>> yeah, 7,500 from the feds -- >> or the federal government. thank you very much, uncle sam. so it drove fast, 0 to 60? >> 7 seconds. you know what, you won't feel like you're in a tin can. >> well, being 6'4", we'll see what we can do here. oh, not bad. phil, thank you very much. thanks for watching "street signs." "closing bell" is next. eh, eh! all right, welcome to the "closing bell," i'm scott wapner here at the new york stock exchange. >> i'm diely and maria and bill will be back tomorrow. it's the dog days of summer. we have a big day for you today on the show. the market having a quiet monday, but if one guest is right, it won't be quiet for long. terry burnham, former goldman sachs trader, says the dow is likely to fall to 5,000 than it is to hit 20,000. he's here to explain that incredible bearish call. >> we want him to definitely

explain that. also, one of the most hotly contested stocks out there due with earnings in about one hour from now. there it is right there. herbalife, the stock is having a nice day -- oh, it's having a nice year. up more than 80% this year. noted herbalife cynic, our own herb greenberg, is going to be here when the news hits the tape. it's the story that has many asking what in the world is steve cohen thinking? on the weekend after seeing his firm indicted, he throws a flashy party at his hamptons home. it's definitely legal, but is it smart? we'll discuss that ahead. and the markets right now, let's look at where we stand on this monday on the street. it's been somewhat of a quiet day. not a quiet week ahead of us, though. there's the dow at this hour. it is down 23 points. take a look at the nasdaq and the s&p, as well. we're negative across the board. modest losses as we await a whole bunch of news coming down the pike this week. joining us to break down all of it in our "closing bell exchanges" is danny hughes from

divine capital, mark from janney montgomery scott, stan from s&p capital iq, and our own rick santelli. you know what, rick, i'm going to start with you. because there is so much happening this week, you've got the dollar to watch, you've got rates to watch, the fed, the ecb, the boe, gdp -- take it away. >> well, i think the gdp is fascinating, because when i was talking to one of my favorite economists, jim bianco, this morning, the past two recessions might disappear with the new methodology. i'd like to ponder that. i think viewers and listeners should ponder that. when we're looking at interest rates, hovering south of 2.60. we briefly traded north of 2.60. haven't closed above that level in close to three weeks. and you're right, judge the dollar, if you look at a chart over the last couple of months, it's been weak. if you look at the dollar-yen in particular, you can see one of the antagonists to that

relationship. if you look at the nikkei, you really scratch your head a bit. a big reversal the way the japanese markets and the stimulus motor rehaving several months ago. but i think top of the heap is to continue to monitor the aspects of the differences between corporate profits, stock market indices, and growth as measured by gdp, even if its reformulated state. of course, monitoring the fact that you could walk it back all day, but we're still about 35 to 40 basis points more rich on a 10-year than we were before some of the taper walk-back started to go full force. >> yeah, rick, i know that's a number that a lot of people are watching. and among the things that scott mentioned, there is one thing he didn't mention and that's gold. danny, when you look at gold, do you see it sort of decoupling from the s&p, sort of hovering the a the 1,320 level. how should we be looking at gold this week, and where are you seeing that going? still sideways? >> a sideways trade, especially this week. this is a busy week. it's a rambunctious week, if you

will. i think one of the things -- three things we're really watching, although there's a lot on the dashboard, a lot of noise out there. correlations is a big one. you know, everything is kind of decoupled since april. you know, we saw all of the tradeable asset classes go exactly in the same direction for so long, back then in april, everything started to unwind. you saw currencies and then commodities, bonds, stocks. so now, everything's up for grabs. and i think that that is because we've set the table for tapering. so we're definitely going to eat. we don't know when that's going to happen. next is profits. you know, we're seeing big profits, but where is that global growth going to come from? that's a big question that we have. and buybacks, too. buybacks have been tremendous since ending in the first quarter of this year, year-over-year growth of 17%, $400 billion of buybacks hit the tape according to them, so that's a big number. >> many a, put it all together. what does it mean? it's a huge week. a make-it-or-break-it week for

this rally given everything in front of us. >> i think the market is trying to find a new catalyst. right now going through a bit of a consolidation. i don't think it will be enough to call it a pullback, meaning a decline of 5%. and then, i actually believe we're going to go and retest the 1,700 level. we see typically that century marks are important levels, takes a couple of attempts like a rusty door to break it open before it swings open. the belief is we head up to about 1,740, 1,750 area and re-evaluate. >> and didn't mention the fact that you have 135 companies reporting earnings this week. so lost in the shuffle of this tremendously busy news week, you're going to have a lot of important reports out. >> -- companies that you'll be glad you forget about them this week, let's be honest. >> -- happy about it, i'm sure. earnings have been pretty good. and so, i think that the feeling of that -- has kind of kept this market where it s i think we're only down, you know, 25, 30 points or something like that today.

and it's pretty quiet. so it's a good thing. >> but, mark, i know this is set to be the best month since october 2011, even with the trade today. we have two days left after today. do you think that we're due for a correction with window dressing, with the fed? i mean, you name it, there's a lot that could bring this market a leg down in the coming days. >> well, what's been mentioned before, you can see that this week alone is going to give the market plenty to chew on and could alter the direction that we've had in the equity market really for the first 6 1/2 months of this year. i do think the market's probably ripe for a pause. mostly what's been driving stock prices higher has been multiple expansion. and i think, obviously, with the earnings, while beating about 70% of those consensus estimates so far, still only growing about 2% or less on a year-over-year basis is not going to be enough to inspire market participants to drive equity prices higher, at least at the moment. and so, what i think we're going to need to see is economic validation, which we do think is

a second-half story, that will then be that which pulls forward profit growth once again, and that'll be the cause for the next leg up in equity prices, which very similar to sam, we do believe that ultimately there's still higher highs to come in the equity markets than even where we're at today. >> i mean, the last time we had this -- we had a 6% or so pullback, everybody thought that was the start -- or at least in the midst of what was going to be a much deeper correction than it turned out to be. why, mark, are we to believe this is anything more than a slight pullback? you'll get highly accommodative language out of the fed on wednesday -- or thursday, whatever the day they come out with the statement -- and you know what the market reaction is likely to be. >> well, i agree with you, scott. i don't think it is likely we see that precipitous decline again, simply because, one, the fed policymakers are exceedingly careful this time through recognizing the shock that they applied to the market on june 19th when just talk about tapering was enough to move both

the equity and fixed income markets. so they'll be very careful with their language, and i think leaning more dovish than hawkish at this juncture. and in addition to that, there's still so much skepticism out there relative to equity prices and sideline cash as a result thereof that i still think whatever pullback we might see is going to be short and shallow, because i think investors still believe they have to remain committed to risk assets or equity prices given the fact that i think the climate will ultimately prove fertile for corporate profits, even if you have to wait a couple of months to get validation on that front. in the meantime, the pain of the alternative -- low-yielding bonds or cash -- have high costs for opportunity. >> all right. guys, thank you so much. >> josh lipton, market flash. what's going on? >> scott, a quick review of some big movers in today's trade. we want to start with interpublic in the green, off session highs saying it does not

see a need for a major merger or acquisition following that merger announcement we heard from omnicom and publicis. and announcing they would have a share repurchase. another i want to mention, caterpillar, repurchasing $1 billion in shares from sog gen. and we'll end on herbalife, scheduled to report after the bell. the street wants to see eps of $1.18 on revenue of 1.2 billion which would represent year-over-year growth of 8% and 12% respectively. carl icahn saying it's undervalued, said he has made $250 million and has not sold a share. you heard about the billionaire brawl here, icahn is long, ackman is short. back to you. >> all eyes on herbalife after the bell. we'll keep you around to watch that with us. right now, about 50 minutes

before the closing bell on this day at the end of july. we have the dow that's down just about 29 points. the s&p is down just about 5. talk about a bearish call. our next guest says the dow is going to reverse course and reverse course in a dramatic fashion and hit 5,000 before we ever see 20,000. he's going to make his case next. >> yeah, we're interested to see how he makes that case, especially given the bull market. we also have starbucks reporting better than expected earnings last week. the stock is up 50% over the past year, and now the store is rolling out a new initiative to get you and your smartphone inside. stay with us. we'll have that story. we'll be right back after this break. clients are always learning more

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all right. welcome back. we want to recap a story i brought you at the end of "street signs." we want to look at shares of cf industries. third point's dan loeb revealing a position in that stock today in a quarterly letter to his investors, a letter i have obtained. there's a look at what the stock is doing as a result. also, mr. loeb is stepping up his criticism of sony entertainment. remember, he's taking a near 7% position in sony as he urges that company to spin off its

entertainment unit. he does say in the letter he's surprised that sony's ceo doesn't worry that the entertainment unit continues to generate profitability levels far below its competitors. he sent a couple of letters now to the ceo of sony, and, kayla, we're waiting for sony's official next move. the ceo has saidwouldn't be opposed -- >> of course, given the time difference between the u.s. and japan, we could get something overnight. that's when we tend to get news out of sony. so it certainly will be interesting to see how he responds to this. the cf strad, i think, is interesting. you saw the stock jump to 8%. these are very, very high-yielding, free cash flow companies. very competitive space. a lot of m&a. there are a lot of strategic movements in this space, and so, it's no surprise that something that generates as much cash as one of these fertilizer

companies does, that you wouldn't see someone go after to start returning some of that to shareholders. >> which is what he wants to do. he says in the letter we believe it's structural cash flow generation strength, misunderstood, that management should deliver a much larger dividend to its shareholders. to your point. again, that's the latest news from dan loeb of third point. we'll see what sony has to say. again, this is not a letter directly to sony, as the other two letters have been. this just a regular quarterly letter to third point's investors. but in it, after the first couple of letters to sony seemed to take a bit of a cordial type of approach to this whole thing, this is more pointed criticism of sony entertainment, at least third point's own investors. >> an interesting story. >> yeah. >> we're watching the markets, and in just a moment, one expert says the dow is heading for a course reversal that could send it down to 5,000. bob pisani, the dow is down about 31 points right now, so we're not going all the way there.

what are you hearing from traders on the floor? >> reporter: did i hear this right? 5,000? is that right? >> that's correct. >> reporter: there's no sign it's happening today, good news. that's a 70% drop. i'm sorry to laugh. but there's no way it's -- this looks like friday, we had the de -- 5,000, i'm trying to get my head around this. put up the full screen. the last time we were at 5,000, it was 1995. guys, that was the real estate reporter back then. i had brown hair in 1995 i don't know where the s&p was. probably 500 and we probably had $35 or so, we printed that year in earnings. this year, we'll do $103 in the s&p. so we're talking about, you know, a third of what we are -- of where we're at right now. i don't think we'll be there for a while. today, you know what? look at the dividend stocks. telecom, utilities after a horrible six weeks, making a little bit of a comeback today. elsewhere, i would note the problems in japan, four down days, 8% declines, yen stronger.

a little bit of a hiccup in abe land over there, the japanese stocks that trade here at the new york stock exchange, weak again today. i'd like to hear the reasons why we're going to go to 5,000. i have a hard time with that one. >> yeah, bob, we do, as well. i'm sure all of our viewers do, too. we'll get some answers right now, in fact. the dow and the s&p, bob sang, aren't fall from the all-time high, but our next guest, as bob said, is calling for dow 5,000 before we see 20,000. what's behind that cause? >> terry burnham joins us now, from acadia asset management. and also michael with the inflation rotation fund. terry, we have to start with you. that's a 75% drop from where we are right now. what do you think will contribute to that? >> right, well, thanks for having me on. i really wanted to go on the record with this crazy call, as bob said, it seems extremely unlikely. and yet i believe we've already begun what will be a wall of

pain for most investors. in i can just take a moment to say, even though i believe there's a tremendous amount of economic pain coming, i've got three little girls, i'm an optimist overall, they love cnbc, we're optimistic things will go well, but we have a lot of pain coming along, and if you'll give me a moment, i'll lay out the economics and psychological reasons for that. >> go ahead and give us a quick rundown -- >> give us the main reason. give us the main reason, terry. i mean, what in the world is going to take the dow from 15,500 to 5,000? >> yes. the main reason is that we're broke and we're following the wrong policies. so the average american saves almost nothing and has $100,000 saved. so that means that 2%, 3%, 4% interest rates, wherever we go, they live on a few thousand dollars a year. what has to happen? they have to save more. we have to take that pain, and what we've done on a policy front is exactly the opposite. we've tried to encourage people

to continue to overconsume, and all that's done is made the problem bigger, and it shifted the problem from the people who ought to be bearing the pain to the people who ought not be bearing the pain. >> there seems to be a little bit of a behavioral shift in washington. i'm not going to give them too much credit. michael, we are getting headlines this afternoon that treasury is reducing its borrowing needs, $209 billion is what they're going to start borrowing going forward. we heard from tim geithner that there was a way that treasury could respond to some of the structural budget issues in washington, and we're starting to see some of the first glimpses of that. why do you think maybe we are going to stay where we are, or what sort of issues do you see with terry's argument here? >> i think the mayans had a crazy call, too, and we found out they were wrong, and you have to be aware of the apocalyptic scenarios. you can have deflationary shock, and central bank paranoia is a

good ammunition to prevent that from happening and you talk about the behavior. the instinct of every federal reservist is to keep chairman and an institution as a job. if you go down to 5,000, i find it hard to believe any central bank will be in existence. and also in the midst of an equity bubble. if you have every single retail investor in the market, and clearly we're nowhere near that. so as much as it may sound like extreme, i think you have to really be careful about assuming that you will see such a setup, and if you are going to see dow 5,000, i hope i'm told when so i can leave the country. >> yeah, terry, do you want to respond to that? it seems like such an outlier call to the point where i wonder even about the credibility of it, just when you make such a huge call saying that the market's going to go from 15,500 down to 5,000, people sort of roll their eyes thinking that it's crazy. >> yes. so it sounds crazy, and everyone

always wants an economist who will stick their neck out. so i'm doing that. and i want people to remember it sounds crazy now, because it won't sound crazy in the future, i i this. so that's why i really appreciate the opportunity to come here. now, what's interesting about markets is that people believe crazy things at tops. remember when we believed housing prices couldn't go down, when we believed gold was the safest investment, 2011, 2012, gold was the safest investment. and here, what we believe that's absolutely crazy is the central bank can make us richer. if loose money could make us rich, zimbabwe would be an economic powerhouse. so we all know that that's not true, and yet, at market extremes we believe things that are absolutely false. and so, i embrace the, you know, the idea that this is crazy, and in the not-too-distant future, i believe that we will change our minds. >> terry -- >> that's what -- go ahead, kayla. >> well, i'm just wondering, it

is a bold call. i'm glad that you are talking about what's behind it. are you putting money behind this call? are you actually investing in line with this thesis? or is this just a recommendation that you're putting out to the market? >> yes, so in the lead-in, it said i am acadia -- i'm no longer at acadia. i'm a college professor at chapman university. with my personal money, i'm invested along with these beliefs. and i think things get worse than that, which is to quote argo, no good alternatives. the least good alternative is cash, and even that will be risky in the future if financial institutions fail. >> michael, the last word. >> a quick point, talking about dow 5,000, a highly funded, you're talking about the end of the capitalism system. if you are going to bet on that, we have more important things to worry about, as you might want to live abroad. everything you're betting becomes worthless under the end of the world scenario.

>> yes, i don't agree. the dow went down 90% in the depression and we didn't have the end of capitalism. >> we didn't have much leverage anywhere near that kind of leverage in the '30s. >> yes, so you -- >> terry, when you were at goldman sachs, were you a contrarian trader there or what? >> i was only there -- i was only there for a short time. i was in the bond area. so, yeah, i've been a contrarian, i think. >> all right. terry burnham, michael. >> thanks. >> thank you. all right. 35 minutes to go before the bell rings. the dow is hanging on to a loss of almost 38 points. the s&p, nasdaq negative, as well. up next, we were talking starbucks. will it perk up your portfolio or get you in hot water? and herbalife reporting earnings after the bell. it's a true battleground stock, and we'll have the instant analysis and reaction, including from resident herbalife skeptic herb greenberg. >> i feel like he just comes out of the woodwork when they report earnings. and then, some people won't

let the federal government breathing down your neck ruin a good party. embattled hedge fund giant steve cohen had a bash this weekend raising ire and eyebrows. more on that ahead. [ male announcer ] it's time.

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shares of starbucks trading at all-time highs a of the giant coffee company raised its earnings. it's adding charges stations to a number of locations in the silicon valley area. is now the time to buy? on the technicals, richard ross, and on the fundamentals, we have brian bentner of oppenheimer. brian, starbucks beat earnings, raised full-year guidance and introduced some new concepts, and is that enough to make you a buyer? >> we've been recommending starbucks for quite a long time. it's had a terrific run representing the awesome business fundamentals. but we do still like it here. it's really threefold. number one, we think the street really underestimates the improving sales trend. i think when you look at the food that's going to be coming into starbucks' stores, it's not fully representative in estimates out there. number two, look at coffee. i would say, you know, to the viewers, look at the coffee chart over the last 18 months. it's really divebombed. that's going to drive margin

expansion, and i think it will drive visibility in some of the best eps growth in restaurants. number three, i think there's a balance sheet catalyst coming. i think this is an underutilized balance sheet. i think they can lever up, potentially buy back a lot of stock, or really up the dividend ratio -- payout ratio. so while it's had a great run, i still think there's room to grow. >> all right. balance sheet aside, you're looking at a stock in 2009 was below $10 a share. and now at $72. at what point, does the chart get out of hand and what are you reading out of it now in. >> the technicals buttress brian's bullish belief here on starbucks. there's significant upside from current levels. when you bring up the short-term, one-year chart, you don't have to be a technical strategist to see why you like this stock. you're up 63% just in this well-defined trend channel asloan. we get a fresh gap off to an all-time high. but what i really love about this stock is the longer-term weekly. that suggests there's much more upside. you see on this three-year weekly, last year a 30% bear

market decline within the context of the secular bull trend. beautiful textbook double-bottom, break out above $60. we see measured upside to $80 a share. we'd still be a buyer right here. >> all right. beautiful textbook bottom. i think we will leave it right there, gentlemen. richard, brian, thank you for being with us. you guys both agree it's a buy. scott? >> all right. stocks are lower 30 minutes or so before the bell rings. >> certainly an interesting deal in the market. a lot of them today, including huge merger in the advertising industry, plus hudson bay's $2.9 billion purchase of saks. what's behind the activity, and you may be surprised and whether a lot more could be coming soon. and snapchat. mostly teenagers use the self- -- use the self-destructing messaging app. but it could be catching on with traders. are they using it to make insider trading harder to prove? that story is ahead 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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welcome back. big merger monday today, rather, changing the face of the retail and advertising industry. a busy day, and julia boorstin has been tracking the deals. she joins us now. >> reporter: that's right, kayla. and this merger monday, three mega deals were announced. the second and third largest ad agencies merging to combine a new ad behemoth, that's pub lickis and omnicom to combine their revenue, nearly a third of all of the major ad agencies' revenue. if it gains regulatory approval, the company is expected to use its scale and data to negotiate better terms and better compete for digital ads which are expected to go to 27% of all ad spending by 2017. there's also a big deal in the luxury retail space. canada's biggest department store chain, hudson's bay company is buying luxury retailer saks for about $2.4 billion. the deal will create a department store giant with three chains, saks, lord &

taylor and hudson's bay, and 320 stores in some of the biggest cities in the u.s. and canada. now, the retailer plans to expand saks' footprint, especially up north. and, also, a mega pharmaceutical merger today. u.s.-based perrigo, which makes over-the-counter medicines, is paying $8.6 billion for irish drug company elan. it will allow a much lower tax rate as well as a platform for international expansion. now, kayla, we'll have to see what kind of fallout we get from the mega deals. we could see players in each of the three categories advertising retail and pharmaceuticals start to snap up some of the smaller companies so they can compete with these new mega merger companies. back over to you. >> all right, julia, thanks. out in l.a. what's next on the m&a horizon? >> with us now to discuss that is roger altman, the chairman of ever core partners. roger, thank you for being with us. welcome to "closing bell." >> nice to see you. >> what do you think we're going to see in the back half of the

year in terms of m&a? i spoke with a bank executive last week who said the animal spirits are still there, they just need to be unleashed. it seems that at least today is a sign that we're moving in that direction. >> well, if you look at the data for the first six months, merger market conditions are right in the middle. they're not hot and they're not cold. you had announced mergers globally in dollars, slightly down for the first six months, 2013 over 2012. you have the u.s. piece of that, just u.s. deals, up rather nicely for that same period. so the rest of the world was especially weak. but my point is that merger market conditions are fine. are they -- are they white hot? no. but are they poor? no, they're not poor either. it's good to see these three deals, because they indicate strength in the market.

but we're really in the middle, and that's not a bad place to be, because from our point of view at evercore, business is really quite healthy. >> you know, roger, i wonder, though, as you see so many stocks near their 52-week highs or either setting new 52-week highs, plus an economy that's still fragile, whether there's little upside for a ceo to do a deal. maybe he's worried -- he or she is worried about what will happen with the economy, and what's the upside for a stock that's already near a new or all-time high? >> well, scott, i think it works the opposite. not that way, but the opposite. in the following sense. while you might think that buyers should wait for prices to be low and pass up opportunities when prices are high, it's usually the reverse of that. when stock prices are high, confidence follows it,

confidence is high, decision makers think externally rather than focusing inwardly, and deals historically rise. the volume of deals rises. so you take that, and you take the likelihood that the u.s. economy over the next three years -- '14 through '16 -- as ben bernanke said in his now somewhat famous press conference of three, four weeks ago, is going to be quite a bit stronger. he talked about 3.5% real growth for next year, and unemployment rate coming down to the 6.7% to 6.5% range by the end of the year. that would be a strong year. if you believe that, which i do, and you think 2015 and 2016 will be like it, which i do, then you have a combination of good confidence arising from high stock prices, a sense that business conditions are about to improve quite a bit, and that makes for good merger activity, and i think the environment is rather improving for mergers,

even though, as i said in the beginning, they're really in the middle now. >> right. well, roger, you look at some of these stocks at their 52-week highs, and you also would think, okay, if i'm a target company, i'm not going to feel comfortable selling at a point where my stock is below that 52-week high. you want to do right by your shareholders. if i'm acquiring company and i have cash to burn and i'm seeing the economy get bheter and my profit margins are as good as they've been, why would i not make the decision to increase my capital expenditures? hire more people, when layoffs are finally stopping, but hiring hasn't necessarily picked up. where is that full crumb between hiring and doing deals, and should companies not be hiring before they're spending billions of dollars to buy out their competitor? >> well, of course, it's ultimately a mixture of both. internal investment and hiring on the one hand, and inorganic moves like acquisitions on the other. now, businesses are hiring, although not at a strong pace.

i mean, the average monthly job increase figure has gone up this year. so hiring is improving, but not very fast. and capital spending, in my view, is healthy. but again, not white hot. but in terms of acquisitions, a couple of points. first, a lot of acquisitions, of course, are driven bin y synerg, and secondly, in this market, share prices are typically going up -- that is, buyer share prices -- upon announced acquisitions. so in this market, most announcements are accompanied by an increase in the buyer's share price, meaning that investors in general are liking mergers these days. so that's an extra incentive to do them. but ultimately, it's some of each. >> well, roger, we're certainly going to keep you on, keep you coming on, to keep discussing

this trend as it goes forward. hopefully, we'll see some white-hot hiring and white-hot deals, too. roger altman from evercore, thank you for being with us. >> thanks a lot. 20 minutes to go before this monday on the street wraps up. the dow is pretty much hanging out where it's been, down 26 points. the nasdaq is off 9. the s&p 500 down just about 5. snapchat is a way to share a moment on the iphone without allowing the recipient to share it with anyone else. the message supposedly self-destructs in seconds, but should it be used on trading floors, or will it be a tool for insider trading of information? and after the bell -- ♪ -- millions of americans are possibly just more than an hour away now from being a casualty of the war between cbs and time warner cable. details of that squabble are coming up. (announcer) scottrade knows our clients trade 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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welcome back. snapchat, if you're not aware, is a mobile messaging app that's gaining popularity, sweeping college campuses, and it allows people to send messages, pictures, video, and only allow them to be viewed by a few people for a few seconds before the message is hidden forever and erased from the snapchat server. apparently. but who else is using the app? wall street.

that's making some worried when asked about regulating the self-destructing app. wall street's top cop had this reaction. >> can the bad guy snapchat buy wireless at 3:45 and get away with it because you don't have the technology to stop it? >> i don't know what you're talking about. >> so is it possible that wall street is trading insider secrets with that app? we take it down to the traders to find out. cnbc market analyst kenny is here now. >> and snapchat expert. >> you know what snapchat is? you do -- >> i do know what it is. i had to call my two kids and have this conversation about -- i'm not a snapchat user, because as i understand, nothing really good happens on snapchat, because it's a picture you don't want anyone to see, you want to disappear after five seconds. >> maybe you do want some people to see it for such a short period of time and that's -- >> what could you possibly want someone to see for three seconds and then hope it disappears forever? so that's question number one. so when you talk about wall

street -- >> i think probably the stuff that they would like to be posting on their facebook or instagram pages but they know those get searched and those are more readily publicly available. >> so it's a picture you don't want anyone to see, right? if it was something you wanted someone to see, what difference does it make? which is probably okay. people want to send something they don't want people to see, but therefore, it lends itself to exactly what we're talking about. do they have this ability to take a snapchat of some research report or some recommendation that's not yet public that might be going out and send out, that's the question. >> why wouldn't they? i mean, they apparently would have that ability -- >> right. >> -- it would disappear maybe 10 seconds after you or or joe public opened it. >> right. >> that's an issue, right? >> that's absolutely an issue, and they shouldn't do it, because clearly it's illegal. it's insider trading. clearly, the regulations say it's illegal. but yet, how do they regulate snapchat when preet bharara

didn't know what it was. >> he wassi maybe being tongue cheek. >> we should maybe give him a little more -- >> there was more after that one sound bite. >> he said law enforcement has evolved. we don't look at e-mails -- you know, in the s.a.c. case, it's front and center. the other interesting thing, kenny, jim asked about, do you send someone snapchat at 3:45, s it doesn't seem to work that way. it's a little more fuzzy. there's a lot that can happen. >> right. there's a lot that can happen. until they're able to regulate it, maybe you'll see compliance department say, listen, no more personal cell phones on the trading desk or in this area -- >> let's put it this way, as far as you guys know, correct me if i'm wrong, you guys aren't allowed to have cell phones walking around the floor. >> you can't have a cell phone walking around the floor. no one is supposed to be on a cell phone, that is, other than issued, walking around the floor on a cell phone, guests or

otherwise. >> you walk around with electronic tablets. >> the tablets are new york stock exchange, those are execution devices. those don't communicate anything but orders. >> and we have no proof it's going on, but it's been opened up to discussion. >> yeah, and there's probably a lot more to talk about. >> right. kenny, thank you. there are -- how much time do we have left? 10 minutes to go before the bell rings. the dow is still down 28. down day, modestly so, on this monday. >> a big show for you next. don't sign up for another free trial until you hear this report from sharon epperson. why millions of those free trials are anything but free. billions of hidden charges. it's a fascinating story. yes, we're keeping an eye out for herbalife. the big earnings report is after the bell. we'll have instant analysis. the analysis you need right here on that incredibly controversial stock. golden opportunity sales event and choose from one of five lexus hybrids that's right for you, including the lexus es and ct hybrids. ♪

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go. >> welcome back. modest losses across the board to start what is a very busy week on wall street. with us now, mark spellman from value line funds, and michael crofton from philadelphia trust company. michael, mark, welcome. good to have you both be with us. >> good to be here. >> i said it's an incredibly busy week given on what's on tap between the fed, ecb, gdp, you

name it, earnings. how do you size up the market here in. >> the market is priced where it should be. i think earnings are coming in mixed. you really can't measure earnings this time, because there's so many stocks bought back, reducing the share count. revenues are okay. some better, some worse. i think the market is in a real good spot. what i like about the market is consumer confidence is strong and remains strong, and i think consumer confidence can power this to the next level. >> mark, where do you fall? some say it's overbought. some like michael say it's at a good point. where are you? >> i'm finding different pockets of value. i think because rates are higher, the sectors that are going to work going forward are going to change. so the sectors that rely on investment dollars that are competing with fixed income instruments are going to underperform, and namely the reits and utilities. and other areas, we're seeing some really interesting growth -- i think the earnings so far have been pretty good, much better than expected in many groups. and you're going to see income stocks that not necessarily are the highest-paying income, but ones that are growing dividends.

i think they're going to be the ones outperforming going forward. >> such as whom? what areas of the market do you like right now then? >> sure. >> specifically. >> specifically? i think we're underweighted in tech for quite a number of months. we're wanting to see some of the prints hit. i think some of the tech names are starting to get interesting. i see emc. they'll buy back stock in the next few months. they initiated a dividend. some of the tech names are getting interesting. >> i love the tech. i love emc. i love if f5. >> you've been hearing that for a long time. people have been picking tech stocks for the last several months. >> stay with them. >> they haven't delivered. look at microsoft. microsoft has been terrible. >> i'm with you on that one. >> -- microsoft. >> i think a lot of people have been trumpeting tech, wrongly so. >> some tech -- some tech -- you have to be selective -- is starting to deliver. i don't like consumer staples or discretionary. they've outrun their ability to

generate the earnings necessary to justify the stock prices, and people are going to get burned in those stocks if they hold them much longer. >> all right. gentlemen -- you have a last point? >> you look for the tech names going through the transitions. product transitions, software transitions. those are the ones. i would add s.a.p. to that. it's been a lousy stock, but however, a lot of products are coming out in the next couple of months where the earning also get going and i think the multiple will start expanding. >> you like s.a.p., say over an oracle or -- >> yes. >> you do? >> yes. >> speaking of a stock that's disappointed. >> i like oracle. >> you do. >> they don't give you much to like? >> no, but i bought it on the cheap. i think we'll be well rewarded. >> looks like mark will let you keep orange countying ale. all right. up next, the closing countdown. after the bell, if you're a time washer subscriber, you're about an hour away now from losing access to cbs and showtime, unless a deal in the 11th hour can be made. we'll have the latest on those excruciating negotiations when

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countdown." i'm going to show you what is no doubt the stock of the day. that is cf industries. this stock just shot higher ever since we first revealed about an hour ago that dan loeb's third point had taken a stake in this company, a position in cf industries. there's a look at it. up more than 11% on that news. $201 and change for shares of cf industries. if you're wondering what's leading the dow -- by the way, that's the best performing stock in the s&p 500. the best performing stock out of the dow, caterpillar. accelerating its buyback. the stock is getting a boost, as well. again, the beginning of what is an incredibly busy week, michael. what will you be looking out for most? >> i'm going to be watching the fed very closely this week. i think if we can get the fed to give us more clarity on what their intentions are, this market can begin to make new highs. the market is really poised to do better. earnings have been good generally. you know, some have missed. for the most part, revenues are okay, in line.

companies have done a great job cleaning up the balance sheets, getting technology into their businesses, eliminating, you know, overredundancies in the business models. so i think the market is poised to look much, much bet erk as long as interest rates remain contained and consumer confidence remains high, we'll be fine. >> give me the best case scenario of what the fed could say if you're a bull in this market. >> what the fed could say is that they are seeing growth in the economy and that if they see enough growth they'll begin to take the foot off the pedal. >> so taper is okay. >> i think taper is okay as long as we have the growth to sustain the market. the market's priced in a lot of gdp growth already. it's priced in maybe 3.5%, 4%. if the fed says they see the growth acceleration, i think they can taper and the market will get right through it. >> i don't know if the market's priced 3.5% to 4% -- >> i think it has. it has -- >> that sounds optimistic considering we are due a lousy print for the second quarter. >> it is optimistic. that's where consumer confidence comes in. the consumer is seeing well beyond where we are now.

and even corporations. look at the mergers today. the advertising companies. they wouldn't dou that they didn't see the growth. >> the best area to be in now. we talked about technology. what else do you like? >> i like industrials. i think industrials are poised to do extremely well given the low interest rate environment, given there's a lot of pent-up demand that's been satiated. i like industrials, tech, energy, particular domestic energy, gas, things of that nature. >> industrial earnings were one of the bright spots if not the brightest spot so far. banks have done obviously -- >> financials are doing great. >> financials have done well. ge has done well, utx, honeywell. >> i like utx, 3m, a whole bunch of industrials in the portfolio doing great. we love financials. a lot of financials in the portfolio. we had to suffer with them earlier, but they're doing well now. >> all right, michael, good to see you. >> thank you. >> michael crofton, philadelphia trust company, president and

ceo. 20 seconds before the bell. it's a down day, but again, you have such a busy week. the market seems to be taking a wait-and-see approach. kayla and i will have that plus big earnings coming. herbalife is moments away. [ bell ringing ] it's 4:00 on wall street. welcome to the "closing bell." i'm kayla along with scott wapner. maria bartiromo will be back tomorrow. we had negative housing data this morning and the dow has been down ever since the open. closing just down 35 points. nasdaq down just about 14. and the s&p ending down 6. but still a good july overall. the markets tried to fight back. we have bob pisani to walk us all through what exactly happened in the market today, toward the end, bob, they went down, they went up, couldn't quite get there, could they? >> reporter: no, ll