spice to it, and made with the chicory stout beer. what do you think? >> i think it's good. >> a little kick in there? >> i think i'll be jacked up tonight for -- they say, sullivan, why do you have so much -- espresso sausage. >> the beer and the brat. >> we have to go. we'll sit here and eat this. thank you. have a great weekend, everybody. thanks for watching. >> cheers. hi, everybody. happy friday to you. we're in the final stretch for the week. i'm maria bartiromo, coming to from outside the new york stock exchange for our special summer on the street day here on "closing bell." hey, bill. >> i've been looking forward to it all month here. finally, the sun came out -- >> missing you! >> -- i'm loving that. >> missing down here. >> i'll get back there next week. bill griffeth at cnbc world headquarters. we're in the final day of the

dramatic week for the stock market. it needs to be up 72 points today to be back to unchanged for the week. maria, it doesn't look like that will happen. we're down now 112 points. >> yeah, certainly it's been a pretty good downer of the day. outside the new york stock exchange, traders are talking a lot about next week and the federal reserve and how that will likely be a catalyst. they were relieved this week is coming to an end, but also looking ahead to next week and ben bernanke's big news conference. that, of course, timed around the fed's decision on interest rates. the meeting begins on tuesday. the press conference happens on wednesday. we're going to be talking to folks out here a lot more about that. plus joining us later on exclusive is new england patriots owner bob kraft. he says one of the reasons he just signed tim tebow was for his spirituality. he did say that. we'll talk about the business of football. >> i'm a fan of tim tebow. i hope they can make use of him.

the jets wasted his talent. let me show you -- >> let's not talk about my jets! >> it's not a comment on the jets. i think tebow could have been better use. anyway, here's where we stand. the s&p down eight points, about a half percent, and it's been testing the support levels of about 1,600 again today, and right now the nasdaq is down half a percent as well, or 18 points at 3,427. so another down day. we had the producer price index, which came in hotter than expected. and the consumer confidence number, which came in less than expected. so mixed economic data is what's causing some of this downdraft today, maria. >> yeah, really set the tone. let's get right to the closing bell exchange here, as someone walks in front of the camera. rich peterson from s&p capital,

sam leech from wolf management and our own rick santelli. gentlemen, nice to see you. >> beautiful out. >> how does the trading look? what's your take? >> it's a quiet day today. it's actually very appropriate considering what this week has been. you said it when you came in, it's been a volatile week. and after this morning, we had mixed to negative data, so the market settling in in the 1,620, 1,640 range. it's a friday in the summer. people are kind of taking it all and getting ready for next week, like you said. there's a lot of data on the table next week. >> it's all about the fed -- >> not just the fed, but the existing home sales, the cpi, mortgage applications, jobless claims, a bunch of stuff on the menu. >> a lot to dictate things, bill. >> tim, the debate has been lately over what the fed's intentions are about tapering on quantitative easing. do you think the fed wants that kind of debate? or do you think they want to be more transparent? what do you expect to hear from the fed meeting next week? >> well, bill, i think it's

really important for the fed that they don't surprise anybody. that the fed is really trying to have the investing marketplace, the investing public really assimilate what they intend to do, and have that factored into their programs so we don't have really a shock in the system. >> i mean, they failed on that count if that's the case, because, you know, everybody's confused. right, maria? who knows what -- >> yeah, i would say. >> -- they're going from here. >> yeah, kenny is cracking up. he cracked up at that comment. >> i think what they've done is they've kind of planted the seed, right? they've got everybody talking about it, to take the temperature of investors and traders around the street. >> right, right. what's the temperature right now, rich? >> the temperature may be normal, but my hearing is kind of -- i have no earpiece. you know, right now, we're seeing the third down week of the past four. the investors are a little bit trepidacious over next week's numbers. and also more important, the answers to these questions. this is the survey for primary dealers that the fed -- new york

fed sent out to, you know, primary dealers earlier this month. >> what did you learn from that primary dealers' survey? >> we didn't know the answers. ben bernanke & company likely do know now. the important question is question 6, a question sent to 21 primary dealers, where do you expect to be the rate of tapering? what do you expect to be the composition -- >> that's everybody's question, right? >> i'd love to hear the answer to that. >> is it 2013 or 2014? >> i think we're of the opinion it could be early 2014. really, the fed doesn't want to reverse course. they don't want to find themselves going back to $85 billion a month, 65-- see the numbers be soft. and then go back to buying again. >> that's exactly the point. they have to start seeing better numbers before they start the tapering. if the numbers in june, july, august end up being better, then maybe you'll see towards the end of the year. >> and i don't think, bill, i wonder what you think about this, bill, if the reason the fed lowers the bond purchases to $65 billion from $85 billion, for example, and if the reason

they do that is because of better economic data, i don't know if the market sells off on that. >> well, the -- you have to take the premium. you're going to take that three-point premium out at some point. >> -- s&p 500 going to see declines. >> rick santelli -- rick santelli, what do you think? has the fed purposefully sent mixed signals out so we would have this kind of debate, we would have this kind of market volatility? or do you think they would like to be more transparent? >> you know, bill, the only way i could answer this is if i had my whiteboard from earlier in the day and a good black magic marker, and i made something that somebody would say was a butterfly, somebody would say was a bmw at the top down on a sunny day. i think that next week's meeting will be like many meetings. it's a rorschach. i found it so fascinating that john said today the fed will never say the word taper. i remember when taper was what i

told the barber, taper the back a little bit. you know? if we keep interest rates in this managed format -- forgetting quantitative easing and purchases, just interest rates, effective fed funds rate. is it nine basis points? maria said, well, they'll probably keep rates low to 2015. i will go back to the following. >> right. >> '08 crisis, 2015. seven years. doesn't that bug anybody other than me? it just seems as though we've gone from crisis management to permanent management. >> you know, i see it differently than the way bob -- than the way bill led into the question, rick, because i think ben bernanke has been one of the most transparent central bankers i've ever seen. >> transparent? transparent -- wait, what -- but wait a minute, maria. what's he transparent about? what facts do you have that you see more clearly? >> well, that he he's going to continue to being there, he will stimulate this economy until he gets 6.5% unemployment. >> he's stimulating for five years. we still have gdp going to be

1.7. >> right. >> so there's no success. >> he's doing what he said -- >> right, but he's -- >> the only point i'm making is transparency. i'm not saying whether or not it's a good idea. >> he's doing what he said. he said he won't leave until x, y, z happens. it's everybody else that says, oh, by the way, we'll start the taper. >> exactly. >> you know what? maybe -- listen, sir. isn't it possible that he and his programs are actually an impediment to the free market catching its own breath? just look at the mortgage market. he leaves no incentive for banks to get back in the mortgage business. >> right. >> i think that's the point we're getting to, and i absolutely agree with you. at some point, it has to stop. but now he's in so far over his head, when does he stop and how fast does he get out? >> yes. >> tim leach, how do you answer that question? what are you doing in this market while you're waiting for the fed to begin tapering here? >> a great question, bill. we are believers longer term. intermediate term, longer term, in the equity market. we think valuations are decent.

we believe in the ongoing ability for corporate merks to generate profits and earnings. so we have an overweight in equities. this will be a choppy period of time, though, over the next several of weeks as the market is digesting and trying to kind of interpret every raise of eyebrow and tweak of an ear, you know, coming from the chairman. which is part of what we do, right? and so, we are overweight. we are advising clients to buy on the dips at this point. we're advising clients to be cautious around fixed income. we think that rates are going to be continuing to back up from here. and there's going to be some pain felt as that occurs. >> yeah. all right, gentlemen, thank you all. we just love that somebody calls him sir. that's just great. he loved that part. >> thanks, everybody. >> see you guys later. let's get to bob pisani. a shaky week for the marks. how do we stand for over an hour? >> reporter: we call paul sir over here. on the floor of the new york stock exchange. thanks, maria.

the dow jones industrials, the one thing we found out this week was plenty of interest rate risk, but also growth risk. the imf came out, lowered its growth forecast for the u.s. normally, that does not move markets, folks. around 11:00, it did move it down. maybe it was coincidental, but saw a definite move up in the dollar. the dollar weakened, and the dollar-yen, we all watch that now. the yen strengthened, moving down, means the yen strengthened. generally the markets move to the downside. the story of the week has been about bonds dropping and emerging markets having trouble. here's where we are so far for the week. generally s&p is down fractionally. that's the agg total bonds, actually up, a two-day rally, a little more stability in some of the bond fronts, but not in emerging markets front. the eem, the dropping down, and over the week, japan hedged equities, down 4%. that thing is approaching 30% down in the last month. finally, you want some clear

example of this battle going on between international investing and u.s. investing, look no more than reits. it's a monster. it's the main way people invest in real estate investment trust these days. it's down 0.8%. but vanguard has an international reit, mirror image that invests in reits overseas, down almost 3%. a good example of how people are fleeing the international markets, a lot more interest in the u.s. markets. maria, looking good outside today. back to you. >> all right, bob, thank you so much. we're looking at double-digit decline for the market. we have about 50 minutes before the closing bell. you can see it's down about 90 points on the dow jones industrials average. >> tebow mania, right? >> tebow mania, bill. he has a new home. i'll talk exclusively with robert kraft, the owner of the new england patriots, about his signing of the controversial quarterback, tim tebow. did he really do it because of his faith? >> at least let him run some plays this season. also, the box is open on streaming music and pandora may

be hoping it was closed. the internet radio trailblazer already has its hands full with apple entering the arena. now it's dealing with a huge music publishing lawsuit. we'll tell you all about that coming up. and then, after the bell, at a cost of reported $225 million, "superman" has gotten a movie makeover. and the buzz is pretty good. wait until you hear what time warner has riding on the man of steel. back in a moment. [ male announcer ] we've been conditioned

to accept less and less in the name of style and sophistication. but to us, less isn't more. more is more. abundant space, available leading-edge technology, impeccable design, and more than you've come to expect from a luxury vehicle. the lexus es350 and epa-estimated 40 mpg es hybrid. this is the pursuit of perfection. and epa-estimated 40 mpg es hybrid. (announcer) at scottrade, our clto make their money do more.re (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade...

ranked "highest in customer loyalty for brokerage and investment companies."

welcome back. we have a big crowd out here outside the new york stock exchange. inside, we have a market that's under pressure. the market heading south as we wind down what has been an incredibly volatile week. take a look at the major averages now. the dow off of its lows, but still down 75 points. nasdaq down 15 points and the s&p 500 weaker by six. bill? >> let's talk about the housing market. even the prospect of rising interest rates already having an impact on housing, and as diana

olick reports for us, the effects in some cases are exactly what you would think, but in others, a very different result. >> reporter: bill, fears about what the fed chairman will say next week about interest rates has mortgage rates continuing to rise. the 30-year fixed conforming loan hit 4.15% last week, up 3.59% at the beginning of may. that's a 14-month high. while that has pushed refinance applications down 36% in a month, purchase applications fell just under 2%. that could be because buyers on the fence are scared rates will go even higher. >> it's the equivalent of a price increase. it creates urgency. we're actually seeing more sales now because rates are beginning to creep up very slowly. and if that continues, and if we stay in a manageable range, we'll be fine. >> what's so interesting, though, is that as conforming fannie, fraeddy, and fha loans get more expensive, jumbo loans are getting cheaper. the gap between the two is the

narrowest now since before the credit crash. the conforming 30-year at 4.14%, the jumbo at 4.28% according to bank rate. that's because banks are doing more jumbos now, up 15% from a year ago according to inside mortgage finance. they're also finding more buyers for them, and that is making pricing more competitive. maria? >> all right, diana, thanks very much. reaction now on what this means to the higher end of the housing market. joining me now is columbia university real estate professor christopher meyer and fred, a licensed real estate and mortgage broker. good to see you both. thank you for joining us. fred, we've been seeing a creep-up in rates, mortgage rates moving higher. what impact has that had? >> well, again, like the ceo of toll brothers was saying, there is urgency to come out, but in the jumbo market, people are buying because they want to buy and they're buying in big cities -- new york, philadelphia, san francisco, l.a. i read a statistic where 73% of the houses that sold last month in san francisco went over

asking price. >> wow. >> yeah. >> in other words, it's really not crimping this market? >> no, not at all. >> particularly in the jumbo loans -- >> exactly. >> -- the one we're looking at. >> is there a danger -- >> yeah, go ahead. >> is there a danger to an increase in jumbo loans? chris, we're highlighting jumbo loans. what is a jumbo loan these days? what's the threshold for that? is there a danger to the housing market if we see an increase in the number being issued? >> a great question. >> i don't -- i think the increase in jumbo sales is happening for two reasons. one of them is we're seeing home prices creep up again. and so, more houses sort of fit into the -- into the jumbo range. and the second is that, frankly, there's a lot more competition. lenders want to hold these things on their books. they're less scared of housing than they were. and you're seeing securitizations, not just by redwood, but other companies now able to get securitizations out.

that liquidity coming into the market is really helping. these are still very high-quality borrowers, so the people who are in the jumbo market, generally speaking, are going to have bigger down payments, better credit. they're going to have the kind of things the market is looking for today. >> yeah. >> these are all positives. >> there's a lot of cash buyers out there. what they're doing is because of the increase in the stock prices, they've been able to go on margin, get cash, and buy the place because it's competitive nature. >> this is what bill's talking about, though. is that a worrisome sign? >> well, then they refi after they buy it and get a real mortgage. still, the five-year and seven-year jumbos, it's got to be about a three-quarter rate difference in price. so it's so much better to get. 30-year jumbo, yeah, it's out there, but it's still -- get great deals on fives and sevens. >> how much impact has the fed's policy had on the jumbo market? >> fed's policy is mostly happening just through overall long yields. and so, we've seen that rates jump up, you know, more for the conforming market than the jumbo

market, in part that's because that's what the fed is buying. they're buying the conforming securities, the gse securities, and that -- the sort of -- this sort of fear that the fed is going to stop buying those securities has led the yields on those to jump up a little bit. had less of an effect on the jumbos, because those are -- you know, the buyers on those are already not getting a government guarantee. >> fred, i read an interesting statistic, fred, that said the sales of homes priced between $750,000 and $1 million were up 41% on a year-over-year basis, while those priced below $100,000 were down 10%. what do you make of that? are we talking about a lot of investors moving into the market, speculators, rather than people who actually want to buy homes here? >> no, it makes perfect sense. these are real buyers now. the speculators came in three, four years ago. like, in san francisco, there

are houses in pacific heights that sold for multimillion dollars, by investors coming in from china, bought them for cash, nobody's ever lived in them. they have no intention of ever living in them. they'll just wait for the day when they think the top happens, and somebody with a lot of money in san francisco will buy those houses. so it doesn't surprise me at all. >> where's the buy -- where are the buyers for the cheaper homes? what happened? >> well, the problem is most of those buyers still have income problems, credit problems. >> they can't get a mortgage. >> they can't get a mortgage. fha, fannie, they're getting tougher on the underwriting standards. no matter what you say. i've seen crazy, stupid things and we still have an appraisal crisis in this country. >> what were you going to say, chris? >> part of it is the investors have been concentrating on the low-priced homes. what does that do? that pushes up the prices. there are few of them under $100,000, it's a statistical artifact, in how you're collecting the data.

and you're talking about the cash buyers. they're focusing on the kinds of things they can get rental yields on, and that's where you're seeing the people concentrate. there's some high net worth folks who don't need a loan, but a lot of them are focusing on the low-priced stuff. the prices -- some of the markets, they're up 20%, 30% in a year. >> it's interesting that they're cash buyers, in an environment when rates are rock-bottom levels, they're still uncertain about it, and, you know, they just want to put their cash somewhere -- >> well, the problem is, in some of the deals, you have 28 people bidding on one house the day it goes on the market. so if you don't have a cash deal, forget it. don't even submit your agreement. >> right. >> that's the biggest problem. >> what's the jumbo loan today look like versus right before the housing crash? does it look different? >> the underwriting is completely different. i mean, there it was, "hi, how are ya, here's a loan." >> right. >> now, you know, we have some tough underwriting standards, let me leave it at that.

it's just there's intelligent lenders out there who get it and some who just need to dot every "i" cross every "t." and we need in this country to get better quality control on loans, things will go much better. >> all right. bill? >> thank you, guys. you still with me, maria? >> thanks -- yes, thanks very much, bill. appreciate your time. >> been a pleasure. >> hey, you know, market's coming back a little bit, although as we've been pointing out, in order for the dow to be positive for the week, it needs to be up 72 points on the close. today, we're 150 points away from that, down 74 points with about 40 minutes left. 35 minutes or so. apple ready to take a bite out of pandora's streaming business. and now, pandora has to face the music on a lawsuit as well. is this a box that pandora can close? can we come up with more analogies relating to the myth of pandora? we'll get to that coming up. also, if interest rates are on the rise, is your portfolio

properly prepared? some news that you can use just ahead here on the "closing bell." right, maria? >> yes, absolutely. we're coming to you today from outside the new york stock exchange. "superman" is 75 years old, but by many accounts, he's pretty young actually. at least time warner has something to say about his age. a lot of people out here with me. good to see everybody. thanks for being here. so "superman." >> yeah, going to be a great movie. i think christopher nolan's presence makes it watchable for me. "the dark knight" was one of my superhero movies of all time, and "superman" is the quintessential superhero of america. so going to see it. >> you going to see it? >> yeah, a whole generation of boys and girls learning to fly off their garages. >> where you from? new yorkers? tourists? >> westchester. >> brooklyn. >> westchester.

>> hands up for brooklyn. we'll talk to you coming up. bill, live outside the exchange on what turned out to be a great day. "superman" is going to be in theaters today. we're going to talk about the big ticket item of the film for time warner when we come back. stay with us. the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

it's easy to follow the progress you're making toward all your financial goals. a quick glance, and you can see if you're on track. when the conversation turns to knowing where you stand, turn to us. wells fargo advisors. 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. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪ all your important legal matters in just minutes. protect your family... and launch your dreams. at legalzoom.com we put the law on your side.

welcome back. pandora under attack on several fronts. our john thwart with the story. over to you, john. >> reporter: yeah, maria, bmi to the left, apple to the right and pandora in the middle. monday, apple gave a peek at itunes radio, a service designed to compete with pandora. itunes has a free custom radio station with ads and an ad-free subscription option that's cheaper than pandora's by a third. pandora stock popped off the itunes radio announcement because of damage from competition doesn't look like it will be as bad as some expected. still, pandora is down 13% from late may levels before the itunes talk heated up. and then bmi, broadcast music inc., which collects license fees on music and pays out to artists and publishers. it's suing pandora over its move to buy a south dakota radio station, in an effort to pay a licensed rate that's less than half what pandora's currently paying. the problem with that move, apple has its itunes download

business to subsidize radio. pandora just has radio. if pandora loses in court, it could be in for a world of hurt. bill? >> all right, jon, thank you very much. let's talk about pandora. look at the charts. will the company and the stock overcome these challenges? let's talk numbers today on the technical side with abigail dolittle, and on the fundamental side steve cortez, of tjm. abigail, let's start with the chart. what's your view on pandora? >> pandora looks like it's about to pull another bullish trick out of the box, maybe moving back above 19. let's look at the six-month chart, and i'll show you why. a beautiful uptrend. it's consolidative, and an ascending trend channel. the pause, the 14% drop down, that jon just told us, is actually a bull wedge into a potential double bottom.

and that would be the pattern to potentially take pandora back up if above 16.02, the neckline of the double bottom confirms a target rate of 18 to 19. so i think we're about to see another bullish move by pandora. >> steve, is any of this news music to your ears? >> bill, indeed it is. >> sorry. >> as is abigail's commentary, because fundamentally, i love this company. i will say i love this product. as a consumer, pandora's playing constantly in my house, and it embarrasses the heck out of my kids when people come over and it's revealed my favorite station is the glee channel. i'm not afraid to admit that though on national tv. >> nice. >> as far as the stock goes, here's what's important. is there a lot of competition? absolutely. there has been a lot of competition for a long time. the reality is pandora still controls 70% of the internet radio market. so it is the commanding presence in this space. i would also say i think it has the technology edge over itunes or iradio, because apple's radio

application will only work on its devices, whereas pandora is agnostic to hardware. it works across devices, across smartphones, so it will continue to do well. it has an incredibly loyal user base, and i like the stock. >> those are great points, steve, but there's something the viewers should be aware, and that's the stock has been volatile out of the ipo gate, trading in big, wide range. and investors need to be careful about the possibility that if it were to break below 14.66, and more trurly 13.95, we could see a big swing down, possibly on some negative news out of the court case. near term, i am -- i agree with you. i think we have this move up. i think that everybody needs to be aware that volatility of this stock and the fact that that trend could continue into the future. >> right. abigail, i absolutely concur. this is a volatile stock. this is a stock that moves, as jon fortt mentioned, there is clearly litigation risk out there. so far, this has really been a teflon stock as far as deterring and deflecting competition. >> while you were both talking,

the stock turned positive, up four cents. >> whew. >> thank you, both. abigail, as always. steve, i admire you're comfortable in your own skin. happy father's day. see you later. mae rhea, 30 minutes left. we don't have art on now to tell us if we have a buy side or sell side, but right now, down 84, 85 points on the dow jones industrials average. >> up next, with the supersized budget and major franchise potential, the man of steel's box office numbers this weekend are incredibly important to time warner, and the plans to do it justice league franchise. look at the movie and the buzz around it, coming up next. also, everybody's been talking about news corp. chairman's rupert murdoch's impending divorce, and there's another one that's pending that will cost him three times of rupert's all combined. tdd# 1-800-345-2550 [ trader ] when i'm trading, i'm totally focused.

tdd# 1-800-345-2550 and the streetsmart edge trading platform from charles schwab tdd# 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd# 1-800-345-2550 i can even access it from the cloud tdd# 1-800-345-2550 and trade on any computer. tdd# 1-800-345-2550 and with schwab mobile, i can focus tdd# 1-800-345-2550 on trading anyplace, anytime... tdd# 1-800-345-2550 until i choose to focus on something else. tdd# 1-800-345-2550 [ male announcer ] all this with no trade minimums. tdd# 1-800-345-2550 and only $8.95 a trade. tdd# 1-800-345-2550 open an account with a $50,000 deposit tdd# 1-800-345-2550 and get 6 months commission-free trades. tdd# 1-800-345-2550 call 1-866-294-5412. we know some people are never happy with the way things are. and get 6 months commission-free trades. at honda, and are always dreaming of how they could be. smarter, simpler, how-on-earth-does-it-do-that... er. and they make it that way. because things can always be better. we like those people. they think like us.

introducing the best civic sedan yet. made possible by honda. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ [ roars ]

♪ ♪ [ roars ] ♪ [ roars ] ♪ [ male announcer ] universal studios summer of survival. ♪

it turned out to be a beautiful day on wall street. the blue skies are back. but inside the new york stock exchange, another tough week for stocks as we end lower here. josh lipton is tracking some of the monster movers for us. josh? >> bill, let's review some names making headlines today. start with gamestop. analysts at oppenheimer are fans. upgrade gme to outperform. saying the market is underestimating earnings and cash flow potential here. their stock price 50 bucks. another one moving way higher today is groupon. deutsche bank raises that to a buy, saying they should be able to grow billings 20%. ganett, the nurp chain, soared 30% yesterday, announced the deal to buy belo. and another one that dropped, monster beverage, forbes

contributor reporting the american medical association may support a ban of higher-energy drinks for people under 18. according to the report, the ama is set to debate this issue this weekend. some analysts covering monster telling me they've not heard of this news. still, monster lower in today's trade. and a spokesman for millionaire richard branson tells cnbc that virgin has expressed interest in the u.s. car rental market. will more competition mean lower prices? shares of hertz and avis both lower today. back to you. >> all right, josh, thanks. now, we all know that rising rates are inevitable. at some point. the question is, how soon and how do you prepare your portfolio in the meantime? right? >> yeah, that is the big question. david sturmen from street authority says he has a plan. he's here to share with everybody, and also jeff cox, following how investors need to play the changing environment. you said yesterday was a dead cat bounce. >> i did. >> it feels like you were right. the term. david, let me ask you, lay it

out for us. what are the three things you would be getting out of now as a way to prepare for when rates start moving higher? >> a couple of considerations. one is companies that have profited from the low rate environment. for example, the mortgage rates which have had a nice spread between the low-cost borrowing and reinvesting the proceeds in higher yielding mortgage bonds. and all those kind of business models that have benefited from the spreads are really -- not going to be able to sustain those dividends. and then other companies that have been from the consumer perspective. for example, the homebuilders. a difference between a 4% mortgage and 5% mortgage. so as rates start to slowly rise, you'll start to really see an erosion in demand in some areas that have had the tailwind. >> bill? >> that's the question. jeff cox. as david said, slowly rise. the big debate is whether the rates will slowly rise when the fed gets around to tapering, or whether we're going to see a spike of some kind? are investors preparing for that, do you think? >> it's a great question, bill. and i think that the big thing you have to keep in mind -- two things. one is, why did the rates rise?

are they rising because of economic growth, or are they rising because of some type of market panic? if they do rise, history tells us that's not good for the market. recent history, though, tells us something different. we've seen during raising rate environments during this bull market, 21% average growth rate in the s&p 500. so the market actually can go higher. i think the biggest thing, the biggest bet, is that the rates are going to rise because of the economy improving. that's going to help cyclicals. that's going to help beta chasers. if you want to get back to i told you sos, i had said back in late december, it would be a beta chaser, and the market up early on, it will benefit now. >> how do we know the rally is over, just because rates start moving higher? you're making the point -- >> that's why, as i said, we're

going to go through a churn, but there will be areas that have not done so well earlier, that were doing well in the -- doing well in the low-rate environment, not going to do so well, and you'll see some turn in the market. >> david sturman, what happens next week when the fed meet -- what happens if ben bernanke comes out and just comes out and says, you know what, folks, we're not going to be tapering for a while. not this year. maybe not even next year, until we get to 6.5% unemployment. bonds theoretically would soar at this point, and yields would go down. would you be selling if that were happening? >> well, no, you know, to get to jeff's point, there's a difference between what the fed will do with short-term rates and what the economy will do with the longer rates, the 10 years. as we start to get more robust activity, it's inevitable that on the long end we see a movement upwards here. so kind of -- as much as there are plays that are heading off the short rate, the longer-term rate plays really starts to have an impact, again negatively, where we've talked about, and also areas benefitting.

>> and i will just add to that, the market right now is pricing in higher rates. it is pricing in the tapering. if the fed turns tail on that, you could see a negative reaction on that, just from the standpoint that all of the portfolio guys i talk to are shipping -- shifting to cyclicals out of defensive. that will create a lot of issues in the market. >> all right. we'll leave it there. gentlemen, good to see you. >> thank you. >> thank you so much. we're in the final stretch of trading here. we've got about 30 minutes before the closing bell -- 20 minutes, actually, before the closing bell sounds. with the dow jones industrials average down 88 points here, bill. >> you know, it's the split that everybody at news corps has been talking about. we're not talking about the newspaper business from television and movies, but rupert murdoch's pending divorce. if you think this divorce will cost him a lot, it's peanuts compared to what another billionaire paying for his marital woes. rocket frank will explain coming up. and after the bell, a lineup with new england patriots owner bob kraft to talk about his high-profile acquisition of tim

tebow. he said tebow's spirituality was a factor. >> hopefully, his arm is another factor. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine.

just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before. i got this. [thinking] is it that time? the son picks up the check? [thinking] i'm still working. he's retired. i hope he's saving. i hope he saved enough. who matters most to you says the most about you. at massmutual we're owned by our policyowners,

and they matter most to us. whether you're just starting your 401(k) or you are ready for retirement, we'll help you get there. i work for 47 different companies. well, technically i work for one. that company, the united states postal service® works for thousands of home businesses. because at usps.com® you can pay, print and have your packages picked up for free. i can even drop off free boxes. i wear a lot of hats. well, technically i wear one. the u.s. postal service®, no business too small. markets slipping into the

close here. the dow down 113 points, heading back to the lows for the session here, maria. and it doesn't look like we'll finish below 15,000. but this will be a down week for the market. we needed to be up 72 on the dow to finish positive. that's not going to happen here. >> yeah, it's been a wild week. kind of expected that we go into the weekend, people did not want to go into the weekend long given we have the federal reserve meeting next week. >> exactly. >> and who knows what comes out of it. right, bill? who knows what bernanke ends up saying in terms of the tapering. >> yeah. >> so we're watching that. meanwhile, when billionaires divorce, it gets people talking. while much of the focus this week has been on rupert murdoch filing for divorce, another billionaire is in the midst of a split that will likely cost him more than all three of murdoch's divorces combined. over to you, robert. >> reporter: thanks, maria. rupert murdoch's record may be broken, but not by murdoch. he's getting divorced from his

third wife, but it's not likely to have much impact on his wealth or the company. certainly it won't come near that $1.7 billion that he spent the divorce from his second wife, anna murdoch. but news today from reuters suggests that energy tycoon harold hamm may spend nearly twice that amount with his recent split with his wife. the big difference between murdoch and hamm? the preup in. -- prenup. hamm did not have one. the bigger issue for hamm is nearly all of the wealth was earned after their marriage in 1988. sue ann, the wife, was an executive at continental resources, with tco, for sometime, and that means she helped create a lot of the wealth. while hamm is worth $11 billion today, he could be worth $3 billion less after the settlement. it would send his wife of sue ann of the 20th wealthiest women in america. she would even be wealthier than oprah. now, hamm's divorce could also have a greater impact on his company if he's forced to sell

shares in order to pay off his wife. that potential outcome could put pressure on the shares. in fact, it already has. the stock is down today 1.4%. back to you guys. >> it starts to add up after a while. a billion here, a billion there. >> reporter: that's right. it gets expensive. >> get that prenup. >> reporter: that's right. >> continental down quite a bit today. all right. so we're heading towards the close. we have about 13 minutes left in the trading session. the dow down 111 points, what has been a wild week on wall street. what are investors making of these swings? maria, what are they saying outside the new york stock exchange? anybody get quivering knees right now? >> yeah, we're actually here with a whole bunch of folks talking about markets and investing today. shivle? you're here from -- >> rosenblatt securities. >> so you live in new york in. >> yeah. >> you're jeff. >> yes, from pennsylvania. >> good to see you both. what do you think? did you lose money this week or make money? >> it's a crazy week.

you win some and you lose some. >> you don't care. >> not really. >> in other words, you're in it for the long term or you just not investing? >> i'm in it for the long term. whatever happens this week, i'm in it for the long haul. >> it doesn't matter. jeff, you thinking you lost money? >> maybe a little bit. overall, not anything significant. >> what's your inclination in terms of a wild week like this? does it matter to you? >> for me, over the past six months or so, i've actually been building more cash and then selectively putting money in on pullbacks. >> you're a buy on the dip kind of guy? >> i am. >> who else is a buy on the dip in this crowd? buy on the dip? [ laughter ] all right. we'll take a short break and come back. more market action. stay with us on "closing bell." [ male announcer ] this is george.

the day building a play set begins with a surprise twinge of back pain... and a choice. take up to 4 advil in a day or 2 aleve for all day relief. [ male announcer ] that's handy. ♪ made a retirement plan, they considered all her assets, even those held elsewhere, giving her the confidence to pursue all her goals. when you want a financial advisor who sees the whole picture, turn to us. wells fargo advisors.

yes, hi, mom. so time minutes of what has been another volatile week here. and right now, around these levels, maria, the dow is down about 3% from its most recent highs, the all-time highs that were set not too long ago. >> yeah, a tough week,

certainly, as part of that. with us now is david darist, and also randy bateman from huntington funds. it has been a wild week, very volatile. randy, you say it's time to start thinking of option strategies. >> this market has been moving so rapidly based on any type of news, up or down, that you probably have loot of your viewers that want to get their feet wet. they've been out since 2008, getting nervous now. been left on the sidelines. we're seeing it across the board from our customers. they want to get their feet wet a bit. a good way to do that is to use option strategies where you can take some of the uncertainty out of the marketplace, maybe buy half of what you want to own in a particular stock. >> right. >> and then write an out of the money call and write an out of the money put. you've covered yourself. if the stock goes up, you've collected the premium and maybe a dividend. if the stock goes down, you'll be put more shares which you really wanted to own in the first place, but you've cut your

costs because you've accrued the two premiums. it's a nice way to get started in there. >> david, what do you want to hear from the fed next week? >> what do you want to hear next week is what bill is asking you? >> what do i want to mary from the fed next week, maria, is they're basically going to go slow on tapering off on the bond purchases. we've got a lot of good signals going on in the economy. ten things right now. you have the household net worth is up to 70 trillion. it's above the old high. you have the consumer confidence up. you have the house prices up. the house sales up. retail sales were just announced yesterday, surprise to the upside. on the industrial side of the economy, you have industrial production. you have lead indicators. you have the chicago purchasing managers index. you have the new claims, they have fallen 12,000. so they're down at the low end of the range here, maria, and the chicago purchasing managers index. so we think any pullback here,

use this as an opportunity to get into the market, buy some medtronic, buy some abbott, buy some of -- >> you still like japan? japan, obviously -- this market is following japan so closely. you still like japan? >> maria, we still like japan. they went down because of concern over interest rates shooting up. they've calmed down. they went up over the yen goi going -- the yen going up again. >> right. >> against the dollar. that seems to be slowed down. it was ahead of itself, maria. >> finally. >> and abenomics, he'll do it in the fall. >> i'm not asking you for the reasons. i know the reasons. i'm asking if you would put money in japan. you still like it. >> >> yes, we still like it. >> what about you? >> yes, i like it. we have robust international exposure. if you look at the growth from the world, a lot is coming from the emerging nations. 55% of the growth of the world came from the bricks last five years. the other 25% came from emerging

nations that are not bricks, and only 20 coming from the developed nations. so a lot of opportunity internationally, we think, for growth and to be able to play that -- >> go slow on the bricks, maria. buy some europe. angel america will switch from mother teresa to shakira. and happy father's day to the fathers watching. >> yes, thank you. happy father's day to you. >> from merkel to shakira. there's something to keep an eye on. we'll wrap up the week with a closing countdown in a moment, maria. >> yes, we will. and after the bell, join us, check out the bikes. they started $20,000. would you pay 20 grand for this bicycle? we'll take a look at these. these are not ordinary bikes by any stretch. you will hear and see what's so special about them coming up. all business purchases.

so you can capture your receipts, and manage them online with jot, the latest app from ink. so you can spend less time doing paperwork. and more time doing paperwork. ink from chase. so you can. a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ [ babies crying ] surprise -- your house was built on an ancient burial ground. [ ghosts moaning ]

surprise -- your car needs a new transmission. [ coyote howls ] how about no more surprises? now you can get all the online trading tools you need without any surprise fees. ♪ it's not rocket science. it's just common sense. from td ameritrade. welcome back. the 0 seconds left. a quick review of the markets. this is the dow we're talking about. monday, we were down 9 points. i'll do the vanna white thing. down 116 on tuesday. down another 126 on wednesday. we had that jeff cox dead cat

bounce yesterday, and then we can show you what we're doing right now. we needed to be up 72 points to finish higher for the week. that's not happening. we're down 104 as we head towards the close. peter costa and ben willis are out on the street with maria. what do you think the fed will do next week? >> i think the fed will use jawboning as one of their major news. they're effectively tapering with jawboning. they did it without much action. they were able to move the markets and that's what you'll continue to see. >> what about that, peter? >> well, as far as -- they're not taking any risks by just keep talking about it, the potential of ending it. >> what's your anticipation of the market reaction? let's say ben nailed it and that's exactly what happens, we see some jawboning. how does the market trade? >> well, actually, what we're seeing in the market now is we're seeing this is more of an event -- equity event type thing.

any time there's news to particular, there's stock movement, or any kind of news -- ma macro news, the market reacts to it. everyone is starting to discount -- or put to bed the tapering off into their portfolios already. >> we've got to jump. here's the bell. >> that's it. have a good weekend, everybody. all yours, maria. and it is 4:00 on wall street. do you know where your money is? hi, everybody, welcome back to the "closing bell." i'm maria bartiromo. a tough day for the bulls. early gains well evaporating before lunchtime. let's see how we're settling out today with the dow jones industrials average lower in the triple digits, down 107 points on the dow at 15,678. and an important event next week of the federal reserve meeting, and the s&p 500