>> yes. >> it's fabulous. >> it is good. >> i have to say it's delicious. thank you so much for bringing this in. >> thank you for having me. >> i apologize. i'm wiping my face. very quickly. we're watching into the close, what the markets are doing. we've come back from the lows of the day. the nasdaq is already in positive territory. have a great weekend. here we go, everybody. ♪ hi, everybody. welcome to the "closing bell." we're coming to you from outside the new york stock exchange for our special summer on the street series as we continue. welcome to the "closing bell." i'm maria bartiromo. as does the summer swoon for the stock market, the stocks are trying to hit break-even today. we are approaching the end of the week, bill. happy friday to you. >> happy friday, maria. yes, i'm bill griffeth here inside the new york stock exchange. the market isn't any better from this view, as well, although we are coming off the lows of the session right now. it looks like it's trying to go

positive. i'll point out this is an expiration day. anything can happen during the last hour of trade on an expiration day. but before this, the dow is in jeopardy of having its worst week of the year. we're down about 2.1% going into the day. if we finish below 15,095, that would make us the worst week of the year. and we are -- well, we're above that right now. >> i've got to tell you, bill, it feels like the quietest expiration friday we've seen in a long time. >> it does. i said to art, what if they held an expiration and nobody came? but they -- >> and that's what happened. we've got a big lineup for you here to walk you through what's happening as we approach the close and what may happen next week. we'll be previewing that. we have david rosenburg coming up. john cary and ralph acampora. you will want to hear what ralph said about yesterday's decline.

we spoke to him yesterday, as well. i'm excited to hear what he has to say about the market. you know he's been very bullish. yesterday, he said he doesn't know he's found a bottom yet in terms of the selling over the near term. >> right. it will be very interesting to see what ralph says about the short-term sell-off here. also we're keeping a very close eye on the dangerous developments in egypt. it has turned out to be another deadly day there. we'll have live reports, bring you the very latest, and the market responses to that, as well, maria. >> all right. let's take a look where we stand as we approach the final hour on wall street. the market having come all the way back, looking at a not showing, down about five points. you knee the big bounce from the lows in the last hour. checking the nasdaq, where we're also seeing a pretty good bounce-back from the lows on the nasdaq. a similar chart pattern with a gain of three points. nasdaq had been negative, but it has resumed its positive territory, even if just by a fraction. the stand & poors 500 index trading in a narrow range and

similar chart pattern, down just about three points, bill. >> by the way, we didn't mention that yields alone the curve are now around two-year highs. the yield on the 10-year now at 2.85%. that's got to take some of the wind out of the storm here, bob pisani. >> reporter: oh, boy, is that the big problem. we've had a little bit of a rally late in the day. put up the dow. we almost went positive while you were talking, bill. waiting for us to go positive. it didn't quite happen. somebody seems to like consumer stocks in the last 15, 20 minutes. put up coca-cola here, if you're wondering why, it's moving off the lows. so coca-cola has moved to the upside. put up coke there. there you go. look at that. it went positive briefly a few minutes ago, and some of the other ones, proctor & gamble. i don't know why proctor moved down midday. you see the drop? it rallied back. that helped the dow. but let's move on here. the modest late-day rally, let's call it. rates are acting like there's

imminent dramatic taper coming with the 10-year at a two-year high. i don't get it. i saw industrial production kind of disappointing this week. and this morning, single family starts down 2.2% or so. that was a bit of a disappointment. i thought we'd see more strength in single family housing, multifamily was strong. but federal reserve better have some very good rationale about why they want to do some dramatic tapering. nice to see the homebuilders for the most part have a little bit of stability here. it's a modest two-day rally we've got. bill and maria, i'm in bullard's camp now. bullard's been arguing for, i guess you would call it taper-light, which is you should go slow on the tapering, because the economic evidence isn't there, based on the numbers this week, i'd go along with that. back to you. >> that sounds familiar, bob. >> yeah, bob, thank you so much. >> we've been saying the same thing, haven't we? >> yes, we have, for sure. >> all right. even with equities in the red, john carrey has $200 billion in assets under management says he

wants to put more money to work in this market, even as the decline continues here. >> yeah, he's a buy on the dipper. he joins us now to talk more about it. let's find out where the big money is going. good to have you, sir. you see any weakness as a buying opportunity. you're not looking at any decline as something -- >> so we have to keep an eye on that. overall, i'm optimistic about the economy over the next couple, three years. earnings are strong. dividends are providing good support. share repurchase is encouraging. so i would be buying, yes. >> john, are you buying the cyclicals because you think the economy is growing or buying defensive issues because the stock market's going up because of the fed? >> particularly now, i think i would be favoring some of the consumer cyclicals, some of the industrials, and the financial

sector, which i think has a lot of room to go. >> what about the tapering? do you think we will see the federal reserve begin rolling it back this september? >> i think we will see something this fall. because i'm not sure that the natural unmanipulated level of interest rates is significantly higher than the current level, especially since we've had already this upward move in interest rates. i just don't know how much more there is to come, given that inflation is still pretty modest given that unemployment is still relatively high, given that economic growth is tepid. it is a growing economy, but a slowly growing one. >> why do you think rates are going up right now, and is it -- and is it a point -- will there be a level at which you think stocks will have to go down because of that, and you'd rethink your position to buy stocks? >> we're still at a very, very low level of interest rates on a historical basis. >> right. >> mortgage rates have moved up into the mid-4 from the 3% area.

but that's still very modest in the longer-term basis. so i'm thinking maybe the adjust. we've seen is just in anticipation of what might happen once the tapering begins. people don't really know when it will begin, how much tapering there'll be, how fast it will conclude. so people are starting to position themselves. and think about where the rate might be, level of interest rates, might be six months down the road. >> let me ask you -- i feel like -- i feel like the action is happening more now international than in the u.s. a lot of people wondering if, in fact, you know, this is the beginning of something bigger, if the short-term trading will mean more declines. and they're looking at europe. and there's even some talk about emerging markets beginning to bounce. where are you on europe and emerging markets right here? >> well, again, most of the news that seems to be concerning people is positive. asia's looking a little bit better.

europe may be start a recovery. here in the u.s., the growth is continuing. auto and housing sales remain strong. unemployment's coming down. so on the whole, i'm thinking that most of the developments in the news are positive. >> all right, john, good to you have on the program. thank you for joining us. >> thanks, john. >> thank you, maria and bill. >> we'll see you soon. we want to get more now from the folks inside the action, realtime. let's get inside the nyse. we have thomas of rm option strategies and our own rick santelli from the cme group. good to see everybody. was it just a quiet august friday, or is there something different about the expiration? bill and i were saying a moment ago, it's the quietest expiration we've seen in a long time. >> it does feel boring, doesn't it? i think partly a friday in august. yesterday's move was fairly dramatic. what's interesting today is that the market tried, it really kind of hovered right around that 50-day moving average on both

the future and the cash, maybe a little below, but trying to rally and stay there and hold there, which i think is actually a positive sign. at least in the short term, right? i think it will test it a little more, i think it needs to. i think the market is nervous. but for today, it does feel quiet. i think that makes sense, after yesterday's kind of dramatic move lower. that is just kind of churning and digesting. >> rick santelli, i was tweeting earlier that the bond vigilantes appear to be saddling up, the march toward 3% on the 10-year continues. what's going on? how much higher are we going here, do you think? >> you know, i think 2.83 was my call, actually, for where we would close today. it was the first significant top we had in -- earlier in the week. so use it as a pivot. but consider the following three reasons, bill, that may help answer your question. i asked traders why were rates up. they said, euro gdp. this is a glide path leveling off. even if the data isn't great, stabilization needs to move markets and it may be something that the fed should pay attention to, the doom's day

disaster is probably gone. number two, japan and china were sellers. the 67 billion drop we saw was one of the bigger drops by foreign investors in six years, and that data is two months old. that's june data. the third point. technicals. we're hitting all of the technical marks, momentum. it really is a charting delight to watch the treasuries. usually when that happens, you're in a trend you don't necessarily want to jump in front of. >> interesting. >> it makes a lot of sense, rick. let's bring in rick, jpmorgan funds. david, what do you think about yesterday's sell-off and what we're seeing post? are we done with the selling yet? do you think this market continues nervously throughout the summertime? >> i think there could be some more market nervousness here. but overall, i'm not terribly worried. i think what's going on is rates are gradually moving to where they need to be. i mean, when the fed stops tapering, you know, when they

get to the end of bond buying, we should be somewhere around 350 or maybe even higher than that. so we're still just moving in that direction. i think that movement is making people nervous. but ultimately it's not a movement that will slow the economy or stop the economy from growing. so i would still be positive in equities right now. >> and, tom, gold has been stellar the last few weeks here. is it going up for the same reason that stocks are going down? or what's going on here? >> well, i think you have august, it's very thin here. and i think there was a lot of short covering, broke through a lot of technical levels on the upside. and i think that shorts don't like to take a lot of pain. the longs tend to dig in. but the shorts tend to cut and run for cover, so i think that's what you're seeing. i think people are getting bullish, so be careful. i wouldn't get too bullish here. it has to get above the 14, 15 area, maybe spend a little time up there before you can get bullish again. >> all right. >> all right. >> very good, guys. >> thank you, everybody. >> nice tie, kenny. >> appreciate it.

we've got 50 minutes before the closing bell sounds for the day, and for the week, a market is under pressure by a fraction. the dow down about seven points, bill. financials have been one of the best performers on wall street this year, but when we come back former wells fargo ceo says the current regulatory environment is threatening to derail both the financials and broader economy. he'll join us exclusively coming up here. also, two of the biggest bulls on wall street are somewhat bearish. coming up, they explain what's behind their change of hearts over the near term. and we love this, the favorite story of the week, a zoo in china trying to pass off a dog as a lion. we are not making this up. it really happened. why that could be a canary in the coal mine for the real health of china's economy, later on "closing bell." stay tuned. [ barking ] [ male announcer ] come to the lexus

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welcome back. it has been a week to forget for the bulls. dominic is rounding up the week's movers and shakers. >> reporter: maria, earnings results came from big retailers. they took center stage.

the tone got tampened. less than robust results from walmart, macy's, nordstrom's, so walmart announced numbers that missed analysts' estimates, but comparable same-store sales fell. those are sales at stores open for at least a year. the biggest retailer also lowered the full-year forecast because of a, quote, challenging sales and operating environment. now, macy's, a similar story as the department store giant reported profit and sales that missed analysts' estimates. they also cut their full-year outlook. macy's cited a reluctance by spending -- and spending for shoppers for that real sales shortfall. and nordstrom's, they had a report that had the same kind of feel as the upscale retailers lowered its full-year profit and sales forecasts. we'll cap it off with the retail roundup, with jcpenney. because its biggest shareholder, activist investor he bill ackman, is likely calling it quits, at least for a big chunk of his campaign, to turn around the struggling retailer.

he's resigned from the board of directors after a highly publicized spat with fellow board members and entered into an agreement with the company that paves a way of him to divest. so all kinds of things shaping up, maria. back over to you. >> all right, dominic, thank you so much. keeping the focus on financials, this is the group that's been the leader this year, but very recently, regulators and the governments have been putting the pressure on big time. take j.p. morgan. this week, two trader in the $6 billion london whale case were charged by u.s. attorney bre preet bharara. >> and wells fargo former ceo said if the law was violated, they should be charged, but when it comes to regulating the industry, he said it's at a level that's damaging to the economy. dick joins us in an cnbc exclusive to talk more about that. welcome back, sir. >> hi, bill. >> good to see you again. >> hi there. >> what do you think is the onerous part of the u.s.

regulatory agenda now for the financial services industry? what's hurting the most? >> well, i think one of the most is the mortgage business. as you know, the mortgage business has improved greatly, but not as good as it could be, because of this ability to pay issue that's in the dodd-frank bill. the industry is scared to death of the litigation that could result from this, and, therefore, i would -- i would surmise that the bottom 25% of people who should be eligible for a mortgage are not getting a mortgage today, because of the uncertainty of this law and the qualified mortgage and the other issues going on there. >> you know, i brought that -- >> we should be booming at the moment -- >> i brought that up with barney frank. he was on the show a couple of weeks ago. i said there are a lot of banks not making loans like they used to because of the regulatory environment. he said, let me get this straight. banks are not loaning to people because they fear they won't get their money back? he said, that was the whole

point of dodd-frank. what do you say? >> well, no, that's not the point. the point is that it is impossible for any bank to make loans that -- where there will be zero foreclosures, right? >> right. >> because if you did, only 50% of the population would get a mortgage. so there's going to be some defaults. but if you're going to be blamed for, let's say, default rates of 2%, 3%, then instead of approving 80% of the loans, you're only -- you can only approve 60% of the loans to get rid of the 2%. and -- >> dick, you know -- yeah? >> and the point is that none of these financial institutions that are making mortgages today made the bad mortgages of the subprime debacle. >> okay. >> we know how to do this. we've been doing it for 50 years. >> that's a good point. yeah, that's a very good point. these are not the players -- >> there were ten investment

banks and ten s & ls, so why are we punishing all of the people who know how to do right? >> we talk about this a lot, dick. it's this pressure on the banks. but isn't that the reality of the day? and the new norm? you can complain about it, you can say that regulators don't understand the complexities of the business, and they're -- once again, the pendulum is going too far. but whether it's the mortgage business, whether it's the capital levels, compensation, you know, then, of course, you've got the u.s. attorney coming down with charges, this is the new normal for the banks, and this is not going away anytime soon. is this a ten-year period we'll see this industry under pressure? >> it just depends. if you are happy with the 2% growth in the economy, then it might go on for ten years. what i am saying -- forget the banks. i am saying that this is having a very detrimental effect on our economy -- our economy should be growing at a minimum of 3%.

we should not have 7.4% unemployment. >> you're right. >> and so, what i'm saying, if you're happy with our economic environment like this, then, fine, just keep piling on and we'll continue to have this kind of growth. why would anyone want to accept this kind of an economic environment today? i'm talking about jobs. i'm talking about people who deserve credit that are not getting it. >> well, for -- >> that's exactly -- that's exactly what john chambers said to me. john chambers said we should be having a 4% economy right now, and how are you going to invest, how will you hire people when you don't know what the tax rates will be, you don't know who your regulator is, because only, you know, 10% of dodd-frank has been -- has been implemented. you don't know what your expense side of the business will be. >> but to play devil's advocate, dick, you know, the -- for good or bad, the financial services industry gets the blame largely for the financial debacle we went through in 2008 and 2009. and there are those who say they

need to be punished. and this is what the u.s. attorney's trying to do. you know, the s.e.c. is going after this, doj is going after this. let me -- >> but, bill, no, but, bill -- >> go ahead. >> stop there. >> all right. >> i want to say it again, and i've said it a hundred times. 20 financial institutions caused this problem. 7,000 others did no wrong. ten of those were investment banks. ten of those are s&ls. no mainstream commercial bank contributed to the problems of the finance financial crisis. >> here's where i'm -- >> should you punish people because somebody else did wrong? i don't get it, bill. i don't understand the question. >> i'm glad you said that. this is what preet said during the london whale news conference. listen to this. >> capitalism works best when its captains do not lie and cheat. capitalism works best when its biggest beneficiaries play by the same rules as everyone else.

and that is why prosecutors need to be even more aggressive, regulators need to be even more vigilant. and as i have been saying for some years now, companies themselves need to pay closer attention to the cultures that they create. >> there you are. he's talking about the cultures that are created in various banks and investment companies out there. >> what i am telling you is that i believe the 7,000 banks that were out there, that did no wrong, had a very positive culture. 20 different. so you're going to punish the 7,000 who did no wrong? i don't understand even the comment by this person. >> what about too big to fail? what about too big to fail, dick? what about those banks deemed systemically important and they're too big to fail? those are the same actors there in 2008. >> well, let me say this. when we started our company back in norwest, in minneapolis, a

$20 billion. today, we're $1.4 trillion. i believe there's an infinitely less chance of wells fargo failing today than norwest was back in 1985 that almost did fail. so i don't even understand what too big to fail means. it's not size that causes you to fail. it's con -- it's concentration of risk. it's inadequate liquidity. and it's having a business model that is too risky, because it originates in a sell model instead of originate in a hold model. >> do the regulators understand that? >> of course, they don't. >> right. that's the issue. >> well, let me -- let me repeat that. i think they understand that, but i think the regulatory agencies in washington today are totally impacted by the political environment there. they're simply responding to the

politics that are going on in washington. they know what the right answer is. but they don't have enough fortitude to tell the truth and say, hey, these are wrong. >> dick, we always appreciate your -- >> thank you. >> -- your candor. thanks, sir. >> thank you. >> see you soon. all right. heading toward the close now. about 35 minutes left on the expiration day. the dow trying to get back to positive territory, but down 11 points right now. bill, the market may be down for the week, but have you looked at apple lately? the stock is up 10% since monday. what a good week it's had. up next, we'll hear from somebody who says the stock is still cheap. and it's certainly tgif as far as the market is concerned. coming up, we'll discuss whether the pullback is a repeat of what happened in june when we quickly shot back to new all-time highs, or if this is actually the start of the bigger and deeper correction so many have been predicting. more of summer on the street on "closing bell" coming up. [ male announcer ] come to the golden opportunity sales event

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we're going to make apple cool again. to the misfits. the rebels. it's the people who are crazy enough to think they can change the world by the 1-2-2. >> i still can't get over how much ashton kutcher looks like steve jobs, from the new film "jobs" which opens tonight nationwide today. it's out. so is the word that samsung, by the way, may beat apple to

market with this smartwatch that we've been watching for from apple. samsung's could come out in september. so that's the latest bite that apple took after a week that saw activist investor carl icahn say he bought a large chunk of apple shares because he believes the stock is undervalued. and no sooner did he say that, than the company's market value spiked by nearly $13 billion -- that day alone -- and it's up even more since then. so is apple a buy now that it's back at 500 bucks? let's talk numbers on apple. on the technical side is ennis, and on the fundamental side tavis who covers the name for raymond james. ennis, what's the chart look like? >> we'll call it the three-year weekly chart. and we can see that apple actually built a very nice base over the last few months and it's rocketed higher. the problem that i see is that now it's into a very significant area of resistance, between $500 and $525, where a lot of trading

took place last year. and as we know, previous support oftentimes becomes resistance. i think apple's ripe for a pullback now that it's pulled back in that area. >> so you would not buy it here? >> i would not buy it here. i wouldn't chase it. >> what about you, tavis? carl icahn said he feels it's undervalued. do you? >> i do. we upgraded last month and ended up being well timed. it's less undervalued than it was a month ago, obviously. but the core thesis here is that apple does not have the volatility in its results that a lot of tech companies have, and we've seen a lot of stabilization in the trends this summer, certainly better than what the bears would have thought, and now we're coming up on a new product cycle. and that new product cycle holds the promise of reaccelerating revenue growth and improving gross margins. although a lot of the longer-term bear stories could ultimately come true. >> right. >> i think the next three to four quarters fundamentally

should be substantially better than the previous three to four quarters. >> but the buzz is more incremental than anything. the knock on apple is not enough innovation the last couple of years. what about that? >> i think innovation comes in lumps, right? they had the ipod in 2001-2002. then the iphone in 207 and the tablet in 2010, '11, so it's not every year they develop a new product category. to your point earlier on sam sing having a smartwatch, you know, there's been smartwatches out there for a long time. apple was not first to market with a smartphone. not first to market with an mp-3 player or a tablet. they come out with products that are opt imized for what consumers want and they've had a good talent of picking the right time to launch the products rather than being too early or too late. >> enis? >> i would say apple is undervalued below $450, but over $500, it's overvalued to fairly valued. >> all right.

thank you for your thoughts on apple. but you've seen the movie already, maria. what did you think? >> you know, i have. i thought it was terrific, actually. one thing i will say, ashton kutcher has the steve jobs walk down. i mean, that's all i'm going to say. >> right. >> when you see him walk, it's really -- it's actually like funny. we're with a big crowd over here, bill. everybody, who is going to go see the new steve jobs movie? okay. how many people in the crowd have iphones? how many have blackberries? all right. one, two. a couple. how many have android? couple. how many have something else? two people have something else. okay. so apple wins once again. and the samsung galaxy, that's one -- oh, a couple of those, as well. here we have vincent. hi, the iphone right with you. >> i do, absolutely. >> how many devices? >> one device. >> just one device. how about you, maria? >> yeah, i also have an iphone. >> one or --

>> one. >> uh-huh. >> b.j.? >> iphone. >> iphone. >> iphone. and, you know, a lot of people say that some people have more than one device. which is interesting, because that's -- people refreshing. did you refresh recently? are you planning on refreshing, in other words getting a new phone? >> you did. >> i refreshed last year, but i'm planning on refreshing this year again, see what apple comes up with. >> that's powering the company. thank you, everybody. thank you for participating. by the way, we'll be talking with guy kawasaki, he worked with steve jobs. we'll have him later in the program. we'll talk about steve jobs and think about what he thinks of the company today. we'll take a short break and be right back. more "closing bell" live from outside the new york stock exchange. >> guy's an old friend. he ran garage.com for a lot of years, looking forward to seeing him. the dow, meantime, toward the close, down about 7 points. as we head to the wire for the day, and for the week, will we finish with the worst week of the year? keep it here on "closing bell." the answer is just minutes away. stay tuned. 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. years ago the pop duo, the carpenters, had a hit song with "we've only just begun." is that a song we need to queue up for the market correction? jackie deangelis is here and she's looking at then and then the market today. over to you, jackie. >> reporter: i happen to love the song, maybe i'm an old soul, but that's the specific question, especially as we're watching the yield on the ten-year hit its highest level in two years. to figure out where we're going, let's see where we've been. in terms of the large-cap sectors, the worst performers are the utilities, telco services, the healthcare stocks. within utilities, pg&e has seen losses this month of nearly 7%, leading telco lower, century link, and also verizon. and in healthcare, regeneron and tenant healthcare seeing double-digit losses, but the news hasn't been that bad for all of the sectors. tech, materials, and also industrials, they have held up. apple, of course, leading tech

higher with a near 11% gain this month and dell up 8%. in terms of materials, cliff's natural resources, outperforming with a near 20% gain. will the recent losses continue, or is this it? is this the beginning of the big correction? on my online show on futures now, i spoke to mcneil currie of merrill lynch yesterday. he said yields could go as high as 3%, and with that shift will come more volatility for stocks. so perhaps brace yourself. >> wow, all right. thank you so much. bill? >> and as we sit here, we should lead jackie on. the market has been going higher. as we head toward the close on this expiration day. we'll see how things work out. we have more on the difficult markets. david rosenberg is chief economist, and i welcome you. where do we stand right now? if you were on the fed, would you begin tapering? is the market enough to take the training -- begin to take the training wheels off here, do you think? >> you know, you look at the stock market, you know, even

with the white knuckles, we're still up 16% for the year. so let's take, i guess, a broader-turn perspective, and even though bond yields have ratcheted up, i think 2.85 on a 10-year note, i don't think will bring the economy to its knees. i think that as far as tapering goes, the reality is this. when you take a look at the new supply of treasuries coming on stream, because the fiscal deficit in the near term is coming down much more dramatically than expected, so when you look at the flow of bonds coming on the market, if the fed doesn't taper soon, they'll be buying up a greater share of that flow of new debt issuance. so by not tapering, what they will do, i think inadvertently, is engage in a passive easing in monetary policy, which i don't think they want to do. so tapering is -- tapering is not tightening. perhaps the market's having trouble digesting that. tapering is not tightening. tapering in some sense is avoiding an easing in policy. there's another reason the

market is jittery right now. but tapering in september makes perfect sense to me. >> okay. >> david, let me ask you this, what kind of an impact do you think the beginning of tapering will have? i know a lot of people are overhyping the impact of going from 85 billion in bond buying to 65 billion. a bit. but if we're in an environment where we have a debt ceiling debate, we have a market sell-off, you know, we've got a new fed chairman announcement, and we've got, you know, unemployment, where it,7.5%, or just below it, is there going to be an impact, even just psychological, from the fed changing its stance in september? >> i think it's overblown. when i take a look and see tapering making front-page news every single day, there's got to be some other reason for what's going on. you know, back in april and may, we got to 1.60 on the 10-year note. and i think it was predicated largely on the economy somehow relapsing because of the fiscal squeeze.

that hasn't happened. there's been an adjustment in terms of bond yields in that respect. >> right. >> and we're talking about up thatt er tapering impact on the equity market, but nobody is talking about corporate earnings. this time last year corporate earnings running 8%, and now 2% year over year. guidance, as you saw out of cisco, macy's, walmart, and estimates are coming down for the balance of the year. >> yeah. >> so after you've already had a 16% increase in the market year to date, the normal positive year, more like 7%, 10%. you know, i don't know this has a lot to do with tapering. i think it's a pause in the action and a lot of it reflecting that the earnings backed up right now, maria, is probably mixed to negative compared to what people thought several months ago. >> all right. david, thank you. appreciate your thoughts on the economy and the marks today. >> thank you. >> you bet. 20 minutes left. dow hanging on to a slight gain here, maria, as we head towards the close. up three points on the dow.

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welcome back. a lot of action today. not too much change from where we started out. the market is quiet right now, back to flat on the session, after some pretty good volatility earlier on an expiration bill. >> yeah, ben willis from -- ben willis, let me start again, albert freed and company, is here with me inside. it's been very quiet. >> it has been. >> you think because it's august, or what? >> even bad by august standards for an expiration. nothing on the opening, which is usually when you will see the biggest impact. >> doesn't anybody need to hedge anything? doesn't anybody -- >> i would really think the movement we saw during the week, that we would have seen not many more stocks pinned to a lower

number, at least on the puts side. but nothing has come of it. i equate -- i think what we're looking at is the fourth quarter of a jets exhibition game. you have to cover it. but there's nothing much to watch. >> and you have the a team in -- >> exactly. >> maria? >> it's wiinteresting, bill, because i was chatting with bob here, i know it's friday, it's august, but you would think it would be busier because of the expiration. >> yeah, even here, the expiration on a good day will get 200 million shares at the open. we only did below 100 million. this even tells us the options market isn't that volatile. the thing traders are most worried about, they can't figure what the right yield is on the 10-year. they've been talking about it all week. we don't know where to be with it. the key point is next week we'll find out more. we'll hear from jackson hole, and even if mr. bernanke is not there, all traders want to know is tell us what the right level for the 10-year should be. >> how do we not know? the market is the market, right, bob? i mean, come on. >> i'll tell you why we don't know.

we have modest -- [ overlapping speakers ] do you think the yield on the 10-year is going up because they're expecting tapering earlier rather than later? i know you are. >> yes, absolutely, the yield is moving because of that. again, the markets tend to overreact. i think it will prove to be an overreaction to the initial tapering. eventually, we'll get above 3%. sure. >> but, ben, we have modest economic growth. 1.5% on the gdp. >> absolutely. >> inflation is below -- >> preaching to the choir. >> my heavens, if this continues, do you really think we should be north of 3% on the 10-year yield? i don't. but apparently the market seems to believe this. >> i think the market is heading to 3%, yes. >> -- components, what about the inflation component? >> the data we saw this week goes to the idea that there will be a tapering. now, it's a question of the degree of tapering, whether it's 5 million or 25 million in the first iteration.

they don't want us to believe it's a tightening. it's a natural tightening, but not as far as the 0% interest rate policy, which is what will keep the lid on the 10-year. >> or did the talk do the work for them? already the rates have risen. maybe the taper isn't necessary because rates have moved. >> they seem to be pricing in a really aggressive tapering, 85 billion, 65 billion. >> no way. >> i can't believe that will happen. not on this economic data that we're seeing. >> i agree with you. >> i can't believe -- i can't believe you're outside the new york stock exchange. we've never seen you like this before, bob. incredible. >> actually, it's just a hologram. the real me is locked in a safe inside the building. >> the real him is sleeping upside down in his closet. all right. thanks, everybody. we appreciate it. have a great weekend. ten minutes before the close, bill. we're flat on the session, fractionally weaker. >> that was a great picture. the dow in jeopardy of posting its biggest weekly loss of the year. we've been telling you about that. one money pro says this just means the stocks are on sale.

we'll find out why he's still bullish straight ahead. and then, believe it or not, the summer is almost over. is it really? where has the summer gone? >> it's not over yet. >> -- for the school year. we'll show you the hottest must-haves, back-to-school gadgets coming up on "closing bell." back in a moment. ♪

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heading toward the close here with nine minutes left in the trading session. the bias is to the upside, maria, to the tune of 220 million to the upside. it's expiration day. anything can happen in the last five minutes here. and the number to keep an eye on for the dow is 15,095. we're four points above that. if we close below that, it would be the worst week of the year for the dow jones industrials average here. >> so is this just a bump in the road or should investors expect more declines to come? joining me now is stephanie link, cnbc contributor from the street. and also with me out here is john buckingham from al frank asset management, joining bill and i. thank you so much for joining us. what did you think about yesterday's sell-off, stephanie? was that a reason to be concerned that there is further selling to come? >> i think that we are in a period of very volatile -- a lot of volatility at this point. we have to get through a lot of

things, not to mention that august and september are typically choppy months. so we have to get through the fed, some sort of decision. and the biggest issue to me is interest rates, right? the backup in interest rates and the velocity of interest rates. if it continues to go at a very high speed, i think we're going to see a -- we could see more pressure to the downside, certainly, because then you have question marks about the viability of the recovery. >> short term. >> short term. >> and, john, is that downward pressure continuing, you subscribe to the long-term value investment style of my old friend al frank used. do you buy on the dips or what are you doing here? >> oh, absolutely i'd be a buyer here. keep in mind that we've come up rapidly without really much of a pullback at all. and to talk about this week's activity, you know, yesterday was a 1.5% decline, and we're down, what, a couple percent from the peak. this is normal kind of stuff. i mean, we don't really have a big concern that we're heading south, especially given that we have -- don't see a lot of enthusiasm from the individual investor. i just don't see it with my

clients. we don't see it in mutual fund flows. we don't see it on american association of individual investors survey. i just don't see a lot of excitement and enthusiasm for stocks right now. >> for a long time, we were talking about the great rotation. all of the billions of dollars that have come out of the bond market eventually finding a home in stocks. are you expecting that? >> well, i think eventually it has to. valuations on equity, while they're certainly at the higher end of the historical range. when you're getting nothing on your money market fund, you've just lost money on your bond fund, you know, red ink in the bond fund, stocks are pretty attractive, especially when they're up 20% on the year, and you're getting a dividend yield of 2%, 2.5% on the portfolio. >> so, stef -- >> but what's interesting -- sorry, bill. >> no, go ahead. >> i was going to say, what's interesting about this week, in the decline, the cyclical stocks have actually outperformed. so the defensives, you would think in a decline, people are nervous, rushing for defense. they're not. it's actually materials,

technology, financials, industrial, all have outperformed. one of them -- one of the groups that did not perform is discretionary. and i think it's starting to get interesting, discretionary, because there's pockets of discretionary that makes sense. i think the restaurants make sense. i also think the homebuilders, home-related goods makes sense. that's where i think the apparel money is going to. i think people are saying, i've got only a certain amount of money, and i can't -- i really want to be doing it for apparel, and i'm going to go and focus on the home. and so, it will be interesting next week when home depot and lowe's reports to see if we get confirmation of that. >> a good look ahead. thank you, you two. appreciate it. >> thank you. >> we'll take a short break and coming back with the "closing countdown" after this. >> a good time to mention i'm in for larry tonight. so join me on the report at 7:00. >> excellent. >> i've done my job there. there we go. >> i will be there, bill. 7:00. >> i'm sure you will. a tale of dogs and cats. we love this story, except someone wants this dog to be a cat. [ barking ] a big cat. like a lion. ♪ the lion sleeps tonight

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average, and much of that decline was from yesterday. we know the numbers from cisco and walmart. that took the winds out of the sails there. the yield and 10-year, we're now at 2.85, now 2.83%, just off of that. allen valdez, why are yields going up, and are you less inclined to buy stocks if bond yields continue higher? >> you know, we still like the market. but i think the general public is less inclined to buy stocks, because they figure, why buy if the yields are going up? that must mean tapering is closer than 2014. >> even if it goes to 3% on the 10-year, will you still buy stocks? >> we still like the market. we think the market is a good place to be. even, with all of the minutia the last few day, the dow still up 16% for the year, s&p up 15%. >> retail was not a great -- >> no, that was discouraging, especially when you see it's main street that's really hurting. >> right. >> sure, walmart, you saw kohl's, you saw macy's, those are bad numbers. no doubt about it. it's the consumer slowing down, 70% of the economy is consumer

spending. >> all right. it looks like we'll go out below that number. so it looks like the dow will have its worst week of the year. [ bell ringing ] this week, yields on the 10-year going to a two-year high. more now on the second hour of the "closing bell," "summer on the street" continues. have a good weekend, everybody. and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo outside the stork stock exchange for our "summer on the street" series. we're having the market close unchanged, but it's the worst week of the year, this friday caps the worst week of 2013 for stocks. look at how we're finishing the day on this pretty tough week for the street. the dow jones industrials average down about 18.75 to 15,093. the nasdaq gave up 1.75, close but no cigar on nasdaq, it tried several times to stay