>> eagles june 8th on nbc. >> thank you. let's check the market very quickly. dow down 34 points, nasdaq down 2. s&p 500 down 6.8%. that's the end of the show. perhaps time for hair of the dog. >> thanks for watching "street signs." "closing bell" coming up next. hi, everybody. as we enter the final stretch, welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange. this market struggling to extend the winning ways as the dollar moves higher. hi, ty. >> i'm tyler mathisen, i'm in for bill griffeth at global headquarters this afternoon. we're on top of these markets and more on today's programming, including the banks are mad as heck and aren't going to take it anymore. banks fighting back and mobilizing against washington and a slaw of new regulations coming down the pike. we'll have a special report on

what they're doing and what's at stake. maria? >> yeah, ty, jpmorgan's jamie dimon still under fire ahead of this month's shareholder's meeting. we'll talk to frank biznotto about that and a lot more. we'll talk about why he's going to run that company. stay tuned for that special interview, coming up. >> and is it just me or does it seem like every time you want to use your frequent flyers miles, you can never get the flights you want or the seats you need. new information that those miles may not be worth all that much at all. maria? >> let's check the markets as we approach the final stretch here for a thursday. the dow jones industrial average lower by about 50 points. things are worsening as the dollar strengthens. that's what's going on in this market. as you can see, this downtrend that really took flight at about 2:00 p.m. eastern, as you can see on the dow industrials, worsening as we speak, with a

decline o the nasdaq composite also under pressure. nasdaq down 7.5 points. and the standard & poor's index pulling back from that record high, a decline on the session of 9.25. and the dollar is on the move. in a moment, we are going to get back to the markets and talk about investing. we have breaking news right now on google. get to julia boorstin right now with the details. over to you. >> google's youtube is announcing paid channels as it looks for revenue beyond advertising from the 1 billion monthly youtube users. the pilot launches today with 30 partners in 50 channels including "sesame street" and ufc. it will roll out further in coming weeks. now, subscriptions will start at 99 cents per month, although the average for the pilot program is $2.99, and channel creators will be able to pick which countries they launch in, and whether they will include ads, although the

majority will not include ads. content partners will earn the majority of the revenue. and as for the question as to whether this is a threat to cable tv and netflix, the company stressed that it is all on on demand and ala cart, indicating it's more of a compliment. but the potential here is clearly huge. there is capability to stream live content, though no channels are using it yet. tyler, over to you. >> thank you very much, julia boorstin. now back to the market and the "closing bell" exchange for a thursday. danny hughes joins us, burke white, jim key from south texas money management, and our own rick santelli. rick, i want to start with you, because you were pointing out, as you have been all week, the move in the dollar versus the yen, is that what is tripping the markets, the equity markets right now? >> no, as a matter of fact, it isn't, but it's a particular event, nonetheless. here's what i'm picking up. and i had to call the mother ship to see if they had heard. supposedly, there's an article

being written by a fed insider that's supposedly sourced, you probably know who i'm talking about that seems to hint that maybe there is a tapered, more talk of a taper. however you want to spin it. but that seems to be why we're seeing a sell-off in stocks and a sell-off in treasuries. and it makes sense. i don't want to go into detail, because i don't have primary detail. i'm just recanting everything i've heard in the last 10 or 15 minutes. >> that's the rumor out there, but you also have to look at the dollar and the move it's making, right, rick, in terms of perhaps putting some pressure here. we're off of the lows in terms of this sell-off. let me get your take on what's going on today and what has been going on. thanks for joining us. >> thanks for having me. i think this is a broken record market. but i think that as we're getting close to overbought in the market, on any measure, sentiment, technicals, mcclellan, last time we had that was mid-april. remember we had that little flash, don't blink or you'll miss it pullback of just a

couple percent. we are overbought then. we got out of overbought and the market's been rallying since. the dollar really rallied into that overbought status. >> let's take a look at a chart of the dollar and see what's going on, gary, if you could get that going for us. let me get your take, danny. as the dollar moves higher, which would be such a negative for stocks in your view? >> we're looking for a negative for stocks anywhere we can get it, maria. >> you're looking for an excuse. >> the dow was up earlier today and i saw it fall you have and i said, wait a minute, nobody got the news flash that was happening. but the fact is, everybody is waiting for a pullback, and we've seen so much of a run in this market that's related to utilities and telecomes. they've really been the leaders, and that's because of yield. don't forget, everybody's chasing yield. we'll continue to see that, but i would ask you to look to industrials. we're starting to get some better data. pmi coming out of europe was actually better than expected. it was still pretty bad, still

in the 40s, but better than expected. and i think we can see the bottom happening, industrials are where we want the look going forward. >> it's the industrials that are actually getting impacted by the dollar. you see their products getting more expensive versus their international counterparts. let me get your take, jim key, on this rumor that rick santelli mentioned earlier, that the market is lower on this vague rumor that "the wall street journal" is publishing a story about jpmorgan and the fed, tapering off. do you buy into that? when would you expect the fed to start tapering off? >> you know, that would surprise me, because the fed's kind of articulated that it would have to see higher inflation numbers, which it definitely is not seeing. and a lot lower unemployment. so sounds kind of like a rumor to me. i agree with your other guests. doesn't take much for the market to take a breather at this point. >> forget me for interrupting, but burt, it seems to me from my sort of ill-informed vantage point that the market seems pretty much inoculates against

virtually everything. a little earnings disappointment, some bad news here. >> that's what's danny's saying. the one thing it hasn't had to be inoculated against, particularly, is a move by the fed. do you agree with that, and that the fed is really the only thing that could seriously derail this rise? >> yeah, i think so. a definitely think a policy mistake is the biggest danger for this market. we've got to pay a little bit of homage to companies. they've done a great job of navigating profits in a really tough revenue environment. sluggish growth, so they've done a good job. at the end of the day, the big risk here is a policy mistake, and that would be the fed beginning to taper too soon. i agree, i don't think that's going to happen. i don't think the fed is going to taper anytime soon. but i believe they're with us for a while. but i think they'll start hitting that a lot closer. >> qe is the policy mistake, not the taper. the policy is the policy mistake. come on! that's all we talk about is that, if you're looking at

rubber duckies, whether they're pretty or ugly, when you fill up the bathtub, they all go up, isn't that what we always talk about? how could this be good policy? >> no doubt about it. you're talking about $85 billion a month is $118 million, you know, ends up, $118 million an hour. that's an enormous amount of policy. i got that, long-term, it's not good. but at the end of the day, that's what's helped this. but the zero interest rates, i agree, it's a danger. and i worry about the billion dollar hedge fund managers fighting over herbalife, i worry about the person who's seeing their savings earn zero and on a real basis lose money. >> now we're talking about. >> i agree, i think it's a bad policy. but at the ent of the day, the market loves it. >> that's the bottom line. >> you can criticize, you know, manufactured activity, but t a the end of the day, this is reality. and this is what's driving this market. and you've got to figure out how

to inforvest around it. >> investment managers are under the gun every quarter to make profits and the way that they do it is by investing in stocks right now. you have to be in it. regardless of what the policy is, you can write any letter you want to, but the fact is, they have to make money in order to gain assets. >> all right, everybody. we'll leave it there. thank you so much for your time. appreciate it. we want to find out what is behind this struggle today. bob pisani in the middle of the action right now with more on this market decline. hello, bob. >> let's put up the dollar again. maria was referencing that earlier. it's true, the dollar has gone up since about 2:00. see that nice move up? but a lot of this, i think, might be due to, again, weakness. the other side of this equation, to put up the dollar/yen relationship. because we crossed 100 yen to the dollar. that hasn't happened in a long, long time, since 2009. that's a very critical level here. so remember what's going on. short the yen, go long japanese stocks. that's one of the big plays. this is confirming this play. look at the dxj, the wisdom tree

hedged japanese fund. this hedges out the effect of currency. this is an intraday chart. you see how it spiked up there. so short the yen, go long japanese stocks is working. that's at a new high. put up the dow jones industrial average. and i know we saw that little drop there. the only other little thing i saw was a comment from the fed of the philadelphia fed, happened at the same time. he said he would like the fed to slow the bond buying program very soon. now, he isn't known as a hawk, but i think that was a notable comment. he also expecting 3% gdp in 2013 and 2014, surprisingly strong number from here. move on and talk about a couple of other things. the sector heres here, a little bit indeterminant. utilities really week. this has been a trend now for several days in a row. keep an eye on that. finally, jobless claims, five-year low. i think that's very significant. a lot of people were coming out this morning saying, there is a correlation with lower jobless claims in the s&p 500, and that's a big, important point here on the economic front. guys, back to you.

>> thank you so much, bob. we're in the final stretch of trading here. we have 50 minutes before the closing bell sounds for the day. a market under pressure with the dollar rising and rumors and speculation about when the fed will begin to slow down on the easing. the dow down 25 points. >> and up next maria, gene sperling is here. earlier today, the gop-led house passed a bill, a debt limit bill, that did not make the white house happy. we will get the details and mr. sperling's reaction. then banks pushing back against tougher regulation, but which side of the coin is best for you. we will find out, coming up. and later, is this bull rally that we've been watching here for months real and sustainable? larry kudlow says yes and he will face off against our resident stock skeptic, jeff cox. that and much more when we come back on the "closing bell." are you still sleeping? just wanted to check and make sure that we were on schedule.

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helps him deposit his checks. jay also like it when mother nature helps him wash his car. mother nature's cool like that. citibank mobile check deposit. easier banking. standard at citibank. president obama renewing his focus on job creation today, as the house of representatives lays down a line in the sand about the debt ceiling. john harwood's covering it all for us and has the details in front of the white house. john? >> tyler, starkly different

economic messages from the white house and from house republicans today. president obama went to austin, texas, to push the message that was contained in his budget, which is that the key for the growth of the middle class, growth of the economy, is economic growth, as indicated by two executive orders, one of which would expand government data sharing for businesses and also would foster the creation of manufacturing centers. he says that government action is necessary to encourage the growth of the middle class. >> part of our challenge, you've got to try to see the same kind of seriousness of purpose in your leaders, from washington to wall street. all of us have to commit ourselves to doing better than we're doing now. and all of us have to rally around the single greatest challenge that we face as a country right now, and that's reigniting the true engine of economic growth, a rising, thriving middle class. >> now, republicans on the other hand in the house of representatives are pushing a

message of austerity. they puassed a bill earlier tody that would allow the government to raise the debt limit only for the purpose of paying bond holders, to prioritize the payment of government obligations once we hit the debt limit. the obama administration argues that that would create default, in fact, if not legal default, by deferring payment of other obligations from the government, things like social security benefits and other benefits or other obligations incurred by the government. so the two sides are on display, these arguments, and they're part of the ongoing debate about whether or not we're going to get a budget deal later this year. odds are very much up in the air about that, and i know that you're going to talk about that, tyler and maria, with gene sperling right now. >> we certainly are. john harwood, thank you very much. what does the top white house economic adviser gene sperling have to say about the latest moves in the ongoing debt drama. he joins us now from the white house to talk about that and the president's focus today, as on so many days, on jobs.

mr. sperling, let's talk first, though, about this debt prioritization. the president has vowed to veto the legislation that would prioritize debt repayments and the white house is against it, but prioritizing how you pay your bills is something that every american family has to do. tell us why you don't like this plan. >> well, no, that's not right at all. what this is like is telling an american family that if you pay your mortgage first, you'll be okay if you default on your credit card, default on your student loan, and default on your car payment. that, obviously, is not good advice. but it's much more serious when you're talking about the united states government. we've had over 200 years of an impeccable credit standing and full faith and credit. and the idea of this prioritization is, as john just said, prioritization is default by another name. it's not about preventing default. it's simply about who you pay first, when you are defaulting.

the united states full faith and credit does not mean that we will not pay bills that we owe people, that we'll pay bondholders, but it will be okay to default to veterans, to small business contractors, to medicare. that would be so harmful for our economy. the impact on job growth could be absolutely devastating. but even the longer term impact to our credibility, our credit standing. so i really don't think this is a partisan issue. i think any serious person who cares about the united states financial standing, about keeping interest rates low, about, you know, what it means for the united states over these laos 200 years to have honored its credit should find this to be a nonstarter. not a serious proposal. >> gene, so have we cut enough debt for right now, then, do you think? shou be putting debt cutting aside and not a priority right now? >> let's separate two different things. what the president is saying is,

we should not be contemplating anyone looking at using default as a budget tactic. the era of threatening to default the united states of america in a budget negotiation, that should be over. he's not going to negotiate on the debt limit. but, maria, he is working every day to create the conditions for a serious budget agreement that would include long-term entitlement savings, we think, tax reform should raise revenues, and one of the important points, maria, we've talked about this so many times -- >> so raise revenue, meaning raising taxes? >> well, you have tax reform, that would raise -- >> so taking away loopholes? >> taking away loopholes. and again, this is what speaker boehner and other republicans have talked about as the right way to raise revenues in the past. but the point i wanted to make to you, maria, we've talked on this show often about the importance of dealing with our long-term entitlement savings. well, right now the default is, we're letting this very harmful sequester take place. it's hurting jobs, it will

prevent us the from being able to do the kind of things the president's talking about in austin, texas, today, invest in skills and high schools and invest in manufacturing senders, and the irony of all of this is it doesn't help by one penny on our long-term entitlement. sequester ends in ten years. the president's trying to -- is keeping out his offer to speaker boehner, which would, in the second ten years, reduce our projected entitlements by $1 trillion to $2 trillion. $1 to $2 trillion versus zero in the sequester. >> i think everybody agrees that this has to be done. gene, i think everybody is on that page. knowing that we've got to reform these programs, because, you know, they're going to go bankrupt unless we see some kind of reform. but you said that the era -- you know, you said recently the era of threatening default is over. you just basically reiterated that that in your last comment. but once again, it's like we're finding the two parties cannot find common ground. don't you think the american

people are sick and tired of all this fighting back and forth? why can't we just come to an agreement and do the things that need to be done in a practical and responsible way, gene? >> i couldn't agree with you more. that is not always the case, maria, but right now i could not agree with you more. and listen, i mean, let's understand what the president has done. we were very close to an agreement with speaker boehner. he's kept that offer on the table. $400 billion in medicare savings. that would probably lead to multiples of that in the outyears. he has kept on the table his -- the republican's request to have adjustment to our cpi calculation. very controversial, a very difficult measure, even with our own supporters. but what the president's doing is exactly what you're suggesting. he's saying that we have to compromise, we have to have an honorable compromise if we're going to come together on a budget agreement that's good for jobs, that allows us to invest in skills and manufacturing and

things like that, and deals with our long-term entitlement challenges. >> you talked a moment ago -- >> that means everybody has to give a little. the president is giving. we just need a lot of the republicans, and i do believe there are republicans who want to be part of the president's caucus of common sense, but it's time, as you said, for us to come together and acknowledge, no one's going to get 100% of what they want. everyone's going to give, but the country will benefit by us having a pro-jobs, pro-growth budget agreement. >> wouldn't an energy policy be pro-growth and pro-jobs, gene? >> excuse me, i'm sorry? >> wouldn't an energy policy and drilling, some of the richness, in terms of the commodity in this country, wouldn't that spell jobs and growth for this economy? wouldn't that be a game changer? >> there's no question that we think that our increase in production is a very important part of our economy. in fact, the president's down in austin today, talking about how we have a very strong future in

manufacturing. that there is a potential, if we do the right policies, for a manufacturing renaissance, when a lot of the top manufacturers will tell you is part of that is what natural gas prices -- >> exactly. >> -- have done to contribute to our competitiveness. and really, we need is a budget agreement that's good for jobs and the economy, but we also need to, as the president's doing today, remind people every day, the ultimate goal of everything you do in the budget strategy and policy is about growing our economy and growing it in a way that you strengthen the middle class and you strengthen our investment in a more productive and competitive united states. >> let me turn one last question, to the question of growth. would tax reform contribute to growth? and would your ideal tax reform include the elimination of certain deductions and the lowering of rates and the flattening of the tax code? so that the tax code is less a part of our economy in the future than it is today? >> so what the president has put forward is he's put forward both

a long-term entitlement savings agenda. he's also put forward a couple of measures that he feels would be smart tax reform, that would basically have tax expenditures capped at 28% for everyone. but what the president has said all along is that what's important is that we have a tax reform process that raises that amount of revenue, that raises revenue to help reduce the deficit, and meets his fairness goals. that's what the president's put forward, but he understands that if we work together, democrats and republicans, maybe another idea comes forward, but he feels it's an idea that needs to be a type of tax reform that's consistent with his principles of contributing to deficit reduction and honoring the progressivity of our tax code as it is right now. >> so, gene, what is this tour, the president's tour going to mean for job creation? how does one equal the next? >> well, what the president's doing today is making very clear that he wants congress to work

with him on doing things like, you know, having more high schools that focus on stem education, investing, making sure we're meeting that skills gap that you've talked about before, maria. >> sure. >> on manufacturing, we have a proposal that i think does have some strong bipartisan support, on manufacturing innovation partnerships. we haven't been able to pass our -- the president's larger proposal in the state of the union, but we're showing that we could do three pilot programs, that we're announcing today, in manufacturing and things like dingal manufacturing and other areas that we think will help, theas president says, make us more of a magnet for the location of advanced manufacturing, which we believe, now, we have the wind at our back, and that we could have a stronger and more sustainable manufacturing comeback, which isn't just about the jobs and the factory, it's about what it does to innovation in our country. >> certainly a big part of it, gene. always a pleasure. thanks so much for talking to us today, gene. >> well, thanks for having us.

>> we'll see you soon. gene sperling joining us at the white house, as usual. we are in the final stretch of trading. we have a market that is under pressure, but well off of the lows. check it out. down just about nine points. looks like we could actually go positive in the next 35 minutes' time. >> barnes & noble shares soaring after microsoft reportedly offer $1 billion for its nook assets. but what would barnes & noble be without the nook? so should they sell at any price? . also, real american profits. forget this global economy, turns out stocks generating revenue and rising revenue, solely in the u.s., are significantly outperforming the market. some are still trading at a discount to the s&p 500. we've got the names and we'll name names. that's next. stay with us. [ male announcer ] what?! investors could lose

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stocks are struggling to head back to record highs. but one stock bucking the trend today is barnes & noble, as you see right there, and jane wells spla explains why. hi, jane. >> barnes & noble's chart made for a very good reading today, on a tech crunch report that microsoft may buy nook media for $10 billion. and they'll stop making tablets next year. but barnes & noble shares hitting a 52-week high. microsoft already owns 75% of nook. john tinker thinks buying the whole division makes more sense to go after amazon and ebooks. and since their entire market cap isn't that much more, why not buy the whole enchilada and

get some stores for mr. softy's retail plan. >> in the same way that apple has stores, samsung is now going to be using thebuy stores. it would be logical for microsoft to take their very limited strategy, part of which are only pop-up stores, and buy the whole of barnes & noble. >> now, barnes & noble's chairman wants to take the retail stores private himself. there are other stakeholders that could make a fuss, like liberty media. but tinker says one wild card to watch for, news corp.'s spinning off publishing. and back in 2000, rupert murdoch and john malone had merge terrify talks with barnes & noble when they were partners. maria? >> thank you so much. so should you add barnes & noble to your books? let's start talking numbers. on the technical side of the story, ari wauld, and john stevenson, with first asset investment management. gentleman, good to see you.

thanks for joining us. >> good to be here. >> well, we just heard jane's report. do you like barnes and noble on this report, john? >> i'm out of this, right? >> essentially, it's just a rumor that it might be a takeover. and keep in mind when microsoft bought into this company, into nook media last year, it was valued at $1.7 billion. this has been the story of barnes & noble for the last three years. it spikes on rumors of a merger and acquisition activity and falls back and depending on what's negotiated in this transaction, whether they keep content, you know, are stores involved? do they have some sort of licensing agreement back to the nook products, what is included? it could range in value from $27 a share down to five bucks or maybe even zero a share. i think on balance, it's really much better to be left alone or sell into the strength today. >> what do you think, ari? do the charts agree with john's

point? >> not at all. the same story over the past few years. but the charts are getting stronger and stronger here. i think this is a long-term turnaround story. i think there's more upside to this as well. let's look at the charts. barnes & noble, devastating downtrend, since 2006. but we can see over the past few years, the behavior is getting much better, it's making higher lows, it's spinning this symmetrical triangle pattern that's broken out to the upside. all within this big, rounding bottom. so i'm looking at $24, $26. that's the next resistance zone. i think that's a conservative target. the breakout actually targets $29. i think we can see that in the longer term. go ahead, john. >> i don't think the charts tell the whole story. in fact, i don't think they tell a story at all. i mean, you go back nine months and this stock was $11.27. it's really almost doubled since at this point in time. it's really on the news. the fundamentals look horrific. nook itself, sales in the last

quarter were down 26%. overall, retail sales were down 10%. posted a loss -- >> psychologically, it's very difficult to buy a stock after it's jumped so much in a short amount of time i agree. but buy it on weakness then, longer term. if you're looking for a rotation candidate, there's been a lot of talk about this. this stock has underperformed by 70% versus mid-cap retailers since the market began. this is going to -- >> that's because there's a longer fundamental -- people are not going to barnes & noble and buying books. that's the problem. >> well, that is a big -- that is part of the if you want fund issue. >> if you're looking for an unloved stock, that's beaten down, barnes & noble is it. >> we will watch both -- you both make compelling arguments. gentleman, thank you both very much. ty? >> the dow bouncing off its lows, now down about seven points. the s&p down four. nasdaq positive by about 2 1/2 with about 27 minutes before the bell. >> and the big banks are

fighting back against increasing efforts to regulate the banks in ways they say would crush business models. up next, find out whether this united front will work and how that impact could have on the bank stocks. back in a moment. and later, the basketball superstar kobe bryant giving his mother the worst mother's day gift ever -- a legal battle. but after you hear the story, you say she deserves what she's getting. the details later on the "closing bell." tdd#: 1-800-345-2550 opportunities are waiting to be found in faraway places. tdd#: 1-800-345-2550 markets on the rise. tdd#: 1-800-345-2550 companies breaking through. tdd#: 1-800-345-2550 endless possibilities. tdd#: 1-800-345-2550 with schwab, i search the globe for the big movers. tdd#: 1-800-345-2550 i can trade in 30 different markets tdd#: 1-800-345-2550 to help me seize opportunities, tdd#: 1-800-345-2550 potentially better returns and new ways to diversify. tdd#: 1-800-345-2550 to get an edge, i use schwab's global research. tdd#: 1-800-345-2550 they give me equity ratings on foreign stocks tdd#: 1-800-345-2550 based on things like fundamentals, tdd#: 1-800-345-2550 momentum and risk.

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welcome back. the big banks battling back against washington's rally for more regulation. kayla tausche looking into what's going on today. kayla? >> three years after dodd/frank financial regulation has gotten its second wind. starting earlier this year, an onslaught of stricter rules coming into view that have wall street and washington at new odds. two facets of dodd/frank still in the works. final rules on how to clear derivatives and the volcker rule, both are expected to be finalized in the coming months. but two new threats would change the landscape. one the kurnd brown/vitter bill and a potential introduction of a global transaction tax. the fate of both of those issues is unclear, but the reason why

wall street is beefing up its representation in washington is two-fold. one, simple suggestions are now becoming legislation and banks fear the new rules could hamper the health they've only finally come into. so they've brought on former government officials like bush 43's tony fatto and michelle davis and stephanie cutter to help inform them. but don't call them lobbyists, they call them myth busters. >> they're there to educate you. that's what the lobbyists say they do nape educate you. >> and they are. by the way, they're the only ones out there educating, because at this point, it's a constant attack on the banks, and whatever's popular with the masses. so somebody's got to be out there actually explaining what all of this regulation and this uncertainty is doing to business. >> well, they do educate with a point of view. that's why they're paid the money they get. so -- i don't know if i degree, but okay.

>> sorry? >> i don't agree. >> okay. what's online, joinings us is paul miller. brian gardner, senior vice president. maria and i will talk this out later. it's all going to be fine. paul, let's talk about this. and whether you think the regulatory risk to banks today, particularly the large banks, makes them a good buy or a not-good buy. >> well, right now we have to see where all of this comes out, but i think right now these things are fairly valued. and the too big to fail issue, i don't think, passed, but the regulators, i think, are going to make these banks hold more capital. i think that's the damage. i think a lot of people are concerned out there that the capital play for these institutions, that big portfolios laportfolio s like, like buybacks and dividends, could be hampered. which it looks like that's what they're leaning towards. >> and capital, as well as liquidity, right? they want to tie the health of

these companies not just to capital, but now also to liquidity, which probably is the right way to go on liquidity, but not capital. what i don't agree, ty, and what i was alluding to is the idea that all of this is actually helpful. because we've got so much talk and buzz about what's going on, and anticipation about what might happen, and in fact that's causing a lot of confusing and a lack of certainty. and that's really what is bothersome. so brian, there's a lot of noise in washington. it's sort of vague and mysterious. do investors care about this? is this stopping them from investing in the group? >> i don't think they care about the legislative side. they don't care about brown/vitter, they don't really care about the financial transaction tax. they discounted that. they don't think that stuff's going to pass. they are worried to paul's point, and i think they should be worried on the regulators. and the regulators in a way are being affected by what's going on, on the hill. but you're seeing this shift over the last couple of months from the fdic and tom honag,

basel's very much up in the air. it hasn't been finalized, it's been proposed for a year, and now there's shifting going on about what basel's going to look like. so i think it's making investing in the group that much tougher, because of that regulatory uncertainty. brown/vitter is a sideshow. >> so it's the uncertainty? >> last week, i heard lloyd blankfein speak rather thoroughly about regulation. and he said, among other things, rather surprisingly to me, that regulation has always been here. and maybe he was just speaking because he knows who's listening, but he didn't feel that the level of regulation for specifically his company, goldman sachs, was all that much more onerous, franksly, yet, than it has been. so, paul, is that a legitimate point? >> it's not yet. >> you know, i think right now, it is a legitimate point, but i think what they're worried about is where they take it with the next step. the regulator's under a lot of

political pressure from congressmen to tighten up the rules, tighten up capital liquidity rules, make them hold more debt, all these things, which is going to really hit their bottom line. >> that's the point. it's the anticipation. and every day, we have new ideas. you know, dan tarullo came out last week. he's had a new idea to do capital, you know, target to higher capital levels, as well as tie it to liquidity. the vitter bill, i mean, all the anticipation is keeping the banks not doing anything. so it's not necessarily regulation of today. of course not. dodd/frank isn't even implemented. >> it's the short-term uncertainty, but to tyler's point and blankfein's point, this goes back to what jamie dimon said in 2011, before basel was even proposed. just tell me what the rules are and i'll manage the hell out of the risk waitings. the banking industry, especially the large banks, know how to -- i don't want to say game the system, but that's close to what it is. it's more of an impact, really, for the smaller players, that don't have the sophistication to manage their businesses to the

regulatory world, the same way that the too big to fail banks do. >> i just don't -- >> go ahead, maria, sorry. >> no, please, you finish. >> i think the regulatory uncertainty is a greater problem for community and regional banks, less so for the big banks. >> i think that's a great point. i just don't understand why we're not ever acknowledging the fact that debt is way down, capital is way up, cash is way up. these banks are in the best position that they have ever been in. and you know, we keep attacking them. what else do we want to get out? >> there's a very strong story to be told, both on the financial position that the banks are in today, which is substantially better than what it was, in terms of quality and quantity, compared to 2007 and 2008, and also the economic potential impact of higher capital rules on economic growth. tony fratto has made that point before. i think it's a very effective point. i think the banks have been

lacking in telling that story. they lack the political clout to do so, and i thought it was interesting that richard davis, actually, in the journal article today, suggested that bringing in the community banks to help on this issue. the community banks were never going to lobby on behalf of the big banks on this issue, but davis understands. i mean, it's a fundamental point, davis understands how little political clout the larger institutions have right now. >> absolutely right. absolutely right. >> thanks, gentleman. this topic will continue. we've got a lot more coming out. we'll talk with first data ceo, frank bisignano. we'll talk to him about financial regulation as well as what he is seeing at first data and why he took that job. that's coming up. we're in the final stretch of trading. we've got a market down about 24 points on the dow jones industrial average. ty? >> maria, would you believe that getting kicked out of the dow may e a good thing for your stock? we've got the data to prove it,

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revenge of the rejects. a dozen stocks that have been kicked out of the dow industrials over the last few years, well, guess what, they've been outperforming the dow. let's get to mary thompson. she's been crunching the numbers mary? >> both the rejects and replacements recently outperforming the dow. the rejects' gains exceeding those of the replacements. here's how they stack up. from its recent lows on november 15th, the dow is up 20.4%. the average return for the 12 stocks pulled from the blue chips average since 1999, 30.2%, while their replacements' average gain is 24.3% since mid-november. their recent gains belie some long-standing troubles, though, as all are well off their hay dye highs. take navistar, owens-illinois,

benefiting from a recent restructuring. and as for aig and citi, they continue to recover from near-death experiences during the financial crisis, and international paper reflects an extreme makeover that's left its focus on projecting packaging and printing paper. not all the rejects are returning gains during the record run. as for long-term investors, rejecting the rejections may have paid off. only 2 of the 12, honeywell and altria, have outperformed the dow since 1999. back to you, tyler. >> all right, mary thompson. now, there are about 11 minutes before the closing bell. and the dow and the nasdaq, sort of hanging on there. the dow off 36. the s&p down by 7 and nasdaq dipping into the red just a little bit. maria? >> up next, jeff lavin that'll says a pullback is around the corner. he makes the case, next. >> and can the resurrected

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stocks down just a bit late in the day after those moderate gains, and we're just minutes away from seeing whether the dow can mark a third consecutive day of gains while nasdaq is going for six in a row. one of our next guests says as good as the run is, the scene is being set for a pullback. >> and we are actually now back at session lows right now, down 51 points. and he is jeff leaventhal. and also with us is matt chestnut. matthew, let me kick this off with you? why do you think this market is worsening? the market once again at the lows. >> it's about time, if you ask me. we're probably just seeing a little bit of cooling off. we had a strong week again, great numbers today, five ipos today, money flowing into the market, it's time to take a

little bit of a breath, re-evaluate, still holding above 16 on the dow and 15 on the dow. those are strong numbers. i think it's cooling off. >> jeff, do you think this is the beginning of a sell-off? >> i think that's exactly right. i think all things do come to an end. while we're bullish on stocks longer term, i think we're due for a 5% to 10% pullback, that may come in may, maybe sell in may and go away, but maybe over the next 30 to 90 days, we'll see that 5% to 10% pullback. >> if i had $10,000 to deploy between stocks, bonds, commodities, alternatives, how would you do it? >> you can't fight the fed, obviously. the market just keeps going higher. but you start getting value place being talked about, like apple and things like that. one place you might want to put some money that hasn't gotten any love right now is gold. gold's had a pretty strong rally off the lows, we're at 1455. that might be one place if you're going to put some money, especially if you think the market retrace 5% to 10%. >> what about that big sell-off

in gold we saw a couple of weeks ago. are you not afraid of like that repeating? >> you're always afraid of it, but i think that was the final pukeout. i think that's a good sign. now we see some strong hands in here, trying to take it a little bit higher. and maybe if we can break through 1475, 1,500, maybe we can get to a push higher. >> did you say it was a puke-out? is that a technical term? >> it's a new technical term. >> tyler? >> jeff stepping beyond that for just a moment, sort of the same question to you. you see a 5 to 10% correction. what would you be doing with your money right now? >> well, again, we still like equities, in particular, large cap. we would be waiting to put that money to work until that correction comes. and in addition to that, w d overweight technology. as you know, technology lagged in the first quarter, but we're starting to see some life there, and lastly, japan. and we think japan has a lot more to move. all that being said, we're still waiting to put that new money to work until we see that correction, both here in the

u.s. and in the japanese markets. >> how severe might the correction be, jeff? what are you expecting? >> i don't think more than 10%. 5%, 10%. that would give us a good entry point. we still think the economy is recovering, so there's -- you know, longer term, the equities should go higher, but we just have to see some type of breather. it's march, 2009, four years straight up and no rest. >> all right, gentleman. leave it there. >> we'll come back with the closing countdown. >> and then, sun america's heather hughes says forget about sector rotation. find out why she says two of this year's best-performing sectors will continue to lead this market higher. you're watching the "closing bell" on cnbc, first in business worldwide. [ female announcer ] what if the next big thing, isn't a thing at all? it's lots of things. all waking up. ♪ becoming part of the global phenomenon

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luckily, he found someone who gave him a fresh perspective on his portfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age. it's not rocket science. it's just common sense. from td ameritrade. looks like some winning streaks are going to end. seconds to go before the closing bell. art cashin is with us. who or what tripped the market here this afternoon? >> it was certainly a reaction to the dollar. the dollar was up, the dxy, the dollar index was up about 38 or 40 or so, and around 2:00, it really began to spike. it may have been rick santelli's rumor. it never really got big in new york, but once you saw the dollar moving, gold went under

pressure and stocks went under pressure. >> and that rumor being that there's an article, potentially, coming out, indicating that the fed may taper off or lyingighte on its bond-buying purchases. that's the one you're referring to, art? >> that is the rumor. rick said it wasn't too well-grounded and i said it really didn't get to here and it's not that truly believable. >> art, thank you very much. it is time for the second hour of the "closing bell." 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. stocks dropping on wall street just a day after the dow and s&p 500 closed at all-time record highs. take a look at how we're finishing the day on wall street. we did see some selling and pretty volatile at the end of the day today. the dow finishing off of the worst levels of the day, but nonetheless, a decline of about 22 points. a lot of talk about the federal reserve and whether or not we're going to see an article about them slowingow