coming up. i department want to try to hit it out of the mark like josh did. >> and it held up reasonably well. better than best buy. >> we struggled, one of us was going to take one, someone was going to take the other. "closing bell" right now. hi, everybody. we're into the final stretch, welcome to belle billion. this market just can't get going, bill, after a pretty big warning. that's right, if fed ex is concerned, it makes a lot of people squeamish about christmas and we have friday's important jobs report for the month of

august. will a good job's number dampen hopes for stimulus. that could hurt the market since a fed from the move seems priced in at this point. >> that's right, we have the dow jones industrial average off of the highs and the lows right now. up about 70 points at the best. up now 16 points on the average. nasdaq is down, and the s&p 500 looks like this, a collar chart. back to that potential red flag for the economy. this is fed ex and ups after they cut their earnings for the first quarter. >> since they're seen as a bell weather, what do the warnings say about where the economy and the upcoming holiday season may be headed.

we have guests with us now to discuss it. todd, what does this warning mean to you? you're worried about other companies as well, right? >> yes, fedex used to be a approximaty. if you want to die sect the warning, look at some of the retailers out there. remember, amazon uses fed ex, and if they're coming out with this warning, it means that people are not spending money. >> it's interesting, despite your general optimism, you see general downside scenarios hear. is it a result of what we hear going on? >> absolutely, it's not necessarily fedex, we're in a structural deleveraging economy. we're trying to work off the excess with a under capitalized

banking system and high levels of unemployment, and they will probably be persistent for the next five to ten years. there's no easy solutions. >> wow, five to ten years. danny, you have to put money to work in the meantime. >> there's a lot of places to put money to work, actually. most of them, to be a good stock picker in this kind of a market, it's that kind of place, you have seasonal liquidity, we're looking at companies with great dividends, and great buy back programs going on, and there's quite a few of those as we see a lot of money moving. we're looking for yield and safety. all of those big names like fed ex, ups, coca-cola, those companies are providing that for investors. we have a lot of gloom hanging over this market right now. and the cliffs that we're about to fall after.

>> facebook just announced a stock buy back. that doesn't qualify it automatically? >> no. >> but you don't want to be a owner of buyer of fed fedex yesterday. it can't be just an umbrella comment, right? >> no, you're right. dollar cost averaging is the way to buy anything and thaefr for all investors, forever. you can't just take a shot one day. unless you're a day trader. when you're looking at over the course of a long period of time, you have to be dollar cost averaging and pay attention to the ups and downs. >> how can you tell clients to do that right now? especialfully this uncertain market. this is what's going to happen. fedex will be the domino. every other company will be

talking about this. these companies barely beat on the top number. and now fedex is coming out with a warning. >> guidance has been going lower since the beginning of the second quarter, so that's not new news. rick santelli, you guys must be waiting for tomorrow, right? >> we, i'll lel you look at what all of the traders are looking at. as you start to look at the markets, what really jumps at you is that ten to two year spanish spread is now even steeper than it has been, and it was the flatness that concerned them. it's been successful. it's the fixed income markets that have counter moved.

long and short story is that mario draghi did what was at the right levels and the right anxiety points and the market has been passive and not active. we could see a lot of action tomorrow, and many traders president it will be probably a bit of a disappointment. >> what are we waiting for, rick? what are you looking for out of draghi? what will it take to stabilize these markets from the europe standpoint? >> well, from the stableization, their going to look at things like sterilize. we went down with the twist. we're buying -- >> what does this mean, i'm seeing sterilize all over the headlines, what does it mean? >> it means the effects of the balance sheet on the purchase of securities doesn't expanse it

because for everything their buying there is something they're selling, and they're thinking more about buying on the short end of the curve, maybe the sterilization might be something like t-bills. >> yes, what about the important events coming up in the next week or so. the ecb number, the fed meting next week, more developments in europe as well. you take a wait and see attitude or jump in ahead of time? >> there is also presidential and congressional elections that will weigh on the economy too. so, with the amount of uncertainty that we have from a monetary standpoint, there is no question that investors are demands compensation. when we look at the s&p 500 at

14 times earnings, we think there is a huge equity premium priced into the market that investors can take advantage of today. >> thank you, danny, i'll see you later on the countdown. >> the market is back up. >> it feels like a fed day, doesn't it. >> it feels like we're waiting. >> stick around, you do not want to wait to miss what's still ahead on today's "closing bell." . >> still to come. fed up, can the central bank stimulate the economy enough to create more jobs? the surprising answer is straight ahead. plus, open season, more and more states are targeting big bangs for bad behavior. are their efforts misguided? and maria's power hour. don't his her interviews with

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welcome back, there are three more jobs reports until election day. what is the true cause for unemployment and can the fed do anything about it? steve leisman is breaking it down. >> is it structural or cyclical, and is there anything the fed can do anything about? structural is a result of deep changes in the economy. things like globalization, a kills mismatch, unemploymented construction workers and engineering jobs. what about permanent lower growth? the key, i cording to some, is

more monetary policy. take that away and look at what cyclical is. and things like temporary economic shocks, and earthquake, something like a hurricane. it can increase fland for employment, ber nak key said that qe boosted by two million payrolls. it went back up, never hit it's old level, and it took 19 years to midthat old level again. the united states over the same period. it went back up, back up, back down, and now here we are, if you can zoom in on the edge

here. this is the big question for the fed, what's the right level of unemployment to come back down to. is the old number something we can attain, or is the level higher. we looked at it from different angles and it looks cyclical. '08 and '09, things like construction came mack. unemployment rose too fast for it to be long-term government issues. programs like extended unemployment insurance have maybe kept the rate high. let's look at what the response was. lacker and bullard say there is a huge percentage of people unemployed for a long period of time. where is the deflation. all of this extra slack, then we

should have deflation in the economy, and the former president of the central bank. an expert in monetary policy, put up this chart. when you look at core inflation, there is no deflation. he argues thath race should maybe be higher. bill, a big debate in the federal reserve. what number should we be aiming for, and can balance to anything about it. this is a cyclical problem that can be addressed. >> he said as much for what they had done so far created $2 million. let's bring in somebody that's skeptical about the fed's ability to help with unemployment. diana was a white house economist under e.g.en and h.w.

bush. i guess you're feeling is that the fed just lowered rated enough to this point where they don't have much left in terms of ammunition, but why couldn't they help with the unemployment rate? >> well, the fed would lower rates to stimulate the economy, and that's what it did in the first part. with rates low, there isn't much oomph left in it, and awful of this is weakening the dollar, and gasoline prices will rise, food prices rise, old peent don't have as much interest rating from their savings, and it's weakenning the economy. >> so what are you looking for diana, what will it take to move the needle it nerms of job creation. >> to have job creation laich chairman bernanke said himself, he needs to stop the economy

from going off the fiscal cliff. we to do to something about the increase in spending. we need to do something about the regulations that prevent job creation. >> what about that, steve, did they look at all of the freezing impact he is having on the economy? right now many corporations are not wanting to hire more workers because they don't know what the economy will look like down the road. >> that's a great question, and what was brought up is a great point, can monetary policy do anything about it, and or can fiscal policies, policies from the congress do anything about it with things like job training programs, if you have a lot of junction workers unemployed and we need engineers. further education. is it more of a problem for the

fiscal authority than it is for the central bank. >> so ben bernanke has been saying we'll be there if growth doesn't pick up, has this been the right move? >> well, weakenning the currency never resulted in a stronger economy. look at turkey or argentina, they have weak currencies. we need something a predictable currency. >> you would not argue they can't adjust to differences between countries. for example, if one country is less competitive, the currency weakens, and it help it's become more effective. it's different than a car insurance that weakens for a market reason. there's no doubt that the federal reserve can put people back to work. that's not a question.

it could keep things wide open, and -- >> i think diana is doubting that. it's exactly what she's saying. >> the federal reserve has been weakenning the currency for the last five years. >> what's happened to the real traded weight of the dollar. it's not moved that much, and at the end of the day, look, relative to the euro, we're stronger than we were. >> that's because the euro has been declining. >> are we going up or down, diane, pick a way and go with it. >> you want to compare it to the euro with what's going on -- >> what's -- >> the euro has been weakenning. >> steve, how does monetary policy create jobs. >> if we lean on aggregate demand, and the question is can they create employment -- >> the answer is no. >> it depends on how much slack

there is. >> we're talking about what can it do right now, not at the binning of the recession, when interest rates were high, and then one could have aring it had had a positive even. rig right now they are at historic lows. >> what is the right amount of unemployment? >> not 8.3%. >> are we closer to the natural rate or is there still slack in the economy? >> there's a lot of slack in the economy. plus, the government is doing everything it can to stop job creation. it just put a $2,000 tax on if you remembers with workers that don't have the right kind of

health insurance. it didn't approve construction of the keystone pipeline. the government is doing everything it can to halt private businesses from creating jobs. >> i feel like i have been in a fed meeting. >> i'll tell you, bill, we're going to turn around one day and say remember when rates were at 3% and you could borrow so cheaply? >> it might not be that far away. >> the dow is up 10 points right now. >> remember this now famous quote by sandy wyle? >> i think what we should probably do is go and split up investment banking from banking. >> now, a response from the architect behind the merger of one of wall street's biggest banks. bill harrison will sit down with

me. he'll explain why all of the anger towards wall street is misguided. >> first, a tail of two retailers. what happened. which retailer stock are you better off shopping right now?

35 minutes left in this stock session. it's been a wait and see day, traders sitting on their hands with the dow drifting in and out of negative territory because we're waiting for a meeting tomorrow to learn about the plan. right now the do you is up about 15 points, trying to avoid the third down day in four, and fedex's profit jougt look last night did not help sentiment. you see materials and telecom trading to the upside. >> time for talking numbers. out of energy and into retail.

shares of dollar general climbs half a percent today. the low end retailer as been a bargain, compare that to the high end company like tiffany down 12% on the year. should you continue to hide out in the low end? i have ennis tanner here, and dana telsey. >> back to school numbers are good, they upped their guidance, dollar general, dollar tree, low end consumer shopping at these stores. >> retail has been working, huh? what is the chart telling you? >> it's been a very strong stock

all year. what's most important is the $48.50 level was broken, it's above that, and i think it's constructive along as it's above that level. >> you want to buy it? >> i would put it as a hold. >> i think lowered crude prices in the last week have been a big factor and international growth be e ag concern. >> dana, would you invest? >> sales momentum always wins i think we will continue to see the low end do well. >> you're at a hold, so almost a match up story. >> maria, we have a little over 30 minutes left in the trading day. you know we haven't heard much

about the libor rate rigging scandal, now the states are looking to what the banks did and if they can get a may day out of it. and how about this for austerity. now they want the greeks to work six day weeks. 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. tdd#: 1-800-345-2550 call 1-866-294-5412.

welcome bank, several states are taking aim at the banking to find out if the rate rigging scandal cost them my money. the state treasurer of north carolina says a settlement with banks could be huge. >> she joins us right now are the democratic national convention. thank you for joining us today, appreciable appreciate it. >> thank you. >> have you gotten a handle on how much money it could be? >> we do not, it is an unprecedented crisis and we have

to do a lot of analysis. so you're looking at pensions, interest, swaps, and we're thinking in north carolina it would be over $10 million which is our threshold to look at litigation. >> which banks are you targeting specifically? >> we're just doing the analysis right now. ly say that bank of america and jpmorgan were two of the banks involved. >> how did they do it, can you walk us through how they manipulated the rate? >> we don't know how long or mouch they manipulated the rate and that's work we're hoping to find out. in the meantime, our biggest exposure is interest rate swop where's we tried to protect against volatility interest rates, where we would pay an

amount and they would pay us back, and if the interest rate was lower, our payment was lower. >> you think it would be lower -- is it that big of a deal? >> the two swaps at the state level are $1.3 billion in north carolina and that's not counting the local government swaps, the university system, and we're just one state. so i do think this will be large, but there's a lot more analysis that needs to be done? >> how many states do you imagine will be getting done in this? >> i think there will be over two dozen states? i just talked to eric schniderman. >> i know you're also focused on the state's public pension and interest rate swaps, how would

libor impact investments. >> in north carolina we looked at that and we think the impact will be fairly minimal on the investment side. we have fairly minimal. >> you're doing the due diligence right now. what kind of time table are we looking at? who will this progress do you imagine? >> we teed critical information from is federal and national level. once we get to the fourth quarter, we can go a lot further with our analysis. >> as the conversation about a settlement begun with jp morgan or bank of america? >> not at all, right now it's trying to get that grip on the wide spectrum of impact this

could have on our state and my department, and then we'll work with the ag to decide if there is league action to be taken. >> and the international banks, which ones are you looking at there? >> the ones involved with the barclays, right now we're looking at impacts and then we'll decide what the scope is. there could be criminal pnlts if they didn -- hopefully more information will come from the national level. >> thank you for joining us today. >> final stretch for the trading day, the dow industrials up about 20 points right now. >> september may be the worst month for the markets, or second worst, but investors are increasing their investments in stocks. is that bullish or bearish.

>> and after the bell, the man behind the merger from jpmorgan chase. bill harrison will join me right after the bell. but first, before we go to break, the dividend. which stock is outperforming this year. ann inc., 1-800-flowers.com, or gnc holdering? today, our financial advisors lead from a new position of strength. together with bank of america, they have access to more resources than ever before. a steadfast commitment to help you achieve your financial goals in life. that's the power of the right advisor. that's merrill lynch.

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just before the break, as part of the dividend, we asked which stock is performing this year, ann ink, 1-800-flowers.com, or gnv holdings. >> here is something we have not heard at all lately. facebook one of the biggest winners on wall street today.

over to you, julia. >> after hitting another all-time low yesterday, things are looking up for facebook. shares gained nearly 5% for mark zuckerberg, and the company reduced the shares by nearly 4%. and linked in shares are also soaring. jeffreys upgrades from a buy to hold on expectations that it will beat and raise earnings. and yelp shares are up more than 6% today on comments about the growth prospects. >> jeff cox finding that levels have fallen, and investors are putting money into stocks. >> popp pisani is out on the floor somewhere here, they're

putting money to work? >> i call this the cross current market. i can give you five great reasons to be bullish, and five to be bearish. you follow the money, it's still kind of saying heem are ses tant, but to moe they're kind of leading indicators. the sentiment indicators are starting to get bullish as you said in the teaser there. cash is starting to fall, the money is starting to come over to the sidelines as far as the sentiment surveys go. >> they're off, as they become more bullish, that can signal a top of some sort. >> when they get to a top -- >> look at this market, it's trading up, it doesn't want to go down, obviously money is moving in the market.

>> that's still pretty low. they're not very great right now. it's a melt up market, not a lot of volume in it, 50% bullish, and i did a story last week that basically everybody in wall street is taking up their s&p 500. >> so you're looking for protection in this market right now. >> i'm looking for a little bit of upside, i think there could be not a black slump, but a charcoal gray one down the road. what's the potential upside and downside. i feel like because serve so pessimistic is a bullish sentiment. especially economic and political outliars out there. >> bob, you have the data that showed a lot of triggers here are looking for the downfall.

i agree that it's pessimistic, i don't think a lot of money is coming into the stock market. i think we all know about the in flows and outflows. if you can convince everybody the eu is not a good bond buying program, you can argue for the expansion of the market. instead of 14 times forward earnings, maybe 14 time earnings. there is a counter vailing force here. a lot of people are flat going into the close of the year. 1400 is where a lot of people have their price targets. >> there's not a lot of long term commitment in this market, cash levels, lounge does that stay like this, or is this a trader's market? >> there's a lot of dead money out there too. you look at the junk bonds, that is sort of another indicator and that money has to start going

some place else pretty soon. this could be a real quick snap back. you make a great point. it's a five minute market. things can change like that. >> very headline driven, but you have to put money to work somewhere, where do you put it. >> i think if anybody will have corporate gains, it will be apple. but i'm not somebody that's getting out of my positions, but i don't know that i'm building a lot of new positions either. i'm protecting what i have. >> carol, you don't see profits going up hooert, do you? >> no, i agree. i think multiple expansion is the only way you get a driver in this market. >> if you look at estimates, though, the third quarter was

basically flat or negative. the a the analysts. >> they think financials earnings are going to be up 22%. that's according to capital iq. >> they get a look in the third quarter and then they revise their earnings. >> what about the election? >> what about it? i think investors are pricing in a romney victory here. >> i think so too. >> you see people start to front run that. >> and if it doesn't happen, we will see a quick, fast, and furious -- >> is that what you're reading, bob? is that what you're hearing on the floor here? do they think romney will win? >> the floor is republican and they want romney to win.

i don't know that it's a great indicator or anything. >> i think people are waiting to see what will happen. they're not putting money to work for hiring or r and d. >> but the money is there. >> what is behind the rally that doesn't want to go down other than the fed? >> well, the ecb, and just printing money and that whole thing. i don't think there is a lot behind it either. we're trying to have a rational discussion about the markets. >> silly us, what were we thinking. >> we're going towards the close, about 15 minutes left in the trading session. >> so creditors have a demand for grease, a six-day workweek. you wouldn't mind giving up your saturday, right, bill? new greek curse words have been inventing at the hearing. >> we'll tell you what those words are, and from reality tv star to wall street investor,

kim kardashian will be here next hour to talk about her big play to make a mark on wall street. >> kim kardashian and maria bartiromo in the same stage, pay per view coming up. stop! stop! stop! come back here! humans -- we are beautifully imperfect creatures living in an imperfect world. that's why liberty mutual insurance has your back with great ideas like our optional better car replacement. if your car is totaled,

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grease as we know has implemented several austerity measures. all to meet terms of the bailout plan they had last year, and now they have another concession. >> they're reportedly demanding greek leaders mandate a six day workweek for the next round of bailout funds. so go to work six days and then we will give you the money. they're basically making a point, you cannot not work, not pay taxes, put your money overseas and think you will all

of the money in the world you want to spend. >> greece is a basket case economically, something has to happen. as we were discussing here in 2008, extraordinary circumstances demand extraordinary solutions. and that is one of them. let's face it, they're in trouble and they will have to pony up to just the money they going to get. >> this is just trying to stick it to them, it's not necessarily going to put a dent in anything. >> do you take a wage cut then? something has to go. the germans will not approve any more bail out money. >> and that'sy think grease will get out of the euro. >> this might be the kind of requirement that would force their hand on that issue, that's for sure. as much as some of the european

leaders pay lip service to wanting grease to stay in the euro zone, it could be the way of nudging them out the door. >> it's a message. >> yes. a six day workweek. >> it's great. okay, we all thought about that now. we're going to come back with a countdown for this wednesday. >> and then i have an interview with bill harrison who will defend the big banks and explain why all of the animosity is misguided. [ male announcer ] what if you had thermal night-vision goggles,

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okay, if they're on schedule, we have about five minutes left, if they're on schedule, the ecb meeting will start tonight, meet again tomorrow, and then we will hear from mario draghi on what they plan to do. the market's anticipation here, look at the yields on the spanish ten year bond or note. they continue lower, now down to 6.24%, and then look at the italian yields also backing further away. remember when the italian yields

were better, and they're at 5.5% right now. the euro conversely going higher. now up to $1.25. that was at $1.20 when mario draghi made the comments that they would do whatever it takes to preserve the euro zone. the jawboning, and the expectations. >> yes, and now we need to see the bacon. we need to hear a plan for the short term, keep rates in check, manageable so these guys pa pay their bills, as well as long term so they can get their arms around the unemployment situation. >> they're looking at stabilization, not a solution. what does our market do right now? we're in wait and see mode.

we usual any follow the euro. the zone last not did not help today. yields for our own treasury markets have been higher today, now the ten year yield is almost to 1.6% for a time today, so, our markets will respond as well by the time we learn. it will be on the open. >> no doubt everybody was waiting on the ecb and the draghi comments. >> i cannot wait to hear your interview with bill harrison. >> william harrison, jamie dimon's predecessor, and who else you got coming up next hour? >> i'm very exciting about bill harrison, and we're also going to talk to kim kardashian who is creating a new bland and trying to make her mark on wall street.

so i'll see you at the top of the hour. >> one more thing i want to show our guests here, our three sectors are positive here today. materials still growing here, and then the consumer discretionary. carol roth, would you buy, bill gross said yesterday that he feels that whatever the ecb is going to do is inflationary. would you buy gold? >> i don't know they would touch gold. i think it will feed the market tomorrow, so i'm expecting unless something very, very strange happens -- gold thousand -- >> would you take it? >> it's a little rich for me at these levels. >> what kind of language are you looking for out of the ecb.

>> you want concrete. >> yes, we want something concrete from them. the chances of that happening is minimal. >> what concrete, the amount of bounds they would be buying? an unlimited program? >> how much they're going to buy, how long this is going to take. the time span, how much pain they will be willing to take, and once you know that, that talks a lot of uncertainly out of the market. a lot of what happened is no risk in this market. this is more of a traders environment than a investor's environment. >> it's going to be a lot of wording, and i don't think there will be a lot of substance. >> there's a lot more coming. >>