>> you know who would be a good driver of that ferrari? >> dario franchitti. which is odd, because he's actually scottish. >> that's culturally insensitive when you do that accent. smash a turtle with a hammer, jump down a pipe, and collect gold coins. >> "closing bell" takes you all the way to the close. that's next. hi, everybody. another record setter, welcome to the "closing bell," i'm maria bartiromo at the new york stock exchange, where there are still no signs of a pullback today. >> i'm bill griffeth. how many traders do we see walking the floor around here, shaking their heads, saying it's still going up at this point. this historic bull market continues. looks like another close above 15,000 for the dow jones industrial average. had been higher earlier. we were up 24 points. now it's again at 14. >> seems to be a bit of a vacuum of catalysts, not a lot of economic data, not a lot of earnings news, so this market creeps higher. also ahead on the program,

starbucks ceo howard schultz will be here. we always like to talk with the always-outspoken coffee boss about the state of business, the economy, jobs, and a lot more. that's coming up in the next hour. >> also here exclusively, very exciting, duke basketball coaching legend mike kruszewski. they asked coach k. to speak there after he gives his presentation, he will be here on "closing bell." you don't want to miss that. >> i love talking to coach k. about leadership. >> that's his thing. >> we'll talk with him. the dow jones industrial average, off of the highs of the day, but nonetheless, none chartered waters here. nasdaq looks like this. gains there as well. although it, too, off of the best levels, showing a gain here of about seven points, a quarter of a percent higher. and the standard & poor's in unchartered territory again. another all-time high if we

closed here. a gain of just two points, nonetheless, unchartered territory. >> bob pisani is walking the floors. >> the way i've been explaining this. modest liquidity, restricted supply, increased demand nor stocks, because people are looking for dividends and you get a squeeze on stocks. take a look at some of the major indices. the industrials are up, the transports are down, for the first time, they've generally been outperforming. cyclical index, still modestly on the upside. the consumers have been on the downside. that's been the trend for the last week and a half. you can see it today if you look at the major sectors in the s&p 500. earlier in the day, marries, financials, tech, and industries, all leading. that is still the case, although you can see today the gains are relatively modest compare to where they've been in the last few days. elsewhere in other sectors, hmos have been on the upside today. they've been a bit of a laggard. i think what's going on here is people who trade some of the health care stocks are sort of

rotating into hmos, maybe out of some of the big biotech names. we've seen huge moves in some of the biotech names, those stocks have all been having nice moves back to the downside today. >> thank you very much, robert. let's get to our "closing bell" exchange and talk about today's market action with rich bernstein, michael joeyoshikami warren mooiryers, and rick sant joining us as well. rich bernstein, you're not shaking your head at all? >> no. we've been bullish for 3 1/2 year's, still bullish. we think we're in the part of the market where people begin to accept, there really is a bull market. the early part of a bull market is always met with fear and indecision. that was true about this early cycle, and now we're finally getting people to accept that maybe we're in a bull market. >> well, people accepting that maybe we're in a bull market.

i don't know, because a lot of people still questioning the fundamentals here, and whether or not this would be a bull market, without the federal reserve in place. >> but, maria, i think one has to remember that early cycle environments are always dominated by the fed. the whole point of monetary policy, in fact, i think you have larry myers on earlier this afternoon, the point of monetary policy is to effectively inflate capital, and then companies can take advantage of, the private sector can then take advantage of. >> michael, you're among those who feel maybe enough is enough right now. too much of a good thing. you're starting to become cautious. you're going to some of those defensive plays right now, aren't you? >> yeah, absolutely. we haven't got out of equities, but we've been taking profits, as names have rallied. we've been paring back our positions, still staying in equities. bill, we're still neutrally weighted on equities, which means we've been riding this bull market. but even though the fed, and i'm not so sure, really, actually, the fed's job is to artificially

stimulate the economy, but if, in fact, the fed is doing that, which it is, and which japan is doing, europe is doing, i think there does get to be a point where earnings have to take over. you're already starting to see guidance being pushed down pretty significantly by kmaens, kma companies like dacaterpillar, f example. so i'd say stay in stocks, but cart back your profits. don't ride it all the way up. you've got to take a little profit here. >> warren myers, what are you seeing in terms of profit taking today on the floor? are you still seeing that kind of conviction we've seen this entire bull market? >> i look at the bigger picture, where the fed and the central banks around the world are forcing money into the risk assets, which has been very bullish for the equity markets. but in the absence of really any economic news or any other real big news, and the move still continues to go up. that leads me to believe there's

still underlying upward moment in this market. in the absence of anything else, this market looks like it will continue to go higher. >> why isn't that the definition of complacency, warren? >> it is and it isn't. i think, again, the bigger piece in my mind is the central bank action we're seeing. and that's putting a floor in this market. and as long as that's there and there's the perception it will be there for the foreseeable future, that gives people enough confidence to continue to add money into this market and that's what's driving it up. >> what sectors would you say are going to be in the lead or do you see the most interest in at this point? >> you know, you're still seeing a lot -- i hate to keep repeating it, but at of the big dividend-paying names have been very strong. tech has been in and out, depending on the names. a lot of money is still going into best of breeds across the different sectors, and i think that's the defensive play, that you can have and still be in this market. >> well, rick santelli, we've given you a lot to play with here if you want. we can talk about that soft

ten-year auction, or you might want to talk about rick's contention that the fed's role is to inflate assets in this economy right now. >> how about the richard fisher interview. that's another angle for you, rick. >> there you go. take it away! >> i think in terms of liquefying and accommodating when things get spongy, i don't disagree with that, but i think it was more in tune with a cyclical issue than a structural issue. i guess that's where i have my beef. richard fisher, i thought, was wonderful this morning. specifically about the exit and the fact that there isn't a central banker on the planet in any country that can look anybody in the eye and say there's any experience with returning home from this island we find ourselves on. and i think that's a very genuine, honest comment. as far as the markets, if you look at a chart since unemployment, friday, rates, of course, are rising since the records in the dow and the s&p rise. but i would say that 500 points ago, mid-march, we were at 2%. so thumb on the scale or no, there seems to be a whole lot

more interest in selling, but here we sit, 25 basis points lower than we were when the dow was 500 basis points lower as well. >> are rich bernstein, do you want to defend your fed view? >> all i'll say, bill, is this notion what the fed is doing is totally artificial just, i don't think it's correct. because it would be artificial in we weren't seeing anything in the real economy. but the real economy continues to improve, albeit, at a moderate pace. but the real economy continues to improve. the profit cycle, by our reckoning, looks like it's troughing right here, and looks like it's going to accelerate through 2013, into 2014. so it's not like there's nothing in the real economy that is responding to this. it's not like we're just inflating assets and there's nothing real underneath. and i think there's plenty of real improvement in the economy. and especially in the u.s. economy, when you compare it to what's going on around the

world. >> i guess, relatively speaking, though, relatively speaking, is it really that great? revenue pretty much disappointed in this latest quarterly report. >> it's not that great. i mean, housing's strong, i agree with you on housing, but beyond that, what's so strong? >> michael? >> i don't think the economy really is that strong. if you look at the jobs numbers and the production numbers, it's what we call a stumbling recovery. i guess the question really is, what's the fed's role? is the fed's role to stimulate when the economy is struggling or is the fed's role to continue to stimulate when the economy is recovering? that's the artificial part that i think maybe, rick is somewhat disagreeing with and i agree with as well. i think the fed should really be there to stimulate when the patient is near coma, but when the patient starts to recover, you ease off. and right now, we have no signs that any easing is going to actually happen. and a comment about dividend stocks, the reason why dividend stocks, and everybody's beating the drum on, continue to do well, is for individual investors, and maria, we work

with hundreds of individual investors. their first stop out of cash is not fixed income because of their concerns about interest rate increases, their fixed income is to the boring dividend stocks. that's why those are such strong capital rallies, even though they're paying dividends. >> great analysis. thanks, everybody. >> thanks, guys. see you later. >> appreciate your time. heading towards the close. 50 minutes left and we're hanging on to gains. any positive day for the dow and the s&p will be another new all-time high for either of those averages and we're at a 12 or 13-year high for the nasdaq as well. cooking the books. have you heard this story? ernst and young out with a new story that many companies may be fudging their numbers to meet targets, the targets they initially put in place. and then we have some big earnings after the bell tonight. we have green mountain, groupon, news corp., tesla among others. coming up, we'll break down exactly what you need to watch for, for those numbers. and it's been a very good year for starbucks.

the stock up better than 15% year-to-date. coming up, we'll talk exclusively with the company's chairman and ceo, howard schultz, about what he has planned for the company next. that and a lot more coming up next on "closing bell." it's as simple as this. at bny mellon, our business is investments. managing them, moving them, making them work. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing. bringing the power of investments to people's lives. invested in the world. bny mellon.

welcome back. bank of america ceo brian moynihan coming face to face today with investors at the annual shareholder's meeting. kayla tausche was there. >> bank of america shareholders is spent three hours lobbying questions at brian moynihan as well as chad holliday, but little controversy emerged down in charlotte. executive pay was approved and the 13-member board affirmed, each member getting at least 96% of the votes. the group included six new faces appointed in the last year, in face of the five directors stepping down. but of the five proposals submitted by shareholders, from political contributions to board nominees, none passed. but one did get a significant a lot of attention. it was a call for b of a to publish a thorough review of its foreclosure and mortgage servicing practices. a quarter of investors supported the move, which comes as the bank remains mired in crisis litigation over legacy housing issues. the bank under ceo brian moynihan has paid out $45 billion to settle these claims and then some, but they keep coming. b of a named in a new york

lawsuit monday for violating a previous foreclosure pact. another ruling today allows the u.s. to bring a suit against the bank for toxic mortgages sold to fannie mae and freddie mac. in prepared remarks, moynihan said, quote, we've resolved a significant portion of mortgage litigation, but we know there's more work to be done. maria? >> thanks so much, kayla. >> let's talk about this troubling new survey out from ernst & and youyoung. here's the big headline. company chiefs across the globe are lying about revenue. >> is this possible. david, thanks for joining us. your survey was down with business leaders outside of the united states. first off, explain that. why. >> we do a global survey every two years, and then a yaur pooen survey on the alternate year. this year, we added middle east indian africa and really wanted to hit some of the rapid growth

markets. >> i'm not pollyanna, although people would accuse me of playing one on television, but i know this kind of stuff goes on. but i was stunned by how pervasive it seems to be based on your survey. were you? and how did you get these employees you surveyed to admit to it? >> well, we use an independent agency. we polled 3,500 employees in various markets and asked a number of questions. and i'm also surprised at the results. we do quite a bit of this over the years and these are pretty staggering results, bill. >> so what are the results? go through these staggering results for us. what did you find the most egregious? >> i think, clearly, when you have close to, you know, a little over 40% of management, that are talking about pressure to meet earnings and there is clearly some indications that they're aware of wrongdoing.

that's a pretty astounding result. i mean, the back end of that, the question wasn't asked, what do they do with it? so i suspect being in this line of business, that many of these directors and managers began investigations into what these issues were. >> do you think they are? i mean, that's really another question i have. where are the charges in all of this? if it's that pervasive. >> clearly, i mean, the u.s. has had a pretty aggressive enforcement regime under the fcpa. so i think you see that. the bribery act out of london is clearly topical with british companies that are operating in rapid growth markets. and i suspect you'll continue to see enforcement in these areas going forward. >> so how do you monitor this and find out what's going on? i mean, you did a survey and you got this result. how come we're not seeing this in the actual balance sheets?

>> well, maria, if i understand the question, i mean, clearly, corporates are focusing on these environments. the issue of bribery, fraud, and corruption is not a new one. and i think for me, this is all about the size -- most large corporates that are investing in high-risk markets are totally aware of what the risks are. it's really how they deal with them. i think, clearly, economic pressure in mature markets are forcing corporates to go into high-risk markets to find growth. and some of the statistics that you're seeing from here is all about what those challenges are. >> so you think this is largely risk and bribery? >> i'd say most of it is bribery and corruption, maria. so if you look at, you know, the percentage on the sampling, a lot of that was africa, middle east, india, and the former eastern block. you don't need to be an expert to understand that your risk going into those markets are pretty high, and that you have

to go in, eyes wide open, and understand what those risks are. >> you know, they all say, the pressure to perform on a quarterly basis is so great that they are forced to do this, which i don't buy. but what do you think -- i don't know, i'm afraid to ask. what do you think the results would be if you were to ask that question here in the united states, or have you asked that question? >> on our global survey, which we do every year, we ask similar questions, and i think, you know, u.s. corporates, when you're dealing with non-exec or exec directors, clearly, you know, understand, you know, risk and clearly are empowering their compliance mechanisms and others to address this on the front end of a transaction or if you're a direct investor in a high-risk market, you're going to do forensic due diligence, for instance, training, education, and clearly there's been a number of examples where if you don't do it, the penalties are pretty severe. >> you finesse that very well. i'll ask it point-blank, do you

think the percentages here in the u.s. would be as high as they are in your international survey? >> i suspect that the percentages in the u.s., honestly, would be lower, for foreign direct investors in these markets. >> if you're saying it's largely corruption and bribery, there are some companies out there, and i'm not agreeing with this, but there are some companies out there that say bribery is a way of life. that's business. >> in some countries. >> when you're dealing with certain companies. is that what you have found? and is that why you don't think the u.s. would be as egregious? >> well, i think coming back, look at the fcpa. the type of enforcement you've had under the foreign corrupt practices act over the last two or three years. clearly washington is sending messages not only to u.s. companies, but to foreign companies that are registrants, that they better follow the law. and bribery is against the law. so, i think, you know, bill -- i don't want to be defensive here, but most large u.s. corporates understand this risk and, you know, address it.

is it perfect? no, but they're -- >> right. >> well, we can only hope so. david, thanks for joining us. an eye-opening survey. appreciate it so much. >> my pleasure. we're in the final stretch of trading for the day and a market picking up some speed. 31 points on the dow jones industrial average, as you can see. >> a ceo shake up sending shares of web md soaring to a one-year high. when we come back, we'll find out if this red-hot stock can continue being a prescription. >> and target is using facebook-driven deals. a big partnership between target and facebook. we'll hear from somebody who says they're doing it all wrong, find out later on the "closing bell." [ lorenzo ] i'm lorenzo.

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welcome back. i want to get to josh lipton for a market flash as we watch the down. >> steve iseman of emris partners is speaking here in new york city. he is speaking and he is moving some stocks. one in particular, ocwen. once in a while you come across a company, he says, that is completely and utterly in this place, and you can see the intraday pop there in ocn. he also mentions forrester and home builders like lennar, pulty, and standard pacific. bill, back to you. >> big move there, josh. thank you very much. well, the nasdaq may not be hitting new all-time highs as the dow and the s&p are, but it

does continue to lead the latest leg of this broad-market rally. seema mody has some of today's movers for us. >> we knew about this move of capital into defensive names and out of cyclical sectors would take place, but now we're seeing the wheels turn. and that's what's helping tech stocks outperform. apple shares also getting a bid. a lot of focus on webmd, not because it beat street expectations, but the company announced that after only 11 months on the job, ceo cavin redman, who was brought in from pfizer last may, will be stepping down. he brought in deep pharmaceutical knowledge from pfizer, but may have lacked the technology mind-set needed to lead a health care i.t. firm. webmd has appointed an interim ceo, david schlanger. >> in talking numbers today, we're looking at webmd on the

technical side. on the fundamental side of the story, steve cortez with veracruz tjm. good to see you both. steve, both the ceo and the cfo are leaving. what does that tell you? what does this mean for the company? >> that tells me there's trouble. and it's getting a very nice lift today and it's had a nice few weeks. but if you were unlucky enough to have bought this stock two years ago, even with this rally today, you have still lost half of your money. webmd has been a bit of a dr. kevorkian for many portfolios. my view is it's going to continue to be. this is a company that loses money. not only is the ceo leaving, but the cfo as well. that kind of an exodus, i do not believe, is reason for owners of webmd to rejoice, but instead to use this lift, if you're an owner, as a chance to get out. >> abigail, what's the chart look like from your standpoint? >> the charts tell a different story than steve's take on the fundamentals. they say that his fears are actually in the past and that webmd buyers, strong buying

moment, are looking to the future, and a push toward profitability. i think this stock could even go toward 50 within 12 months. let me show you why. when we look at a weekly chart, since it's ipo, we see a wide range between the buyers and sellers, support and resistance. this really represents greed, fear, and uncertain. nobody knows, out of the gate, greed. that quickly gave way to fear, panic selling. but it set up a nice capitulation bottom. that's called a falling wedge. that's what set up the big rally into 2011, and then another wave down on fear. recently, though, at the end of last year, that fear gave way to a capitulation bottom. sellers came in. and now we're in this strong wave of greed. we could see a pullback toward '22. but webmd stocks really suggest that the stock is going back up towards resistance. >> abigail, you mentioned the ipo. it's interesting today with this big rally, we're not trading at $30, which is a price it traded

on its ipo day. that was way back in 2005. since that time, the s&p is up 30%. and in webmd, you are -- >> i agree with that, steven. that's exactly that trading range i was just talking about. all the uncertainty, nobody knows. greed and fear is what's driving this stock and the near-term catalysts. right now the near-term catalysts, really a push towards profitability, street has the mo to go profitable in the fourth quarter. maybe it comes earlier. plus, they're also developing a channel that would take -- help consumers with the health care issue later this year, in terms of -- >> we've got a vacuum in terms of leadership. and on the fundamental side of the story, does that create issues here, steve? >> i think so so, maria. and the reality is, too, users of webmd, of the website, are spending less and less time on the website. it's a very dangerous trend. thaz a bad model going forward, particularly as prescriptions expire for many of those

advertisers. what the bulls are opening for, and i think hope is a poor strategy, is a takeover. and that may be a reality, but it's not a reason to invest. >> i see. >> i think that everything you're talking about, steve, is in the past. again, investors are looking toward the future. they're looking toward profitability. today, the company raised its revenue targets. that suggests, actually, that the drug pharmas spend on marketing maybe improving. they're really developing ways to try to have their users spend more time on the website. i think that you're going to see this stock probably, again, double, just as it did after its ipo, within a year, within a year or two years. >> we'll see about that. thanks very much to both of you. we appreciate it. we'll watch web md. thank you. >> be ware of the falling wedge, as we -- >> technical talk. >> exactly. sorry about that. 30 minutes left. the dow hanging on. in fact, we're heading back to the highs of the day, up 38 points right now on the industrial average. another all-time high. up next, survival of the fittest. is it getting harder for hedge funds to survive in this

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welcome back. the hedge fund industry is on pace to double returns from 2012. this year, a simple index fund or an exchange traded fund that mirrored the s&p 500 would be doing better than most hedge funds. >> very frustrating for many professionals. plus, through the end of march, hedge funds saw net outflows of over $9 billion, which is on top of the more than $20 billion that they saw in outflows in 2012. so how do hedge funds survive in today's market environment, especially when the much-simpler and much less expensive alternatives seem more lucrative, at least right now? joining us from that sky bridge

alternative conference is james bucan, ceo of pacific investment management, which focuses on investing in hedge funds for clients. essentially, a fund of funds. jane, thank you for joining us today. >> thank you for having me. >> it is a tough environment. it's a tough argument to make for a seemingly riskier investment, when the simplest of investments is doing so well right now. you know, many investors are geniuses, right? >> well, i think you used the key word, which is seemingly riskier. if you actually look at the data, on a risk return basis, hedge funds went down only about half the equity market did in 2008. and risk and returns still go together, so they are less risky than the equity markets and they are going to have a hard time keeping up on the upside. >> so, jane, let's talk about the fees. i guess this is really the most debated part of this story. 2 and 20, is that what you basically pay for a hedge fund? explain to our audience what 2

and 20 is. >> 20 and 20 takes 2% of the fee and 20% of the profit ifs he makes money. if he doesn't make money, he takes the 200 basis points, which is a pretty hefty fee. what we're seeing in the marketplace for large investors, people such as us, people such as big state pension plans, sovereign wealth funds, corporate pension plans, and other fund to funds is that we're significantly negotiating some pretty large discounts on these fees. so the fee of 2 and 20 is more what you call what the small allocator would end up paying. >> so what would be a more accurate fee structure then? based on your negotiations, what's an accurate fee structure then? >> when you factor in what we're paying our underlying hedge fund manager, the data we showed the other day showed we paid about 1.2 and 14 protect of the profits on average across all out of our funds. >> that's still much higher than anything else out there, right? >> private equity, i think, beats us, but, yes, it's

definitely on the higher end. >> let me go back to performance for a second. i sit on a couple of nonprofits, i know you do, maria, and there's a lot of questions asked of investment advisers during a down market. because if they're in, especially in hedge funds or any kind of a risky mutual fund of some kind, performance to the downside, there's going to be questions about that. to the upside, it's always, you know, everything's rosy and everything's good. but when the market is going down, that's when hedge funds seem to do better. i mean, you guys protect money better, but you're not as good at making the money on the upside when it's this kind of a market when everything's going up, right? >> that's exactly right. you're exactly correct about it. it's just a disk risk/return trade-off. and i think what's interesting is when you look forward, i'm not sure where the equity markets are going to go. i mean, who knows? the earnings are coming in, it looks strong, but on the bond market, rates have gone about as low as they can be.

and the question you want to ask yourself is, do you want to be long bonds now without the ability to go short, hedge, use derivatives, do all those things that hedge funds do? and most of our clients, what's important to keep in mind is most of our clients, as well as, i'm sure, some of your listeners, are people who need certain rates of return, in order to finance their activities, in order to provide living money. so the question becomes, in an uncertain future, how do you develop a well-rounded, well-diversified investment plan? i would not advocating putting all your money into hedge funds, i think few people would, but i think it's another diversification tool in a well-constructed portfolio. >> but what do you say to those people who say, why would i pay 2 and 20, or 1 1/2, 14, why would i pay these high fees when i just have to look at the last couple of years and know i'm better buying an s&p etf or an s&p dividend etf? >> that's a great question, maria. we'd all be geniuses if we can invest on the past. the question is, what's going to happen in the future. and if you look at what's going to happen in the future, i think

it's reasonable to find that hedge funds will provide a different return pattern and maybe it's appropriate for some people. clearly, fee-conscious investors, where fees are the most paramount -- you know, index funds are the way to go or maybe some etfs. but for those people interested in trying to get a little alpha, other alternatives, whether they be hedge funds, private equity real estate, which are recall, relatively, the fees are pretty similar across those, i don't think one's higher than the other, those provide diversification tools. >> where are the best opportunities right now? where are you investing? >> we think there are some really interesting opportunities in the fixed income markets. it's interesting, we're sort of joking that the central banks are sort of becoming like hedge funds, becoming activist investors. we call that activist central banks. what's happening is, we're seeing, instead of setting the general economic climate and being the director of the drama, they're actually stepping up and playing. so, for example, in japan, i know that's a bit far, we're seeing that they've come out and

said that reits are cheap. when a central banker says an asset class is cheap, that's a great way of attracting money to that. we're also looking in europe. we think there are some very interesting places where, on the long end, there are some very interesting opportunities. >> all right. we will leave it there. good to talk with you, jane. thanks so much. >> thanks, jane. >> thanks. >> we appreciate it. we've got 20 minutes before the closing bell sounds. seeing a bit of a boost as we approach the close. >> a barrage of earnings heading our way tonight, after the bell. you've got news corp., groupon, tesla, green mountain coffee, all moments away from reporting. josh lipton has an update. >> speak of coffee, starbucks shares nearing all-time highs today. up next, howard schultz will tell us exclusively how he's planning on driving that stock higher. stay with us. my mantra?

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names reporting after the bell. first up, green mountain. analysts looking for 74 cents on revenue of $1 billion, respectively, that equates to growth year over year of 15 and 16%. stock has enjoyed a big run, up some 40% so far this year. also, groupon, the online daily deals service. the street expecting eps of 3 cents on revenue of $590 million, representing growth of 5% year over year. we we'll also be on the lookout for news corp. analysts think we'll see 35 cents on revenue of $9.2 billion. investors want to know more about the timing of its publishing spin-off. also watching ratings and revenue for the networks blockbuster show, "american idol," company conference call at 4:30.eastern. and finally, tesla is reporting. street looking for 4 cents on $500 million. the key here, what the company has to say about the model-s backlog. have they managed to bring that down? also, any guidance they can give us about being able to maintain

profitability this year. stock is up some 65% so far. 2013. remember, a big short in this name. bill, back to you. >> yeah, big percentage there of their sheaares. thank you, josh. heading towards the close. the dow up 45 points here. up next, brian peery explains why the biggest risk to your portfolio right now is being underinvested in equities. we hear that a lot. and he'll explain it. >> yes, we do. also, instructions from the court. college basketball's coach k. explains what business leaders can learn from the sport that he has been dominating over the past 30-plus years. that's still to come on "closing bell." bny mellon combines investment management & investment servicing, giving us unique insights which help us attract the industry's brightest minds who create powerful strategies for a country's investments which are used to build new schools to build more bright minds.

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well, as we head to the close with the dow and s&p flirting with all-time highs yet again, the question is, should investors be bracing for a pullback of some kind? there we've asked it again. >> mike thompson so the head of global markets intelligence for s&p capital iq. he joins us now. here we are on tail end of the earnings period. let me get your take on how you would characterize the earnings so far. give us that backdrop in terms of the fundamentals. >> well, maria, i think, first, the most notable thing is, this was a record quarter already.

i think, according to the cap iq consensus, we just had an all-time record for early earnings, 2666. that beats q4's 2633. so that's great news. earnings came in a lot better than they started. we were under 1% expectations. they're coming in at about 5%. that's good news. and i think the earnings parade will continue. i think expectations right now are very conservative. 4% next quarter, 7%, the third quarter and as high as 12% for the fourth quarter. so i think earnings, you know, i think earnings are stable right now. and the market multiple has expanded. . >> is that why we're sitting at all-time highs right now, michael? so many people look to the fed and the tremendous liquidity they provided as a reason to force people to go into equities. but you seem to be suggesting that the earnings support this market move here. is it? >> well, you know, not to go back two weeks when rick santelli was jousting with us about, you know, the fed's

contribution to this. i think he brings up a great point, and i think if there's one thing that can derail this is a miss handling somewhere in the future of taking the accommodation out. so, here you've got kind of a really interesting situation. where not too good of news or a mixed bag of news on the econmetric front is keeping the rationale in place for the fed to stay their liquidity course. if you start seeing those unemployment numbers even improve further, right, and the housing market, you know, continues its march to recovery and evener many positive economic numbers, then you've got to start wondering, what happens to the fed? and i think what's a particularly vexing question among institutional investors, bill, is that if you have a changing of the guard at the fed, will the next fed chairman be as adept at taking a combination out as this one was at putting it in. and that could be a serious issue. >> well, what do you think? when would you expect the fed to

start bringing it in. and do you think it's going to be a hard landing? >> you know, look, i guess the best we have to do is look at what happened back in '92. you know, i think, i still recall, james baker, you know, being very critical of alan greenspan at the time for putting the brakes on too quickly and starting that ascendency in rates. and i think, you know, if the economy is still in a fragile state, i think it could cause the market a certain bit of anxiety. maria, do i think it, alone, could, you know, punch the market down? i don't. but i think that coupled with an shot could throw investors a curveball. i think it has to be coupled with something else. but i think the market will start trying to figure out, who replaces bernanke. and i think this is going to be a story that starts working its way into the vernacular of institutional investment community. it's already started. >> haven't we already figured

out it's going to be janet yellin? and she's of a like mind with ben bernanke on this. >> well, actually, the real question is -- i'm not sure. you know, it's funny, if you talk to some constitutional investors, i've had a mixed bag on that, right? not to comment or epine one way or the other about yellin, but that she tends to be a little bit more dovish. i think people see bernanke, although what his actions seem to be, the hawks would say he's dovish, i think he's more of a full-field player. i think the circumstances called for him to be there, but i think in another circumstance, he would be much more hawkish, whereas i think most people would think in, you know, yellin would bemore of a true dove than bernanke. >> but isn't that precisely what the market would need at that time, someone who would be less likely to be as abrupt with the tapering off, if, in fact, she's that dovish, then she'd be less likely to be as abrupt in the tapering off, don't you think? >> perhaps, perhaps.

but i guess then the question just becomes -- >> we're all playing speculation here at this point. >> but this is the fun part, right? look, what the fed has helped contribute to, you know, it has laid the context, right, for, you know, reininflation. but i think what it did, is it was a catalyst for recognition of asset inflation, within the equity markets. now, we can command and rationalize these evaluations. we're not even at the seven-year average, we're still trading below 15 times next year's earnings. there's a story and narrative to justify this most recent move, and you have this nice, sort of slow recovery, which sort of says the bond market's not going to shift anytime soon, but i think you can make the argument both ways. and i think what will happen is you'll have some sort of divisiveness, because people will start wondering and worrying a little bit about what would happen with interest rates. and the other thing, which is really interesting, right? you take a look at the credit markets. how much of the debt is short-term? an overwhelming amount of the

debt is short-term. so, if you start seeing some issues where people start thinking that, you know, inflation's going to get up and the fed is forced to move, then i think you start having a more complex thought process about what might happen here. >> good to see you, mike. always enjoy your insights on the markets. see you later. >> thank you, mike. >> coming back with the closing countdown with the dow up 38 points. >> and after the bell, don't miss an exclusive interview with the ceo of starbucks, howard schultz. we'll hear what his company's sales say about the state of the economy. back in a moment. all stations come over to mission a for a final go.

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coming up on the four-minute mark here. and i mean, here we go again. the dow, here's what has happened this morning. a sell-off, thought we were going to have a little bit of a correction day after yesterday's gains. didn't happen. things turned around and they were really led higher by the transports. the transportation average turned early on, and then the rest of the market followed. kind of bumped along there for a while, but the last hour here is when we saw most of the gains for this day and we're up 38 points, now at 15095. that will be another new all-time high. new earnings coming out, lots of them, important companies, green mountain coffee, they're looking for a profit of 74 cents on a billion dollars in revenue. that's up 74% right now. groupi groupon is up 4% almost at 5:00

a and change. news corp. is lower by 1% right now. they're looking for 35 cents on $9.2 billion. and tesla motors has been in the news a lot lately, up a fraction at this point. they're looking for a profit of 4 cents on $50 million. but the rally continues here. >> it really does, bill. i know you saw the news at the end of the day that we were seeing a bias to the up side. chatting, actually, alan and i, about that. what are you seeing? >> definitely on the buy side right now, at our firm. we're bias to the buy side. >> why? >> just, you know, we've had good news and earnings season is almost over. over 400 stocks have reported already. 67% of them have beat, so earnings -- >> on the bottom line. top line has been not very good. >> still weak, but still, it looks good. you know, companies look good. they look strong. the revenue isn't as much as we'd like, but it's not as weak as we thought either. so overall it's been a good earnings season.

so now we're getting into data. the news today was good out of china, germany industrial production was good today. overall, the market looks good in may. no one's going to go away. >> i said to bill earlier, there seems to be a vacuum of information now. during vac couuums of informati what happens typically? >> usually it drys up, like we're seeing, but we're not selling off. we're trending upwards, which is a real strong sign. >> i think last week you were with us and the market was down. we said, are you likely to buy a dip like this, and you said, yes, i am. and we continue higher. some of your brethren are walking around here scratching their heads saying, i can't believe this is still going on here. >> well, again, i go back to the fed. i think as long as the fed keeps infusing this market -- >> but the fed has been -- i get that, alan, and warren myers was just saying the same thing, but the fed has been in this market for three or four years now. and last year at this time, we had a decent correction in this market. >> the question is, what are the alternatives, right? even though the fed has been here for three years, what's better than the return of a dividend payer?

where's the return? where's the yield? >> right now we're up 14% in this market this year. so, you have to come here. you have to come here. where you going to go? and remember, there's $11 trillion on the sideline in cds and checking accounts and savings account. they're going to look for a new home. >> i'm going to get ready for the 4:00. howard schultz in the next hour. see you later. >> thank you. these earnings that are coming out tonight could set a trend for tomorrow. news corp., groupon green mountain, tesla. these are all companies in different industries that are seeing to some degree pretty good growth. >> right across the board, the growth has been pretty strong, it really has. my only concern is, what happens when the fed stops? >> we don't think that's going to happen for another couple of years. you're just going to keep buying for two more years? >> stocks are going to be very careful, but we're going to be in this market. we think in this market, forget the daily and the trades, but at the end of the year, you'll be happy to be in this market. >> good to see you, as always.

nice tie. we're going out near the high of the day. an awful lot of stock coming to be bought at this juncture. up 50 points on the dow. new all-time high for that and for the s&p. stand by for those earnings and the exclusive coming your way with coach k. and howard schultz of starbucks, that on the second hour of the "closing bell." i'll see you tomorrow. and it is 4:00 on wall street, do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. the bulls marches on today on wall street, as the dow and the s&p 500 close at another all-time high. take a look at how we're settling on the street today with the market higher in the double digits. the dow up about 48 points, about one third of 1%. that is uncharted territory. the dow at an all-time high of 15103. the nasdaq composite