[ male announcer ] the spark business card from capital one. choose unlimited rewards with double miles or 2% cash back on every purchase, every day! what's in your wallet? [ cheers and applause ] hi, everybody. good afternoon. welcome to the "closing bell." i'm maria bartiromo. we have a big show ahead. a huge lineup. i hope you'll not miss a minute of it. coming up in the program, i'll be talking with republican house majority leader eric cantor and the number two democrat in the house, steny hoyer. also ahead, an exclusive interview with aig ceo about his big move to get his company out of the government's hands. later on, we'll talk to new york

city mayor rudy giuliani. then we have this rally going on. >> we do. we look forward to all of those big interviews. do not touch the dial. a big two hours coming up here. yes, we have this exciting rally on wall street today. the dow poised to close once again at its highest level in more than 4 1/2 years in anticipation of a lot of the events still to unfold this week. tomorrow, thursday, and into friday. here's where we stand. the rally from the get go this morning, haven't really looked back much. off the highs with the dow up about 75 points right now. 13,329. the nasdaq is up just a fraction right now. that's been the lagger today. we'll talk about that coming up. now at 3104. the s&p 500 index today is up 1/3% or five points. >> a lot of momentum in this market. investors clearly in the mood to buy ahead of the policy decision meting and a series of key meeting and votes on the future of the european debt crisis.

in fact, check out these guys with these nifty robes that you see here. >> you like that, don't you? >> the fate of the world could rest in the hands of these german justices. who will vote on the limits of germany's power to say how its money should be used, how it should be spent on measures to save the economy in europe. any setback could hit the markets hard. we're waiting for this decision coming out tomorrow. >> could you see our supreme court wearing those outfits? i don't know. i don't know how ruth bader ginsburg would take to that. let's talk about this key event and other issues that could affect inves ves to bes on this busy week. we have donald cox with us. don, what do you make of this rally? this is a market that just wants to go higher despite the concerns both here and in europe, right? >> well, it's a liquidity driven rally. the goal has been moving along with it.

when those two move up together, you know what's happening is a perception that there's going to be yet more liquidity coming into the system. probably both in universieurope united states. that keeps the action going. >> is that a good thing, don? what do you think about that? is it a good thing we're seeing such momentum in this market ahead of the fed policy, ahead of any of the policy coming out of any international central banks? >> what it does have is a very good effect from the standpoint of mr. obama because, although -- well, people say the unemployment number was terrible, so that's bad for obama. all the polls show that if the s&p 500 is doing really well, that the people out there tends to be more tolerant of some bad economic numbers. on the other hand, if the s&p is cratering and we're getting bad unemployment numbers, then that's good news for mr. romney.

>> september and october typically are volatile periods for this market. some tough times right now. ron, one of the expectations is that the fed may add liquidity, but they may also extend the period of time that the fed will keep rates low for that period of time. maybe into 2015 is the expectation. is it a bit disingenuous when you consider that ben bernanke's term in office is up in january of '14, i think it is, to extend it beyond the time when you could have a big change in the makeup of the federal reserve. >> you're going to have a big change in january if mitt romney wins and makes good on his promise to fire ben bernanke. that could change in a couple months from now. i think the fed institutionally is driving the markets towards the realization that rates have to stay down in order to accommodate an economy that's growing as they would like to say below its potential. in fact, i was sent a note that janet yellen, in a report she created, market participants

actually expect rates to stay extremely low until 2017 before the fed starts to actually really shrink its balance sheet. some of this is semantic. i think the fed is going to do other things like stop paying the 25 basis points. i think there's a lot to comment. i think it's positive. it may outlast ben bernanke. >> samir, what do you think? do you want to buy in this rally or sell it? >> it kds go a little higher if the fed announces qe-3 on thursday, sure. you could have a little bit of an overshoot up to 1500. for us, we have a year-end target of 1400 to 1450 on the s&p. you've got a lot of big events that, you know, everybody's mentioned already that could lead to a little bit of disappointment and a little bit of setback. you know, for us, it's a really good time to kind of rebalance some of those classes that haven't done so well. >> does that mean you're selling into this rally, sameer? >> yeah, i think you trim equities a little bit, especially on the international side. you've seen a big move in european banks. i think you take some of that

money and keep a little bit of dry powder on the sidelines in case one of these events doesn't go as planned. >> rick, you had this moody's warning. the markets didn't miss a beat here. what do you make of that? >> well, listen. i, unlike many, consider the words of these rating agencies important. i know they didn't do a good job leading up to the crisis. then again, who did? i do think the assumption that every rating changer, outlook change that isn't for the better with regard to the u.s. and big developed countries is going to be as meaningless as the first round, i think that's a flawed a assumpti assumption. >> the demand for that three-year note was very strong today. >> it was. i should have been all over that because many traders on the floor after the auction were showing me comments by the likes of firms like goldman who said the short end is very cheap relative to the high possibility of qe-3. >> and not to mention the fact i believe congress is working back

door on something like simpson bowles. the president snuck in his acceptance speech of creating a program like that. i really don't think we're going over the fiscal cliff. i think moody's bmay be trying o put additional pressure on washington. >> you know, it's interesting. if you look back a year ago when we got the downgrade, that was the beginning of an enormous flood of money moving into treasuries. do we have a repeat if we get downgraded again? >> well, i wouldn't want to go that far in saying that. the stock market could go up and people could allocate assets away from bonds into stocks, all other things being equal. that's a tough call. >> don cox, you made the case for gold earlier. how high do you think that could go? >> well, i think that there's two things happening. gold is going to trend higher, but the big thing that's changed things is that gold stocks are now solidly outperforming

bouillon. what that tells me is there's a change of thinking among investors generally about the validity of this and why they need to kind of protection. i would take that as a lot of investors have concluded that they're going to solve problems near-term in europe, that obama will be reelected, which means the trillion-dollar deficits will continue. that's going to be really good for gold because gold did well from the time nixon closed the gold window. it collapsed once margaret thatcher and ronald reagan and paul volcker got in. what they need is another big spender. they're going to get it. >> gentlemen, thank you for your thoughts on this momentous week for the markets. we're heading toward the close. markets coming off their highs of the day with 50 minutes left. the dow is up 74 points. >> don't go anywhere. it's a huge day here on the "closing bell." ♪

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a little more than 45 minutes left in the trading session. on a rally day, stocks have been

many positive territory much of today's session. right now the dow is up 71 points. we had been up more than 90 points for a time today. the dow aiming for its highest close since december of 2007. the level to watch is 13,365. so we're about 40 points away from that right now. energy, financials, telecom among the leaders today. maria. >> ratings agency moody's sending a message to washington today. get your act together or get ready for a downgrade. all this in the middle of a highly partisan election where many doubt both parties will be able to work together to get anything done. we get reaction right now from eric cantor. good to have you on the program. thanks so much for joining us. >> maria, good to be with you. >> what is the reaction on capitol hill today to what moody's said? >> we continue to want to go and provide solutions and resolve the differences here in

washington. all there's been over the last couple years is a one-way street. we're looking for some action by the president and the white house to come to the table with us on all the issues that we're confronting, whether it is the fiscal issue of the deficit, whether it is the sequestration issue, or whether it's the tax issue. we continue to put forward solutions. we have passed bill after bill. the senate has been unwilling to take them up. frankly, the president's been unwilling to meet us to sit down and try to iron out the differences. >> so what are you willing to give on, congressman? when you look at what the two sides are basically sticking to their guns, can it really be realistic to say taxes can never go up, that, you know, taxes should stay where they are forever in any environment? what are you willing to give on? >> first of all, raising taxes is not the answer. we all know that. this problem is too large to think we can tax our way out of it. what we really need to be

focused on is how big do we want the government to be, and begin to assess our priorities so we can manage down the deficit. that's clearly how it is. once we get a plan in place where, in fact, we've got a solution to the overspending, you know, we can begin to tell people their tax revenues will go to be paying off the deficit. but the problem is, maria, there's been an unwillingness to face up to the hard facts that there are obligations that have been assumed by the taxpayers, frankly, and there's not enough ney those obligations. that's what we have to sit down, iron out the differences, and go forward. >> i know you guys have just gotten back, but what's been the discussion in terms of getting together on the fiscal cliff? has the work begun after the vacation? >> well, clearly this week we'll have on the floor the continuing resolution, which is the funding bill for the federal government, that will take us well into march, beyond the election. we continue to reach out to the white house and say, look, please come and join us, mr. president, on this issue of the

defense cuts. you know, we've got a severe defense cut facing the pentagon that will hollow out our military, affect the ability for us to defend this country, and we in the house have proposed a solution to that and said there are some other ways that we can reduce spending and save costs, but please at least tell us where you stand on this. we've got gotten an answer on that either. >> so you haven't gotten an answer on that yet. let me ask you about the timing on this. i know the defense companies are going to have to alert employees if, in fact, there will be job cuts. there's a deadline in doing so. i think it's october 1st. what is the timing? when will these companies start having to explain to employees, look, you're going to be cut because our spending programs are going to be cut? >> there's a requirement that federal contractors have to alert their employees if there are going to be layoffs. there's just been inaction on the part of the president and the white house on this issue of sequestration. you know, secretary panetta this morning was saying that the

pentagon hasn't taken any action. the president hasn't taken any action. these defense contractors are going to have no choice to notify their employees that there are going to be massive layoffs. i'm from virginia. a big defensive state. this is going to mean real jobs in a state that will feel the impact of these cuts that the president seems to support. >> you know, ironically, if we did go off the fiscal cliff and no deal gets done here, it might actually make moody's happy. they're threatening another downgrade. but it could mean higher taxes. is that what you're expecting? >> we don't think higher taxes is the answer. we feel the confidence in the economy rests on the fact the government has to start getting it right. for too long -- >> but it looks like that's where we're going, right? >> i don't think there's any question. if mitt romney wins this election, and i believe he whether, we'll make sure that

taxes don't go up and that we go about reforming our tax code the way that most of us on either side of the aisle want to see happen. if the president gets his way and wins the election, taxes are going to go up. it's very clear to me. >> you know, it's man power today saying that -- of course, they track jobs and hiring. they're saying flat out the unresolved fiscal cliff is, in fact, stopping companies from hiring. they are just not going to do it with these uncertainties. so given the state of the economy, this terrible jobs number just last friday, how is it that you and the democrats aren't getting this done right now? i mean, is there an urgency here or no? >> there's absolutely an urge y urgency. we have said from the beginning we want to work in good faith. we have worked in good faith. we haven't seen any reciprocal action on the part of the senate or the white house. that's the problem. and honestly, you know, if you think about it, maria, the fiscal cliff were to occur, what does it mean to investors and business people when they have to pay higher taxes? it means that the risk premium

has just gone up. so if you want less of something, you raise the price of the risk, and you'll get less of it. now's not the time to have less investment resulting in less confidence. that's why we're looking for a more sensible, reasoned approach where we can fix the problem with the deficit, but the president needs to come sit down with us. for two years now, he's not been willing to actually sit down, appreciate the arithmetarithmet say, you can't tax your way out of this. >> let me move on to this bob woodward book. it details the failed debt talks between the president and speaker john boehner. it details that there was tension between you and mr. boehner that, you did not agree with the direction he was going with the president, which was a deal that included tax increases. does the book paint an accurate picture? >> you know, john boehner and i saw eye to eye on the fact that we don't think increasing taxes, especially in an economy like this, helps job creation.

somehow it helps our economy and the confidence level. we never differed on that point at all. it was the president who continued to insist that the only way to go forward was to raise taxes. again, i think that, you know, the budgeteers will tell you, you can't tax your way out of the problem, as i said earlier. the real focus should be on curing the spending problem in washington. that means we've got to deal with the entitlement situation. we have to deal with health care entitlements in order to manage down the debt. that is the first and foremost we've got to do, otherwise you're throwing money into a hole asking people to pay more taxes. >> so is that the biggest area to cut in your view right now, entitlements? are there other low-hanging fruit you can talk to us about that would move the needle? >> there are issues abounding here in washington. when you have $3 trillion worth of spending that the federal government is about.

in fact, i participated in discussions with vice president biden for seven weeks. in fact, we were able to produce, with a group of us, a list of at least $2 trillion in cuts that would have gone at least some of the way towards what we need to be doing. there are all kinds of areas that we can cut. but let's not mistake this. the congressional budget office, omb, all of them will say if we don't get a handle on our entitlements, you're not going to resolve the deficit situation. so that's why we really ought to be focused on this, and the president has just been, you know, awol on this, has been unable to come forward with a solution. and again, we really need -- we all realize the severity and you are -- urgency of this situation. i wish the white house would. >> you keep saying the president won't come to the table. if the president wins the re-election, is this going to be an ongoing theme?

how are you going get things done? >> the election is going to be dispositive on the issue of taxes. mitt romney is not for taxes going up. he's for tax reform, simplifying the code, and bring down rates. the president has insisted the only way he'll go forward is to raise taxes. the impact of raising taxes falls on small business people, our job creators. if we want to see jobs and investment return, we don't want to see taxes go up on those individuals because that's who we need as an economic engine. i do think going forward the election will really answer this question if we can't get it resolved before. >> not to mention the number that the president keeps talking about is anyone making more than $200,000, which, of course, is a number that includes a much wider wrath than what you would think in terms of the millionaires and billionaires

that the president talks about a lot. let me ask you this, leader cantor. the latest abc poll, washington post poll, shows the president has an edge over mitt romney on the economy right now post the convention. can romney win if he can't edge the president in this department, something that romney and ryan have been putting front and center? >> mitt romney can twhwin this election and will win this election. i think a lot of voters, especially those who will be deciding this election, the 5 or 6% in the middle in about eight states who are just starting to tune in post-labor day. this is a terrible economy. the optimism is just not there. most of these voters are at home. they're worried about how they're going to put their kids through school, worried about how they're going to deal with health care costs for their elderly parents, worried about making it through the month. mitt romney is the one who has a pro-growth economic plan, who's going to put in place an energy solution. we can see jobs come from that

sector as well and help fuel the competitiveness of our country. >> so how do you explain that poll then, leader cantor? >> i think that there's still -- the two sides have sort of solidified in their positions, but there is that swath of voters in the middle. some say 150 counties, 3 million voters, that are going to decide this election in eight states. so, again, i think these folks are the independents. they don't necessarily pay attention to all the back and forth, but i think now traditionally after labor day that, will occur. mitt romney and paul ryan's pro-growth message will resonate with folks who want to see jobs come back and see this economy grow again. >> representative, we look forward to talking to you more about it. thanks for your time today. >> thank you, maria. >> see you soon. representative eric cantor. later, we'll hear arguments from the other side of the aisle when i talk to the number two democrat in the house, steny hoyer. join us for that.

meanwhile, in the final stretch on wall street today. we have a rally under way. just 35 minutes to go. >> slowly losing altitude here. luxury retailers are feeling the heat after burbury's earnings warning. is it an toupt go shopping for these stocks, or is it tough times ahead for the luxuries? we'll talk about that coming up. then after four years, the government is finally a minority shareholder in aig. what's next for the giant? how is the looming fiscal cliff impacting business? we'll talk to the boss. he'll join me at 4:10 p.m. eastern on "closing bell." is now within your grasp with the e-trade 360 investing dashboard. e-trade 360 is the world's first investing homepage that shows you where all your investments are and what they're doing with free streaming quotes, news, analysis and even your trade ticket. everything exactly the way you want it, all on one page. transform your investing

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welcome back. it's fashion week in new york city. with so many concerns about the economy, how are the companies under the tents performing versus this time a year ago? courtney reagan joins us now at a look at who investors should be watching. >> hi, maria. you know fashion week is of course hinged to growth in the high end. burberry's profit warnings today did show some names lower. but not everyone is concerned. morgan stanley reiterating its shares of coach. potentially creating opportunities to better compete with michael cores. >> michael has an incredible connection to his consumer. he really understands what his consumer wants and what a woman can wear. so when you see michael's runway shows, they're very easily translatable into fashion that

every woman can wear, which is what's made him so incredibly successful. same is true of ralph lauren, tommy hilfiger, and calvin klein. >> fifth and pacific has returned 57% to investors. that's a stark turn around year over year. lvmh shares also turning around sharply. tiffany and burberry have reversed course the other direction. one thing that's clear here at fashion week is that even when economic times are tough, consumers will find value and pay for what they perceive as unique, wearable fashion. now, it's up to the buyers to find it. maria. >> thank you. bill, over to you. >> talking about luxury stocks, they've been losing grounds today, but not because of what's going on on the khcatwalks. burberry issued a profit warning today. so is it a fashion faux pas, if

you will? let's talk numbers on the technical side. it's richard ross. on the fundamentals side, dana. what did you make of that? it seems that not all luxury companies are immune to the downturn of the economy these days. >> i think that's exactly right. not all of them are immune. some of them doing company-specific initiatives in order to help themselves. certainly what we heard from berburberry today, it is more company specific. the reduction in the number of opening price point items and the focus on higher end items, in that time of environment, that change led to weaker sales. plus the fact that traffic was weak. you talked about michael cores. their opening price point items, the newness this they have. newness and price are making a difference. >> okay. well, as we said, rich, that stock's been lower today after the burberry warning. what do you make of the chart? >> when it comes to luxury retailers, we say don't get played, get even.

michael is a great way to do that. this is how you rock an ipo priced at $20, closes up 25% on the first day of trading. up 100% from there. back in august, we see the stock takes out $50. breaks out of an eight-month trading range. we've pulled back on the heels of this disappointing burberry number. we're testing key support at 20-day moving average. we think this is a compelling entry point for an otherwise compelling high-end retailer. we're a buyer of michael kors right here. >> even at the higher levels. interesting. dana, what would you do? >> i'd be a buyer too. when you look at how these companies grow, they're expa expanding their product line. they have good initial product. chanel opening more retail stores. they have more opportunity globally. >> d.a. narks rich, good to see you both. thank you your thoughts today on michael kors. >> bill, 30 minutes before the closing bell sounds for the day.

we have a rally under way. it is off the best levels. dow up 67 points. former nyc ceo does not think too highly of the facebook ipo. listen to this. >> the brand is broken. the credibility of this company is going to be in question for a long, long time. >> can facebook ceo mark zuckerberg say anything to restore investor confidence when he makes his first on-stage appearance since the ipo in may today? don't forget, we'll have complete coverage of zuckerberg's speech tonight on fa"fast money." that's after the "closing bell." apple shares up more than 60% in 2012. sweet return, but should you do the unthinkable and sell it before it unveils the iphone 5, which is expected to happen tomorrow? somebody here says absolutely. stay with us on the "closing bell." tdd#: 1-800-345-2550 you should've seen me today. tdd#: 1-800-345-2550 when the spx crossed above its 50 day moving average, tdd#: 1-800-345-2550 i saw the trend. tdd#: 1-800-345-2550 it looked really strong. tdd#: 1-800-345-2550 and i jumped right on it.

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check out shares of apple here. up better than 60% year to date. of course, we're all focusing on tomorrow's big event when the technology giant is expected to unveil the much anticipated iphone 5. >> that's expected to bolster apple's stock and sales. some saying it could boost gdp.

>> this is the apple economy, isn't it? >> i guess it is. some are saying this could signal a top for apple. eric chan is in that camp. but john says there's more room to grow. john, you think the juggernaut can continue, yes? >> absolutely, i think it can continue. you only have to look outside of u.s. shores to see why. the iphone 5 supposedly going to support china mobile's proprietary 3-g network with a subscriber network of over 670 million. that alone should be reason enough to be very, very excited about apple stock in the future. >> so eric, you're bearish on the stock, right? you don't think apple can keep growing at this pace. you're on the other side. >> absolutely not, maria. when you look at the company, 2/3 of revenue is coming from iphone sales. given that several analysts have said that the smart phone market is already saturated, it's

competing with the sea of android companies such as samsung in a market where you've only see 6% growth in smart phone sales this year. >> well, i mean, you know, isn't it true they've got a pipeline of products? i mean, whether it be new tablets, new mobile phones. so won't that be enough to generate growth? >> i see it possibly generating some growth, but when a product, one product is so dominant like the iphone for apple, you've got to be concerned that the other products have to come up and really start showing the same type of growth that the iphone has. >> john, do you think that's valid? >> no, i don't. the smart phone market is very much what have you done for me lately? android owners are very fickle. 17% are saying they're going to look to buy an iphone with their next device. if you go outside long enough and say it's going to rain,

eventually it's going to rain. i would not bring your umbrella and prepare for that. >> let me ask both of you. jo john, is there a level to which you would sell apple? eric, is there one where you would buy? >> apple has had growth year over year. i say ride this train out. apple has a proven track record of improving twices. now would not be a time to sell. i would like to see two or three jen rapgss down the road and see what apple is doing. >> i'm pretty cautious because if you look at the overall market share of what's going on with the smart phone market, samsung has definitely been dominant compared to the rate of growth of -- >> but is there a level at which apple would go down to where you'd start to buy the stock again? >> i'd love a stock split, but, you know, i think that it -- >> you think we'll get it? >> we might get it.

>> all right. >> put it in the dow, theoretically. gentlemen, thank you both. >> thank you very much. >> thanks. >> we might get that mini ipad too. all right. heading toward the close. kind of holding level here with the dow up 66 points. >> with the dow at nearly a five-year high, will a german court and our fed derail the rally? >> is our nation heading for another credit downgrade as moody's warned? at least one top democrat isn't so sure. >> i don't necessarily believe everything the credit rating agencies tell them. i'm not going to use them to judge whether our country is strong or not. >> but moody's has warned of another credit downgrade if our leaders cannot make a deal. will that spark republicans, democrats to work together on a deal to fix the fiscal cliff? i don't know. what do you think? the number two democrat in the house, steny hoyer, weighs in on that issue at 4:30 eastern time. stay tuned. sh card from capital one, sven's home security gets the most rewards of any small business credit card!

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more volatility ahead. >> what does that mean? are investors too quick to buy into this market? steve sach joins us now. gentlemen, good to have you on the program. what does that mean, more volatility? how do you prepare for more volatile, and are you buying into the market or selling? >> what we're seeing our clients do from a flow per spespective prepare themselves. some of our volatility based products, we're seeing them take a view that while the rally may no the be over, they want to protect themselves for the uncertainty driven by the election coming up. obviously, still the headline risk out of the ecb. watch the factors we dealt with over the summer but sort of quieted down. >> how are they doing that? >> mostly going long are volatility products. they're preparing themselves to hold equities but to continue to hold hedges against them. a lot of our products we use for risk management purposes and our volatility products are used in the same way. >> mike, do you get the sweaty

palms? >> we always have sweaty palms, given the kind of volatility we've seen historically. you know, certainly we've seen it come down significantly. saw it pop up again yesterday with the vix up as much as it was. at the same time, we still think there's room left for this rally. >> so you're not going to sell at these levels? >> we're not selling at these levels, no. >> are you adding to positions? >> we've been adding to positions, certainly. there's things you can do to tweak your exposure. you can get a bit more defensive sometimes. you get more offensive other times. right now the way the portfolio has been working quite well, and it goes essentially to, you know, higher growth, higher quality companies that are doing well in this kind of market, this uncertain type of market. >> stay with your winners then, i guess. >> bob, where are you seeing the flow today? yesterday we talked about where the leadership was. those financials. are you still seeing momentum in those groups that have taken the lead? >> stocks, japan, germany is

getting good flows right now. financial stocks are getting good flows. you know what's hitting new highs today, maria? exchange traded funds with high-yield bonds in them. the jnk, for example, is hitting new highs on very, very large volume. what's happening here is they're trying to front run the fed. they're going to continue the zero interest rate policy. those high-yield funds would be beneficiaries of that because people pour money into stuff with a higher yield. there's one. >> would you buy high-yield bonds here, steve? >> i probably wouldn't be afraid to buy high-yield bonds here from the perspective of there's still that chase for yield going on. we obviously have a good insight of what the fed is going to do. from a valuation perspective, balance sheets look good right now. i wouldn't be opposed to that space right now. >> what's your expectation, mike, on some of these news headlines that are out of our control?

whether it's the german court deciding on the constitutionality of the bailout or the fed on thursday? >> i think that the fed has indicated strongly that something is going to be done. the degree to which, we're not sure. >> if you're just joining us, that would be the picture of the german constitutional court. that's not the fed, in case you were wondering. >> wow. i didn't get to see that on the monitor. >> serious outfits. >> 4:00 a.m. our time tomorrow morning, east coast time. what do you think the market does with that? the expectation now is that they will say that -- >> the expectation -- what if they don't? you would likely have a selloff. the market is pretty smart. i think that a lot of the uncertainty, you know, perhaps is build in. you can sort of pick what the outcomes are. i think there will be a relatively positive one or the mark would have sold off before now. >> you would think so. we'll see what happens.

gentlemen, thank you. bob, see you in a little bit. >> thank you, guys. we have about ten minutes before the closing bell sounds for the day. we have a market holding on to gains, although off the best levels. dow up 61. >> we are seeing that sell side bias coming into the market right now. just how big of a flop was facebook's ipo? former nyse ceo went on earlier on "squawk box." here's what he said. >> as a public investor, it's a massive failure. as the broader public looks at the capital markets indian and investing in this company, a huge failure. >> more on the facebook fallout still ahead. and can mark zuckerberg say anything to restore investor confidence when he makes his first public speech since the ipo? what's next for iag now that the government is no longer the majority shareholder. ceo robert benmosche will join me for that interview.

facebook's been rallying today along with the rest of the

market. as we all know, that stock is nearly half of the price of its initial public offering a few months ago at $38 a share. >> unbelievable. today on "squawk box," the formform former nyse ceo weighed in on the flop. >> as a public investor, it's a massive failure. as the broader public looks at the capital markets and investing in this country, a huge failure. the only declaration of success is that the company raised $10 billion, okay. at what cost? the brand is broken. the credibility of this company is going to be in question for a long, long time. >> a lot of people feel that way. how many times have we said in the last few months, where's mark zuckerberg? when are we going to hear from the ceo of the company to get his view, to get him to defend his company? today we finally get to hear from him. >> he's going to give his first speech and interview today at

this conference that will be live tonight and tomorrow. we'll have live coverage. i think that's probably the glaring mistake that this company has made. stocks will go up and down. we've seen ipos have a flop in the beginning and come back. the fact that we haven't seen the company address the real issues, that is how you're going to really increase revenue on mobility, how do you capitalize on mobility, that's really what the question is in terms of advertising. we haven't seen anybody address this. that's the issue. >> kind of ironic for a company that's based its model on social networking and you don't hear from the ceo. speaking of social networking, how many hits on your facebook page have wished you a happy birthday today? show them what you have there. the traders on the floor, let's just say, love maria. she's lived here for 15-plus years. i can just say maria's car insurance just went down today because she finally hit 25. >> thank you. >> congratulations. >> thank you. >> happy birthday.

>> thank you so much. >> from everybody here at the new york stock exchange. >> thank you, everyone. i appreciate that. >> we'll take a break, come right back with the closing countdown for this tuesday. >> and then house speaker john boehner not at all confident that the cust avoid another credit downgrade. >> the house has done its job on boe both the sequester and the looming tax hikes that will cost our economy some 700,000 jobs. >> so will both sides of the aisle be able to cut a deal before the nation falls off that fiscal cliff? steny hoyer joins me from capitol hill. he'll also respond to my interview with eric cantor from earlier this hour. busy edition of "closing bell." stay with us.

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td ameritrade's empowering web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. okay. four minutes left in the trading session. we've been talking about how the dow has been hovering around five-year highs. let's show you that five-year chart of the industrial average. this takes us back to late 2007 when we were at the 13,340 range. we're still 20 points away from that. remember, back in the fall of '07, we hit the all-time high on the dow, above 14,000. today's rally, as we show you the day from this morning. they were waiting for the fed on wednesday and thursday. they're waiting for that german constitutional court ruling tomorrow on the bailout plan over in europe. but we sort of wear and tear on

that rally late in the session here. where did the strength come from? the euro. we can see that. we always track the euro. that was getting stronger as the day wore on. this is a four-month high for the euro against the dollar with today's rally. that had an impact on gold. euro goes higher, dollar goes lower. six-month high on gold touched earlier in the day. we're well off those highs now at 1734. oil also moved higher today. we're back above the 200-day moving average on the price of oil, which was at $96.61. now at $97.04. we'll see if that can continue higher. the yield higher. they sold treasuries to buy stocks. you have a very strong three-year note auction today. the strongest demand on a three-year note auction since 1993, almost 20 years in strength there. the sectors, the strength was in energy, financials, industrials. what would you be buying? you said you'd be adding to positions here. are you going to buy the strength here?

are you going to buy energy? >> we're a little overweight in energy right now. investors are little underweight. materials, a market weight. we really like consumer cyclicals like discretionary stocks. we like technology a lot and health care. >> is there anything you don't like? >> well, that's the thing. we're very excited about the equity market still. i think there's still room to grow, as i said in the earlier segment. >> you're not worried about the fiscal cliff? >> we're worried about all that stuff, but the market is looking through that saying these guys in washington, d.c. are going to get the job done in some sort of semblance of agreement is going to come to pass because if we don't, look at dire consequences if not. >> peter, the constitutional court in germany rules at 4:00 a.m. eastern time, gives us plenty of time to trade on this afterwards. what are you guys on the floor expecting there? >> you know what? i think we're not going to get any surprise from them. two weeks ago i might have said something differently. the more i've been reading, i think they're probably going to

hold true. they're going to agree with the ecb. >> what will the market response be? do we sell on the news? >> i think we've seen some of that response already in the last few weeks. we've seen that the positive commentary coming out of europe has been price in this market. there might be a little selloff tomorrow because that's done and everyone will be looking forward to what's coming out on thursday. we'll have a little selloff on the opening tomorrow if they agree this is constitutional. i think at some point we'll start rallying again. i think the market is still poised to go higher. >> so those could present buying opportunities for those still not in equities, as much as they should be. >> gentlemen, thank you both for joining us today. that is it for the first hour as we head toward the close on this 9/11, a tradition continues here at the new york stock exchange. members of tuesday's children ringing the closing bell along with former mayor rudy giuliani. tuesday children formed after 9/11 to help those thousands of children whose lives were impacted by the event