anymore because they're running up to the attics. "closing bell" is next, see you tomorrow. hi, everybody, good afternoon. welcome to "closing bell." i'm maria bartiromo. a volatile day for the market, but after all the wild moves not far from where we started the session. the dow was down more than 100 points earlier, but they're flirting with positive territory right now. so if the dow closes higher, it could be the first time the dow finished in the green after having been down 100 points during the day. if not, it will be down six days in a row, unusual activity for the dow. as you saw it, there was a big hole first thing this morning,

it has been crawling out. we were positive just been 2:00 p.m. the nasdaq is down 19 points, that was also down shorply today. >> the dow and s&p trying to snap this losing streak. seems like the fiscal cliff is becoming a bigger worry as earnings fail to impress on wall street. we're looking at this earning season picking up next week and this week. >> i think that's the focus absolutely. and in the exchange, we have bob pasani. hey, guys. bob, haven't spoken to you, welcome back.

what's going on, why the turn around late today? >> all of the names from the health care rally, the consumer staple names, merck was up, financials are not doing much today. i would say this is a modest rally. i would say that this is not a particularly great victory for the bulls here. >> let's talk about earnings for a second. what do you think of the earnings at this point. are they low enough or do they continue to slow down? >> i think the companies will surprise on to the upside. since then, we had some unfortunate disappointing years on payroll frauds on top of the fact there is low volume in the

markets. anything can shift either way. once earnings come out, this market trades higher. >> i'm just wondering if the asia slow down is showing up in the numbers. is this slow down translating to estimate cuts? >> i think in other areas where cash is on hand with companies, companies will be very aggressive to once we predict a win with the white house, this market will go substantially higher. >> david, what do you think? is it all about earnings? >> it's a head wind and it will continue to be once we saw in the summer of 2010, summer of 2011, the potential to retest the lows, that's another 4% to the downside. after that i get more exciting about the valuation and stocks. but it's disappointment on the fiscal side. we will see lousy rhetoric about

the tax bills going up in january of next year. europe is still a problem for beyond yield declines, and the index below 50 is typically a period that stocks are flat to down in the near term. those to me are all head winds. unless we get material news on corporate earnings that north america is holding up well, it's going to be a head wind, that simple. >> y >> rick santelli? >> yes, it's nearly as exciting and wild as yesterday's tens, but it's still the lowest auction rate on record. and yesterday, a smidge under 146, the direct bidding over

45%. these are not dumb entities. even the federal reserve in it's minutes mentioned of course the slow down in china. it's not only a ramification for giving us a clu about the world economy, but also a clue as if they're a bottomless reservoir of capital. >> that's why the feds are going to have to ease support. >> how much more can they ease though, david? there is a limit to that. >> there is if you look at how low fed funds are. but the tried and true federal reserve easing -- >> is that what ails the economy? is that the problem that is keeping us from growing at our normal wait? that will not solve problems, is

it? >> too much money creation philosophy picks up and could be inflationary. what yields the economy is this deficit problem, and that while corporate america is reasonably healthy they will be reluctant to spnd until we get some kind news about this cliff -- >> bob, this quarter, we have the big jpmorgan report for tomorrow, people worried about the derivatives, what's your take? >> this is the lowest expectations. what i'm more worried about, and i have been away for a couple weeks, third and fourth quarter are very serious problems.

you will get very cautious commentary on q 3 and q 4. fourth quarter they're expecting 14% earnings growth. in bank stocks, where will you get -- >> could it change your mind if the financial sector is not a performer here? >> it's tough to predict. what will move it is confidence. when we get certainty in the market, and the movers and shakers come back into the mark, that's when you will see big upside in the marketplace. >> thank you all, we'll see you later. it's a volatile day with the stocks making big swings. now we have some of today's big movers. >> it has been a value tide day for the market no doubt, and you mention if it was to close in

positive territory, it would be a first time it recovered from a triple digit decline. as far as the s&p, look behind me, we're rebounding off the session lows. you were talking about some of the strong points and some of the weak points. it happens to be one of the front points, it is toj that is the weakest point. marriott expects stronger numbers. and gold stocks have taken a hit today. investor frustration over the fed's lack of commitment to more stimulus hurting the group as well. also the soft commodity come splex back on the rise so corn, wheat, and so i bean prices in positive territory today. the protein companies are taking

a bigger hit after bank of america cut tyson and smith field after concerns on that pricing. corn is a primary feed source for livestock. tyson the worse performer down 4.4%. >> thank you, let's get to brian shactman. >> yes, look at the end of the day chat here for questcor. they had decent analyst feedback lately. they will supposedly respond to a short sellinger report, and defending what might be out there as a pop in the stock. there is momentum here, back to you, bill. >> thank you, we're heading to the close. hope you can stick around for the next couple hours. we have 50 minutes left, let's all see if we can finish positive today. don't go away, a lot more ahead on this busy edition of "closing

bell." >> coming up, bull in the china shop. worried about the americay predictions surrounding china's economy? steven tells us why those earnings don't add up. plus, victims of the fiscal cliff. the surprising truth is just ahead. and the price of higher education. sobering news about a wave of upcomes defaults on student loans with the federal government holding 90% of them. is another massive taxpayer bailout on the way? the answer is right here on "closing bell."

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we have 45 minutes left in the trading day today, the market back in positive

territory. the dow well off session lows. as you can see, it is up about 6.5 points here. it was down up to 112 points today. technology is the lagging sector today, all day. the s&p 500 tech index is falling, and at one point, all of the components were negative. the dow transport index is also down. the dow transports are seen as a leading indicator of the market. the worry is that if china gets a cold, america gets the flu. it is a worry for theless robust economy here. it is expected to come in just over 8% in china. last a long way from the better than 10% rates that we saw back in 2010.

>> cnbc steve rattiner said china's economy is still strong, let's face it. this joke that we have, this hard landing their heading toward, with an 8% growth rate. we're not talking about bred lines there yet, are sfwhe. >> no, and that's why i wrote the peace. you find out that a consensus group of economists think china will grow to 8% this year. there are problems there and i'm happy to talk about them, but i want to provide balance to all of the negativity you hear. >> steve, let me ask you about where the slow down is going. we know the numbers have come down, but of course the point that you're making is obviously a great one. and that is really where the

growth in the world is. that engine of the world has to have an impact going from 10% to 7%, right? >> sure, but it's the other way around. china is slowing down i think because the rest of the world is slowing down. there is as a brighter side to this, which is of course commodity prices have come down because the markets are not using at much. if you want to worry about something, what i think you should worry about is the possibility that the slow down affects their political stability. people worry about it in general, and certainly when they're economic issues they should worry more. >> many people in china are getting a taste of capitalism, the way that a free market works. you wonder how they will respond

and more importantly how the government will respond if the slow down continues. they're already cutting rates. >> they're cutting rates and stimulating demand and lending, and they're trying to avoid reig nating the real estate bubble or boom before the 2008 and 2009 slow down. so they're trying to get a soft landing -- >> what's a more realistic expectation for growth in china in the long run. they could not maintain a 10% rate forever. is 8% is? is it lower? 6%? what do you expect, long-term, from china? >> i believe it will decelerate. i can't tell you what percent per year, but it should be at least 8%, and then it will slow down from there. it's just the law of large numbers. those are quite exceptional growth rates when you consider

all of what's going on in the rest of the world. >> what about the political instability that you referred to a moment ago. how worried should we be about that? >> part of why china is a place with so much negativity is because it's so opac. they don't know what's going on inside the closed doors, they don't have any of the transparency that we have. i think it's fair to worry, but i don't think anybody, frankly, has great visibility into the political stability. if you can ask me, i think theyl work through this and it will stay in tact and there are just risks around that. >> so this transition, how long do you think it takes? this is clearly a big effort, and this is a long-term story.

what's your take for the transition from an export economy to a consumer economy? >> that has not gone well. they have not creating the social safety net to get them to go out and spend. i say you have to give them a c grade on that perspective. >> thank you. we have 40 minutes before the closing bell sounds for the day. we're back in negative territory, but not by much. >> yahoo confirming the shift of 400,000 user passwords and it dropped to the third most used search engine. >> and you want to stick around for a discussion on who gets hit with new dividend tax. it's not who you may think

because it goes beyond the so-called 1%. stay with us on that.

welcome back, a lot of volatility today in equities and oil today. >> quite a bit of volatility in the oil market particularly this afternoon after the u.s. announced further sanctions

against iran. they said they believe they were involved in the nuclear weapon process. as present crude topped $101 a barrel, they were talking about the gains we're seeing in the present market. earlier this morning there was a monthly report saying we could see the global growth slow down and cap risks and places like iran could continue to see prices rise. traders are watching the china gdp data tonight. >> thank you, as energy turned around so did the stock market today. shareholder goes face to face with management at the shareholders meeting. it all comes as a recent report that shows yahoo was losing market share to their

competitors. we have two guests with us now, and we need to mention cnbc and yahoo have a business alliance to share and co-produce editorial content. mark, what does it look like f yahoo these days? >> test technically range bound. if you look at a longer term chart, they had a lot in the '90s. since the middle part of 2009, the stock has been in a tight reign since that time. if you look at a shorter chart it is a different picture. that's a close of of how the range moved over the last couple years. those add value in terms of knowing that when the stock gets out of this range you should follow that and think that it can continue. >> when you get that narrow rain there will be a breakout at some

time. >> i think it will trend down, and the key level is 1540. if it gets to the lows of the range which is 1440. 1650 is very important. if it gets above that it will move to 19. the nasdaq has been a under performer and that doesn't look to be complete. >> bill, i think that yahoo is a buy here. i agree with mark's assessment that it's been trading range bound for months and years now, but i think it will resolve itself to the upside. taking it up are a few factors. they have a strong history of beating or meeting expectations. there's no reason, nsk every wherein to think that will be the case for the rest of the year. the management turmoil -- i think it could be a spike higher, i think that will remove a huge overhang for uncertainty over investors, and relative to

the rivals, yahoo is really remaking itself and moving toward a media oriented and publishing type company. and the recent deal you mentioned with cnbc, facebook, an entertainment deal with clear channel. all of this suggest management is very serious about moving toward a media company, tail winds to help yahoo go higher. >> it would help if they would name a ceo at some point. >> that would help. >> thank you for talking numbers today. >> bill, thank you, we have the market right now up at 11 points, the dow jones with just about 30 minutes before the closing bell. it's not just the super rich paying more in dividend tax at the end of the year. it's the massive whack for the middle class. you know if warren buffet is

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buffet. welcome back, stocks are mixed right now. bob is back at the big board and it looks like the bulls are fighting in? >> yes, we moved to flat territory. it's been health care stocks and consumer staple stocks that have led the way. you want to see tech stocks and financial stocks leading this time of year. all of the tech stocks are to

the downside. the only other group up, home builders, they're making positive comments. >> so you think congress will never let us plunge off the fiscal cliff? former chief of staff for president clinton begs to differ. >> the probability -- i would say we're probably going over the cliff. i hate to say it but i think that's probably right. we worked hard to try to get common sense to overrule politics, and that's a tough thing in washington. >> and that would be bad news for folks with dividend paying companies. they would soar and hit the middle class particularly hard. 68% of folks with dividend income made less than $100,000. >> talking about this is steve

mcmillan, and grover nordqvist. >> yes, one of the thinks the bush administration did was bring the dividends down from 35% to 15. to let that snap back up because of balm's higher taxes. it would be very helpful for the economy and devastating to holder retired people who count on dividends. >> do you think it will go that way, though? you have to believe they will agree to extend some of those tax cuts. it's not brain surgery giveen that dividend paying companies is any place anybody is getting any yield. >> this is all up to the presidential election. we all know obama's position. he could have made 15% permanent 2009, 2010, he never did.

he wants that to snap up to the 45% range. romney made it clear he will keep it at 15. >> what's interesting here is you not only have a policy disagreement on the appropriate level of what taxation should be, but they want to bring it up to the ordinary level of income. as you note, the fiscal cliff occurs, and we fall off of it, we could have a fax policy that no one is far. that is the full tax hit on americans. >> how do you think this plays out? we had dave kamp here recently, and he admitted that they probably won't get to the this after the election, what do you think they will end up doing in congress? >> that's what is so scarey.

you have a house passing legislation to try to take this burden of uncertainty after the american economy. and what we had from the president was again, a repeat from his earlier proposals that he doesn't want to allow full extensions of tax cuts. people are trying to plan their taxes and what their income will be next year, and what their investment wills have to look like. so after the election, it's -- as grover noted, we have a president right now that's determined to make a stand despite the fact that we have a soft economy that can't handle any tax increase on anybody. >> so what does this mean in terms of economic times that we're living in. does it guarantee recession? >> i think there's too many

factors to say that -- talk about the situation in china, and a host of other problems in the economy. the march begin for error is small. we have 2% growth in the last quarter. there is really no indication of a significant driver that will pull us out of the problems that we're in right now. and all of this uncertainty for the questions about federal tax policy are bringing the people back to hedge their bets. >> grover, let me ask you about something else. i know the report said that when you think about it, they're taking the other side of the trade. we're all afraid of this fiscal cliff, but what it does is reduce that deficit that we have been building for so many years, making it more manageable, and it pushes into recession, and in

the long run it's more beneficial to the economy. what do you think grover? >> the kind of tax rate increases that obama's reelection would guarantee, this is not just dividends. the alternative minimum hatch match. 31 million families will be hit by the alternative minimum tax. all of the taxes that we see coming in, the doubles or the halving. it will further slow the economy. this a has been the worst recovery from a recession since world war two. why? because of the threats of the tax increases which if obama is preelected all become very real. the fact that he wants to extend the cuts for some people, we know that's not true.

he was president in 2009 and 2010 with a democratic house and senate, and he extended none of them for anyone. not poor people, not middle income people. >> other economies want to sure up their problems there, but we're trying to avoid the same situation. we have this austerity program that we may face at the end of the year. >> no, we want less spending. we want to progrowth policy in the real economy. lower tax rates, strong economic growth, less government spending, that's what greece should do, they've been doing the opposite, and that's what we should do. >> just to be clear on the benefit to the economy of the deficit reduction you get from going over this fiscal cliff, that's only compared to the

alternative of continuing to borrow a trillion a year for the next several years. we want to the take care of the fiscal cliff and the problem overtime, not to oppose a massive tax increase in one fell swoop. >> thank you for joining us today. heading to the close, 22 minutes left here, the dow down five points. somebody here says absolutely. >> after the bell, maria sits down with james grant. they will talk policy, interest rate rigging scandal. >> of course, we're watching jpmorgan chase tonight. tomorrow we expect news on the claw backs from the trading laws. we'll take a look at that. a different view you won't see anywhere else. >> do you think jpmorgan chase should get money back from jamie

dimon. he said it's up to the board, what do you think? tweet us your thoughts at cnbc closing bell, and we will air some of your responses. >> first, the dividend, which stock has advanced so far this year? costco, cvs, or walmart? over the south pacific in 1943. i got mine in iraq, 2003. usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection, and because usaa's commitment to serve the military, veterans and their families is without equal. begin your legacy, get an auto insurance quote. usaa. we know what it means to serve.

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just just before the break as part of our dividend, we asked which stock has advanced the most this year? costco, cvs, or walmart? now the payoff, walmart that is climbed about 20% year to date. welcome back, the market may be off of the lows of the day today, it was down about 112 points and we're now up.

let's find out what is driving technology lower today. >> it is getting hit the hardest after surprising the street with a sharp cut to the full year outlook. they are spending less on tech services thus the reason for the downward revision. another loser is lexmarq international. the analyst are writing that younger workers are not printing as much given higher adoption rates of mobile devices. the stock is down better than 7%. >> the major averaging well off the lows. the dow and s&p trying separately to be positive so we can stay out of the red for a sixth straight session. with historic lows on the long end, what's the best asset class for investors now?

>> we have cathy jones with us, and joseph is on the other side, thank you for joining us. let's start with equities. in terms of the rush of the year, or the next couple months in the summer time, are you expecting volatility? >> i would expect some. whether it's the continued slow down in china or something else, i think all of the headlines make greater uncertainty. it should not be a problem for companies to exceed these expectations. i don't think you will see a repeat from last quarter, but the earnings season will not be the big disappointment that so many people are talking about. >> look at the yields on the treasury auctions this week. i was saying to rick santelli

that a lot of people want to lend money to the united states for very little return. >> it is a flight to safety, and they're tired of saying record lows and treasuries, and it shows you just how much uncertainty there is with the liquidity in the market. it isn't just the return but the liquidity. treasuries you can get in and out when ever you want to and that's not true of every asset class. >> are you willing to stick your neck out and say how low they could go here? >> they could continue to drift lower. two years ago they were well over 3.5%, and they continued to come down. they could certainly drift lower. we have a slow down, a decline in commodity prices. we have europe and all of that uncertainty, and recession going on. so there is definitely a case to be made. >> where do you find yield then?

>> we like the investment corporate bond sector for quite some time because we think the corporate sector is in decent shape. earnings are off their peak, but that will effect bondholders. we like the investment rate. you get extra yield without a long duration risk. >> where will you make money right now? >> counter act some of that volatility. for long-term investors, i think it's really important here to realize this huge dislocation you have here between valuation of stocks and bonds, a lot of these issues that we're dealing with are not dealing with the same issues so far. so for a long term investor -- >> you want to buy here before earnings? will we be able to get stocks at better prices after this earnings period? >> i would not try to call a

bottom of the market, but if i look at where valuations are, whether i buy this today, a week from now, or two months from now, this is a nice place to get into the investments. >> i hope we don't have the same problems in five years. thank you. i'll ask you later if you think the fed will have more quantitative easing next year. >> ten minutes until the close. dow industrials down 5.5 points here. warren buffett calls the interest rate scandal a big deal.

hope you saw warren buffett on squawk box this morning. they talked about the magnitude of the rate fixing scandal for

libor. >> it's a terrible position. if you have millions of contracts based on libor, and one side is profiting, the people on the losing side of every trade are going to come after you. we have focused a lot of boar cl -- barclays -- >> financial services industry can't get out of their own way. they're arguing against more regulation, and then we have this happening ben. >> yes, and then the jpmorgan trading loss. just from a business standpoint, record low interest rates that's creating problems in terms of making money. >> you wonder if more regulation

would be the answer to solve that problem, right? we already know there are so so many regulations they face. they have too many regulators seeing them, but this is happening, so will they be that effective. >> they have clearly been asleep at the wheel. let's face it. they have regulators living at their banks, we still see these things that have been missed. you have to point fingers at the regulators. >> too big to fail? >> i don't know if they have to break up the banks. when you have a large super market like bank, other banks may off set the areas -- >> it just continues to hurt confidence on the part of the investor, share hholders.

>> you have some orders -- >> it's starting right now. we will come back with more on that in the closing count down. coming up, james grant will join me. can rates go lower? what's his take on the scandal? [ male announcer ] feeling like a shadow of your former self? c'mon, michael! get in the game! [ male announcer ] don't have the hops for hoops with your buddies? lost your appetite for romance? and your mood is on its way down. you might not just be getting older. you might have a treatable condition called low testosterone or low t. millions of men, forty-five or older, may have low t. so talk to your doctor about low t. hey, michael! [ male announcer ] and step out of the shadows. hi! how are you? [ male announcer ] learn more at isitlowt.com. [ laughs ] hey!

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okay, four minutes left. the dow is to the downside. the last time they closed more than 100 points down on the day, but that's not going to happen, we're down 26 points right now. so they're on track for the third losing streak. the euro hits a low. we were down to 1.21 earlier. but the good news, europe is on sale for american tourists right now. so when the euro goes lower,

what happens? it was a 145 on the ten year at one time today -- yesterday, now we're at 147 and change as we continue lower here, and the yield on the 30 year auction here today was a record 2.58%, and when we show you the 30 year in just a moment, we're around that, 2.56, so those that bought ine a profit. everybody is making money these days. when the euro goes lower, the equity market goes lower, so we will have a sixth straight session. and you see here that bias that we're seeing come in. even there all of this, the volatility index has not moved that much. we're up 1% here at the moment, but we're nowhere near that 20 level that beginning the yellow flag phase of the fear

indicator. a turn around late in the day for oil. they announced more sanctions against iran. that seemed to help here on wti crude in new york. we're just a penny higher today, and north see cruise is moving higher because of the labor problems in nor way, so we're above $100 there. the sectors very defensive. those that were gaining are on the defensive side. utilities, which nobody likes these days are trading higher today. matt, will we ever see a positive day again here? >> today is not that bad if you think about it. the breadth of the market is worse than it is. so if i told you we were only down 3%, i would take that from a trading standpoint. i'm not ready to jump in and buy

things. >> we said earlier, now we're going lower, six straight down days here, you think we'll get something from the fed? >> i think there is a possibility later in the year. i don't think it will be today. if there is upward drift in the unemployment rate, there is a goo chance they'll do something. >> i think jpmorgan will be the biggest. >> china's gdp will be out. >> it will be reevaluates and adjusted. i'm going to look at jpmorgan. we have to see how much clarity they will give us going forward, and that's what i'm looking forward to toward morning. >> thank you, good to see you, we're heading lower again, but as matt points our customers, the dow was down at theow