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tv   Closing Bell  CNBC  August 17, 2012 3:00pm-4:00pm EDT

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classic toy, but she is modelled after a new york drag queen and she will retail for $125 and will be available just in time for christmas to put in your stocking. the maker of barbies is up about 25%ear to date. have a great and safe weekend, see you on monday, same time. "closing bell" is next. >> hi, everybody, welcome to "closing bell." we have more rallying going on. the rally is continuing as we enter this final stretch with the do you. i'm bill grit fet and that is maria bartiromo. the dow is close to hitting four and four and a half year highs. let's show you, write these numbers down.
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>> i'm on it. >> if the dow closes today ladies and gentlemen at 13289.32, that would be a four and a half year high. and if the s&p were to close at 1419 we would be at a fresh four year high there. so that stealth rally does continue today. sure does, today, apple hit a new all time high looking forward to the release of a new iphone and a smaller ipad. facebook hit a new all-time low this afternoon. the lock up expired yesterday, and groupon also hitting a new low today after it was hit by an analyst downgrade. >> did you know the dow has
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rallied about 9% since june. it's been had a good year. volume has been very light especially this month. bob pisani said this is the least loved rally, but they will take it. we have peter sorentino and courtney reagan with us. what's driving this rally to continue and continue even though no fundamental changes are so cured. >> it's the draghi rally. it's no coincidence that the day he spoke and the day he said he would come to action that the markets took off. the spanish index is up 25%
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since that day. too he it's solely draghi. >> will it sustain into next week? >> it will until the fed meeting or jackson-hull. but with us at the upper end of the trading range, what we will see in the global economy. >> peter sorentino what do you make of it? >> we had such a sell off that most institutional investors have been under owned and selling in the retail space. any relenting at all and the market would just rebound on it's own natural course. the low volume, it's just sort of been a gradual flow of equity and money coming back into the marketplace. nothing really fundamentally based, people just don't hate them as bad as at the end of the first courter. >> courtney, i know it's been a light week, what do you look for
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a catalyst to keep it going. >> pretty much any, maria. there is reluctance from investors, we're dipping one toe into the water to see how it goes. it's been a good week, v volatility is very low. you asked about next week, take a look at the vix. futures contracts in september are up above 18, january above 25. there is still some uncertainty. you want to wait and here that ben bernanke is going to say, that's a big, big catalyst, i think we're all waiting for that. >> yes, and ronan is especially waiting for that, as yields rise, ron, multi-year highs on the ten and the 30, is fed intervention being taken off the table? >> maybe by the economy, bill, and no one would be happier than i if the fed didn't have to do
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anything else and if this was a self sustaining recovery. we're getting three separate markets telling us the same thing. commodities are moving up for reasons that the u.s. economy has been looking stronger than people thought at this juncture. i think the fed will probably do something, and mr. bernanke may kind case that on august 31st, and the european central bank, when they get back from their vacation in september, they will do something dramatic because they have to. >> upside for the broader market. peter, i know that you own or you have owned banks in the past. is this an area you want to buy into or are you saying away with the regulatory uncertainty. peter sorentino, sorry. >> we had been moved into the regionals believing that the north american economy has been stronger. the money centers still worry us. we think trading volumes are
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questionable. so for the nuts and bolts and industrial part of the economy. that part of the banging sector will prosper and do well. we're putting money to work there, but we're still cautious. >> peter, an odd trial floated by the white house that they would consider selling oil out of the spr, i'm hard-pressed to find a reason why other than israel moving on iran, do you think that would happen? what do you make of all of that? >> it's politicking two and a half months before the election. if you look at the last time they did release oil last year, oil fell $4.50 dollars the day of the announcement, and a week later it was above where it was before the announcement. >> and that's right about where we are. >> bill, i think you put your finger on it. is this politics, just trying to get gas prices down before the election?
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which is really not that onerous, or is it -- >> who believes that it works when you pay lip service rather than just selling. >> they're signaling though, maybe a pre-emptive step before a pre-emptive strike. it's all speculation on my part, but it seems that's what people should be thinking about. if you read the press, the drum beats are different here than they are there. >> the vix, the front month, is it a five year low? courtney's point is well taken, but nobody is faring anything about the moment at least. >> that's right and you're not getting a safety bid with people worried about the onset of activities in the middle east. it's odd for the white house to make this announcement. it seemed to be strange that the. >> todd: got floated. >> peter, what about earnings here, that's really the fundamental story.
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estimates going much higher, end of the year, do you believe those estimates? do you think the market is setting up for a fall? >> i think the bottom is over. i think q 3 earnings could be negative year over year. it's a growth story and margin expansion story is over. again, qe clouded that after going through third quarter earnings season. >> thank you all, we'll have a good weekend. ron, take care. >> thank you, and we're in the final stretch here for the weekend, the market higher here by a fraction. it is 506 minutes before the "closing bell" sounds. coming up, ryan's hope. does one of the architects of
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simpson-bowles leave the plan? allen simpson up ahead. walmart now defending it's health against an indiana union. is this another case of unions gone wild? and looking for a motion, hex, or spell on e bay? >> thank you for bringing up such a pain much subject. >> good luck, that's all coming up on "closing bell." [ male announcer ] when a major hospital wanted to provide better employee benefits while balancing the company's bottom line, their very first word was... [ to the tune of "lullaby and good night" ] ♪ af-lac ♪ aflac [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ...forbusiness.com. [ yawning sound ] that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan,
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welcome back, about 45 minutes left in today's trading session and the trading session for the week. let's give you a quick market stat check here. do you industrials trading in a 30 point range. the industrial average now up about 12.5 points.
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at it's best level in three and a half months, looking to hit a fresh four year high. the nasdaq in positive territory up about 11 points, technology one of the leadership in the groups today, strength and teches in particular, apple at a record high right now, apple trading up $10. we're going to look at sars -- shares of caterpillar. the stock is down more than 20% over the past six months. here is the question. are you ready for a rebound? take more profits? let's talk profits. jc, you like caterpillar at these levels?
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>> yes, i'm starting to like caterpillar. it has falling 20 in the last six months. if we can overlay the s&p 500 with kat pillar, we can see the s&p and caterpillar have been highly coordinated and traded pretty close together except until about mid-june where divergence occurred. >> we have a stealth rally, but caterpillar has not participated. >> did not participate until recently. we started to see them have signs of line into it. we see a nice rounding base which is healthy. they have this horizontal restance line that we're at right now today. and the downward sloping line. so i like to slowly start scaling with hoping to breakthrough the resistance.
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>> he is making the case technically for the stock, do you like caterpillar right now? >> this is a great company long term, but it has some head winds to go through. the fall off in june, the lack of performance when people got scared, but we got a great quarter and good sales in your opinions today. the problem is the sales numbers are going to weaken. you're hearing a mining program being deferred, rental companies are getting nervous because of the politics and the fiscal clip. it will be a market stock for the year term. >> yeman, thank you for talking numbers with us. thank you for joining us. >> we have a market that is up, just about 45 minutes before the
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closing bell sounds. up next, can paul ryan's budget fis our problems? we'll talk with allen simpson. and ebay cracks down on magic, and we're not talking about the popular card game. >> like a broth boil and double toil and trouble. coming up, why ebay's rule changes could leave people scrambling for a new source for love positions and hexes. plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying...
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welcome back, it is our -- it's options expiration day, so we had a little more volume here at the new york stock exchange, but we have had a pretty low volume month here in august, and we're about 12 points away for the dow from a four and a half year high. we are at 13279 for the four year high, and the s&p is about two points away from a four year high right now. >> technology is money the big gainers today. banks are not that strong, we have fractional moves for the upside, but it has been what's
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been working is working again today and that has been technology. tell come rolled over after a very nice perfoance earlier in the year, and a lot of people focused on transportation to ks bill. a lot of people want to see the confer ration from the transportation average to confirm there is participation. not a lot based on the volume figures. >> do you know that the vix, the fear indicator, the front month, is it a five year low? that's a five year low that we're sitting on with the vix right now, and i was going to point this out later, but when you get a low in the vix, it does not usually signal a bottom in the market, it's the other way around. and one of our next guests is nodding his head here on that very topic. joining us is david darst. you get low volume, low
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volatility, you get august duldrums. it's time to go slow. that's what the folks on the chicago futures exchange say, they're all stuck in the '70s, they have platform shoes out there. it started at 23 this year. it's now 14.5 as you pointed out. equity mutual fund cash is at near a record low. 3.7. the all time low is 3.3%. it would be a nice tyime, the market sup, carry an umbrella, because we're entering a rough time geopolitically. everybody forgot -- >> so you want to sell into strength here? >> yeah, take a little off the
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table here. >> iran and israel is your concern? >> yes, carry an umbrella and hope you don't have to use it. with volatility low -- another thing, bill and maria that we talked about before early ther year, that was in february you had oil, stocks, bonds, and gold all went up together. that has an 80% hit ratio, and that's what happened this spring and last month, and it started in the bonds bill where you have this big move upward. >> people like to point out that the yields in the ten years and 30 years have been moving higher since draghi pointed out that he would do whatever it would take to preserve the euro. it would seem to suggest that the markets are not anticipating ch from our federal reserve right now? >> the markets are taking a nap
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right now. you have the meeting minutes from the july 31st and august 1st meeting coming out so we'll know what they talked about, but that being said, the best thing that happened this week is 6 had 4 on the spanish ten year buy. >> and we have not mentioned this, the spanish stock market is at a four-month high right now. >> so when you see rates come down in spain -- >> yeah, and italy too, you've seen an easing off. >> the markets don't seem to be concerned about all this. >> it's 4:0u in the morning, people are sleeping, people are on vacation. while europe is taking a breather, take money out of the market, pause, and reconsider after labor day. >> thank you for stopping by. >> thank you for having me.
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we go heading toward the close here with 35 minutes to go. the nasdaq and s&p quietly higher today. a union pension fund is suing walmart to get documents about the mexican bribery scandal. plus, facebook, the flop continues. the stock hitting another new low today, but there is another former favorite doing even worse. we'll have that name coming up next. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 and with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime... tdd#: 1-800-345-2550 until i choose to focus on something else. tdd#: 1-800-345-2550 trade at charles schwab for $8.95 a trade. tdd#: 1-800-345-2550 open an account and trade up to tdd#: 1-800-345-2550 6 months commission-free online equity trading tdd#: 1-800-345-2550 with a $50,000 deposit.
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. welcome back, we want to right to scott cohen. bringing mu meaning to the term inside baseball. you remember the case they brought last year, now another former major league ballplayer eddy murray has been brought into this as well and he settled the charges. this was involving a case called advanced optical, or medical optics i should say, and the
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former ceo charged as the tipper in this case. murray paid the charges of about $25,000 without admitting guilt. thank you, scott cohen, look at this one-year chart of walmart. if you owned it you thought you would be happy, but think again, an indiana pension fund is now suing. they say they want access to thousands of documents. a move that may open the door to further action in the courtroom. why would the pension fund do something to put shareholders in the cross hairs. >> we'll ask the person representing the fund, and also with us is emily miller who saying this isn't about the bribery case but about the fact that walmart is not unionized. stewart, they're not hurting by
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any means if they own shares of walmart. why the lawsuit and why now? >> i understand that union bashing is in vogue know, but that's not what we're talking about here because in fact the ibbw of indiana has a wonderful relationship with walmart, walmart hires ibbw workers in indiana to help them. >> what are you after with this suit. >> we're after information. and we're not looking to hurt walmart, we're looking to help walmart because they're a core holding of the pension fund. what we're looking for here is transparency. obviously walmart had a problem in mexico. and when it was brought up to the board level, it was covered up, and when shareholders asked for information regarding what
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happened at the board level, which they are statutorily entitled to, the board said we're not giving it to you and turned over a bunch of blank documents, so we want to know the truth. >> how does this help the story, isn't it about the fact that the unions are upset that walmart won't unionize? >> no, walmart hires ibbw indiana workers. that's not the dispute. i understand there is a dispute with the movement -- >> emily, what do you think? >> this is something but vultures. the unions are being vultures in this situation. the public unions in california and new york wanted to get in on this case and they were told they couldn't. >> you have to admit this is a pretty serious charge. there are documents that seem to support this that have surfaced
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since that new york times article that support the case against walmart. those are serious charges you would admit, right? >> and they're the ones responsible for handling this. other than the fact of denying it all day long. public and private unions are wn. public unions are gets closed from scott walker to chris christ christie, the days of unions are over and they're getting desperate. >> you're saying because union membership is down, they should not pursue their rights. >> don't you have anything better to do than sue walmart when you're making money off them already. your pension is doing better. >> actually we're not suing walmart, if you red the complaint, you would see what we're really doing did.
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>> steve: going after the wrongdoer who is are senior officers or board members and suing for the benefit of walmart so any recovery we got goes to the company themselves. >> i'm not a lawyer, i don't know all of this terminology, but i can't imagine they're thanking you. >> don't let the facts get in your way. if you want to deal with real life, you would nose thee are shareholders persuing their rights. they want accountability. >> is that the end go here? you want accountability? >> for instance, for those who -- >> why knot leave it to the feds to do this investigation? why get involved in this?
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it seems to complicate the issue. >> the fed will do the investigation, walmart will have to pay the money, and the question is is should the shareholders suffer from that or should those hurt -- >> the outcome has yet to be seen, but what the american people care about and the union members care about is the jobs and the take home pay. when you have a reyouon it reduces jobs and the economy and does not help. we've seen right to work states, many more with a pro union side. so they can sue people and get desperate, but what the american people care about, and why the majority of americans think
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unions hurt theeconomy, that's what americans care about. we must go, folks, thank you for your time. >> thanks. >> heading towards the close, it is an options expiration day, we might get more volume. the dow is up just seven points. paul ryan blasted obama's stimulus plan, but he requested stimulus. >> and will a witch put a curse on something ebay is about to do. >> i'll get you my pretty. yes, we're going there, why some say ebay hates witches and warlocks and we'll explain. ♪ i can do anything today ♪ i can go anywhere
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the debt and deficit back in the forefront, but it was my next guest that really got the conversation going. allen simpson cochaired a presidential commission charged with cutting the federal deficit. the president never enbraced the plan and it was left to twist in the wind. alan simpson joins us now, what do you make of mitt romney picking paul ryan for america doing something meaningful to bend the curve on this debt. >> first, it's always nice to be part of your program. ryan will add a great deal to the ticket. we found him to be a guy that doesn't need to sit down with a big pile of papers and a staffer telling him or her where to go. he springs his own brain to the game. he is very intelligent, very sharp, he does things to him
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that are realistic and will be dramatically different to others, and they say it's a great temperature late and things to look at, and they're talking about entitlement or revenue reform, if you go around searching things for every plan that will enrage part of the public we'll never get everything done. >> why do you think after you cape up with a plan that most people on both sides of the isle feel is incredibly credible, why do you think the president blew off your plan, and your plan was a mix and tax revenues, and ryan is just cuts, what do you think? >> you can't lead medicare out, medicaid, it will suck up everything in the federal government, and the reason the
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president dumped it was the left, his pals, say you didn't do what you said you would on guantanamo, you didn't do this and that, and now you're talking about entitlement reform against poor old senior citizens, and the right would have said, you know, you say obama voted for this? the atmosphere on december 1st of 2010 isn't much different from now. if he voted for it there would have been a unanimous vote against it. >> don't you think most people recognize we can't afford all of the promises made to folks. your plan came up with a realistic way to cut things, at least a little, like defense like you said. how come your plan was blown off, what have you heard from the president? >> you heard what he said about ryan many months ago and chopped
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him to bits. that poisoned the water pretty well. it doesn't matter what you're doing hear. nobody will talk about thinking to do anything about this before this election. and between november 6th and december 31st, there will be a wirl pool of $5 to $7 trillion floating around. you want to play the game of emotion, fear, guilty, and racism and you're not getting anywhere. if you can't stand the word kmied, and you can't kmied an issue without compromising yourself, you're in deep trouble as a legislature. >> is it fair to say that with the issues that we will see a recession in 2013 in are you expecting the economy to dip back into recession next year? >> i there was in congress in the senate for 18 years and
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never saw any statistic or any kind of projection turn out. i would not play in that mess for anything in the world. i have no idea. i do know this, we owe $16 trillion, and we borrow 41 cents for every buck we spend, and somebody is goofy, that's all i know. >> what do you mean by that? >> if you have that kind of a hole and you're digging, quit digging. who is kidding who? medicare? how can that work? it doesn't matter what you call it, it's on automatic pilot, there's no cost containment in it except down the road. when do you a dock fix. the law said you're going to cut doctors and boy here they come, it's the same with every bit of society.
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interest deduction, a million bucks? who is kidding who? it's been revealed today that paul ryan sought stimulus money for his district while publicly deriding it. does that cut his credibility? >> i don't think so, there's a person that hasn't done that. senator kyle got a nascar operation into arizona, and then voted against the package. everybody does that with the debt limit and the highway bill. if that's the campaign issue destroying his integrity, then the laugh is on me. >> seems like the laugh is on all of us, actually. paul o'neil was on "squawk box" and they were asked what he would do about the debt and i would like to get your reaction. >> what about either one of those plans. >> they're better than what's on
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the table right now but they still didn't get where we need to get. cut to the chase, i would be out in the streets for a candidate who said we're going to kate a sensib sensible progressive tax. we're getting rid of the any knowledge income tax system is, get rid of payroll taxes, get rid of the disincentives to hiring people. wow, paul o'neil wants to get rid of a lot of taxes, what do you think? >> the problem was we didn't deal with it because the u.s. senate, while we were just getting started, put in the senate resolution, i don't remember who the co-sponsors were, saying that it's essentially the senate that there should never be a value vaded tax, and the vote was 84
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or something like that to 14. if you want to do that, that's fine, but you have to get rid of the present system. it terrifies people. that's what paul says is absolutely true as long as it's a cig lar thing a a singular thing. >> as far as tax reform, we have been talking about this a long time, how come nothing has been done about it in so many years. if we want to lower the rate and broaden the base, what's the problem? >> there's never any oversight hearing on that, and you hire the best people and pay them the most money to goat go get that tax code, and those expenditures
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and we said get rid of them all. there's 180 of them, you talk about pain, and boy there is stuff in there that twangs my heart. we say you do that and we'll give you something you're looking for. anything over that, you pay 23 and then go to a corporate rate of 26, then 36, and then a territorial system. there it is, we put it in there, it's easy to look at, but only about 10% of the american people use those tax expenditures and they're the wealthiest people, and they hire the best guys to get the best deal knowing once you get it into the social engineering tax code it would never come out. only 24% of the people itemize. the little guy has not even even
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heart of this stuff. >> anybody is going to try to have the best possible scenario, and if it's all legal, you want to ensure that you're getting the best deal if you're a business, corporate, or individual. let me ask you this, shifting gears slightly here, you're aware of mitt romney's dust up over his taxes. he says he's always paid at least 13%. the cat fight on returns is debatable if it's important. it. >> steve: it a good rallying point for closing some loopholes and doing tax reform for simplifying the system? >> sure, don't forget the guys with the most bucks gets the most tax expenditures. you request pick a level, and you can go to, let's just say you should just con if i case all of the wealth and anybody that makes over a million bucks here, let's just take away every
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yacht and every overseas thing, every little bit of the extra home, the whole works, that money would run the country for nine months. who is kidding who? we owe our deficit is one trillion, we're not threw yet. surely there must be some people with their heads screwed on right and their brain functioning to know that what we're on is totally unsustainable and unpredictable. who is fooling who? >> and congress goes on a five-week vacation, is there enough time to deal with this stuff after the election? we have one month and a half. >> we'll find out, they will be mucking around in it. my hunch is the guys without the guts, not going to do anything, and give this bs and mush all day long, are going to get caught next year, they'll go up to them after the markets call the shots. they don't care about democrats
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and republicans or presidents, they care about their money. and they're going to say we want more money for our money. and at that point inflation will kick in, and the little guy will get stung. and they'll say you have saved me and you didn't, and i'll get you on the next go round. that's raw democracy. >> senator, always nice to have you on the program, thanks so much. >> thank you. >> alan simpson, good guy. >> good speaker, good talker. some ebay users are up in arms about what they call a witch hunt against tho with alternative religions. >> she turned me into a newt. >> a newt? we just like playing the
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another day,noth a record low for facebook. julia boorstin breaking down this saga for us that's turning into a tragedy. >> yes, how low can facebook go. the day after the expiration, the stock continues to plummet down another 4 plus percent. volume more than double it's ten-day average. another social stock groupon fell as much as 8.5% today, recovering after a bit and off more than 5%. they downgraded the stock on concerns of slows growth giving it a $3 price target. bill? >> julia, thank you so much. stocks higher if you're just joining us ahead of the close here. the dow and s&p are set to posttheir sixth straight weekly gain. >> six weeks. >> that's what they call a summer rally.
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the nasdaq is set to close for a fooift week higher in a row. it's on very low volume and volatility. >> my one liner, don't fight the fed. that's the crux here. no matter that the the european situation is still in a funk and there are no solutions there, the fed is there, the ecb is there, and all of this easy money with rates at rock bottom levels are telling people you have very few alternatives for wealth reuaticreation. >> the yields that the fed is trying to keep down are moving up right now, kisuggesting theye not expecting much from the fed. >> is the fed getting political,
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they have to wonder why the fed is not getting active. e bay feeling the love today, shares up 2%. but you can bet it's not because of any kind of love spell. the online retailer announcing plans to ban the sale of magical items. apparently there is a big demand for magic with more than 6,000 active listing. >> so what does it include? you will have to go elsewhere to buy the demon eliminating potion, if you want a love spell, you have to do it the old fashion way, and hexes, you cannot get that revenge curse on ebay, and the sell of home businesses like tarot card readingings. >> so that's not a home business. >> it's all going away, who
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knew? we'll be back as we head toward the close on this expiration friday. john corzine considering opening his own hedge fund. would you invest with somebody whose old firm lost $1 billion in customer money? you know, ronny... folks who save hundreds of dollars by switching to geico sure are happy. and how happy are they jimmy? i'd say happier than a bodybuilder directing traffic. he does look happy. get happy. get geico. fifteen minutes could save you fifteen percent or more on car insurance. that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan,
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all right, we have one minute left in the trading day with a slightly higher market. we have a guest that has a stock that nobody else knows of. why do you like it among the high dividend payers out there right now? >> we like all high dividend paying stocks in general. it's on a nice space. very, very high as you imagine, but they came down with the shipping market. they can -- >> that's a high dividend payer not in a trade right now. thank you for joining us tod.

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