didn't get any kind of a respite from the selling right from the beginning of things, sharon. >> we really didn't. it started at 8:20 this morning with a huge plunge there right at the open outcry session, start and now we're look at price that's may be posting the lowest close of the year for this june contract. we're right above that $1,600 mark. a lot of traders pointing to this being post-election reaction here for what's happening in france and greece and very concerned about the recovery in europe. also others are saying that perhaps warren buffett did have

an impact on this market. and of course he has not been a fan of gold for quite some time. but traders that i talked to say really it has to do with technical selling. you say it's all really about technicals not necessarily the news. >> well, we've been stuck between 1,625 and 1,675 for about three months, and right in the morning as soon as we got through 1,625 you sue 1,611 and then throughout the day it was just a wave of selling. so we haven't even been able to retrace up back to 1,615 or 1,625. nowhere close. you're seeing a lot of technical selling. >> sue? >> if longer term you're bullish on this market do you take the opportunity to get in today or is the momentum to the down side too strong? would you wait until things settle out a little bit? >> i think right now you have to look at momentum being in selling territory. until we see something turn around i think i would still continue to sell rallies and buy dips. >> how low could we go here?

>> i like 1,581. >> a lot of traders are talking about that mid 1,500 range, sue. some are saying we could even see a dip to the 1,400 level. i have more on cnbc.com. >> thank you, sharon. appreciate it. s&p hitting a two-month low. let's get the trading action here. bob pisani's here with me on the floor, but i should note the market has improved considerably since we started. >> we're 50 points off of the lows for the day. that's the good news. still about 4-1 declining to advancing stocks. volume a tad heavier than normal. i wouldn't say dramatically. we'll do about 4 billion shares on the consolidated -- down 1.3%, 1.4% on all the major sectors all across the board, consumer, energy stocks -- >> and retail -- >> retail got clocked rather badly on some of the retail earnings reports that we saw this urban mog from fossil, which is a bit of a surprise given that we knew the european market was weak and they're very

heavily exposed there. hershey's had a new high there but that's just about it in the consumer names that are moving up. >> all right, bob, thank you very much. we want to bring your attention to the news alert down at the bottom of the screen. the kraft group along with wynn resorts have suspended their bid to bring a casino to foxboro, massachusetts. kraft is off just a quarter of a percent. and of course that's with some heavy pressure in the market today. an interesting story that i know brian schactman and the rest of the team back in e.c. will be following for us. nasdaq is under some pressure as well today, perhaps not surprising given the sell-off we've seen. three-month lows hitting that index. and seema modi is following those developments. >> further economic turmoil in the eurozone is pushing investors out of risky assets like tech stocks. that's why we're seeing a sharp sell-off in some of those tech heavyweights. ibm, a blue chip, down better than 1%, although we are off of our session slows. concerns over europe not the only reason we're moving lower. disappointing earnings report from electronic ards as well as

casino operator wynn resorts has those two stocks leading the decliners on the nasdaq 100. we're also seeing some big moves in the biotech space. dendreon investors hitting selling. a lot of concern about future sales growth of its prostate cancer drug. analysts at citi saying they are concerned with the risk reward of the stock and believe the only upside comes from a potential acquisition. so a broad sell-off we're seeing. tyler, back over to you. >> thank you very much. and speaking about getting whacked, high-end retailers getting hit hard on fears about europe. the s&p retail index down 1.5%. but up 16% over the past year. courtney reagan is on the retail beat. courtney? >> well, after fossils disappointed and lowered full-year revenue guidance, a question many are asking today is will the european debt crisis finally be the catalyst that will derail luxury's rally? fossil blaming softening macroeconomic conditions in europe for its revenue weakness. shares p been up 58% year to date. until today. shares are now down 2.3% so far

this year. those european sales weakness worries spreading very quickly throughout the hyatt retail sector today. the seemingly teflon retailers looking a lot less indestructible today. check out some of these names. and while most of the s&p has reported first quarter earnings many retailers are just getting ready to report. so investors are concerned today that the weak european sales trend could be an unwelcome theme over the next coming days. tyler? >> courtney, thank you very much. let's take a look now at the top five retailer stocks over the past year. sears for reasons of its own up 70%. lululemon up more than 57%. gap higher by about 50%. collective brands and hot topic up ut 47%. i thief been into one of those stores. another perspective on how to play the drop, andrew slemon is senior portfolio manager with morning stanley smith barney overseeing nearly $2 billion in assets for the firm's yoefrl -- of the firm's overall 1.8 trillion under management. andrew, welcome. good to see you. >> thank you.

>> there are a lot of reasons to the untrained i'd why may of 2012 feels rather like may of 2011. >> yep. >> greece is in trouble. >> once again. >> is it the same? is it different? >> i think it's different. and i think the major difference is that you have the ecb that is ready and willing to lower rates and be accommodative. and that's really the story of the stock market. right? which is what is rule number one of investing? don't fight the fed. we have the federal reserve saying if the economy weakens we'll do q e-3. we have the ecb ready to lower rates. and we have the bank of china being stimulative. so we have some very positive monetary policy going around the world. >> i suppose one other thing you don't have this summer that you had last summer was the looming threat of a debt crisis in the united states. >> exactly. nothing's happening in congress this summer. but what it does mean is later in the year we're going to have this fiscal cliff that everyone's talking about. that could create some angstlight later in the year. but i think after this pullback

we're having, and it could be over in the next couple weeks, it could be pretty good sailing for the market near-term. >> so some of the high-flying headline stocks like apple have been hit. do you see this then as a chance to buy them cheap? >> what has had for apple since they hit over 600? they beat the number, right? this company is going to earn close to $50 a share this year. the stock's trading at 11 1/2 times earnings. but there's a lot of what we call weak holders. when a stock goes up 45% in one quarter, it means people are chasing the stock and so that when there's a pullback they're quick to sell. and that's what's happening. >> let me push back in my own feeble kind of way. the history of technology stocks that race to these outsize total market valuations like microsoft, like cisco, is not favorable. how'd that work out for you? >> the difference is those stocks traded over 100 times earnings. apple's trading at 11 1/2 times earnings. it's trading at a 40% discount to your utility here in new york. new jersey. >> so if you like apple, what

else would you be cherry-picking at these prices today? >> sure. i think the story is that investors have flocked into dividend yielding stocks. so high-yielding stocks are trading at 20-year valuation high. growth companies, because people have very -- they're very concerned about the future. are at very low valuations. so this is a great opportunity to buy growth stocks. apple is one of them. but there's plenty of others. >> like? >> well -- >> in your portfolio, give me some examples. >> here's one in china. called netis. it trades here. ntes. it's an online gaming company. and anyone that has teenaged boys knows as i do that they love to play online gaming. >> oh, yeah. >> and so you have a company that's trading at 12 times earnings but growing their earnings at over 20%. banks here. texas capital bank shares, based in dallas. very good market. mortgages doing well. they're a mortgage lender. growing at 20% a year, selling at 13 times earnings. >> it's what they do, isn't it? >> exactly. the point is at a time when

investors are chasing high-yielding stocks that have no earnings growth, the real story is in growth stocks. >> three chaerz for growth. andrew slimmon, good to see you again. >> thank you. >> we'll talk about monster next time. >> you know it. >> back to you, sue. >> thanks, ty. gold getting smacked down as we just told you. the markets selling off decidedly. we're down about 35 bucks on close at the close. the dollar is up significantly against the euro as the price there gets more confusing. and check out office max. the shares are off about 10% on the trading session. the retailer beating profit estimates thanks to cost cutting. meantime, a quick update. kraft group and wynn resorts are suspending a bid to bring a casino to foxboro, massachusetts. we accidentally showed you the chart for kraft, the food company a couple years ago, but they are not involved in this particular situation. it is bob kraft. wynn is, however. and that stock is on the down side by six points on the trading session at 119.05. time for another market alert. brian schactman, take it away.

>> of course bob kraft owner of my beloved patriots who didn't win the super bowl again against the giants. two stocks to look at. one good one, one not so good. first solar hit another all-time low today of 16.48. slightly bouncing off of that. but i do want to point out nine of the last twelve trading sessions it has hit an all-time low. pretty incredible. the other one is grand canyon education. always keeping an eye on for-profit education because it's been a real split here. i've got names like apollo and clear education which are negative for the year and grand canyon and corinthian which are up for the year. good numbers, good niens guidance, and their enrollment and up. the stock is doing quite well, up 9.8%. and steeifel nicklaus added it their select list. >> pandora adding some new customers. the stock, however, has not done quite as well since its ipo. that is up next with the ceo. before the break, though, the commodity board and today's biggest five losers. of course gold leading the way. but cop herr a significant

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coming up on "street signs" at the top of the hour, investor psychology shaken. five down days after the dow hit four-year highs. we get some couch time for your portfolio and also is there a shareholder spring afoot? activist investors targeting a bunch of companies including yahoo. does another ceo need to go to restore confidence? and you've been hearing all day on cnbc about that offer b of a was forced to make to help out struggling homeowners. we want to know, is it fair that underwater borrowers behind or on their payments may get a principal reduction? vote yes or no at street signs.cnbc.com. we're going to reveal your

answers on "street signs." but for now back to sue and tyler on "power lunch." >> thank you, mandy, very much. we'll see you at 2:00. stocks are tumbling of course but investors are tuning in to pandora. shares are up 5% as listeners are sticking around longer on pandora's side and the company is attracting new customers. david faber is live at the ctia wireless conference with pann pandora's ceo. it's exclusive an cnbc. >> hi, sue. i am joined by joe kennedy. nice to have you here. you guys did present some very good news it would seem, at least being greeted that way by shareholders this morning. radio listening for pandora in april 2012. a year ago it was 3.1%. it has moved up significantly. active listeners 51.9 million. mobile is increasingly as we might assume, and we are here at the ctia, the most important single component of your business, correct? >> absolutely. i mean, mobile is the foundation of the experience. the way to think about it is

mobile wireless connectivity enables internet radio to reach all the places that consumers historically listen to radio. and that started being enabled really with smartphones and the iphone and continues today to connected cars and beyond. it's the foundation of our continued growth. >> there's concern as we watch google move to more mobile or facebook, so much focus on that. when and if the advertisers are coming along. what has your experience found in terms of the willingness for advertisers to come along with you as your user base of course has gravitated toward accessing you mobilely? >> we've seen tremendous growing in the adoption of mobile by advertisers. in fact, we more than quadrupled our mobile ad revenue last year from about 25 million to over 100 million. second actually only to google in terms of publicly available data on total mobile advertising. so we're a clear leader there. we continue to see advertisers wanting to be where their

consumers are. they know that's on mobile. and they're moving quickly to have those conversations that they want to have with consumers on mobile. >> is desktop going to be a part of your business at all in the next five years? does it continue to be vibrant? or is it sort of something that you kind of slough off? >> we continue to see growth on the desktop, but clearly at a much lower level. and again, radio's historically consumed, you know, not in kind of offices to some degree but most of radio consumption is in the car, in the home, on the go. so we've always known -- in fact, pandora has been on mobile phones now over five years. we've been focusing on mobile literally since the very moment that we launched the service. >> can you and are you taking advertising dollars away from the terrestrial radio providers? >> i think more and more that is the case. we are competing for those advertisers. that's really a function of that share that you referenced. with now almost 6% share of all radio listening in this country we are effectively larger than

the largest am or fm radio station in many markets in this country and on our way to being larger in most markets. what that means is to the traditional radio advertiser pan dora is a highly relevant compelling choice. lots of audience for that advertiser and some very powerful, unique capabilities in terms of targeting and int interactivity. >> and yet investors or those who would consider investing in your stock always come back to cost structure. your growth nobody can argue with. but royalties are by far your largest cost. paying the music providers. you know, make the construct for me that says you can actually become profitable given each listener you add you're also paying that huge royalty to the music company. >> well, the leverage in our model is really around revenue per hour. and when the hours are growing at a stratospheric rate like they are in mobile, which is great. consumer embrace of pandora personalized radio is amazing. but at that growth rate we don't really see the leverage. if you look at our business on the desktop, where the growth

has slowed down, desktop advertising is more mature. we actually have a content cost to revenue ratio that's about 31%. actually very much in line with the kind of long-term guidance. >> what is it on mobile? >> on mobile it's well over 50%. but we've really demonstrated i think the power of the business model on the desktop where we've had a chance to develop the market, the ad market is more mature. and our growth has slowed a bit. and that will eventually be the same case in mobile. >> you may be facing slowing growth but growing margins? is that what you're saying? >> it actually is the case that as our usage growth inevitably slows, we can't continue to grow 87% year on year at this extraordinary scale. we'd end up being more than 100% of all radio if that were the case. so wee inevitably slow and that enables in some sense the radio to catch up and because the leverage in the model is revenue per hour that really does enable us to kind of unlaush and fully demonstrate the power of this

model. >> david kennedy, thanks for joining us. >> thanks, david. >> shares up 6 1/2% on those strong mobile numbers from earlier. sue, back to you. >> with a lot of pressure in other parts of the market, very impressive. thank you very much, david. jim cramer has the ceos of sprint, at&t mobility, and ea tonight from the ctia. and as always, the madness begins at 6:00 p.m. eastern time. and he is then back at 11:00. so jim iuorio, how are you playing these high-profile ipos like a pandora, like a linked in, or are you playing them? >> i'm not playing them. but here's my take on them, is that there was a while that the market kind of grouped groupon and pandora in with facebook and to a lesser extend linkedin. and the problem i have is that at facebook and linkedin you build this network that becomes less portable if you were to try to extricate yourself from that. and that's where their value is. with groupon and pandora my problem is that people can replicate their business model. and pandora i like better than

groupon. i like better than groupon. but pandora still i'm worried that new technology will come around. tyler, back to you. >> jim, thank you very much. let's check our newly launched exclusive cnbc social conversation index. mobile edition. we are following the very latest buzz on facebook, twitter, google plus, and more about all things mobile. here are the top five phone brands for music apps right now. apple way out in front as you might expect. then motorola. then blackberry. samsung. and htc. blackberry in the music app business. hmm. next up, much more on today's market picture and how to play the rest of the week as you look there at this rather bad day for the bulls, even though the market is off its lows. ♪

welcome to the world leader in derivatives. welcome to superderivatives. welcome back to "power lunch." i'm brian schactman here at the markets desk. i'm always keeping an eye on the rare earth names and wondering if any of these companies will make it to the point where they can actually bring these rare earth metals to market here in the states. molly corp., rare element, and avalon, all three getting hit hard today. molly corp. the biggest of

those. rare element down 6%. and avalon another delay on their prefeasibility study which is a major problem for them. that stock down 26%. ty, back to you. >> we're going to throw out the script now, folks, and talk about the markets because they are topic a today. sue's with us. dennis berman. jim iuorio is with us as well. what we had planned, forget about it. we're going markets all the time. jim, let me ask you since you're sitting right across from me, you just heard andrew slimmon and he said yeah, people are thinking that this is like last summer, there's greece, but it's really not like last summer. do you agree with him or disagree? >> i disagree. i don't think it's like last friday. and i think the problems in europe are actually escalating. but i think our economy's in a little better position to handle that. albeit it's slowing a little right now but i don't think it's anything to worry about. the fed has told us conclusively that they are dovish. we know that over the last couple of years. and anytime problems start to happen we have chairman bernanke, yellin, dudley, they've all said we're willing to throw more money at this problem. we know they will.

>> dennis, slimmon's point was that the fed, the t european central bank stand ready to jump in and be the sort of protector, the pocket protector of the markets. do you buy that? and would it be so terrible if greece pulled out of the euro? >> i don't entirely buy that because there's an incredible political situation going on now in germany. does germany have the guts to basically throw away everything it's been saying for the last two years and give more bailout money to greece? and i don't think merkel has the political strength to do it. >> sue? >> i totally agree with dennis. i don't think that she has the political capital to do it either. and i think that we're starting to see the fracture of the eurozone, not completely certainly but it's at the edges. and i think that jim is right. i think things in europe are getting worse, not getting better. that's why you're seeing people move into the swiss franc. there are very few safe havens in the market. because the central bank has put a cap on how much they will let it appreciate that's not a good trade long-term for a lost

traders. there's a lot of frustration which is why you see people just dumping what they have and moving to the sidelines. >> i think we may be able to limp through the summer without the kind of major 20% falloff that we had last summer, but i kind of agree with you. i think that the euro's days, frankly, feel to me numbered. and that ultimate ly you're goig to have a northern european currency bloc and then the rest of them, the south. >> o'and over the last two years, tyler, we've seen governments, the ecb take steps, almost half steps to sort of stabilize things. but there's really not that much left. unless they want to issue you're o'bonds or germany wants to start make transfer payments to greece i don't think it's going to happen. >> i realize a lot of people who think that's absolutely the wrong point to take, but i do think that man, if i'm looking at this, just the way it feels, i'm feeling a tectonic shift here. >> the eurozone has been on one path toward one end. the question's always been how rapidly they're going to get there. at the end of the day can germany and greece and italy stay in a marriage?

two countries that have vastly different economic ambitions. >> and spain. >> and spain, sue. exactly. >> spain i think is one of the markets that is not being followed right now anyway as closely, the focus is on greece. i personally am more worried about italy and spain. >> folks, thank you very much. dennis, sue, jim, great. so is it fair that underwater b of a borrowers behind on their mortgages may be eligible for a principal reduction of up to $150,000? doesn't it make you just want to get behind on your mortgage if you get a principal reduction? go and vote on our street poll at streetsigns.cnbc.com. we're going to show you the results during "street signs," during the 2:00 p.m. eastern hour. we will be back meantime in two minutes. minutes. ♪

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in high school, i had a physics teacher by the name of mr. davies. he made physics more than theoretical, he made it real for me. we built a guitar, we did things with electronics and mother boards. that's where the interest in engineering came from. so now, as an engineer, i have a career that speaks to that passion. thank you, mr. davies. all right. before we leave you on "power lunch," let's get you up to date on the markets. the doufrnlgz off its worst levels of the trading day by beer than 40 points. down 147. the nasdaq is down 34. s&p down 15. tough close for the gold bulls,