it just really underscores what the market's been able to do over the last three months. you guys have a great weekend, a great day off as well. good friday tomorrow. all of you have a great holiday. thanks for watching this special edition of "street signs." my thanks to all of you. "closing bell" starts right now. a very special edition of the "closing bell." let me welcome you. i'm bill griffeth here on the floor of the new york stock exchange. >> and i'm sue herrera, filling in today for maria bartiromo, who will be back on the monday. the markets are closed tomorrow for good friday. so we are now in the final hour of an historic first quarter for stocks. it's been a buffalo first quarter. >> we will barrage you with numbers to tell you how historic it has been. wouldn't it be somewhat appropriate, though, if we end the last day of the quarter, to close at a new high, finally, for the standard & poor's 500

index? we need to be up, how many points, 2.3 points to hit a new all-time high. we're above that now. >> yes, we are. >> 1565.15 is the last time we set an all-time high back in october of 2007. we're above that. we'll see if we can hang on to that number in this last hour of trade today. >> i hope so. i don't need to make good on that cup of coffee. >> three cups of coffee now. >> let's get to bob pisani, who knows exactly where we stand. >> folks, you want to see what a broad market rally looks like? look at the major sectors so far this quarter. when you get defensive names like health care and consumer sta staples, up double digits, and financial and energy up double digits, that's as good as it gets. about the major indices, they're all up, but they're led, again, by cyclicals like the transports and small caps. that's a very gad sign. if you like small caps, they often lead when economies are

expanding. how about the world? the u.s. is the place to be. everybody kept saying, but, look, the s&p is leading everybody else except japan, which is in the middle of a yen deflationary frenzy. elsewhere, china, spain, brazil, a lot of the emerging market countries were down this year. and bill is right. it would be a little coda to end the quarter if we could get the s&p to close at 1565 or above. guys, the question i ask today, what would make it really big? that would be if we could get 2% or 3% above this. a decisive break above the old triple top, around 1,600, that would get a lot of people squawking. and the good news, guys, the market breadth is still pretty strong. guys, back to you. >> all right, bob, thank you so much. and stay with us, as well. so is today going to be the day? the s&p 500, trading above that all-time closing high right now. it's been doing it at different points of the day. the question is, is it going to be there at 4:00 p.m. eastern

time when that closing bell rings? we will find out. >> in today's "closing bell" exchange, we talk with gordon schwab, lee munson from portfolio asset management, rob morgan from fulcrum securities, and we're adding our own rick santelli to the mixture as well. my friend, gordon, a lot of complicated things going on here before the close. we've got rebalancing, a lot of stuff. do you think we'll close above the all-time high in the s&p and will that be significant? >> yeah, bill, i'm pretty confident we're going to close. look, it's the last day of a quarter, last day of a month. there's no reason for them to sell them off here. if anything, they'll mark them higher going into the bell. but it's going to be a major liquidity event here. we're already seeing numbers starting to expand here. so we're getting set up here for a pretty exciting close and it will be higher. >> i'm hearing there's a lot of inventory to sell, but then you've got those who might do the old window dressing and want to buy into the close as well, right? >> yeah, we see a lot of that. and one of the things that seems

is to have happened around here, as these liquidity events at the close continue to proliferate is that it seems to find the contra side of liquidity and a lot of the volatility seems to get mitigated, although there are, generally, some spots that that doesn't, so that's where the interest comes. >> lee munson, weigh in on this. because the headlines tomorrow in a lot of the financial newspapers is going to be, if we do it, the close, the record close in the s&p. so the average investor, do you recommend that they add to their positions now or, given the fact that we have some key earnings reports coming up, should they wait a bit? >> you know, i think what you need to do right now, if you're overweight in stock going into this quarter, i think you need to rebalance. so, sue, if somebody has a 60/40 mix and they wake up this weekend and see it's 70/30, go back to that 60/40. why? you're right, earnings are going to come out and if we do get some volatility, the bust way to stay a bull for the rest of the year and stay advantage is have a little dry powder, a few

treasuries in your portfolio to trade a bear when they have two or three days in the sun, that might be the next couple of months. >> as we all know, bulls make money, bears make money, but pigs get slaughtered, as they say. rob morgan, we've had an historic first quarter, the best since 1998 for the dow. and if we're up 55 points the today on the dow, it would be the best since 1987, for a first quarter. what about the rest of the year and the second quarter? you sort of see sideways action from here, right? >> i do, bill. i went to an overweight on stocks about 18 months and 300 s&p, 500 points ago. and i, like lee, am a bit worried here. i think, at best, we -- i mean, we can't sustain this for the whole year. at best, we probably get a sideways market through the spring and the fall and at worst we get some kind of correction. there's so much good going on with stocks right now, i think the sideways market is more likely. but at the same time, we can't be come pl complacent here, bec

obviously, bad things happens when everything winds up so well with stocks. >> indeed, and rick santelli, when those bad things happened, they've been moving into the fixed income market, into treasuries, in a big way today. do you anticipate that trend continuing? and can we have the bond market rally continue at the same time we have the stock market rally? >> i definitely think so. and i think that the answer to that would be f-e-d, so the answer would be yes. and i think in terms of stocks, you know, bob has it nailed down. you know, we're the only link in the world of fiat 500. so i continue to think you're going to see a lot of investors come here. we had a guest on earlier, and she said that we've seen some of the biggest equity outflows in europe since august. i think that's very telling. but once again, just because the fed is pushing the tide up and all the ships from floating, you still have been to be kafcarefu. in the old days, i would say, sell some calls against your stock position, but with

volatility being so low, i don't know if there's enough vig there to even make it interesting. >> the one thing i'm a little worried about rick, is what happened last we can. when you have fedex, oracle, caterpillar, kind of disappointing, that doesn't set a good goal going into earnings season. if we get that kind of tone from other companies, we're going to be moving sideways. >> but haven't be expectations kind of been dampened down a little bit, bob, because of the fedex and the caps? >> we're at historic highs. maybe we would have been higher if it was tn't for them. we would have been at a historic high last week, for shoe, but i don't see mump dampening of expectations so far. >> in fact, lee munson, you feel after this earnings season is over, then you'd be comfortable getting back into this market. again, how much higher could we go by the end of the year and what would you be investing in? >> first of all, i think that we can probably -- we can get close to 1600, a few months ago, i thought that 1575 was hit. but i think that, right now,

what you want is you want to stay large u.s. i think if you want to take your profits off the table -- rick had a great point. when i was a kid, he wrote covered calls. now for our clients at portfolio, we actually have to take off a little bit of our equity exposure and stay neutral weighted. but if you need to commit some money right now, stick with large u.s. and just keep a broad-based s&p. and also, look at those emerging markets. guys, the emerging markets, they did not have that great first quarter. but, again, keep it simple, just rebalance. it's very easy. >> do you go for dividend payers? i mean, so that at least you're getting a little bit of income? >> i would stay away from that. i think the dividend play right now, those large cap value, i think it's overplayed. i think you could be disappointed. remember, investors need income, not necessarily yield. i would also, if i had to buy some bonds right now, i would rather buy overpriced treasuries as a rental instead of the high yield markets. and we still own high yield,

just not as much as we did three months ago. >> rob morgan, a lot of people who come through here who are still very bullish always point to the fed, as rick santelli did a moment ago. you're saying, well, we've had a very good quarter, let's take what we can here, but is it possible we don't have a sideways action? we continue higher the rest of the year, because of the federal reserve and the liquidity? >> bill, i am still overweight stocks and i think if i were a betting man about saying whether stocks are going to go up or down from here, i'd be biased to them going up. but my thought is, is that probably, probably sideways is what we see. >> what worries you, rob? >> and that's okay! that's still bullish. >> well, yeah -- we would take that after this kind of a quarter, right? >> exactly, exactly. >> but, yes, what is worrying you, rob? other than just an 8% to 10% gain for the dow this quarter. >> well, you know, with the fed action, and rick can jump in on this too, with i think, eventually, we're going to start to see some signs of inflation

come into the inflationary pipeline, and that would be quite a shock for the market to see that. so it would take some time for that to develop. >> funny you should mention that. because, rick, and maybe you do want to weigh in on this. i just saw a report today that said, even as the price of gold was going lower this quarter, it struggled mightily, central banks were in there buying in size, this quarter. very savvy for central banks. you think they know something that we don't about inflation? >> i don't think central banks know anything we don't, to be quite honest with you. but in terms of gold, i tried a long time ago to stop looking at it in the old ways. i'll stick with my story from the other day. i think the securitization of the gold market through etfs makes it very difficult to decipher. but in terms of the fed, i like that inflation comment that was just made. i think inflation's down the road. but even sandra pianalto said,

should inflation start to get back over 2.5%, even she would question the buyback programs. now, i think we're a ways away. the problem with inflation is once you and i and the whole panel are talking about how much it's risen, it's going to go pa papa parabolic rather quickly, but i think that's a ways down the road. >> the 2% inflation target, they're still below that. he's got some room to move. >> all right. thank you, guys. see you later. have a good, long weekend. >> we are headed the closer to that closing bell. right now, the dow jones industrial average is positive by 33 points, the nasdaq by 6, and the s&p 500 is above that all-time closing high at 1567.31. let's see if it will hold. meanwhile, hewlett-packard, yes, hewlett-packard has been the darling of the dow in the first quarter. the single best performer. the worst, there it is, caterpillar. but will those roles reverse in the second quarter? we have that trade, coming up here. >> we're going to look ahead to

the next quarter, in fact. three pros give their single best stock to own for the next three months. you don't want to miss this list. >> and ebay shooting for huge growth in the next couple of years. how will this company do that? we'll talk to ceo john donahoe. he'll be with us exclusively when the "closing bell" returns. stay tuned.

well, the s&p 500 is trying to finally close at a new high, and what's been an historic quarter for stocks. josh lipton is here to take a look at the quarter's winners, and yes, there were a couple of losers there too. hi, josh. >> hi, sue. the benchmark gauge, up some 10% this quarter. but the stocks have been leading a charge. netflix takes the gold, shooting higher, up some 100%. two other names, well in the green. best buy and hewlett-packard, up 86 and 66%, respectively. remember, hewlett-packard was actually down 45% last year. not everybody, though, is joining in the good times. names in the red include cliffs natural resources, down some 50%. jcpenney is down hard, as is peabody energy, down 20%. as for the dow, on track to

close up 11% in the first quarter, it's best showing since 1998. hewlett-packard, american express, travelers among the biggest percentage gainers. only caterpillar and alcoa in the red. and finally, i just do want to point out, blackberry, right now, losing ground, reported a surprise profit today, but also said subs slipped. blackberry, down some 2.2% right now. bill, back to you. >> josh, thanks very much. so, let's move on to ebay. their shares up nearly 4%, just today, as investors watch for clues about the company's growth plans on this, which is ebay's investor day. ecommerce companies trying to expand globally and use mobile technology to hit some very aggressive targets. >> joining us now is ebay's ceo, john donahoe. he's lived with an exclusive interview for us is and we're also joined by our own jon fortt. so how much do you want to grow in the next two years, i guess, is the big question, mr. donahoe. i'm sure you want to grow quite

a bit. but tell us how you plan to do that. you've put out some pretty aggressive targets. >> well, sue, what we said this morning was that last year, we enabled over $175 billion of commerce across our properties, ebay, paypal, and gsi. and in 2015, we want that number to go to $300 billion, where we enable $300 billion of commerce. and what's happening, the reason that we're able to do that, is that mobile technology is completely blurring the lines between what used to be call ee ecommerce, or online, and what used to be called retail, or offline, and now it's just commerce, so it's a bigger market for our company. >> john, the last time you were with us, we talked a lot about the mobile strategy you want to employ and are employing. how much of the growth will come from mobile? and what about social media? i know you had a deal with facebook that you had put in place a while ago, but we haven't heard much about that lately. so social media and mobile,

where does that all fit into your scheme here with your growth strategy? >> well, mobile is obviously at the center of whatwe we're doin. we'll do over $20 billion of mobile commerce volume this year, $20 million of mobile payments volume. but i think the world of mobile is more than what you just start and stop on your smartphone. we're seeing mobile transform how people shop. in the next two quarters, you're going to see stores putting touch screens on their store windows and inside their stores. you're going to see mobile being a connection point between online and offline. and we're doing a lot of cool innovation in those areas. and then on social -- >> sorry, you're going on in social. >> what happened to the facebook deal? >> i want to make sure i finish bill's question. >> thank you. >> i heard you, bill. the broader question is just around how we can use data to enrich consumer's experience and social is one way of doing that. so, in the first place, the ebay feed, which is now the home page of ebay, allows you to put your

interests and what you're following and people you're fog and people your friends are following, it allows you to shape your entire ebay home page based on those interests. i think we're going to see more and more engaging shopping experiences, both on your own interests and interests of your friends. so there are a lot of opportunities to leverage data more clearly, to do that in the next several years. >> sorry about that. >> your turn, jon. >> we've got to talk social, of course. i wanted to ask you about competition in mobile and payments. i've been tracking recently, a company, brain tree, i know you know that company well. they're up to about $1.5 billion in annual mobile payments. that's the rate where you are. i know you're far above that at 20. but, still, the thing that they're doing is a little bit different. they're working with some innovative companies, fab, uber, to make it simpler to pay on mobile. and their growth rate is impressive. how do you view them as a competitor? how much does paypal maybe need to change in order to steal some of those customers away? >> well, paypal is still way

outfront, jon, as you know. and at south by southwest two weeks ago, we launched our new developer platform, including the mobile payments library. and what that enables developers and merchants to do is to bring paypal's mobile capabilities into their mobile apps, seamlessly and easily. and give consumers choice. they'll be able to pay and sign up to pay just by flashing a credit card, you know, taking a picture with your smartphone, a picture of your smartphone, and boom, you've created an account, and boom, you can pay right there. so it's still early days in this, and paypal's got a lot of innovation, both at the small end, and then, as you know, at the larger end of retailers and large retailers, globally. >> talk to me about the global picture, in fact. perfect segue, thank you for that. >> happy to help, sue. >> specifically as it refers to china. ali baba has had a significant presence in china. is that a market that you think that you can aggressively compete, ali baba in, or are you

looking at other parts of the globe? >> well, china, we have a significant cross-border business out of china, where chinese sellers are able to sell and connect to the rest of the world through ebay and paypal. in fact, over $6 billion of volume comes from chinese sellers to ebay and paypal buyers around the world. we don't really participate much in the domestic chinese market, because on paypal, we need a license, which you can apply for, and on ebay, we just focused on other geographies. the bric markets we're really focused on are russia, where we just launched our russian-speaking site. interestingly, ebay's the number one ecommerce company in russia today, even though we've never had a russian-speaking site, and we just launched a russian-speaking site today, and we intend to compete aggressively in brazil and we're already the market leader in india. we see a lot of growth opportunities in the bric and emerging markets. >> the emergence, the merging of offline and online, you were

talking about before, i was reading a report by anthony declementi, earlier this month he points out, neiman marcus decided that they were going to be closing its ebay store online. they figured it was more cost effective to do it themselves. what does that do to your strategy to partner with other retailers that are out there and their online presence? >> well, we have dozens of retailers coming on, bill, at all times. for instance, target just opened their store on ebay. and this is a learning process. neiman marcus came on early. we learned with them, as we've learned with coach, we've learned with target, we're learning with others, but there are now over 30 large retailers who are selling on ebay and finding out how they can work that into their -- the challenge that all retailers face, which is, how in a -- this multi-channel environment, how can they reach consumers both where the consumers are, on mobile, on the web, or in their stores. >> does it say that neiman marcus customers are not on ebay, whereas target customers may be, are we talking about a

niche demographic situation here? >> no, i think it has more to do with what inventory different retailers choose to put on, in what ways. what you see in the apparel and clothing category, there are a lot of retailers who are being very successful around offering flash sales on ebay and opening up their own stores and offering unique inventory at prices very attractively on ebay. there's a lot of examples of success. in any field of innovation, you're going to be learning, there will be things that work and things that don't work. and we're constantly trying to double down on the ones that work and learn from the ones that don't. >> john, i know you're talking about moving into offline retail as well. any data points you can give us for confidence that, say, home depot, that initiative of yours is really working? >> i just look at the number of retailers that are signing up to use paypal and are signing up to connect with paypal. by the end of this year, through our discover partnership and our

direct connections and paypal here, we'll be in 2 million locations in the united states and then driving to four. and this is the year where we're really working on consumer engagement. how do we engage consumers at point of sale? a small example would be the jamba juice app inside the paypal mobile. where you can now order ahead and skip the line. so we'll be taking consumer pain points like standing in lines or like, not having the coins to pay parking meters, other things in consumers' everyday lives and showing how paypal, used in the offline world, can help solve those pain points is and be an attractive way to pay offline, just as it is a leading way to pay on mobile and online. >> great stuff. >> we've learned a lot this year. >> he's still learning, folks, but the stock has been on fire today, up another 4%. thanks for joining us, john, very much. >> thank you, bill. >> you bet. see you later. >> boy, he's in a beautiful part of the world, isn't he? >> we all know how nice it is in

california right now. >> yes, we do. the dow is up 49 points. the s&p, is it possible, looks like we may get an all-time high on this final trading day of the first quarter. hewlett-packard has been the dow's biggest winner this year, 65% gain. cat, certainly not the same story there. the worst blue chip performer, in fact. up next, find out whether it's time to bet on the dogs of the dow instead. also, health care, that's been this year's best sector in terms of performance. one of the stocks driving that rally has been biogen, which is hitting an all-time high today. the biotech ceo will tell us whether its newly approved multiple sclerosis drug, it's a pill, will send shares is even higher. that's coming up on the "closing bell." stay tuned. [ male announcer ] i've seen incredible things.

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we are watching that s&p with -- we are really focused on that, because they could do it today, finally, we might get an all-time closing high. we have a little bit more than half an hour left in the trading day. fingers crossed for the bulls, right, bill? >> question of whether that's the beginning of a new leg or the end of a leg. we'll find out. we're a little more than a half hour away from the close of the first quarter. biggest gainers inside the dow this quarter was hewlett-packard, of all things, up about 65%. the biggest dow loser over that time, caterpillar, which has fallen roughly 3%. only alcoa is also lower in the dow, so far in this new year.

but, laooking ahead, which is te bigger buy, is it hp or cat? let's start talking numbers on that. on the technical side is richard ross, on the fundamental size, it's erin gibbs, the equity chief investment officer, it says here, at s&p capital iq. good to see you both. rich, you like hewlett-packard still. you want to go with the strength. you're not looking at caller pillar as an investment rate now, right? >> no, in fact, you want to avoid caterpillar. the stock has dug itself quite a hole, down 3% year-to-date. even as we push out to new all-time highs here. we're a seller on a technical and a fundamental basis. you pull up the chart, you see back in november, we establish a textbook double bottom, along with the broader market. that provides the springboard for a breakout above the 200-day moving average. that's that line coursing through the center of the chart there. a quick run up to $100. we fail into that key psychological resistance, sets up a false breakout. we're now back below the 200-day moving average. that's your key sell signal.

keep in mind, bill, everyone's talking about the u.s. this company only gets 25% of revenues here in the u.s. 75% from overseas, slowing growth, weaker end markets, gold, silver, copper, all at the lows for the year. you want to be a seller. >> all right. erin, he went into the fundamentals to some degree, so you're allowed to do some chart talking, if you want. but you actually like caterpillar versus hewlett-packard. why? >> we actually think this is a good place to buy. we think the write-down announcement pushes the stock price down, and it's at the lower end of its trading range for pes, about nine times. we think it could go to 110, 120. yes, the u.s., it is important. we are seeing recovery in the u.s., but we also still see that coming from emerging markets. a lot of it right now is the

ratcheting down from the chinese investment and some of the negative news from europe. but we think that's going to play out. and longer term, we do expect an economic recovery. we do expect the stock to go up. >> folks, thank you both. we're going to cut it short, because we've got some breaking news and it all has to do with the market right now. >> and in fact, let's check the s s&p. we have half an hour to go before the s&p, and right now, the number we need to close above is 1565.16 and right now, we are above it. so we'll see. let's just close the market right now. be done with it. >> why not, sure. i know traders who would want to do that. and we've forgotten about the dow completely, but it only needs to be up 33 points to hit a new all-time high, which it's been doing regularly, and it's in that territory as well. coming up, we'll hear from someone who says the fed will start scaling back on its stimulus measure this june. find out if that will send this

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and of course, most market watchers agree that the fed's easy money policy has been stimulating these markets. so as we look ahead to the next quarter, the big question being asked right now is when will the fed pull back on that liquidity and what impact will that have on the stock market? >> adrian miller is director of global market strategy at gmp securities. he thinks the fed will start taking action perhaps as early as june. john herman is director and rates strategist at mitsubishi ufj securities. he says the fed won't pull back until 2014 at the earliest. adrian, i'll start with you. why would the fed pull back the punch bowl. and if they do start to do that, what happens to the stock market? >> i think the fed will pull back the punch bowl, if you would, but only gradually, initially, until we can get some more and more convincing evidence that the economic growth is sustainable. so to the extent we can see for the quarter, for the next three months, a similar kind of robust growth, i call it robust. we have a change of private payroll above 200,000, maybe

above 250,000, you have the consumer continue to be resilient, spending slowly building momentum. you have all the right indicators going in the same direction, that's a big help. >> so to be clear, right now the fed is buying roughly $85 billion worth of treasuries every month. what you're saying is they won't buy that much beginning in june, perhaps, if things are improving. >> if things are improving to their tastes, i could see them scaling back perhaps to $65 billion per month, during the third quarter, and slowly, gradually stepping it down. >> kind of weaning us off. >> bill, what do you think? >> i think it's a little bit too early to be thinking that way. we have a very upbeat forecast for the economy, as a backdrop to the rates view. but, basically, what we see is, you know, the fed is really trying to engineer the economy growing and sustaining this 200,000 gains in payrolls per month. and last year, as you know, when they relaunched qe infinity, the view is that, maybe, the economy

was only maintaining 120,000, 130,000. after all the revisions, we're up to 190. we believe that we can sustain that going forward. and the amazing thing, from our standpoint, is that, by the time we get to this stage of the game next year, at this point, we're going to be close to 101% of all the jobs lost in the private sector, recovered. so we think what the fed's going to do is try to achieve that and then taper down. >> the fed has said, very clearly, 6.5% is their target, adrian. we're not even close to that. >> no. >> so why would they begin the process of weaning us from all of this liquidity if we aren't even close to that? and there's no reason to believe that we will be in three months. >> no. but you've got to understand, those targets that you heard at 6.5% and 2.5% on inflation are really pegged more any change in interest rates. it's really not a barometer for when the asset prices are going to be scaled down. ben bernanke made that point clear last week. >> but do you think the market differentiates between the two? >> i think it takes a while.

initially, when they first laid it out, they did not, in december, they did not. i think over time, you begin to see the market understand that, that there is a difference. the thresholds are for interest rates, the asset purchases are there to comfort that this growth is sustainable. that's an important thing. >> bill, there's an important point to bring up, and that's this -- when we look at payrolls and break them down by fed district, only one fed district, at this point in time, has achieved and recovered 100% of the jobs lost. and that's a dallas-fed district. all other districts have not done so. we think the fed is really going to engineer this recovery and build a broad-based foundation for going forward. >> i get on the jobs site, but here's a worry for some people. what happens if we have yet to begin the process of growing jobs, as much as we want to, but inflation, the inflation target for the fed, starts to rise above that. now they're stuck. do they pull back on the liquidity even before we're hitting the job growth we're

after or what do they do, john? >> bill, we're still ahead of the game in terms of that outlook. weapon don't really have inflation generating that kind of momentum. i mean, we're looking just even for next week to go back to payrolls. we're looking for about a 230 print in private payrolls next week. unemployment rate to come down. we think the unemployment rate's going to come down 0.2% over the next two month. we're very bullish on the economy. but basically, chairman bernanke has clearly diguided that what need to see the sustaining this. once we get past this next report, the next couple of reports are going to lose a little momentum, and that feeds right into bernanke's view that he wants to keep the gas pedal fully extended here. >> good to see you both, on a very important question that we're facing right now for the markets. speaking of which, the dow, up, what, 48 points. that's all-time high territory. the s&p is also in all-time high territory right now. we'll see if we can hang on to that in the next 20 minutes. >> we're on the verge of a

record close in the s&p. and we've got some market pros that say that there are still some great buys out there. coming up, get the name of two etfs that our experts say should be the best to own over the next three months. >> and later, you will get three stock names that our guests predict to lead the next leg of this rally. so, have pencil and paper ready, all ahead on the "closing bell." ♪

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all right. right now we're watching the s&p. we have only about 15 minutes before the closing bell and we are in record territory on a closing basis for the s&p. we'll see whether or not when the bell rings we're still at that level. bill. >> in the meantime, as the market approaches these record closes for the major averages, our next two guests are each armed with the exchange traded fund that they say is the one to own right now going into the second quarter. with us, harry clark of clark capital management and doug dale

of security. harry, it's been a long time. how you've been? >> it's been a long time. >> how have you been? >> good! >> let's start with you, mr. clark. the exchange traded fund you'd by for the second quarter is which one? >> xlf, financials. they're money making machines. when you buy an eft, you get the best of the best. the biggest is berkshire hathaway, wells fargo, american express. no place else can you get these big, big best companies in one place than an ef. actually done about 11.5% so far this year. bill, we project 16% this year for the s&p. i think, actually, we'll do 20 to 22% for the year. i think it's a good buy, right now. >> all right. doug, what about you? but picked the market vector's

gold miners etf, but the gold market has really struggled this past year. why did you pick this particular one? >> sue, i'm looking for areas of the market where the fundamentals are strong, but for one reason or another, the industry is weak. last year in 2012, you saw substantial turnover in the gold mining sector. companies were looking at acquiring more mines versus paying attention to looking at how profitable each of those mines can operate. so, today, when you look at companies like new mott mining, it's got a dividend yield at 2.5 to 4%, which is twice the level of the s&p. as question go into q2, i would be looking to put new money into areas that are undersold rather than overbought. >> thank you. we have less than 15 minutes to go. it could be a historic closing bell for both the dow and the

s&p s s&p. so far, so good for the s&p. >> but there is a potential roadblock for this rally continuing. next, what it is and how you can protect your portfolio, coming up. ) at scottrade, our clto make their money do more.re (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies." a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say?

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as we get ever-closer to the

close, we're watching to see if the s&p 500 with finally close at a new record high. right now, it is. but we will see when the bell rings. our next guest says he has some concerns and the main concern is profit margins for the rest of the year. and if they disappoint, this rally could be a distant memory. >> and joining us is our friend, david darst, morgan stanley wealth management. and you guys raised your target on the s&p to 1600 this year. >> correct, but yet all of you are still concerned about the quality of earnings for the rest of the year. >> bill, two areas. number one is financials and number two is the consumer area. specifically, the consumer discretionary area. not the consumer staples, which is drug stocks and your food companies and your beverage companies. they're fine. but the consumer discretionary, which is travel, which is hotels, automobiles, that's what you want to see these jobless claims numbers that just came outer, 357,000 for the week. >> that's right, for the week. so, consumer confidence had a

big hit. the conference board number, you saw it drop from 69 down to 58. so you need to see jobs that are created with good wages. that's one of the four ps is profits, personal income, production, and political dysfunction go away. that will help confidence. >> i'm going to sound like pollyanna, but doesn't the fed -- it doesn't council all of that, but doesn't it make up for some of the quality of earnings out there. so far, it has. >> you've got to listen to the market. you say this constantly, sue, you say this constantly, bill. the h-e-r, that is housing, is doing well. we have this boom going on in the united states. and finally, the r is renaissance, recovery, resuscitation, recuperation of the industrial and the manufacturing part of the united states. the ism manufacturing numbers bear this out. you'll get monday and wednesday next week, manufacturing monday, nonmanufacturing wednesday, and

friday is the jobless claims. and i'm exhausted from speaking with you, bill. >> well, let me take over and ask you the energy play. the energy play. you're referring specifically to shale and shale oil. >> and shale oil. sue, you want to own schlumberger, you want to own halliburton, you want to own baker. you cannot get to the oil or the gas without these three. what you want to see is, united states has under six states 3.5 trillion barrels of oil shale. the total in the world is 1.7 trillion, all countries. we have two times what the world has. it's expensive to get to. but this innovative united states is making it happen. >> all right. david darst, always -- i want that tie. that is a gorgeous tie. >> it is a very nice tie. >> you're going to get this tie. >> i didn't say for that reason. but anyway. >> happy holidays to you and your beautiful family. >> thank you, guys. >> david darst of morgan stanley wealth management. as we stand here, the dow is

moving into territory. if it's up about 55 points today, it will be the best first quarter we've seen for the dow since 1987. going back 26 years. >> all right. we're watching thoegz markets. we're coming right back with the closing countdown. right now the s&p is still in that record territory. >> we'll find out if this is the day we finally get a new all-time high on the s&p. we'll find out, after this. [ male announcer ] just when you thought you had experienced performance a new ride comes along and changes everything. the powerful gs. get great values on your favorite lexus models during the command performance sales event. this is the pursuit of perfection. at a hertz expressrent kiosk, you can rent a car without a reservation... and without a line. now that's a fast car.

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inside the five-minute mark here. so we're making history today in a number of ways. let's just look at these charts very quickly. this is the last trading day of the first quarter and what a quarter it has been. the s&p, we will finish, it looks like -- >> don't curse it. >> we've got four minutes left. at a new all-time high. but in the quarter, up 10.0%. that's what you usually get in a whole year. the dow, even better. in fact, if we close at these levels right here, with a gain of 11.27%, that will be exactly the best performance we've had in a first quarter since 1987, going back 26 years. however, we've been focusing on those two. you know who did even better? the small caps, the russell 2,000 index. in the first quarter, even with this correction in february, up 12.25%. and we continue this rally here, ben willis, into the souecond

quarter? what do you think? >> april's not a real good contin indication of the continuation of this rally. but we have the first day of the month, which traditionally is again positive inflows from individual investors, which has been a tide in this market that the professional investor couldn't stand against. every time we talk, we look for a pullback. we don't get any more than 100 points before the money comes in to buy the dip. we would like to see more than that, but this has, an incredible run. >> how much of a monkey off your back is it to see the s&p closing at an all-time high? it's like, that milestone is behind us. that's what i'm hearing from all you guys down here. you just want to see that done. >> from a professional side, we want to see it done, but it's great for the psychological and the individual investor who fled this market four years ago. money is starting to come in. they're not necessarily coming out of bond funds, but the money is coming in. it's a low velocity tide, but this market just keeps creeping up, however you want to look at it. again, i would like to maybe tuesday to hopefully get that little bit of a correction, but the glass is half full.

you see corporate earnings up 40% from where they were in 2007. >> are you worried about the new quarter of earnings. that's the other undercurrent that we're hearing. >> it is an undercurrent, but, i think, again, the overall trend is that the glass has stopped going down, it's half full, and it's creeping up slowly. >> i learned long ago, that glass half full, glass half empty, it depends on whether you're drinking or pouring. s&p up 6.8. looks like we're going to do this all-time high. we still have the conversation, as we continue to inch higher, we're all still gun shy saying, it's got to come back at some point. we're not yet at the point where we say, of course it's going to go higher from here, right? >> it's a function of age. i was here in 1987 when the market was doing that. and we remember what happened in october of 1987. >> yes, we do! on that note, i'll bow out. >> see ya. >> i think that's part of it. and i think by the end of the year, the market can go higher.

but we've had a great year this quarter. >> yeah, we've had a great year this quarter. and zben, it gets back to that old question, how much of this is the fed? you guys have to trade this market. you see the flows coming in here and the flows keep coming in, we keep hearing, because people know the fed is going to backstop them. there's that bernanke put. >> absolutely. you have the fed underneath. you have the individual investor, which, again, some people want to trade against. i don't think it's a wise call yet. there's a lot of money flow that can come into the market, and justifiably so based on where equities are valued right now. that's a tough trade to be involved in. >> what are you doing right now with this market? >> right now, i'm comfortable long. if i'm a long-term investor, if i'm from my trading account, i don't want to go home long this weekend. i think you get a chance to buy them a little bit cheaper monday. but, again, as i said, first day of the month is monday. i would rather go home short tuesday than today. >> all right, thank you, my friend. let you get ready to trade the close here. what a first quarter. th