the new new york works for business. find out how it can work for yours at thenewny.com. and and welcome to "closing bell" everybody. >> i'm bill griffeth, and the markets are locked in a tug of war right now. there is weak confidence inspite of a positive report on home prices. many names in the group are posting strong gaining into the final hour. we're just off the highs of the session here with the dow up 55 points. it had been up about 70 points. about 15 minutes ago, at 12558,

the nasdaq up 20 points at this hour at 2856, and the s&p up 8 points at 1321, so modest gains today. >> one stock very much on our radar today is zynga. those shares are trading higher after they released a new network that allows gamers to play in different platforms. it has lost nearly half of it's value since november. keep it right here on cnbc, because we're going to be talking about today's news with the ceo. that will be a first cnbc interview, so you don't want to miss it. >> first, let's get back to the markets, financials among the sectors on the move after a goldman sachs report added jpmorgan chase -- they were swapping the morgan's today.

>> they were. in the "closing bell" exchange, we have brian shactman, and rick santelli, rick, i'm going to get to you about germany being down grated from a plus to aa minus. was this expected at all? >> it wasn't expected today. there has been questions on going that as germany continues to be the focal point that this type of issue would arise, but the markets didn't have a huge move. i think at this point when you're the tallest mountain on the landscape, no matter if it'sal enough for some and not for others, it seems impervious to these headlines. investor relative value, looking at germany, is still mighty fin when you contrast it to markets like in portugal, spain, and

italy. >> we're seeing two of your notes, how was that actiuction? >> it was very boring, 60% was taken by dealers, and it makes these a little more difficult than they used to be. >> we were just talking before we went on the air here, this is a very headline driven market right now, it must be exhausting for money managers right now. >> we're going crazy. my hair was push black about two years ago. it's very difficult and it is headline by headline. and this downgrade with the german bonds is really the event, and the downgrade comes later on. we're poised for anything to happen. >> if we can see an exit by some

of the weakest member states, maybe it would be better for the ret rating in france and germany. but in terms of the equity market there would be a huge knee jerk reaction. >> any way we can get clarity is a good thing. if the countries exist and we get austerity measures, anything we can do different than what we have right now is a good thing as long as it's moving toward the positive. >> and you will not get much clarity on thursday. you will not get resolution on what the 27 countries want. this downgrade has a lot to do with angela merkel and her standing her ground, and the comments about her sharing liabilities over her dead body, and she is flirting with the disaster of the eu. look at it from her per sective. if you were in her position, would you want to assume the

liabilities and transfer so much from your assets to another country. >> it's not like they're in a conglomeration of countries, oh way, they are. >> this is a joke, but 150 years ago they go invade the country, fix it, and get out. >> maybe we should go back to the good old days. >> scott, do you like this market here? >> bill, i tell you, i think if you believe that we're in a modest growth, modest inflation environment, and europe will not fall into a recession which i think that will, you need to be buying stocks. we're trying to prepare clients for the next leg up, that means taking care of -- >> which sector, scott?

>> how is it you don't think europe will go into a recession. i don't know what a severe recession looks like unless you look at europe right now. >> i think if you throw exge exgermany, sure, but people's expectations are already bad, look at the valuation whether it's those stocks, which i'm not saying buy european stocks, or our stocks which are not expensive. you have to count on nothing out of europe, we're counting on a middle to moderate recession that's going to last for a long period of time. we're counting on the emerging market growth coming back, and just modesty. we're not talking about high interest rates or valuations. we're talking about muddling along, earnings growth that is good. 6% or 7%. that's the environment that u.s. stocks can do tell. >> what's going to be the

catalyst if you have demand weakening in europe and the u.s.? we talked on in network about the u.s. decoupling with their economy. i think year learning we have to find out if this is a summer slow down, or whether we are being impacted negatively about what's going on. >> i have to get to you in terms of sectors and expectations, and a lot of sectors are pricing in the end of the world for financials, at leasle and there are some good things out there and bad things, let's agree the end of the world is not coming, are financials cheap? >> it's not coming, and if you take a snapshot of the fundamentals right now you would see the market is very attractive. stocks are selling at 20% overvalue. based on where interest rates are today. financials look attractive at this point. if you don't believe the end of the world is coming and europe will fall apart, you buy those,

utilities, and you make a lot of money doing that. >> thank you all, we'll be checking back with you as news warrants. we want to move on here, we have news on general mills, we have that story right now. >> look at shares of general mills, off of our lows raised it's quarterly dividend. they raised by 8.2% for 33 cents a share. this is very good news for general mills. also want to look at shares of zynga falling sharply. investors are not happy with the announcement. so watching shares of zynga very closely. the ceo joining us for an interview on "closing bell," make sure not to miss it. >> yes, that will be a first on cnbc. in the meantime, zynga is down but stocks are high. there are a couple notable

groups, let's get out to the realtime exchange. >> a couple groups different, but home builders having another positive day today. they are being lifted nearly across the board. they're up almost 6%. 19 of the 20 incitis cities ret 20% of the decline. up 3 1% for 2012. we have big numbers running for the year. switching gears, let's talk about corn. corn is at the highest number for years. it's the hot and dry midwest weather damaging that corn crop. the corn and so i bean

conditions are the worst in 24 years. the last time we saw them this bad was for a bad drought. the higher grain prices lift shares of fertilizer names. a fall in production this year could mean higher demand for crop nutrients next season. also fertilizer companies are said to they should be able to increase their dividends. that's what's going on in today's trade, going on. >> you can take the girl off the farm, but she never left the heartland. the market is headed higher, we're back close to the highs of the session as we go into the unpredictable final hour of trade. >> stick around, you don't want to miss what's coming up on the closing well. >> zynga unleashing several new

social network games. it will help the company diversify away from the reliance on facebook? we want to know which stock would you rather bid on right now? zynga or facebook? tweet us at cnbc "closing bell." and shares rallying as the media giant considers splitting up into two companies. is breaking up in the best interest of shareholders? and which other companies may be ready to split? [ mechanical humming ] [ male announcer ] we began with the rx. ♪ then we turned the page, creating the rx hybrid. ♪

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welcome welcome back, 45 minutes left in the trading session. a bit of a rally, it's a smart little rally with stocks rising on what some watchers are calling a technical rebound. the down up 66 points. a moment ago we were trading at

12568. all ten s&p sectors have been trading to the upside lead by ken assume e consumer discretionaries. zynga was trading higher when it announced it was expanding it's playground, but in the last 15 minutes it took a sharp turn down to the lows of the session at about a 6% decline right now. it's called zynga with friends. it's a way for players to connect in one place, and it doubled the number of games from five to ten. >> while players might like today's announcement, what will it take to keep investors interested. we're going to go to julia who

is joined with the ceo of zynga. thank you for talking to us. so you're bringing together mobile and social gaining, the stock has taken a nose dive recently, how will this new platform grow revenue and profits? >> this is the evolution of our zynga platform which, we first made available to consumers and other developers in the first quarter, and we announced zynga.com, and we have been continually bringing new innovative features to our users there. and what we announce today is that we're rebranding the experience as zynga with friends, and we will take these features that we found great engagement with, and make them available to our players across

facebook and eventually across noble networks as well. the way we look at the future and growing revenues and earnings, is it starts with our players, our products and our players. and what we're doing is building a network of players that we can, in a scaleable, repeatable, profitable way, bring new games for ourselves and our partners to that audience where ever that are, and we already started to prove on mobile with recent launches in the last couple months -- >> in this area, is it competition with facebook? >> no, we think there has been a terrific relationship between us and facebook. facebook has been the most important flplatform and

accelerator of bringing social gaming to the mass market. that has been a terrific business for them, and we have been their large partner, they're obviously our largest partner. i don't think that facebook is in the business of trying to build great first party games, and we are. >> you mentioned facebook is your bigger partner, they're also responsible for 90% of your revenues, as they're growth slows, how big of a problem is that for you? >> facebook said this and we have too. the last five years were, for them, about getting everybody to have an identity and a social network and it's facebook. for us it was about everyone starting to play games and we have seen that. the next five years is about driving more value for that audience that is on social networks and playing games.

so we're focused on delivering more value across more categories. >> driving more value, do you mean getting them to pay for more things? right now your revenue only comes from 5% of your players. if you're providing more value, don't you need them to pay for it? >> definitely. that's part of it. so what we have seen today, in our really casual games, things like power ups, people wants to pay for those, we're bringing more casino games like slots. and we have been growing our advertising network. >> bill, you want to jump in? >> yeah, i know ceos hate nothing more than having to comment on their stock price, but your stock has been tied and feathered because you seem to be so tied to facebook, which is

seeing it's own revenue decline or at least slow down because of the migration to mobile which you seem to be trying to embrace, but do you sense the market just feels like technology has gotten away from all of you and you're having to play catch up in an age where people are playing on so many different platforms and you never know how you will make money after of these guys? >> to answer your question, i think first of all facebook is the leader on mobile as well. they are the largest network, the largest application in the world, with by far the largest audience. we believe that we're the largest mobile gaming network as well. so i think we have been successful inform making mobile games social, bringing our webb players with us to mobile, and we see, and facebook sees, terrific future and upside. and again, i see mobile as

another accelerator of making playing more available to more people. >> i get all of that, i'm sorry, but my question is, why do you think your stock is down so much right now? not just today but overall. >> i believe that my job is to toe discuss on delivering long-term revenue growth. growing our audience long term and do that by focussing on what we do which is building great play experiences and a network around it. we're obviously very bullish about the future for social gaming and play, and we're happy to talk about all of the drivers of that future, but we're very bullish on it. >> yes, another thing you have to focus on is building revenue

as well. you're very excited to have facebook ads on zynga.com. so how great of a role will facebook play. >> we think advertising is a terrific part of the future, and we're investing in it heavily. it's been growing terrifically. it gets us in a position where any of our players, whether they want to spend money in the game or not, can have alternative ways to advance to get those virtual items or things they want. and it gives us as a industry a way to drive revenues from 100% of the people enjoying our products. >> great, advertising and as you diversify, mark, thank you for talking to us today. man i did and bill, back over to you. >> thank you, we want you folks

at home to get in on the conversation right now. which stock would you rather be betting on right now? again ga or facebook? tweet us your thoughts on cnbc "closing bell." >> and you can tweet us, but bit griffeth never even looks at twitter these days. we're counting down to the closing bell, just a little over a half hour to go, let's look at how we're doing with the dow and the nasdaq still holding in positive territory. amazon is getting read to launch a new version of the kindle fire maybe as early as next month. we'll look at this here. >> and find out why somebody says stoking fears about the fiscal cliff could make the situation worse than it is.

>> i love that animation.

>> natural gas has made a real come back and trading at a five-month high today. >>man i did, prices continue to climb here and electronic

trading up another penny or so, and part of it because of the warmer temperatures across the country. it's adding to the cooling demand and fuel the demand for natural gas. technically we did have options expiration of the july natural gas options and the price was a magnet to get prices higher to those levels. we're going to cease the expiration of futures tomorrow. the ought contract is under 280 or so, so they say to watch 285 for natural gas. >> and we will talk to ed markie to wrote an editorial that says we should limit the amount of natch ram gas exports that we export. we'll get both sides of that issue coming up. in the meantime, shares of amazon rallying again today following publishes reports they may be moving up the release of

the next version of the kindle fire. should you be buying at these levels right now? we'll have more. it's mark newton, and on the fundamental side. ben shacter, what will it do to the company's stop? >> i think the timing is speculative, but the reality is there will be another kindle fire. amazon has always added more to the products they have. could you see ad supports? lower price points? i think consumers would react positively. >> does that make you want to buy the stock more? >> it does, they're growing the competitive mold deeper and wider before. we don't see a company out there ready to catch up to them for what they can bring to the

consumers. >> mark, do you like it at these levels. >> technically the charts are still bullish despite the under performance in the market. the stock has done well, if you look at the last few years, here is a stock since 2008 you have seen consistent higher highs, higher lows, the key thing is this stock pulling back this year to start off an early january, and since then it has been consistent outperformance since that time. one of the things that stick out is right after earnings the stock went up four times average volume. it was up 15%. in general it had little sign of deterioration, so despite the nasdaq being down, this stock has been up about 10%, and it should trend higher. >> i'll ask you both very quickly, do you have a stock

price target? >> 247 in the short term. >> ben, what are you looking at? >> we think it can go higher from here, and i think it will continue to be driven by consumer acceptance of these offerings. can they get more amazon prime members, having things delivered in two days or one day, we think those are getting deeper and wider and nobody will be able to catch them. >> ben and mark, thank you for your thoughts on talking numbers. thank you. the dow is moving higher. and also the s&p and nasdaq with only 30 minutes left to go. is news corp better as two parts or one? they will discuss their intent to split this thursday. investors might not like the idea of a break up later on.

if we start exporting our huge natural gas supply, we could give up a once in a lifetime competitive advantage. ed markie is joining us today at 4:00 p.m. sharp.

okay, a few moments ago, news corp said it will announce splitting into two companies on this thursday. and there are ten have been completed spinoffs in the united states so far totaling in $26 billion. so that's become a big part of corporate america these days. >> yes, it has. what will the rest of the year look like for spinoffs? let's bring in our two guests. bob, i will start with you. what is driving the acceleration and spinoffs, and it is something that generally works out well for shareholders. >> if you look at what happened

to the news corp stock today it went up 6% just on the rumor. it's really a combination of factors, but the most important one is different pieces of the company being valued in the marketplace at different multiple, you would think if the market were perfectly efficient, it would do all of that. >> there's a common theme about everything from the wall street journal to dow jones, maybe the market felt like they weren't achieving their full value or perceived value by being a conglomeration. >> that's right, there were two enormous spinoffs last year. conoco phillips, was one. >> matt, let me get to you, you think a split would be a bonanza

for the company. you obviously are quite keen on this stock. what do you think each part would be worth? what do you reckon? >> i think that right now the market almost perceives that the print business is a call on the entertainment and cable business. there is really no value. i also think when you strip out of the u.k. and the newspaper press, it helps depoliticize news corp, they're very tied up, and the overall uk political situation. so i think this is a political that would really be positive if you would, and the stock is, i think, considerably under valued. i think it should be in the high 20s. >> do you see more coming down the pike in any industry, matt?

>> i think there are things happening that are interesting as well, but not quite on this scale. >> bob, what do you think? >> there are plenty more to come. we're working on a lot of them. some completely independent of news corp will be announced on thursday. >> what about rim, can i ask your speculation on that? >> there's a lot of different things but there's logic about value in the different pieces. if you want to increase value, it's one way to do it. >> at least achieve value. and you can't assign value when there are too many moving parts and pieces. >> yes, and you can get a big chunk of the catch. >> thank you, we will wait for that announcement assuming it

will come on thursday, news corp announcing it will split in two. heading toward the close and we're hanging on to the highs of the day. >> forget all of those fears about europe and earnings being thrown into the wall of worry. and the ceo of orbitz for the decision of seeing more expensive options for mack users and cheaper options for pc users. >> and this is our question for today, which stock would you rather bet on right now? thank you to all of you who have tweeted in. the question is zynga or facebook. one or the other. tweet us @cnbc. get ahead of it!

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decliners by three to one. the last time i talked about it the stock up 9%, now more than 11%. this is after they reported a loss by 37%. this is better than analyst were expecting. we're mentions celgene getting a upgrade. the stock has been down 20% in the past three months, so seeing a nice lift today. if you're worried about the stock market, fear not, we have three market watchers offering a good view. >> somebody will play the devil's advocate. here with us are erin gibbs along with jonathan galab. and it's always ladies first here on cnbc, so erin, why are

you bullish? >> we're still seeing low valuations. we still feel there is a lot of ability for companies to see higher valuations, and we also feel that compared to a lot of your other options out there, the u.s. economy has the highest risk we ward. we feel that we can get a little more. >> you're saying you would not touch bonds? >> more so in the equity markets in europe and asia. >> it's interesting, we had jack mogel on the other day talking about valuations, and he agreed they are low, but she a bull on the markets any way. he is mr. buy and hold, but he acknowledged that fundamentals are not that great right now. >> i will half disagree. >> do so at your own peril.

>> corporate earnings have been brilliant given the level of economic growth. i think we're going to see a good quarter of earnings coming up, and i think that will be the lift of the markets. >> and you have a price target of 14075? >> yes. and i think the real key is earnings. it's not valuations, it's the ability of companies to manage through a slow growth environment. >> i hope he is right, but we're more cautious, 13050 by the end of the year. we hear about the emerging markets, they're not growing that well, it's not about china, there's a lot of fog out there. >> so you don't think this bad news is already priced in? >> no, i think it's going to get

worse. and in the emerging markets they're not helping. >> so what will you buy here then? >> we like the valuations here so energy on a pull back, agricultural commodities look attractive. so if you don't have any in your portfolio, now is the time. >> are you bottom fishing now? >> what are you buying? >> still the fear stocks? you like the dividends right? >> yes, the yield on the treasuries is going down. at&t, southern company, they're all good on these. >> we're going to talk about impending tax changes later in the show, but what does it do to the case for buying dividend-paying stocks. >> all of these companies really manage their cash well. in that case you shift from paying out dividends to buying back stock. give your equity investors a return one way or another.

>> we had a company on the other day is splitting their stock. under armour, nobody does that anymore. >> we upgraded energy and took down consumer discretionary. >> what's going to push energy higher? >> demand has been dropping for a number of weeks here. >> one of the keys is that there's been a build up of inventories, and we think that ultimately saudi arabia pulls back supply off the market and the price is higher. >> they really do something the price don't they. i will put you on the spot here, it was not predistestinepredest been asked our viewer ifs they would be zynga or facebook, do

you have an input on that? >> the strategist that look at the market -- >> do you like social gaming? we'll ask it that way. is that a sector you like here? >> i like technology broadly. i think that you find companies like apple and others with great cash flows and valuations, and i'm not sure you need to reach for the sky in some of the other names. >> considering gm just pulled their advertising from facebook, i feel a little more comfortable with zynga. >> i like it companies like capital machinery, it, networking. there's a lot of spending there. here in the united states in china and elsewhere. >> that is such a macro strategist answer, isn't it? i did put them on the spot. >> countdown coming up about 13 minutes to go before the closing bell. what is the dow sitting at? it's up 60 points.

>> meantime, black stone ceo chairman says to avoid this fiscal cliff has a situation. we'll talk about coming up. next on the debate coming up in y,e next hour of "closing bell" hape, and form.

. watching shares of best buy going higher. moments ago, the wall street journal" announced that richard schultz is exploring a possible buyout. they're saying the efforts are in the early stages and may not yield a deal for best buy, but none the less the stock was higher anyway today, but it has popped on this report by the wall street journal that richard schultz may be looking to sell the company or a piece of it. >> meanwhile, ahead of the black stone group, a guest host for

"squawk box" this morning, he says tax reform is key to avoiding the fiscal cliff at the end of the year here in the u.s., watch. >> you probably need, this this country, some time of tax reform, because you need to be a nuclear scientist to figure out how to do a tax return. there's something wrong with that. and there are many countries in the world that do extremely well economically in growth and job creation with lower tax rates, flatter tax, less deductions. it's a formula that i don't know has failed anywhere. >> i was going to say that exact prescription there, lower tax, higher economic growth, the first thing i thought was singapore, that is exactly the way they have it, and it works perfectly. >> huge deficits?

>> they have such an incredibly successful country, they have a much smaller country, but it has worked well for them. >> and listening to steve make that point, he is a smart guy, one of the richest men in the country, why didn't he run for office. this is someone we need to make decisions in the senate. people in office get elected making promises they will make the tough decisions, and they don't because they want to be reelected. so you get a guy like steve and he doesn't even care. >> so we're trying to work out what the impending fiscal cliff is doing to the economy right now, and what could happen come january. so we're going to break all of those questions for you in the next hour pop we're coming back with the dow holding on to gains

with about 58 points right now. >> a majority of wealth americans voted for president obama last year, but he may have trouble with it this year, and it has nothing to do with tax hiking, details are coming in the next hour. >> coming thursday, maria will be reporting from the aspen ideas festival. richard fisher will be joining us with his take on the fiscal cliff and what policy makers need to do to support the economic recovery. that's coming up on thursday.

inside the three minute market. we had a little bias here as we head toward the close with the dow coming off of the highs in the session. look at this trading pattern now for the dow. here was the low just before noon and the market headed higher. watch this, we'll show you what crude oil did in new york today, and you will see a very similar trading pattern. a chicken and an egg, who is leading who? i suspect it's oil calling the

shots right here. the price of oil moved higher today. the gasoline just eked out a gain. week over week and year over year and demand has been coming down for 66 consecutive weeks for gasoline. and prices are sharply lower, and we're just going to finish together. the ten year yield bumping up just a bit today. we have the auction that when about as suspected we have notes auctioned off on thursday, and the price of gold getting slammed again today, down almost $15. the sectors today a risk on day, it is digressionary followed by others today. what is the market telling you

right now? it's still very headline driven. >> if today is a risk on day, and we're up 40 points in the dow, that's pretty scary right now. we have the health care debate that's going on. >> right, and the eu summit, to tomorrow will bring a little more of nothing, 500 million shared today, not very active. >> jonathan, you said you liked energy, you're swapping out of consumer digressionary, what about financials? >> if we're right on our 1475 call, ultimately the financials will do okay. generally the trade will pay over the remainder of the year. >> thank you, gentlemen, both. we'll see you, and the supreme court decision could come on thursday on the health care situation. that could certainly move the