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tv   Closing Bell  CNBC  June 10, 2013 3:00pm-4:01pm EDT

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it was originally to the downside on the announcement from apple that it's coming out with itunes radio. free, with ads, no subscription. we were expecting something like iradio, and we got it. >> there is a lot of competition. i used spotify, and among, apple, as powerful as it is, google play will have its work cut out. pandora has critical mass. thank you for watching. welcome, everybody, to "the closing bell." the markets are kind of holding its own right now. we've had a very, very busy week last week. lots of volatility. so maybe the market deserves some kind of a rest today. we have plenty of news we have to get over here, as well. >> the markets were seesawing earlier. the dow was up about 15 points. we always see the most activity, bill, in the last hour of trading. >> yes, we do. >> i'm kayla in for maria bart roma who is back tomorrow.
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today, apple shares are moving in the market right now. the company just announcing itunes radio, a competitor to pandora. we'll be talking to pandora's ceo coming up. >> and it's an internet radio service, but through the itunes platform. >> they want more people to download the software. it's a free application, of course. you do have to host it on your phone and computer. >> we're getting details about that. we'll have more about that coming up. also, back to the future for the housing markets? suddenly jumbo mortgages are all the rage. what does that mean for the market? why it may or may not be a good thing for the housing market is coming up. and booz allen is taking a hit, down as much as 5% int intraday. how does someone like him not even working directly for the government gets access, and where he could have tapped anyone at any time, even the president. it's incredible and even a disturbing story. we'll have an update later. >> he had only worked there three months.
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>> 3 months, 29 years old. astounding story. >> more on that coming up. first, a look at the seesaw day we've had on wall street. the dow now up 10 points, moving higher into the last hour of the day. now at 15,258 after that incredible 200-point gain on friday. the nasdaq is trading higher, as well. up three points. apple itself is higher, as well, as kayla was saying, with all of the product announcements at the developers conference today, trading at $347.42 and nasdaq, trading up just a fraction at 1,643. this time friday, we were just about to kick it into high gear on the day to the upside. what about the final hour today? today's "closing bell exchange" john from wells fargo, one steven grasso from stewart frankel, joining us and bill nichols and our own rick santelli. steve, tremendous volatility last week. what's going on right now? what's the message of the
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market, do you think? >> well, we bounced right off the 50-day moving average in the s&p cash. we've done that a couple of other times. each time we've done that, the mark has increased in value by 7% to 9%. if we were to do that again, you're looking at 1,750 in the cash. is that going to happen? for me, i don't think that's going to happen. i think we'll see a retracement back down to that 50-day moving average, maybe a sell-off. a lazy monday. i wouldn't read too much into this. i do see lower prices before we lift. >> lower prices before we lift, john, though, i want to ask you, you say now might be time to move into the cyclical names like industrials, like i.t., if the market is expecting pullbacks, is now the right time to get into some of the names? >> absolutely. you have to give away a little bit. sometimes the market goes down a little bit, but it doesn't go down a lot. it's like keeping a beachwater under water. it's buoyant. >> you say for those who think risk is a bad thing to avoid,
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risk aversion has been the thing to avoid. >> you have to balance the risk. you can't focus on one, or you'll miss the other side of the coin. >> rick, i want to ask you about this risk aversion. one of the big headlines this morning was the s&p actually raising its outlook on u.s. debt. if we rewind to august 2011, when that outlook was downgraded, treasury's actually rallied and the yields went down. we're seeing the flip side of that trade today. what is going through the markets' mind and why are we seeing at yields on the tenure? >> i'm not sure we could attribute much of the action to the s&p upgrade of the outlook from negative to stable. but it is something to pay attention to. we all know that the rating agencies are important, but investors are more important. and if there's only so many different avenues of investment or lack thereof, that's what's going to be the driving force. and treasuries today, yields up about four basis points. fresh 14-month high going back to april of 2012. but i think maybe something even
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more important is going on in the logistics of the marketplace. and that is some of the dodd-frank rule writing given to the cftc, which puts over-the-counter swaps on regulated exchanges, phase two, category two, is hitting today, june 10th. that means more and more customers are not only going to have to use exchanges, but have to margin those positions. and guess what? the margin most likely will be -- or will most likely be t-bills or treasuries, which may be a mitigating factor to some of the selling and the fact that that sector is so out of vogue at the moment. >> what we would attribute to -- what we would call a technical reason for markets' activity at that point. bill nichols, speaking of the treasuries at 2.2% on the 10-year, you're watching 2.5%. you feel that'll be a more significant level to be reached, yes? >> well, i think it speaks the more -- you need to see more
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extreme movements, 2.15, 2.20, a more significant fashion. >> do you think that's -- do you think that's going to happen -- [ overlapping speakers ] -- we've been waiting -- >> perhaps not in the next week or two -- >> -- out of bonds, into stocks, it hasn't happened to some degree. but do you think that's on the way in. >> i think it's on the way sort of two, three, four months out, the end of the year and perhaps early next year. if we see a significant move in the fixed-income markets, that will be really interesting. >> you know, i -- there's one we're watching in particular now, apple sliding in just the last couple of minutes, taking a deep dive as the company wrapped up its presentation. now at about 440. this is one of the most widely held stocks. would you recommend buying it at this time? >> you know, usually it's -- >> sorry. >> we're talking to steve grasso. >> sorry. >> usually the developers
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conferences have the stocks going higher. apple is in the middle ground. negativity has surrounded the name. people will be dumping apple, reigniting the google trade. you know, apple, it's a safety bet. right now, nothing safe seems to be bought. >> we have to get used to the idea this is not steve jobs' apple anymore. >> right. >> this used to be a huge broadway production. we've all been waiting for the announcement of this internet radio, whatever form it would take. once upon a time, if that was to be their big announcement, they would be -- >> what do we also hear? we hear it's that he had 18 months of pipeline for apple, and we're getting right there, or we're already past there. so now you see people selling it ahead of what they think is a lack of a pipeline. we've seen nothing but that. >> when you think about the pipeline, we're getting there. but this internet radio would seem like a given given the products that apple already has, but interesting it took them this long to actually announce something like this. i want to look at the nasdaq,
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though. bill, john, i know you guys are the equity guys, so i want to bring you in on this, too. the nasdaq has outperformed apple. it's like a deverging trade. we'll start with bill. where do you think the nasdaq goes? >> well, i think we've seen you can rally nasdaq without apple. i think for the next move up, though, i think apple would have to be some component of that. i think google has definitely taken over from apple in terms of leadership of the nasdaq. you're seeing names like microsoft leading the way. that's one stock near its highs that could push the nasdaq higher. >> john, what's your comfort level with the nasdaq here where it is? >> i think it's phenomenal. i like technology. i think technology will sell more -- more technology being sold to corporations to make them more efficient. that's not a trade that's over yet. i think nasdaq is going higher with or without apple. >> yes, that is a pretty breathtaking sell-off in apple. we'll keep an eye on that through the next couple of hours. thank you, gentlemen, for your thoughts on today's market action. let's get to josh lipton breaking down some of the other
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big movers. josh? >> less than an hour to go before the closing bell. let's reveal the big name movers in today's session. starting with apple. announcing the latest version of its desktop operating system called mavericks. the ceo saying the company's apps store hosts 9,000 apps and unveiling the highly anticipated itunes radio. interesting to see pandora as well, the internet ready service provider and competitor in joining a pop here. and another thing to watch, soda stream hits a new 52-week high. the company cancelling an appearance at an oppenheimer appearance later this month, analysts say investors are speculating that the cancellation implies something bigger for the company. remember, last week lots of rumors that pepsico was buying soda, a rumor that the ceo denied quick. another name in the green, starbucks rising to a historic high. analysts say mcdonald's, kind of a barometer for the general restaurant industry, giving starbucks a lift. remember, mcdonald's saying
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sales at established restaurants jumped 2.6% in may. we'll end here with a sector in the red. homebuilders. analysts at jpmorgan downgraded lennar to neutral, saying its valuation appropriately reflects its above-average fundamentals. pulte and d.r. horton also lower. >> do you think there's an arbitrage going on between apple and pandora? >> when apple started selling off, pandora shooting up. it's up, but interesting, because when the news of the apple itunes radio was leaked to the press, pandora fell by as much as 28%, a huge precipitous drop. >> they had to wait for the details to see what it's about. >> right. we're getting word that this will come out in the fall. it seems apple investors are underwhelmed with this product long telegraphed as a game changer for apple. you can see the shares down .25%. >> and pandora shareholders are exhaling now. we're holding toward the close. 50 minutes left in the trading session. up 15 minutes, about a 90-minute
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trading range for the dow so far. >> google is finalizing a $1.3 billion deal to buy the online mapping company ways. why is it spending that much when google maps is so highly regarded as building a corner in this market? we'll debate that. and more on the apple developers conference today. the announcement about iradio. is it a success or not so far? is the innovation that apple watchers have been looking for, is this what they're getting? plus, we'll get reaction from the ceo of pandora now that apple is charging the streaming music leader. that's still to come. we went out and asked people a simple question: how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪
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the question is how do you make sure you have the money you need to enjoy all of these years. ♪
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[ roars ] ♪ [ roars ] ♪ [ roars ] ♪ [ roars ] ♪ [ male announcer ] universal studios summer of survival. ♪ welcome back to the "closing bell." today, the tug of war between bulls and bears continues. light volume in a relatively small range. bob is on the floor. what are traders telling you? >> risk on is a little bit on the offside. take a look at the major sectors today. i think the problem is those weak china export numbers are kind of weighing on the markets. better numbers from japan's gdp. the industrials, consumer discretionary, on the weak side. and commodity stocks and commodities like aluminum,
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nickel, zinc, they're all very low. much lower today. this is the china story that's hitting us overall. the other major story, interest rates sending stocks to the downside again. reits, utilities, housing stocks down. as well as bonds. the good news is the s&p upgrade of the u.s. debt to stable, that's a real positive overall. but i think it's hurting the interest rates sensitive sector, because it's pushing the talk that the fed may continue to reduce its bond-buying program, maybe a little bit earlier rather than later. kayla, back to you. >> all right. thanks so much, bob. my next guest knows a thing or two about the u.s. debt situation. david walker is a former controller general for the united states. we'll ask him about that in a moment. >> yeah. first, david is raising red flags about the new healthcare law, what we all affect natalie refer to as obamacare. he thinks cities and states could move retirees to those government exchanges that will be created through obamacare, helping their fiscal situation, but at the expense of taxpayers
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across america. david walker joins us now. he's now founder and ceo of comeback america initiative. david, welcome back. good to see you. >> good to be with you. >> would you blame cities and states for doing that if they can -- >> no, not at all. >> -- offload the risk? >> not at all. there are a number of risks associated with the affordable care act. one of the biggest challenges state and local governments face is retiree healthcare. and they've never had an option. now they have the option. as you know, rahm emanuel, who's the mayor of chicago and a consummate democrat, has already decided he's going to exercise that option. >> right. >> we'll see how many other people follow suit. >> david, on the white house blog, the president and some of his staffers have already been talking about how this change to the affordable care act, or this development, has already helped california and helped people that previously couldn't get
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this type of care, they're currently buying it from some of these exchanges. walk us through the basic tenets of how states could benefit from this. >> well, basically, you have a situation where in the private sector, very few employers offer retiree healthcare, much less subsidized healthcare for retirees, but many state and local governments do. in many cases, it's a much bigger problem than underfunded pension plans, because these obligations are unfunded and healthcare costs continue to grow much faster than inflation and much faster than the economy. they've not had an option to be able to provide these people coverage other than their own plans. now they do. and i expect that many will take advantage of it. >> and what kind of a price tag are you thinking it's going to be when it comes to -- for taxpayers? what kind of tab are we talking about? >> let's put it this way. chicago thinks that they'll be able to save about $800 million.
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chicago's a big city, but it's only one city. and there are 50 states. now, not all the states provide this coverage. the blue states tend to have very generous and very lucrative coverage. the blue cities do. i expect that they'll be the ones that could benefit the most. obviously, you could be talking about a very large price tag. >> david, we want to switch gears now to the s&p credit rating bob just mentioned. it's now stable. two years ago, it was negative and the rating was downgraded. so we're good now, or still structural issues that need to be addressed? >> you know, candidly i have respect for the rating agencies, but i don't think they do a good job with sovereign debt, especially in regard to major industrialized nations, in particular the united states. they're very my optic, very shore sighted. they have blinders on. they don't consider off balance sheet obligations adequately. they're really looking as to whether or not we're going to fault.
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the united states is not going to default. we issue debt in our own currency, but there's significant interest rate and currency risk if you're an investor. the last time they downgraded the outlook was because the political dysfunctionality. quite frankly, we're as dysfunctional now as we were then. >> you know, the three reasons -- they gave three reasons why they were upgrading to stable from negative. one was the fiscal cliff deal that they reached, that congress reached at the end of the year. number two is the sequester. right? i mean, they cut back on spending that a lot of people were after. and the bigger than expected payments to the government from freddie mac and fannie mae. not to mention, they were saying, you know, congress can thank ben bernanke for a lot of what he's been able to do with monetary policy. are those reasons enough to make us -- give us a stable outlook for government debt? >> no, bill. and you're making my case, and i know you're reading what they said, and you're exactly right. you know, the fact is that we didn't do comprehensive tax reform with the fiscal cliff.
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we basically raised prices on the quo quote/unquote wealthy. and the sequester was a nuclear weapon that was not supposed to have gone off. it has to be restructured. we haven't addressed the three fundamental things that have to be addressed to deal with the structural deficits. we haven't done -- dealt with demographics. we haven't dealt with healthcare costs and we haven't dealt with our tax system. we've gone from the whole getting deeper 10 million -- pardon me, 10 million a minute to 8 million a minute, and the only reason that they've done things is because they failed to agree on a program and a plan to deal with the structural problems. i come back to what i said. they're shortsighted. they have tunnel vision. and they don't adequately consider the off-balance sheet risks. >> david walker, always good to see you. thank you for your thoughts today. >> take care. >> see you later. heading toward the close, how are we doing? up two points.
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ooh. 40 minutes left. making progress. >> all right. google reportedly set to make a billion-dollar bet on ways and somebody here says this deal will help google stock map a route to new highs. >> and we'll look at that. and it's not the government that has access to your phone and internet records. it's also government contractors that we're learning. who else has access to all of the private information and what are they doing with it? that's later on the "closing bell." [ male announcer ] with free package pickup
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welcome book. google already controls a huge share of the online map business, so why is it willing to pay over a billion dollars to get someone else's maps, too? seema explains. >> reporter: google wants to assure it remains the leader in the online mapping space, and ways has become an increasingly popular mobile app that allows users to basically share realtime traffic and roadside information that can help users find the most efficient route to get from point a to point b. analysts say the acquisition of waze could be a good thing for google, since it's considered one of the leaders in the online mapping space, but the integration of social usage will be critical since waze has the crowd-sourcing element. we're seeing shares of google up about eight bucks on the day. kayla and bill, back to you. >> all right, seema, thank you very much. so is this good for google and its stock and its
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shareholders? on a technical side, we talk about it with carter wirth with oppenheimer and on the fundamental side steve cortese, a cnbc contributor. carter, this is a stock that marches to all-time highs this year. do you like this for google? >> we do. it's dreamy, actually. it's the word you use. it marches, which is to say, it has the important advances but it's sustainable in the sense that when it does get a bit ahead of itself, it has these orderly pullbacks, and you can see that over the last of the course year. there have been three important advances, each of one with an important punctuation mark or giveback which gives you the setup for the next advance for an all-time high. it's that sustainability, the orderly nature, with pauses and rests and givebacks, that keep it very sustainable. we think plenty higher. >> steve, do you like the acquisitions they're making, their latest strategy? >> you know, bill, yes. i agree completely with carter. i think the google intern movie over the weekend might have been a flop.
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this stock is anything but a flop for investors. google is outperforming today. it has outperformed, in fact, for years, and for the most recent year, over apple. it's another smart way it is outflanking apple. what are they focusing on with the acquisition? they're focusing on mobile. when we look globally, android has become the standard. increasingly, google owns the international smartphone market. this is part of that strategy, maps in general are part of that strategy. i see much higher prices ahead for google. >> so you guys have nothing to disagree on. >> that's right. >> unless you saw the movie, carter, and you liked it. >> i like those two actors. i haven't seen the movie. while it is up a lot more in the market, 25% versus 14%, 15%, it was a stock that was stuck, range-bound for two, three years. so this recent advance is a catch-up, and we think, again, just as steve said, plenty more to come. >> you know, bill, also, just to tie it into today's news, we're talking a lot about the nsa. if you want to talk about somebody who knows a lot about
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us, forget about a government agency, google knows more about all of us and about our habits and our communications than i think any private organization, at least in the world, and why that might not be a great thing for privacy concerns, it's a good thing for google as a company and for google's shareholders. they increasingly figuring out ways to make money off of the consumers. >> kayla, what were you going to say? >> i pulled up yahoo! finance. i wanted to see how much cash google had. 50 billion at the end of the last quarter. even if they're paying for cash, it wouldn't really seem to move the needle as far as its balance sheet goes. steve, i guess from the fundamental side, maybe you have a take on that. >> you know, yeah, kayla, listen, i'm not saying this acquisition is a reason to buy google. i'm saying it's indicative of the broader strategy, which has to capitalize on mobile. i think what google did is they took their dominance in search,
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and they are still incredibly dominant in search. they have four times the market share compared to the next biggest competitor, microsoft, and taken that stream because online ads won't be the revenue, but they've taken the stream and smartly invested it into mobile and android. this is just a small part of that much larger investment. one interesting point is that along with motorola, they're going to be producing smartphones in the united states for export. they have plans for brand-new, very large plant in ft. worth, texas, great news for google and great news for america as well. >> and you think they would have hitched their wagon to a better movie than "the intern." if you want to laugh at owen wilson and vince vaughn, watch "wedding crashers" or something. >> lightning doesn't strike, at least at the box office. >> apparently not. we found that with "the hangover." >> yes, we did. the dow is in the red right now, down about 11 points. s&p for the second time today also slipping into the red by about one point. we just have about a half hour before the closing bell, and it certainly seems like it will be
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itunes radio coming this fall to a variety of devices near you. that's at least the word from apple's developers conference in san francisco. john ford is there for the details on apple's big announcement. hey, john. >> reporter: hey, kayla. that's right. we did get itunes radio. aside from that, not a lot of huge surprises, but apple did reveal some things that point to where they might be headed. one of the things apple did acknowledge is some of the people saying that their innovation might not be what it used to be. marketing chief steve schiller took that personally. take a listen. >> can't innovate anymore, my ass. [ laughter ] [ cheers ] >> reporter: he was showing off the macpro, which will be coming
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out later this year, a professional machine. the star of the show, though, was ios 7. that's a very deeply revamped version of the software that runs the iphone, the ipad and other ios devices. johnny i, the industrial design guru at the helm as far as the software look as well. now, on the mac, we also did get some new hardware. take a listen to phil schiller describing that. >> these new applications deliver the most important features we want in a portable device. all-day battery life. >> reporter: not a lot in terms of new design there, but the battery life on them is impressive. the new version of os 10, which runs macs will be mavericks, no more big cats, and locations in california that inspired apple, a naming convention they used to use, a code name hardware. also, this is especially of note. new on siri bing search.
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that's right, not google search, but bing search results from within siri. clearly, they're taking the competition with google to a all-new high. >> all right, jon, thanks. stick around. we want to get some of your color on this along with nicholas carlson from "business insider." nick, it seems like the developers would be excited by what they saw today. do you think apple went outside the convention center there and reached the public with an announcement like itunes radio? is that exciting enough? >> i don't think itunes radio is the big thing that will do it. i think it's the thing -- it's a small thing, you could have missed it -- in ios 7, you hold up your iphone and move it from side to side, it appears you can look behind your apps. the reason i think that's such a big deal is the reason people buy iphones is because they have huge wow factor. you know, you look at it, your friends, and oh, my god, that is so cool. that's something apple really hasn't brought new in a few months, maybe since the ipad
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mi mini, maybe longer. when people see the way ios 7 looks, they'll be, like, that's cool. i want to buy one of those. >> are you getting jiggy about that, too? >> not exactly. it's a cool thing. when i was reading tim cook's comments, he said this is the single biggest change to the iphone operating system since the iphone came out. it wouldn't seem like the ability to see behind your apps would be a game-changer from that perspective, or at least to categorize it like that. as soon as the event ended, the shares plummeted. >> i know you were impressed by what you saw, jon. >> reporter: yeah, there's a lot more to ios 7. not only did they change that, they got rid of some of the old looks in the apps, but even the way you navigate from one app to another, the way the apps update in the background, the way it's easier to get to certain functions like changing the brightness on your phone, that drives me crazy. that's important. but to the investor and to the apple watcher, probably what's most important is to see the way that johnny ives team and craig
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federinni, the design team on software and the engineering team on software, were able to work together to pull off this volume of changes in this amount of time. that was important and the degree of services integration into those, also important. it's a good sign for what apple will be able to do going forward. >> i don't know, nick, this till to me -- when i look at the stock and how it dropped so dramatically after they closed the conference out, this still says that the shareholders out there and the traders are saying what they saw today was more evolutionary rather than revolutionary, which is what we've been going the last couple of years. >> okay, you go with the traders. but when you look -- the big problem that apple is dealing with lately is google and android. a lot of people have said that android is getting better at the things it was bad at. faster than apple is getting better at the things that it was bad at. for apple, that's cloud and services, syncing your desk top to your phone. google has been good at that between the desktop and android.
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but google is getting better at design, which is something apple is supposed to be good at. what today showed is apple is getting better at cloud and services. you know, the new desktop os has great integration with mobile. but what it really showed is that, look, the king of design is still apple. ios 7 is beautiful. and the traders may not appreciate it, but i'm telling you, when normal people look at ios 7, when they watch this video, they haven't yet, when they see it, they'll be, like, wow, that's cool, and they're going to want to buy these things. >> well, the real audience, of course, is the developers, jon. this event is for developers who are building apps for that ecosystem and that ecosystem has always been thought to be best in class. and you're talking to some of the developers. are they impressed with what they saw today? >> reporter: well, i didn't get a chance to get that many conversations done, trying to run back down to the camera. i did get a sense of reaction to several things throughout the keynote, and they were very impressed with ios 7, which i wouldn't discount, because it's a dramatic new change.
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and some people might have thought it was ugly. also important to note that apple has returned a lot more revenue to the developers than the android ecosystem has at this point. this change delivers kind of a clear way for developers to target a market that they know they'll be able to reach, they know there's a new iphone coming out. so it's very interesting from that perspective. the reception for the developers, positive on the key points. >> by the way, nick, what about itunes radio? i mean, should we get excited about that, or not? >> well, itunes radio is -- it's one of the things that gets, you know, takes apple to parity with with what's out there, pandora and spotify. it's sort of, don't leave us for pandora. don't leave us for spotify, stay here and we'll do what you can get elsewhere. that's important. because itunes is a lock-in feature. real quick on ios 7, in terms of developer reaction, there was a standing ovation for ios 7 after it came out. i know this is a pro-apple
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crowd, but a standing ovation is still significant. >> all right. thanks, guys. good stuff. jon, we'll let you get back to doing more reporting out there, see if you can get more response to what they saw at the developers conference. see you later. >> i think the jury is still out until the consumers see it and feel it and hold it in their hands. >> when you look behind the app, exciting. >> i'm not going to knock it until i see it. >> okay. where were we? 20 minutes to go and -- in the day, and the dow is virtually unchanged right now as we head towards the close, after such a volatile week last week. >> we crossed the flatline. it's unclear where we will end. good news potentially for the economy. the auto industry is revving up for a massive hiring spree. find out how many jobs that could add to the economy. don't look now. but jumbo mortgages are making a huge comeback. we're going to show you which companies are cashing in later on the "closing bell." it's monday.
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auto sales may be surnling this year. auto stocks, a group of about 20% year to date, but sales of toyota's prius have shifted into rever reverse. phil lebeau with the latest on this. has it lost its cool or its charge? >> reporter: you can play on a number of words, bill. there's no doubt the prius is entering a more mature phase of its growth cycle. when you look at what prius sales have done this year, down 7.8%, compared with toyota up more than 5% for the year overall, and for the industry here in the u.s., up 7.3%, it is clear that prius is struggling relative to its competitors. so a couple of things have happened here that have hurt prius in terms of trying to keep up with the industry as a whole. first of all, gas prices. they've been moderate. because you've got moderate gas prices, the end result is you don't have the clamor from buyers in the market to go out and buy a new hybrid. also, they're slipping due to increased competition. look at ford. this is a perfect example. ford now makes up 14% of all
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hybrid sales in the united states. now, the vast majority are still with toyota and with the prius, which has 47% of the market. but because you have ford and other competitors coming in, there are 38 hybrid models on sale now compared to just two -- just two a decade ago, and that's when prius pretty much changed the world when it came on the market. look at shares of toyota as the stock is now well over $100 a share. but it's not close to its all-time high, which is up in the 135, 136 range. bottom line is this, guys. we'll see a new ad campaign launched from toyota later this month. toyota hopes that that will start to spur prius sales again. but right now, they are struggling relative to the rest of the market. >> phil -- >> 38 models. i had no idea. >> even with the deoperation in the prius, it's still a good chart for toyota. other things we want to get your take on. we hear the industry is about to go on a massive hiring spree. i've seen numbers as much as
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35,000 jobs in the near term. is that a pie in the sky number? >> it's not a pie in the sky number, especially when you factor in the suppliers and all of the ancillary companies in manufacturing. look at this chart from the center of automotive research. and with the center for automotive research found that we're hitting close to peak capacity in terms of production of automobiles in this country. by 2014, we'll be building almost 11 million vehicles in this country, guys. and as a result, you see a number of these plants shifting to three shifts in operation from two shifts and that's why you see the hiring surge. >> a lot of them have been loathe to put out the money for the capital expenditures. expand their factory capacity. i guess the fact that they're doing it now suggests that they think this is in -- this is for real, the kind of sales growth they're seeing right now. >> and they're doing it judiciously, bill. instead of adding a new plant, they are adding a third shift. instead of saying, well, we're at max capacity, let's see if we can squeeze something out on the weekend shifts.
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that is going to be the new change when it comes to manufacturing. they don't want to add a whole new plant. that's very cost intensive. instead, it's add as many shifts as possible. >> and, phil, to what extent are we seeing the influx of jobs from foreign auto manufacturers versus u.s. auto manufacturers? >> that's a huge part of it. take a look at volkswagen doing in chattanooga. bmw, mercedes with huge plants that have expanded and continue to expand down in the southeast. the foreign manufacturers, that's really where most of the growth has come from. the domestics, they're adding jobs as well, but keep in mind they cut so many jobs, you know, '08 through '10, that really what they're doing now is starting to build up again. >> all right. phil lebeau, thank you so much for that. >> thanks, phil. >> you bet. all right. there are just about 15 minutes before the closing bell. the dow is just down 1 point. it was up as high as 52 points earlier in the day. it hit a low of -- >> down 36 points. >> a low of 36. so come back from the lows, down
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from the highs. >> we continue to zig and zag. and steve has been one of the bigger bulls on this program during this historic rally. even steve is starting to become cautious about this market. when we come back, we'll find out how he says you can protect your portfolio from a potential summer sell-off. >> and our resident bear jeff cox hasn't been in hibernation for long, but he says it's not just stocks overpriced because of the fed's easy money policies. it's every asset class across the board. he explains why. that's coming up next on the "closing bell."
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could it be, kayla, that one of "closing bell's" bigger bulls has changed direction? steve of asset management has become indeed become more cautious on this market. >> we're going to find out. he joins us along with bob kaiser from s&p iq. thank you so much for being with us. >> yes. >> a frown over there, steven. >> yes, i'm trying to think of the answer. you have to boil it down to growth and valuation. the growth of the economy, a lot of people, investors, have been expecting it to accelerate. it hasn't. we've seen a slow down of growth in the united states. slower than expectations, and
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also in china. if you look at valuations. i looked at the dow today before coming in, a close proxy for the s&p and the overall market, about 14 times the earnings and a dividend yield. the valuation is getting kind of full. we've had a 15% run year-to-date and now seeing the growth slowing. it will take the wind out of the markets over the summer. >> you guys raised your rolling 12-month target on the s&p to 1,710. you're going to the next 12-month period right now. >> it's another group within s&p capital iq. as you know -- >> i've been bullish. >> i love all of -- >> fair enough. we're thinking 1,700, 1,725 by the end of the year. we've been bullish since last fall. the market's done very well. a few weeks ago, trading 15 times forward 12 month earnings, 15 valuation, a low-growth environment, agreeing with steve, it's what the market will be worth on the upside. it makes sense the markets pause. we're coming into the summer months. we may consolidate for a couple
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of months. >> what sectors are you bullish on, given a day like today, light volume, and hovering near the flat line. it's hard to find a place to put your money on day like today. bob? >> i think in this environment, high-dividend yielding stocks will remain in favor with the investor. >> bill, you still think that? >> where will you park your money? capital gains, will you exit the market completely and miss something if the market jumps 200, 300 points in a single day? the cautious thing is park your money where you have been all year, and if you have cash on the side, wait for a pullback. the cyclical sectors, anything consumer oriented, is what you want to be. >> and you, mr. cautious? >> blue chip names, high dividend yields. the dow jones industrials, the top five have 5% yields. 4% yields, the next five have on average 3.6. just buy a basket of the companies. the mercks, intels, pfizers, at&ts, verseds, and you get good
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diversi diversity. why wouldn't you earn those? taxed at a preferential rate, owning the corporate bond funds rolling over, make an allocation decision. >> if we see a pullback, it will be the fourth annual, the summer swoon so to speak. what catalysts do you see on the horizon that could spark that if we do see it? >> i'm glad you asked that question. i wasn't prepared for that. if the u.s. economy is mostly a consumer-driven economy, 70%, and most of the consumer earnings come in the second half, the third, fourth quarter because it's back to school and christmas, you have to look for the canaries in the coal mine now. if you've noticed, retailers have been very choppy the last three weeks. a lot of hits and misses. i would suspect the negative catalyst is more negative news out of the consumer names, which we don't own now. >> what about the notion, we talked about this friday, bob, maybe we don't get a traditional correction where everything goes south for 10% or whatever. that we've had a rolling correction as we've gone,
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various sectors taken out while others have re-emerged, as we moved through the year here. is that possible that we're going through that now? >> you should see, as the economy picks up steam, we've seen recently low top-line growth. you would expect to see better top-line growth. the lack of cap-x with the economy should come on board, technologies, other sectors out of favor should come back again. >> the autos. they'll go through the hiring but they won't build back the plants. they'll add to the shifts they have right now. so that's what you're talking about here. >> yes. >> yeah. >> and i would add, if you want me to add -- >> please do. >> -- the consumer spending is driven by interest rates. interest rates are going up. maybe buying a car would be less attractive. so that's another headwind. >> you think they'll go much higher, we're up to 221. it's about 2.21% on the 10 year. >> we're acting like 2.20 is a huge number. >> yeah, it's 10%. so your point, i don't know if
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it will have that much effect until it gets to 2.50. that's a conventional wisdom. what you do in your portfolio is buy a gold mine. they're totally out of favor. trading at a huge discount to the price of gold. if anything suggests we get a little inflation or growth, those names will go up. >> miners, that would be a contrary move. >> yeah, absolutely. >> you're talking about interest rates, and talking about tapering. a lot of the signals from the fed. >> the key word through the next few months. gentlemen, thank you so much. up next, we're coming right back with the closing countdown. >> and after the bell, jeff says that investors have one month window now to ride this rally even higher before a significant sell-off happens, and we'll get his call on that when we come back. stay tuned. for his small busine. take these bags to room 12 please. [ garth ] bjorn's small business earns double miles on every purchase every day. produce delivery. [ bjorn ] just put it on my spark card. [ garth ] why settle for less? ahh, oh! [ garth ] great businesses deserve unlimited rewards. here's your wake up call.
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[ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ about two minutes left in the trading session. the stock we anticipated would be the stock of the day today was apple. they had the big developers conference out in san francisco. and here's the kind of day apple shareholders had. i mean, a bit of a rally for much of the day until -- they were waiting for the big announcement. what's the big gee whiz announcement they'll have? will it be the new internet radio that's been talked about? it was. and this was the response. stocks down about .75%. so not a huge move in the aggregate, but a clear move lower after the announcement
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came out and they closed out the developers conference. what moved higher as a result? we add in pandora, one of the music streaming services so popular that apple is trying to play catch-up with, obviously. and that stock is up 2.3%, and much of that move happened after apple closed out the conference and moved lower. so that was the kind of day we had with apple. we'll talk more about that in the next hour of "closing bell." for the dow itself, zigzag day, finishing near the lows, down about 20 points. peter kostis, such a volatile week last week and now a quiet day. what's going on? >> you look at the chart, it's actually a little more -- there's a lot of movement. we've had several plus moves -- >> within a tight range. >> a very tight range. that's a day trader. after seeing what the s&p said this morning, to me, it was a positive commentary. i don't think we should take anything, you know, negative away from it. we should think long term. >> about raising the outlook for the credit rating?
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>> yeah, long term, a very good sign. you know, the u.s. economy and obviously, we reflect the u.s. economy here. >> thanks to peter. very much. that's the chief executive of qualcomm ringing the closing bell. stay tuned. much more to come for the second hour of "the bell." a seesaw day on wall street. welcome to "the closing bell." maria is back tomorrow. bill will join meese on the set in a moment. stocks looking for direction following a big two-day rally, of course, on the heels of friday's jobs report. here's how we're finishing the day on wall street. the dow is down by 11 1/2 points. nasdaq up by 5, even despite a fall in apple shares, and the s&p 500 down by just shy of one point. so a rare break from extreme volatility today will not last. we have jeffrey stock from raymond james, chad morgannd

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