that. i figured i'd ask the question. thank you for being here. >> my pleasure. >> that does it for us today. make sure you join us tomorrow. right now, it's time for "squawk on the street." ♪ >> good monday morning. welcome to "squawk on the street." i'm melissa lee with jim cramer and david faber live from the new york stock exchange. carl quintanilla is in london covering the london. what a weekend of action we saw. >> unbelievable weekend, melissa. today's the first full week -- this is the first weekday of competition. olympic park, full of spectators for the first time during this we'll talk later in the hour about some of the key events over the weekend. obviously big success in men's basketball. some mixed success in men's swimming. we'll meet a member of usa's water polo team who's going to

work for goldman in the fall. and we'll talk to ge which announced this morning $1 billion in infrastructure sales to olympic cities since torino. and as the olympics become even more focused on emerging market countries, is there a better emerging market play in ge stock? that's coming up later on. >> you see soon, carl. take a look at the u.s. futures here. and we are looking to open lower here on the dow. down about 13 points. keep in mind, on friday, we closed above 13,000 for the first time since may 7th. looks like we gave up that mark. nasdaq looking to add. as for the picture in europe, green arrows although it is a big meeting in europe with the ecb meeting later this week. germany higher by .7%. here's our roadmap.

>> european stocks hitting highest levels since april as investors wait to see what mario draghi does at the bank's meeting that will take place thursday. >> it is merger monday. chicago bridge and iron buying shaw group for more than $3 billion in cash and stock. the deal is sending construction and engineering stocks across the board soaring premarket. >> and samsung and apple facing off. it could be a case of apple versus google, really. it could present a problem for google, its android operating system and its partners. >> the bulls hoping to keep the momentum going after ending last week with a bang. the dow closing above 13,000 for the first time since may 7th. spurred by hopes of more action to come from fed policymakers holding their big meeting this week. the jobs report is due out on friday. markets like to wait ahead of

these big events. what do you do while you wait? >> i think people want to believe there is tremendous unanimity in europe right now and that what bernanke does is going to drive the stock market up. but that rally last week caught a lot of people by surprise. if you come in today on top of that rally, i don't think that represents real horse sense. >> did you get a sense that a lot of last week's rally was a short -- the bulk of earnings season is over as well? >> yes. i feel that the draghi comments were coming just at a time when the spanish five-year was inverting and people were starting -- of course, the european bond markets are good today. whenever their bond markets are good, people come in, buy some of our stock, buy some of the banks. banks are still well behind the market. maybe they retreat back to apple which has been doing nothing. but i will point out that we have a couple of things that do make people feel better.

we'll talk about shaw in a moment. but when you get a takeover in a sector that had been left for dead at the same time that carl mentions that ge is getting big infrastructure orders, you feel a little better. >> although to the extent that those bond markets are a little more giving today. today i cannot worry as much about europe bubbling up. it's not bad for the second quarter. but the second half of the year looks to be problematic. a lot of companies cutting their guidance. the third quarter for the first time, we could see an earnings decline. what should then be your approach if you're thinking about domestic equities? >> there was a rather amazing thing that happened last week. the short covering and the s&p buying covered up even companies that didn't report good numbers. let's watch arrow electronics did. big shortfall, big downgrade, big semiconductor superpower.

at the same time, we have news -- some of the brokerage firms want to get ahead. citigroup wants to get ahead of attritional fall values in semi. >> and then also what may be troubling to some is that the rallies were built on the back of defensive stocks. it hasn't been the traditional beta necessarily. we've seen telecom, for instance, hitting the highest level since june 2008 on friday. staples hitting multi-year highs. retailers doing pretty well -- well, staples. >> rth has been up. the costcos, the walmarts. >> but the multi-year highs are the staple stocks. >> it's colgate, it's kimberly. kimberly clark has an amazing quarter. it's a share-take game. colgate, incredible numbers. people feel emboldened by stocks like this because they figure, they're immune anyway. >> should we feel any less about the rally because it has been built on defensive stocks? >> a lot of people do feel that

way. a lot of people felt that perhaps if the euro stops going down, we could reverse some of what had been this asterisk kind of -- if it weren't for the euro and the dollar, the numbers would have been really great. watch cloak cla. it's watch coca-cola. it's been a leader. me merck took over the leadership on friday. you don't want merck to be the leader. gilead and jell cnn were strong and amgen. and then starbucks blew up. it was a terrible quarter. >> but the leaders have been the companies that have been largely domestic, though not entirely. kimberly clark sells plenty of diapers all over the world and have a very significant dividend. we hit 1.55 on the ten-year. the yield is soaring. >> you can't own the ten-year

because that's where -- everyone owns the ten-year. how many years have we -- have people said that's the most dangerous piece of paper in the world? i wish that the stocks i follow were as dangerous as the ten-year. >> right. >> well, europe, of course, still will have an impact over here. european stocks extending last week's rallies. spanish bonds falling today and falling fast over the last week, as eu leaders send more signals they are prepared to tack it will debt crisis. jean-claude junker says leaders will decide in the coming day what is measures to take after mario draghi said the central bank will do whatever it takes to save the euro. tim geithner set to meet today with draghi and schauble, all ahead of thursday's ecb decision on interest. then they'll meet with van damme

and sylvester stallone to come back and save the euro. >> that would be a good movie, actually. >> these guys fighting with pencils and spreadsheets -- remarkable. >> why not stick more names in that -- >> that's true. it was full of information. geithner meeting today, a lot was made of that last week, although treasury officials are saying this meeting had been long in coming and was planned for weeks. it's not like it's because of draghi's comments which a lot of people wanted to believe. and then you had hollande and merkel on friday. we are setting up for some sort of disappointment, whatever happens on thursday, it is going to fall short of what the market wants. when you take a look in the prism of the rally we've seen.

>> by the way, geithner, expressing his disgust about europe at our own delivering alpha conference, really just sayi saying, it's amateur hour. we keep waiting for germany to come out and blast this proposal. we're going to switch to employment. when i look at the charts this weekend, kind of in awe of the automatic data and paychecks chart, trying to figure out -- working on a correlation. those stocks have been red hot, obviously not because of the float. i'm wondering, there's probably an undercurrent that maybe we get a better jobs number. i don't see it. but those stocks are forecasting a better jobs number. kind of remarkable. so are the big regional banks forecasting a better jobs number. >> well. miracles do happen. >> it would take a miracle, huh? a miracle? >> maybe not a miracle.

does it feel to you as though the economy is moving at a pace that it would create more jobs than -- >> we have the chicago pmi today. >> companies cutting their forecast, the previously high growth companies like starbucks and also at the same time have an environment in which jobs are being created. >> i don't see any jobs being created. >> it doesn't feel that way. >> no, it doesn't. it just seems like we pick up the paper and we're suddenly talking about israel and syria, we talk about spain and italy. no one seems to be talking about the greek lack of job creation. you don't hear -- ford talked about hiring people. we already heard that. the stock trades off of europe. i keep waiting to hear in some of the industry that is had been hiring people like oil and gas. they've shifted over to oil, less shale. i'm looking for an industry that's hiring. i have not found that industry. >> well, companies that are going public are still hiring.

silicon valley is still hiring. >> good point. >> one after another, these venture capitalists come on tossing around half billion here, half billion there. in the meantime, we're stuck with the zynga, the groupon. >> capital raising that takes place here will result in jobs, maybe not thousands of jobs. >> how about the fact that the gm guy who was kind of instrumental in wrecking the facebook deal -- >> yes. >> -- is gone. >> questioned super bowl advertising as well. one had to wonder. apparently he's taking another approach. >> taking the approach of spending more time with his family. that's often an approach you don't want. i know few people who say literally, i'm done, i'm spending more time with my family. when i quit my hedge fund, i quid said, i'm done. and the "new york post" said, that's ridiculous. he'll never do that.

>> how long did that last? >> i lost 50 pounds. >> you did. very fit. >> thank you. i spent more time with my family. >> let's talk a little m&a. shares of shaw group, you saw it soaring in the premarket. the engineering company agreeing to be acquired by cb & i for about $3 billion, $46 a share. it's a cash and stock deal, largely cash. the offer is a 72% premium to shaw's closing price on friday. that's a nice one. they do a lot of cash. they're talking about it being -- i think they're saying a 7 multiple is what they're claiming on fiscal adjusted ebitda of 2012. it's not crazy but it's a deal in an environment where we don't have a lot of them. helping the group overall as well. >> kbr had a really good quarter last week. foster wheeler's been lagging.

i had mr. bernhard, ceo of shaw, on. and he was adamant that people should not write off his company even though they have huge projects in coal and nuclear. this man had a great balance sheet. this man had a lot of orders away from coal and nuclear and was always pro-shareholder and said to the shorts basically, bring it on! he's thought the shorts a terminal lesson today. >> what exactly is it that this company does? reading a press release -- they built the plants themselves or do they put the pipeline -- >> no, they build the plants. that's why they have so many people who work for them. they had been a giant builder of nuclear plants, obviously that's on pause. >> and then coal also sort of on pause. >> on pause. >> that's the problem. $46 remarkably represents a level in the stock not seen for four years.

>> wow. >> four years. >> that's why you take it. big premium. >> exactly. >> if the stock hasn't seen that level for four years -- >> this was quite a quizzical deal although mr. bernhard has repeatedly said, don't give up on my company. >> some shareholders of cbi aring is that same question. >> last week, shaw missed its earnings. >> it was a horrendous -- holy cow, it was a terrible miss. >> the stock lost a good 10%. >> very different the reaction of shareholders here. we'll see how it plays out over the course of the day. bankers will tell you this is why you should be doing deals. at this point we're getting so far into this year versus expectations of what had been a very positive year, certainly

not been at all when it comes to m&a activity that many bankers may be saying, let's leave it till next year. >> you correctly pointed a thee sus thee cyst last week saying these companies can't grow without takeovers. >> the point was that you're starting to see companies acknowledge, it's not going to be there this year, maybe we need to look again at doog doing something. >> isn't it cresting that infrastructure has been more abundant in this country. this is an industry that has way too many players. i wonder whether or not kbr is not talking with somewhat -- maybe apple talking with twitter -- not! any segments cannot grow because there's not enough orders to go around. the texas utilities bill was

going to create of a lot of jobs. >> that didn't work out so well. >> they needed nat gas a little higher. >> get your electricity rates up. >> this is an exciting story on an other wais kind of draghi day. apple and samsung squaring off in federal court today over control of the smartphone and computer tablet markets. samsung counters apple as doing the stealing and some of the technology at issue has been industry standard for years. it's almost going to be a case of apple versus google because it has far-reaching effects for google. >> they've been fighting this everywhere. when you open up an iphone --

which i don't recommend -- but it's samsung. samsung is a maker of a lot of the stuff of apple and they're the biggest competitor. when does this end? when does apple go with intel? when does apple decide, we're going across the street and stop dealing with samsung. it's an amazing thing to be a vicious competitor, even in court and also completely reliant on their technology. never seen anything like it. >> they probably had no idea. >> very interesting point. >> it's like going to an arms does he recall th dealer that happens to be the nation you're fighting. but apple's always gone with the best products inside and samsung makes the best. >> it's interesting some of the evidence that they have in this case, a 2010 e-mail. it was a design meeting to discuss two samsung galaxy phones and the e-mail said the devices were too similar to apples, should be made noticingly different. seem to be a lot of smoking guns. that's one piece of evidence out

there. apple has a lot to this case as well. if it wins, it could help stem the competition from android devices. >> if it wins, it's huge. >> it's important. that competition also people are starting to wonder whether it's become more significant. >> but there's a million cases everywhere. the judge said the other day, these are nuts, and don't game them. coming up, energy is this month's best-performing sector. which are your best bets to keep the rally going? let's take a look at how we're set to hope. 13 dow 13k looks like is going to be left behind at least for this monday session. lower open on the dow and the s&p. nasdaq opening higher. more "squawk on the street" straight ahead. [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process --

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yahoo!'s new ceo said they have a new deal in the future. meyers off to a good start. but free food and swag aside, what does meyers really need to change first thing at yahoo!? tweet us and let us know. we'll air your responses throughout the morning. >> i think she needs to just go buy twitter. i'm actually not kidding.

what they have lacked is a social, mobile -- >> apple may be looking at twitter. oh, maybe not. >> that was a bogus story that got floated. there used to be this thing about facts. so glad we got away from it. >> what constitutes the bar of letting people know something. companies talk to other companies all the time and consider doing things. that's what companies are supposed to do. i'm sure that mayer will be brought many ideas. >> see if she takes your suggestion, twitter. fascinating. >> that would be a very, very large deal for yahoo!. >> it would be. >> i think they should go on a grapefruit diet. no more pizza and beer. >> if you're twitter, do you want to own a tremendous part of yahoo!? >> i don't know. coming up, cramer's here to

help you get off to a nice week. mad dash is next. and also more from carl in london at the olympics. >> i'm standing at the midpoint of tower bridge, the iconic bridge in london, sitting directly over the thames river. what an amazing view, the olympic rings hanging overhead. the first full week of games begins this week. we'll have complete coverage as "squawk on the street" continues. don't go away.

a little more than four minutes to go before the opening bell. time for cramer's "mad dash." what have we got? >> deutsche bank downgrades jpmorgan. my charitable trust owns this. they're talking about regulatory issues. this company could be involved with libor. >> i want people to start thinking about this libor scandal in a broad context of the liability from these strike suits, name will from all the class action suits. we saw one, berkshire bank today -- >> yeah, but -- >> think about this. it's out there as liability. the credit rating agencies are still powerful, still all over these guys. i don't know what it's going to cost you eventually. >> another round of downgrades because of lightbulber? >> we're not going to let you buy back any stock or increase your dividend. we have a $10 billion potential liability. it's just -- >> this is the next subprime.

not coming up with any cloture in this thing? >> not anytime soon. >> going to be more downgrades. >> all right. you did that all in a minute. we have to go to break. a lot more coming up here on "squawk on the street." can we keep the big rally going? [ male announcer ] while many automakers are just beginning to dabble with the idea of hybrid technology... it's already ingrained in our dna. during the golden opportunity sales event, get great values on some of our newest models. this is the pursuit of perfection.

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and we'll throw in up to $600 when you open an account. there we go. the trading day has begun here at the big board. the boston securities traders association over at the nasdaq, lpl financial does the honors. it's going to be a very important week. a lot of events this week in terms of the fed meeting, the ecb meeting, the jobs report on friday. in your view, what's the most important? >> i think it's going to be the ecb. when you go back and look at the trading, in the early morning hours when draghi came out his comments, it's literally set the tone for this rally. the second leg of this rally was when the germans floated or at least merkel was in agreement, any sign of discourse, any sign that there's not only agreement

and spain's back to -- look at the employment numbers in spain. they're hideous. the economy is obviously in recession. so europe is the story. >> yeah, i think that bears repeating. it is that kind of a market, it would seem, where if we get something significant out of wherever it may be, germany related, whether it's merkel or somebody else, we could just reverse everything we gained last -- >> and last year at this time, what were we looking at? >> a debt ceiling crisis is what we were looking at right here that started -- >> this is one of the most volatile weeks one year ago. >> yes, this was a horrendous week. >> we saw 300-point days, day in and day out. >> and yet the vix is low. it's kind of an opposite situation. it's all in europe. our politicians seem to be just focused on -- i'm not sure, the olympics, wailing wall -- there's not a sense that they're bearing down on whether there's a big bond market turmoil

situation. >> but we have our own potential crisis brewing, which is known as the fiscal cliff. and it's not that far away. it may be more of a hill than a cliff initially. >> we have a giant inflation story going on with food. >> yes. >> no one's really focused on that yet because it's not at the store level. i went to the store this weekend, i was pleasantly surprised how inexpensive it was. i got that lactaid, didn't mean that. i don't mean to heard the lactaid people -- >> all due respect to the lactose-intolerant people. >> jpmorgan down by 1.4%. it was down by as much as 2%. bouncing back just a little bit. >> we're in the early days of

trying to figure out the implications of the libor scandal on the liability side of all of these civil suit, these suits that will take place, that are taking place and many more to come from those who say they were unfairly impacted as a result of libor being kept artificially -- >> will there be libor reserves? >> i would say no, so far. >> so far, but if we know that the lawsuits are on the -- this is the writing on the wall at this point. >> it may be a very difficult case to prove. >> true. >> i'm not a lawyer. and i won't even try playing one on tv. >> i actually went to law school. >> yeah, you did. >> he is one. >> there's interesting activity in best buy. is that just like something that is going to bubble up and you can't kill it? >> you have the founder of best buy who owns 20% of the company, very much committed to trying to buy this company. and there's a news report out of

one of our competitors saying that he is as serious as a heart attack in terms of putting together -- >> is that a good or a bad thing? >> i think that means he's serious. >> when it comes to best buy, you've got the company, of course, in some bit of turmoil. they have their own advisers in terms of the ceo out and the competition of the board. when it comes to a leveraged buyout, you have to come back to the math and the willingness of private equity funds to participate here. even if schultz rolls in his 20%, as would be expected, it's going to be a significant cut that needs to be checked out by private equity. but levering up this company, it's in decline right now. it's a big number. i don't know what the number is in terms of the equity checks. you need more than one private equity firm. right now, they don't like doing the so-called club deals where it's two or three firms in one deal. and you're buying a company that really needs a turnaround and you're levering it up. so not so easy. >> yeah.

in terms of deals, roper industries, a deal, small one, by your scale. $1.4 billion. but it is sending shares of roper to fresh highs on the session, up more than 4%. another example of one of these companies -- the deal is immediately accretive to earnings. that sort of fit that is thesis, searching for growth, doing a deal to add to earnings almost immediately and the shares of the acquirer goes higher. >> and they don't have a lot of growth. we've seen a lot of industrial deals from companies that basically are saying, look, we don't have it, we've got to create it. and one of the things that would really be helpful here for the stock market, there are so many players in so many different industries, we kind of need to see that consolidation to really make some earnings momentum here. i come back to the eaton deal. people didn't think that was on important deal. that would make this company far more domestic and give them a huge share. united technologies, no one

talked about that goodrich deal -- huge share. these are trying to get other players out to raise the margins. we have seen a lot of stories in this era of the revenues not being great, but the margins being great. that's part of the issue. >> let's go to mary thompson, check in with her. she's in for bob and on the floor this morning. >> we have a higher market right now although a mixed open. we saw a little bit of weakness. the dow, blue-chip's up seven points. nasdaq getting a pop from semiconductor, up about 11 points. but continuing a theme from last week, traders say they will be focused on any news coming out of the eurozone, even as we awaited any news from the federal reserve on wins as to whether or not they are going to take any added steps to provide stimulus to the u.s. economy. then on friday, we have the jobs report. a very big week as far as economic developments and data that will be released this week. take a look at the euro. it is lower for the first time in four days. of course, we watch that because

there's a strong correlation between the euro and the s&p 500 which had a very strong end to last week. that being said, traders say, we come into today's trade a little bit overextended from last week. that could mean a little bit of weakness. keep in mind, we have been down on the dow for the last eight mondays. if we make it nine in row this time, that will be the first time that's happened since 1973. you guys have gone over some of the movers we're watching today. roper industries raising guidance. and then announcing that acquisition. and best buy. those are stocks we've been watching today. jpmorgan, you mentioned that, being cut to hold over at deutsche bank on concerns that earnings expectations may be too high for the bank, among other issues. and we want to point out that cit group reported a small loss there. we'll see whether or not that stock comes under pressure. dow holding on to an 11-point gain. jim, back to you. >> rick santelli's at the cme group in chicago. good morning, rick. >> good morning, jim. of course, if you look at an intraday or a two-day chart of

our tens, you'll see that rates are down just a little bit today. but more appropriate, they touched a high yield closing at 1.55 on friday. we saw reversals on many of the safe harbor securities. if we look at the foreign exchange side, we could see that traders, of course, are all anticipating there's going to be a test of that 1.20 level that we seem to have bounced from, based on some of the draghi comments last week. but we'll have to wait and see. those comments have lost a little of their horsepower as an abundance of stories over the weekend throw into question what kind of efficacy the ecb leader will have. but this is a midwest story. we see corn prices, look at this chart, they are solidly above $8. november beans are hooking back

up to another retest. not only historic prices but maybe 17 or 18 cents a bushel. we'll continue to monitor what condition the crop is in and we'll continue to monitor things like the ethanol mandate getting more and more talk on this trading floor as well up on capitol hill. back to you, jim. >> thank you, rick. this corn story, we have to keep in it front of us. corn is the backbone of the food chain. just keeps going higher. let's go to bertha coombs at the nymex. >> hey, jim. right now, we have wti having closed above $90 for the second straight week. just hovering on either side of that line today. traders say overall they, too, will be watching what comes out of europe later this week. and of course the jobs number on friday. disconnect as far as gasoline, some reports the big refinery in philadelphia, sunoco's refinery, remains offline, the catalytic cracker that creates the gasoline, the problem.

meantime, mike fitzpatrick over at kilduff reports that offline nuclear plants supportive along with the warm weather for nat gas. what's interesting is if you look in the "ft," jim immelt saying nuclear energy has become so expensive, that's supportive for nat gas longer term. back to you. >> bertha coombs, thanks a lot for that. coming up next, heading back across the pond to carl. he's at the olympic games. "squawk on the street" is coming right back. [ chirps ] ♪ [ chirping ]

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well, i had all the classic symptoms...

like the elephant on my chest... he thought he was having a heart attack. she said, "take an aspirin, we need to go to the hospital." i'm on a bayer aspirin regimen. [ male announcer ] be sure to talk to your doctor before you begin an aspirin regimen. i'm very grateful to be alive. aspirin really made a difference. welcome back to olympic park. "squawk on the street" live on this monday morning from london. day three of competition, of course, the games of the xxx olympiad. big weekend over the weekend for

u.s. sports, whether it's swimming or gymnastics. but you have to point to men's basketball as one of the biggest victories we've had so far as a country. over france, 98-71. every member of the team scoring. kevin durant, 22. kobe with 10. lebron with 9. eight assists. tony parker playing with goggles of getting that eye injury. team was never really in trouble. france was 1 of 11 from the three-point range. michelle obama, the first lady, managed to hug every member of the team. later on, of course, the u.s. men's will play tunisia on tuesday. tunisia lost to nigeria in the first round. china and u.s. still pretty much 1 and 2. great britain is having a tough time climbing the standings. but the u.s. still behind china which really got out of the gate

from the get-goe get winning the first gold here in london. a lot more still to come. later on this hour, we'll meet a member of men's water polo who's going to work for goldman sachs in august, a stanford mba, been a part of the team for 11 years. likely his last olympic games. we'll talk about what's more intimidating, playing for that team or for lloyd blankfein and whether he sees any parallels. >> what a story. has this guy worked in finance before in any capacity or was he a full-time athlete? >> he's actually got a stanford mba. he started a food company. the decision was whether or not to play for another olympic games or go to goldman. he had several different opportunities. he's going to work in the wealth management division. he hasn't even had his first day of training yet. but we're going to talk to him about the game itself. he's had some injuries in the past. as a kid, used to draw the

olympic rings on his arm, that's how long he's wanted to be part of this. they silvered in beijing. a lot of indication coming potentially here in london, i think his first day at goldman is august 20-something. they beat montenegro over the weekend as part of the round robin, the early round robin. still a lot of hope they could take gold here in london, too. >> be interesting. tim runs a great corporate finance food business at goldman sachs. i think goldman has historically loved to have athletes and team players. so it's not totally unusual. >> right. they take a lot of great college athletes as well. when you're in wealth management, you're in a customer-facing job -- >> can't hurt. >> people love to talk to guys like this. water polo is brutal, by the way. >> yes, it is. taking a check on the markets here, basically flat on the s&p as well as the dow. the nasdaq is higher by .25%. apple is a notable standout, up

2%. finally potentially testing the $600 market again. $596 is where we are right now. facebook not getting a big bounce after friday's drubbing. it is higher by .25%. >> not time to buy groupon yet. >> not yet. >> is that too early or did we miss the boat already? >> one time i said, we're getting close to thinking where zynga could be interesting. and on twitter, people said, he's telling us, buy it, buy it -- no. i was being a little facetious. lufkin industries, they make the donkey that is you see go up and down. hurt by natural gas shifting to oil plays. this is a constant theme in america. there was a tremendous amount of infrastructure built up for nat gas and the companies can not stop drilling fast enough and going to oil away from gas. >> i don't know if you saw this,

a follow-up on a story we were talking about some weeks ago. another two board members of duke energy have stepped down. remember that? >> yes. >> interesting. interesting fight, if you will, where one gentleman promised the job and then pushed out and mr. rogers taking over. but these were two progress energy board members -- or they were with progress energy's board prior to the actual merger. they have both stepped down. >> stock's been a horse. terrific yield. duke, by the way, big builder of coal plants for a while, a la shaw. shaw's book of business, everyone was so worried object it. chicago bridge & iron wasn't. now you never have to worry about it again. >> they're talked a first-quarter book for shaw. >> pretty quick. >> interesting move in the tech space. >> oracle.

>> this goes to show you the horse race that's going on in terms of the cloud computing area. vmware made that nice acquisition last week. oracle's following up with cxigo. >> i call oracle the killer stock. it never seems to go down and kill the shorts. larry ellison, he would be a great water polo player. yacht master. the guy is just -- i'm not going to lose. that attitude is pretty good if you're a shareholder. >> right. got to take a break. much more "squawk on the street" straight ahead. >> coming up, market volatility hurting your head -- >> he's got a headache. >> no, i don't. >> how about now? >> cramer's got the cure for the insanity. >> don't forget to dot the is. >> certainly. >> six stocks in 60 seconds when

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welcome back. let's get over to simon hobbs and find out what's coming up in the second hour of "squawk on the street." >> monday horng is going to be an interesting week this week. deutsche bank saying this week will determine how we trade to the end of the year with what's going on in europe. we'll focus on energy stocks, the best-performing sector for july. and we are live from the limplz gam olympic games and many of us are still reeling and what it meant for britain. >> quite a trip. time for "six in 60." six stocks in 60 seconds. let's start off with equinix. >> it's up 80%. >> ciena upgraded to a hold. >> maybe something happening. >> jeffries downgrading eli

lilly. >> buy lilly. >> downgrade at citigroup. >> people won't stop calling the top in the housing group. >> and also a downgrade today -- >> another guy says, listen, they're vulnerable. look at stanley works. >> and broadcom gets a buy over at citi. >> they're on the road talking. they're going to have a great second hf. >> "mad money" tonight, you're going to take a closer look, perhaps, at some of the deals. >> i want to talk about shaw in the context of takeovers in this market and talking about what you've been saying, which is that the way to get growth isn't necessarily to be able to grab revenues. there's no revenues to be had. it's to get companies and fire people. that's how people get earnings. >> that's not particularly

helpful in an economy in which we were looking for job growth. >> didn't know you wanted me to set up an economy stock -- i'll do that. this is an amazing moment, david. there's so little infrastructure growth in a country that needs so much infrastructure. the irony of it should not be lost -- >> good point. let me get your take on earnings season. we are through a lot of it. we still have the media companies, for example. what's your take and what do we know about the second half, third quarter and second half of this year and how does it color your approach to the market? >> everybody's guided well and done well. to guide it down is just a recipe for having a good second half. it is amazing how dumb the market is in some ways. if you guide down and you beat the guidedown this quarter, everybody loved it. why shouldn't the same thing happen in the third quarter? if europe is benign. >> that's a big if, my friend.

today we're taking a wait-and-see and we see the s&p flat for the session. 11:00 tonightd. >> your idea in my head in "mad money." >> deals. >> the deals are the only way to get any revenues. >> there's not a lot of ceo confidence. >> thank you for putting that positive idea in my head, though. >> say again? >> it was a positive idea in my head. >> the latest on the shake-up at gm and a lot more when "squawk on the street" continues.

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and welcome to the second hour of "squawk on the street." let's get to the roadmap for this next hour. after last week's stealth rally, the markets are on hold as investors await potential action by the ecb and possible hints of more stimulus from the fed. we'll have your look ahead to this week's trading next. >> and gm says out with the old and begins its search for the new as the company's global marketing chief announces his surprise resignation. we look at the potential

replacements. >> plus energy clocking in as a best-performing sector in july. but can it continue its reign at the top? >> and carl quintanilla sits down with water polo's comeback kid as he is set to take gold in london. let's check in with carl at his olympic perch. over to you. >> day three of competition. but the first weekday in which we've seen the crowds here at olympic park in full force. take a look. it's amazing to me how different the mood is when you obviously have spectators filling the park. it's almost celebratory. no matter whether you're at a security checkpoint or at a ticket venue or at the concession stand, people are absolutely thrilled to be here. that sentiment, i think, is going to last the entire 17 days. medal count, of course, china continues to just kill it from the very beginning, getting the first medal, currently leading the medal board. u.s. in number two position.

simon, great britain is having some issues with medals, not that many of them, two at last count. some heartbreaking losses in swimming and today, "the times" with a silver in women's cycling. they call lizzie armistead, elizabeth ii. it's been tough going. i know on friday, we talked about the opening ceremony, you were right about them employing some children, which they did. we later talked to some source who said that queen elizabeth, that great shot with daniel craig, was offered her own dogs trained -- they said would you like some trained dogs to do this. she said, no, i'll use my own. and she did four different takes because it was shot back in march or february. they did four different takes with four different outfits because they didn't know which outfit they would eventually use. hard to imagine the queen sitting for four separate takes.

but that's what one source told us over the weekend. >> it's fascinating talking to people at home. they love it. they're proud to be british and think the queen was wonderful in what she did. but it's clear for anybody who's not british watching the opening ceremony, they don't quite get it in the same way the british did. a lot of quizzical looks there. >> yeah. as you mentioned, we'll talk some water polo later in the hour. and caylee evans will be here to talk about the hidden costs behind the games. we've talked about the cost of a beer at some venues. did we hear 11 pounds? >> i heard -- >> 11 pounds? that would cause me to quit drinking. >> really? >> 11 pounds of beer? come on. >> 11 pounds for a single beer. >> yeah. that's crazy. >> david's like, i'd pony that up. >> what do you pay in manhattan for a beer?

you could easily pay that in manhattan for a beer? >> yes, you could. >> it looks great. the brits are rising to the occasion. >> yes, they are. >> and even with a couple of different disputes over tickets, london should be very proud at this early stage with how things are going. >> carl, we'll check in with you later on. back to the focus here in the u.s., the economic data for the market, full slate today. let's bring in john riding and bill stone, chief investment strategy of pnc asset management. guys, great to have you boetd with us. john, i want to start with you. your expectation according to your most rekroent know is for the fed to do something in the fall time frame. do you think it will be below consensus? >> i don't think the fed's necessarily going to do something in september. what we're saying is next week is too soon for the fed to do that. they did the extension of

operation twist for the next six months. there hasn't really been a huge amount of data that we've gotten. there's been some slight positive signs within some negative reports, including signs of the housing market stabilizing and maybe a slight recovery. i think the fed wants more time. they want to see if this friday's jobs report, which we think will be 115,000, they want to see the august employment report as well. >> do you think there's a magic number in your view -- is there a magic number at which the fed will act? >> well, i don't think there's a magic number. i think unemployment is the key focus because that's part of the dual mandate. the problem is the thing that are holding back the economy, the uncertainty about tax rates next year, the problems in europe and the problems in asia are absolutely nothing that u.s. monetary policy can address with the tools it's got left. so in my opinion, it would be better for the fed to do nothing. but we're not making policy here. they're making that in washington, d.c. >> that's for sure.

bill, if you read the press at the moment, everything seems to be fairly negative, from "the journal" talking about decelerating profit growth to the sort of data we had out on friday. where do you think the market is going to go from here? >> well, it's a tough one because it is kind of a tug of war between certainly slow equipment growth and right now being in a soft spot. and the fact that on the other side, risk assets look relatively cheap. i would say that a lot of it is driven -- a lot of what we saw last week was drifb out of what happens with the policymakers in the short run. that's why it's important with three major central banks meeting this week -- >> yes, and of those, if we get something market-pleasing out of the ecb, for many people, that's very important. and we should remember coming out of december, december the 6th when we had the ltro, we had a rally that went through

december and through the first quarter of the year. do you anticipate that that is a possibility now? is that something people need to think about or is it just plain wishful thinking? >> it's a really tough one with the ecb. i think it's a distinct possibility. it's out there. i do worry that they're not going to necessarily meet what are rising expectations. you saw at the end of last week with draghi's comments and rumors that came out and factual that he had some meetings, that there might be some more substantive moves in terms of giving the ecb banking powers, reinstating bond purchases. it's out there. but the other side exists that the market gets disappointed as well. >> john, you mentioned watching the employment reports and watching the unemployment rate very closely. now that we've come through the bulk of earnings season for the second quarter, has that influenced your view of the strength of the jobs market at this point? >> well, i think what it's done is reinforced the concern we

have. the growth in the economy as shown in last week's gdp report where gdp growth was 1.5% in the second quarter, the earnings reports have generally been a bit disappointing revenues, less disappointing on earnings. it looks like the top line in terms of economic growth isn't delivering. and if that's not delivering and you have uncertainty over what the tax rates are going to be next year, it's hard to see companies committing -- i thought the most interesting comment after the earnings season was from u.p.s. which was basically highlighting the issue, especially the fiscal issue for next year, as a factor restraining the businesses, the chip with u.p.s. i think it's very important to fix that tax uncertainty. and obviously we're not going to get anything out of washington until after the elections. so it's really tough. >> bill, for a lot of investors out there, they might take a look at the year-to-date returns and say, the markets are

actually pretty good. the s&p 500 year to date is up 10%. the nasdaq is up 13%. the dow's up 7%. at the same time, these gains, this rally has been built off of the rise in defense of stocks, utilities, telecom, staples. does that concern you in terms of the strengths of the markets and its ability to withstand the headwinds going into the second half, that so many corporations have outlined during earnings season? >> it does concern me that it's always, i'll say, easier in the sense of if the market hasn't run, that the expectations aren't quite as moved up. i think the thing that really continues to, i believe, put some sort of floor under things to come extent is the fact that, as i mentioned earlier, valuations remain pretty attractive. and we don't expect, even though we're in the camp similar, that foumpblt growth is going to be slower than we like, we don't believe earnings are going to completely fall apart or anything like that that takes

apart the valuation story. the other side remains, what do you go into that has an attractive return structure in terms of bonds, particularly treasuries, very expensive? cash at zero. there is at least some support there on the side of what else you'd be looking at. >> guys, thanks so much for your time. we appreciate it. we have a quit market flash for you here. want to send it back to headquarters. kayla tausche over there. >> watching shares of roper industries. one of the leaders of the s&p 500 this morning. big question is the fact that they beat their earnings and they have raised their outlook for 2012, acquiring a private company, sunquest, for over $1 billion. it's really that outlook for 2012 that's doing the brick here. empty seats at the london olympics have organizers scramble to fill the vacancieva. how are the corporate sponsors reacting to that? we'll take you live back to

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day three of competition at the london olympic games. welcome back to "squawk on the

street." after an amazing, dramatic weekend of sports, of course waking up this morning to a different kind of story involving empty seats in various venues here at olympic park. cnbc's kelly evans joins me to talked about that and a whole lot more. the story today, big story in the london press is, outrage, londoners told they were unable to get tickets to any of these events and they watch on television and there's in some cases hundreds of empty rows. what's going on? >> i notice this had firsthand because i was at the beach volleyball saturday morning. and first you thought maybe it's because it's 9:00 in the morning and it's saturday. but it's the cheaper seats that were filled that were fun, that were rowdy. but there's this big empty band of seats that were courtside where you could tell that no one was going to fill them. it's interesting because after people notice this pattern at event after event, they've said to the organizing committee, what's going on? what gives?

and in fact, i think sebastian coe, he's tried to paint it as not necessarily a london issue but something that's common to all olympic games. >> this is rather early in this whole process -- that is not unfamiliar in the preliminary rounds. and i'm not sure that naming and shaming is what we're into at the moment. i don't think you will be seeing this as an issue long term through the games. >> well, that may be the case. but there's already pressure on them to basically do something about these empty seats. tons of people here would love to get into the games and they're saying, why can't you at some point either give those tickets over? why can't you have a process to figure out why these people aren't showing up? but you can imagine, too, on the other side of the coin, if they start giving seats away and the people show up to claim them, it's a tricky situation. >> it's more dynamic of the early part of the games where there's not a medal at stake necessarily. you would think later on when there's more medals at stake, the people would be quicker to show up. >> right.

and they've been quickly to clarify, saying this isn't a sponsor issue, the sponsor seats are filled. that said, we have indications that not all the sponsor seats have been taken. maybe some of the corporate participation in this event is not what it's seeing. a lot of the hotels were rooms were blocked -- they aren't seeing a lot of people lornd. the organizing committee says it's the accredited seats which aren't filled. maybe friends, family, journalists aren't showing up. but there's probably an element of corporate sponsors not showing up as well. >> and tough for an olympic family that can't get in to see their family member play. >> right. >> meanwhile, we rode the tube a little bit over the weekend. no real problems to speak of. >> i've been taking the tube back and forth. i've been surprised how easy a ride it is. the water cooler talk around the office is the degree to which london is kind of quiet. almost feels like a holiday.

i think people have left town in anticipation of horrible crowds. you're not even getting to typical traffic and travel patterns for this time of year. it's nice for us using the system. maybe not so much for retailers. >> i think we might talk in the next hour prices of various goods, programs, shirts -- i saw some prices for t-shirts that blew my mind? >> 28 pounds for some of these t-shirts. that's one of the things that's kept people away. someone tweeted to me saying, i can't afford to shell out to go to the olympic games. just getting to london, staying in london, traveling around, it's daunting for a lot of people. >> see you in the next hour. >> thank you. >> david, back to you. still to come, we're also a few days into the london games. already, though, a lot of great story lines emerging. here's a sneak peek at what is still to come on "squawk on the street" today. >> coming up, what's more

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shake-up at gm yesterday as the auto giant announced it's parting ways with joel uanik saying he failed to meet expectations that the company has for its employees. phil lebeau is going to fill us in on what really went on there because that quote raises more questions than it answers. >> it does, a lot of questions. and joe's leaving this company less on two years after taking the chief global marketing position. he's out of a job. officially he has resigned, leaving the company, quitting essentially. but the company said he failed to meet expectations of gm employees. a sort told me that his

departure is due to the handling of the chevy manchester united marketing deal announced within the last couple of weeks. joel himself is only saying he wishes all the best to the people at general motors. as for his impact on gm marketing, he only had a brief stint. and during that stint, it was the chevy runs deep campaign. >> camaro, another reason why chevy runs deep. >> there were some memorable ads -- like this one, that ran during the super bowl -- of a college grad thinking he's going to get a chevy camaro. look back to gm's ipo. at the time they said, we have fresh blood we're bringing in. joel was held up as an example of somebody coming in from hyundai with fresh ideas. look at what the stock has done and gm's market share.

a lot of that fresh blood brought into the management ranks at gm, it's gone or changed jobs significantly. that has a number of people in detroit asking, is gm really changing? >> right. we're a long way, as you point out, from where that company went public, not to mention where it went after it went public. europe has add a lot to do that with. but this is a guy who -- i think of facebook pulling advertising questioning its efficacy. and also the super bowl. he made a name for himself there in a couple of short weeks. >> and it raises the question, did he push gm too far too fast? now, publicly, dan akerson, the ceo of general motors, says, listen, i love what joel is doing. just a few weeks ago, he gave an interview where he praised joel. but, remember, gm, still at its core has a lot of the same management that it had before it went into bankruptcy. and this is a company that has not been known for moving quickly when it comes to things like marketing and advertising.

and joel was maybe too candid in saying, we have to change things, we have to do things differently. you have to wonder if that played a role in this decision. >> so it goes to the conservative nature of the underlying organization from what you're saying? clearly he did ruffle feathers, as david said, in particular by questioning when the gmc branch exists as a stand-alone. but in essence, it's about the conservative nature still of the organization. >> i think that played a role. there's no doubt that something happened with this manchester united deal that brought about joel leaving abruptly. no doubt that that is at the end what happened here. but you have to wonder if there were other factors in play in terms of his style and how quickly he wanted to change general motors and that resistance that is still within that company. >> phil lebeau, thanks so much for that update. let's send it back to kayla tausche for a quick market flash. >> watching shares of apple, up just about 2%, just shy of that $600 mark.

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♪ here are the stories we're squawking about. shares of shaw group soaring this morning. up almost 60% after the engineering firm agreed to be acquired by cb&i for more than $3 billion. at&t hitting new 52-week highs. and corn futures rallying up

more than 2%. december corn futures have surged more than 45% in just the past two months. and as we are one hour into trading, let's head to chicago and get more on the market's latest moves. we are joined by trey kimpa. not that much direction here. the s&p gaining a little momentum. what's caught your eye? >> well, also look at the nasdaq. the nasdaq is gaining ground on the s&p. this is not a market you want to get short right now. we continue to gain strength. getting leadership where you need to be getting it. in my opinion, the action in the crude oil is a little bit marginal here. the market not all that excited about staying over $90 a barrel. i might take a shot at the short side of crude as you put premiums on the back end over the last couple of days. >> getting leadership from where we're supposed to get leadership. what does that actually mean? >> when the market works higher, the nasdaq needs to be outrunning the s&p. it happened on friday. it happened all last week.

as long as the nasdaq is gaining on the s&p, that's not a market you want to get short. it will more than likely drag the s&p higher. the nasdaq is the leader, plain and simple. >> tres, why is that? explain in greater detail, would you? >> i just think when people are putting the risk-on trade, they're going after the companies that have more of the stronger earnings story, things like that. where is the biggest growth sector you're seeing in the united states? it's going to be in your nasdaq stocks, in the technology sector, things like that. so when you see the nasdaq gaining ground as a trader -- i come in here and i use that every day in my day-to-day activities down on the floor. if i see the nasdaq gaining ground on the s&p, that's not a market you want to be short, plain and simple. >> just in terms of positioning, we've got the ecb meeting, we've got a jobs report, you name it, we've got it this week. so in general, how are traders perceiving this? wait and see until withich even?

>> this market acts like it wants to go higher. but the market is hanging a lot of its hat on the idea that you have quantitative easing 3. isn't it ironic that we have negative economic news, yet this market wants to go higher because the negative economic news, people think, oh, that's going to spur the fed for more open market activities. guess what, the fed is going to be in this market, that's not going to change. is it possible to have a rising stock market when an economy is contracting and not performing well? yeah, that's possible. i think we're in that kind of market right now. >> tres, thanks for joining us. appreciate it. let's get a check on the s&p energy sector, on track to be the best performer for the month of july. bill featherston joining us. great to have you with us. bill, in terms of your top picks at this point, what are they and what are the sort of themes to carry the sector higher?

>> our top picks at this point are anadarko petroleum followed by noble energy and occidental petroleum. looking for steady oil prices to grind higher in the second half of the year. we think we've seen the lows on gas. when you look at the space, seasonally tends to do well in the back half of the year. and the group looks very expensive. >> fidel, oil is sticking within a range of $90. >> basically they are not supported by market fundamentals. they are clearly reflecting what's happening in the middle east. oil prices should be lower but not likely to go anytime soon

because of the tension. as far as the energy sector, it has underperformed the market significant, year to date. but in the last 30 days, that changed completely and almost 90% of oil and gas stocks have outperformed the s&p 500. >> and that is the point, fadel, isn't it, that we're coming from this low base? and your commentary that i'm reading here about the deficits that some of these big oil companies may run up because they have to explore for oil but may not have the revenue, your commentary seems very negative. >> absolutely. as i said before, market fundamentals do not support a $100 brand or $90 oil wti. ill prices should be at least $10 lower than what they are. and that's what the market told us early in the year when oil prices collapsed by almost 25%. it's not sustainable, it's not buy market supply and demand.

we have plenty of oil. there is no shortage. there's a perception of potential supply disruption that's moving this oil market higher. >> fadel, one small point on that. over the weekend in jerusalem, mitt romney was clearly seeking to appear more hawkish on iran than obama. containment is not a solution, as far as he's concerned. does romney influence the price of oil moving forward or not? >> well, absolutely. any statement from a presidential candidate in the u.s. will have its way into the oil market. oil traders are waiting for an inflammatory comment by one of the politicians to push the price higher. they have really no legs to stand on. if it was not for the tension in the middle east and if it was not for this rhetoric that we hear from politicians, i think oil prices should be down by at least $10, maybe as much as $0. >> bill, i want to go back to you, in terms of nat gas and the call that you're making that

we've seen the lows probably of nat gas, in terms of the company that is this may help or hurt the most, what are they? >> well, we think that obviously the biggest beneficiaries would be the pure play gas resource companies like range resources, southwestern energy, ultra. but a lot of these names reflect a pretty good recovery in the gas price to the mid 4 level. we think the better opportunity within the equities would be more balanced companies with good exposure to gas, such as devon energy, anadarko or apache. >> in terms of fadel's belief that most companies could be forced to choose, do you see that in the industry? which ones are most at risk if that's the case? >> i agree with that. that's part of the reason why we're bullish on oil prices. if you assume that the majority of non-opec production growth is coming from north america, it's hard to argue for low oil prices.

so the companies most exposed to have to cut capex in 2013 would be chesapeake energy, hess, pioneer natural resources, just to name a few. >> thanks for your time. we appreciate it. we have breaking news here. let's send it back to headquarters and steve liesman. steve? >> thanks very much. we have some comments here or a statement from the united states treasury about the meeting that just concluded between treasury secretary tim geithner and german finance minister, wolfgang schauble. they both take note of statements from european leaders to take whatever steps are necessary to safeguard financial stability in the euro area. both finance ministers taking note of especially comments by the european central bank president, mario draghi, that he would take whatever steps are necessary within his mandate to save -- bring stability to the euro area. they do so, however, in a

context of stressing the need for policymakers to adopt -- this is again over the weekend saying that they need to take the long-term steps they've agreed to to bring a monetary european union together. they agree on three basic goals here -- sustainable public finances, reducing global macroeconomic imbalances and restoring growth. a little bit for everyone in that statement, the united states has emphasized more the growth restoration part and the germans have emphasized more the idea of sustainable public finances. we don't know what's going on behind the scenes, simon. i think we can imagine what the debate is. the germans have been more on the side of the ecb doing less. i think the united states has been more on the side of the ecb doing more. we know there have been or will be conversations between mario draghi, the president of the ecb, and the president of the

bund bundesbank. >> and it's come from angela merkel, francois hollande, the italian prime minister, clearly moving towards something or tempting to move towards something. the question becomes, does merkel's tacit approval mean that that's enough cover against bundesbank objections and that they could still move forward? >> it's an interesting question, simon. i know that maybe viewers aren't so interested in getting into the weeds of german politics. but it is a fascinating dynamic between the political side and the financial side, the bundesbank in germany. somebody told me once when i was over there that germans may or may not believe in god but they all believe in the bundesbank. so who actually holds the cards in that situation is an interesting question. the bundesbank may be more powerful than merkel -- >> well, you say that.

but they have gone through bond buying. and two germans rescienced from the ecb at protest at bond buying. and the germans don't have a veto there. it would be nice to keep the bundesbank on board, but it isn't everything, as you know. >> both those statements are correct. and it's also true that the ecb has done a lot of things that were opposed first publicly by the bundesbank. but eventually they've come along. two members did resign. you're absolutely right, by the way, to point to them -- the two finance ministers, geithner and schauble, pointing to those comments last week. there's a reuters poll that just came out, simon, 19 of 24 traders saying they expect spanish and italian bond purchases from the european central bank. 10 of 19 expected this week. >> and crucially perhaps from the safety net. we'll talk about that at 11:30. the combination is very powerful. thank you, steve.

up next on the program, we need to get back to london. one athlete getting ready to take on wall street as soon as he wraps up his quest for gold in london. we'll take you to london 2012. carl will sit down with water polo's comeback kid, peter hudnut. that's next. people have doubts about taking aspirin for pain. but they haven't experienced extra strength bayer advanced aspirin. in fact, in a recent survey, 95% of people who tried it agreed that it relieved their headache fast. visit fastreliefchallenge.com today for a special trial offer. looking for a better place to put your cash? here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank,

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♪ i want to go ♪ i want to win [ breathes deeply ] ♪ this is where the dream begins ♪ ♪ i want to grow ♪ i want to try ♪ i can almost touch the sky [ male announcer ] even the planet has an olympic dream. dow is proud to support that dream by helping provide greener, more sustainable solutions from the olympic village to the stadium. solutionism. the new optimism.™ ♪ this dream

beautiful live shot of london as "squawk on the street" continues on this day three of olympic competition. you know, the u.s. water polo team is off to a good start at the london games. but one player is looking beyond the pool and taking on wall street. peter hudnut after he hopefully wins gold in london is going to work for goldman sachs. we were wondering -- we were debating before you came out

what's more intimidating, doing this or working for goldman? >> oh, right now, working for goldman. 20 years of experience in the pool. i've been on the national team for about 13 years. so this is definitely more comfortable as of right now. but i'm excited to launch the new journey. i can't wait till that's quite as comfortable as this. >> reminds me of beijing. you've said it didn't feel like you won the silver. it felt like you lost the gold. >> yes. >> how much of this is driving you this time? >> we've got ten guys returning from the last team. that definitely tells you it's driving -- you take on negatives, you learn from it. and you try to let it remotivate you. i think that's something we've done. the majority of the guys continued playing. i took a few years off for graduate school. for me, the internal fire just kept going. >> you have an mba from stanford. you've been an entrepreneur.

>> trying. we'll debate the success of that. >> why goldman? you're from california. you could have gone to silicon valley. you could have tried another self-funded venture, right? >> i met one of the goldman partners who was doing some recruiting up at stanford and had just a wonderful conversation and afternoon with him. and he and i kept correspondence for a number of months. after that summer, i called goldman and i called the people with whom i had been in contact and begged them to have a sitdown with me and give me an opportunity. through lord knows how many interviews -- it was a lot -- each one inspired me more and felt a little clearer. and the team with whom i'll with working, just felt right. >> are you long or short the market? >> that is a great question. i'm -- >> you're hedged? >> i'm hedged. we can get into some specifics,

but, no, i see a lot -- i'm long in certain areas. i'm still experimenting and learning. >> i have to follow up on that. what do you like? >> a few stocks i've selected months ago that have done quite well. it's all a growing curve right now. >> we're all ears. >> oh, geez. last fall. i got into -- no one knows -- housing is obviously a little scary right now. but i saw an opportunity with masco corp and i got in there. i think mid 8. doing relatively well. i was in chesapeake. see how that goes now. >> give me your price point there. >> it's okay. >> nice play on masco, i think he got in around $8 a share. it's been 100 years since the united states has won gold at this sport.

if you're not too familiar with it, it's incredibly physical. they're treading water the entire time. four quarters of eight minutes each. they say it takes the endurance of a marathon, the toughness of hockey, and the strategy of chess. if there's any doubt that these guys really rumble in the water, peter recently lost his front two teeth after colliding with a rival in the pool during a match. incredibly difficult sport and having beaten montenegro yesterday, we hope they do well during the entire course of the games. >> carl, just on the subject of the swimming, everybody here is really excited by ryan lochte and the triumph on saturday and the disappointment yesterday. i think there's a 200 meter race today that he's back in. are people as transfixed by that story on your side of the pond as they are here? >> absolutely. lochte -- isn't it funny how on saturday night he was the hero. and on sunday night, a bit of the goat after having that last

leg just get away from him as the french took over. but swimming is always the key event of the first week. a week from today, we'll be talking all about track and field. but that's the olympics, right, simon? it arrests the attention of the entire planet. and i don't think there's been a better example so far than that swimming meet. >> phenomenal. and the stock picks -- melissa loved the stock picks there. >> i'm pulling up the chart of masco right now. at $13 and change, that was a great trade. i don't know what his next call is. but that was a pretty good bet. >> i didn't press him on chesapeake. i thought that might be too painful. but that's been -- masco's been a cramer play for a while. by the way, he loves "squawk." he loves cramer, loves david, loves melissa. loves all you guys. huge fan of the show. >> nice. >> see you a little bit later on, carl. what a great interview. still to come, with the dow closing above 13,000 for the

first time since early may on friday, are the charts pointing to a leg lower ahead of the jobs report on friday? we'll have your technical take next. but first -- >> an estimated 12 million people a day are expected to use london's tube during the course of the olympic games. we're here at the st. paul stop where people having coming and going. things look pretty good. officials told us londoners got the message and mostly got out of town to make room for all the spectato spectators. if you've heard the words, mind the gap, this is the gap as people step in and out. "squawk on the street" is back in a moment. yeah. one phillips' colon health probiotic cap each day helps defend against these digestive issues with three strains of good bacteria. approved! [ phillips' lady ] live the regular life. phillips'. is now within your grasp with the e-trade 360 investing dashboard.

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welcome back to "squawk on the street." the market flash desk, we're taking a look at shares of armstrong rolled industries. a triple wlmmy. it missed on revenue, eps and lowering outlook for the year. take a look at shares right now down nearly 14%. i'll send it back over to post nine for now. >> thanks so much, kayla. meantime we have a lot of market movers here. even though the s&p and the dow are basically unchanged. shaw group is one. that's a big deal for today, david.

and a huge premium is being acquired. >> a 2% premium, talking $46 overall. $41 in cash. but you do get a bit of stock as well, $5 and cbi equity. 0.1288 shares. interesting note, though, cbi shares if we can take a look at them. what has been typical in this market is very often the stock goes up. they're announcing synergies that the market buys into. but that premium is giving investors in cbi some pause, wondering why they needed to pay a 72% premium in this -- for this company at this point. so they are suffering at least for now. >> the context of that, in terms of questioning the premium is that $46 and you take out price is a level not seen in this stock for four years. for four years. and yes, they're getting a $30 billion backlog with this deal but the stock hasn't traded anywhere near that level for quite some time. last week it posted

disappointing earnings which sent the stock down about 10%. so why the premium, why now? good questions there. >> may have within something that they needed to do in order to win the day. you will -- a management team is going to be hard pressed to refuse a four-year high on a stock price. whereas you can say no to a lot of other things. so, i don't know -- you have not spoken to the bankers who helped structure this transaction. should be able to answer those questions with a lot of facts. >> but you do speak to a lot of people. do you think m&a is coming or are we drawing up? >> i think we'll continue to see the size deals. i don't expect we're going to see any major transactions. there is a activism that's going to motivate certain transactions, as well. remember about that. maybe not pure m&a but perhaps divisions and the like. but this is not going to be a good year for m&a given the expectations we had coming in, simon. >> is that impasse about holding cash in case the economy turns

down again? >> it's in part about that dreaded word uncertainty and the fact that so many choes wonder about europe, starting to see their business at least, decelerate. june here in the u.s. you've got the fiscal cliff. couple that with stock prices. it's all those things. one on top of the other, that really have become a hindrance. >> it will become a huge buying opportunity at some point, won't it? >> they like to buy when they're confident and they're usually confident when the stock prices are high which is the wrong time to buy. >> i get it. tweet time in our first few weeks, yahoo!'s new choe introduced a weekly all-hands meeting and there are reports of a possible deal for yahoo! in the future. marissa myer off to a good start at yew how. what does myer really need to change first thing at yahoo! tweet us @cnbc. we're back in a minute. every pn is backed by an equally powerful and secure cloud.

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tomorrow on "squawk box," cargill's choe. >> the biggest private company in the country. >> they've got their fingers in everything. >> everything. >> when it comes to agriculture. this is a huge opportunity to get to hear what's happening. that's tomorrow on "squawk box." >> let's get to squawk on the tweet. in her first weeks on the job, yahoo!'s new choe marissa meyer introduced a weekly all-hands meeting, free food, and reports of a possible deal in the near

future. that brings us to this morning's squawk on the tweet. meyer seems to be off to a good start, but free food and swag aside what does she really need to do to change first thing at yahoo!? change the name to google. all she needs to do is google, what should i do as google's new choe. they're brutal. she needs to decorate the front of yahoo!'s headquarters with a for sale sign. probably something in the stock. anyway. >> that's it. we've come to the end of that particular hour of "squawk on the street." but don't forget, we continue into hour three, and this is what you've missed so far. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> i think everybody probably should pay their fair share. as you know, less than 50% of the american people actually pay any federal income tax now. i think everybody should pay something. to the federal government. and i think some people will

probably have to pay more. >> i give the president credit for shining a spotlight on jobs, creating a bipartisan task force to focus on it. and really championing the efforts around entrepreneurship. >> i'm wondering, there's probably an undercurrent that maybe we get a better jobs number. i don't see it. the stocks are forecasting a better jobs number. kind of remarkable. >> the trading day has begun. >> the problems in europe and the problems in asia are absolutely nothing that u.s. monetary policy can address with the tools it's got left. so, in my opinion it would be better for the fed to do nothing. but we're not making policy here. they're making that in washington, d.c. good morning, welcome to the third hour of strlt strt coming to you live from post nine and olympic park in london. where carl quintanilla is keeping up with all the action there at the games. carl? >> hey, guys. good to see you this morning.

day three of competition is the first full week begins, interestingly, no real hero coming out of these games so far for the u.s. either in swimming or gymnastics. just take the case of jordyn wieber. failing to qualify on the all-around coming in fourth overall. big hope for the u.s. she was already the world champion but after failing to qualify, being out of balance on the vault, having a form break on the handstand. no real major mistakes, but just failing to shine. she was in tears after the event. she will not contend for the all-around title. of course, the u.s. now has just two women in the all-around finals. weeber can still medal in the team competition but it's difficult, difficult story to report on from an individual standpoint. you can see her after the event. medal count, china in the lead, outpacing the u.s. and italy in third place. later on this hour, just how expensive it is to come to the

olympics. and ge will talk about some of the structure sales they've been able to make as a result of first sponsoring the games back in torino. a lot still to come this hour. >> and i think the hidden costs, that's a real issue because a lot of people are wondering, the costs in order to host the games, is it worth it, does it pay out in terms of gdp or even stock market performance later on. >> yes. that's right. you know, the games, interestingly as you know, melissa, between china, between russia, rio, they're really becoming emerging markets, all these cities in emerging markets have to reinvent themselves and hopefully ge wants to get a piece of that action. >> it's amazing how young some of the athletes, well i'm thinking particularly the gymnasts, look. you used to say you could tell you're getting old when the policemen look younger. these are children oftentimes. watching it over the weekend. >> funmi you say that yeah, some of the british swimmers, of course, who were hopeful golds had to settle for silver because some 16-year-old came in, you know, and beat them and came in

on top. i think overall the message is, well, that's good for the future of the sport. but you're right, when you're 16 and you're besting a 22 or 24-year-old it can be a little humbling. >> extraordinary. carl we'll come back to you later on. for the moment carl quintanilla. >> certainly a busy market week. in the meantime not much action on the major indices. the dow is looking flat up 14 points. the nasdaq is down by 5 1/2. but of course the big events this week, fed immediating, ecb meeting and friday's big jobs report. technology and social media stocks on the rise. apple up 2%, as downloads of its new operating system topped 3 million in four days. cisco is the top gainer on the dow. yelp and linked in in trading solidly in the green. abercrombie & fitch one of the biggest losers today, after the retailer posted disappointing results on friday. >> let's check the road map. obviously we're going to talk about the markets. taking a bit of a breather.

we're clearly above dow 13,000. corn is trading at record levels as the drought in the midrest shows no signs of letting up. then the hidden cost of the olympics. why ticket holders are the ones paying the really big money for the london games. and markets in europe at a three-month high on hopes of the ecb will take steps to ease borrowing costs in spain and italy. we put to the a really interesting european close. we'll go to that in about 30 minutes' time. plus a new way to capitalize on the internet. the company that's buying up custom domain names in hopes of making big money in the future. we'll talk to the co-founder of doughnuts.inc. in the next hour of "squawk on the street." >> meantime, commodities in grains. corn hitting record highs once again. virginia joins us from the cme. great to have you with us. >> good to be here. >> love your patriotic jacket. >> yes.

>> according to the weather forecast the midwest is going to remain dry until the weekend. does that mean that there is a ceiling for the price of corn at this point in terms of those showers will mean corn prices will come down? >> well, i think that the problem with corn is already in. the only thing that's not in is the exact numbers and what the yield will be. they keep reducing the numbers, there was one call today that if iowa really gets to, you know, down to 1.17 that it would be almost a catastrophic loss to the corn crop which would be huge. already the reduce in the yields already about 10%. which could possibly be 20% in a matter of days. and so with rain coming in, it's not really going to help. it only is going to be possibly helpful for soybeans coming up next month. that's where there are critical signs in the next few weeks. soybeans is the crop to kind of watch now. corn has pretty much had it at this point. >> so corn has it hit -- it's funmi because it seems like day

after day we say corn is hitting a record high. do you think the trade is over and it's time to switch to beans? >> i don't believe so. because i think that everyone's not really sure about what the effect is going to be, if we continue to get demand. we don't know how high we're going to go before demand actually stops in corn. but at some point, you know, some of the end users are going to have to come up and buy it. i think that we still have room to really rally high. if there is some other news that, you know, crazy around the world, this wild ride is not over. so we have possibly even rally another dollar before we come off the top here. we don't really know what that number is. >> and in terms of sort of the derivative trades in the commodities pits, off of this high price in corn, where do you go? is there a trade in cattle for instance because corn prices are so high? is that a popular trade or not really taking place? corn is the place to be? >> right, well it's possible. corn and soybeans, i guess are

the place to be. even wheat, wheat's been rallying. it replaces corn for feed, for animal feed. at some point animal feed gets so high that the farmers and cattle farmers are you know just sending all their cattle in, you know, to the stock yards because they -- they can't afford to feet them, and still make a profit. so that really puts the squeeze on that particular market. >> all right, virginia we're going to leave it there. thanks for your time. virginia mcgaity. >> a lot of the press over the weekend was questioning whether or not there was a bubble in social media and it's burst, as we had in 2000-2001. gary kaminsky is looking at that. and facebook in particular. >> good morning, guys. we know what happened with facebook on friday. i want to take back when facebook initially filed that s-1 i went to the good folks at capital cube and asked them to run the numbers based on the facebook historicals. what would that mean for values such as google and apple? you remember those numbers looked very, very high. apple was 1600 shares, google

was 1250. the reason i love quantitative analysis it takes all the sort of touchy feely stuff out of it. it's about numbers only. you put it into the black box, not about pr or hype, just the numbers. we know what happened onay. we know that basically they met earnings, consensus estimates on earnings and basically beat the revenue estimate by 3%. let's go back to when google first came public and their first quarter as a public company, not only did they miss the eps consensus, they actually missed it, but they beat revenues. they beat revenues, blew out the revenue estimates, it was a 61 beat that day. stock went up 15%. what does this mean? next slide. essentially when you look at the multiples, and you look at what the numbers were, the surprise factor in the case of facebook, again this is capital analysis, no subjective opinions, just the numbers, there was a 3% surprise factor in facebook, there was a

61% surprise factor in google. ironically, at the end of the day, they were both essentially trading at the same multiple of sale. what does that tell you? the job of an investment banker is to make certain when you price a deal you're going to create a level where you give -- where you deliver the type of expectations where you surprise on the upside. you want to underpromise and overdeliver on that first quarter. no opinions here. these are just the numbers. you want a confirmation that the overprice facebook deals, the facebook deal was way overpriced. >> so the bottom line here is that at the end of the day on friday, it was priced closer to the true value of the stock. is that what you're saying? >> not quite. if you look at the numbers. let's go back to the last slide. if you look at the capital cube numbers, looking at what did google today after that huge upside surprise in revenues the first quarter out, it says on numbers to numbers, facebook has further to fall because you did not create the upside surprise

by the bankers that you had in a name like google. they're trading at the same multiple sales but the upside surprise was quite significant and here it was not, the numbers to numbers, no emotions, facebook still overvalued. >> and we should note, facebook shares today down another 1.5%. >> this could be the reason why. again, there's no emotions here. that's why i love it. no emotion. just the numbers. just the black box. >> love it. thank you. let's head over to the cme group, check in with rick santelli. >> it's a big day melissa lee. we're going to do a bit of a retrospective. you remember in april when we went out to oklahoma city, we did a nat gas conversion of a ford f-150. well we're going to do a follow-up, because this weekend, in the chicago "tribune" business section it talked about natural gas cars show quiet signs of success. boy, are they ever! as a matter of fact, one of the groups that does research in

this area side by year end, nat gas vehicles are going to outnumber plug-in vehicles, the ones with that commercial where the girl says she can't find her gas tank. anyway they're going to outnumber two to one. nat gas around 124,000 cars and trucks, and regular plug-in vehicles, about 60,000. now the reason i bring this up again is because it accentuates this notion of picking winners and losers. listen, the government may do some things right and some day when i'm limited to 10 seconds for santelli exchange we'll cover all of those. but for the moment, what they don't do well is allocate resources adequately. we all know the stories of the solyndras. but the real story should be america grassroot, bottom up like in oklahoma city, a whole country of hobbyists have moved this to the forefront, and by the way, there was one change. when i was in oklahoma city the equivalent to fill it up with your own in-station pump in your garage was about 66 cents.

yeah, it's now up according to that article, 80 cents, nat gas has gone up. let's talk about europe. we heard mario draghi say he is in to the ecb for whatever it takes. and moody's kind of adressed that. they said that is an essential requirement that the ecb is behind, and trying to do everything they can to fix what ails the eurozone. but it is insufficient to really tackle the problem. so basically what moody's is saying is what i've been saying and that is stability. yes, we need stability. we need funding rates to be stable. but it still is a long time from the picks. and in the telegraph today in europe there was a survey. 51% of the germans believe maybe it might be better to leave this whole eurozone scenario. remember there are about 27% of the gdp of the eurozone region. so we want to pay particularly close attention to those trends. by the way, in about ten minutes we're going to have florida representative allen west right here, right here with me, we're

going to talk about things like nat gas and so much more. melissa lee back to you. >> thank you, rick santaellaly. >> let's send it over to kayla tausche. >> rick just showed you the intraday chart of nat gas. up more than 5%. that's helping a lot of nat gas stocks, namely range resources, western energy and cabbott oil and gas. these have exposure to nat gas prices. it's helping southwestern up nearly 4% today. simon back to you. >> straight ahead on the program, why the city hosting the olympic games won't be alone in paying an arm and a leg to make the games great. more on that and more live. s? anyone have occasional constipation, diarrhea, gas, bloating? yeah. one phillips' colon health probiotic cap each day helps defend against these digestive issues with three strains of good bacteria. approved! [ phillips' lady ] live the regular life. phillips'.

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welcome back to "squawk on the street." live from olympic park. a beautiful day in the east end of london. you know while it's an honor to host the olympic games, it also comes with a huge price tag for the host city. and as it turns out, for olympic ticket holders, as well. kelly evans is here with more on the hidden price of the olympics. and we're basically talking getting around eating that kind of thing. >> start with getting there in the first place. we all know how expensive it is to travel to london any time of the year.

there are some parking lots that are raising prices 60% and charging people 40 pounds a day. and if you think about the exchange rate, for a lot of people the pound is pretty strong. so all of these prices, especially when they hit foreign visitors, really do make it tough to just casually stop by the games. the cheapest tickets do run in the range of 10 pounds to get on the grounds here. 20 pounds to the events. those are all sold out immediately it's up to 150 to 450 pound tickets even on the market. that's not something many people can afford. >> swimming last night. the face value on my ticket was 185 pounds. and i was, i felt like i was in the stratosphere. i mean, i was that far above the pool. >> worth it coming to see a show in london. the theater famously the london theaters they're half empty. and now we know london stadiums are, too. >> how about food? >> this is the other thing. if you want to come in for lunch into -- if you want to have lunch here at the olympics, it is going to cost you.

a couple of classic british dishes, we've got our fish and chips here. this will set you back about eight pounds. we've got the pie and mash i think, i might be mashing up the name of this, too, this one which is glistening here, as you can see the oil, will set you back about 8 pounds 50. >> do we know what kind of pie this is? >> i think chicken. there might be some other meat involved. what matters is the fried outside pie. we've got our pork scratching. but interestingly, too, this is also heavily sponsored. only coca-cola. only heineken if you want soft drinks. the coke is 2 pounds 30. the heineken is 4 pounds 30. this kills me, the vitamin water will set you back 3 pounds. that, if our little calculations are correct, is something in the range of almost $5. >> almost five bucks for something that probably goes for i'm guessing $1.50, $2 in new york. >> i know for a fact you can get

12 for 12 at target very often to a dollar apiece. >> would you argue that this is bordering on the gouging stage? or is this pretty much -- >> look, there's no competition. so in some ways maybe it's refreshing that they aren't charging even more. if you try to eat healthy and get a salad that's going to be 7.50. a combo with a coke is 9 pounds 80. that's $15.37. some of the souvenirs a t-shirt is 25 pounds. that's almost $40. a water bottle is 14 pounds. that's $22. they could charge even more but limited by being able to move the merchandise and sell the stuff because it's not something everyone can afford. >> i'll tell you one thing i brought, and simon and guys, you'd love this. we talked a lot about hewlett-packard, apparently this is a big thing. this is a big deal in the uk. >> oh, my word. >> can you see this? >> i have hp sauce at home. people bring it to me. it's brown sauce. it's spicy.

it's actually houses of parliament sauce but you say hp sauce. listening to you two moaning away about the price of the olympics. surely this is capitalism at its best. >> i think it's capitalism at its worse. if you're in here with anything that looks like a nike swoosh or a pepsi product they'll tackle you. >> you need to take a packed lunch if it's too expensive. >> even the workers, they're supposed to take their lunches in a clear plastic bag so they can make sure they're not bringing it from nonsponsors. >> fascinating stuff. i assume you're going to get to work on this fish and chips right now. >> right now. >> sorry, simon. >> try the pie. >> it's worth every penny. >> the bottom of it. >> not on live television! >> you report back to us later on. >> see you later. london 2012. >> coming up next, congressman allen west joins rick santelli on the floor of the cme to talk jobs ahead of this friday's number. and counting down to the close in europe.

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quick market check as the dow just turned negative. down five points right now. s&p down about 2 and the narz down about 13.5. we did see cisco ease off highs earlier in the session. it is now up 1.5%. certainly a leader on the dow. but it has backed off of its gains for today. meantime let's head over to rick santelli in chicago. he's got a special guest. >> i do. my special guest is either colonel or congressman allen west from the 22nd district of florida. so the cme group and myself, and cnbc welcome you. >> well, it's an honor to be here with the cme group and yourself, rick. i had to come up from down south because i want to try to open up a chick-fil-a franchise in chicago. >> that is a big controversy in the city. and forgetting the issue of what your thoughts are, for example, on gay marriage, doesn't it strike you as a little bit odd that the -- the necessary

situation to open up a business in chicago would pry into the beliefs and mores of the owners? does this strike you as a bit unusual? >> it doesn't when you understand the liberal side. free speech is only free if you agree with what they say and what they believe. that is really the problem that you have right now with the federal government, being invasive and intrusive nature. where they're trying to dictate where private sector organization can relocate and establish themselves. those are exactly the same thing you saw with boeing. where you have the national labor relations board getting engaged there and telling them they could not move to a right-to-work state. that's not the america that this great institution here is trying to promote. free market and private sector. >> you know, congressman, this week we have a fed meeting. so tuesday, wednesday we're going to hear from ben bernanke whether he's going to fire up the printing press again and start another quantitative easing program. if i wave the wand and you are the president of the united states -- >> there would be a lot of people nervous.

>> i'm sure there would be. would ben bernanke need to be nervous? >> ben bernanke would absolutely have to be nervous because this quantitative easing thing, you know, where we're trying to print more money to keep the interest rates artificially low, i think we're at 0.25%, we're creating an artificial economy. it really concerns when you look at the largest holder of our federal debt, $16 trillion, is the federal reserve. so we're actually printing money to monetize our own debt, which when you look at what happened last week with the dow going up a little over 13,000, it's because the european central bank is saying they're going to do the exact same thing, print money to buy up their debt. that's horrible monetary policy. and that's not how we're going to turn this thing around. i'm telling you i'm concerned we're creating an artificial economy here in the united states. >> one of the arguments of europe is we can't have austerity because we only have the money to pay, for example, for entitlements, everything holding up society. society like in spain. if you had to pick one thing for the freshmen congressmen that came in with a conservative stand and being blamed for

everything since they've underscored debt and deficits in this country, what would you tell american viewers about those 70-plus congressmen? are they on the right track or the wrong track? >> we're on the right track. when you think about washington, d.c. is not talking about how much more money they can spend. we've got the conversation change talking about how much we can cut. when you look at the whole thing about this farm bill, since bee do a lot of commodities trading here, the farm bill is no longer a farm bill. it's a food stamp bill. in 2002 we had 20.6 billion dollars spending per year on food stamps. today we're at $75.8 billion. what we're saying is this is not the america we want. we've got to get this thing turned around. that's why you see freshmen and newly minted members of congress pushing back on this onerous government spending. 45% increase in food stamps, recipients in the last 3 1/2 years of 9 obama administration. 46-year high for americans in poverty. >> real quick we're late. yes or no, should we raise taxes

on anybody, any percentile for the coming up pending lejs slags being talked about? >> no, absolutely not. we need to keep the rates where they are to provide the certainty. what the senate passed was just a gimmick. it's not going to yield anything. >> thanks, congressman and colonel for joining us today. melissa lee, back to you. >> thank you so much. rick santelli. just a few minutes left in europe's trading today. we're sitting at session highs. details on the u.s. right after this. tdd# 1-800-345-2550 let's talk about fees. tdd# 1-800-345-2550 there are atm fees. tdd# 1-800-345-2550 account service fees. tdd# 1-800-345-2550 and the most dreaded fees of all, hidden fees. tdd# 1-800-345-2550 at charles schwab, you won't pay fees on top of fees. tdd# 1-800-345-2550 no monthly account service fees. tdd# 1-800-345-2550 no hidden fees. tdd# 1-800-345-2550 and we rebate every atm fee. tdd# 1-800-345-2550 so talk to chuck tdd# 1-800-345-2550 because when it comes to talking, there is no fee.

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the european markets are closing now. >> all right, simon? >> you'll see that the rally continues in the periphery of europe. don't forget that spain rose 10% thursday, friday. italy rose 9%. almost 9% and that rally continued. this will be the week that could determine if deutsche bank said overnight how we trade to the presidential election. will the ecb be able to pull the consensus for coordinated action to change the situation in europe, or will it ultimately fail? let me just show you what's going on in greece. greece is quite interesting today. there are protests from bank employees on the streets of greece. this morning, the state-run ate's healthy assets were passed over to one of the big four locally. the bank stocks are surging in greece, partly because of the asset swap. partly because on friday the 18 billion euro life line was

approved by the european commission antitrust and also because there's talk that the greeks will ask for a write-down from the ecb on the debt that is owed by the country. so you see a very strong performance from the greek banks. in general across europe today, a lot of the banks have rallied. and you can see this, the weaker banks, the banks that are exposed to sovereign debt, belgium, italy, spain, france, you see those banks have done well. and that's why the market is higher overall. and of course, you continue to get that rally at the short end of perhaps notably the spanish debt market. so the yields continue to come down after that huge move that we had thursday/friday where we tham down like 7%, a 2% move lower. still unsustainable arguably. just be aware that rally continues. obviously everybody focused on what mario draghi could do with the bundesbank. you should also watch importantly what happens with mario monti, the prime minister of italy. i think he's very interesting. he spoke yesterday to angela

merkel. he's going to talk to francois hollande tomorrow. we have the ecb meeting on thursday. he is going to have a summit about the head of spain, the prime minister of spain, as that ecb meeting finishes on thursday. will they come forward and jointly ask for assistance from the esfs, the esm, the safety net, to directly buy their bonds in addition to the ecb? so let's get to the graphic they put on your screen. that is very important. it's the combination of the direct purchasing, according to deutsche bank, by the safety net at the primary level and the ecb buying at the secondary level, a powerful combination, if you can get the two. because it lessons concern. could reduce the german angst and it also helps if they can get some movement on greece just having some of that debt forgiven at the ecb.

i hope i explained that very well. kind of threw me with the early graphic. there are some cynics around what is happening going into this very important week. actually potentially it will have absolutely no difference further he down the line. that's the assessment that comes through from jpmorgan overnight. other people are saying look, if we really have a game changer under way here you would have had a bigger move at the tenure further out on the ten-year of the spanish debt and we're still at 6.6%. or arguably they would say that actually the bund, the german bond market, if we had a real solution here, would have sold off to a greater extent. yes the yields are slightly higher but no great shakes when you consider where we've come over the last three months. so a very divided analyst community on what will be an important week. >> you can also see that skepticism in the currency market, we did see the euro against the u.s. dollar decline once again. >> but let's emphasize a very

strong rally in the euro. >> true, true. >> that's the context. >> that's true. >> simon, thanks for that. let's bring in mary thompson, see what's moving on the floor right now. >> it appears investors are taking a breather after thursday and friday's big rally in the market. also weighty news from two of this week's key events. there are three of them this week. the two investors are talking about any news out of the fed's meeting on wednesday about added stimulus. and then the meeting of the ecb, the european central bank on thursday. followed by friday's jobs reports. a lot for investors to wait for later this week and appears they're doing a bit of a waiting game today. that being said, stocks did move a little bit heighter at the open but then pulled back on a report from the dallas fed. this really more typically is market 3406ing report. it was the weakest reading for the dallas fed in ten months. the markets hit a peak about 10 and when that report came out and moved lower after that. the dow fed reporting weakening

factory activity in that region as the primary reason behind the disappointing reports there. that being said, investors are taking a bit of a defensive posture today. the sectors that are doing well, include telecom, consumer staples, utilities, they are higher. weaker consumer discretionary and health care stocks. within consumer discretionary, jcpenney is down for the first time in six trading sessions. it's been kind of a rocky ride for that stock. over the last year as the company's new ceo implements and then changes a new strategy to revive that retailer. apple also making its presence known today, despite the weakness in the nasdaq. it is having its best day in a month. the reason being the company has been touting new downloads of its mountain lion operating software over the last four days. 3 million downloads of that. that's giving a lift to its stock today. then just checking on some of these home building material stocks, armstrong worldwide of course cutting its full-year outlook, putting pressure on other building material stocks

today. the dow off 18 points. >> thank you very much, mary thompson. >> i can tell you from personal experience that gary kaminsky is a very happy go lucky guy. not a lot irritates gary kaminsky. this morning, however, he's champing at the bit. something did wind you up over the weekend. >> you know i had one of those, really last week we had something that happened. i had, really, are you kidding me over the weekend? i picked up "the new york times" saturday morning, great article, giants stocks are walking tall again. talking about the mega caps. every strategist, if i had a dollar for every strategist mentioned in this article, how many times over the last ten years they told us this was the beginning of a huge mega cap rally i'd be very rich. these guys have been saying this for decades. what i found interesting, melissa you touched on this earlier in the day, obviously the big mega cap, the dividend paying stocks is a great place to hide. additionally there's been this idea that given the uncertainty in europe, try to stay on the u.s. centric focused company.

the problem with this piece is that it talks about how this is a good sign for the overall equity markets. i completely disagree. in fact you want to see, historically the mid cap name be the relative outperformers. because that says portfolio managers have conviction to get into names where liquidity is not their major concern. nowhere in this piece does a journalist who's trying to be a portfolio manager, and that's the problem here, say that it is about the liquidity because these guys are concerned about getting out of the name if something happens bad and they want to get out and raise cash quickly. >> i think that you can also say not just in the mids but in the smalls it's the same mentality that once you see a market willing to take those risks on higher beta growth names that's a market that is a healthy one. >> correct. remember, small cap managers have to buy small cap names. large cap managers have to buy large cap names. but it's the all-cap managers that go to the large caps and they go there only for

liquidity, which is what you have happening over the last several months as opposed to trying to make investment positions where you know you can't trade out of it quickly -- >> at the same time though, gary, that does not -- it doesn't interfere with the idea that for now maybe, utilities and telecoms and staples, we're seeing that play out in today's action, that still might be the place to be for now. it's not necessarily a sign of a healthy market. >> exactly. if you want to say historically what has been a great sign for the beginning of a big run, it is outperformance by the midcaps, the names where you got the growth, a you can't just trade out of them overnight. >> okay. gary? always a great -- he always makes such good market observations. >> yeah, absolutely. >> let's -- >> let's go over to -- >> -- contribution. >> we have some news on small cap stock and a mid cap stock. salix and pro-genics falling

sharply. the fda declining to approve a drug they're developing together. the fda says it needs more data. but salix bought the rights to the drug from pfizer last year. today a handful of analysts are cutting the price target on the back of that news. salix is a mid cap company. losing about 13%, which is very negative but if you take a look at progenics that is losing nearly 50% of its market value. >> wow. kayla thanks so much for that. up next from beijing to sochi to rio are the olympics the great emerging marketplace. s new york. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business.

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♪ coming up at the top of the hour on "halftime report" we're trading apple mania from the twitter rumors to speculation over an ipad mini. how you can profit from the headlines. also bond heavyweight reveals why he thinks interest rates are about to rise. and one of the biggest bears laying out his bull case for stocks. now back to carl over in london at the olympic park. >> thanks so much, scott. general electric today said it's pulled in a billion dollars of olympic infrastructure sales ever since it began sponsoring the games back in torino. and there's more to come as the olympics go to other emerging markets. we caught up with chief marketing officer beth come stock who is on the board of nike to see how the games are fueling growth. >> i don't think we knew what to expect when we started. keep in mind when we did the

sponsorship this was a something new for ge but new for an infrastructure company to sponsor the olympics in the way that we did. we didn't quite know what to expect. we had -- we imagined that perhaps we could do some infrastructure sales as part of our partnership. and it's really taken off for us. for a couple of reasons. i think the -- the olympics committee is just a great partner. so that's been very helpful. the cities have created wonderful partnerships. i mean they need what we have. so the ability to go in and provide power, like the stadiums, lighting, water pure fiction, health care, that's proofen to be a pretty powerful equation. >> everyone says sochi. the build-out is going to make london look tame some say. are we getting a sense? >> we're getting a sense. it's hard to say how big it's going to be. but we've sold a couple of big energy generation turbines already into sochi. and it's a commitment by the

government to invest in that country. and so we hope to be part of it. >> of course, gentlemen stock's done pretty well as they trim back on ge capital. you heard beth talk about what they sell, and a lot of it is used by all these cities looking to reinvent themselves even after the games. so the big power generation units, some water filtration, the lighting will be used, simon, as the east end of london is made better over the years. >> yeah. and we should be clear, ge has -- i mean the contract for ge is that it has first refusal, i believe, on the infrastructure project. i mean that's the point there, isn't it, carl? they were able in many senses to mop up. >> and even now with rio, even though it's four years away, the orders are already coming. sochi is very far along already. we've got long lead times. big machines. big orders. and that's why in part they've renewed their sponsorship through 2020. >> in the meantime, there's a

little bit of pushback from the mother ship here on your concern about $4 for -- 4 pounds a beg your pardon for a beer at the olympic games. one of our producersuan says that's nothing compared to the nine or ten bucks you shell out for a beer in yankee stadium. and $10 for a water at the u.s. open. >> go to flushing meadows. $10 for bottled water. >> yep, yep. >> no question about it. unfortunately here you're dealing with people who've traveled halfway around the globe to get here. i mean, not that going to queens is not difficult. but, it's different than coming from dubai. >> you will be back in time for the u.s. open as well, carl. >> i don't think that's a question -- >> see you later, carl. >> next on the program the internet start-up that's bringing big changes to the way the world names websites. doughnuts inc., yes, donuts, inc. has received more than $100 million in funding and the

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coming to the internet that will affect users on a daily basis. one start-up is looking to cash in on that process. donuts inc. is a domain name registry that recently raised over $100 million for investors, and is looking to obtain and

operate new so-called dot brands suffixes. dan schindler is a co-founder of donuts inc. and he joins me now. how does it work, then. what are you actually doing? >> hi, simon. thank you for having me on the show. well, what's happening is that the regulatory body of the domain name space is a corporation called acann. they have what's known as an affirmation of commitment with the u.s. and other governments that in addition to ensuring the maintain the stability and security of the internet that they bring a choice and competition to this landscape. and that is exactly what we're doing at donuts. we've raised well in excess of $100 million and have applied for 307 new generic top-level domains. they're not actually dot brands in that 1900 applications, there

are hundreds of brands who have applied for their new top level domain but donuts applications are generic, everyday dictionary words. >> right. so, so, you've got, for example amazon applying for dot amazon or yahoo dot yahoo, you're applying for dot baby, or i don't know, whatever. >> dot baby, dot news, dot football. >> the hope is to then sell that on to other people? >> no, what we do is we're t the -- we're like the mine. we're known as the registry. we make our names available at the second level, via a chain of accredited icann registrars, companies like go daddy, network solutions web dotcom and the registrand buy their names at the second level. so simon.journalist for example. >> is there one name that you're the most proud of, you think could be worth the most money. i don't know if dot baby would rank up there.

is there one that you own you think is really going to be a gold mine? >> well, you know, i should tell you that we started with 3,000 names before we whittled it down to 307. and you know, we kind of look at them like our children. we love them all equally. >> oh, come on. >> time will tell. there are -- look, i think it's fair to say that there are some names that not just donuts but other organizations feel will be especially lucrative. dot app has been applied for by 13 applicants. up to 307 names -- >> if you effectively remove the rules and people can register whatever they like don't you longer-term convolutize the value of that name. you could think of 15 suffixes that could be really cute at the end of it. >> yeah, but it's not a question of registering whatever we like. the regulatory body has had very

strict guidelines. this has taken years in the making. it's going to be a case of you have to be able to satisfy them that you can pass the technical and financial criteria and that you are responsible registry in order to be able to operate these not just regg strering whatever you like. >> have you registered dot donut? >> no, we haven't. >> just curious. >> maybe we should have. >> maybe melissa will beat you to it now she'shood the idea. >> and then i'll sell it to you. >> okay. >> thanks, dan. good to meet you, sir. thank you for coming on. any chance you're going to list -- can anybody else get in on this business? >> yes, absolutely. i mean the application window is open for the best part of four months and there will be subsequent rounds by icann in the years to come. >> nice to meet you. dan schindler, co-founder of donuts inc. soon to be sold that name by melissa lee. >> marissa meyer has only been on the job at yahoo! for a short while. free food, a weekly all hands meeting, reports of a possible deal aside, what does yahoo!'s

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time for squawk on the treat. yahoo!'s new ceo marissa meyer introduced a weekly all-ands meeting, free food and there are already reports of a possible deal in the near future. so that brings us to this morning's squawk on the tweet. meyer seems to be off to a good start but free food and swag aside what does she really need to change. earnest tweets, sell yahoo to google. >> brutal. it comes back. and robert tweets change the name to goo goo. >> what's on your radar? >> we haven't spoken about the ftc in a couple of days? did you know the cftc had a meeting last thursday to discuss i believe the topic was technology issues related to the cftc and anyone could have participated. i did not participate, i did speak to a number of people. the public meeting of the technology advisory committee, it was held last thursday, a couple of people that were on that call mentioned to me that not a lot of specifics, not a

lot of meat on the bone as it relates to what happened. however chairman gary againstler did point out to the public that he was a little upset when cnbc first reported the story and showed a picture of him on air that we actually showed a picture of his twin brother. he's got an identical twin brother robert gansler who is a portfolio manager at t. roe price. let's show the right picture of gary gansler who is the chairman of the cftc not his twin brother robert gansler. do we have it? i hope we're going to be able to show the right picture because he was concerned about it. do we have it? there we go. so, you know, an honest mistake, guys. it is an honest mistake. >> are you sure you've got them the right way around. >> i'm sure that that is robert on the right there. >> but is that amazing? >> robert is at t.rowe, gary is

at the cftc. >> what are the odds of that? >> rick probably loves that one. >> i do. i wonder if his brother would be any better at overseeing the industry. >> he said he wondered if the brother would be better at regulating. he's not a fan as you know. >> he is a portfolio manager at t. row. he is and once again there are so many more nuances to the story. the peregrine story never ceases to amaze me how the technology that they're discussing is so rudimentary, and so been overlooked. i think the euro is the bellwether in the carrot versus stick. and i think this week we're going to have a tough time in front of wednesday and thursday to do anything, because the market's in a lather of anticipation. >> all right. rick, good to see you.

we'll see you tomorrow and carl, what do you have coming up tomorrow from london? >> as the father of twins i'm still trying to get over the twins guys. it's going to be a great week obviously a lot more swimming still to come. tomorrow, we're going to meet omega, the official time keeper. we're going to look at a starting gun. they also, of course, have huge exposure to the high end in china. talk about whether they're seeing some weakness in china and europe. and over the weekend, we went around olympic park and talked to the greeks. greek fans who've made their way here. a lot of them already live in london. but they've had a tough time. they barely got a team together. they sent one athlete home for doping. another athlete home for a racist tweet. but the fans are still trying to hold out hope. and even a little debt fencive on some questions regarding the euro. so that's all coming up tomorrow. >> wow. big day. big day. nice to see you again, carl. have a great evening. enjoy london. >> yep. >> all right. that does it for us heret