mandy, six weeks' vacation. cheap bordeaux. baguettes. >> i think it's worth it. i think we're also going to complain here about our taxes. we love to complain about our taxes. >> very, very true. >> merci. "street signs." hi, everybody. happy monday to you. welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange. this week trying to kick off on a winning note. not so fast. >> we have a new buzz term to keep an eye on. taper talk. >> yeah, right. >> taper talk takes its toll on the markets today. higher earlearlier. major averages in all time high territory. fed officials, especially charles evans of chicago, very bullish talk on the economy which led some to believe maybe the tapering would begin earlier

than later. >> goes to show you how fragile this market is. every time we start talking about the federal reserve tapering it down, pulling it in as far as the stimulus this market semlls off. >> only lost 20 points. it wasn't that scary. >> any talk about the beginning of the end of stimulus is certainly something people focus on. countdown is on for two ceos. jamie dimon and apple ceo tim cook faces a capitol hill grilling about all the cash his company still has abroad. we'll have the latest on both developing stories. >> they keep $100 billion over seas. we'll talk about that. another developing story, the irs scandal. more questions about who knew what and when. former republican governor of mississippi haley barbour will be here. dow jones industrials down

just about ten points. we are now negative. but not by much. nasdaq composite and s&p 500. similar chart patterns. the nasdaq, we'll see a decline at just about 2 1/2 points. well off lows of the day on the nasdaq. s&p 500 down just a fraction as well. again, off of the lows here trying to make a comeback as we approach this final stretch. >> let's talk about it all in today's closing bell exchange with sam stovall, dan i hughes from divine capital. uri landerson, i'm going to start with you, our resident bear, on this panel. still? even at these levels? >> yeah. absolutely. actually, more at these levels. because the market's more expensive. so i don't think there's much more than a couple of percent up for the rest of the year. i think we could go as low as 1400 in the dog days of summer. >> why? what's going to be the catalyst to get people to say, okay, enough is enough, i want to be a

seller here when we know the federal reserve is still buying $85 billion worth of bonds every month? >> i think that might have to taper off a little bit. it's going to be more i think the view that expectations, growth expectations in the market are unachievable given what's going to happen in the economy. >> dani, you think earnings are going to support this kind of a market, though, right? >> going forward. we think so. there's a couple of reasons for this. let's not forget that earnings growth for some of these large s&p 500 companies, particularly the ones that are in the global markets, about a third of their revenue comes from overseas. that is a triple increase since the year 2000. and even though we've seen china back off and we're talking about brazil backing off, they're still talking about 4%, 7% growth in these emerging economies. so we do -- plus, the tax rates overseas are much better than they are in the u.s. so that kind of growth, we think, is sustainable over the

long haul. >> let's talk fundamentals, sam. what are you seeing so far this year in terms of earnings and revenue growth. >> ternings growth has been better than expected. s&p capital iq thought we would see only one-half of 1% coming into the first quarter. we ended up with ten times that amount. yet the revenue forecast was expected to be up 4%. came in less than 1.5%. i think we need to be able to go beyond the belt tightening, beyond the share repurchase programs to make investors feel as if there is enough critical mass to support a move higher. >> connect the dots. we're having a debate on whether or not this market is actually going to be sustainable given the fundamental backdrop. do you think we need more of a lift or do you think things sustain and warrant this kind of activity in terms of valuations? >> i think from a fundamental perspective, we still have anywhere from 5% to 10% to the upside based on historical trailing gap operating earnings numbers. so from a fundamental

perspective, we could easily see this market move higher. the question is technically, we bump up against the upper level of a channel, so it's like we're sitting at a stoplight. we're waiting to see if the light ahead of us or behind us turns green first. >> hank smith, you're watching those people who are buying bonds because they are nervous about the stock levels. but you think that's a positive for the stock market? >> absolutely, bill. the sentiment is still rather -- maybe not fearful, but there's a lot of anxiety and the anxieties change. people realize they've missed a bull market. the great -- so-called great rotation from bond funds to stock funds hasn't even begun yet. there's still net inflows into bond funds. you're not buying a bond fund because you're optimistic, confident, euphoric about the market. you're buying it because you're scared and they're willing to accept very little. so there's still a ton of fuel and a lot more positive sentiment to go that can trooif

stocks higher. >> interesting. hank, the last time we talked, i believe we talked a bit about financials. are you still a buyer of financials? what's your take on this jamie dimon shareholders meeting this week? >> well, look, i think it would be a shame if he left. because they stripped his chairmanship and ceo. he's really one of the best executives in the financial industry. and so i -- i think it's much to do about nothing. hopefully shareholders will make the right choice and let him keep both roles. yes, we do like financials in here. and they are very attractive. they're undervalued. and they're returning to normalized earnings and also they'll be delivers much more in dividends over the next three years. >> you think he really would leave? i mean, would you put money to jpmorgan today ahead of this vote? >> we are continuing to buy jpmorgan and continuing to buy wells fargo in our view the two highest quality banks in the united states. >> i don't think he would ever

leave. i don't think he would leave. >> that does take -- it really -- i don't want to say it tarnishing his image as the smartest guy on wall street, but it certainly doesn't help. it's almost as if you are taking away some of his reputation on wall street. he'd be the only top banker on wall street that is not both chairman and ceo of his corporation. i take it back. citigroup, they have the separation there. but, still, that would be a big step back for jamie dimon. uri landisman, don't take this the wrong way. you know i respect your analysis and opinions, otherwise you wouldn't be here. but do you sometimes feel like a stopped clock with your bearish calls on a market that keeps going higher and higher and higher? you understand why some people would be skeptical of somebody who says they're bearish in a market that has just done so well this year. >> absolutely. i really thought the year high would be about 1620. it's obviously surged through that. i'm a little bit surprised.

but i have raised my floor for the year from 1300 to 1400. but i still am very negative. think people should be pulling out of stocks. can't believe money is still flowing into bond funds. you're just not being paid for your risk anywhere. i'd be very selective about where i'm investing and raise a lot of cash. >> real quick, if i'm taking money out of stocks, where am i putting it? >> i'd be putting it into natural gas and into yap nejapa equities. those are the only things that look very appealing to me now. >> japanese equities certainly on fire. thanks, everybody. >> can stocks come back and close in record territory? everybody, put your sunglasses on. bob pisani's here. nice tie, bob. >> takes a strong man to wear a purple tie. >> we have the same shirt. >> thank you very much. the important thing about today is we're getting smacked around because fed officials keep talking. very annoying.

we've got a thin tape. even a guy like evans who is a dove sees the end of the road somewhere. take a look at the dow industrials. he made those comments in the middle of the day. one of the reasons we started seeing it move to the downside. sectors, still a risk on. it's not gigantic gain. still respectable. till moving on the upside. big story this week is going to be home depot and lowe's. other than mr. bernanke. it's a home improvement story. they're going to be reporting tomorrow for home depot before the bell. remodeling trends are improving. existing home sales up. i think the one headwind we've got is the valuation. look how well they've done this year. lowe's and home depot have outperformed the overall market. lowe's up 19%. home depot up 24%. see what the s&p is doing.

in fact, guys, low's was downgraded today by oppenheimer precisely on that. that's one of the reasons you see it town fractionally today. bill and maria, back to you. >> we love you, bob. >> thank you. final stretch of trading here for the day. about 50 minutes before the closing bell sounds. a market flat. down six points on the industrial average. >> if it's lower today don't worry because they're always tuesday. >> 18 positive tuesdays? >> it would be 19 tomorrow. >> about $100 billion. that's how much money apple keeps overseas to shield it from the tax rate in the u.s. that's more than double what they have in the united states, by the way. now apple's top executives are being hauled off in front of congress to talk about all that money oversea. find out what that means for the company and your stock. was yahoo!'s billion dollar tumblr bet a smart one or not? decide for yourselves. coming up, both sides of a very heated debate. after the bell, exclusive interview with blackrock

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welcome back. apple ceo tim cook will be on the hot seat tomorrow. not from shareholders. why cook is getting a grilling on capitol hill. over to you, eamon. >> we've got a little bit of a strange situation going on here in washington. you're right. tim cook from apple will be here in washington tomorrow. he'll be testifying before the permanent subcommittee on investigates. that's an investigative committee up on capitol hill headed by carl levin that's been engaging in a long running series of investigations into american companies and how they treat their offshore income for tax purposes. they've previously looked at hue let pa-- hewlett-packard and otr

companies. what we've obtained in the last few minutes are some testimony on behalf of apple. we're not being told whose testimony this is. whether this is tim cook's testimony or not. but this is testimony on behalf of apple that they're going to deliver tomorrow before the subcommitt subcommittee. what we've got here in a strange way now is apple's defense here to what the subcommittee will reveal tomorrow. the subcommittee's findings are embargoed until 7:00 p.m. tonight. what we've got is a defense here from apple of its conduct and tax structure. what we don't have and what we can't bring you before the embargo is what the subcommittee has found here in this case. let me show you a couple highlights of this testimony. they're fwoing to say, apple is, apple is an american success story. they're going to defend in a full throated way apple's tax status and the way it has structured itself, including a defense of an entity called apple operations international.

they're going to aoi performs important business functions that facilitate and enhance apple's success in international markets. it is not a shell company. this is what apple will say tomorrow. they will also say the existence of aoi does not reduce apple's u.s. tax liability. so clearly some focus here on the part of apple on this offshore subsidiary, apple operations international. they're going to say it's a holding company that performs centralized cash and investment management of apple's foreign posttax income. it was incorporated in ireland when apple began its long standing business presence there. aoi is properly treated as a cfc under u.s. law. so, maria, a very strange situation in which we've got this testimony just a few minutes ago. apple's not telling us exactly who's going to deliver this testimony tomorrow. whether it'll be tim cook or some other official. and it is a full throated defense of findings that will be presented by the committee at

7:00 tonight. so we have the defense here. but we don't have to bring you now the findings themselves, maria. >> well done. we get the answers before we know what the questions are. >> you know, it's like college but upsidetown. >> thanks, eamon. >> you finesseed it well. a question that comes to mind here, should the tax laws for bringing overseas money back home be changed so a bill is a lot cheaper for companies like apple? in other words, a tax amnesty of sorts to bring -- to repay trait that money and bring it back home without a tax obligation of some kind? >> a lot of people believe if the tax law were to be changed an enormous amount of money would come back into the united states. today companies look at it as being taxed twice. joining us to talk about it is ben par of c-net. and cnbc contributor mike san thole who says he doesn't think that would make much of a difference. good to see you both. thanks for joining us. what would you estimate? how much do you think would be sent back to america, ben, if, in fact, we were to see a change

in tax law that would not double tax corporates? >> i think we're talking about billions if not hundreds of billion. there's more than a trillion dollars in u.s. multinational cash overseas that would come back if you simplified the tax laws. you don't even have to do the kind of amnesty they did in 2004. they just have to simplify the tax laws and make taxes more fair and money will come back. >> you toent agree, michael. why? >> first of all, i wouldn't argue against tax simplification. i think there's a massive industry in corporate tax or avo avoidance optimization. we overplay how big a factor this is and whether companies use their cash here to invest here, spend, invest, and hire and things like that. i do think there was -- dale has a lot of cash overseas. that was untouchable until they wanted to use it to buy the company itself. it seems to me a little bit overplayed as a big swing factor in how companies optimize their

use of cash. >> ben, what about this -- this apple operations international, aoi, that tim cook is going to highlight during his testimony tomorrow. that's a $100 billion operation. did they say as a holding company that brings important business functions to apple overseas. there's a reason to hold $100 billion overseas is what they're arguing. bad idea? good idea? >> it's what apple needs to do to be -- to be good to its shareholders. that's how it's going to save the most money. if you simplify the tax code i suspect a lot of that money will come back for things like building out more stores and building out more employees and building out its central locations and more of that would happen. you know, not all of the money is going to come back. every company is going to use that money differently. but if you have simpler and more fair tax laws, a bunch of that money will come back and it's much better to be spent here than it is to be spent abroad. >> let's not forget one other thing here. a big portion of apple's customers are overseas.

they've got employees there as well. it's a global business. so, you know, who's to say where they should keep their money? if they look at the situation as being taxed twice and they've got, you know, x number of employees, x number of customers, huge customer base outside the u.s., what's wrong with them keeping their wiggle room in some regard in that cash overseas, mike? >> i don't think there's any argument that they have the right to do so. you know, they can route their profits, you know, anywhere in the world they so choose and is legal. i do think, though, really what we're talking about is the u.s. were charged a differential between the tax they paid overseas and what's owed over here. it's cumbersome. you have to get tax credits and the rest of it. i toent really think we should treat these big companies as any sort of vikt ps o punitive tax policy when in reality their corporate tax, effective tax rates are as low as they've been

in history. i don't think it's as big an economic factor as it's being played. >> what's the incentive to bring it back? what's the incentive to bring it back here at this point? >> they don't have an incentive to bring it back, maria. >> they should. >> look at what apple's doing. they're borrowing in the u.s. against the implicit base of the overseas cash. that's an inefficiently, i fwesz, on some level. but more companies could do it. if they really wanted to spend the money here they could borrow against overseas cash. >> ben, you're saying they should change the law to bring some of that money overseas. how much should come back? >> it's tough to tell. if you you have $1.7 billion, i suspect at least several hundred billion would come back to the states to help with operations if r a lot of timpbt companies. that's not a small number. i'm thinking about the future here. when you're talking about just -- you have $1.7 billion out now. think about how much more is going to be out there the next couple years if you don't

simplify the tax laws and make them more fair. it's as simple as we want the money to be coming here, not the money to be staying out there. >> all right. thanks, guys. intelligent conversation. appreciate it very much. >> thank you. tonight on "fast money" former apple ceo john sculley will weigh in. in the final stretch of trading. about 40 minutes left for the closing bell to sound. market mixed to the lower, down 15 points on the dow. what are the odds? the first dreamliner hits the air today. they have the ceos of united airlines and boeing on board, and the flight seis early on it arrival. what are the odds? phil lebeau was also on the flight. he'll give us his blow by blow account of the trip and plus we'll find out whether this will help boeing stocks sore to new highs. also, 600 million tl$600 mi. one winner. what's the single best stock the power ball winner how old buy tomorrow? clients are always learning more

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breaking news on boeing's dream yn liner. the first domestic flight since the fleet was grounded for 123 days has just landed. it was this flight from houston to chicago o'hare. our phil lebeau was aboard. how was the food? >> phil, this was an uneventful flight. that is exactly what boeing and united wanted. as you mentioned, this is the first commercial dreamliner flight in the united states since middle of january. there were 186 passengers on

board. despite all the speculation we've heard that people would steer clear of the dreamliner because of these battery problems, we did not find that to be the case with passengers we talked with. >> no. i'm the head of a quality center of excellence. i know the challenges boeing has had over the years. i'm pretty confident they've had an opportunity to work out some of those kinks. i feel pretty safe and secure on the flight. >> i have been eagerly waiting to take this flight. i tried to book one november 4th. i booked a newark flight which got canceled because of delays. i have been just waiting and waiting and waiting for this flight. >> i'm very comfortable. i never thought anything about it until when i got to the airport and everybody started asking me if i was nervous. are. >> reporter: that didn't make you nervous? >> no, it didn't. >> reporter: as you take a look at shares of united over the last year, rising with all the of the airline stocks, keep in mind this was also a big day for boeing. the dreamliner battery fix includes ventilation that we got a chance to see underneath this dreamliner in case there is a fire in the new battery

compartment. boeing has retrofitted 45 of 50 dreamliners that need new batteries. the ceo is confident this fix will hold. >> we have fixed that, added two layers of redun dancy beyond that. so highly confident. highly confident. >> jim mcinerney on the flight, he was sitting in coach along with the ceo of united airlines. who says the big guys don't sit in coach? as you take a look at shares of boeing continuing to march higher. getting close to that $100 mark. guys, back in chicago. an uneventful return for the dreamliner. >> happy you're safe back. is it time to get onboard boeing now that the dreamliner nightmare is over, we think. let's start talking numbers. technical side, carter worth with oppenheimer. fundamental side of the story, steve cortez is with veracruz. carter, you like boeing here? how do the charts look? >> sure, this stock took off, of course, no pun intended over the

last two months. what's important about it if you look at the chart is that the move is very short lived. meaning a stock like this, of this size, to be dead flat for 2010, '11 and '12 to break out above the 80 level. the break out level is only two months old. we think this carries. it's not over. the objective for a breakout level like that would be the pass top. those are essentially at the 108 level. about 7%, 8% from here. we think that's a reasonable objective for anyone who retains a long position or who's not long and wants to get long. >> what about you, steve? fundamental story? >> you know, i'm skeptical here. i think if you've been lucky or smart enough to be long this stock it's time to deplane right here. not because i see anything decidedly negative about boeing. i think there are better alternativ alternatives. i think if you want to bet on the airliners, by the airlines. airline stocks, by the way, have outperformed boeing if we look at delta and southwest, for instance. over the last year they've been significant outperformers.

i think a purer play. i don't think it's really so much about the airline story anyway. i think it's really about defense. defense has done really well for boeing. there again, i think better alternatives. i'd rather be in lockheed martin or northrop grumman. >> at this point knowing the bad news is behind, the dreamliner seems to have now gotten back on track, is there an opportunity to see a ramp up in the stock, you think, or no? >> i mean, i don't think from here. my guess is that that reconciliation is more than price. i would also point out one problem with boeing is that it effectively a bet on emerging markets. because the u.s. market, while it's doing very well, is not where the growth in coming years is going to come from for boeing. it's primarily asia. the only problem with that story, just today, in fact, if you look at emerging market stocks as represented by edm, it hit a five-year low relative to the united states. relative to s&p. so if you are betting on asia, i think that right now you're fighting a powerful trend

against you. and boeing really is de facto in many ways an asia bet. >> all right. we'll leave it there. thanks very much, gentlemen. appreciate your time today. see you soon. meantime, precious metals staged a comeback today. sharon? >> they're continuing to rise right now in electronic trading, too, bill. we're looking at gold which had been down seven sessions straight and silver which had hit a 2 1/2 year low before bouncing band and reversing course today. it happened around noontime. a lot of traders pointed to tend of european trading for the day as well as the fact that we are looking at some short covering and some bargain hunting and further weakness in the tlar contributing to the runup we're seeing in price reversal that we saw in the precious metals. also keep in mind we're talking about very thinly traded market when it comes to silver, at least, which has dropped as much as 9% in the first ten minutes of electronic trading last night. and that equally being an oversold market, just like gold, is a reason why some traders said technically when the

numbers got right, time to get back this, then we saw a sharp reversal to the upside. back to you. >> all right. thank you, sharon. heading toward the close. 30 minutes left here. the dow down eight points. don't panic. everyone, settle down. tuesday is coming. top fed official meanwhile optimistic on the economy. and that hurts stocks? blackrock president rob kapito will weigh in. also we'll hear from somebody who says that yahoo!'s billion dollar purchase of blogging site tumblr was a huge blunder by ceo marissa myer. we'll get to that story when we come back. 2550 when i'm trading, i'm so into it, tdd#: 1-800-345-2550 hours can go by before i realize tdd#: 1-800-345-2550 that i haven't even looked away from my screen. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 that kind of focus... tdd#: 1-800-345-2550 that's what i have when i trade. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 ...helps me keep an eye on what's really important to me. tdd#: 1-800-345-2550 it's packed with tools that help me work my strategies,

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the big deal of the day. yahoo! ceo marissa meyer making a billion dollar bet on blogging site tumblr. jon fortt has details. >> i do want to note, cnbc and yahoo! have a business alliance to share and co-produce editorial content. yahoo! gets three important things out of this tumblr buy. one, david carp, tumblr's founder and ceo, 26 years old, a proven hand at growing and holing an audience in the mobile and social era to tumblr itself. it gets 300 million monthly

unique visitors, many of whom younger and more mobile savvy than yahoo!'s core audience. tumblr's data is going to offer yahoo! clues about what it needs to do to grow the rest of yahoo!. marissa meyer learned at google how to turn data into better products. she'll have another here. a few pointed to quad cast numbers. two problems with the numbers. an insider tells me they're wrong. two, tumblr launched a popular smart phone app update last summer. tumblr's base is quickly moving to summer. quad cast measures pc and mobile web. not app usage. a big fish, the kind of talent google and facebook tend to want. in that sense it's a big win already. >> i'm in the tumblr community. not happy with the deal with yahoo! actually. one person writes, i beg you. don't sell us out to yahoo!. i mean, have you tried logging through flicker from your mobile phone? please, man, don't do it.

another. why, god? why would you let this happen? yahoo! won. i guess it's just a question of time before our data will be sold and our blogs become full of custom ads like facebook. sadly that day i'll say good-bye. >> i think marissa meyer anticipated that. her first tweet when they announced it is we promise not to screw it up. >> she's very in touch with users. >> larry thinks those against the deal may be on to something. but allison chantele of business insider says the yahoo! tumblr deal is a good move and makes complete tragic sense. allison, why are you so bullish on this? >> their audiences really don't overlap at all. combined they can give yahoo! an audience of 1 billion monthly users. that is huge. yahoo!'s audience before was sports, business types. these are the young, kind of hip ter people that yahoo! really needs to reach. that prime 18 to 34-year-old demographic. tumblr can bring that to the table.

>> larry, why do you think buying tumblr was a bad idea for yahoo!? >> i've been through the dot com double. you're a company that's not even profitable. you're spending a billion dollars on a company that did $13 million in revenue last year. projected to do $100 million. revenue could be much better spent in much different ways. i don't like it. i think they need to get into a content play here. i think you're going to see it in the marketplace with the stock. the market is not liking this deal. >> what about the content play? what would have it been a better deal, then? better use of their money? >> would have been a better deal if they got into a deal like hulu or even a crazy deal like zynga where you can get the content. it's about e-commerce. and it's about advertising. so the promise we saw here in the dot com bubble was there were companies with no revenue like we just saw the one here now for a billion dollars bought. where there's really nothing behind it. you need to scale advertising into the mainstream. and i don't see them being able to do that. >> what about that, allison? did they just simply pay way too

much for this? >> i don't think so at all. i actually think it is perfectly priced. i think you look at instagram and facebook and people cried the same thing when that deal happened. i think it's one of the smartest moves, maybe the smartest move mark zuckerberg has ever made. you look at youtube and google from back in the dot com boom. that was actually really, really smart. you could very much argue that youtube sold far too early. this may be the case for tumblr as well. >> do you think this is the start of many more deals? it seems like marissa mayer came into this job as inquisitive as hell. she wants to grow and expand through deal flow. >> yeah, she wants to grow through deals. but you've got to grow in the mainstream way. that's the problem. i think what's going to happen here, i think facebook, instagram is going to pick up users. you're already seeing what the users are saying here. this is about big money social media. the companies that talk about -- more about liking the social media than turning it into monetization are going to be in trouble. i think this was a bad play here

by marissa mayer. >> what about that? the precedent's set, though, allison on flicker. did they drop the ball on that one? >> this is great news for flicker. tumblr is all about sharing things, particularly photos. the things they can do with flicker at this point are great. i think marissa was very smart. by the way, this is what she was hired to do. she was hired to bring back yahoo!'s brand which has been really dwindling over the past few years. she could be sitting on her hands and hoarding the $1.1 billion. she's taking as by risk here. it will help the brand in the end. >> she needs to take a risk but do it in a content space. social media is all about content. that's the way it's going. that's where you've got to be. >> this is social media. this is all content. all user created content which is even better. >> the problem is a lot of this content is not going to be able to go mainstream. >> they're actually going to put a lot of the blog's contents on yahoo!'s main page. they're going to make it as mainstream as you possibly can. a lot of tumblr blogs have been

turned into books. that's pretty mainstream. >> they're going to have a tough time making it work. >> we'll be watching that content for sure and how they use it. thank you to you both. in the final stretch of trading. 20 minutes before the closing bell sounds for the day. a market that has worsened since we've been on the air. just a fractional move down. 20 points on the dow. s.a.c. capital founder steve cohen feeling the heat after v receiving a subpoena in an insider probe on his company. the plot thickens in the irs targeting scandal. new developments today putting knowledge of the scandal after the fact closer to the oval office. we've got those details. then, we'll hear from one lawmaker who says the irs needs a complete overhaul in the wake of this auditing scandal. he wants people held accountable. stay with us. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked.

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of justice over a potential settlement that would have warded off an indictment ot firm and its founder, steve cohen. cohen instead found himself in recent days served with a subpoena, asking him to testify about his own company before a grand jury. whether cohen will give evidence or take the fifth amendment remains to be seen. but the breakdown of settlement talks has changed s.a.c.'s tone from confident to more uncertain. on friday s.a.c. told investors in a cryptic letter that its cooperation with the government was no longer unconditional. and that it wouldn't be able to post them as frequently on its legal developments as it had in the past. it has also told employees that it won't comment on subpoena stories "new york times" in the, on cnbc and elsewhere today. and that they should carry on with business as usual, but that the firm can't say much more per their lawyers' advice. meanwhile, performance is going sideways amid a rallying s&p. investors once supportive of the fund are now starting to sound shakier. blackstone group's fund of funds which has hung tight with s.a.c. for the most part through the

crisis is now planning to redeem at least a chunk of its $410 million invested. other investors are making similar plans. fanning concerns in s.a.c.'s executive suite about what may be coming next. they've been confident up to now. i'm starting to sense a change of tone and posture here. so are investors. >> are you sensing a change in terms of flows, kate? are you seeing money come out of s.a.c. as a result of all of this uncertainty swirling? >> it does sound like blackstone is preparing to do that, maria. i toent think we'll have a final sort of calculus until june 3rd or even june 4th. the investor redemption tedline for the second quarter is the third. normally it would be 45 days in advance which would have been last week. but s.a.c. gave investors an additional two weeks in hopes that they would get a little more clarity on the situation before making their final decision. we know now that when s.a.c. extended that, they were probably in these settlement talks with the government hoping that they would have good news to issue. that they had warded off any future indictments in exchange for a fine and some other

concessions. now it appears that's very unlikely. >> you have to believe this cannot help performance. if they're distracted with all these legal issues that facings them right now, performance has got to suffer even in this great bull market we're in for equities right now. >> to be fair, it's interesting. i know people that work there. i'm told really in the rank and file, people have been able to remain focused. it's a very nimble, sort of aggressive type of mentality that traders have there. they continue doing what they always to. i think maybe up until today it hasn't been terribly distracting for most traders and analysts. at the same time, you know, there has been talk that perhaps s.a.c. was trying to stay more liquid in the wake of notions that investors may be pulling capital and they need to have it handy. s.a.c. has denied that. i know that since 2008 when, of course, a lot of people including them faced outflows and faced setbacks in the market, they've generally been more liquid. as to being more liquid year 2013 because of the legal turmoil, i'm told no. one interesting thing, if they do have to get more cash quickly you may see some impact on the

market. it may be tough to have s.a.c.'s footprints on it because they have so many positions and they trade so quickly in and out of positions. but they are a very active participant in the daily flow of trading. some people think they have a percentage, 2%, 3% of the daily volume on the nyse. >> amazing. wouldn't be surprised. thanks, kate. >> thank you. >> see you later. heading towards the close. 13 minutes left in the trading session. dow down 22 points. up 40 on the high, down 40 on the low. 80-point trading range today. meanwhile we were talking with chris. he says the tart of trally is o getting started. >> back to the '90s in terms of the move we're going to see. on today's big data download, why home depot may be a good buy ahead of the company's earnings tomorrow. find out how to play that stock right now at big data -- start again, bill. bigdata.cnbc.com. and on cnbc's mobile app. [ kitt ] you know what's impressive?

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sfwlnchts less than ten minutes to go on another record day on wall reit. it's not just the large cap companies getting all the glory these days. russell 2,000, small caps and mid cap stock indices hitting not just new highs but all time highs once again. >> unbelievable. where do you want to put money in this environment? joining us now, chris highzy and anthony chan of chase wealth management. chris, let me kick this off with you. you said we're just in the middle of this. this is the beginning of this bull run. how do you get there and how much bigger can this become? >> the most important thing to look at is two simple things. supply of equity being pulled out of the market from stock buybacks. supply dropping very addressively. at the same time you have a supply of investors not in that asset class. you get there by record profits and aggressive central bank decent valuations.

and a mind set that's very skepticism that this can continue on. >> when i was at credit suisse on friday talking to the ceo there, what i learned was 30% of the accounts in the private bank there are in cash. >> still. >> so that totally underlines what you're saying. there is enormous potential here. if 30% of the accounts at credit suisse and other private banks, a huge ramp up possibility. >> everyone's waiting for the 1% to 3% to 5% pullback. when you get 5% pullback you get skeptical again. i'm going to wait it out. that's em blematic of the '90s again. >> anthony? >> i think we're going to go through a rotation. i think chris is right. when you look at stock buybacks close to 5%. look at the rotation you're probably going to see financials coming back. you're probably going to see industrials. i think you're even going to see energy as the rotation takes place and the laggards start to take the lead. >> what we kept hearing last week, obviously we acknowledge the defensive issues were what

led the way in the first quarter this year. now people are talking about moving into cyclic ams. so that seems to be what you're advocating right now. >> clearly the cyclicals have been lagging. 70% of the market is cyclicals. 30% is defensive. when you see that 70% coming back, and it will come back, the market's going to get more exciting. >> yet you're counting on this rotation out of fixed income. we've been talking about this for a long time. still hasn't happened. what would be the catalyst to actually get people to move money out of the fixed income into stocks? >> the big catalyst is not just a change in the fed's transition plan in terms of going from what is an ultra easy policy to a less easy policy, it really is the 210-year yield getting to 3 or more. real growth at 1%. that will spook a lot of the fixed income investors that don't understand bottom prices can actually go down. >> even a fed dove like charles evans of the chicago fed was saying he's surprised at how much the economy is growing right now. you know, the implication was

maybe even somebody like that would argue for tapering back some of the fed's buying right now. i mean, he's sort of back pedalling right now on the wires saying that's not exactly what i'm saying. he is acknowledging a stronger economy. is it possible the fed's liquidity starts to come back a little bit here? >> at some point you are going to see tapering. you got to ask yourself why is tapering taking place? is this 1994 when the federal reserve wanted to slam the brakes or kill inflation or is there tapering because the economy is getting better? if the economy is getting better corporate profits are getting better. yes, you are seeing a lot f o rhetoric suggesting tapering. john williams from the san francisco fed who at one point was considered a dove now because he's been talking tough, everyone says he's more of a hawk. all of them are moving in that direction. but the key voice will be on wednesday when ben bernanke testifies between the joint economic kmit tee. >> 3% on the 10 year. is that a 2013 affair, 2014. >> 2014. >> thank you, gentlemen. appreciate your time today. we're come back with the

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charles evans of the chicago fed made his speech today saying the economy is stronger than he thought it would be at this point. everyone interpreted it to mean maybe a dove like charles evans would advocate tapering back bond purchases. we saw this decline. at the low down 40 points which matched the low of the morning. sideways ever since. we all recall for the last 18 consecutive tuesdays the dow has traded higher. an incredible statistical anomaly. we'll see what happens tomorrow. we get retailer earnings starting tomorrow. one of the big ones will be from home depot which has had a stellar performance this year up 24%. and we'll see if they can match expectations. today it's down just a fraction right now. peter costa, what are we to make of this? at some point we have to -- we have the same conversation all the time. at some point we have to have a correction of some kind. stocks are not going to go straight up forever. >> no, bill. i do think we're getting closer to that point.

i think we're going to see within the next 300 or 400 points i think we'll see a top for -- it's going to be a short term top. we definitely will see it. i think we're going to start seeing the pullback from there. >> i get the big macro story. the fed's still putting liquidity in there. a lot of companies are buying back their stock. reducing supply. te the earnings are getting better. housing market's getting better. deficit's coming down. but stocks can't go up forever. >> no. what i'm seeing is that we're not seeing the inflows into stock funds and mutual funds is starting to get smaller and smaller. without new money into the market, i'm sorry. everyone loves this rotational theory about people rotating into new groups. >> right. >> i don't buy that. that's just money being moved around. you need new money to make the market go up. i think we're starting to see it dry up a little bit at this juncture. that's not permanent. i do think we're fwoing to see a little bit of a dryup right here. >> thank you, peter costa. always good to see you. going out about the mid-point of the range. 22 points on the dow jones industrial.

stay tuned in the second hour. maria has exclusively the president of blackrock, rob kapito. stay tuned. retail earnings tomorrow. could set the tone for tuesday that traditionally in 2013 has been higher. second hour of the "closing bell" with maria is coming up right now. i'll see you tomorrow. and it is 4:00 on wall street. do you know where your money is? welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. market in the red on concern the federal reserve could begin tapering down the economic stimulus measures. take a look at how we're settling out on the street today with the dow jones industrial average down a fraction at 4:00. on the east coast the dow down 18 points at 15,336. we had been in unchartered territory once again earlier only to reverse after we did hear from some fed officials talking about the beginning of the end of the stimulus should happen. real opinions coming out of fed