regulations, raising capital. and a better system of checks and balances. but then banks continue to get beaten up by washington where they push for hasher regulation remaining in full force. i'm not comparing the errors exposed in washington to what happened in the financial crisis, but what i am saying is that trust is gone on so many fronts. trust in our financial system trust in our ceos trust in government, trust in our leadership. the last thing we need now to get that trust back is new barriers to transparency and covert operations to take down groups just because you do not agree with them. no, that will not get trust back. that does it for "closing bell." have a great weekend, everybody. see you on monday. "fast money" begins right now. live from the nasdaq market site in new york city's times square, i'm melissa lee. party like it's 1995. how this rally mirrors one of the most distinctive years in market memory.

and why some believe it's a possible nirvana scenario for investors. battle for dell. carl icahn upping the ante for dell. what is at stake after his spirited interview earlier today on "the halftime report?" and what's in store? the biggest names in retail getting ready to deliver earnings. we're tackling the postgame analysis. the dow and the s&p 500 closing at all-time highs here. we're tackling if the rally is getting overextended here. interesting close to the session. we did see the markets rip into the close, grasso. >> we did. it's getting a little too telegraphed for me. we had a conference call this morning and i felt negative. i sold my apple, sold my google. i felt it was too telegraphed at this point. i think there's room to the upside. i don't feel like i have the brains to pick a top here. >> we had outperformance in the nasdaq today without apple which grasso sold. >> yeah, apple was down most of the day. closed down 85 by.

the nasdaq was up 1.75%, versus the s&p, up 1.1%. you've seen the rotation. industrials have done well here. but to me, the main story is the slope, the assent here is getting steep. from the lows last month -- >> like a broken record dan nay than. >> really? >> you're the constant bear. >> i'm not a constant bear. >> yesterday, you saw ben bernanke hints he takes his foot all the pedal and the market sold off. first time the market went red -- >> grasso that's the story. complexly agree with steve here. let's keep in mind a couple of things. the big trend that none of us are talking about as we hit new highs is this deterioration in the former leadership, these reach for yield sectors. utilities on april 15th were outperforming the s&p substantially. that's all been erase and we're less than a month since then. you have a lot of deterioration in half the market right now. and what i think you don't want

to see, although it's nice the cyclicals have joined the party, you don't want to see that continue. you don't want to see what you saw in high yield bonds today. what we have to be cognizant of the strong dollar has gotten maybe too strong for this rally to continue. >> that's actually the theme i was most interested in today, the dollar strength. and it hits on a bit of which sectors would you want to be in when you're at a market like this? i think you get more selective when the market is trading 1635. i would be staying away from commodities and energy names. i think health care domestic plays are still relatively safe. >> great point he just made on energy. energy was reporting and they were obviously beating so everyone was getting in covering their shorts in the energy space. but energy's done reporting today. so, now, basically, the whole sector is done. you don't get that beta chase. >> in terms of the reach for yield, josh, you nope tis that one stock in particular set some records today. >> yeah so we own johnson & johnson, i've probably mentioned it on the show 6,000 times --

>> at least. >> well look this is one of the biggest winners i've ever seen in a short period of time. it's put on 20% and it's not supposed to be acting like that. i think that factors in. the record that was just put out there by my friend ryan from schafer's investment research is this is 19-weeks straight they eked out a penny gain on this week. that's never happened with any stock according to their research. >> josh, i got to ask you this. here is a company that's trading all-time highs, fairly stretched valuation. only supposed to grow mid single digits for the next three years. at what point do you have to pull the plug on this thing? do you have to sake profits? >> define stretched yield in an era where bond yields are under 2% and not going anywhere any time soon. and number two, look j and j is actually three companies in one. they've been hesitant to characterize themselves that way, but we all know there's a lot of potential to unlock value here.

if, in fact, that's what this management team wants to do. i would not be shocked to see this stock trading north of 100 in a year or two's time. >> yeah but josh -- >> i don't think it goes there as quickly -- >> you can make the same case for a lot of the utilities. they got thrown out, but i held onto my southern because i wasn't down that much. but i'm still hoping that chase for the yield still comes back after the commodity place -- >> i think the utility point is good, and health care. the way these things have gotten taken apart, you saw the rotation, it's got to happen -- >> we have a second half growth spurt in the economy, god forbid, you don't want to be in ewe till tips. >> i'm definitely using this as my play in case the market reverses, in case you play a recession, which is probably not going to happen but in global growth stays the way it is i'm happy being in utilities. if it doesn't reverse, we go to 1750 in the s&p, i sell. >> let's continue our discussion about the slow market meltup that we're witnessing pushing stocks ss to their third week of

gains. our next guest says the markets may be poised to party like it's 1995 all over again. let's welcome the senior columnist at yahoo! finance. good to see you, michael. 1995, in case our viewers out there, they tend to be younger people. >> sure. >> that is a year where the s&p 500 gained 34%. this is a very positive comparison. >> not only did it gain 34%, but did it in the most gentle kind of low drama way you could imagine, going up 34%. you never had a 4% pull-back. the reason i bring it up here besides just kind of liking looking back at the market analogies is, this year's rally kind of maps to '95 relatively well, to this point. no 4% pull-back, you didn't have a pull-back of that length the entire year in '95. and also i think though we kind of say, okay the whole late '90s was this magical period nobody had a worry in the world, wrong. we actually did. and, in fact there was a lot of macro worry and you were coming off a very stressed period on

wall street. >> are you as worried -- i saw the piece, but are you as worried now? we saw that europe can take us down, ben can take us down. those are bigger instances than we had back then as a marketplace. are you more worried now? >> i would be. i think it's a higher risk environment in general. i wouldn't take this as a tactical cue at all. it defines the potential upside risk, if nothing goes wrong. >> in '95, i was in a dorm room listening to wu tang clan. i have the reference -- >> were they in the dorm room with you or were you listening to -- >> i'll never tell. no but so for the younger viewers, and i studied this after reading your piece today, can you talk about how much -- we justed a a whole segment about sectors, how broad-based was that rally? i assume it had to be almost everyone participating. did we see the rotations month by month where people would say, oh that's not holding up

anymore, this isn't holding up anymore. >> to some degree, yes. and the context, is 1994 was a blood bath in the bond market. wall street, the securities industry as a whole lost money that year. basically, surprise preemptive rate increase early '94, basically green spanspan tries to get ahead of eninflation. you had edge funds blow up. that context were, the financials were dead. in '95, financials took over. >> i'm curious what you would say to someone who says well the demographics are much different. the ownership is now a much old older crowd that has to sell for environment purposes. in '95, you had the baby boomers coming into the stock buying aspect. >> i think that has a lot more to do with the pace of economic potential than it does with who owns the securities right now. i think it's way overplayed who owns it who is selling it to whom and who is buying it. most of it is so concentrated with hyper wealthy people that don't have to sell to actually

pay the rent that it's not really the story. i do think it has a lot to do with what's our economy capable of? because in '95, the stock market was sniffing out this radical kind of growth phase in technology, in financial service services -- >> nete ipo. >> that was that year. >> online trading started basically that year in a main stream way. >> mike, thank you. >> you got it. >> mike yahoo! finance. there aren't too many people here on this desk who were trading in '95 or in the markets but you were -- >> i was. i was. and there's a lot of similarities, but you know for me it's always a little bit different. it's a little bit of a tweak. we don't have inflation to worry about. there's a whole different foundation to the trading environment now. and that's why i sold some names. >> what is it sniffing out right now? that's the question i have. we have the situation where, you know, the u.s. is totally decoupled from the rest of the world as far as what's going on in europe and what's going on in emerging markets.

to me we have a situation where, yes, the u.s. is being deemed as a safety trade. i don't know unless the emerging markets join the party and europe really starts to grow again, how this can continue. >> all right, let's check in with josh lipton who is back at headquarters. couple names he's tracking today in the afterhours session. josh? >> melissa, leaders and laggers in the dow this week. the best caterpillar. stock hit a nine-month low on april 22nd. since then it's bounced 11%. the worst this week mcdonald's the golden arches down 2.6%. mcdonald's saying this week that global same-store semis fell 0.6% in april. taking a step back, though this year, mcdonald's up 13.6%, but cat down 1%. only stock on the dow in the red for the year. melissa? back to you. >> thank you, josh. by the way, on "options action" in the next half hour we have a trade on cat. mcdonald's any buyers here? >> it's actually a very competitive environment. wendy's came out with their sales guidance as well.

all of these names are in a hyper competitive environment. i don't like the space. >> each time they hit these stocks on earnings, they come back immediately because their yielding 3% plus and they are buying back, shrinking the float and people say, all right, it with us a bad quarter, whatever it's mcdonald's. coming up next the biggest movers of the week but first, carl icahn steps up his fight for dell. and we've got the goods on the west retail trades ahead of next week's earnings. the names that could deliver the biggest upside. that's straight ahead.

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karl eye can stepping up his battle for dell on today's "halftime report" he had a few ideas for unlocking profit.

take a listen. >> i should show you five ways dell can make a fortune here. he can go out he can make a deal with microsoft, he already has made one there. or, i could give you five ways. he can do a deal with hewlett-packard and merge them. the software coming to fruition they bought. it would be extremely, extremely profitable. >> so, what would a merger with microsoft or hb mean for dell and can he win? and, of course what is best for -- if you were a dell shareholder right now, what would you do? >> i would definitely be taking his bid. it's by far the best. you are going to get the $12 plus the free option not a free option, but close to free in the case that dell does well in the future. i think that's a much safer bet than taking michael dell's offer. >> no doubt about it. carl stated the board will be gone michael dell will be gone. they want to lever this thing up. they want to change some things but does not change the fact what he wants to do if you want to put dell's sagging pc

business together with hp -- this thing needs to be broken up. i don't get why anybody wants it. >> one of the highlights of that interview was when scott brought up jim chanos and how he was shorting dell and icahn said i don't remember him being on fortune's wealthiest list. >> he's picking fights with everybody. >> in terms of billionaires -- >> i always go with icahn. if i'm going down a dark alley, i want him to watch my back. >> this is $23 billion, if they were to just like all ail agree to a one-year truce, they could have this fight over $16 billion next summer and -- this is a melting iceberg. i'm sure icahn can unlock value here. he's been incredible but for a share holder? what are you holding out for? 40 cents more? >> right. >> i can't imagine why woud want to be locked up in this. >> let's move on now. macy's reporting on wednesday, walmart, jcpenney kohl's

nordstrom on wednesday. let's take your position. tom, pleasure to speak with you. >> good to be here. >> what are you anticipating because already in terms of the data points we have gotten, it's been a mixed bag and a lot of the retailers seem to be impacted by the weird weather that we've seen. >> certainly weather's been a problem in the first quarter. but i think the problems transcend the weather. the hard lines guys aren't doing that well either and i think the fact of the matter is people are paying more for taxes, and as there's more money coming out of their pocketbook it's got to come from somewhere and retail spending is part of that. >> so, how do you extrapolate that? are there certain parts of the demographic you think are being hit harder because of the payroll tax hikes, so therefore, there are kinds of retailers that could see some weakness? >> well i think the higher end in general is now beginning to feel some impact where there

hadn't been that much at the higher end. i think you are starting to see some impact there. again, the great performers will work their way through this. we've got some private companies like jay mclaughlin that have high end customers and they are doing well. they wouldn't be doing as well as they might have been doing, but they're doing remarkably well. but in general, i'd say, and the broad lines guys it's going to be mediocrity. i think jcpenney will be a train wreck. >> tom, you know on one side you see that there's -- the tax issue is definitely a head wind but we haven't seen any inflation, so, the cost of goods has been very low. it's been disinflation for a lot of the companies. is that an extreme, you know wind at the tail for them? >> actually, the way it works, generally for retailers over time, retailers like to see modest inflation, because generally, you know, if things go up by x dollars, you can pick up a couple more margin dollars, by having the same margin percentage, and thus have a

greater contribution. so, when things come down in this competitive environment, retails tend to come down, as well, and put pressure on gross margins, so, i don't think the softness of the cost size is going to offer that much help to the retail community. >> tom, when you look at the retailers that are going to be out with earnings which ones do you think fare the best? >> well i think, when you have somebody like jcpenney who is basically handing over hundreds of millions of dollars of revenue, throwing it back in the marketplace, in the near term their direct competitors like kohl's and macy's will probably pick up some revenues. walmart's probably some what above that -- below that customer, and nordstrom, probably above that customer so, for that near term reason, i'd favor them. long-term, i think you have to like the people who are just well positioned. nordstrom and kohl's are great merchants. i was in a kohl's store this

week. they are doing a better and better job in cosmetics and other categories they improved their men's offering. i think they are a well run company, so over time i like well-run companies. >> tom thank you. top retail pick? >> i actually like jcpenney though he hates it. and here's why. soros got involved. you had bank financing can took away their cash flow problems and people aren't talking about this, but the numbers are terrible. in the second half this year sales may turn positive for jcpenney, given where the stock is. there's a lot of bad news priced in. >> it is friday, that means it is time to hit the biggest pops and drops for the week here. pop for yahoo!, up 7% this week. josh brown? >> yeah i think the story here is really about management and confidence in management. they really haven't delivered majorly on the bottom line but people are looking forward to the ali baba ipo. >> a pop for cliffs natural, up 18%.

grasso? >> chase to cover, i'm not sure how long that lasts. >> pop for whole foods, up 11%. dan? >> these guys were stuck in the mud. they are facing the challenges of decelerating earnings. they reported they beat they guided, they announced. stock made a new 52-week high. >> drop on the week for the ewe till tips etf. ennis? >> movement from defensives to cyclicals. i go with grasso. i don't think the utilities run is totally over yet. i wouldn't be a huge buyer of it but i'm not a seller either. >> let's take a look back at some of the best moments of the week here on "fast money." >> dom knee's pizza. who did patrick doyle said gave him the idea of -- >> you, you -- >> thank you. >> happy belated. >> there you go. >> tim seymour. >> thank you, sir. >> vladimir beautypew putin loves apple. you have to be careful. >> that's true. >> to my friend to my left dan, he's going to make some

interesting arguments, but i'm going to make the correct ones. >> we miss you out here melissa. gary is whining at the pool right now. >> he's always whining, isn't he? >> very funky, very ugly 1970s style sandals, you know? >> oh not to mention the speedo. great week. thanks. coming up next why these stocks may be in a danger zone. plus your first move for monday when we come back right. ♪ roomba, roomba, roomba, roomba ♪ ♪ roomba, roomba ♪ ♪ roomba, roomba ♪ ♪ roomba, roomba ♪ ♪ roomba, roomba ♪ ♪ got a robot vacuum ♪

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let's take short interest. rising short interest in some of the markets most talked about stocks could be a bear trap so dan has been looking at which stocks have some of the highest -- >> bear trap and really dangerous. we get the question all the time, we got it last night, do i short tesla here? no you do not. who knows why this thing is going up the way it is but remember this. hedge fund are chasing performance. these setups like tesla, where you have the top five shareholders that own 50% of the shares and 50% of the shares are short, you do not want to get involved in these things. to me you avoid these stocks. >> i want to make a broader comment on the state of shorting stocks circa 2013. if you look at the 50 most heavily shorted stocks they're actually up an average of 10%. and 27 of them are up 30% or

more. so, this is really a tough environment for any kind of short-receiving, especially something like a tesla where it is so heavy shorted. >> there are a lot of other stocks here. solar city green mountain coffee netflix, as well as first solar. netflix is an interesting one. that is a karl eye carl icahn name. >> netflix is in a different category though. it has something to it. the others have global growth that are just hitting them in the face. if you are not buying on fundamentals, you shouldn't chase it to buy it on covers. you have to have a story. >> would you buy any of the other high short interest names? >> i love the solar space long-term. this isn't the best entry. but i do like first solar. >> okay. let's get to the final trade. it is that time. your first move. dan? >> stay tuned for "options action" we're going to lay out a bearish trade. >> steve? >> call come.

got long today. >> ennis? >> jcpenney. >> josh brown? >> buying ieo for oil names. >> all right, thank you so much for watching. catch more "fast money" on monday at 5:00. you can follow me on twitter. meantime, don't go anywhere because "options action" begins right after this break. ♪ ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ]

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this is "options action." tonight, get your groupon? ♪ people gather round ♪ >> we have a way to make money on groupon if the stock goes up down or nowhere at all. plus what's this guy talking about? >> about two weeks ago, i bought a january 400 call so the january 460 call and i sell the january 325 put, zero. >> nice. >> no cost. >> dan nay than will give you