cheers. the california grape harvest of 2013 crushed the record, up nearly 7% from last year's record. that's something to drink to, everybody. see you tomorrow. and the stock market with a warm welcome for new fed chair janet yellen. welcome to "the closing bell" today. i'm kelly evan at the new york stock exchange where the dow is up 212 at this hour. >> yes, it is, kelly evans. i'm bill griftfetgriffeth. after a brief pause yesterday, the bulls are running. the dow is back above 16,000.

the s&p is back above 1800. the s&p is about 1.3% away from its all-time highs. >> the closing high was 1848. we have another day like today and we're back. a lot of people are going to be saying what happens to my correction? >> exactly. >> we have jim grant coming up. he'll be joining us exclusively. he's a closely watched fed follower. no fan of ben bernanke. what does he think of janet yellen and what she said and the market action which he described as completely manipulated by what the fed is doing in the first place. he will be here in just a bit. >> always look forward to jim grant's comments. in the markets right now it has been off to the races pretty much all day and it's one of those days where you haven't seen much loss of momentum as the day builds. the dow up at about the high of the day. we're just off the high of the session up 211, or 1.3%. this would be the fourth consecutive up day for the dow. first time we have seen that this new year. nasdaq up 1.1%, 46-point gain at 4194 and as we mentioned, the

s&p is back above 1800. we're up 21 points or 1.2% right now at 1821. let's get to our closing bell exchange to talk about this rally day with abigail doolittle from peek theories, bruce khan from sustainable inside capital management, steve sachs, rob stein, and kenny pocari. rob stein -- >> yes. >> is this pullback over? what's going on? what did you make of what we were going through the first month and a half and now it's off to the races again? >> yeah. well, we had a little minor correction and the economic fundamentals didn't fall off the cliff. it's a different time than it was last year and the years before. we've entered a period of visible risk and left a period of uncertainty. a pert of uncertainty, when markets sell off, you don't step back in. with visible risk, you're able

to comprehend and evaluate the risk you want to take and find a level that's appropriate to investing. the same thing happens on the upside, too, when it gets too rich. you will see a little more trading but people were looking at good opportunities. >> is it too rich right now? >> no, i think there's some more room to go. i think the expected return for equities is higher from here. >> steve, what did we learn today? the combination of janet yellen reiterating what we already knew to some extent at 8:30 in the morning seems to have helped throughout the entire session to support equities. >> i don't think we necessarily learned anything knew. it's a reiteration of what we knew. we might have forgot it in the last six weeks in the mini correction. the fact of the matter is the mark row economic drop back is solid. we have seen data that suggested we're softening a bit, but ultimately when you step back and look at the data, there's really nothing wrong with a 3.2% annualized gdp growth. it's not as good as the 4.2%

original estimate. you have to remember, the ten-year long term unemployment rate in this country averages 6.5%. there's a reason the fed picked that number to begin with over a year ago. so ultimately we didn't learn anything new today but it's a reiteration of the fact that the macroeconomics picture, the fundamentals, are still in place and the pause we've had in place is probably pretty healthy. >> kenny, you're skeptical of the rally. >> i am because it doesn't have -- it doesn't have the momentum in it. it doesn't have enough of the buying. it feels very much a traders market versus a change in mindset. you don't have that corresponding volume to go with it. >> but it came after what some could argue was a climactic sell-off on monday when we were down over 300 points on the dow.

>> we were really only down -- at the worst case we were 8% off the high. still not really considered a correction because we didn't get to that 10% point. although there were some stocks within the indexes certainly that corrected more than 10% and those are the ones that investors found real value in. for the broader market, the correction wasn't really a correction. it was a trading range, right. so, therefore, i'm not -- listen, it's great but i think we see the market kind of pull back again. >> bruce, where do you see value and opportunity in this market? >> we think that markets are currently getting increasingly nervous around stranded assets. those are assets that a lot of the fossil fuel energies are holding that are potentially going to be written down over time as carbon tax is put in place and policies around the world are starting to beef up their clean fuel standards. you really can see this in the balance sheets of big oil where they're starting to deploy more and more capital into research, development, and starting to convert that $2 trillion of cap

ex they have been spending into low carbon economy solutions. >> abigail, you'd been skeptical of this market as well. now we've seen -- we put together four consecutive up days for the dow. is this rally for ra he wieal? >> i think it will prove for noise, a relief rally, a bounce. i think it's cover-up for what is really going on and that is this year's shift toward safety, bonds, gold, and the yen. they have all been rallying right out of the start of the gate this year preceding the brief but violent pull back in stocks and those three asset classes still appear poised to be rallied. this tells me smart, early money does not like something somewhere, probably systemic, maybe an em, maybe even in europe at this point, and that similar to what kenny suggested, i think the real correction is to come. i think u.s. equities are going to follow japan and the emerging markets, and the real tell here, the bonds. the bonds have been telling the truth. follow the bonds. that's where stocks are going, and right now the ten-year is

still saying stocks will pull back more. do you agree? >> i do. >> what is it about the bond market, that the fed is tapering and yields should be going much higher than they have been. >> right. but i think that the bond market is telling you it doesn't believe it. it doesn't believe that the economy is going to be strong enough. therefore, ultimately what's going to end up happening, is the fed going to stop the tapering, start to initiate it again? i think it comes right back to the lows of where we were last week around the 1735 level. i don't think you're going to get that big, big correction a lot of people are talking about. i think it comes back and tests that level once again to see if there is real commitment there. >> rob, what would be the catalyst for an event like that? does there need to be one even? >> you know, i think it's structural weakness that's now become the norm, and i don't see the economic deterioration that would cause a substantial correction, and you're getting a lot of rebalancing. bonds and stocks needed a rebalancing in the first part of

the year so that's it. if you look at where we are from growth and inflation, i don't think that suggests bond prices need to be substantially higher. i don't think bonds are saying anything. i think they're trading in more of a normalized environment. >> bruce, what would you buy here? are you buying anything? >> we're long term investors and we're mostly looking at data that is indicative of the environmental, social, and governance performance of the companies. health care, technology, industrials, all these sectors are becoming more and more mature and the evolution of their strategies around environmental, social, and governance issues. we're looking at that as a proxy of great management and that helps us with our stock picking. >> do you like a name like cisco? it's about to report earnings. it's been a drag on the dow on a day when a name like goldman sachs is doing incredibly well. >> a lot of firms who have taken on the sustainability challenge are starting to see those gains. those companies who are laggards

on those factors, those issues get priced and they get priced down. so, you know, many firms who are now adopting mature strategies, they're starting to see the gains come from environmental, social, and governance performance that ultimately capital market will reflect that corporate behavior. >> reaping what they grow? >> something. there's a line there somewhere i'm sure. >> i'll think of it. >> thank you all. appreciate it. >> we have about 50 minutes left to go before the closing bell. we have a strong session again. the dow is up 215 points. the s&p 500 at this hour adding in the range of 22. >> as you know, janet yellen testified before congress for the first time since becoming fed chair. how did she do? steve liesman, larry kudlow, and rick santelli give us their score cards. i'm betting they're going to be different. >> might be some differences of opinion there. later, we'll get more reaction to her congressional debay when i'm joined by jim grant here exclusively.

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welcome back. new fed chair janet yellen on

capitol hill all day today. she's been barraged by questions from legislators and her answers generally indicated this is going to be all about con tin kn -- continuity. >> the market obviously like what had it heard but what about the group that's joining us. hang onto your hats. we have steve liesman, larry kudlow, and rick santelli. what a dinner party that would be. steve, you said yesterday you felt janet yellen wouldn't say much because the fed already had the message they wanted on the vets. how did she do? >> she did well in continuing the policy that's out there. i think she convinced the markets she basically owns the policy, knows the policy, an it's a complicated policy to communicate. i want to reiterate, are you taking a live picture because they're going to start again. this has turned from a hockey game to a football game to what is now a cricket game. i don't remember a time that a testimony of a fed chairman has gone on this long. i think we're probably into the sixth hour here today.

i think some of the highlights were that she set a pretty high bar for changing the tapering trajectory of reducing it by $10 billion saying that there would have to be a notable change in the outlook and not seeing very much at all in the emerging market crisis we had a few weeks ago. >> larry, you call her the empress of the doves. >> i do. let's see, #doveempress. that word continuity is all over the place. one add on real quick, john boehner, speaker of the house, announced today that the republican caucus will go for a clean debt ceiling -- >> we got to talk about this, larry. >> i think that's very significant. i think it really helped the markets today. i have more to say about yellen, but don't forget, a clean debt bill. >> a clean debt bill. what does that say to you? that in terms of the politics here, that the democrats had more leverage than the gop on this issue? >> no. it says that the republicans in

their caucus could not find something to get 218 votes. >> wow. >> it's that simple. they looked at the bailout of insurance companies, they looked at the keystone pipeline, they looked at cutting spending. they couldn't get 218 votes, so boehner did the practical thing. by the way, i think this takes some relief off the debt market approximat markets. >> absolutely. >> bond yields went up, stock prices went up. what did you think of what janet yellen had to say today? >> first of all, let's quantify something. since the close on the 5th before the four-day run, this being the fourth day that the stock market is up, and from that settlement which was, what, 15,440, we're up a boat load. on that day, on the 5th, ten-year note yields closed at 2.67%. so we're up 4 or 5 points on yield, a boat load on stocks. i think that says it all.

i think in terms of janet yellen, the reader coming in is where my position is, and i'm go over it real quickly. basically she gets an "a" because there's continuity, okay? where i come from, continuity from a bad plan to continuing that same bad plan doesn't barner an "a" plus. i would give her an "a" plus if she didn't have continuity. enough said. >> well, you know, rick is making -- i want to say this is going to be one of janet yellen's greatest days. she got big stock market reception, she got through her maiden voyage. she's a very smart woman, okay, yes, but to rick's point, this is a federal reserve five years after the emergency recovery that still has a zero interest rate and a $4 trillion balance sheet and $2.5 trillion of excess reserve. they don't know what to do with it. that's point number one. point number two, this is a fed that has no clear monetary rules. it's not a commodity rule. it's not a taylor price rule.

john taylor will testify this afternoon -- he's already submitted testimony, the fed funds rate should be over 1%. taylor believes, and i agree, that while the fed tapers, it should be preparing markets for an increase in the federal funds rate. it's coming out there and they should prepare for it. yes, steve. >> i would just point out rules are relative. compared to what? compared to greenspan, bernanke put in place a lot more rules than there were before. it's true they made the 6.5% unemployment threshold even squis squishier, but with a 2% inflation target and a lot of other things they have done, they have been much more rule based than they were before. there's still a long way to go, i agree with that. >> i have never seen, and i have been around this stuff for a long time. i even worked for the new york fed in the 18th century. i have never seen a central bank that wanted, quote, more inflation. i have never seen this before.

and i hope they keep their eye on commodities, on gold, on the exchange value of the dollar, all of which have behaved. so they have to tear away, but i hope they keep an eye on that because i, frankly, don't think average americans benefit from higher inflation at all. >> well, she was asked also about the fact that people aren't getting much on their savings. people who are trying to live on fixed incomes, and the explanation that she gave was, look, at a time when people want to save more than companies want to invest, low rates of return are going to be the norm and we're trying to get the economy stronger so you do earn more on that money. >> i'm not buying into it. you know, there's the people that donate to put the stimulus money in the system so we have regard corporate profits. we have a stock market near record highs, and all of those who saved, and i hate this line that is used so often, through no fault of their own, that should be the mantra for the "o"s and the teens. everybody has a say-so in the

outcome of their future, and i don't think that the federal reserve should have a $4 trillion balance sheet after going rogue then turn into a giant bureaucracy -- >> five years. >> the both of you guys complained for years -- >> five years -- >> for years you have complained about the possibility that there would be inflation -- it hasn't materialized. >> steve liesman, if you're honest, you will acknowledge that two years ago i acknowledged there was no inflation. i wrote about it. >> i acknowledge that. when is rick santelli going to join you on the right side of the aisle. >> all i'm saying is i have never heard of a central bank that wanted more inflation. let me raise another point, all right? stock market, great. profits are rising, okay? that's why i think it's good to buy the correction. profits are rising. but let me say this, you're going to come into the middle of this year, don't ask me exactly when, the middle of this year is going to start focusing on 2015.

i believe the fed funds rate must go up next year, and the stock market will discount that six months or so in advance. just think about that. profits are the mother's milk of stocks, but at some point the fed funds rate is going to do what john taylor wants it to do, and i believe miss yellen, who had a great day today, should start preparing the world for that moment. >> it's the mother's milk of the stock market because the fed is the biggest damn cow in the world! >> you and i disagree a little bit on that point. i think profits drive stocks. i don't think the fed is that important for the stock market. >> i'm thinking -- >> all i'm -- >> if it isn't, then, larry, you should give janet yellen an e-mail saying we're not targeting anything but the balance sheet. where we're at is where it's going to stay. it's not going to get any bigger and let's see what stocks do. >> i think they're going to have to. and i think they have to start taking cash out next year -- >> but, larry -- >> they have to shrink the balance sheet. >> we have to go, guys.

i'm thinking for larry, curling can't end soon enough on cnbc. >> i know. i want to get back. thank you both for having me. thank you both for having me. >> come back anytime. >> i appreciate it. >> see you later, steve and rick as well. you heard me say wow. they put the dow up and it's continuing higher. we have yet to see any stumble this afternoon here and we're at the highs of the session as we head toward the close with 40 minutes left. the industrial average up 223 points right now. >> also, look at shares of tesla. they have been on fire, up more than 30% just this year, and that was after a strong performance in 2013. the stock has now briefly crossed the $200 mark for the first time today. can shares keep shifting into overdrive? we've got a stock brawl on tesla coming up next. another monster storm is about to slam the east coast we are told and put a chill on valentine's day. how will it affect you and how you spend for said holiday? will you still be able to get those flowers on time or go out to that expensive dinner?

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well, did you know that some owls aren't that wise. don't forget about i'm having brunch with meagan tomorrow. who? seriously, you met her like three times. who? geico. welcome back. so it looks like new fed chair janet yellen's first testimony before i don't think is a hit with investors. it's fueled a pretty big rally here on wall street. the dow is up 217 points.

dom chu, which stocks are taking us higher? >> it looks like the traders got that bullish catalyst they wanted from yellen. green mountain continuing its strong run continuing in us that coca-cola had taken a big stake in the country. a strong day for regeneron. strong sales of its ilea eye care drug. on the flip side you have info blocks plummeting after they cut their second quarter sales outlook in part on weaker government business and a tough day for conagra, one of the worst performers on the s&p 500. it lowered its outlook for the full year blaming weaker than expected demand in the consumer foods unit. we'll end on tesla which topped the $200 per share level for the first time ever earlier. they gained 344% in 2013 and are already up north of 30%, kelly and bill, in 2014. back over to you. >> thank you. anecdotally, this is the stock

most people ask me about. >> yes. >> what about tesla? should i buy it now? should i wait? they're all -- because it is a stock that has fallen at times almost as fast as it has risen. so should you buy it at these levels around 200 sn$200? >> let's drawl it out. andrea james and zachary karabell. zachary is also author of "leading indicators." before we get to you, zach, andrea, i'm curious, at $200, how much more room do you think tesla has to run? >> my price target is $200, but it's not the end point for tesla. if you think about it, this company captures 5% market share of, say, the $40,000 car market. it can do about $2 billion in net operating profit which is about $15 a share. so you can put a 20 multiple on that, that's 300 bucks. >> okay. mr. zach karabell, author, you'd rather buy the car though.

you have to spend a lot more for that than for the stock. >> you would have to buy about 500 shares of the stock to do one of their higher end sedans, and, look, i have felt this way about tesla for a long while. you know, when we're talking about tesla when it was $150, around that, and then it went down to $110. now let's say you have been an owner because you believe in the story and i think they're an incredible transformative company, no issues, no and or buts, but it's an intensely momentum stock. unless you're a momentum buyer or trader, how many people are holding onto it when it drops 40% and then goes up 50%. it's like talking about netflix seven or eight years ago. an incredible company transformative and important but it's hard to ride that up and down and up and down when so many people are just trading it for the momentum. >> do you think the most volatile days for tesla are behind it now? >> i think that the stock will continue to be volatile. you've seen in the last year it's gotten a whole lot of

interest from -- everybody is interested in tesla, people who maybe even never bought a stock before are wondering if they should buy shares. you have to have an investment strategy to make money on investing in tesla, but it's one that i think people should be exposed to for the long term. >> and that's where i think -- part of the issue there is i think the stock could take many years to grow into its current multiple which means we could be here a year from now and it could be at $300 and $100 a year later if there's inevitable competition and issues just because of this astronomical valuation. >> but is 20 times a $15 per share estimate -- 20 times doesn't sound that aggressive. i guess that sounds like how much earnings power you think they have. >> it's not getting 5% of that market in the next year. >> let's face it, andrea, are you buying a car company or elon musk? >> it's everything. it's a car company, it's a technology company, it's the most innovative thing going on in auto right now.

i mean, it's sort of everything. and it's also a bet on what's going to be sort of the next big thing, what's transforming the way we live, and tesla is one of a few companies out there doing that. >> so, zach? >> but, again, this is one of these cases where i can agree 100% with that statement as a reality in the world -- >> don't you want to buy it for five years down the road? >> if this stock is going to go back and forth in a 50% to 100% range, that are other things you could be in with a greater degree of confidence than i would with the stock movement of this particular company over that particular time. >> all right. >> hey, zach, what's your favorite leading indicator? >> the ones we should all create for ourselves, the spoke ones, not the ones we talk about every day but you have to talk to me about the book and read it. >> don't give the ending away. we want to read it so -- >> my favorite is jobless claims. thanks, guys. >> thanks, andrea. nice to see you. appreciate it. as we head towards the final half hour of trade, the dow is

up 209 points. we're having one of the strongest sessions after yesterday's weakness, bill, since july of 2012 if you string the gains together. the s&p is up 20 points at this juncture. >> janet yellen told congress about the state of the housing market. >> the recovery in the housing sector slowed in the wake of last year's increase in mortgage rates. >> so is the housing recovery in jeopardy? when we come back we'll ask the chief financial officer of the nation's largest mortgage ora e originator.

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welcome back. if you're just joining us, rally mode on wall street. it will be the fourth consecutive up day for the dow. the dow back above 16,000. we'll keep an eye on that. that's getting kind of close right now. and the s&p back above 1800. that's the one the traders really watch, and we are about

1.4% away from an all-time high on the s&p right now, kelly. >> yeah. snap back if you have ever seen one. earlier today in her first testimony before congress fed chair janet yellen addressed mortgage rates and their impact on the housing recovery. here is what she had to say. >> growth in business investment started off slowly last year but then picked up during the second half. in contrast, the recovery in the housing sector slowed in the wake of last year's increase in mortgage rates. >> joining us for his reaction on that and a few other things to talk about with wells fargo chief financial officer tim sloan, who is also a member of cnbc's cfo council. welcome back. good to see you in person at the floor. >> good to see you, bill and kelly. >> do you agree? how do you assess not only her assessment but what do you think of the housing market? >> we would agree with her. we've seen a slow but steady improvement in the housing industry for the last couple years. it slowed a little bit in the

second half but affordability are still very good. >> is it all just because of the level of mortgage rates. it goes up another few ticks and things slow down again? >> the level of mortgage rates had a big impact on mortgage volume because of how it affected refinance activity. we worked through that refinance cycle, but in terms of what's driving the housing recovery, part of it is rate but part of it is employment. employment continues to grow. that's a huge driver. >> and hopefully that would be a driver ultimately of loan demand, the kind of back to basics business that a lot of banks are eager to be in. you're going to be heading to the financial services forum shortly where a lot of people are gathered talking about the prospects for the financial industry. do you think they are bright because it seems like all people want to talk about these days are the small peer-to-peer lending clubs that are popping up and growing fast. other finance opportunities. venture capital, for example. where does that leave a wells fargo, even as the biggest

player in the u.s.? >> it leaves us in fine shape. we have always had competition. we've been in business for 161 years. there's always new competitors coming in the market. that's fine from our perspective. it gives our customers the opportunities to make choices. they have been choosing wells fargo a lot in the last year. our consumer checking activity was up 4.7% last year. our loan volume on an annualized basis in the fourth quarter was up 7%, much greater than underlying gdp. we're fine with any sort of competition. >> if there were no overt regulation, extra regulation, however you want to describe it since the financial crisis, what do you think that loan growth figure would look like? would it change materially or is this an issue where you could do more if regulators would let you or that just reflects the business and demand for loans in this country? >> there's no question that the changes in regulation that we've seen have had some impact on loan demand, but it's a demand issue. it's not a supply issue. and so from our perspective, do we have a lot of regulations?

yes, we do. does it make the business a little bit more complicated than it has been? it does. but i don't think that it's significantly impacting loan demand today. >> speaking of regulators, new york financial regulators put the kibosh on a multibillion dollar deal you had with the largest mortgage servicer out there. is it dead now? and what do you -- there were questions about their treatment of homeowners and they wanted to look further into that before they were going to allow this partnership to go on. what can you tell us about that right now? >> well, it's in flux right now. they are a very good customer of ours. we have a great relationship with them. we're hopeful they're going to be able to work out any differences they have with the regulators. this wouldn't be the first time that the regulators have ever stepped in and impacted a transaction in a financial services industry. we're hopeful it works out, but if it doesn't, there are a lot of other buyers that are very interested in that portfolio. >> this is not a function of regulators being more aggressive than they were before the financial crisis.

are they overdoing it? have we swung too far to the other side where they're looking too critically at how you guys do your business right now? >> there's a lot of oversight today. there were also a lot of things that were done in the industry that were inappropriate in the last cycle. we don't think that we need as much regulation as we have today, but we have it, and we'll get through it, and we'll be fine. >> real quick, you bought back 5% of your shares over the last couple years. that's offset, as the journal is pointing out today, by stock issuance. how much more do you plan to buy back at this point? >> it's going to be a function of how the capital plan results are reviewed by the fed. that's going to happen in the next three to four weeks probably. we've made it very clear that we think more return to our shareholder as opposed to less is a good thing. >> and that's even without carl icahn giving you guys a hard time. >> that's correct. in terms of dividends and share

repurchase, we returned $11.4 billion to our shareholders last year. our plan we submitted asked for the ability to increase that in 2014, so we're hopeful the fed won't object to it and we'll be able to do that. >> always good to see you, tim. >> good to see you. >> tim sloan, the chief financial officer of wells fargo joining us at the new york stock exchange. >> we can only hope it's warmer in florida than it is here. there's about 20 minutes left to go before the closing bell. we're still holding in roughly where we started the hour with a gain of 200 points on the dow and a strong 21 points at the s&p. >> when we come back, more on the rally as we head towards the close, and this item that caught our eye as well. speedier checkouts for quick serve items coming to whole foods. the grocery chain making a deal with mobile checkout firm square. and after the bell, janet yellen making her debut as fed chair on capitol hill today. despite the market's positive reaction, not everyone is expressed. i'll speak with james grant for

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so it is four wins in four days for the major averages. >> courtney reagan has been spending the day on the floor of the new york stock exchange. what are you hearing? how much of this rally is about janet yellen. >> i know larry says this is about profits, i don't think so. i think this one is about janet yellen. the more she elaborates, the higher the stocks go. traders especially really like the exchange that she had between congresswoman maloney about tapering the taper saying, hey, we're not married to what we said. there's no preset course. we're going to pay attention to what the economic data dictates and what the financial markets reactions to those are. the s&p 500, yeah, we're having a pretty strong day here. look at this, we're up 21 points. correction, what correction? we're about 1%, in the range of 1% from a fresh high there crossing over the 50-day moving average. all s&p large cap sectors are higher today. the yield on the ten-year

holding pretty stead above that 2.72% rate there. kind of listening to the continuity in the message from janet yellen. i think that's something the markets really like to see there. continuity can be a powerful thing. volatility falling to a three-week low. yellen also noting she's paying attention to what's going on in the global financial markets, watching the volatility there. we know that things have calmed down, but i think the markets like to know she's paying attention. that was a question early on, if the fed would make any changes if financial markets around the world started to fall apart. as you can see, they have turned around, but i'm glad she's paying attention to them nonetheless. bill? >> all right. court, thanks very much. elsewhere, fast food is coming to whole foods and we're not talking about burgers and fries. we're just talking speed here. >> whole foods known as a green grosser making a deal with speedy payment service square. julie boorstin joins us with the details. julia, this could make a big difference for a company that often loses traffic because of long lines. >> and, kelly, this is going to make popping into whole foods

for a quick bite a lot faster. now whole foods shoppers will be able to use a square register or square stand to swipe their credit card or even just wave their iphone to pay at whole foods sandwich counters, juice, and toffee bars allowing them to skip checkout lines crowded with people buying groceries. this will allow whole foods to reduce wait times and serve more customers. the high end grosser is already using square stand which is a $300 ipad stand with a built-in card reader in seven of its stores and will now turn several of its whole foods locations into labs to test additional payments innovations with square. if square, which charges on average 2.75% per swipe, can snag even a tiny percentage of whole foods $13 billion in annual revenue, it will be a huge deal for square's bottom line. this partnership with whole foods follows square's big partnership with starbucks back in august 2012 to put its mobile payments terminals in 7,000 starbucks stores. square, which is valued at $3.25

billion back in 2012 when it made that starbucks deal, is expected to file for an ipo later this year. guys, this could really help. back over to you. >> thank you very much. we're heading toward the close, 15 minutes left in the trading session here. do you think we'll close above 16,000 today? that's the question for the dow. >> if janet yellen keeps talking. >> and the s&p is still above 1800. that looks like we'll be doing that. that's more important for the traders today. >> we want to take you to the close in what's been a surprising market lately. we'll be right back after a short break.

we know we're not the center of your life, but we'll do our best to help you connect to what is.

we got about ten minutes left in the trading session and we're starting to lose a little altitude. back below 16,000. >> that's it. it's light out. >> i spoke too soon. joining us is david seaberg from cowan and company. what are you guys talking about? >> it feels good. i'm relishing in the fact that i have told you to buy the dip. we're down 6%, we had our

pullback and i think people are comfortable with the fact of what janet had to say today. she was -- she addressed the jobs anomaly and said don't look into that too, too much. i think she was good at addressing some issues people had concerns with and they bought into it. >> what about the fact there's not much volume. people around here talking about that a little bit. we didn't have much volume yesterday and today you think now that we've got the news, people will come in but that's not really happening. >> we had low volume rallies all last year. >> this is the new normal. >> good sign. >> i think we have to get used to this lower volume compared to what? >> absolutely. >> anyway, we get caught in the weeds on that. does this continue or do we need a better pullback to weed out the weak hands here? >> we had the pullback. >> that's it? >> people were waiting for it, at least for the near term. it continues if we don't start to see the economic growth that janet was referring to today. at the end of '13 we were all convinced that we were going to

see the continuation of good economic numbers. we were derailed a little bit with the jobs and ism numbers. she addressed that a little bit today and said don't look into that too, too much. we have an economy that's gaining momentum. if we don't see the numbers start to come together, i do think you can see people back off a little bit. >> and just as importantly perhaps she also said that she didn't consider this market -- i forget exactly how she put it -- but overvalued. anyone who thought she might be more concerned about macroprudential could relax. >> do you want to hold that there is a second? thanks. >> you another know who you're going to see on the floor of the new york stock exchange. paul rogers the lead singer with bad company all those years and he's here promoting a new cd out called the royal sessions. are you here to -- in the mood to make some money today? >> well, you know, always in the mood to make some money. actually what i'm here for is to bring some memphis soul to the heart of wall street for kids'

education. so will you have this -- >> is this part of the foundation that's for that purpose or how does that work? >> we made it in memphis and all the proceeds will go back sto stacks academy of music for the kids. he made it because we love this music so much and it's given me so much. so want to give something back. >> obviously a labor of love there. so do you think that janet yellen should continue the taper for the federal reserve? >> yeah. >> yeah, okay. >> a good idea. >> have you ever rang the bell at the new york stock exchange? >> i think this is the first time. >> you're in for a real treat. everybody is excited to have you here. i know they're going to want to get you up to the balcony so you can get the ringing done. >> thank you. it's a real honor to be here. >> we will be listening at 4:00 p.m. so will all of our viewers. looking forward to it. >> it will be a treat. he will be singing right after the top of the hour. paul, good to see you.

>> good to see you. >> thanks for joining us. paul rodgers of bad company. it's called paul rodgers, "the royal sessions." >> it's the songs that inspired him. >> i just happen to have a hand held mic in case that happens. we'll come back with the closing countdown. >> after the bell fed critic jim grant explains why he says investors can't trust this market. valuations affected by the fed, why he feels that with either ben bernanke or janet yellen at the helm, this is a problem. you're watching cnbc, first in business worldwide. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com.

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coming up on the four minute mark here, and i don't know, doesn't look like we're going to finish above 16,000 on the dow. we keep looking at this weekly chart of the industrial average. again, we don't see that 300 point decline of a week ago monday, but we sort of bottomed out at the 15,400 range. we've been climbing ever since and in that time the dow is up 3.5%. that's pretty good period of time over this four trading day period. the four consecutive up days. as for the yield on the ten-year, there's been even more volatility there as you can see over the last -- since last wednesday or the end of trading on tuesday, and in that time if you can put it in these terms, the yield on the ten-year has

gone up by 4.4%. so the dow is up 3.5% but the yield on the ten-year has gone up even more, terry. what do you make of this rally we've been in here? is this for real? >> i think it is to a large extent that we expected some kind of decent sell-off in january. >> 7%. >> 7% was a little more than we thought. what we're looking at now is a little more technical damage than i thought in terms of moving averages and things like that. what happened overall is positive for investors to have an opportunity to get back in but i don't think it's back off to the races yet. i think we'll have to do a little work between 15,700 and 16,000. i think you'll see the s&p 500 need to do a little work around the 1800 level before we move higher. but all decent entry points for investors. >> you're not ready to rush back in is what you're saying. >> we've been buying the dip. that was our mandate all along. we got some better prices than expected and we got a little fear inside some of that buying

towards the end. when they turned around, we all got a sigh of relief and it's a decent time to bail out of some of it and take a second look as we do some more look at the lower levels or middle range levels. >> some technicians are watching gold right now and it's coming back. >> i'm watching it, too. >> almost at $1,300 and there are those who feel that could have a negative impact on the stock market at some point. >> i'm beginning to feel there's a disconnection between them as gold trades a little more like a currency nowadays. you got countries that are inventorying gold and continue to do so like china. just in the paper the other day. i'm really looking at them as being independent, and i actually personally believe gold is going to take a hit below 1200 into the -- as we move into the second quarter of this year and confidence builds with the u.s. markets. >> so you wouldn't be buying gold at these levels. >> i would never buy gold -- >> i know, but in terms of your opinion. >> i think gold goes lower. >> the debate on the floor has

been was this about janet yellen or was it simply the fact that the congress house is going to vote tonight on a debt ceiling bill that has no conditions attached to it which is a big victory for the president at this point assuming that this thing passes? we won't have to worry about the debt ceiling for another year here. >> well, i think it's more of a situation where the markets are hearing what they wanted to hear from yellen. they wanted some reinforcement she was going to be somewhat on the same page as they originally read. the market welcomed that. i think she's intelligent in her approach and that's what the market is looking at right now. the debt ceiling was kind of a given. we knew the republican party couldn't risk the abyss again. we knew that that was going to come. so that was kind of built in. i think the market right now is a little exuberant over the fact they see somebody that's going to continue this policy. i still think we're in for a little more weakness. >> good to see you, terry. >> pleasure. >> thank you for joining us.

we're going to go out off the highs of the session. still a decent rally continuing. first four-day gain we have seen for the dow consecutively in this new year. stay tuned now. we want to hear what james grant, one of the firercest fed critics has to say about janet yellen. i'll see you tomorrow, kelly. thank you, bill. welcome to "the closing bell." i'm kelly evans. with stocks posting their first four-day win streak of the year, the dow putting up 189 points -- we knew that was about to happen. paul rodgers is here in the house. he, of course, of bad company fame. we have some background vocals here. some mood music, if you will, as we digest these markets. let's listen to paul for just a moment. ♪

>> all right. again, that's paul rodgers, and he'll be entertaining people on the floor for the next moment or two as he brings out a new cd. i believe -- we'll just press on. we'll carry on, guys, and try to talk a little bit about this market today. not that we don't mind a little bit of a concert, but dr. j, can we call it a bravado performance for the markets or janet yellen today i guess? >> well, it was a fabulous performance by the market and by janet yellen today. as you said at the top, kelly, that's what people are worried about, was it going to be real or was it going to be exactly like bernanke? now it is, that she really nailed it. she stuck the landing. that's why we're up so strong today, kelly. >> all right. >> the markets wanted a female version of ben bernanke and they got it today with janet yellen.

she said exactly what everyone wanted to hear and the market rallied. >> kate? >> i have to agree. i mean, obviously the market hates a negative surprise but they love a positive one, right? so there was some uncertainty about what yellen would say, what tone she would strike. we talked about this last week, would she make a break from bernanke? the data seems a little murky. i was in a meeting earlier with a cfo who said we learned to not read too much into any given month of economic data, and i think she's taking that kind of thinking into account. >> carol, sorry, what were you going to say? >> i think this music is apropos because it's almost like the party continues. janet yellen is the keeper of the punch bowl. the revelry will still continue and all the partiers are like party on. which makes me concerned but apparently all the other investors love it. >> it was interesting to look at the moves in some precious metals today. the dollar weakening. how much further does this move

go do you guys think? >> i'm having a hard time hearing you, but precious metals, that was a real head scratcher today because gold was up so strong, kelly, and it's been up -- that's the outperforming sector all year. it continued today despite the fact that miss yellen said tapering is on and it's going to continue. >> what do you make of that? >> i think it might have just got sold off too hard. >> i think there's something to that, and if you talk to people who invest in gold either through the etf or the commodity, they would tell you it's close to enterprise value and on a fundamental level it may be just too oversold as john was saying. maybe there's some legs there even when the stock market is doing well. >> a tale of two markets and a tale of two investors. there are those who believe that there's going to be the taper. there are those who think that the party is going to continue, and i think you're seeing that bifurcation in the different levels we're seeing today. >> all right. i also want to bring in allen

valdez -- i'm sorry, tim seymour is the joining us from "fast money" fame. what do you make of the market? >> people have brought up the fact extreme positioning was at work. we had two, three standard deviation events in riskier assets for sure. i think janet yellen today gives a little more certainty to fed policy, and that's maybe a difficult thing to say, but i think she hit it down the middle of the fairway. to the doves out there, there is some sense that they could breach the inflation expectation, could breach the unemployment requirement, and that means that the fed may be around for longer than people think. but people freaked out a week ago on no change in fundamental data in my view, and that was based upon mostly extreme positioning and people being concerned about emerging markets. they don't invest there, and that's a problem. >> i think that's interesting. we saw some news today, perhaps one of the first casualties of the recent volatility, that brevin howard fund that managed

about $2.5 billion and is closing after being down 15% last year which as far as i have seen is probably the worst of the major hedge fund companies in em. they had a soft january down about 1.5%, but that's not terrible given what's happened in the world with a number of currencies. i'm wondering if that market is going to stabilize a little bit just from my anecdotal poll. investors seem jittery and even some sovereign wealth funds lost money. >> a lot of people lost money. i think this is a great time to raise funds for an emerging market fund. brevin howard is one of the best in the world. seeing fund outflows, a lot of the big guys sometimes are atms for fund flow that is are uncondominiumed. there's a lot of momentum money that at times think it's great to own emerging markets. >> i think that's one of the

concerns we're seeing. a lot of traders are telling me today was a bungee cord move back up. that kind of snap back, that kind of volatility of a snap back, that's got some people worried. if you think about what's changed over the past three weeks, what has changed? the fundamental picture is still being questioned. there's still a lot of big earnings coming up. a lot of people are concerned a little bit, are we snapping back too quickly. >> let's bring in allen valdez joining us on the floor from dm e securities. what about the speed of the snapback? >> i think this whole year will be total volatility. i agree, it is a snap back. but we were overdone on the sell side a couple weeks ago. so now it's just that normal snap back. but we're going to see this volatility continue all year. anytime you get news or data, this market is so driven on news and data it just throws it to the extreme all the time. >> wait a minute, but shouldn't the market be driven by news and data. >> what market isn't? >> it is but it goes to the extreme. we're off 200 points, basically 192 points. years ago we would have never saw a move like this in one day.

now you see these moves constantly in one day. >> although the market is now valued at 16,000 -- or the index is at 16,000 and years ago it would have been in the low thousands. >> it's time to buy volatility. this is a great opportunity. you look at what markets have done over the last five to ten days. that tells you when vol is dipping lower, if you believe 2014 is the market you said it's going to be, you want to be owning vol here. >> three or four years ago the fed was not the key fundamental, right? we weren't so laser focused on what central banks were doing here and in other countries. whereas now it's crucially important. >> you could actually make sense of the news. that's the problem. it's news driven but we can't make sense of the news because when unemployment numbers go down the market goes up. we will continue to sow that volatility throughout the entire year. >> what about in terms of the action on the buy side, the talk about the volume a little bit. people were saying, look, maybe there wasn't a lot of volume today but as bill suggested last

hour, maybe that's just the new normal. >> i think it is the new normal because last year we saw the volume never got busy upside or downside. the down sooird we saw a little more volume but not much. the upside we never saw any volume. but that is the new normal. again, i'm going to stress, i think we will see volatility the whole year and i think it's the thing to trade. >> and we're looking again across some of the other asset classes. it's not just the equity markets which responded positively. we're also watching the bond space where that's last hour when we were talking to some of our commenters you a the top of the three, they were saying we're worried because we feel like the bond market is the smarter guy in the room -- >> i concur. >> it's sitting at a level of 2.7% and that correlates to a weak economy. >> i never bought into all the quantitative easing. if you look at the fundamentals of what's going on in the economy, it is very sluggish at best. i don't see any catalyst for growth. we're really at a point where we're not going to be able to squeeze much more out of profit

margins. that means it's going to be hard to financially engineer these earnings over and over again. companies have not made the investments to drive growth. i do not see the obvious catalyst for growth. i don't even see a nonobvious catalyst for growth here. >> speaking of earnings, we have a lot of big earnings coming up. we're 75% through but we have big names. walmart, hp, priceline. all these big stocks which we heard some not great news from. they're going to be coming out with earnings and investors will start to question the fundamental picture. is the recovery there. >> if you look at big tech or old tech and also some of the more consumer focused names, those have been weak spots. i think concern areas for a lot of people. could be an important tell. >> yeah, and a lot of people are actually becoming very, very focused on performance after these earnings. only about 53% of companies now have responded positively to positive earnings. that's down from 58% over a five-year average. so it shows you investors are

getting choosey and picky. they want to see real growth, not just a broad line earnings beat or revenue beat. >> thanks, everybody. olympic curling is coming up at 5:00 p.m. by the way on this channel, but get your second screen ready because mr. tim seymour and the "fast money" freestyle will be streaming live on fastmoney.cnbc.com and that also starts at 5:00 p.m. our reporters from the new york stock exchange, the nasdaq, and the chicago merc chiming in on whether this rally has legs. and in terms of staying the course, federal reserve chair janet yellen saying the central bank will keep taking its foot off the stimulus pedal even as the job market recovery looks, quote, far from complete. jim grapnt grades her first public comments since becoming fed chief. that's all coming up. you're watching cnbc, first in business worldwide. out there... in here. 1-881 tdd#: 1-888-648-6021 out there, tdd#: 1-888-648-6021 there are stocks on the move.

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welcome back. this is the winter that started early and now seemingly is never ending. another huge storm impacting much of the country and our economy, by the way. weather channel meteorologist chris warren tracking the storm that some are calling historic. haven't we been here before, chris? >> well, we have, but this

doesn't happen too often, when you get the potential for a major ice storm. just a couple weeks ago it was snow for much of the south. now we're adding in the ice, and the impacts with the ice and the snow from texas all the way up to new england, almost 60 million people potentially impacted. a big, big issue will be the ice happening tonight and tomorrow. greatest risk here from east of atlanta all the way up to raleigh, and here this could be significant with power outages potentially lasting for days. and that is likely for parts of georgia into north carolina and even as far north as virginia. snow, around a foot in the appalachians from north georgia all the way up into maryland and pennsylvania, and then this storm rolls up into the northeast. there could be in the inland locations 8 to 12 inches of snow, a food of snow will be possible. it will be tricky though, where that rain/snow line sets up from d.c. to new york, could be a couple inches, maybe wet roads,

or could be a few toself inch s search shch several inches. >> can you tell us when it might hit. it seems both the amount of snow and ice and the timing of the storm continues to change every time we check. >> well, right now it's going on in dallas. it's going on throughout parts of louisiana, northern louisiana, and then tonight overnight while most people are sleeping in the southeast, that's when it's going to get bad. so wherever you are at midnight tonight, plan on being there for a couple of days. >> geez. >> during the day -- yeah, seriously, this is a big deal. wednesday night and during the day thursday into friday, that's when we will see the snow moving into the northeast. >> all right. we're going to bust out the sleeping bags at the stock exchange. thank you very much, sir. appreciate it. another big one. bringing it back to the markets, the dow posting its first four-day winning streak of the year. dominic chu, lots of lovers today. >> i have to find my sleeping

bag, kelly. goldman sachs is leading the dow higher. it had its best day since december of last year. a nice move for goldman sachs. also cvs caremark moved higher. two companies gained ground on a drug deal. cadence pharmaceuticals surged after they agreed to be acquired by a specialty pharma company for $1.3 billion or $14 a share. now, a tough day though for the animal sciences company. gave a disappointing outlook for the full year. we have also got a slew of after hours earning reports. we'll bring you the details as they become available. >> let's get more on today's huge rally. the panel is back with me. courtney reagan also joining us from the new york stock exchange, seema mody at the nasdaq and rick santelli at the chicago mercantile exchange. a huge day, dr. j. a lot of people are saying too far, too fast. >> disagree.

disagree. and i think the point that you made about when you're at 16,000 or thereabouts, 200-point move is not a huge move. a 200-point move on a 5,000 point index is a big move. up here, not so big. the fact that the market doesn't like what it doesn't know when there are uncertains out there, the market gets nervous about that, that was the jobs report last week. that was janet yellen today. now we know about both t, the storm clouds moved. >> i think what the market liked to hear and what you all have been talking about is the continuity in the message from janet yellen. not too much of a departure from her predecessor ben bernanke, so there is sort of quelling a bit of that uncertainty as dr. j was just suggesting there and that's what the market liked and it was interesting, the more she elaborated, the more comfortable she was explaining her position and what the fom c is thinkic i the higher the stocks moved. as far as if it's too far, too fast, time will tell.

>> what about over at the nasdaq. we started the year with the indexes behaving very differently but lately the action has gotten -- everyone seems to be on the same page. >> now the nasdaq is back in the green for the year. the nasdaq up about 0.3% year-to-date. earnings continue to be the big catalyst for technology. you're talking about f-5 networks, facebook, all these companies are up double digits thanks to better than expected earnings. the technology sector has had a nice run. with that said, brian marshall says i.t. budgets slowly are increases and valuations are seen as attractive and many more tech companies are becoming more shareholder friendly. more of these companies upping dividends, issuing buybacks. >> rick, it's almost the blink and you missed it sell-off though. >> well, you know, i think when it comes to treasuries, i still think there's a big disconnect here. treasuries aren't really caring much about continuity.

think about the last four days you referenced. 550 points roughly in the dow answered by five basis points in the ten-year. most of those were today. 10:00 eastern when the stock market was 150 appointments lower than it closed, we were at 2.71%. we had basically one basis points for those 150 points. think about that. i think it speaks volumes, and i also -- >> rick, what does that tell you? which side of the move then -- if i were just to take my cues from the ten-year, mr. santelli, does that mean that the move up i should have faded or does that mean the move down -- like, i don't understand where that leaves us relative to where we were a couple weeks ago. >> well, i think where it leaves us is the stock market could have a big bounce. it doesn't mean there's a economic bounce around the corner. i think the treasury market is most responsive when stocks are going down. if you're a believer that the job reports, the retail sales on thursday aren't going to be barn burners, then i think the bond

market has it right and look for a little give back in stocks which would promote the buying which is what's most responsive in the treasury market for 2014. >> and i think that's a really important point because a lot of people now, yes, we have the veil of uncertainly gone now that janet yellen has given her testimony. but the question is how do you put january in context? was it just animal spirits as one economist told me. just all these emerging markets concerns are gone in no, those issues are still out there. >> it's a ging of things. foul weather slowing everything down, creating some literal uncertainty in terms of getting to work and productivity. then you had a feeling that perhaps the market was overbought and valuations were overzealous and we were due for some sort of correction. that's something i had been hearing from january 1st basically, not to mention the currency weaknesses. granted they didn't amount to a ton of global market share, but there were enough data points to make people feel nervous. >> i'm curious, because you had mentioned at the beginning of the year people calling for 10%

to 15% correction. we had a max of 7% at the lows last week. does that change the view of the folks you're talking to or do they feel we're just the eye of the storm? >> i think they're sort of medium term bullish. i think they'll think we'll have a good year, not a 2013, but a good solid year with maybe a more than 10% rise in the stock market, and that maybe we're past this blip. now, who is to say, right? the folks i was talking to were saying they expected to see 5% to 15% correction in february and/or march. so there could be another blip to come certainty. a lot of people are expecting a more volatile 2014 in general. >> i think that this is -- coming way too -- back too quickly. i would have liked to hear from rick santelli. i assume e agrees with me -- >> just as a general rule. >> this is a chicago thing that rick and i have going on and a common sense thing but i think qe at this point is not helping the economy. it's actually hurting the economy. it's creating a disconnect.

it's creating a reason for companies to not put people back to work long term. that is a bad thing. even though it's a good thing in the short term for wall street. long term it's a bad thing for wall street and main street. >> last word, rick, briefly. >> i completely agree. i think what we need to do is get back to basics. if continuity means more of ben bernanke and more qe and unknown whether we're actually going to taper, i don't believe that's a good thing. >> thanks very much for joining us this hour. a lot to digest as we look at the big move in markets today. facing the fed, up next, jim grant will speak with me exclusively. we'll talk about janet yellen's market boosting testimony, fed policy generally, and your money. don't go anywhere. [ male announcer ] the new new york is open. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan --

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welcome back. we've some earnings to get through. dom? >> let's start off with an earnings-ish type story. procter & gamble will lower its 2014 guidance due to currency fluctuations. you can see their stock is trading off a half a percent. they think some currency exposure to venezuela may have an impact. also an earnings story per se. fire eye out with his fourth quarter results after the bell. posting a narrower loss than the street was expecting but the stock is getting hit after it lowered its revenue guidance for first quarter. fire eye shares down 5%, 6% in the after market. back over to you. >> thank you. fed chairman janet yellen giving the market a boost. the dow is up 192 points as you

can see. this after confirming the fed's commitment to a gradual taper, some confidence in the economic outlook, and continued low rates. she also raised concern that the labor market recovery is, quote, far from complete. let's get reaction to all of this with jim grant from grant's interest rate observer. a critic of the fed joining me now exclusively. jim, first of all, thank you for being here. >> you're entirely welcome. a pleasure. >> secondly, what did you make of the comments today from janet yellen and the market's reaction? >> well, she missed one thing. she neglected to tell us that the fed is continuing on this unprecedented exercise in price control. janet yellen is meant to be more plain spoken than her press ses predecessors but a spontaneous expression of her intent would be as follows, what we mean to do is to continue to nationalize the yield curve. we want to make the federal funds rate a government rate as we have, and we would like to enlist the stock market in a program of wealth for the security holders of america. that would be the essential

program in plain english. the fed has in its 100-year past manipulated interest rates before but never before now has it treated the stock market as if it were a lever of national public policy, which it is doing. the fed has its thumb on the scales of our finances. >> and certainly they would point to that and say, well, i'm sure in the back of their mind they think a higher stock market, it all moves in the same direction, right? they don't have to pick and choose. >> they call it the portfolio balance which sounds better than manipulation. >> you're talking about the bench mark rates the fed sets. we know all debt trades on the open market. we know the fed is a big player there, but the influence they've had even going into last year when they still owned a big portion of our debt is clearly still overwhelmed by the broader impact of the market. when people are worried, for example, there's going to be massive change in the taper or rate picture. so while it's clear they are setting the price of the benchmark rate, the other rates

still fluctuate according to where market participants see them and see the future. >> it's a kind of a dance or a duet. there's a market and there is the fed, but as long as the fed promises zero funding costs, what you find is credit spreads getting very tight. what you find is a great euphoria settling over almost all of the so-called risk credit markets, whether it's sovereign debt, whether it's corporate credit, whether it's bank debt. there is a terrific -- there has been a terrific rally in the prices of all these securities and the fed does not control them, but it heavily influences them all. >> so you wouldn't touch bank debt here. >> i'm not sure about that. it's an excellent way, kelly. here is one line of sight. i would submit to you that biotech is the most worrying portion of the stock market, not to be sure the people who were

long and have been long and have been mining money from this, but people will say the stock market might not be cheap anymore. it might be on the upper edge of fairly valued, but they say there really is no sign of speculative excess. they are not looking at the 700-odd-billion dollar segment. the biotech segment is plain wacky. by every indication, ipos. if the market is open, biotech goes up. that's the rule. of all the markets that ought not to be connected to the fed ought to be the quite specific and quite scientifically based earnings power of these developers of -- >> but we do see that. because day after day we will talk about stocks that have moved up 800% if they have a drug that's approved or fall 50% if they have a drug that's not. >> or not fall if they have a drug that's kicked out -- >> or some of those, too. >> you're only at 50% if a drug gets rejected. >> what then do you see --

what's an investor to do? if they say, jim, i see the world the way you see it, i have the same concerns you do, but do we all have to hold our nose and be fully invested bears or look to gold which has not been the best investment -- >> it has not been is exactly right but it might not be indicative of the next 15 months. i'm a seemingly a genetically inclined gold bull. i do like the stuff. but i like it specifically because it represents an alternative to the regime of our central banks. think of gold as bit coycoin wit an algorithm. i say janet yellen has embarked on -- >> if it's a reciprocal of their faith in janet yellen -- >> indeed. >> the reason why it's attractive is it's something that's independent of the fed. >> it is an alternative monetary asset and to the extent people

lose confident in the unsecured fiat issuance of central banks the world over, they will come to gold. that is one thought on investing. we have been since late 2008, grants has been fairly constructive on -- certainly on credit and on many equities as well. we had our gala winter whisk issue. more characteristic of our reputation we are on the bearish side. we think there's more risk than prospective reward as things are now valued. >> on that point where in the cycle then -- it sounds like what you're say something we're approaching the late phases -- >> i guess i have been known to be early. i'm not sure this is a late phase. we think it's increasingly a risky phase, and we find also we tend to do our work from the bottom up rather than from the top down. we're finding much more interesting ideas on the short side of the equity market than we are long ideas.

there's always something to do long and short, and if you would asked me decades ago what the future held, i would have given you an emphatic answer. as it is so many birthday candles, i have become rather humbler in the face of the future but we're finding a lot more interesting names on the short side. >> are you shorting biotech? >> i'm not that courageous. we have journalistically shorted -- >> journalistically shorted. >> no margin calls. >> hope to have you back very soon. jim grant. a massive winter storm heading east just in time for valentine's day. we've been asking you to tweet us and let us know if this blizzard will put a freeze on how you plan to spend or how to celebrate the holiday. @cnbcclosingbell is the way to reach us. is mexico a better place to invest than the u.s.? don't scoff. we'll talk about that right after this.

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welcome back. one of the top stories so far this year is emerging markets and the way they have take an hit but that's not stopping mexico's finance minister from the being optimistic. he says mexico is still one of the world's bright spots. here is, in fact, what he told me.

>> all emerging markets currencies have been hit over the past few weeks, but keep in mind for the last 13 months the peso is only down 3.5% whereas other currencies like the currency of indonesia, turkey, or south africa are down more than 20%. even brazil is down 16%. the markets are treating mexico differently. that's based on mexico's stronger fundamentals and an aggressive reform agenda that's pro-growth. >> so should you be investing in mexico etfs other kinds of mexican based investments? joining me is anthony scaramucci and also with us, john spellenzoni, and it's great to see you both. anthony, first to you. how much opportunity is there in mexico and, you know, people have been so bullish. do we need to worry that there's too much optimism about how they're doing? >> kelly, i think the main driver is still the fed and where the tapering is going to be. most of the emerging market countries are going to be

dampened by continued fed tapering. mexico has a lot of great things going for it. i had the community to see that speech in davos a few weeks ago that the president of mexico made. very pro-business, very pro-reform. you're going to see more foreign energy investments there. it's the first time in 50 years that people will be able to do that, and they have the best credit rating now or the second best in latin america, second to chile. so good positives there, but you have to be worried about gdp numbers because if you look at production and manufacturing, they're down a little bit. february 21st they're going to announce gdp. my guess is it's a little sluggish, less so than they had expected. so i would be cautious here in mexico and most of the emerging markets. >> john, what is the best way for investors then, if you agree that there is a longer term story to like here, how do you play it? do you play it by buying mexican etfs or play it by buying oil and gas majors, for example?

>> i think there's a lot of companies obviously in the united states that are going to benefit with mexico doing away with their basic monopoly and hoping it up to foreign ownership. that process was a 75-year closed market just starting to open up now. that's going to take a little bit of time to get people on the ground, do some tests, see what's going on, you know, chevron obviously a big player. exxonmobil, the big boys. today we saw energy in the united states really have a big move and i think that was because of the lmg move today in terms of the fact that the canal possibly export lng along with -- so i think those are some of the positives that we see. i think short term obviously they raised taxes in mexico. that kind of hit their economy a little bit. but because they raised taxes, moody upgraded them to "a" status. i think that's a positive. >> so how do you play it? do you like the etfs here? >> well, i think that you could -- if you have to have exposure to an emerging market,

why not mexico? it's close. i think the etfs are a way to play it. you could play it through the u.s. majors. they're all going to be there. they'll increase their drilling capacity. exxonmobil, chevron, all those companies that have to do with oil infrastructure and have to partner with companies down in mexico. that's a way the united states will be able to benefit if we do not do away with the jones act. those majors operating in mexico could export through mexico. >> anthony -- >> that's a big positive the market is coming to grips with. >> okay. so what about you and what about the performance -- i think it's. mww, one of the biggest mexican etfs. you have a couple things to worry about, their growth prospects, pretty high expectations there. and also what happens with the currency which even though it's done better than turkey and indonesia is still off year on year. >> well, but i do think that -- john is referencing the tax

increases will certainly help as it relates to the credit side and also to the currency, but my big problem is what's going on today, kelly, and that's janet yellen and the direction of the fed. ultimately, unfortunately, over the next quarter or so, most of the investments in the emerging markets will be driven by the fed. i appreciate what the finance minister is saying. he wants to decouple mexico from the rest of the emerging markets but i'm sorry to say i don't think that's going to happen. so more continued fed tapering, i think mexico is going to, unfortunately, be on the bear side in the near term, but i do love the long-term prospects because of what they're doing in the government. >> at what point do you get involved? do you wait for the equity market to sell off there? what entry point then do you look for? >> i think the best recommendation would be let's see where the fed is doing to be in six months. there is certainly a positive bias to mexico and the government there is certainly helping. if you're a long-term investor and you got to pick an emerging market, i agree with john that

that etf is probably a good one. i'm just in general cautious. i'll tell you, two weeks ago a viewer in davos with us, kelly, you would have been worried about the emerging markets. we met with the indonesian finance minister, the mexican finance minister, chile, everybody is concerned about the same thing, and that's the fed, and that's why we at skybridge are may moway more cautious rig. >> wait until the dust settles, if you will. a lot of people say if you want to play mexico, just play the u.s. because it will be a north american story. guys, thank you. good to see you, anthony and john. wall street or the weather or is it a wildcard. find out what's percolating to the top of "the hot list." plus -- >> i'm michelle caruso-cabrera in sochi, russia, at the winter olympics. coming up on "the closing bell," more on some of the crazy clothing that we're seeing in the curling competition. full, complete checkup. ealth da the works. because when it comes to feeling safe

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. . . . .ly use and a 30-tablet free trial. welcome back. let's get a check on some names moving in niece afterhours. dom chu, what are you seeing? >> let's figure out what's going on in terms of the overall picture for a couple companies out with earnings after the bell. we're going it start off with trip adviser which matched street estimates of 21 cents a share. sales coming in a bit above forecast. that stock you can see currently trading a bit to the upside. now also fossil easily beating street expectation in the fourth quarter with sales also coming in ahead of forecasts. its guidance was a bit of a mixed bag.

first quarter earnings were lower than street views. sales higher than street expectations. it's up a little bit in the after hours as well. check out mule rubber maid. it lost ground going into the closing bell after it's graco unit said it's recalling 3.8 million car seats for flaws with a belt buckle that could be jammed and would be unable to open. back over to you. >> thanks very much. we've had cold, nasty weather, but hot markets. what is heating up the website right now? allen wastler is here with "the hot list." >> do you know what the hot thing is? janet yellen and her market rally she kicked up. look at my tricky graph. i have three spike alerts related to our coverage of her and what was going on in markets. i love a day like that. right now we're leading with patty's little wrap up of what traders are seeing in her dovish stance today. it's chock-full of trader reaction. if that's what you really are

into, check that out. now, the second big puller today, this has been up and drawn people in, thousands all day long. robert frank wrote up that we've hit a record number of people giving up their citizenship in 2013, almost 3,000 people did it. that's twice as many as the year before. and he gets into -- everybody says must be the taxes chasing people away. but he gets into some other reasons why maybe filing requirements and compliance and basic laziness might be contributing to that. >> i'm guessing if robert frank is writing it, it's generally the wealthy who are giving up their citizenship. >> yes, it's not joe six pack. gold is a anothnother big one. india has a little problem with their current account deficit so they put in all those gold import controls which a lot of people would argue with.

they put those controls in. they seem to be doing a little better. some people are saying, maybe india will get back into the gold market because of that. of course, we paired that up with another thing from our futures now unit where they had a trader looking at the technicals where he said he's seeing a lot of short covering. >> given how gold has done today, i'm not surprised that's the zeitgeist. >> we'll play both sides and readers will read both stories and i like that. >> i do that. fair and balanced. i want to get some quick reaction from the panel. this does kind of mirror what people certainly on the floor have been talking about, pop in gold. i'm surprised we haven't seen jim grant's comments get picked up. i suspect people want to know what he had to say about biotech. do you think that was interesting. >> i thought what he said about biotech was very interesting but also his comments on gold and it's nature's bitcoin is what he coined the phrase. i think that will get passed around a lot.

i think it mainly sold off because it was too much of a crowded trade back in '11 when everybody scrambled in chasing it at the top at $1,800 plus. now they all chased back out at $1,2 $1,200, which is, unfortunately, the way things usually play out. >> is he wrong about biotech? >> i think that's the big debate. i tweeted out what he said. he said specifically biotech is wacky. basically he's looking at all metrics. if you look at stock last year up 65%, they've continued that assent th ascent this year. some people argue, look, it's a window. this happens. it goes in cycles. other people saying too far, too fast. here is one interesting tidbit, the fda approval rate is at a 16-year high. there are some kind of macroforces in the biotech world which could be pushing the drugs out faster -- >> and nothing could go wrong with that. nothing. >> well, that's what i was saying is actually we've seen some huge moves depending on how these drugs are given the green

light or not. >> and biotech is definitionally a volatile space. it's literally the frontier of medicine and pharmaceuticals. you will see huge pops and falls based on fda approval, successful drug trials or the lack thereof. >> i think you would expect to she that but the level of capital markets activity is interesting. >> and a lot of the fast money that chases into the stocks, also the people that want the big return, the risk/reward is there in the small biotechs. that's why the doctors are there. that's why the research people are there. so they can ultimately sell out to a merck or whomever. >> but you a lot of concern, used to be that the specialists were going into the biotech, the people who really understood it. now generalists are coming into biotech. i was talking to some of the traders, that's a concern when you have people that don't understand the fundamentals getting in. >> i got a direct mail being it

the other day. >> just back to gold real quick. john's point was interesting about the sell-off really dating from september of 2011. that's an awfully long, slow fizzle, but at the same time i think it bespeaks people's discomfort with the economic recovery. if you think about the ster stereotype of gold, it's the fear trade. people have been in and out of positivity for the past two or three years. despite the obvious -- >> obvious as of today. >> natures bitcoin. i love it. all right. by the way, flashy pants, gold medal themed. michelle caruso-cabrera up next in sochi checking out these, the colorful attire of norway's curling team. does it help them win those golds? we'll be right back. ♪

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welcome back. well, they did not pack light. norway's curling team was going all out at the olympics. they're sporting different pants every day of the competition. and michelle caruso-cabrera is in sochi on this very tough assignment. michelle? >> kelly, everybody is excited about curling. unfortunately, u.s. men lost to norway yesterday. it was a pretty tough session. but, remember, it's a round

robin. they have a lot more chances. it was just the first round of play. what everybody is really talking about though, norway's pants. did you see them? they brought nine different pairs, one for the practice session, one for each of the matches. they even have a facebook page dedicated solely to their pants and sometimes they even have links if you would like to buy the same pants they were wearing. women can even buy skirts in the pattern that they wore last night. if you'd like to see more curling, tonight the women are competing as well. that's an exciting session to watch. curling on cnbc. kelly, i know you're enjoying it. back to you. >> i love it. just like the rest of wall street fell in love when we used to show it back during the day. our coverage begins this evening in a couple minutes. it's on from 5:00 to 8:00 p.m. eastern this week and all of next week. there's lots of time still to get into it if you haven't yet already. valentine's day is just around the corner. unfortunately, so is a major winter storm across a large swath of the country. so we've been asking how you plan to weather the storm and

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welcome back. like we said, forget hockey. curl something a sport that has wall street abuzz this winter

olympics. so keep it right here. we'll have all the latest action from sochi in moments. we have a treat for you. you need to do the two-screen thing right now. curling here on cnbc, "fast money" freestyle on fast money. cnbc.com is melissa lee is coming up next with the gang of traders. how do you like this freestyle thing? >> you know, we're having a blast. you thought 30 minutes straight commercial-free uncensored might be tiring? we ran out of time. it went like this because we have a lot to trade. today was a big market day obviously, kelly. did you notice the move in tesla above $200 before retreating. we will give you the ways to trade that. we'll talk tesla and then also one beleaguered retailer who might be poised for a buyback, a share buyback. we're going to name names. >> let's not reveal -- >> going off the rails a little bit here baurs that's what we do. >> well played. we'll see new a couple minutes. thanks. we have another big snowstorm set to hit the northeast this week so we've been asking people in the meantime, how has the

storm impacted your valentine's day plans? here are some of your thoughts and tweets. the retail trader tweets, leaving massachusetts tomorrow for sun florida. in your face winter storm 40. somebody should tell him florida will not be a picnic. a cold valentine's day keeps the fire burning at home. sheila, perhaps people coming up with other ways to spend their time on this one? >> companies have been talking about the drop in the birth rate. maybe this snowstorm on valentine's day is what the birthing rate needs. >> maybe that's why the markets was up. >> it could be. when there's blackouts the same thing happens sheila is mentioning. >> it's the sex relief rally? >> we should probably call this april. >> i should just get us off this track. >> it's actually worth looking into it. >> it would be interesting, the correlation. what should we be watching for tomorrow in these markets? >> cisco. that's one of the big ones. applied materials. those two i think as well as whole foods are the ones i'm

watching for. >> love their introduction of using square because whole foods is one place where you know people leave all the time because they don't want to wait in that super long checkout line. this is the kind of performance you just scream about. >> sarah hues. >> as we join you this afternoon, a fun fact, sochi, russia, the first city in the subtropical climate to host the olympic winter games. and we welcome you to nbc sports studio in stanford, connecticut known as olympic curling central for the next two week. yesterday usa today called curling the best winter olympic sport. among the reasons access ability of the athletes, simplicity of the rules and quality of the u.s. wen