wrapping it up here, mandy, i know you're on "closing bell," and you have the mayor, you'll have him at 3:10 after the show. i want to get back to the east coast. i think what we've seen here is that detroit is a city that is tough, the people are fantastic, but it is struggling. it's going to need a lot of help. the process has just begun. it will take a long, long time. "closing bell" with mandy starts right now, and the mayor coming up as well. thanks for watching, everybody. welcome to the "closing bell," everybody. i'm scott wapner here at the new york stock exchange. thanks, brian, for the great job he's done in detroit. mandy is back at englewood cliffs as we stay on top of the developing story. the s.e.c. charging steve cohen of s.a.c. with failure to supervise two senior employees, failing to prevent insider trading. mandy, i know through the next two hours really we'll continue to stay on top of this case. the implications for steve cohen, for his firm, and what it all means going forward.

>> yeah, absolutely. a huge story. of course, it just broke in the last hour, as well. we'll be continuing to follow what's going on there. i know we've got ron insana still here. you jumped into the seat right at the last minute, because you used to work at s.a.c. >> i did. >> you have some -- maybe the wrong words, but insider information -- >> yeah, i would be reluctant to use that expression. >> just to recap your thoughts on the issue. >> and has harvey pitt and i just discussed, one, i think it's a sign the s.e.c. is getting more aggressive in sending a message to the hedge fund -- and, you know, all investor community, insider trading, if indeed perpetrated, will be dealt with severely. >> is there any inference he's being made a scapegoat -- >> i don't want to use the word scapegoat. certainly, they would be sending a message by going after one of the biggest and most successful hedge fund operations in history. by leveling charges against steve. again, how they proceed with this while the two open cases go

forward, i think is going to be an interesting area of study. >> those are the open cases with steinberg and martoma. >> absolutely. would steve believe to a certain extent, you know, he's being singled out? i wouldn't say singled out, since (unintelligible) has been prosecuted, tried and put in jail, but singled out to the extent it's become a very, very big element of the s.e.c.'s prosecutorial efforts, or i should say regulatory efforts, i would say it probably is. >> ron, can you do our viewers a favor? look, we speak of steven cohen as though we all know him and our let all of our viewers know how important he has been to the hedge fund industry over the years. we are talking about arguably the biggest, the most iconic hedge fund manager in u.s. history. i'm wondering from -- you know him -- if you could put his place in history of this industry, of this business into perspective for everyone, as to how big this really is. >> well, listen, from a

performance perspective, he ranks with the best in the business, with george zorros. his compounded returns since he started in 1992 are well above 25%. he started with $25 million and built it into a at one juncture, $14 billion, $15 billion. two-thirds of that is believed to be his money. he's quiet from a public perspective. but from an observational perspective, he lives the life of a wealthy man, no doubt. i think some of the adornments that have gone with that might have put him in the spotlight. the question is, in the industry itself, is it common practice for managers to look the other way if their portfolio managers or their analysts act in a way that is not in compliance with the law? now, s.e.c. has argued for quite sometime they have a rigorous compliance effort in the very brief 5 1/2-month period i was there, nessbaum, steve kessler,

the head of compliance, made it very clear to me anyway, as an individual, that misbehavior would be tolerated. not that i was in a position to do anything wrong. i wasn't a portfolio manager. i was helping them with other projects. when there were conversations about confidential items, they made it very clear on which side of the management chain those pieces of information stay. >> and, ron, we do have the former s.e.c. chairman, harvey pitt, with us as well. harvey, glad you're still with us. can you tell us where this all goes from here, what's next? >> well, i think what's next is they'll have to be an answer filed. there's 20 days or so within which to file it, unless there are extensions. and i think the s.e.c. will proceed vigorously with this case. i don't think they're going to want to let it sit at all. >> why the s.e.c. bringing these charges? why not criminal charges?

does it mean anything that the s.e.c. has acted before the justice department, which may or may not do anything in these proceedings? >> well, it's not certain, but i would say it makes it unlikely that the justice department is going to bring any charges. the s.e.c.'s charges are really designed to hit mr. cohen where he lives, because if they prove their case, the sanctions can include barring him from engaging in the hedge fund business. that's not a remedy in effect the criminal authorities have, and the standard of proof of the s.e.c. is much lower than what the criminal authorities have to show. >> yeah, and -- >> scott, i would just point out, too, this is -- that would ab material development. i mean, not only does steve take pride in his record and his ability to manage funds for outside individuals, but it would change the financial structure of an s.a.c. capital, which, you know, charges as we

know, or has been discussed in the press, certainly as i know, 3% management fee and up to 50% of the profits that are gained. so for the 125 portfolio managers, analysts, others, a thousand employees that exist at s.a.c., if he cannot manage money for outside investors, it changes the way in which he would manage his own money. in other words, those would have to be out-of-pocket expenses to manage his cash as opposed to being financed by outside investors. so it does have a rather large business impact on his if the s.e.c. were successful. >> he's not banned from ng maing his own money, write? >> well, no one ever is. >> right. there is the seeking of a ban so that he can't oversee other people's money. >> correct. >> right? sorry, scott. >> you know, harvey, you know, i'm sure you obviously know that the new s.e.c. commissioner, mary jo white, there is somewhat of an effort under way right now to get rid of that, neither admit nor deny stuff that goes

on in a lot of the kinds of proceedings. and i'm wondering your thoughts on that, how that could play into all of this, if this plays out over a period of time beyond the 20 days, how that could all factor in. because it seems to me to be significant. >> well, it is a significant thing, but in this case, i think s.a.c. and mr. cohen have made it quite clear from their initial statements that they have to litigate, effectively cohen is in a real risk position, because if an administrative law judge finds he failed to supervise, he can be out of business and that will impact his entire firm. if he wants to settle, this may be one of those cases in which the s.e.c. under its new policy will insist that the settlement can't contain some admission of wrongdoing. >> and i would never say never, mandy, but from what i know of

steve, he would not be inclined to admit guilt. i think that they're going to fight this for as long as as they -- i've not had a conversation with him, let me make that clear. >> that's just on knowing what you know about him. >> yeah. >> and i think harvey would agree with me on that. >> yes. >> yeah. i also have kayla here, guys, who's been following this story, as it broke. kayla, what can you tell us? >> well, scott, i know a lot of people were watching to see if the charges would concern willful blindness, whether he knew about some of the issues that went on with these two portfolio managers that directly reported to him and whether he just chose to turn a blind eye. that's not the charge we're seeing here. the failure to supervise charge is a much lesser charge than the s.e.c. could have brought, even at a civil level. but still, it is the one they're using to seek to ban him from supervising outside money, to be an investment adviser. this is what they did to phil falcone, after the whole debacle whether he was using the funds money for his own purposes. the charges are very interesting, because it goes

through painstakingly all of the interactions between cohen and each of these portfolio managers, matthew martoma and michael steinberg at sigma, where they were talking on the phone and immediately there was a trade that took action after the results of the phone call. there was even in steinberg's case, an e-mail where he said i have information from someone at the company. and cohen was on those e-mails. that is where the s.e.c. is trying to say, look, you were aware of this and you failed to do anything about it. >> okay, kayla, i know you'll continue to follow that. harvey pitt, thank you very much. ron insana, our thanks to you. we haven't lost sight of what's happening on wall street, by the way. this is a big day in what's been a big week. a record-setting week, really. remember the major averages had been at all-time highs, and microsoft dropped a big bomb with its earnings. google soon followed. so we've been all over both of those stories throughout this day. and the impact that it would have on the markets. with us now is david from morgan stanley melt management, rich

peterson, david sauerby, and all three gentlemen are with us to follow the markets. so, david, not reagecting to s.a.c. focussing on the markets, where are we as we sit here today? >> a great point. we're a quarter way through the s&p 500 companies reporting. we're hitting the main midpoint of the reporting season. we believe the big shortfalls, scott, are going to fall in tech, in industrials, and in healthcare. now, we happen to like all three of those, and we would be a buyer on any disappointment that comes through here. so we like those groups. >> okay. you liked tech, presumably you liked it yesterday. >> yes. >> does the microsoft bombshell -- because that's really what it was, you don't see a stock as big as microsoft move in the magnitude it has or drop such an earnings bomb very often. is that a warning sign, david, that all those people who liked tech should reconsider? >> we've said for a long time, you and i, the mobile internet

is the big story. not so much the pc. you want to look at the tablets. you want to look at the smartphones, scott. and there you really want to look at apple. apple is up 10% off of its lows this year. it's down 21% off its highs. so you want to basically stay in the sweet spot of the smartphone. stay away from the pcs right now. that is a slowdown. you saw this failed lbo of the big personal computer maker this week. so you're going -- you're going to see continued pressure there. there's an erosion going on. just as when happened with the mainframes, the minicomputers, the microcomputers, pcs are in a slow mode growth. >> i want to ask a question, too, to rich now, because speaking with paul hickey just a moment ago on "street signs," and he had an amazing stat, rich, that really for me told the story here. i mean, okay, so we say record highs, record highs, a lot recently. but he says the current bull market ranks fifth -- fifth -- on the list of all-time strongest bull markets.

this is an incredibly strong bull market. where do we go from here? does it have legs? do we have enough fundamentals out there that it's going to take us even higher from where we are right now in. >> sure, mandy. a few points. first of all, if you look at the 12-month forward s&p 500 earnings, we're trading at 15 multiple. you look at the fall 2009, we were trading about 17 forward multiple. so, in fact, the market relatively speaking is cheaper than it was now than it was a few years ago. and in reference to david's reference to technology, the fact is, technology is sort of decline -- profits in the first quarter, prior to yesterday's announcement the, we were looking for a 4% decline in profits from the s&p capital iq data. after the announcements, down 6%. the two materials are the laggers. we're seeing the gains in financials and in the consumer discretionary. in fact, where we saw the numbers, look at chipotle. did they beat at the top and bottom? look at the financials, where b

of a, goldman, others, beating thanks to the fed helping out. >> yeah. david sawyerby, we talked earlier today how you had the strongest amount of money, the largest amount of money pouring in to u.s. equity funds for the week in, like, five years. smart money coming in or late to this party? >> oh, probably coming in in about, in baseball terms, top of the sixth inning for how u.s. stocks will fare. and given that, where markets have underperformed in emerging markets, i think there's opportunity there, as well. i would absolutely agree that on a valuation basis, stocks are still compelling at real earnings yields in excess of 4%. that compares very favorably to what you're getting still in the bond market. so valuation to me is a plus. cash flow growth is a plus. maybe the only -- maybe the only yellow flag out there is stocks now are trading about 8% to 9%

above their 150-day moving average. strictly from a technical perspective, when it starts to get that ahead of itself, usually it has a bit of a pit stop or a hiccup, at the same time that sentiment has gotten, i think, unusually bullish to its long-term average. >> yeah. >> but despite that, stocks are still the mistrusted asset class, by a number of investors, and that will be important for stocks in the longer term. >> david, do you agree there may be yellow flags out there, suggesting technically speaking we could be overboard and due for a poit stop? >> mandy, we do. the american association of individual investors, as you know, 48% -- >> that's the survey. >> -- bulls, 19% bears. long-term average is 39% to 30%. we would use any sell-off or any correction, vix is low, the volatility index is low, we would use any sell-off to put money to work. we're sitting on a little extra cash and a little extra u.s. large-cap growth equities. we do like -- we do like japan, still, mandy, and we like mass

limited partnerships. >> have a great weekend, everybody. we have the detroit mayor in the wings to react to his city's bankruptcy, the largest municipal bankruptcy in u.s. history. we're back in just a moment. [ male announcer ] come to the golden opportunity sales event and experience the connectivity of the available lexus enform, including the es and rx. ♪ this is the pursuit of perfection. ♪ (announcer) scottrade knows our and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading.

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no doubt by now you have seen the headlines over detroit's bankruptcy filing. let's head to the city now to talk with the mayor, dave bing. mayor bing, it's really great to have you on our show. this was a decision by your emergency manager. did you agree? >> well, i think now that we're there, it doesn't matter whether i agree or not. we have filed for bankruptcy as far as the emergency manager is concerned. and now, we have to work our way through the process. >> it certainly sounds like, sir, that you were not in agreement. to what degree did you express

your dissatisfaction with that decision by the emergency manager, kevyn orr? >> well, when kevyn came into the city back in late march, the goal was to try to fix the city without going through bankruptcy. but the mere fact that his background is one of the top bankruptcy lawyers in the country, it was obvious if we couldn't fix the city through negotiations, bankruptcy would be the next -- the next route to go, and he's taken that route as of yesterday. >> mayor bing, you are an nba hall of famer. you have been a very successful businessman in this country, and i'm sure this is not one of the things you wanted on your resume, presiding over the largest municipal bankruptcy in u.s. history. how did we get here? >> i think if you go back 50 or 60 years, quite frankly, is when the process started. it started with the migration of our citizens. we were almost 2 million people back in 1950, and today, we're about 700,000 people.

so you lost all of those people, and most of them were middle-income people with families. and a lot of the revenue that we needed to run our city was outsourced to our suburbs, so that was the beginning of it, and we haven't rebounded from that yet. >> mayor bing, what did you personally do to try to avert bankruptcy? what were some of the steps you were taking? >> well, the things that we could do -- the balance sheet was so out of balance, with somewhere between $18 billion to $20 billion overhanging debt. there was not a lot we could do. our revenue had dropped precipitously, and without the revenue, there was no way that we could provide the kind of services that our citizens needed, demanded and deserved. so you had to wind up a 50, 60-year period borrowing from peter to pay paul. and now, it's come to a day when you can no longer do that.

>> mayor, have you spoken with anybody directly from the white house? do you think there's any possibility of federal intervention here? >> i have a 4:00 call with washington, d.c., but i'll be very honest with you, the president is well aware of the situation here in detroit. he's been very supportive of detroit by virtue of bailing out the auto industry. but i think to try to bail the city out is something that he's got to be very careful -- and i don't want to put him in a horrible position, because detroit is just the first city of many dominos that will probably fall. there are several cities in the same kind of situation that we're in. if he does it for us, everybody will say, "why detroit and why not us?" >> so are you saying that you do not expect the president to do anything for you here? >> it's not that i don't expect him to do anything. but i think his hands are tied. and he's got a lot of issues that we're dealing with from a global standpoint. we would love to have washington

and the president come and bail us out. but we have to do things for ourselves. so there's some things that i think we'll get from a support standpoint, with different departments and the federal government, but for the president to step in at this point in time, it's probably unrealistic, and it wouldn't be fair to him. >> it may not be realistic, it may not be fair, but are you going to ask the president anyway for help, sir? >> well, i'm not sure that i'll be talking directly to the president. most of the people that i talked to would be his primary secretary, and i have calls lined up for them as we speak. so it sounds in your voice that you certainly think that it is. what do you do next? what's a realistic outcome to how you can move your city forward? >> well, there are a lot of negotiations that will go on to try to limit the debt on our balance sheet. so i think that's going to happen over time, but at the same token, we've got to think about growing our city.

we can't -- we can't cut our way back to prosperity, so we have a downtown that's coming back very strong. we have a midtown that's coming back very strong. but the cancer is in our neighborhoods where the majority of our people live. so we've got to do things in the neighborhoods to support the people that stayed here, that still live here, and then encourage new folks to come back to the city. >> do you see any alternative at this stage to chapter 9 bankruptcy? is there anything you would prefer right now? >> i would have preferred that we not gone the bankruptcy route, but now that we're there, we've got to work with it. we've got a lot of professionals that are in here. i think very capable people. but this is not going to be easy. this is the heart of the labor union. our labor unions are going to fight back. they've earned the right, from a pension standpoint. that's not going to be easy for them to give up. but the big debt on our balance sheet are the banks and some of the secured creditors, and those

are the ones we'll be dealing with first. >> mr. mayor, we wish you well. we thank you for joining us, we wish you luck on your call at 4:00. it's an american tragedy. i think you'd be the first one to say that. >> i would absolutely agree with you, and we're going to work our way through it. we're not going to quit on it. >> mayor bing, thanks so much. >> best of luck to them. best of luck. all right, mandy, about 35 minutes to go before we close up the friday session on wall street. the dow is hanging in there, down 20. a lot of that has to do with microsoft and what again has been another record-setting week for the markets. >> indeed. also general electric, ge, posting the best gain in nearly two years after its better than expected earnings, and somebody here says it's time to jump on the ge bandwagon before it's too late. that's coming up next. scottie? >> all right. from a hot stock to something that will keep you cool this blistering day in new york. ♪ people in 33 cities around the globe will be able to use their

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what a day for ge today.

trading up 5% on an earnings beat, an upbeat forward comment as well. the stock is hitting nearly five-year highs. is it too late to get in, though, or will ge keep climbing? let's start talking numbers. on the technicals is abigail doolittle at the seaport group and risk reversal.com. guys, welcome. a lot of moving parts. we'll keep this tight. abigail, what are the charts telling us? >> scott, the charts are telling me you want to take profits. when we pull up a one-year daily chart, we see a nice ascending trend channel. that means buyers have been in control. however, on today's pop, we've hit the top of the channel, and that suggests selling pressure is ahead for a drop back down into the channel, the range, below $22. supporting that bearish possibility, this morning's move on the gap up, likely to fill at 23.94, plus the divergence of a

broadening formation uncertainty on the part of investors is likely to pull ge down not just to the bottom of the range at 22, but possibly through it for a move to 20. so i'd be taking profits here. >> ennis, you buy that? what do the fundamentals say? they seem to suggest from the earnings at least a much different picture. >> yeah, in an environment for large multinationals in the u.s., it's been difficult. ge gets more than 50% of its revenues from outside. it performed well. the environment is weak. they acknowledged that. what helped them is their diversification of the businesses. revenues, even though they didn't grow, they're able to squeeze costs lower, the margins improved, and probably most importantly, going forward, emelt said guidance -- even they revenues the second half of the year are supposed to be weak, they don't expect a much different earning environment. i think ge 15 times, 3% growth, $250 million market cap, the numbers speak for themselves. >> all right. guy, we'll leave it there.

thank you. a quick check on the markets as we're counting down about a half hour to go before the closing bell. well, it looks as if the dow is soggy along with the nasdaq. the s&p is sitting ever so slightly, though, in the green right now. scotty? >> the oil prices are taking a pause today, but still pushing near $108. is there any end in sight to the spike? up next, the ceo of a big independent oil company tells us how high prices are heading and how that will impact the cost to fill up your car. mortgage lenders are starting to get an appetite for riskier loans again. we've seen this before, folks, and it did not end well, did it, for the housing market? we'll be hearing from one top mortgage broker who says yogi berra was right, it's deja vu all over again. find out why later on the "closing bell." i've been doing a few things for a while that i really love-- tdd#: 1-800-345-2550

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i want to show you what's happening with the oil markets right now, because we have now sat with the wti at the highest in about 16 months, in fact we crossed over the 109 barrel mark for the first time since early

last year. with us now at the imex is jeffrey grossman from b.i.g. brokerage. with an economy, let's face it, is not firing on all cylinders, although we're in a recovery, this is a pretty high price. >> absolutely. it defies all conventional wisdom based on inventories and the current situation. now, keep in mind, of course, you have a news-driven market here that has about $5 or $10 uncertainty premium brought out of the middle east here. there's no question about that. that was where we were about, you know, two weeks ago before the egyptian situation took place. >> do you think we go higher from here in. >> i personally don't. i think they've done as much as they could possibly muster at this point. this market, again, probably has to settle back to where it broke at, about $105. more likely, with any positive information, probably has to test $100 before it could make a serious move up. it will need some, again, economic news or information, inventory that'll spur it. otherwise, it's just doing it on

air now and pure speculation. >> indeed. we're up by 17% year to date for wti. thank you very much for your thoughts, sir. i want to also get the thoughts on what's really behind the very quick rise in oil and gas prices and also what's the impact on consumers if they stay at these levels or go higher. scotty? >> joining us from dallas, brightling oil and gas founder, chris. thank you for joining us. >> thanks. >> what's driving oil to where it is? presumably, you heard the comments from the trader on the floor saying at least in part it's news driven, maybe $5 to $10 premium. what's happening? >> i'll agree with him, but we look at hard facts. i think drawdowns on stockpiles and supply, they're down for the third week in a row. i think more importantly, what we're seeing from october 2010, recall that wti used to trade at a premium to brent. we're going back to that time, because the last three years we've had a big glut in oil, stuck in the midwest, and what we've done now over the last three years is we've rectified that. we've got rail moving almost

900,000 barrels a day down to the refineries, we've got the sea way reversal, the longhorn reversal pipeline. so oil is moving where it needs to go. and i think we're going to see the oil test $110 and probably start to retreat from there until we get better economic news, better jobs numbers. >> chris, with the disdount of wti what does it mean for the refiners? >> it means additional costs. what you're seeing now is there's going to be the cost of refining tires. what it's going to translate to is higher gasoline prices, so consumers should expect the summer driving trips, the little vacations that will cost a little bit more as we go into the fall. >> how much more? >> well, i think we can see -- here's an interesting stat. as oil moves by $20 a barrel, gasoline moves by 50 cents a gallon. 20 bucks is not a lot. we've seen that almost here in july a lone. i think we could see gasoline getting near 3.90. i don't think it will hit four bucks. >> why has wti been able to get

on top of brent? what's happening -- >> economic news from europe is not great. america's economy is recovering faster in europe, asia, including china. they have headwinds from the north sea with declining production there. so at the same time, brent has come down, wti has also moved up. it's given us a bonus there. i think we'll see wti trade here on out very, very close to brent if not higher. >> we often say there's a tipping point in terms of consumers, right, when you fill up at the gas pump? >> sure. >> at what point do you feel the economy gets bitten by the high gas prices? it used to be four bucks a gallon nationwide. i know in certain parts it's already four bucks. is it now five bucks? >> i've said it before last month on the show, i think $5 is the new $4. i think that's the true freak-out number, if you will. $4 used to be that where everyone at $4.13 recalled the highest it's been, everyone said i'm going to stop driving, i'm going to take my bike to work. so i think now we've moved up

slowly toward the $4 numb bother, and i think folks are less concerned. you'll still see pushback if the national average gets above $4, because the media will be covering it more and it will be a bigger story. >> yeah, no doubt. chris, thank you. >> thank you. >> the founder and ceo of breitling oil & gas. let's look at the markets now. we're moving towards the close, not just the trading day, but also the trading week. so can we close at record highs? anything can happen as we've discovered many times on the show, in the last few minutes before the closing bell. do stick around. scotty in. >> yeah, 20 minutes is an eternity down here in the last hour of trading. anything can certainly happen. up next, we'll have the latest on the s.e.c. charges against the s.a.c. capital steven cohen. it's a civil case. is that all that it is, or are criminal charges perhaps next? we're back in a moment. before their gift helped preserve the point... before a credit solution

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look at this. how strong do you think the case against steve cohen is? >> i think the way the s.e.c.'s brought is probably the way they had to bring it. on the surface, it doesn't look like a very strong case, which i think one reason they brought it as an administrative proceeding and not as a civil jury trial, they're going to be in front of an administrative law judge, someone employed by the s.e.c. there'll be sort of a type of trial in front of the singular judge in d.c., and there won't be a jury, there won't be press. it's a private proceeding. i think it's a little bit lower burden for the s.e.c., but i think they needed it in this case. >> you know, tom, speaking with ron insana a moment ago, and he was saying what he knows about steve cohen, this guy's going to fight it all the way to the end as opposed to settling. is that your feeling on this? >> ron's a savvy guy, mandy. yes, no question he'll fight this. especially if you look at the relief that the s.e.c. is looking for. it's not the money that bothers a guy like steve cohen, it's

that the s.e.c. wants to bar him from managing anyone else's money and being a hedge fund manager any longer. i don't see anyone who's as successful as he is could put up with that. >> hold on, if i heard you correctly, you said you don't think it's a very strong case? >> i think it's a weak case. >> and i ask you that -- and part me for a moment -- i ask you that because we had somebody on previously who said it seemed to be very strong. they're quoting from e-mails. >> yeah. yeah, they had strong e-mails they would go into a civil courtroom. no, can they win it in an administrative proceeding? i would agree with your guest, that's probably why they did it, and could probably win it in this proceeding. there's a lower burden in this administrative proceeding, which is why they brought it there. >> kayla? >> manned dah, it's interesting that they do cite from the e-mails. they show cohen was directly supervising each of these managers, but also each of the specific trades, and in one instance, the trader got an e-mail from cohen that said nice job on dell, even after they had been e-mailing back and forth

that this trader got information from someone at the company. but what is interesting about the case is even though they are citing directly from these dialogues between cohen and his deputies, that still the charge that they chose to bring was failure to supervise. not securities fraud. not willful blindness, not something that's more serious. even though they are trying to ban him from investing outside money and being associated with an investment adviser at all, that would be a very steep consequence. but at this point, the charge is so far lesser than i think what the industry expected as a worst case scenario for steve cohen. he has $9 billion of his own money. at this point, the firm doesn't really feel like it's going to be a worst case scenario. they issued a letter to employees at the beginning of june, after they stopped cooperating with the fed, and said we have no intention of becoming a family office. that's not where this is going. >> although, kayla, you could push back and say, there is no firm if steve cohen is banned from the industry by the s.e.c.

then it becomes a family office. s.a.c. capital, as we know it, run by an iconic hedge fund manager, will never be the same. >> the semantics of what does end up happening, scott, will be very important, because if they not only ban him from running outside money but also being associated with an investment adviser, then s.a.c. capital as an entity sort of fails to exist. you can't be incorporated. you can't have the word adviser in your name. there's certain issues that then arise if you can't even be associated with an adviser. but i think that they view that as putting the cart before the horse, and that that's something that, you know, you don't have to talk about today. there's still a lot to happen in this case. >> sure. >> sorry, sorry. >> go ahead, mandy. >> i was going to ask tom about the two portfolio manager, steinberg and martoma, because the cases are still open. what do you think happens with those? what happens if they're found not guilty? >> i think that would definitely help out for sure, because this whole case, the s.e.c. has brought, has -- relies completely on steve cohen's

relationships with martoma and steinberg. if they didn't do anything wrong, it's hard to say steve cohen did anything wrong. >> tom, we have to run. i know we're under a time constraint here. quickly, does this imply anything about the likelihood of federal charges, a federal case? >> i don't think it does. not at all. >> why not? >> because i think the burden here is a lot lower than the federal charges. don't forget, if they bring federal charges, they have to prove those beyond a reasonable doubt. i think if the s.e.c. had that kind of evidence, they would have brought this into a civil courtroom and you would have seen the justice department file quickly behind that. >> tom, thank you very much. kayla, thank you to you, as well. >> thank you. folks, if you're outside, you probably know it's scorching hot. excuse me. across much of the country. >> and you're all choked up about it. >> i'm all choked up about it. fighting a cold here. crazy, so hot out there, and i'm fighting a cold. what does the heat wave call for? ice cream! of course. well, uber. that's the company that lets you request a quick cart service from your smartphone, taking advantage of the weather for today only. you can use their app to order

an ice cream truck. scotty. >> you know we have to give it a try, mandy. go to your uber app, order an ice cream truck to the nyse, because it's literally scorching hot. there are the interns. >> there are the interns. >> anna, wilson, it's 100 degrees almost. we're going to send those guys outside, wait for our ice cream truck. we're going to see if it shows up and hopefully indulge. >> there they are. off they go. okay. the truck's been ordered, i believe. we'll monitor the progress on the app's locator. this is all realtime, folks. it's all a bit of an experiment. bear with us. okay, what have we got? we've got about 13 minutes until the closing bell. the dow is currently under water by 12 points. the nasdaq is underperformer, no thanks to all to a couple of clunkers, like google and

microsoft. the s&p is just squeaking into the black. scotty? >> yeah, another record-breaking week on wall street. up next, a pair of top strategists tell us how they're positioning their clients for next week. a-a-a.

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okay. we're ten minutes away from the final closing bell of the week. you know what, folks, even though it's a bit of a soggy day in terms of actual movements out there, we can't forget, can we, scott, that just yesterday, we were at record highs. so where we are right now is basically at record highs. it's been a record-breaking week, even though, as i say, we're not seeing massive movements in the stocks today. >> yeah. >> joining us now. >> absolutely. >> christopher wu and mark harris. mark, can we go even further, higher next week? >> without a doubt. look at the philly fed index number that came in. incredibly compelling number. you look at the components of it. it was an incredibly good number. earnings have been coming in good. the investment banks. it feels pretty good out there in the grand scheme of things. we're positively inclined. >> yeah, chris, give us your read here. you know, earnings have been all right, at least from an eps

perspective. it's been the usual. two-thirds, at least, of the companies beating. revenues remain challenged. microsoft, google drop a bomb, but the market is holding in all things considered. >> it reflects two things. one, the picture isn't as bad as people think. there have been some misses. but we've had challenges around the fixed income. there's a bit of allocation. the fundamental story is good, and aboving from bonds to equities is propelling the markets higher. >> we talked earlier how you have the most money coming into u.s. equity funds in something like five years. >> yeah. >> what does that mean for the market? what does it mean for the rally? >> prior -- it's a bit of a rotation going on. the transformation point here is about taking more equity risk, the reduction of kind of the fear that everything is going to go sideways instantly. i think when you do that you start taking more risk and that means more equities. >> i don't want to be a debbie downer, but mark, you mentioned a moment ago, you cited stronger earnings. i know as of yesterday, 69% of

the earnings so far this year have beaten estimates. and yet, is it possible that the bar was so low, so many estimates were brought down in advance of the season, that it's that easier to beat these days, right? >> but that's not necessarily a bad thing. i mean, the stock market, as everybody understands, is an expectations game. it's about setting a bar on those earnings and on that top line and making sure you're able to leap over that. in the end, we are really starting to see that. on top of it, there is health underneath. in the end, we still have rates low for a long time, despite the bernanke commentary. honestly, look at some of the bank numbers. those bank numbers from the investment banks were truly compelling. and blew away -- and raised expectations in a lot of the businesses. that will pull a lot of cash in and get assets flowing into lot of the funds you're seeing. >> we keep marveling at the resiliency of the u.s. market. really at the expense of what's going on in the rest of the world, whether it's europe, the emerging markets, which have been stung pretty hard. >> sure. >> our viewers may have heard

you talk -- or wanting to talk about europe. is there opportunity beyond the u.s. border? >> yeah, no, we think there is. europe, broadly speaking, is cheaper. largely because the bank, the industrials, some of the more cyclical growth oriented companies have really kind of been crushed in the valuations. consumer safety plays are expensive, but if you peel back that layer, you find value. our view is, if things are turning out better than expected, central banks have been putting liquidity into the system, you want to look for growth driven by capital expenditures going into the second half of the year. one place that's not picking that up just yet is europe. that's where we're starting to allocate more to. >> yeah, all right. mandy? >> yeah, mark, where are we investing? you said the markets can definitely go higher next week. what will push them higher? which particular stocks or sectors are you putting money into this. >> i think energy still feels good. oil at $104 a share. that feels good on that price. and you've been seeing it in the reaction of the emp stocks, the index for the stocks, you'll see

the reaction. it's been a long time since those have been lagging, and now to see them come back has been healthy. on top of that, individual names. names like hologic, a ceo turnover, also bottom-up, turnover stories. it's a takeout story. even sherwin williams, one knocked unnecessarily on what some concerns are around a potential turndown by the mexican authorities of an acquisition they want to make in the end, it's a buck a share, this company has other alternatives. names like that. >> names like that. mark, chris, thank you very much for joining us. coming up next, we're right back with the closing countdown. scotty, only five minutes left. the dow may still turn positive. look at that. it's flat lining. may still turn positive. >> yeah, it's working its way back that way, mandy. the s&p, too, it's 9 points, 8 points or so away from 1,700. so you could have significant milestones, not necessarily today, of course, but as you look towards next week and into monday with some big earnings reports looming.

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it's not rocket science. it's just common sense. from td ameritrade. welcome back. time for the closing countdown. making a run for positive territory on the dow, may not quite get there. still down eight, though the s&p is positive, new high as we do the closing countdown. allen valdez is here with us. surprised that we've done as well today with microsoft and google? >> very surprising. you know, you saw those numbers this morning. you figured the market would sell off, guys would lock in the profits for the weekend. said we probably could close on a plus right now. it's possible. >> what does it mean for next week? >> next week is a big week, though. we have apple. we have gm. we have ford. mcdonald's on monday morning ahead of the bell. >> boeing. cat. you know, this is a good sign that we did not crush today,

it's a great sign for next week. >> yeah, you have some certain -- some bellwethers reporting next week. [ bell ringing ] that will decide where the momentum is. allen, have a great weekend. we'll see you next week. that's all for us at 3:00. there is much more ahead on the "closing bell" at 4:00. mandy and i will be here with more on s.a.c. and the markets. it is 4:00 p.m. on wall street. welcome back to the "closing bell," everybody. i'm mandy sitting in for maria, who will be back next week. scott? >> yeah, i'm scott wapner. mandy, also getting a lot more on this bombshell this afternoon. that, of course, the securities and exchange commission bringing civil charges against s.a.c.'s steven cohen. tech shares weighing on wall street, but the s&p closes at a new high. here's how we're finishing the day. right now, there's a look at the dow. it's a drop of only 5 points. pretty tight range for stocks. wa