first rate to debt that hundred thousand dollar modification. >> thank you very much for joining us today vmt it's been a pleasure having all of you watching us. and join us tomorrow. time for '"cake on the street." >> god wednesday morning. live at the new york stock exchange. jim cross-claim sir on assi assignment. take a look at futures today. going to be another tough one as the dow is looking at its 6th kw consecutive session. >> let's get to our road map for this wednesday morning. no surprise it starts with the

markets continuing to drive not just the equity trade. it is a four-month low here in oil. morgan stanley shares lower free market after revealing a filing that philadelphit would have to nearly $10 billion. this, as investors wait to take action on one hundred bank around the world. disney also beats on stronger theme park results vmt and the green mountain draw continues. the chairman getting ousted to meted margin callings. the stock taking another leg lower so far this morning, carl. >> listen, the u.s. can not shake often the longest since april 10th. plight cal uncertainty in greece for a third consecutive day.

also have concerns about the health of spanish banks. simon ho board of arbitratibbs . >> and people are focusing on what the spanish are intending on doing friday. you know the spanish had a property bubble the same as america did. what they're saying on one hand and what the report is suggesting they'll do on friday is saying you'll have to raise from 7% to 30%. that's where you'll get the figure of $45 billion. the other thing they're going to do into this collection is seven savings banks. almost a toxic bank. the state is going to put in another 10 billion euros.

so as carl says, if you look at this 20 year chart to an 8 and a half year low, where a good 50 points below, inevitably the spanish bond market is now beginning to see its yield spike higher. and if you look at the six-month chart, we're geting well give the sort of levels we had before the ecb came through with that massive injection of capital coming out of last year. we all said that the situation in greece would actually materialize itself in a market sevens on those yields. and obviously, that is what is happening here. skbl do you think the time is coming where we're hearing from german coalitions that are suggesting maybe it's time to let greece go their own way? >> we said that for a year.

at the moment, because it's -- we don't know how far it's gone. at the moment, the lenders are willing to give ground and give them space. if they're not, you have a complete stand off. >> yeah, the interesting action this morning, simon, i'm sure you noticed this, is the action with the german bond market. >> you see that on both side. it's the question you have to ask or maybe should be asked is are we headed back for a recession here. >> the u.s. could do 2% this year despite all the trouble that is we're seeing in europe and in china, as well.

we'll talk more throughout the morning, of course. >> morgan stanley, the meantime, says it would have to post $10 billion to counter parties in exchanges if it suffers a multinch downgrade. this is poised to start cutting ratings on one hundred banks. >> it looks like 60% of tangible book value and a two nch down dprad is priced in. but the question of three notch or two notch, that is not priced in. >> david faber, i know you're down in new orleans listening to this entire conversation.

and some of the spreads between goldman starting to widen here. we're seeing the two firms going -- there's different ways to some degree. >> yeah, you know, carl, of course, morgan stanley stock has been under pressure ever since earnings. >> that still seems to bun likely according to many people who follow the company closely. at least that was according to him. it does seem like in the 10 q perhaps moved up their consideration of just how much clotted rail would have to be take body care of, so to speak, if there were in fact a three notch downgrade. a lot of that has been based on this concern about a potential downgrade.

as you would point out, david, ifs not a liquidity issue. when we talk about additional collateral needing to be posted, they have $179 billion in liquid assets. it's slimplly collateral. and we should know that more began stanley reached a record high for the year. these three, the u.s. and different kind have been hit the hardest whenever the european bankss have fallen. that is what we're going to be watching since yesterday, we did not see a pick up in the u.s. financial services sector as we saw the rest of the markets pick up late in the session. we saw those declines stick. and they stuck until tend.

and that is what was troubling. >> morgan stanley still trading about 60%. meantime, macy's still ahead. and the guidance below, we're going to talk macy's a little bit more. meantime, disney. studio division did post a loss. the ceo focusing on last week's opening for the agenervengers. >> it's a franchise from our per spect eave. we see tremendous interest in consumer products and in games for the avengers.

we have the ability to be something much bigger. >> so there will be a sequel. interestingly, in the daily news today, scarlet joe hann son was talking to mayor bloomburg and he said to her hey, thanks for saving new york. >> wow, the avengers not included in this quarter. that's seen as a huge pick up. >> we've seen five price target increases. this morning. woofs really the highlight, not guilty just talk of the avengers and how to pick up the future quarters earnings, but also the parks.

the parks, the operating income was up 53%. tokyo disney had very strong gains and they're already breaking ground on shanghai disney vmt they say that china is going to be a primary focus for disney the the near knewture. that's a drat prompter of travel or spending. >> yeah, and the forecast came down 16 cent. so that's certainly positive. >> david, also entrusinterest ty about net flicks. so it looks like the digital strategy, at least for now, is goons to be as steady as she goes. >> carl, you know what i'm hearing myself, we're having some issues with the ifb. so i didn't really hear you very well.

in terms of that disney quarter, it was a good one. and don't forget the cruise ships. espn is what we always come back to when it comes back to disney given how important that is. and advertising rates continue to go up despite the fact that they're spending more on production and fees from the cable providers. back to you guys vmt. >> in terms of the digital partnership, there's some concern that it would capitalize ratings of tv shows if you have pry vault practice, what would it do to the ratings? >> let's move onto green

mountain coffee. the founder internal trading policies. another board member also asked to step aside. stiller tells nbc he was shocked and hurt to lose the title. he says there were no sec laws broken. the issue here is he got a margin call. that sale was a violation in the trading window in which you could not sell stock. but, again, he is out. >> yeah, as chairman. i think he's still on the board. interesting story. two top strike that jestss joining us this morning. jim paulson with wells capital

management and ceo of principle global investors. jim paulson, anything in the last ten sessions or so that is causing your well telegraphed optimism to get shaken? >> i get nervous just like everyone else. isi think the understood toe, i think the recovery of the united states is broadening. it's showing up in many more areas like housing activity doing better, like the job

everyone in the first four months of this year for the household numbers, we created 270,000 jobs a month so far this year. so i any it's a broadening recovery with the idea that by the second half of this year, we might get the emerging world going again. so do you want growth in those two areas of the world? i think it's a buying opportunity. >> jim, it sounds like you're almost on the same page. volatility is the name of the game. at the same time, when you've paired the stock declines that we've seen with the decline 234 gold, gold is at a 4-month low. the huge decline in oil. the only thing attracting bonds

are ten-year treasuries. >> this hs-tk a set back that i also see as a buying opportunity. you mentioned if weakness in the oil price. that is good nuys for american business because it makes many of the inputs, oil and other commodities, that american business used cheaper. so i think there is a little bit of good news. i do see what happened this week as essentially investors, specklators raising the probability of a disorderly event in europe. maybe the probability of that went from 10% to 20%. that's a lot of uncertainty by short term operators. i think it's a buyi ining opportunity for the longer term investor.

it's not your conventional recovery. but i do think since it's basically a u.s. domestic recovery, there is some ben nit in looking towards mid caps and small caps. but i would say h is a really good opportunity for the longer term investor. >> at that he has levels? or do you wait a while? >> i find that very hard, carol, to decide on a very precise way. i think the bract hcl way for an investor to play this is to have a plan and, of course, a setback like the one we've seen in the last week will take you a way to equities. if they're down five or six percent, you're needily like three percent under wealth. mine would say use this tinted

to get up to wealth. if there is further weak nests, you've got to avenue voyage down. it will be like the last year or two. the disastrous event probably won't happen. you'll see the rolling train wreck in europe with a basically positive development in the u.s. economy and markets. >> interesting to hear bot of you gentleman approach the story with slightly different colors. good to see you guys. >> in case you missed the headline, cp,w on the nasdaq has been halted. bed bath and beyond has announced that it has reached a definitive agreement in an all cash transaction. bed bath and beyond shares are

just about four bucks off of an all-time high. so we're waiting for it to perhaps open for trade. this is one we're watching today. >> when we come back, we'm trade the banks and find out if it's a buying tonality or just a sign the financials may not be safe to invest. >> s&p has bottomed before noon eastern time. we'll see if it happens again when we come back in just a moment. in your fight against bugs. ortho home defense max. with a new continuous spray wand. and a fast acting formula. so you can kill bugs inside, and keep bugs out. guaranteed. ortho home defense max.

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macy's reporting first quarter profits. but guidance is below wall street forecast. a senior analyst. great to have you both here. chuck, i want to start off with you. macy's had a beat, but it didn't raise the full year. also, if ewe wanted to pick on macy's again, gross margins were on the decline. what's good out of this quarter? >> i think if you take a step back, they just came from a quarter where they've delivered 40% gross earnings.

but to your point, they kept their guidance at 325 to 330 which is about 10 cent below the street. macy's is notorious for being conservative. the stock has been a bull. so the company doesn't have any -- it doesn't make any sense for the company to raise too much. this company has campi exceeded by over 30%. at the end of the day, numbers are going to go higher. skbl liz, would you say buy on this pull back, what looks leek 5% today? >> yeah, i absolutely aye with chuck. they tend to be con toughertive vb. it's yeast too early in the year to greaseive lie. and i think that i would be a buyer on weakness. >> liz, at the same time, we have seen a lot of buyers taken on the chin partly because of

what was said about weakness. we saw tiffany's take a hit. how much should we be concerned that there is a shoe to drop when it comes to luxury exposed to europe? >> i think it's a concern. obviously the big decliner yesterday on that weakness in europe. and i think it's certainly something we are concerned about. for macy's, i think that they're really ebbs poxposed more to th middle class. as the economic data continues to improve, i think that macy's number continues to improve in the u.s. economy. i'm focusing back on domestic stocks. macy's is a gray way to play that. they have strong momentum focused with exposure to u.s. recovery. >> chuck, does it matter to you

when that exposure is split between europe and china? are they equal liabilities in your view? >> i maven mean, i don't think they're equal liabilities at this point. i think that the terrorism market continues to be extremely strong in the narc market and i think that's probably helping out the likes of sack's and mmacy's. but we've been keeping an eye oven europe siphons last fall. >> all right. chuck and liz, thanks for your time. we appreciate it. >> all right. tiptoeing. >> coming up next, we'll get the word from the street to see what you should be watching before the bell. we are still looking at a lower opening here. >> yeah, i think we got one shot of some of the youngest floor traders i've ever seen.

we'll get a shot of them right after a short break. don't go away.

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it's always nice when we can get someone who's not of age in the building. this is going to be a benefit for schools. we'll talk about the ceo of the part ne'er ship in a little bit. someone just said what channel is it? i guess they didn't see the peacock on the set. >> it is cnbc. >> yeah, great to see you. we have about two minutes before the bell rings. what is your take on this extension of the sell off? >> well, paul and i had a chat yesterday. and we were talking about have you watched the progress? and one of the concerns would be spain or italy. what we're seeing this morning is there's been a spike in spanish bond yields. and that's what's got markets very concerned in here. and that's why we're extending this sell off.

>> over the weekend, there was a profile of people who were bullish, greek bonds who say they're not going to let the u.s. taxpayer or the european taxpayer take a hit. the per sen taj of bonds in private hands, relatively small. if they walk from the euro, is that a deal breaker? >> well, again, it ace a concern of con teenagen. if they tend to break or go back to the drop bond, people will realize, gee, i'm in italy, maybe they'll go back to the lira. if they take my money out now, i get the full value of the euro. maybe i can store that in some place i can find. that's the fear, that if they get away, you can wind up with runs on the banks elsewhere. >> does that mean that this is not happening yet? >> you have to watch the euro.

there's almost a mysterious bid for it at that 129, 130 level. and some of the cynics think it might be china because if they could keep the euro relatively strong, they could sell more products in europe. >> thank you. >> don't go away. let's get to the opening bell. there's a look at the s&p 500. the breadth looking relatively familiar here. at the big board, the schools highlights special needs children. over at the nasdaq, the largest financial services group in northern europe. so we'll work our way through some of the big stock stories today. disney, morgan stanley, green mountain. >> 7.1 stake and crying funds are saying it is undervalued or

represents an attractive investment opportunity. he says that it is an interactive collection. profitability has lagged and a nice pop to ingersol rand up almost 3%. that's when we saw some of the biggest turn arounds in the market yesterday as we did see the market struggle to pair its losses towards the end of the session. art, do you think that that is meaningful in terms of where we saw the turns and where we didn't see the bounce? we did not see the bounce with the fbl knell financials. we saw the bounce in multinationals. >> i think it was twofold. it was on people eegs list to buy. and i think it was a normal shopping list coming to bear in the final hour and a half.

>> 10-year, below 1.80 at one buoyant this morning. ic impact on what's happening? >> yeah, i think so. equally concerning was on "squawk box" they had the guy from ecri on. and he said i'm still with it and i think that there's going to be a recession. that will be of great concern. if the attention shifts from europe back over here to the u.s., that could be a problem for us. >> so i think worth mentioning at the top here, blow out guidance raising for 201. >> and we should also wachl aig. remember the treasury unloading as part of its stake over the weekend.

goldman sacks saying there's more attractive places to be. it says that as the treasury sells down, the discount that is assigned to that state should sec. aig will trade more on fundamentals. aig continues to sell to buy back more close ily in line with the value of its assets. >> yes, some have called it a go-to stock. the overhang was a billion share overhang or something like that? and whitney told us valuing best in congress over the weekend said that that was his top pick right now. aig is his top pick. that's his fourth biggest in his portfolio. someone wrote yesterday s&p is up for the year 8%. do you think emotion is being or

played here? >> well, i think, first of all, floor ruggers tend to be skeptics by nature. so when you walk in a room, you check with the exit doors are. i think when they see this vulnerability, and particularly coming from europe where they can't really get their arms around it, that probably understand scores some concern. >> okay. lark looking at what else is on the floor. as i call around on the strayeding desk. i think there's a realization that the european leadership has made a mistake that they were fairly timid. you can't really rejackets the bail out. that's not the way to go. and they are now waking up to the mistake that they've made. the consensus is that there's going to be another election in june in greece chatty and it's a

very high probability that the left may in fact win this win. that they infact, have the political momentum. the betting here is greece wants to stay in the euro. but the europeans are going to go along and continue to provide bail out money. and i think the your perenne leaders have realized it was a his take. i think you're going to hear more rhetoric now. that at this point, there is no choice. you're either in or you're out. and that the next vote is clearly going to be a referendum. it would still be spending more than it takes in. greece is still under water. greece is still completely dependent on handouts from europe. meantime, even ireland does not want any part of austerity.

there's going to be a vote on the fiscal stability pact. that's going to be in ireland in three weeks. three weeks ago, 60% were in favor of it. it's not clear whether this pact is going to pass in ireland. that's how the political tie is changing. so a lot of people more interested in watching that as the real front now in termings ofs of where austerity is going. i know decoupling doesn't exist. but if you've seen what we are from the recrenelate highs, we're down to only 4% here in the united states. have you seen every country in europe? as of today, is now down double digits. even if germany, even in france, now down 14% sibs the highs of

the year. spain is down 24%. italy is now down 20%. but down 4% in the s&p and it sure looks like a little bit of decoupling. >> let's get a check on trading with bertha. >> we've got chips and gaming software once again leading the way on the nasdaq. well, when bob talks about all the political wrangling, we are seeing board room wrangling. yahoo, the troubles continue there. now patty heart, the board member who led the hiring of scott thompson says she will not run for reelection on the board. green mountain is um and is now one of the stand outs here here on a mercedesly red day on that

removal of the fohn hr found herb and chairman because of the trading rule issue. human gee gnome, meantime, smith cline is going to take its bid directly to shareholders. and tomorrow you've phot an fda advisory panel talking about its obesity drug already. some of the notes saying they are positive. and soda pots today after that better than expected outlook and a better than expected quota. back to you. >> thank you very much. let's shift to bonds in the dollar. >> there is a huge amount of action today. if you look at our tenure, the european tenure, these yields are really moving lower, rather aggressively. going back to app september of last year, when we created our low yield close, you could see

we're within 10 basis points of trikeing distance to challenge that. you can also see that we're at the lowest levels since january and a another euro dollar. if you lack at the the 9 ah day forward rate that trades and converges, we see that the front euro dollar futures contracts are at the lowest price level since january. here's another out liar. you know, the swiss were tired of everybody piling into their currency. so what did they do? they basically packed it into the euro currency. you talk about a pancake trade? we've been just above that 120 level for a long timing. even though i'm splitting hairs, h is the closest we've been sfwoo looking into it it.

people have written greece off. when do you think it's going to default again? carl, back to you. >> thank you so much. we're watching a lot of these stocks. really shocking opens here. macy's is down very sharply down 5 and 3 quarters a percent. revenues came online and macy's has a history of being a con cebtive here. this is a stock that has been a favorite among as the stock continuesed to hit after a 502 work when just don't go into sources of liquidity and those too often are well-performing stocks that have given investors nice games.

so macys in that may recollects me think of that. we were watching ralph lauren being hit. lemon is down 1.5%. these are all stocks to watch as well as they provided stellar returns this year. as people actually went to these stocks, safety eye roanic come old one thing and to watch gas prices and the inverse correlation between households debt and spenlding. but it's a different thing to count on: >> we should flag some of the action in particular in spanish banks. bbba. std is down by 6%. ivgg, all citying what we're drying inback eh row. the merger of sieve smaller

banks, back-to-back. so there was a lo of people pulling a lot of the banks. but the european baxs greating slatserred. >> morgan stanley is down 2% putting up more collateral. >> going to david here in new orleans. david? >> yeah. >> i know you're wachling europe as well this morning. assuming your piece is fixed. >> yeah, its's more or less work than apologizing. maybe there's some bad weather up there. carl, i'm sorry. in terms of what what i'm watching this morning, we haven't really hit on glaxo. it's not a lot going on, as we all know. bop there has been this consistent beat of activity amongst big pharpma.

it eegs interesting because you can draw a larger picture here of companies that are willing to take slight risks, but not enormous risks. not the transformational deal. they need growth. we know that. patents expiring and so many other things. here you see glaxo just saying we're going to go to a tender offer. we made an offer for you privately and then you said you started your prosays we're going to start our tender off at $13 a share. it's still unclear whether anyone else will come to play. and of course you guys have talked about it all morning longs. you know, the parallels between this year and last year are not to be dismissed.

that is certain. again, given such a strong first quarter and throne concern through april and now once again in may, one only can hope at least from an investment perspective vmt. >> all right. thank you so much, daifrd. and we did some pretty gammy in terms of highlights a loll lot of the stocks were down, here's the real ity. so we paired our losses this morning and we're sdoun by about 7% of one percent. >> on the floor with some very special cast guestst. and if they vade to pyreneing brick spas vmt pave

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time to check on the markets. s&p 500.

take a look. cpwm has just opened for trade just below the take out price. bed bath and beyond acquiring the company. an all cash transaction. it is bed, bath and beyond's largest acquisition to date. >> with us this morning, straight from the opening bell, newmark schools and the ceo of nyse euro next. they are here to promote a $10 million capital campaign for the growth and future of special needs childrenment part of that campaign is a new, state-of-the-art educational facility. a lot of students joining us, as well. dunc duncan, an important project. tell us broadly about the future of special needs education? >> and thank you guys for doing this. it's obviously really important to us, prepidil personally, too. i think you guys know that lium goos to the school. he started five or six years ago

after floundering in public school, these two laid khis have caninged our life and the lives of another a lot of other stupidityings and families. so mu wife had the dream to see if we could help them build the state of the a art facility. we bought property in '010. we broke ground a couple months ago. so this is the public phase of the campaign. >> not only do you think you have a unique approach but also that you think this whole project is scaleable nationwide. can you explain why you think this is scaleable? >> absolutely. we have a systematic approach to teaching children with special needs. and its's a very well documented prosets that we do in our school. we've had other teachs come in and we train them now. what they're telling us is we've got to take this back to our kiss dict and use it. it's prying to practice inside the school.

we have a tremendous range of students and it works for all of them. >> rxegina, you broke ground in march? how long until it's completed? >> our goal is to be in our facility next july to start our extended school year plan. and i think the biggest thing, it will be a 21st century, state of the art facility for our kids. but the bigger pictures that we're really going to have a community crenelateer as well as a teacher training center to really broad hp our impabalate. >> and are there goals for each student? where do they go after they leave the school and they graduate? what's the next step for them? >> you know, individual goals for every student, many of our kids are going to onto college.

felicia is going onto unc next year. we have other students that would move back into their public school system, depending on what their needs are. but our kids are very successful. >> so, peter, you're standing right near me. you're a student. what are your goals? >> just to continue doing well in school. to get into a good college and have a successful life. >> what grade are you, christian? >> fifth. >> and what are you mixed excited about? >> well, i -- well, i'm most excited about the new school coming up. is that the right answer to the question? >> that's absolutely the right answer. >> thank you for being with us. it's really much appreciated. christian, that is one rocking suit. you have to tell me who your

ttailor is. we are in the midst of a continuation ovide the sell off for the past sessions down 114 oints. the it is the s&p 500 that is down the most. you do see gold continue under $1600 an honest. crude is also trading 19' 6. puck more in the markets. stay tuned. right after this. bank blank tdd# 1-800-345-2550 i'm constantly working my screens.

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and take a look at the markets. the dow jones down 1.5%. earp just commenting as we head into the final hours, the multinationals certainly awaiting markets today. industrials are down pretty sharply. ge is down by more than 2%. >> simon hobbs here with a look at what's coming up in the ten as well. >> we're going to have so much fun.

the marks are down, but we'll obviously keep a tag on that. >> we'll have a guy who with can make 40% over bank of america sales stocks. now, that interfew is going to be play play what you haired. the head of jive software will be here and also cinema graph. over to you. >> gold bars. that will be great. thank you vhf much. more gone began myers talks briefly about the markts today. >> we have seen some bottoming in the education, lately. >> i think people are hoping for that again today. i don't know if you're going to get that. for me rickets if interesting thing you're going to get is from the election refolate tea it locked lochhis woad goy to be the movement and it's taken a couple days to wash this out.

i think the equity market has been waiting to take a queue from the bond marketed. it's nowiven indication of growing the pegs many people is weeks away. >> exactly. and that is putting alile fear into the time phrase. >> when we come back, financials takes the brunt of the pain. we'll signed how how you should trade those names in just a mrt. duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services.

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with. bell welcome back to "squawk on the street." it's half the inventory expansion we are looking for. and last month at nine tenths was unrevised. and remember, march, the first month of the third quarter will have an impact on a poultry gdp for that first quarter. and if you haven't heard by now, you must be under a european financial rock. we continue to see the effectings of europe affecting markets and safe harbors whether you're looking at the guilt, the boom or the tenure note.

melissa, back to you. rick, back to you. let's get to the road map for this next hour. who began stanley dragging the broad broader financials lower. bank of america also hosting its annual shareholder meeting. what is the trade on the banks? we'll talk to two top ranked next. >> higher billings boosted revenue. we'll talk earnings, the push into the clod and, of course, facebook with the ceo. >> plus, those euuro bullies with $1600 an hones. what is next for the perks metal? we'll break it all down. >> along with flair familiar we r w sine from the companies to

leal millions of shares in the firm that they owned. bob stiller saying overnight that he's stun today be removed. stiller saying there were no sec laws broken. nothing in violation of federal law. toyota with expecting to triple that number as vehicle production recovers from some post disaster loans. >> back to the broader market sell off here for the third straight day. some concerns about euro zone stability weighing heavy on investor sentiment. we are watching very closely what is going on in spain vmt and that is certainly casting a paul over the entire banking sector down 7%. i have observed in my whtwo yea here the headlines is not

necessarily the main reason of what's happening. it is particularly true when there's downgrades of american growth going on. we saw it with the debt debockle. in fact, many people regarded that as a slow down. aged i'm not sure with what we're seeing here also has something to do with the reratesing of american growth. we haven't seen a lot of downward revisions to growth. >> yea, but it doesn't necessarily revolve around analysts. if you were a hedge fund or an investor, you may have thought that the u.s. would pull you outed of what was happening. now you're back to focusing on europe. >> if we have a stall on american growth that is just

flat, then, yes, concerns about europe and china, as well. >> at a time when the fed appears to be moving away at the margin from que. very important for oil and goal. and also financials, too. in the meantime, the shareholder meeting is just kicking off. here are some pictures. protesters have been taking to the streets all morning long. a lot of these folks associated tangentially with pan occupy related movement. >> good morning. >> paul, whether it's the occupy stuff or loan growth or this pending moodies action, trying to decide why anyone would want to move into a financial -- at least this week? you got an answer? >> you know, it's going to be tough. you continue to get the 10-year

to fall. and it's difficult for anyone to invest. so i think that's weighing very heavily. you do have some positive. you do have a big mortgage re-fi going on. so that is going to be a tail go to. but net interest margin contraction is going to weigh on it. >> you mentioned the mortgage re-fi boom. i'm just curious. we have said that banks are turning customers away. we can't handle this right now. the pipeline overall for the industry is very small compared to how many people want to refinance. are banks swaimply not position well? >> there's a lot of capacities. bank of america was 30% of the market two or three years ago. now they're only 3 or 4% of the

market. so with them exiting the market, they're growing slowly. but that's what's driving that situation. it's driving a lot of the revenues from the banks that have moved on it. but it's difficult to get them town. >> your price tar loo looks, ridiculous at 40% from where their now. did you in that is that when we were at $7? >> you know, bank of america's price target is a real target. but like paul said, the big problem we have right now can be simplified by looking at that ten-year yield. it not only is a combat good indicator of marginings and bond books. but it's as a very good i cont remember.

&app type is waning. in late march, where he with lowered rate lings on 10 banks. the news over the near term is certainly not going to be as good as it was in mid march. >> paul, do you think they're done selling assets? >> i didn't quite hear that question. >> paul, it's for you. i was asking whether or not you thought was done telegraphing asset sales. >> no, i don't think so. i think they will continue to derisk that balance sheet. they don't want to go out and raise capital. &i don't think they will. but they would continue to derisk it and continue to sell assets. >> anthony, can i just come on something from left field? this is this new wave of capitalism whether shareholders

are saying actually we want au better split on the dividends. and you've seen the revolt and credit suites and saying yeah, we will inclews our cessment of any of these banksst. squlus at the margin to which you would refer. hcl it's a tough regulatory enverne. and the eye tainting industry has caused a lop ott of problems. that sid, eh sdil have a take beth of america as an chemism. pch day their their nair. they may change the asset mix a bit. they may have a reduction in mixed weight assets. but at the end of the day, this is a company that can generate 1% roament it's a company that should trade 8 or 9 or 10 maybe times forward earnings. and their earnings potential is around $2 a share. >> last question, paul, you got

a whole rating from bank of america. $9 price target. >> mine is wells fargo. they are completely embraced the mortgage market. one out of three loans are going through wells fargo. >> guys, appreciate that. good to see you both. anthony palinni, raymond james. >> down 116 on the dow. jim cramer will join us in the next section of the program and we'll be talking enterprise social networking. so we'll talk to the ceo and his talk on the quarter. sadly, no. oh. but i did pick up your dry cleaning and had your shoes shined. well, i made you a reservation at the sushi place around the corner.

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well, more on the sell out that we're witnessing. jim cramer joining us on the news line this morning. jim, what do you make of the sell off? >> thank you so much. i think this is more of the same, europe getting worse. you have to wait each day until the hangover is done. and then you can pick it mostly domestic.

i love the previous piece that you guys did because it talked about a wells fargo which has really try today eliminate any european risk. the telephone company down at cia international wireless. those have avoided international risk. and i think that's natural places that can go aftereverything's been hammered. >> you said panic is not a strategy. and then you said it again. panic is not a strategy. and then you challenged viewers the next time there was a european-inspired sell off trying to force themselves to get hungry instead of selling. that's not easy to do. >> not at all, karl. among other things, that they face ultimately so good is how hard it is to go. i loch to look at gasoline and i see ole cming down and' see stores, is it true? is it true? titties retail. you have to sq whether things

chloe stock that's unshapinged. if that were to go down, it would fit entirely my description. can you buy a wells fargo down here because of all of the driving all the banks down? the answer is yes, carl. the answer is yes. >> in terms of macy's jim, macy's is an interesting one because it didn't raise its pull in the fiscal first quarter. is semm somethithis something t on your shopping list? >> indeed. perhaps there's some analysts who method downgrade it. it's got a post rate. if you wanted to buy a hundred shares, would you buy 25 years down $5. it's managing things through a

momentary slow down. again, the answer is yes. it's something i would challenge our viewers into buying, not selling. >> jim, you've got some amazing stuff out of dan from sprint last night talking about compensation, talking about investor confidence in the firm overall. i don't know if we have sound, but your thoughts about what he told you? >> what he told me was he, himself, recognizes they have tremendous execution. he's got a tremendous amount of money that he has to put to work in order to be able to stay competitive with the big guys. at the same time, i mean, we all know the truth about this business. it is so cut throat. when you have to sink $15 billion just to get apple to agree ah sell to you, there's a lot of money.

>> what about tonight, jim, what's coming up? >> well, i love these situations because we talk about what's damaged goods and maybe really just damaged stocks. scotts miracle grow. here we are in the height of the plant season and the stock drops 10 points yesterday. and eog. i've got to listen to what mark papa has to say. >> you are coming back tomorrow, right? >> i'll be back tonight. you know me. you know me. i get up at 3:00 a.m. and get ready to work. >> we'll see you back here tomorrow. the set misses you. jim cramer, "mad money" tonight, 6 and 11 eastern time. >> all right.

jive software unable to hold onto yesterday's rebond. the company recording earnings yesterday that beat estimates on higher billings. joining us earn a cnbc exclusive, tony zangali. >> thanks for having me, melissa. >> what does facebook do to a company like yours? >> facebook gets a tremendous amount of credit for innovating social networking up to almost a billion users. we've taken that paradigm at jive and braulgought it to the workplace. social is here to say it's the new way. >> what is going on in cloud computing? we had a rack space report it was a huge miss and it took a lot of the cloud names across the board no mater where you're operate ning the cloud lower. in terms of trends there, are you seeing consumer signing

contracts? do you have the visibility? >> yes, the larger per trent of our business is out at the cloud. but the big trends are cloud, social, mobile, big data. these trends are converging as the enterprise retools. so i don't see that going away any time soon. >> we should note that the dow is down 160 points. would advice would you give them as to how shareholders pick and choose between people in your space. it's often quite difficult to know who is eating who's lunch. >> well, i think you have to look at the size of the market opportunity. and, as i talked about it, the retooling that's going on around the telepathy. globe. and social, back to the facebook, is one of those

drivers. jive has proven time and time again. industry analysts, whether it's an adjacent software company using our software in a way to make their business better or what have you, that's what buyers of stocks have to look at. a lot of talk about this lock-up period. and i wonder if we have this conversation on june 30th, let's say, if the mood is going to be anymore near as bright? >> well, fire of all, we won't have this conversation because we'll be in our quiet period for a second courteder. but, you know, i think employees at jive are there for the long term. that's what ovpgss are all about. i think you've seen them power through back to the market opportunity. back to the strength in their cussed mer bases.

while we know it's coming up, it's not something that we're preoccupied with. >> let's talk about the elephant in the room. before your lock up period expires, facebook will have come to markt. so i'm managing that the degree to which you sell out, the guys around you amass personal fortune, is this hugely dependent on that ipo? >> well, yes and no. our employees are at jive because they're trying to change the way that work gets done. it's going to further, you know, the fact that social is here to stay. they're going to go through a lock-up period. it's going to be an ipo like we've never seen before. yearn that the employees are preoccupied other than it au as it's goodness. >> tony, we're going to leave it there. thanks for your time. >> thank you so much for having

me. >> okay, let's get wac to the markets, dab down 158 points on the dow. we're going to talk a lot about what exactly is going on. and as booming is sliding about 10%. we're talkings about a a man who would like to sell you compelled bars is next on the program. porn push blark black

it's the "money in motion" currency trade. importantly, we had a break below $1.30 and the shorts covered earlier in the week is now the point at which we break to a substantially lower range. andy bush joins us from chicago. andy, this looks like a moment in time here? >> yeah, exactly, simon. i mean, the euro keeps trns lower. we have hat a dittyle by of a dely rehacks arf the weekend. >> but one of the mysteries has been why the euro hant broken lower before.

particularly on this side of the atlantic with so many shorts to a man and woman hiding up against it. why is it different this time? >> so it's glanding down to a point where we see no hope for the future. the elections in greece are totally unsettling. also interest rates. so the nervousness is getting out there. there just isn't a path forward for growth and it's getting worse. >> isn't this a prime kprampl when somebody big and important says something that calms the markets? sk >> you could, simon. we've seen bounces before. i look at the momentum of the market. and i think that's important. i think we'll continue to grind down here. >> okay. so what's the trade. following up on what you said, i'm looking for a bounce. i hope somebody says something positive to sell it.

i want to leave the stock really tight in this. i mean, you can sell it here. just leave your stop at, you know, a hundred points higher because you want to get it above where we broke down through. just look for 300 points on the downside. >> you might have hoped for something more ambitious, really, andy. we've got some get some remen tom rolling, just reassess. you culls doing that. >> andy, nice to see you. for more current psi trades, but sure to catch "money in motion" at 5:30 eastern. >> you had matched ins a small move, but it can be very big when you earache talking 40-1 le rage. let's head to brian sullivan. >> you know, usually, melissa, we think offed foe stocks as

being safe and stied day rank. uh-uh. look at cqb, we had all the stocks yesterday, guys down 30%. when is the lasts time you saw a food company down more than 30%. weak banana pricing. i cannot make those up. weak banana pricing. >> that's good news for banana lovers everywhere. >> one more check of the markets here as we go to break. which camera? down 1.77. we'll get a break on crude as it continues to fall over. just a moment. ♪

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>> i'm sharon where breaking news on oil supply. up by 3.7 million barrels. gasoline supplies fell by 2.6 million barrels. gasoline supplies were down 2.6 million barrels and supplies fell by 3.3 billion barrels. now the fact that we saw a build in natural gas supplies that was

not greater than what the pet l petroleum institute had, maybe part yvette reason why we're still supported here with crude oil prices above $95. the problems in europe may overshadow this supply data once again very soon. also once again watching what's happening because the sec trying the deal that has been talked about with the refinery in aruba, all of this is happening and causing backwardation. causing some weakness and we're seeing here in the gasoline market. the energy department talking about the con suction of natural gas rising. gold at a four-month low. if you read our story, some traders are saying gold could go to 1400. >> sharon, thank you very much for that.

now we're into trading some of the stories that we're talking about 7:31 earn the west. agreeing to be acquired by bed, bad and beyond in a cash deal valued at $495 million. depen foods up stronger than expected. and as the markets sell off, the vix is up 13%, cracking 20 yesterday. and we peel keen an eye, just not own the vix of guys, but on the forward in the last teev and a bit training sessions. it has lost almost 4% in the last five and a bit trading sessions. people come on and berate the retail investor. maybe in this instance, the retail investor method feel slightly vindicated.

>> 5 to 1, maybe. and here, about 4.5 to 1. >> okay. that's an hour into trading. let's head over to the cme and find out what the traders are watching. lincoln ellis who can do math. joins us. >> so can i. get out of here. >> just needs a calculator. >> i know you're still wimping gold and no respite at 1587. >> no, the last time we were on, it was trading 1650, 1675. and we thought the lack of senior high school tillty in the gold complex being spoke or fortold this kind of downward pressure. if we look back at the 2008, 2009 teem period, we know that foaled is not the diversifier

that people think it is in terms of tresses. >> some of the bulls especially around 1340, which is back to your march low, low rates, right? you've got countries rbis india, china, australia that are lowering but that wasn't happening. is it getting easier to make a bullish argument as we get closer to some of these levels? >> yeah, i think that's right. our target is at 1345, 1340 and that puts a $95 earnings number. and that very much is dependent on the things that you just talked about. and we do see in monetary miscal policy would think that, you know, the economy would be a little bit weak here. but we're not looking for lack spens in a rechest shags call.

lincoln, tavehebaics a lot for joining us. we'll go to kate kelly on the news line. >> hey, i'm here in las vegas where daniel has fired off his latest salvo to yahoo. this is his response to the envest gags over the hiring of scot thompson who i turns oud had push his maize may. he either the no thrks would be good interim ceos. he oles also demanding that patty is the head of the search committee that resulted in the hiring of thompson. this $15,000 throwers fee that she refed for her work on that committee. you may railroaded not hr to not

run for eh rexz to the yeah willed board. and are usually strong lang badge as lobe ared detrex moist stop one aened a earp really worming. he says it's farcical that the board will take more time invexi investigatining what happened wh the thompson hiring. obviously, there were some incidents that went on and they know what they need to know. they say it appears very clear to us and to many corporate governments experts that thompson's fantasy degree was in no way inadvertent error. so very harsh words. they say that yahoo's behavior, that they begin looking into this or go ahead and asked for books and records relating to the hire.

that mr. torp said ewe fell they way without accepting responsibility. ah in fairness, it would seem he has the ummer hand in this on going argument at the moment. >> kate, do you have any sense of the degree to which this discussion, this vower public row and whether or not they're structured in a way to i avoid the tax charge. >> that's a great question, simon. i would think that the discussions with -- about a ali baba could be on going. i'm sure there's a team working on that deal and they're being looked at on its moralitys. i would think that this could go on. and i any would think it's something that they doweled support.

however, anything can happen when there's this kind of turmoil at the top. >> kate, a this point, does dan lope have any supporters out there who might support this sort of change? >> i have not heard that specifically. but i would not necessarily be surprised. he seems to have wanly the last couple of arguments. they venality succeeded in having scott thompson teep down. step down. there has been some reaction, at least in terms of thompson acknowledging that at least there's been a problem. it would seem yahoo is taking this very seriously. we ere chatter that the board is in close contact on and oing go an diswags abatis this. so hay don't know what lobe is doing.

i will try to get a litful more information on that because i'm out here and he is, too, at this last lay vas gas conference. >> i will, id are be there a my conference. well, as we mentioned, both pries dipping along with other metals. ross norman, a precious metals trading firm. great to have you with us, ross. where do you see the next level of support for gold? >> yes u well, gold has got sue ports at 1580. and we've tickled that levlite earlier this morning. below that, we've got 1555. i the the markt is looking to find rock solid support before we can see son sol dings moving ahead. >> living in a period terre gold will see physical demand pick up. we had word that the market cancelled its excise tax. what are some of the factors out there driving this trade?

there's three, really. in india, there's a proposed excise duty on jewelry,gold jewelry. adding to that, also, this is shaping up a monsoon area. and as goo harvests, so goes spepd on gold. so there's some very positive outlooks looking over the next few months. looking across the world in china is very much challenging as the biggest gold kerneder. here we're seeing in 2 last 2010 in the first courteder of 2011 to 135 tons in the first quarter of this year? >> clay, that's a very good point. i think really the main driver

of gold at the moment qs and, indeed, over the course of this year is all about the u.s. dollar. and the corollary to that is all about the euro. gold has many different drivers that will push it one way from time to time. gold has been the first day of this collen dar yes. at 1590. correspondingly, the u.s. dollar weakened and this strengthened. it mirrored the move in gold. and i think melt million u.s. dollar. >> the big fact is that centralbackers will be fool irk to bring it on your point of view. what happens if that is wrong? what happens if central bank eres increasingly move away from easing because they may believe that the unemployment is structural and actually it isn't working extra into the economy?

doesn't that deplait gold? >> it could. they've got certain relievers particularly in europe. both of those are politically unfavorable by an electorate's view. this is what ronald reagan described as the thief in the night. so many will view qe or the prospect of inflation as probably the roads that we'll go. that's why i asked the question. plenty more obama on the sell off. so we cut our losses. stae with us. for three hours a week, i'm a coach.

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>> in addition to priceline, cisco will report its third quarter earnings after the bell tonight. the world's largest computer making equipment trading at its lowest level in four months. is this now a buying opportunity? should you load up in anticipation of the results tonight? now joined from ubso. are a buy every of the stock at this teenage? >> yes, i am. hcl why. it's a combination of three factors. number one, the vague hr vailuation is conley pelling. tocks stressing urn discount to the market. number two, we think the company is in the midst of a -- of a turn around in terms of internal execution.

and number three, our cio and reseller surveys suggest cisco getting more momentum in the market with end customers. and we think this will lead to an improving spending transfer of the company over the next several k quarters. >> there are a couple of ways of reading this. one that orders of equipment might be weak. or maybe it ace that cisco is gaining market share from juniper. where do you tanned on that? skbl aq lull i, it's probably both. in addition to ginner auld of the network companies that reported the march quarter so saw an unexpected weakness in the service provider market. so i think cisco started ah ute their quarter a bit soft. i don't think tonight when we

report, we'll see hp nominal roulette tis. i alsoty this however cisco has been gaining yoens juniper in adecision knot norlgt market. >> thanks so much for your time. >> we'll see where we go this afternoon. dow down 125. >> right after we do cut our losses, we see that coming in towards the closing bell. >> back in just a moment. ment. the hyundai genesis. in a new, faster-acting formula. s tio-y siin lxtes zemethan a porsche panamera s. the 429 horsepower genesis r-spec.

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welcome back. take a look at american online. now known as aol. profit coming in above expectations within $21 million of the first quarter versus just under $5 million one year ago. ceo tim armstrong is saying the turn around is working. of course, it has bold sold a billion dollars worth of pat at any time patents off to microsoft. aol has more than dowelled in the last eight months. the internet is a short-lived fad, aol seems to be taking advantage of this interweb

thing. >> interweb. >> brian sullivan with his latest call. >> catch him emvery day at 2:00 the markets selling off. down 134. gary is chief macro strategist at wells fargo advisers. gary, good morning to you. you wrote on monday that seasonality when you hear the argument sell in may go away, you were not recommending that approach this year. you continue to believe that the current stock market correction is a buying opportunity b. three days in, you still feel the same way? >> absolutely. we're getting a pullback in the market. correction of about 5%, which is not all that significant. we occasionally see these kinds of pullbacks. what we're seeing as far as the big picture in the economy right now is still just modest growth, low inflation, and easy money policies in many countries around the world. we think that's a positive environment for equities. >> if i'm looking for an entry

point, which is what you're suggesting this is a buying opportunity, if i look through the calendar, i look at europe or i look at the election or i look at the tax war here in the united states. there are many, many other major pitfalls ahead for this market and if i was looking for an entry point you could forgive me for think that now may not be the time. it might be six or eight or ten months down the road. >> we're thinking there might be a few opportunities a four months this year looking for the market to be up at 1400, 1450s for the year end target for s&p. we agree there are some continuing problems and issues that we have to deal with. but on a pullback like this where the fundamentals are still favorable, we think this is a buying opportunity. this week or next. >> what are the centers that will lead us to that 1400 or so level on the s&p, gary? >> well, we're thinking, again, that we're going to see good economic growth this year. it's not strong, but it's relatively modest. we are saying inflation come

down. recently here we've seen energy prices start to pull back quite a bit. so we're going to be getting better news on inflation. and we do think the job situation, although it's been soft here the past couple of months, probably get better, that small businesses are feeling a little better about the economy. we'll probably see good job creation in the second half. >> going back to the question, gary, what sectors? >> basically we're leaning more toward the cyclical side of the market right now. we had been a little bit more balanced in defensive, but we think that with the economy, putting in some good numbers here in the first quarter and that we're looking for continued modest growth that we want to be b a little bit more cyclical. >> there is some concern about overall slowing growth, right, that's why some of the central banks around the world are stay starting to kick into action in india, in china, in australia. that's generally not good for valuation unless they're counting on growth in the u.s. not slowing as much. >> well, we're not expecting growth to slow as much here.

as a matter of fact, our markets are doing better in many of these foreign developed markets. the dollar is doing well in this type of an environment. and, again, that's one of the positives we see, is that with the problems overseas and the central banks cutting rates, that actually is a bit of a help for our economy, h is doing better. >> if you buy the decoupling argument, that is true. gary, thanks so much. >> sure. >> gary thayer joining us, down for the sixth consecutive session. >> wow. a few more final thoughts on the a few more final thoughts on the markets right after this.

welcome back to "squawk on the street." market flash on bank of america. stock not moving much. down half a percent. the news though, shareholder meeting. protests outside in charlotte, north carolina. margaret, one of our producers, is there sending us information, basically looks like moynihan is taking heat from shareholders. according to margaret popper, guy stood up and said, should i just be 90 days delinquent and

wait for modification. why should i pay my mortgage on time when people aren't are getting hurt. moynihan got upset with that. guys, i think it's interesting. moynihan is taking heat. questions we've all asked, right not? why not just not pay and get help down the line? he's getting hit with the questions that we ask every day. i don't feel bad about that one bit. >> thank you for that update. bank of america, one of the financials not doing too badly on the session. half a percent. what we are seeing the likes of citi down more than 3%. morgan stanley down 2 1/3% here. of course, all of this is sounding from what is going on in europe with a lot of european banks down more than 4 hrs at this point. >> i imagine you're going to tackle some of this today on "fast money." >> at least some of this in addition to morgan stanley and the additional collateral they may have to post. also, we're going to be out there, a lot of big earnings. cisco, also price line, very interesting price action right now. it is higher by more than 1%. it has been climbing in the past

ten minutes. the earnings are up tonight on conference call. >> see you tonight at 5:00. simon is going to stick around. see how europe closes. if you're just waking up, here's what you might have missed earlier on. welcome to hour three of "squawk on the street." here's what's happening so far. >> we're sitting in america saying, it's for the europeans. but hopefully we'll have a conversation like this this time next year. i'll bet you that we'll be very focused on america, its deficit, and the boot will be on the other foot. >> the biggest issues we have that we face is just policyholders screwing things up, getting inserting themselves in areas and doing things that -- policymakers. >> need of opinion piece the other day from the head of the bank basically saying that there is no more, that central banks can do. it's up to the politicians. and the problem is, political dissident is losing faith among the electorate right now. >> scarlett johansson was at the

metropolitan costume gala talking to mayor bloomberg and he said to her, we think we're saving new york because of the film. her response was, forget new york. we save disney. >> europe will muddle through the disastrous lehman style event, probably won't happen. and so you'll see this sort of rolling trend in europe where a basically positive development in the u.s. economy and markets. >> the opening bell here. here's a look at the s&p 500. >> nobody is really going to touch financials heavily until they get some clarity overseas and that ten-year recovery. >> the big trends are clouds social mobile big data. these trends are converging. the enterprise tools. so i don't see that going away any time soon. >> good wednesday morning. here we go again. welcome to the third hour of "squawk on the street." a track of the markets on a day that looks a lot like yesterday. down more than triple digits. we will see what the afternoon brings. dow is down just over 4 hrs.

s&p is down 15 to 1349. nasdaq is down almost 30, to 2916. macy's down more than 4% after the full year outlook missed expectations. one of the few gainers today in a big way is ingersoll rand, nelson has taken a 7% stake in the company. it's the largest investment in a single firm. let's get to our road map for this wednesday then. the markets are down. volatility is back with a vin jens. see what the market may do next. plus, the chief investment officer of calpers with us live to talk everything from a possible deal with blackstone to fraud allegations. spanish banks dragging down european markets on some new worries about cash calls? we'll see how the overseas markets end their day in half an hour. what it means for u.s. markets. that european close is in less than 30 minutes. finally, dean foods, blowout first quarter sending stock

higher. ceo will join us in his first exclusive interview in more than ten years. all that and more coming up. first, head over to the nasdaq to see how things are trading over there. bertha coombs has the latest. >> the nasdaq is fractionally better than the overall market. but we are seeing a sea of red here overall. cisco has been positive at times. just fractionally right now. down a penny or so. cisco reporting after the bell. we're looking for 47 cents. for over the last five day, cisco up 6%. apple is off 3 1/2. that's the big weight right now. very few stocks that you will find here in the green. price line is one of them. does not upset the point decline that you're seeing in terms of apple from the impact. but you're also seeing retailers looking higher with bed, bath, and beyond, acquiring a discount chain cost plus for $494 million through a cash tender offer. that has a number of other retailers also looking a little higher today, as well, moving meyer some of the discounters

like dollar tree, ross stores, costco. outfitters today bucking the trend and in positive territory. a couple of stocks in biotechs today are moving higher as well ahead of some fda advisory meetings coming up tomorrow and friday. arena, fda adviser panel is going to take up their obesity drug. and notes look positive. gilead actually one of the only stocks in the nasdaq this morning that was positive. it's been positive all day. fda advisory panel will take up two, one tomorrow and one on friday. >> bertha, thanks a lot. want to get more to the markets with cyst verone. joins us here this morning at post nine. chris, always good to have you. >> thank you. >> let's tackle s&p first. >> sure. >> the first important number is still 1340. >> 1335 to 1340 is important. we need to put this in context. remember, this correction is not a week old, two weeks oel.

we've made no price progress on the s&p 500 for 12 weeks. this has been two or three months in the building, not two or three weeks old. that's an important distinction to make. when you look at the other indices, no price context for the russell 2,000 for 15 weeks. >> let me stop you there. you mentioned -- looking at the s&p now. we've have not had to test that level for some time. russell, we have been back to 780 for some time now. >> tested 780 about four times over the next 12 weeks. i'm not convinced it's going to old a fifth. i think that might bring into play some more selling among the more cyclical type issues out there, small caps cyclicals, commodity oriented names. >> as a result, we're going to skip the euro chart and go to staples which relative to the s&p, you expect have done better, will do better? >> yeah, there are two things going on here. broad market defensive slows,

defensive gets big. staples do quite well, health care doing quite well, utilities doing quite well. i also think the other part of the story is when it's tough to get income out there, income oriented stock tends to do well. end cap consumer staples are big dividend players. i would play the next couple of months with these lower beta groups, staple, healthcom. >> almost an inverse of the first quarter. >> exactly. >> when you look at the right side of this chart, how long do you expect that phenomenon to sflast. >> the pattern on those more defensive group is what we saw this time last year, so i think it's fair to assume as we get through the summer months, we tend to be more challenging seasonal anyway that the lower beta defensive names will continue to out perform here. >> finally, the euro which we talked -- we've been talking about all morning long. 130 continuing to be an interesting story. but you think the test is below that. >> i don't think 130 is the level anymore. i think 126 is the level. 130 was tested four times over the last month or so.

it's now failed. 129 right now, we think we play for 126. longer term, i think something like 119, 120 makes more sense. >> finally, on the s&p chart. >> yeah. >> when you look at it, do you see flattish action or is it a series of lower highs, lower lows? >> i think it's a continuation of this range. maybe 1330, 1340s, the downside. that 1390, 1400 level provides pretty good resistance. play the rain by getting more defensive, staples, health care utilities. >> more aggressive targets on the street have come back down to 1450, 1400 over the past couple of weeks. chris, thanks a lot. chris verrone. meanwhile, bob pisani joins us here. >> it's been a tough morning because this is the second day in a row. normally when you open down about 10:00, 10:00 or so eastern time, the markets tend to stabilize because the initial selling is down and it levels off. that didn't happen again.

between 10:00, 10:15, 10:20, the market was dropping and people were out calling to figure out if this is something new out there. we're back in the land of rumors and obscure websites. there are some reports out there that detroit may or may not make a scheduled $5.5 billion payment to greece tomorrow. it's scheduled to be made. already been out there. now there might be conference calls going on on whether they want to do it or not. that's a little bit of uncertainty. you see that weighing on the markets here. again, there's your additional down leg. normally you will stabilize. when you have another down leg like that that's normally because there's something going on. obscure discussions going on about whether or not the socialist political group has formed some kind of understanding or memorandum with the leftest groups in greece. there is a television station in athens that is saying that maybe some kind of agreement close at hand, there's a lot of rumors flying around. we don't have the facts. typically a lot of rumors going

on. look at what's going on. still the standard here. the ten-year is up. the balloon is up. the australian dollar is the downside. here's the pattern we've been seeing the last several days. the vix yield curve, this gets important. remember, now, you see days with where the volatility is up. the cash index. but the futures are not. it's the futures that are important. for the second day in a row, this is not insignificant. when you get a number like that, moving up 3%, 2%, that's what people want to pay attention. overall still, financials, industrials, energy and material are the ones still to the downside. we're now for the lows in the morning. >> some of the rumors, brings back to mind last fall when the report infrastructure for some of these conversations in greece -- >> slows down and reuters reporters running into -- not just reuters reporter, people running into the bathroom of the eu offices asking what's going on, what are you hearing right now. a lot of things are pretty uncertain.

>> thanks, bob. see you in a bit. rick santelli is over at the cnb group with the santelli exchange. >> hi, carl. you know, before the credit crisis, teaser rates. we used to see them on the time. i see them a lot again. it wasn't the teaser rates in particular that caused the credit crisis. it was the logic behind those that moved into the teaser rates and the adjustable rate mortgages, thinking that the conditions that made the decision to go into that type of structure for their mortgage financing would last forever. let me see, 181 on a ten-year. 150s on a boon. teaser rates have gone international. think about the logic of, i have a friend who has an adjustable rate mortgage right now that is less than the current fixed rate mortgages. yet, he is really trying hard to convert it to a fixed rate mortgage. not to much success, actually.

but why would he be doing that? he is concerned that at some point when you least expect it these low rates are going to disappear. but the same isn't true for the federal government or the governments of europe. let's look at the flight to safety trade that pusheded th t treasury rates down. let's call it a more appropriate name. let's call it hedging. hedging against bad outcomes. hey, we know what happened with gold this week or last week? it was a great hedge against a disastrous future by many of this randers out there. yet, when it comes to the point where they're either done hedging or they need to pull out some capital, they pull it out of some of those types of trades. think about the ramifications of what little notice these countries may have. another issues, stimulus or debt. you know what, it's all on a credit card. stimulus is a very nasty word right now. nobody wants to use it after t.a.r.p. and the stimulus we went through in '08 and '09.

in the end, every auction we have, whether it's bills or light ten years today, the government locks in more balance on their debit card. stimulus or debit, it's about the same. wake up call. carl, back to you. >> you got it. put it on my tab, as they like to say, rick. talk to you in a little bit. straight ahead, markets holding on to triple digit losses today. the dow is not down 94. and we'll see how this afternoon goes. some analysis on how we might trade it. plus, some of the world's biggest money managers weigh in from sin city. from sin city. all of that after the break.

welcome back pop i'm brian sullivan. stories surrounding now ousted chairman of green mountain roasted is more interesting because according to a filing he has sold all his krispy kreme stake. he had about $8 million shares stake in if krispy kreme. he dumped it all overnight at about $6.15 a share. so bob stiller has now zero krispy kreme. he had $8 million shares a few days ago. the stock not reacting. maybe more of a story around green mountain coffee ousting him and why he's selling, is he raising money? either way, we'll find out. more of the story i'm sure coming. >> it's been interesting to watch it so far. let's get to our capital markets editor gary kominsky, otherwise known as s.a.l.t. it sounds like he had one heck

of a taken dinner last night. >> good morning, carl. again, i don't know if it's deja vu or the fact the conference is he'll the first couple of days of may. it feels that the third year in a row all the negative out of yup, all the negativity associated with did we already top out of the s&p. the first couple of hours i would have to say the bears had a much louder and vocal voice. let me give you some of the color that we were able to get last night. scottie wapner did a great story of reporting on who binnroubini. in addition, talking about the fact that the euro has to collapse. a lot of conversation about what's happening on the banks of europe and those banks that took money from the ltro, those that didn't, the dispersion there. and then burt dohmen who did a great job recently in terms of deck ca technical analysis on the market.

i listened to the interview you had at the top of the 11:00 a.m. we've been in this phase, carl, where you wiped out the gains here to date much like we've seen the last couple of years. essentially this fear of locking in profits so the early read here is that the bears have their voice, but right behind me roubini is about to get started on a panel with gary siegel. you be assured that siegel will point out that stocks are unbelievably cheap, retrend douse cash out there. great debate will continue. yes, as you pointed out, i was very, very entertained by a discussion with roubini and david from morgan stanley last night who obviously don't agree on a lot of things related to the market. >> yeah. walk me through sort of the conflict that showed itself last night and what was roubini challenged and and how effective was that challenge? >> well, again, neural roubini has been for some time trying to

point out the fact that as much as you believe the europe situation can be contained, the europe situation can be resolved, this idea that they can be order ly. later this week, actually tomorrow, i'm losing track of days here. carl bass will join me. i think anyone who is paying attention, there is no such thing as an orderly default. this is a great setting because you get the different opinions and it's fascinating for me to see who ends up being right and who ends up being wrong. >> you make it sound like there was practically fistacuffs at this dinner last night? >> david does a great job. i had never, and others in attendance, had ever seen david that animated. i just wish we had the cameras filming because david gave an impassioned speech. >> listening to you say that you're losing track of the days while you're in vegas, knock me

over with a feather, gary. you must be doing something right. >> yeah. well, it's all hard work. i'm going to pop into this session right here. come back to you in a little bit. come back to this stuff in vegas. if there's anything that i hear behind you, carl, i'll bring it to you in a few moments. >> talk to you soon. gary kominsky joining us from s.a.l.t. in vegas. a lot more to come later on. still to come here we're going sit down with the ceo of dean foods, gregg engles talking about earnings and spiking food costs. first tv interview in 12 years as they are one of the best performers today on the s&p 500. and then we will count you down to the close of europe in ten minutes.

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seeing pattern recognition here as we get close to the european. rick santelli with a look at trading grains over at the cnb. hey, rick. >> absolutely, carl. tomorrow is the big usda report and that means jerry and ashleigh are here. we're going the start out with ashleigh. let's talk, well, let's talk soybeans. what do you expect to see in the report for people that have been paying attention, what percentage of the crop now is planted as we move towards the later stages of spring? >> we're already at 24% planted, which is way above normal. last year it was about 12%. this time the five-year average is about 11%. we're way ahead of schedule with the beans. we're expected to see the cary out down. >> when we talk carry out, how much is left over. >> we expect to see it 22

billion bush shel'lbushels lowe >> there are other parts of the country that grow lots of soybeans. brazil comes to mind. how does this come into this? three-year lows going back to july of '09 against the greenback. is that something to pay attention to? >> definitely something to pay attention to. it's a huge incentive for the brazilians to plant soybeans. for them, to get a really high price bean, which we're seeing really high prices right now, and then to have it lower, everything is going to be cheaper for them at home. for them to plant soybeans we will probably see them plant a lot more soybeans. it's an incentive. >> yr jerry, let's talk a little corn. what do you expect to see in the corn numbers and, same question to you, what percentage of the corn crops in the ground? >> over 70% is in the ground all right. that limb nates frost danger.

have to have an early frost to get into problems. with as much corn as we have planted, by the first part of may, usda has incentive to raise the yield for next year. this year's crop by knicks fall. we look for them to maybe go up a bush el, could be as high as two bushels more production. that should be various new crop. i think everybody knows that. >> let's be specific. when we talk new crop? >> december and beyond. although september might be a new crop because we've got to plant it so early we will be harvesting corn earlier than normal. we'll get a lot of new crop supplies in the old crop period. for the old crop i look for the carry out to be raised. i know the average trade is 50 million less. they're still looking for that b bugaboo out there. >> so many of my trading friends have gone to the poor house trying to do that trade. real quickly, we see a lot of lemon moves after these reports. corn, you think it's going to be

lower after the report? >> i don't think very much. we've dropped an awful lot. when you look at the corn charts we're not at $7 in december corn, we're lower. the surprise would be if we raise that carry out, 20, 30, 40, 50 million bushels. i think it will be 900 million by the time fall comes. if we come in with more wheat feeding it's going to disrupt things. no matter how good it is, we're curb in demand. >> we've seen a lot of volatility from live cat to corn. tomorrow will probably add to that. back to you. >> rick santelli in chicago. the bell's about to sound across europe. we'll bget that close and judge the affect it may have on the u.s. markets with the dow now down only 62 points.

european close today looks to be just as dramatic as yesterday with the dow now about half of what it was in terms of losses before the close got close to us. simon hobbs here on post nine to walk us through another eventual day. >> we may be about breaking news. game changer of where we are. there will be a decision at the top of the hour. so in 31 minutes time as to whether or not the esfs, the bailout fund, will give greece the money that it should have tomorrow. just over 5 billion euros. the indications are that that money will be forthcoming despite the fact that clearly the noise is coming out of athens at the moment of very discorded.

very confusing of people in the market. we are seeing the european marketing rally in anticipation of that, certainly, let me rephrase that, cutting their losses. here we go, european close. >> the european markets are closing now. >> okay. so you can see that there's a lot of red everywhere. okay, some have managed to put in a move high. the banks have been badly hit. last time i looked credit swiss was down 7%. let me show you a chart of what is happening here with paris and italy around spain. i took these because these are the ones that during the session were moving lower because the banks were under pressure. look what is happening now. i assume on this reuters wire that is coming through an anticipation that europe may acquiesce for the moment and give greece the money that is already on the table. they can't move anywhere forward but they also can't move backward. you have a rough day for the banks. let's look at where we are, for

example, in italy. i was speaking to you earlier about spain and heavy losses in anticipation of the bank announcement from the spanish government on friday. it is also true that some of these italian banks have fallen quite badly today and as we mentioned to you earlier, a rough day. okay. the spanish might be cutting their losses but they are down at 8 1/2-year lows. that's the degree of destruction that we've had on the ivex. let's put up the 20-year chart and see where we are. just down 2.6% below the level that we had for the ice sis in 200 2009. those banks, if you just tuned in, let me recap, on friday, the spanish government will do two things. say you have to increase the provisions that you have for your construction loans from 7% to 30%. and they will also pump money into bank here, which is this seven savings bank. grouped together in a nasty little mess. the important thing there is, a, they're going to have to take

$45 billion of further provis n provisio provisions. how will they raise the money. for the second time, listen to, this spanish taxpayer will be bailing out the banks to an extent. that's scary if you're in the spanish bond market because you don't know they're going to do what the irish did and lose control of the situation. this is the two big spanish banks. i just wanted to demonstrate to you the degree of equity loss that you've already had on these over the last year. 42%, 38%, bank here is where they will pump the money in on friday. they will announce that. let me just show you where we are on the spanish yields because those have been popping higher as you might expect in this environment. look at that. that's real nasty there. just the end up to 6.08%. i think i'm right in saying off the highs. have a look at where you are in italy as well. the greek situation obviously just changes the dynamic. if you're invested in preferral debt in europe, you've made a lot of money. you're going put profits -- i'll

ask you as a peripheral trader. >> yes, i'm going to get profits. >> the poshts thing is, we've got this announcement is in 28 minutes. this could be a real game changer. you could see i assume, wall street seriously cut its losses and the shorts be covered as well, if it comes through as is expected. apparently calling to reuters, very die nynamic discussion amo the members as to whether or not it should come through. >> anything resembling clarity at this point would be somewhat helpful. simon, thanks very much. let's go to the nymex as well after, of course, yesterday's big swings in the oil and gold market. sharon epperson. sharon? >> carl, exactly what simon was talking about is what may be influencing what we're seeing here in the commodities market where gold and oil have peared their losses as well. gold prices are still at a four-month low. down about 200 from where we were at the highs of the year in february. basically where we started out this year of 2012, right around

1592. and now, keep in mind that there are worries about spain. of course, more sale stocks, margin selling, pressured gold prices of 1578. we are up from those lows. and the oil market, up from the lows as well. also have fundamental data there in the oil market as i reported. crude supplies at the highest levels since 1990. that report that came out from the energy department still showed a build that was less than what the industry reports showed last night. we did get big draws in the refined dpuls. and natural gas has continued to rally. we will get the storage data on natural gas tomorrow. but we're also looking at the energy departments saying they expect the demand to pick up. so that may be helping them as well as some of the technical e efforts. >> just chatting with bob pisani off camera about natgas. the spike yesterday and whether or not it's a head fake. >> it's a great play, go ahead

and short oil and everybody has been wrong and it's been a disastrous trade but it's finally starting to work. for the last couple of weeks, natgas has been moving up and oil is cooperating with this trade that people are trying to put on and move to the downside. we're seeing something interesting happening. a little bit of life in these e and p stocks, exploration and production stocks, just had horrible month as natgas keeps dropping. look at these stocks. they are now fractionally on the upside. here's the problem with the exploration and production stocks, they all got a little bit of oil and natural gas. it's very hard if oil is going down and natgas is going up, some of these becomes a little bit of a wash. there's a few companies moving to the upside and some of the big names like apache are kind of break-even today. that's a sign that the markets are starting to get a little bit interested in them. er everybody agrees, everybody is connected, everybody moves at once here. simon made a good point.

the real problem is not greece, the real problem is spain. the country is now facing mass nationalization of the banking system. that's got a real effect on what's been going on. again, there's no decoupling that ever occurs in the world but we're 4% off of our recent highs. spain is 23%. everything else is in double digits. jerl any a little better, down double digits earlier today. but that is noticeable. 4% versus double digit declines elsewhere in the world. down is not god on any circumstances but there certainly is difference out there. finally i want to note today is not nearly as bad as this time yesterday. in fact, the dow is only down 70 points. you can see the weaknesses in the financials and the industrial stocks. energy is coming off their lows because the gas stocks are performing better. materials are just off of their lows right now. carl, back to you. >> thanks, bob. see where the afternoon takes us. meantime, capital markets editor gary kominsky in las vegas at the s.a.l.t.

conference. gary? >> yes, carl, low interest rates around the world debatable whether they help the u.s. economy or what's happening in europe. i can tell you certainty that it is absolutely helping companies and i'll give you a perfect sample. i sat down with jim, the ceo of mgm who runs this beautiful hotel among others, yesterday and he told me what they're doing in terms of refinancing their balance sheet. take a listen. i'll explain why it's so important right after. >> next year is our golden year because some of the debt that's secured in non-callable comes due in 2013. just being able to refinance at let's say today's rates over the next year and a half will not only reduce our debt by 100 basis points, more likely 200 basis points. you're talking about perhaps a quarter of a billion dollars of free cash flow that we'll be able to generate over the next two years over lower interest expense and that is a game changer for our company. >> do you think the community that follows the company, have

they modeled that in yet or wait and see in terms of debt refinancing? >> they're going to wait and see because who know where's the capital markets are going to be, as you and i know. it's in front of us. i think it is more than likely to occur and for us, it's going to mean a substantial reduction in debt, a substantial change in our leverage ratios, and i think it will have a meaningf fuful it on our equity. >> carl, i wanted to play that whole thing because so incredibly important. if you a bull, if you are something who wants to talk about the great impact on companies earnings, ebitda and cash flow as a result of lower interest rates, you heard it there. jim was a former analyst and so i wanted to ask them do they understand this. i thought it was fascinating what he said about, no, it's wait and see kind of thing. there are hundreds of companies out there that are using these low interest rates to refinance their balance sheets. if you want to be bullish on the equity markets, there you have it. >> excellent analysis, gary. of course, i think you mentioned

earlier, scott wapner is going to talk to roubini sometimes in the "fast money halftime," is that right? >> that's right. scott will have rube binnie here in 45 minutes right after her comes off stage. if you want hear the other side of why this euro collapsed in the early days and no such thing as an orderly default, stay tuned, as they say in tv world. >> judging from last night's dinner, sounds like that could get spicy, too. see you in a few minutes. let's get to brian sullivan. >> i can't talk about what you just talked about but carlisle group down today but it is back below or i should say below its ipo price. so a company that makes its living taking companies public is not having a lot of success in the public markets. back to you. >> interesting. very limited price action overall since that thing went public. we'll see. talk more about that in a minute. california public employees

requireme retirement system. joe deer is a xheef investment officer for calpers. he joins us this morning from las vegas as well. thanks for being with us. >> hey, carl. >> sounds like the disparity of opinion out there at this conference. it's interesting. you're responsible for all kinds of asset allocation, equities, mortgage backed securities, commodities, hedge funds. what you're thinking as we work our way into a volatile summer? >> it's not looking good for the short term. it's not a surprise. who thought the european would solve the problem when they did the rto last december when greece was going to be solved. it's a kicking the can issue or rolling the snowball further down the hill. troubles in the middle east, troubles in china. carl, i don't think it's a bright environment in the near term. i would try to keep a tempered realism about what we can do. the response about what to do is why i'm here at a conference on

hedge funds, which is are there alternative approach toes might serve our portfolio better. >> first, let me ask you this. given what you just said about the short term, where do equities fit into your strategy? >> it's half our portfolio. we're not a tactical organization. that doesn't look at $32 billion. we try to think longer term. that half of the portfolio which is devoted to global equities is allocated 45% u.s., 45 hrs europe, and then 10% emerging markets. the likely move over the intermediate term is exincreasi the exposure. when the inflation comes back with rates as low as they are right now, it's not got a lot of gain left in it. i don't think you want to be holding that. if you are a long-term optimist, which i am, you're going to keep the equities where they are and look around the enls for plays, where it's provision, hedge fund alternatives, better private equity, and other intermediate kind of opportunities. >> you talk about fixed income.

we've seen big generational calls being made by big investment banks. high-profile analysts. and yet there continues to be a trade in the ten-year, jo, at 180 today. when does that chapter end? >> i wish i knew. if i did, i wouldn't tell you. you just know. you just know that interest rates can't stay low forever. the part of the solution to the deleveraging is more inflation to decrease the pain of that deleveraging. when it comes, it could be relatively soon, it could be a couple years from now. you know it's coming. if you're thinking long term, you're ♪ going to be raising your fixed income exposure. you're going to hold on keeping the duration shorter. and then, looking within that field for the dislocations that create some opportunity, that's why i think credit dislocation is so interesting, carl. >> yeah. if we're looking at a world that is slowing growth, joe, what is the best way to approach

commodities if you're brave enough to approach them? >> those returns have tended to be uncorrelate with other returns. that's a great risk diversifier for a pension fund. but entry price is important. some of these commodities are depending on political events which are hard to predict. likely for us, more broadry real assets is going to increase over time because it's likely to be a better risk exposure in a big long-term portfolio. >> finally, joe, i don't know if you heard our reporter brian sullivan mentioning carlyle today. 4.2%, your stake. very narrow price action since the ipo. not what we were used to when we're watching new offerings. has that surprised you? >> no, i think carlyle, we want them to do well. they're very important partners for us in our private equity program. i think they did a great job in managing the ipo and expectations. it's still a puzzle why the markets get such a low multiple to the actual private equity

profits and value the fee stream more. perhaps with more people going public it will be a better understanding and that would help the price of carlyle follow akr and others going public. >> it's not always about the fees. it's sometimes about the actual terms. >> fees are the question. >> too high. >> joe, always a pleasure. thank you for being with us today. >> thanks, carl. >> joe dear at calpers in las vegas at the s.a.l.t. conference. up next, he has not had a television interview in over 12 years. we're going to sit down with the ceo of dean foods. first, a look at some of the winners and losers out of the trading session in europe.

♪ right at the "halftime report" live at the s.a.l.t. with the live halftime managers. pierre lagrange and eric sprot and rick reider. plus, nouriel roubini with his predictions for the euro. you certainly do not want to

miss what nouriel has to say about that. back to you. >> good stuff. can't wait. thanks a lot. meantime, dean foods, leading dairy provider hitting a two-year high this morning after reporting first quarter earnings that beat estimates by ten cents. shares of dean foods 14.01. one of the best performer on the s&p today. out performing the s&p this year. it was one of the worst performers in 2010. here for his first television interview in more than a decade, the company's chairman and ceo gregg engles is teaking to us from dallas. gregg, ten years, a long time to wait but glad you came back. welcome back. >> i'm grad to be back. i didn't realize i had been away that long. >> you get busy from time to time. >> absolutely. >> i was sbre interested to hear that from a stabbed point of the investor a lot of investors you think still think the company covers -- or makes jimmy dean sausage. maybe not as much recognition about the name as there could

be. >> yes. you know, we have three businesses here. we have a fluid milk business where we're the largest milk business in the united states with about 38 shares. we have a food service business called morningstar foods. there's plenty of confusion around that name, as well. and then we have a fantastic branded business called white brand foods which makes products you would recognize like organic milk, soy milk, almond milk, international delight coffee creamers. we have a diversified food and beverage company in the u.s. the dean name came from our regional dairy company based in chicago which was the old dean foods company which we acquired in 2000. probably around the time of my last interview. >> right. and anybody who is familiar with that label will recognize it from seeing it in the stores. talk about the overall environment for commodity prices right now for milk prices and whether or not the organic story which we're fascinated with here given what things -- companies

like whole foods have done, where we are in that inning and what that might do for pricing long term. >> well, the white wave business is an incredible story within our company. we had volume up 11% this quarter. we had net sales up 13%. operating income of 31%. and really what's happening in this broad category of organic and better for you products is that consumers are flocking to these products because they're living healthier li ieier lifes making choices that they feel better about for themselves and their families. we're in the middle of a long-term very powerful trend o. that's certainly showing up in the profit it and growth rates of that side of our business. as it relates to commodities more broadly, the milk commodity is actually declining pretty significantly in price, from q-3 of 2011 into the first half of 2012. and that's being driven by a

very robust supply of environment around the world. and that's helping our business on the traditional liquid milk side of a business, is to be in what is at least a couple of quarters long declining commodity market. >> interesting. we have the actual ag secretary later on this morning. we're wondering where your standpoint is in terms of policy in this country when it comes to agriculture, if there was a question that you had for the secretary, can you think of one? >> sure. i think the question for the secretary and for congress is that contemplates the next farm bill is whether or not we want to move to a more market oriented system of pricing, particularly around dairy, or whether we're going to take a step in the direction of policies that frankly even europe was walking away from now in terms of supply management and quotas. and frankly, within the dairy farm community, there is some push for moving towards a supply managed system. we think that's the wrong answer

for the american farm community because we're very competitive globally in dairy and we think it's the wrong answer for consumers because it ultimately leads to higher prices. >> interesting. finally, the street in terms of analyst coverage has a fair number of holds. seven holds, three buys, three strong buys. you've beat the expectations for 13 of the last 16 quarters but no dividend. one of the few s&p companies that does not pay a dividend. do you think that's going to change in the years to come? >> well, i think the analyst ratings may change coming out of this quarter because of the fundamentals of our business has rally been strong across all three of ore divisions. and we raised our guidance very meaningfully. we expect earnings this year to be up on the order of 50% on an earnings per share basis. we hope to see the analyst community get more supportive of the stock, particularly at these levels. with respect to a dividend we have been a relatively highly levered company. frankly, we're going to work our leverage down to lower levels

before we contemplate paying a dividend. i think that's going to take us a little bit of time to get that accomplished. >> mr. engles, good to have you with us. appreciate your time and hope it's not another ten years before the next time. >> i look forward to coming back. thank you very much, carl. >> gregg engles, chairman and ceo of dean foods. when we come back, word on the street from traders here about where the market is headed with the dow down 68 points.

welcome back joining us this morning, is cnbc market analyst here post 9 on the day that echos the last couple of days. gordon, what's going on? >> it's interesting. we've had somewhat of a decoupling with the europe 15 market. appears to be the trend again today. we seem to carry them through into the bell with a little bit of strength. asia starts to take a lead. europe gets involved, all of a sudden investor confidence goes out the window and they sell off hard. futures are weak in the morning, rally back. >> as we got closer to 1340 is that when that trend started to become more important? >> i think so, 1340 is an important number because it should break 1340. you have to look at this 1300. mixed signals though between the equity markets and credit equ y equity. investors have a lot of things they have to sift through. >> what do you think the biggest

unanswered question short term is right now? is it about this traunch, the exit, something else? >> i don't think short term there is a lot right now, carl. it's an interesting time. between fed meetings. earnings are out. you sort of trying to grope around and try to find out what is it that's most important and will be the one to provide some leadership to the market or downside movement one way or the other. so you -- i guess people are focusing somewhat on the european situation. the elections that are going on down there, a sense that the populous are coming up with candidates that are looking to kick the can down a little bit rather than make the hard decisions to kind of fix the economies that require. >> gordon, thanks a lot. >> great. final thoughts after the break.