nnouncer ] state farm. more mobile than ever. get to a better state. welcome in to "closing bell," everybody. i'm bill griffeth at the new york stock exchange where we have a pretty good rally underway. stocks trying to follow through on yesterday's 100-point gain for the dow, mandy. >> indeed. hello, everybody, once again, at cnbc's world headquarters. on today's show, is bad news good again? we'll start with the bad news on the economy. why? because some traders are hoping this will give the fed and ben

bernanke a reason to keep on stimulating full throttle. but obviously, a lot can still happen in the final hour of trading. we've seen it many, many times before, right, bill? so stick around, stay right there. >> we will definitely do that. and when bad is just bad -- that's gold today. another horrible day for gold. bulls, now that the precious metal is on track for its worst quarter in nearly a century. down about 23% this quarter. why is it happening right now? is there anything safe about gold as a haven? we're going to look at both sides of that contentious issue during today's program. also, bill, you will see more of the stunning interview from the american boss that is currently being held in captivity in china by his employees. it's a very bizarre and potentially dangerous situation. you're going to hear directly from him, what is going on, and why. that's all coming up in just a bit. >> crazy story. it has us asking ceos very calmly these days, "so, have you ever been taken hostage?" >> yeah. >> we'll get to that.

a look at the markets. we're near the highs of the session with the rally now up 171 points. that is the high for the session, right there. the dow at 14,931. the nasdaq is also moving higher today, but without apple's help. we'll talk about apple. it's in danger of closing below $400 for the% time since mid-april. but right now, the nasdaq's up 23 point, almost a full percent at 3,380. and the s&p is up, an 18-point gain, back up above 1,600. the gdp number less than expected, but it appears to be good news for investors today. josh lipton is on the floor of the big board. what's going on with this disconnect, do you think? >> reporter: well, bill, we have triple digits. traders will point to a couple of themes. one, gdp, 1.8%. yes, it's very backward-looking, but maybe more evidence that the fed is not going to taper anytime too soon. also, they'll point out it's not

just the fed. it's central bankers, policymakers around the world, from china to europe, offering more calming words. you can see the blue chips now 174. the s&p up 18 at 1,606. if you look under the hood of your benchmark gauge, it's healthcare, utilities, staples. in general, commodity stocks not faring as well. you look at materials, it's actually the worst-performing sector this year, up just about 2%. also, you guys mentioned gold, closing at three-year low here. you want touch on the gold miners, gdx down, about 50% in the past 12 months. and we'll end here on the regional banks. some of the names touching new 52-week highs. today, i was talking to gerald cassidy over at rbc. he will pin that in part on higher rates, steeper yield curve. his favorite pick, by the way, is regents financial, rf a price target of 12 bucks. bill, back to you. >> all right, josh, stay there. we'll talk more about today's market action in the "closing bell exchange." joining us along with josh, kyle harrington, michael yoshikami,

mike thompson joins me here on the set at post nine. what do you make of the rally right now? we've had how many 100-point-move days consecuti consecutively for the dow, whether it's up or down here? >> it's all been driven by, i guess, the near shock that the fed would actually change something they've been doing for a few years. but i think the realization now, you know, we're going to have this kind of volatility going forward. this is something we have to get used to. you know, i think the relief you're seeing is basically the fact that the fed put accommodation in with a dump truck. they're going to take it out with a teaspoon. that's what's helping this market here. and there's something forward looking here. it's really probably about earnings. earnings are going to probably lead and you'll see the beginning of an earnings rally. >> you know, mike, i don't want to undercut the fed and ben bernanke, but we've been here before, we've often seen the

summer swoon. to what degree in terms of what we've been seeing recently, the big up moves and down moves, is this just summer, a seasonality factor? >> it is a seasonality factor, mandy. and when you look at what the federal reserve is doing, they're putting out conflicting messages. bernanke was pretty negative, or i should say more positive about economic growth, and then you immediately had fed officials coming out and basically discounting what he said. but summer is a part of it. we are in a position now where the market has rallied. we have to have more of a stimulus for continued equity rises. and i also think that what's starting to happen is you're starting to see really a fundamental change in how the markets work. gold has always been a hedge. gold has always been a fear trade. gold right now is simply just a capital trade. it's not a fear trade anymore. and that's why -- >> is it a dead trade? is it a dead trade? >> i think it's a dead trade. >> yeah. >> i will tell you that gold, for my perspective -- if yields go up, gold pays nothing. if people get afraid, they're

selling gold. if people are not afraid, equities go up and gold doesn't go up as much as equities. so we've been a believer in gold as a hedge. we're not a believer anymore. >> yeah, i -- i've said before many times, i just don't understand gold anymore. i just don't get it. we'll talk about that a little bit later. kyle harrington. >> yes? >> we often cite the fed as the instigator of market responses this this country, but we can't forget about china, can we? >> no, i don't think we can. look, i agree with what everybody said. from our perspective at harrington capital, i mean, it's strap on your seatbelt, because volatility is here. and i think it continues to be here, both here domestically in the u.s. as well as in china. i mean, we saw -- i don't get the impression that we can trust any real economic data coming out of china. the shanghai index for the year is down double digits, i think 14%, 15% for the year. and it's, right now, talking

about the federal bank in china doing very similar techniques in terms of monetary policy and being very accommodative in the chinese marketplace. >> kyle, how much of that negatively impact us, okay, because i would argue and push back and say there are a lot of chinese people who would like to get their money out of china, and maybe that money could come here to the united states. >> that is absolutely true, mandy. >> there are a lot of money global managers out there, thinking the china isn't that good right now, i'll just keep my money here, no? >> very, very good point, mandy. and i'll tell you that's why i think being in the equity markets, being exposed to the domestic u.s. equity markets, is still a good place to be long term. however, i would argue that volatility will remain, and that you need to identify in a trusted adviser to help you navigate your way through, i think, a very -- a continued volatile economic marketplace here in the united states. >> what do you say, michael?

>> i was just in china last week. and when you actually talk to chinese officials, when you talk to people on the ground in china, you are absolutely right, mandy. they're trying to get their money out of china. they know there are other opportunities. that's why singapore's economy is doing so well. you have to really understand that the chinese are all about returns. that's why they're in africa. that's why they're moving to other countries. if the chinese are so concerned, then i think we should be concerned. the chinese government is shifting now from infrastructure to more internal consumption. that changeover means you need to buy chinese companies that focus on consumption. u.s. companies that focus on consumption. >> like which ones? give us some names, mike. >> a perfect example of consumption in u.s. is a mcdonald's, starbucks, or yum. the kind of companies selling to the chinese consumer. the infrastructure play, from beijing to tinxen, you see miles and miles of empty infrastructure. it's already built out in china.

>> let me bring it back to the u.s. market. the dow continues to climb. art came by a second ago and said it looks like the bias is to the downside, and in a big way, interestingly enough. >> that is interesting. i was talking to art earlier and trying to get his take on this market. he, one, points to the gdp. but art was very focused, bill, on what the central bankers and policymakers were saying around the world. as he said, certainly, you listen to the chinese, also we had in the u.k., the b.o.e. member sounding very dovish. as art was saying, a lot of cooing coming out of the central banks and you see the blue chips responding. >> mike thompson, who do you like here? if we're going to see this kind of volatility, what do you invest in to try to protect your portfolio here, do you think? >> well, again, it depends on what your timeframe is here. you know, honestly, you know, there's -- what's going on is you had a big withdrawal from bonds, you have a lot of cash on

the sidelines. and they've yet to rotate in to stocks. so what i think you're really looking for is good news. what do you do? i'm not sure you want to try to trade this market, because the new cycle will be asymmetric, and next year there could be some challenges and businesses are taking that in, and we're worried about the effect of the unforced mandates in terms of consumption that will occur next year. i'm sort of thinking look at where the fundamentals are. i think we keep going back to, you know, the u.s. equity market. is normalized volatility, but you'll get paid for it. >> i'm looking at the list here for the last seven trading days. up 101 yesterday. down 140 on monday. down 350 on thursday. 206 down wednesday. tuesday, up 138. monday, up 110. >> remember when we had the stealth rally, right, at the beginning of the year, moving -- >> well, maybe slowing down. >> -- and now, look what we have. >> exactly.

thank you. >> thank you very much. let's get a check on the stocks moving the market. jackie is tracking the breakout stocks. >> let's start with microsoft. a mover to the upside. as software developers hit san francisco for the company's annual three-day developer conference, called build. microsoft releasing a version of 8.1, the final version will come out later this year. also, morgan stanley raising its price target from $36 to $40 on microsoft. meantime, adobe seeing a pop after jeffries upgraded the company's stock to buy from hold. that came after the creative cloud model, that's been shifting adobe focus from box software to a subscription model. finally, apollo group, the biggest loser in the s&p 500 today, getting crushed after the for-profit education provider reported earnings yesterday. eps was higher than expected, but revenue did fall short of projections.

bill, back to you. all right. about 50 minutes left in this trading session, with the dow with the highs of the day, a gain of 173. but a lot of stocks coming for sale in the last hour, and in a big way. we'll see whether that is met or not. and willful blindness. that is what the government may go with it as it makes a case against stoven cohen and s.e.c., but how on earth do you prove it? we'll debate that next. and pandora is making a move to go after sirius satellite radio. we'll dig into that and find out which stock the experts say is the best tune for your portfolio. it says here. it's coming up on the most important hour of the trading day right here. (announcer) at scottrade, our clients trade and invest

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did hedge fund titan steven cohen exhibit willful blindness to learn about alleged insider trading at his firm. that's what authorities are looking into. what have you found, kate? >> prosecutors on the s.a.c. insider trading case are reportedly considering charging steve cohen with this offense known as willful blindness.

essentially, that's turning a blind eye to what he knew constituted criminal activity at his firm. so that he could honestly say, i had no idea. i want aware of this. the revelations in "wall street journal" come as a midsummer deadline for filing charges against cohen as part of a broader investigation into a pair of pharmaceutical stock sales is looming. if brought, these willful blindness charges could address a central question in that particular pharma case, that is, did cohen avoid asking what inspired a trader to do a complete 180, because he suspected he was motivated by insider information, or did he have a blanket ban on asking questions about what motivated the changes in posture, because he simply didn't want to know, didn't want to be burdened by the information? up until now, that's been a central dilemma in the s.e.c. probe, which boils down to a 20-minute conversation on a sunday between cohen and this analyst.

we're told there is no wiretap of this call, and cohen has always said that he acted appropriately. under this willful blindness theory, mandy, that may mean simply he avoided asking a relevant question that could have revealed martoma's alleged criminal behavior, and it may have gone on for some time at his firm. >> and the question is whether this tactic will prove to be effective in the prosecution's case, right, bill? >> exactly. kate, thanks very much. let's talk to a couple of attorneys on this. brad says, no, the very simple theory will be tough to prove in such a complicated ways, while tom of buckley sandler says the strategy could actually pay off for prosecutors, and both join us to talk about it now. tom, how would you prove that? it's almost like trying to prove a negative in many cases, isn't it? >> yeah, what the prosecution is going to have to show is that mr. cohen built an organization to insulate himself from understanding what -- where the sources of certain information were coming from. >> without specific intent. >> with that intent.

and that in this specific situation, as with other situations, he may have asked his portfolio managers to use code, or he may not -- or a wink and a not -- or he may have avoided the conversation altogether. >> indeed, brad. it's a very difficult thing to prove, isn't it? >> oh, it's very difficult to prove. i mean, from a prosecutor's standpoint, you want to have direct evidence. you want to have a wiretap or someone, you know, an e-mail. the next best thing is a direct witness. then you have circumstantial evidence. this is even less than circumstantial evidence. this is a situation of, he should have known, but the theory here is very tough to prove. they have to show, the prosecution, that there was a high probability that he was aware that the information came from an insider, that it was material nonpublic information. that's going to be very, very difficult for them to prove. very difficult. >> what about that, tom? how do you prove a wink and a nod? >> well, that's right. it's very difficult to prove that mr. cohen understood the

ultimate source of the information, where that person stood within these pharmaceutical companies. and that that -- and that that individual received a benefit for passing along that information. nevertheless, simply because mr. cohen created and devised this organization to insulate himself, that shouldn't be a reason for the prosecutors not to bring this case. if they don't bring this case, they may be allowing insider trading in a very narrow area, such as this. >> so, brad, how do you think this pans out? where do you think we go from he here? >> i think this is an 11th-hour desperation move from the prosecution. they were hoping for a witness. they were hoping for someone to testify against steven cohen. and if they're going along this line, that means they don't have that. so this is going to be very tough to prove. i mean -- >> is it kind of like a clutching at straws because they haven't anything else? >> exactly. this may work in a drug courier case where the guy should have looked in the brown bag and should have realized that the briefcase had drugs.

but this really does not work in a complicated trading platform with compliance officers, with different levels of traders, where there's different flows of information. and in terms of changing the trading strategy, that happens all the time on wall street. so this will be real tough to prove, i think. >> and i will say this, brad. the attorneys that are working on this case, from both the s.e.c. and the manhattan u.s. attorney's office, are up to this task. i have a feeling that they're going to bring their "a" game, and that -- even though they may not have direct evidence, they are going to bring whatever they have to bear in the court. >> but here's the question i've long asked, tom. where's the due process in all of this for steve cohen? i'm not taking a stand one way or another, but this investigation has been going on for years, and it just, after a while, it feels like a fishing trip. because we keep having these trial balloons floated of this strategy's being talked about, that strategy's being discussed, this strategy's being thought

of. where's the due process for stevie cohen? >> i think the due process comes in to play in the five-year statute of limitations, which is coming up very shortly. the prosecutors have every right to explore whatever legal theories they want to test and they want to charge. but ultimately, after five years has passed, they're not going to be able to bring this case. so that's really where the due process comes in. >> tom and brad, thank you very much for your thoughts. very interesting. >> thank you, gentlemen. >> thank you. >> thank you. heading toward the close, still near the high for the session. up 175 points. some traders have pointed out to me, even as we talk about there's a number of stocksor sa close, those will be pared off. so we'll see. we'll see what the feeling is as we head toward the ringing of the bell. >> we sure will, bill. look out sirius xm, pandora is now available in more than is 00 car models. coming up next, we'll look at which stock you're better off tuning in to. and once upon a time, gold

used to be an insurance policy against a falling stock market. but that fairytale appears to be coming to an end, and we'll find out why the precious metal is not the safe haven it used to be. coming up. [ female announcer ] there's one thing

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it's hard to imagine who would have thunk, but guess what, the dow is actually having its fifth-best day of the year today. we're currently near the highs of the day. we were up by 178 points earlier on. and, of course, we still have a little bit of time before the closing bell. mind you, folks, it has been a winning quarter, which we're about to wrap up, but not a winning month. all three major averages are on track to lose over the course of the month of june. bill? >> yeah, we have the nasdaq up 35 there. shares of apple are still down $5, below $400. we'll keep an eye on that. meantime, people cranking up the radio, and laptops heating up. it's summertime. yesterday, internet radio leader pandora said it cracked 2.5 million activations in cars. that's more than quadruple the number that it had just a year ago, largely because pandora is now available in more than two dozen automobile brands. pandora's shares up today by

more than 7%, following an upgrade, but with sirius xm in 70% of the vehicles and with a subscription model that pulled in $3.4 billion last year, how much of a threat is pandora to sirius xm? let's start talking numbers on the two today. on the technical side is rich ross, global technical strategist, and on the fundamental side is steven johnson at first asset management. good to see you both. can pandora mount a serious threat to sirius xm? >> yeah, i think they can. it will take time. the bull case for pandora is that, you know, they're extremely high margins, about 29%. they're growing the overall listeners by 35% a year. of course, cars are the big area to be in. but, of course, what it will take is really sirius in two-thirds, 70% of all cars, and likely to expand from 50 million to 100 million in the next five years. so we're seeing vehicle sales way, way up in the u.s.,

14 million last year, and likely to go 15, 15.5 million this year. so that will be the big catalyst for them. whether they can really overtake sirius right now, who has all of the advantages of scale and the ability to negotiate with content suppliers, we'll have to see. i think they're certainly an attractive buy opportunity right now. >> you like them better than sirius? >> i do, actually. i think there's way more upside. you could see $25, $27 here, maybe 75 cents or so in sirius. >> okay. >> you know, on a proportionate basis, a better buy. >> rich, which chart do you like better? >> bill, i'm going to go in the other direction here. i'm not going to chase pandora. at 671 times 2014 earnings with microsoft, google, spotify, remember half of all radio listening is done in the car. that's where sirius makes their living. let's bring up the chart and we'll back it up with the technicals. you can see since breaking above the 150-day moving average in

the summer last year, the stock goes on a run. 50%. we then consolidate that move in textbook fashion. that's what you like to see. we break out from that consolidation. now, this is what i love about it. 13% pullback right to that 150 day. that's where you lock and load. you want to buy the stock right here. this stock could trade $4. that's 20% upside from here. >> yeah, but the growth rate of sirius is only 12%, whereas pandora's growing at 35%. i think in this market, none of them are cheap on a fundamental basis. what you're really looking at is growth and margins, and in both those cases, pandora is the clear leader. i think sirius has everything to lose and pandora has everything to gain. they own 75% of internet media, internet radio now, so they're the dominant player in the way the world is going. they're going to kick off autos. >> the key phrase is right now. look at the competitors entering this market. relatively low barriers to entry. come on, microsoft, apple, they just both announced internet -- you have google with the apps -- >> -- runs on ios and it is not

going to run on android. it won't run on other devices. so that isn't much of a competitive threat for pandora. >> all right. have to go, good discussion, guys. fun stuff. >> thanks. >> see you later. we'll take break here. we have 30 minutes left and the dow just off the highs for the session. we're up 163 points on the industrial average. yes, if we closed here, this would be the fifth-best trading day of the year. >> yeah. >> we know you're out there keeping score, folks. >> like, kind of like bad news is good news. the stocks surging despite the weak economic growth report this morning, or is it, as we say, because of the weak number? up next, we'll look at whether that could force the fed to rethink whether or not it needs to let up on the stimulus. bill? then, tomorrow, goldman sachs chairman and ceo and former treasury secretary hank paulson will be speaking to maria from the aspen festival. coming up tomorrow on the "closing bell." tdd# 1-800-345-2550 [ trader ] when i'm trading, i'm totally focused.

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-- finds a profound shift in the financial psyche of americans, and it seems to be inconsistent with what we learned today about the economy. right, steve liesman? break it down for us. explain. >> let me see if i can make sense of this stuff. the data is upbeat in the recent stuff, but not so much when you compare it a little more long term. let's take a look at the cnbc all-america economic survey, the results for june. they're pretty robust compared to '08, or the average we've had in the survey over the course of this really long trend of depressed economic growth. 41% seeing their wages going up. the best number, actually, since 2008. up 38%, the home prices going up in the next year. one of the best numbers. only 40% say the economy is poor. a high number, but less than it's been on average over this time period. now, i want to go in and look at today, the next chart here, the home prices that are expected. you can see a kind of quantum shift over this period. the average expectation has been

for a decline in home values. this quarter, we've seen an expectation of 3.1% over the next year, the people expect their homes to go up. what's the inconsistency? well, the robust gdp -- the robust optimistic numbers on the economy, they don't really comport with the gdp numbers today, a big revision downward for the first quarter. 0.6%, down from the prior report on this. consumer spending revised down by .08. government spending not revised much, but still negative. what's interesting is that the part we're talking about, the consumer, even though it was revised down, pretty robust. the best number since 2011, so maybe not quite as inconsistent. i want to show you something. let's push this to the side and look at another piece of our survey. we asked people, has your standard of living compared to when you thought you would be, exceeded expectations, met expectations, or falling short? we last asked this question in '07. you can see many fewer americans

say that their standard of living has exceeded their expectations. many fewer say that it met expectations. more saying it's fallen short. the way to bring this together, if you take these two charts, it's -- what's happened here is this growth of 1.8%, this lackluster economic growth, is the reason why people's economic lives, why their feelings where they are in the world, is falling short. >> all right. steve, stick around. i want to bring in our own jeff cox and rick santelli to further discuss the state of the economy, how it may influence how much stimulus, obviously, the fed will continue, and for how long. steve, what's your take? do your views match with what he found in the survey? >> i don't like to focus on what people say. i like to focus on what they do. when you looked at the numbers this morning, you can see the consumer is not as robust as we thought. when you try to translate this into how is main street and wall street, how do you reconcile those two things, and i think

you can't. i was so disappointed to see this market -- i hate to sound like debbie downer here, to see the market go down, because i don't, but to see the market rally on bad news just seems like we haven't come anywhere. >> oh, just wait. just wait, jeff. >> -- rallied on good news. what does the market want here? i'm a little confused. what do you reckon, rick? yesterday, rallies on good news. today, rallying on bad news. what does the market want here? >> what's the common denominator? what's the operative word? rally. i think the fed speak finds very fertile ground in equity traders. whether they believe the fed programs are helping the economy or increasing the balance sheet, nothing else, it doesn't matter. they like the cash that extra check. i think, you know, the wealthy are certainly benefitting from the movement up in stocks. so we hear a lot about we want that wealth effect. it helps america. i don't know that it does help america. but it does help the wealthy. i don't see how rising stock prices and companies with all this money and pristine balance

sheets giving back big dividends because they have nothing to do with the money, that seems to make sense, how that's going to back in to better numbers, and i think today's revision of the gdp is living proof. >> clearly, we have not seen this wealth effect transfer into the real economy. maybe to some extent. even when you look at how much were 401(k) balances up, maybe 8% year over year. that does not jive with what's happening in the equity markets. >> did you guys see the numbers i just -- >> okay. >> did you see the numbers? what we're talking about is 1.8% gdp, revised down, in part, but at 2.6%, consumer spending is very much better than it has been, and pretty decent in terms of the fact that they had a payroll tax increase the beginning of this year, and, also, you had the sequester take effect later in the year. not sure that's showing up in these numbers. but the consumer's doing okay. really, the interesting things there are the business investment side, and you saw the 4.8% decrease in government spending. so where the economy is weak is

not really in the place where you guys are pointing to. >> you bring up great points, steve. i've had several e-mails from people who own businesses, and they zeroed right in on that .4% increase on the business investment index. and they don't like that aspect. and in terms of consumer spending being up or robust, 2.7, that's what scares me the most. because i think in the end -- and we'll see personal income and spending tomorrow -- that's the weak link in this chain, in my opinion. >> i would like to know what happens going forward, as well, steve. you know, i've read many times, i've heard many times, okay, so, you know, the second quarter isn't going to be great, but it will be stronger in the second half. can we say that with conviction? >> no. and i think that both sides on this, mandy, have some explaining to do. i think those who have called for the doom and the end of the nation as we know it have been wrong. and i think those who have looked for more robust growth from some of the programs have been wrong. and i think a better discussion would be had from everybody sort of taking a step off of their

ideological platform and kind of having a more interesting discussion as to why that's been. the people calling for inflation haven't had it right. but the people who have suggested that you would get more robust outfit from the stimulus and the fed, have also not been right as well. and i think that we're somewhere in between. it's not zero and it's not four. >> yeah. >> it's two. >> steve, steve, a young lady is on the floor -- there's a young lady on the floor who just told everybody she's pregnant. now, if i ask her, let me see the baby tomorrow, she won't be able to show it to me. i think inflation, it's not that the people that said we're going to get inflation have been wrong. it's just that you're not looking at it with a big enough -- [ overlapping speakers ] >> that woman better have a baby in nine months, okay? there's a period of time when we -- [ overlapping speakers ] >> -- nine months time seven is when it will show up. there you go. >> she has nine months to prove it. >> -- pregnant, can you? jeff? >> if you're ben bernanke, i

think the fact that we haven't seen the inflation is much more troubling than -- than the fact that maybe some people like me, who thought we would see inflation, have been wrong. i mean, where -- when is this liquidity going to reach the real economy? we should see some price pressure, we should see wage pressure, and there's zero wage pressure now. so where this confidence is coming from is just a mystery -- you don't think in a -- >> 7.5% unemployment. >> an improving economy. wages shouldn't be going up. >> not until labor slack is soaked up. that's the thing, guys. in my opinion, when i look at the two theories of inflation, the output gap theory, the theory that's argued, the slack in the economy would determine the inflation, has been better than the monetary theory, which has said a large fed balance sheet would create inflation. >> guys, we have to leave it there. >> -- programmers making at apple this year versus three years ago. >> we have to leave it there. great debate. thank you for playing. >> best wishes to that trader, too. >> yes, we all wish her well. >> we do, indeed. >> whether or not there's

inflation. >> yeah. 20 minutes to go until the closing bell. at this stage, the dow is moving up by about 176 point. at the high of the day, we were 178. we could safely say we're close to the highs. >> close enough. john is still a big believer the bull will win the push-pull. coming up, why he says investors have to buy stocks now, because he feels there's no other alternative for investors at the moment. and one of the key players in enron's fraud and subsequent collapse is speaking out for the first time since testifying against his former bosses and doing prison time. find out what the former enron cfo, andy fastall, has to say, plus reaction from the victims of the crimes at enron. both tylenol and bayer back & body

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disappointing economic news this morning was really no problem for investors today as the major averages get -- get their -- get their rally on. for a second day of big gains that we're seeing right now, bill. >> yeah, the first back-to-back rally we've had in a while. what's the buzz on the trading floor now? josh lipton is at the big board.

s s seema, bertha. josh, what are you hearing? >> the s&p talking on another 16. if you look at what's working, it's a mixed session. healthcare, consumer discretionary, utilities, and industrials. so a mix of both cyclical and defensive sectors. commodity stocks in general having a tougher time today, a.k. steel, alcoa. on the commodity theme, check out boise cascade, bcc, building trades distributor, well below what the street was looking for. looking at prices for commodity, wood products, declining 25% since last april. finishing in the red. bill, back to you. >> all right. the nasdaq surging along with the broader market, but not all stocks are participating, right, seema? >> that's right, bill. closest session highs on the nasdaq. here's what's interesting. apple not participating in today's rebound. shares down another percent today, below that crucial $400 level. mark newton says 382, that's the next level to watch. remember, this is a stock that

was trading in the 700s just eight months ago. renewed concerns from analysts on its pipeline seems to be what's triggering this move to the downside. also, risk reversals. dan nathan says investors trimming their exposure as we wind down the quarter. that might be another reason why the stock is underperforming today. >> thank you very much. in the meantime, stocks may be higher today, but it is another ugly day for gold. bertha coombs with the details there. bertha? >> ugly indeed if you are long, mandy. traders saying they were just taken aback by the big fall that we saw again today. they think that there was some technical liquidation that happened overnight. gold closing here at a near three-year low, and for the quarter with just two days left, we are seeing both gold and silver poised for their worst quarterly performance since we've been keeping records on this. that's 40 years for gold, 50 years for silver. and at this point, mandy, traders see nothing to really stop this downward slide. >> in fact, later on, we're

going to be discussing why gold does seem to have lost its glitter as a safehaven investment, right, bill? >> exactly. and meantime, with about 15 minutes left, we are hanging on. so the stock that being offered for sale in a big way, apparently is being pared out, being matched. it's up 159 points toward the close here. also, healthcare is usually considered a defensive sector, but up next, davis seeberg says why that sector's performance today is a bullish sign of the market. and the border drug distribution company is awarding its ceo a record $159 million pension. not bad. great work if you can get it. keep in mind, the average pension of an s&p 500 ceo, $7 million. how on earth does a board approve that kind of pay? former apple ceo john sculley, remember him, he says this proves there is not enough transparency on wall street, and he knows how to fix it. we'll talk to john later on

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we have a market flash with jackie deangeles on walmart. they're out with an announcement, aren't they in. >> that's right, bill. actually, the spokesperson for walmart out right now with a statement regarding paula deen enterprises and the relationship with paula deen and walmart. the company saying we are ending our relationship with paula deen enterpri enterprises, and we will not place orders beyond that's already committed. we will work with suppliers to address existing inventories and agreements. so walmart just the latest company at this point to terminate its relationship with paula deen. we are watching the stock. it is up about .9% at this point. bill? >> and you can imagine many companies that are affiliated with her, we're going to watch her interview with matt very carefully, on the "today" show. so it may be significant that they waited till after the interview, and now they're making that announcement. so we'll watch the other companies very carefully, as well. jackie, thank you very much.

so a rally on wall street today, even though the gross domestic product number for this morning for the first quarter was well below expectations at 1.8%. so what's going on? what do you do with your money right now? john from the gfi group is with us, and so is david from the cowan group. what do you think? stocks are the only place to go right now, or what? >> yeah, it's been bandied about quite a bit. i think right now, stocks are probably the only place and u.s. equities are getting most of the flows, because we can see that by the price earnings. multiple trading at a 15 compared to a 9 -- >> it's a heck of a reason to invest in stocks, because there's nothing to invest in. >> right now, that's what the fed wants you to do. they want to push you into risk assets. they've been doing for quite some time now, qe 1, qe 2, qe 3. you can't keep the money in the mattress. you can't keep it on lufthansa, you saw that. and, obviously, a recalibration

when bernanke spoke may 22nd. but i think that's starting to pass. the fed speakers we've had out right now have been saying that qe is not going to end. it didn't end yesterday and it won't end tomorrow. >> do you agree with that, david, there's no alternative, i think t.i.n.a.? no alternative to stocks right now? >> i said about a week ago, there's nowhere to put your money in stocks when comparing with bonds and cash. equities are the place to be, absolutely. when you're looking at the numbers today, no one should be looking at the revised 2013 q1 gdp number. they should be looking at it when they're predicting q1 2014. the market is predicting we'll be seeing better numbers going forward. you know, again, my opinion is, i think stocks are the place to be. i've said it before -- >> but wait. which stocks? do we have to get more specific here? the stocks that are going to survive and do really well,

regardless of the fed being there or not being there. >> well, so, let's look at the tape today, right? let's look the the rally we're seeing today and look at the past several days where, you know, during the period when we sold off. look at the healthcare stocks today. they're performing incredibly. we're seeing a lot of money being put back to work in the healthcare names on the desk here. large holders that hold these names are putting more money to work in this space. the really -- i mean, there's a real bid to that particular sector, and that's a sector that's been up. >> okay. >> it's the best performing sector. so when you look at that and see the market rallying and doing well, healthcare names outperforming and have outperformed, to me it's a bullish sign. >> okay, good defensive. john, what about you? what would you invest in? >> we like the financials. we think they've gotten back to a leadership-type group now, obviously with the yield curve steepening a little bit, it won't be an issue going forward. housing is doing very well. we see housing affordability off the charts. the banks rallied off of the

report. more mortgages, more home refinancing. all of that kind of stuff. the backup in yields doesn't worry us too much, as we think the 10s will be 2.25, and we saw the utilities rally today. the big rally in the utilities means the treasuries are ahead of themselves in terms of pricing, worrying about qe. also, the number this morning put the bonds back in their place a little bit, saying fed won't do anything drastic. we say that by the tape today. >> all right, gentlemen, thank you for your thoughts on today's market action. >> okay. coming up next, we'll come right back with the closing countdown. >> yeah, the market is still much higher here as well. coming up, should you double down on this two-day rally or take profits out of the next leg down, whenever that is? top money managers weigh in later on the "closing bell," when we come back. you're watching cnbc, first in business worldwide. [ male announcer ] i've seen incredible things.

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more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade. last 90 seconds. the dow is still up, 159 points. we were up 178 at the peak of the day. i want to show you a couple of things. you see the dow there. i think the fear trade is coming out of this market, and that's my premise to you, allen valdez, when you look at the price of gold today, down sharply, heading for its worst quarter in decades and the vix is down 6%

as well today, what does that tell you about this market right now, that the fear is coming out of this market? >> right, i agree. and i think, you know, most investors now want to be in equities. they saw those numbers today. bad number for the economy, good for the market. i think overall, that's where the money's flowing. it's flowing into this stock market here. they're getting out of the golds, the bond market, and coming here into equities. >> are you buying in this market now? >> we are buying -- we're not even buying for markups. we're getting ready for the next half, next quarter. we are starting to buy a little. yes, we are buying. >> and what are you buying? >> we're buying defensive stocks. we like the stocks that will grow with the economy out there, the railroads, airlines. we generally -- anything that looks like it will go up with the economy, we like right now, especially the regional banks. >> do you like gold here at these -- or anything related to it, like the mining shares or something? >> well, you know, normally, i would say i'm okay with those. but i think it will capitulate a little more. i'd wait until the dust settles. i do like it in the long term,

but i'll wait for it to settles. >> all right, allen valdez, thanks. we're going out near the high today. the dow up 157 points. and this is like the 20th 100-point move we've had for the dow in the last month or so. stay tuned now for the second hour of the "closing bell." stocks surging for a second-straight day. held lork everybody, maria will be back tomorrow. in the meantime, hello, from me. >> and hello from me again. i'm bill griffeth. bad news on the economy. it was aparptly good news for stocks today. here's how we're finishing on wall street. we had a gain of 178 points at the peak of the day. we're just coming off of that right now with the dow up 149 at 14,910. roughly the fifth-best day of the year for the dow, believe it or not. the s&p's up 15 points today. the nasdaq up 28. let me check apple very