>> dld. >> grasso. >> i think squeeze out more profit, sds. >> joey. >> he took my final trade. >> that does it for us. more fast at 5:00. follow me on twitter. power begins right now. >> announcer: halftime is over. "power lunch" and the second half of the trading day start right now. welcome everybody. my partner, tyler, is on assignment today. our number one guest says buckle up a new bull run is about to start. see why he's so confident. and see how to play it if he's right. and we have some advice for you if he's wrong. after the asian markets tanked overnight, the dow jones industrial average in the futures painted pretty dim u.s. picture coming into the session. but we are at the day's lows, but it's not as bad as everybody thought. the dow jones industrial average off 0.5%. same for nasdaq. s&p 500 down about 0.75% on the trading session. gold after a huge move last week a little quieter trading session today. it's down about $8. oil is rebounding. and we're trading up just one

cent on the trading session. and wait until you see what's happening at the new bay bridge connecting san francisco and oakland. it is going to make you really angry. we start with the bullish call and simon down at the new york stock exchange. hi, simon. >> hi, sue. uncertainty in europe, weak job growth in the u.s., an election of course on the horizon. let's not forget that. but still now is the time to get bullish, or so says our next guest. the chief investment officer of global equities. why, steve? why is now the time to dive in? >> well, i wouldn't dive in. but i certainly think you ought to be overweight equities here. we could go lower near-term for sure. there's a lot of uncertainty. but we think we're in the beginning stages of a 30-year bull market in equities. we think you take the averages much higher. in the early stages the markets tend to be a little dicey. you can have big corrections. we're having one right now. but it's times like this that people want to be adding into equities we think. >> what specifically do you

think they should buy? >> we like right here cyclicals. they're really oversold. we can talk names later. certainly oversold cyclicals, u.s. we like better than anything. we like europe and germany and points north and we like some selective emerging markets that have taken it on the chin. >> so inevitably may be some people screaming at the television, but the s&p is down 2% still this is a bull market as far as you're concerned. >> we're trading at less than 12 times earnings in equities. bonds are at historic low yields. we haven't been this low since the early days of world war ii. people -- the one thing i'm very sure of over the next five years, people are going to lose money in treasury bonds. they're not going to lose money in stocks off these levels. >> but doesn't that yield scare you? doesn't that as a stock guy really put the fear of god into you? >> it makes me very excited about the value in equities. >> why? >> because i think that, you know, bull markets start with very difficult conditions that

everyone can see. and then gradually those conditions get better. it's not about where we are, it's where we're going. and so if you look at the great bull markets of the last 100 years, the one started in '32 and one started in '34, the situation is almost as bad as it is now or maybe worse. but it was things getting better off those levels that cause markets to go up. >> good to have you here for the hour, steve. thank you very much. sue, for the moment, back to you. >> well, that was a bullish take certainly. we're not saying steve is wrong, but what if he is? how should you hedge yourself? brian shactman's been looking at that today. >> obviously, sue, if he's wrong, a lot of stocks are going to go down. but what will fair the worst? here's what we did myself and the cnbc data team was screen for high beta names only to the downside. stocks that whenever the s&p goes down 1%, these guys on average go down 3% to 4%. ten names made the list. financials with some insurance exposure seem to dominate taking up half the list.

hartford, lincoln financial, just a few. hig is down 3.5%, if you believe history repeats itself and that the market is going down, heartford might be exhibit a on the avoidance list. another interesting one, harmon international. high end electronics with focus on the auto industry. great play last year but global slowdown could be brutal. the stock performs three times worse than the s&p on down trends. it could be a name to watch, but not touch. the highest beta name to the downside, qep resources, oil and gas play fairing slightly worse than the hartford. weak economy, weak stocks, weak energy prices could mean more weak underperformance for that stock. interestingly, sue, coal names, they're high beta didn't make this list. get this combination, potential one, they could be the ones to avoid if a, materials would see less demand if we had a downturn, and, b, cheaper prices

in coal would mean even more conversion to natural gas. they might get a double whammy with that. those are the ones to run away from if you don't agree with steve. >> brian, thank you very much. you can never give too much advice. more on how to play a possible new bull run. dan fitzpatrick, president of stock mentor.com is here with us for the week on "power lunch." great to have you here. >> thank you, sue. >> you've come up with a couple strategies and stocks you think might work if indeed given all the volatility we're headed towards a more bullish take. >> right. my condition is if we're entering a bull market. >> right. >> i'm still really skeptical, but we'll talk about that another time. the first one is the qqq. if we're going to have a bull market, you have to look at the nasdaq 100. so if we pull up the chart here, what you're going to see is the stock -- can't see the 200-day moving average, but it's right there. it's right where the stock is right now. that's the level of support. that's something that the major markets tested last week. >> so we need to hold that. >> we need to hold that level if

we're going to see it. >> it's at 6031. >> it's about 6031. we have a little more downside we could have. but if this is going higher, it's not only going to need to hold there, but we're going to need to break up above this level and give us a higher high. because so far that's not happening. >> okay. >> another stock that we can look at is ibm. it's like the ultimate -- >> stellar performer. >> it's been absolutely on fire. it's still pretty cheap, the peg ratio's less than one. that's a good thing particularly in this market. if you look at ibm, it's also at critical support levels. so that's going to have to hold as well. >> at 188? >> at 188. i want to see it hold right there. and the last one we need to look at is jpmorgan. the reason is we can look at the xlf, but i like jpmorgan. i think it's come down so far. you have to have, if we're going to have a bull market, you've got to have financials. they've been really weak, but so far jpmorgan, all it needs to do is fall back in my view to about

$30 or so. back to you. >> and we're at $31. >> yeah. almost there. >> we'll see where it goes from here. thanks, dan. see you again in a bit. simon, back to you. >> sue, if you're hunting for yield, and who isn't, frankly, listen to this number. 5%. how do you get it? dan dicker joins us now. dan, where does the hunt for yield take you? >> well, simon, you can get a little more than 5% now in the energy mlps, these are the toll roads, basically, of energy, infrastructure. the pipelines and storage tankers and so forth. these deliver -- these shouldn't have anything to do with the price of underlying commodities. but they actually trade as if they do. and they do it often. we have a history of this in 2008 when energy got slammed. these mlps did as well. and they yielded at the lows upwards of 10, 11, some of them yielded 14%. now, we can certainly hope we don't get that kind of cataclysmic economic action

again. but even right now they're yielding because energy's gotten hit in the last month. you'll have something like -- >> let's get to the names. let's get to the names. >> of course, simon. so we'll get to -- let's take the most -- the ones everybody knows. kinder morgan is yielding over 6%. if you want to go even more, transmonotan, their board is full of ex-morgan stanley guys, very well run. yielding over 8%. and linn energy. there's some serious yield in the energy mlps. >> do you attach a health warning in it then, dan, they're not actually of course constituted like stocks and they have a different tax treatment heading into november. >> yeah. in fact, there's a plus side, simon. the hedge funders don't like it. they have a tough time dealing with that strange kind of distribution into their hedge funds. so this is one of the few areas in stocks where the retail investors on an even playing field don't have to deal with hedge funds. i like that about these. the only downside of course is

if energy keeps on getting hit if oil keeps going down to the 70s and ultimately the 60s. they will get hit, for no good reason, but they'll get hit. if you want to stand on the yield, that's what you want to do. >> or perhaps delay the buying and as time goes on yield greater. we have to leave it there. thank you very much. dan dicker with the mlp, sue. >> not only a search for yield, but also correction protection given the recent selloff we've seen. look no further than at&t and walmart perhaps as a safe haven. they were the only two dow stocks up last week. they're both up again today by almost a full percent on at&t. dan fitzpatrick, still room to run on these two stocks? >> i think there's still room to run on at&t. but what you have to look at is at&t's already had a heck of a run. i think the reason it's outperforming because the dividends have a 5.2% yield on that. also with walmart it's a little bit extended. i'd wait for a pullback. i'm being real picky here. maybe a percentage, maybe or

two. again, really picky. both of these names i like. >> this has been a dangerous market. perhaps picky is a good thing. thank you. >> okay. >> cnbc and the economics team working hard over the weekend on a brand new fed survey. topic one was growth. steve has the exclusive numbers after the dismal jobs survey. what did they show especially about expectations for the fed? >> big change, sue. only a one-third probability of quantitative easing in the next 12 months, that's now up 57%. you can see going back and looking at the history of the survey, we don't get jumps like this. it is volatile. and you saw one back earlier when we first started the survey. but here's another one. all of that key to the jobs report. but also a lot of the other economic data was softer. economists, strategists, the 60 people we surveyed over the weekend think the fed comes back in here. a big question, sue, that was out there was, what good is it

going to do? look at the 10-year down near 1.5%. with the fed coming in really help? there's a thing called quantitative easing, qe, i have ge, gratuitous easing. >> that is the question though because everybody is now expecting qe -- another round of qe. where do they stand on that? do you think it would help at all given what you just outline snd. >> well, really divided, sue, in terms of the benefit of additional qe. some people say, yes, they're going to do it. but only because they think they have to do it and they're going to do something just to do something rather than having any big effect on interest rates at this point. >> all right. steve, thanks so much. simon, down to you. >> yeah. well, we still have steve with us here at the nyse. is more qe coming in your view? how do you play it? >> i would say more likely in europe than here. here i think we're just bouncing along. i think the fed wants to see a little more weakness in jobs before they do something. >> so much of the market expects

qe, least of course those bought mortgage backed securities. if they don't have, that could be a problem? >> could be. but i think most of the market wants to see something happen in europe. if we get marginally positive news there, that will overwhelm whatever the fed does. >> still more from steve auth in the program. >> look very much for it indeed. in europe, the man in charge of europe instead of the fed, can mario draghi back it up? how will he do that? five stocks in just about every portfolio. we are back in a flash to the downside today with caterpillar, ge, bank of america, hp and united technology all making list to the downside. ou picked up back in the '80s. tdd#: 1-800-345-2550 like a lot of things, the market has changed, tdd#: 1-800-345-2550 and your plans probably have too. tdd#: 1-800-345-2550 so those old investments might not sound so hot today. tdd#: 1-800-345-2550 at charles schwab, we'll give you personalized recommendations tdd#: 1-800-345-2550 on how to reinvest that old 401(k) tdd#: 1-800-345-2550 and help you handle all of the rollover details.

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the market beginning to lose traction down here at the new york stock exchange. we're currently on the dow down about 70 points. and it would appear in broad terms falling. let's get a market check now from jackie deangelis. >> hey, simon. we're watching shares of hp here. not a great day for the stock. on pace now for a new 7-year low. in fact, it's the worst component on the dow this year down roughly about 19%. and some other new lows in tech today as well. take a look at dell, juniper, sandisk all following suit in the same direction, lower. >> thank you, jackie. there's talk of a grand plan for tackling europe's debt crisis, it's turning into an incredibly critical week for spain. a meeting tomorrow to discuss the crisis. our chief international correspondent, michelle

caruso-cabrera, is here to get us ahead of any news. >> news broke just in the last few minutes, sue. we had a news conference between angela merkel and berosa, they said we are talking about a lot more integration when it comes to the banking system in europe, but that is a mid-term goal. in other words, not right away. that may be why we see the markets moving lower because while they're talking about a long-term solution, in the short-term you have to ask right now, what do you do about spain? the fourth largest economy in europe is actively seeking bailout funds to help them recapitalize their banks. reports out of madrid report the spanish finance minister is in full on negotiations to get money injected into the spanish banks suffering from the bursting of a massive property bubble there. this is very different than previous bailout requests when the money was given to a government first, say like greece, and then hand it over to the banks. the spanish government wants to

skip that step. spain had originally hoped the banks in their country would be able to raise their money on the open market. that was plan one. that turned out to be a pipe dream. then the government said, less than a month ago that they would borrow the money. at the time spain was onl paying 5%. and then they would lend the money to the banks at a rate of 10%. that's not working out either. why? because look. spain's interest rates have been climbing. they're now above 6%. we were talking about whether or not they were going to get to 7%. plan flee now, turn to europe. why have they seen this trouble? why are their interest rates rising? because of the disaster that was bankia. this is a bank they thought they had saved once. then twice. then the tab went from 3 billion euros to 24 billion euros in a very short period of time. it raised all kinds of questions of just how much money does spain and the banking system need? how much time does europe have is unclear. depends on the patience of the spanish citizen who has the money in the spanish banks, whether or not they are confident about keeping it

there. spain borrows money on thursday, the government does, they want to borrow it from a 10-year time period, sue, that's going to be a very critical test. >> it certainly is. michelle, do we have any gauge of what the demand is going to be or what price spain is going to have to pay? >> we're not even sure they're how much they're going to try to raise. they oftentimes don't say the number in advance so they can tone down the demand so it doesn't look like it's going to be a failed auction. i think it will depend on the headlines in the next three days because there will be a lot of jockeying behind closed doors. what are european union leaders going to say about more integration? i don't think we know yet. >> michelle, thanks so much. we'll see you later too. simon, over to you. >> analyze this, sue. see what wall street's saying about four very big names today. and find out if our own in-house stock picker we have this week actually agrees. also ahead, duck, duck, dash. we'll explain. first some of today's big losers, the dow now down 70 points.

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it is analyze this time. everyday we look at the analyst calls of the day to see how they're impacting the stocks that are in the news. dan fitzpatrick is back with us to break it all down. >> thanks, sue. >> we're going to start with citi making a move on macy's. removing from the top pick list but maintaining a buy rating $40 price target. the stock added to the list on january 28 in 2010. since then it's had a huge gain of about 140%. when you look at this chart,

it's pretty impressive. citi noting it sees three challenges that could limit the upside near-term including that "the market might sell the winners." not a surprise there. i would think they've been doing that for a long time. >> reselling losers for long enough. >> exactly. they're selling anything these days. second quarter same store sales comparisons are challenging and signs of the affluent consumer pulling back. do those make sense to you? or would you push back on any of those? >> no. they really make sense to me. here's the thing with macy's, it's still in a down trend. that makes me really cautious on the name. i wouldn't be buying it right now. we don't see it now. we've got the intraday chart here. >> and it's a down market day. >> exactly. and the last bounce was a pretty weak bounce. and what that indicates after the type of high that we've had, you can see it there in the may high for macy's, pardon the pun, the may high with the big high and certainly ramped recently. but you can see the lower high very, very clearly. that indicates distribution.

the market still isn't coming up -- it's not really embracing this name. i wouldn't be buying it yet. >> what about the affluent consumer, quickly? do you think they are pulling back? >> i think they are. i think they have been pulling back for a while. i think that's going to continue. i think the affluent consumer's going to hang back, maybe save the money. they're the ones in the market. they see this. they're not going to be buying. >> stifel nicholas upgrading boeing from buy to hold. the reaffirm mags of the build rate increase through 2014 are a positive following friday's price decline to a level we believe is an attractive entry point. in a market than extremely volatile or not? >> i feel like i should have worn a bear suit today. i really don't like boeing here either. for a few different reasons. first of all, it is a dow component. so if the dow continues lower, it's going to trade in sync with the dow. also, if you look at the daily

chart, it just recently broke the 200-day moving average. the reason i keep talking about the 200-day moving average is because they're relevant. a lot of times they're not, but right now they are. >> when you penetrate the 200-day moving average, the stock can also trigger technically based selling programs in there. regardless as whether a fundamentalist you follow it, as a technician there are executions on that trade to go through. >> that's right. and fundamentalist by definition are fundamentalists. they don't really look at charts that much -- at least they don't say they do. but the bottom line is boeing is still really weak. yes, it's hit that cluster in the 200-day moving average, which is also where technical programs would buy. >> right. >> the fact that they're not, i'm looking at citi group -- excuse me, boeing, and i could see another $6 to $7 to the downside. >> all right. let's see about this one. citi downgrading mer trade. citi citing high profile weak

ipos. the ipo pipeline has been relatively weak. facebook the most notable. >> sure. >> but take a look at the individual investor in this environment. what would you do with the likes of charles schwab and t.d. mer trade? >> i'd still sell it. that analyst, that downgrade, is about 20% too late. the stock peaked at 20% above current levels. it's still printing lower highs and lower lows. that just means distribution in the market. it's too early to go back in. also, the retail investor's been out for a while. i don't see that there's any time soon that they're going to be getting back in. i'd say the same thing for charles schwab. it's got about the same chart, same outlook. >> all right. so you agree with the analyst, but you would have done it earlier. >> i would have done it way earlier. >> 20%. >> 20%. yeah. that's a lot of money. >> it is a lot of money to leave on the table. thanks very much, dan. >> sure. >> gold and other metals about to close for the day.

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we're just closing now at the merck on some of the metal stocks. gold certainly given up some of its big gains. let's get to sharon epperson for the latest. >> simon, we're seeing a very light volume day here in the gold market with the london metals exchange closed for the diamond jubilee. we are looking at gold prices right now before the close appear to have pulled back a bit after the tremendous rally on friday. up more than $60 on the session. and the biggest one-day gain since august of 2011. keep in mind this week there are a lot of things traders are waiting to hear from. and of course the ecb meeting on wednesday one of those factors. the other important factor will be what bernanke has to say in his testimony on thursday. and whether there's any hint of quantitative easing is what every goal trader is listening for. what the big play seems to be recently is taking another look at the gold mining stocks.

if you look at what's happened over the last year and a half or so, gold prices have significantly outperformed the gold miners. but that's changed in the last couple of weeks. and traders say when you look at falling commodity prices, of course oil prices have fallen so dramatically. and you look at rising gold prices, that could result in the upside surprise for miners, simon. so that is something traders are looking at as a potential play here in the gold market. back to you. >> okay. 1614 is the close on gold. sharon, thank you very much for that. down here at the new york stock exchange, the market continues to be under pressure. the dow is now down 76 points. and with the losses that we have on the s&p at the moment, if we close at that level, it too will have gone into official correction territory down 10% from its highs. mary thompson -- or the april highs i should say. mary thompson has detail in today's action. >> hey, simon. the dow about two points above its session lows today. basically overall weakness once again because of disappointin c

economic data friday. as well as the manufacturing index for the new york region had its weakest showing in just about six months. quick check of some dow movers. factory orders were weaker and effecting some of the big machinery makers including dow component, caterpillar, ge and hewlett packard, also weaker along with the banks in today's session. let's look at some of those machinery stocks, as i said, under pressure because of the factory order numbers today. there you can see goodyear, eaton, joy global among the losers in that group. also airlines are very weak as well. this in the wake of delta posting disappointing numbers on revenue per passenger for the month of may. they were below expectations. that's basically bled into the dow transports and into the rest of the airline sector, which is weaker. the s&p we're watching there 1275 was near-term support. we broke through that after the index broke through its 200-day moving average on friday. traders say next level of support for the s&p is 1250. simon, back to you. >> and big gaps below that were

we to break it. mary, thank you very much. still here at the new york stock exchange, steve auth, chief investment officer at fed rated. he's with us for the hour. and he is a bull. no question. 20% upside as far as you're concerned on the s&p 500 from here. why would now be the time to buy when the market is falling? >> i think -- it's very hard to call the bottom here, simon. things are so bad in europe, some sort of policy response is likely. could we go lower for sure? yeah. i'm looking at one to three years i'm pretty sure we're going to be higher. i'm going to be buying in here. if we go lower, i would add to that position. >> for many retail investors who are talking about their own money that they've worked all their lives for, not just investing someone else's money, they might think it odd that you say buy into a market because things will be so bad the central banks have to come in and do something to sort it out. they might say, actually, you know, i've lived 60 years, that

isn't a good time to buy. >> unfortunately the retail investor often sells low and buys high. a lot of people cashed out in the panic in '08-'09. which is a very hard time to buy. the bear case is easier. everyone's got that information. everyone knows what a mess it is in europe. everyone has the jobs data. the bookcase relies on assuming there's a response. that i've got the central banks of europe and the u.s. involved in this. i think there's going to be a response. >> steve, can the market though move forward without the participation of the retail investor? we haven't seen the retail investor in this market for some time, as you said when they exited in '08 and '09, granted, that was not the time to exit, but we haven't seen them come back in yet. and also the financials have not participated with the exception of a few spurts to the upside. we still don't have a lot of leadership from financial stocks. can the market move forward absent those two? >> answer, yes and yes. we're up 84% off the march '09

lows completely without retail. in fact, retail continuing to cashout. i don't think they really come in big until we cross through 1600 on the s&p. quite a ways from here. yeah. we can move forward. even pension plans are historic lows in terms of equities. i think we can move up without retail at least in the early stages of this market. >> one quick word on emerging markets, which you are bullish on despite the fact they've been hit really very bad over the past four or five weeks. >> yeah. that's the opportunity. i mean, china's down 15%, 18%, brazil down 18%. we think the china story's going to be in tact. they've got a lot of money, a lot of resources, they will engineer a soft landing. if so, you have the chance to buy stocks pretty cheap right now. >> steve, thank you very much for coming down. steve auth, federated cio industries. s&p tech falling below 200-day moving average. a number of big tech names

getting hit inevitably in that broad move. courtney reagan is following the action. >> that's right, simon. look at shares of rim now under $10. we haven't seen this in more than nine years. first solar also hovering at lows since its ipo the facebook shares continue to fall more than 4%. and look at shares of groupon down almost 8%. remember, those restrictions on insider trading, selling have been lifted as of friday. those shares continue to fall as a result of some of that pressure. look at dendreon down almost 15%. roth capital actually decreasing the price target from $12 to $6.70 a share. we're below that right now at $5.78 a share on belief that its prostate cancer drug could be losing some market share to j&j as well as others that have drugs in development. sue and simon, back to you. >> thank you very much, courtney. interest rates, the yield on the

benchmark 10-year note back on the rise just a bit. we're still hovering though at record lows. rick santelli's tracking the action from the cme. and after friday's session, i didn't know what to expect coming into this morning. we have had a little bit of a rebound in terms of the move in the market, but it's dicey out there, rick. >> well, it is. and i think the message of treasuries isn't an optimistic message, not about the u.s. economy, not about the u.s. jobs market. and of course not about the end game with regard to europe. but as you look at a two-day chart of 10s, as sue pointed out we're up a handful of basis points today coming off of the only settlement with a 1.40 handle being friday. if you open up the chart to april, what's fascinating is is obviously we've had a big drop in yields. but it is far from a one-to-one translation into a drop in mortgages. we will get more into that as the show develops. back to you. >> actually, let's talk about it right now. you mentioned the fact it's not a one-to-one correlation. but there are a lot of people out there who saw friday's drop

in yields and i think called their loan broker and wanted to know why it didn't necessarily translate into lower mortgage rates. >> well, let's put a face on it for our viewers. i went back to the mba mortgage applications and i noticed in mid-april their 30-year mortgage was around 4.10% and 15-year around 3.33%. if you look at most recent data as of wednesday -- i know we didn't get all of our drop but we got a good chunk, but the participation was small. there were 3.91% on a 30 and 3.23% on a 15. so less than a third of a drop in 10s and the mortgage on 30s and only a handful of basis points on 15-year. which really is the point, viewers and listeners. there's obviously a correlation with treasury rates to mortgage rates, but it's far from a one-to-one relationship and we need to keep that in mind. >> and if you can get a 3.75% or 3.8% on a mortgage, that's pretty darn good.

i remember 15%. >> it is. but, sue, it isn't all-time lows. >> that's true. >> i've had plenty of viewers and sources tell me 1963 for example one of my sources had a $200,000 mortgage at a rate of 2.75%. >> wow. all right. that's one for the books. thanks, ricky. let's go over to dan. how do you play the housing market right now, dan? how would you do it? >> for the time being, i'd stay away. here's the thing. if we look at four charts here, and we can just kind of take these in order. beezer and kb home are really what i would say the worst of the worst. toll brothers and d.r. horton are the best of the best soon to be the worst. beezer home and kb home went up during the low and the high they went up at least 150%. so they've had a heck of a run. now they're down at least 40% to 50%. so we're getting a retracement there. but i want you to look at the best of the best. toll brothers and d.r. horton.

they actually advanced less than these other two, which i would call the weaker ones. they went up about 100%. they're still actually putting in higher lows and higher highs. and that's a good thing. you want to watch those two stocks. if they start breaking down, it's way too early to get into the housing sector. >> thanks, dan. simon. >> okay. let's recap some of the other big headlines driving the session this monday. salesforce.com buying social media marketing firm buddy media for almost $690 million in cash and stock. stocks that are hitting new highs in this session, pinnacle west trading at levels not seen since april 2007. duke energy at levels not seen since april 2002. on the downside this monday, abercrombie & fitch at a two-year low. electronic arts trading at levels not seen since may 2000. and radioshack at all time lows certainly back through our history of 1968. let's send it to a woman who

won't remember the beatles, jackie deangelis. >> hey, simon. we're watching shares of medtox soaring after lab corp announced it agreed to acquire the company. the deal's valued at $242 million. med tox going to get $27 a share. that's a 37% premium to friday's close. on a down day like today, we're seeing a nice pop in shares of medtox up north of 35%. simon. >> thank you, jackie. up next on "power lunch," it's one of the most ambitious american public work projects in a generation. and it's largely made in china. how it's effecting american jobs next. i'm brian sullivan. cnbc is heading down to atlanta for a town hall event on small business. we are going to be hosting some of the greatest entrepreneurs of our time. small business owners will share their challenges. we'll look at opportunities. and we'll learn new strategies for success. join us as part of our studio audience. for free tickets, go to

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there's an easier way to save. wooohooo... geico. fifteen minutes could save you fifteen percent or more on car insurance. interesting moves here on the dow. we've basically almost halved the losses in just a few minutes here. we were down about 45. and as you can see we've started heading down again. however, the market may well be bottoming on the session. let's check out what's coming next on "street signs." brian, good afternoon. >> good afternoon, simon. thank you very much. are we in for a big summer swoon again? it may feel like deja vu again for the markets, but we're going to show you why it might be a good time for your money this time around. hey, corporate america, stop your whining and start hiring. we are going to take a look at how ceos can step up and put people back to work and also why they're reluctant to do so. and should america take advantage of all this free money, right, and borrow its way to prosperity? we'll debate whether it's time to double down on debt.

because it's worked so well for many other countries. now back to sue and simon on "power lunch." >> let's talk about chesapeake energy, which is substantially higher. a big day for that stock. the oil and gas giant making major changes to its board. the company of course as you'll be aware has lost almost half its value over the past year. kate kelly is following the detail on that today. kate. >> thanks so much, simon. you know, i just want to frame today's announcement in the terms that we should see it as a major corporate governance overhaul. essentially it's a nine-person board the company said they're not going to expand the size of the board. what we are getting is at least five new members and maybe as many as seven. essentially aubrey mcclendon will stay on the board. they'll relinquish the spot as soon as they replace him. simpson is likely to stay on the board.

possibly carl icahn himself, that leaves only two seats that might be holdovers from the previous regime. so that's kind of interesting in its own right. now, corporate governance experts we've talked to some think this doesn't go far enough, some people think further changes are in order. but they're clearly trying to be responsive and preemptive going into friday's annual meeting in terms of responding to some of the criticisms at least the way they're managed. >> what does it mean to me as a shareholder, kate? how should i view it? >> well, i think it means, carl -- i think it means, simon -- not carl icahn, that shareholders will be better represented at least when it comes to the big guys. right now carl icahn and wellington is not nominating anyone to the board per se, but they're another big shareholder. i'm not sure whether as an individual smaller investor this answers your concerns, but you're probably going to end up with folks that are more responsive in general to shareholder issues than you did in the past just by dent of the fact the board is going to be largely a product of what these

holders think or who they think should be helping to lead. but there's still some lingering issues, right? there's the ongoing investigation into aubrey mcclendon's financial affairs being run by the audit committee. he ran a hedge fund for about four years and also took out loans from parties that had done business with chesapeake as a company in order to finance his investments among other things. so there's definitely a lot of smoke around there. if you look at carl icahn's filing today, you'll see he's still very focused on the company's spending. they're really burdened by debt right now. north of $12 billion or $13 billion and he wants to see a robust dialogue around the chairman and other issues. >> usually, of course, kate, he makes his money by takeovers. that's when it really works for him. i wonder if it can come through here. for the moment, kate kelly on chesapeake, thank you. >> from energy to infrastructure, and after last week's jobs report, this one will make you sit up and take notice. did you know that one of the most ambitious american public works projects in a generation

is actually largely made in china? so why are much-needed jobs going to the chinese instead of americans here at home? our senior correspondent, scott cohn is investigating. >> hi, sue. a lot of you have checked out our story, if you haven't, i hope you'll check it out. we reported on friday the decision by then governor schwarzenegger to allow the iconic suspension portion of the bay bridge was a money saving move that turns out hasn't saved nearly as much as officials had hoped. we found a decision like that doesn't just happen. >> high above the waters of the bay. >> building the original bay bridge in the 1930s, there was no question where the steel would come from. >> all the steel sections were fabricated at american bridge companies plants at gary, indiana, and ambridge, pennsylvania. >> but replacing the bridge 75 years later was a different story. >> this project really is unique

in terms of the amount, the intensity and the difficulty of some of the steel fabrication work that's involved. >> only one american bid came in in 2004. and at $1.8 billion, it was more than twice what the state projected. >> that's telling you there's something wrong. you're not getting competitive bidding. >> they knew they had to look overseas, but there was a problem. under the law, a federally funded project has to give preference to american contractors, so they changed things around. now the signature span on the bay bridge is being paid for entirely with state funds. the federal funds would be used for the rest of the bridge with the by american requirement no longer an issue, governor arnold schwarzenegger's administration pitched the project to the chinese. it worked. but american contractors like tom hickman say it was unfair. >> we thought it was gamesmanship. a way of getting around the system.

>> last month the u.s. house passed a bill that would bar that kind of maneuver in the future. it faces uncertain prospects in the senate. tom hickman, who you just heard from, was part of a u.s. group that had big plans had they won the bay bridge contract. plans he says would have had a big impact on the u.s. economy just when it needed it the most just before the recession. you can read more about that in our full report at cnbc.com. sue. >> scott, thank you so much. up next as we continue on "power lunch," the dow earlier on giving up all of its gains this year. it's trying to claw its way back. the s&p and nasdaq in correction mode from their recent highs. should you run for cover or stay and play? we're back in two minutes time to talk about that.

all right. it's power rundown time. cnbc chief international correspondent, michelle caruso-cabrera, and net-net senior ed corp, john carney, here with us. good to have you as always. first up talk with the stocks with dow in negative territory, bears in control right now. steve auth said earlier we're seeing the beginning of a secular bull market. who's right? ladies first. do you want john to go first? >> i don't predict market direction. i will predict there's going to be incredible volatility between here and there, right? we're going to have european union leaders by the dozens

saying things behind closed doors. it's going to be a mess. just hold onto your seats and get ready for a wild ride this summer. >> and be hedged. >> yes. >> i think michelle's right. the big problem here is there's huge upside risks and huge downside risks. at any moment we could have an announcement of some giant bailout and a rip your face off rally could make everybody short stocks lose their shirts. at the same time you can have a policy crumble that crashes the market at any day. i think right now it's probably good to just play it safe. don't go too long or short either way. >> all right. or do funds if you're the individual investor. >> absolutely. >> with a mixture of stocks. okay. second question on the board today, the debt crisis in europe, which we've talked about, s&p saying moments ago that there is a one in three chance that greece will leave the euro in the next few months. so, it's musical countries. who might get kicked out of the eurozone first? duck, duck, gans, which is

apparently goose in greece. >> maybe greece decides to leave on its own, right? >> that's a very good point. >> although right now, michelle, you've been over there. you know the greeks don't want to leave. you ask them, they say we're staying in the euro. in their mind, they are europe. there's no chance for them leaving. >> at this point i'm so shocked we have not seen actually full-on physical runs on the banks. i'm now far more optimistic. they have so much belief in staying or else we would have already seen the banking system crumble. >> the question was properly worded, will they be kicked out? because if they're not willing to accept the terms of the bailouts, it's not elastic. it's not that they're going to receive money from the rest of europe forever without ever caving in on any terms. and the leftist parties in greece right now are saying we're not going to give any terms. >> there's possibility that it will be spain. it's too large. it would destroy the entire eurozone. >> they want to keep spain in. >> i would think. let's move on.

past the debt crisis in europe to another interesting story. bill maher buys a minority stake in the new york mets. i'm going to michelle on this first and i know your take and it's brilliant. >> i know most little boys in america want to be on professional teams when they grow up. most little boys discover they cannot. if they become rich, they decide to buy part of a sports team. it's a great pick up line, ask me how i know, modeling agency, 1%, 5%, you get pretty models at your parties that way. >> a sports franchise bubble. people going in and buying the dodgers. >> right. paying enormous amounts of money. much more than the fair value. >> and doing it not just because they were little boys that wanted to play baseball but because they're predicting they can make money. if you read about bill maher -- >> that's a farce. they say that. they say it's a good investment. >> to justify it. >> they just want really good seats. >> i think that's a huge permit. but i think when you have celebrities buying sports teams

and calling it an investment in the paper, that's a sign we're probably a little toppy in the price of these things. >> i think the price for the dodgers was -- how are they going to monetize that. >> mind blowing. brian sullivan says it's a good investment. we were in l.a. together and he said good deal. >> i don't know about that. thanks, guys. appreciate it very much. coming up, we go hunting for yield among big pharma stocks looking at names generating nice dividends for investors when we all come back. [ male announcer ] when this hotel added aflac to provide a better benefits package... oahhh! [ male announcer ] it made a big splash with the employees.

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welcome back to "power lunch." looking at cheesecake factory, ticker cake, downgraded by william blare to market perform. may could be choppy after a softer april. also second quarter same store sales, they could be low guidance. >> thank you very much. meantime the dow down 61. dan fitzpatrick, what are you focused on? >> thanks, simon. i'm looking at the s&p 500. here's the thing, this is really approaching some key levels. everybody was talking about the 200-day moving average last week. but if you look at fib natch levels, something s&p traders look at. >> it's a technical based trading -- >> absolutely. it's based on whatever. but it's very, very important stuff. 1250 is the 50% retracement from the low to the high.