is good for grain merchants. you can see down year to date. back to you. >> all right, jane wells. it was a pleasure. thank you very much. and thank you all, by the way, for watching "street signs." >> i'll see you tonight on "fast money." "closing bell" is up next. and we do welcome you to "closing bell." >> in one week's time, we have gone from worrying about a correction to now watching for new all-time highs. the dow suddenly knocking on the door. roughly 25 points away. and the s&p isn't too far away either. roughly seven points. today's rally coming even as we learned that existing home sales are slumping. they're at the lowest levels since 2012. what's the disconnect between that and the stock market? we're going to find out what's behind today's move. >> yeah, just keeps going. starting to look like 2013 again. in one hour then, here we go

again, more fundamentals. earnings palooza comes your way with at&t, young branum brands. amgen and gilead. we'll have the information first. the analysis, the market reaction, everything you need to know coming up on the "closing bell" today. also, should you be allowed to accumulate stock in a company you know will be a takeover target? some say that's what bill ackman did. the former head of the securities and exchange commission harley pitt weighs in exclusively about whether or not it's legal. >> very thorny, controversial issue. here's the numbers and all that we have for you right now. the dow, as you see, rallied from the get-go. european markets reopened today after the easter holiday. and they were in a buying mood as well. the european markets were higher this morning. the dow up 96 points off the high. we need to get to 576 for the

previous all-time high. so as you said, we're about 31 points away right now. nasdaq up 45 points. once again, the strongest of the major averages with a gain of more than 1%. now at 41, 67, and the s&p at this hour is trading up 11 points. we're trading at 18.83. joining us today, kenny pulcari. steven wood. chris hobard. and rob morgan. good to see all of you. kenny, i am not picking on you. but we do bring you on because you are the resident skeptic here and the market just keeps going higher here. >> it really does. and at some point, i think i'm going to be right, because it's a little bit confusing, right? the market just keeps marching higher, but what has really changed? the nasdaq is still not there yet. has not recovered. the s&p and dow certainly have. earnings are coming in mixed. top line revenue not really there. but i suppose janet yellen

holding everyone's hand saying listen, we're not going anywhere, nobody worry, rates will stay low. so it forces the trade-in. i think, though, we're right at the highs on the s&p and dow. i have to believe there's resistance here. >> steven what about you? do you believe there's any fundamentals that justifies these moves on the markets? >> last couple weeks, i don't know there's fundamentals that justify the up and down. the economy is doing okay. that square root shaped economic recovery. nothing really is going to knock it off or up, in our opinion. earnings are going to come. i think we do need to look at top line. i think revenue growth is going to be far more important in this earnings cycle. i think if you look at the yellen play right now, that's a squeeze play that we've been talking about for years. that's the way they're going to run this playbook, so that means investors need to look at that risk-based strategy. >> chris hobard, i expect you're

in kenny polcari's camp. you're looking for pretty good correction. maybe as much as 14%. >> that was last week. >> i was going to say, what's going to spark it after the kind of rally? this will be the sixth consecutive update we've seen for the major averages. >> well, and that's it. we're cautioning clients to expect some form of a pullback. perhaps 17% to 14%. really what we're counting on, this is really to clear out the weak hands or those that have been speculating on those momentum driven stocks that have been out there. really more of a back and fill type of a correction. something that's meant to push this bull market or re-energize the bull market. perhaps the fed begins to show their hand and say yes, we are going to raise rates where tampering is more aggressive. we do see that as what will eventually cause a little bit of softness in this market. >> but you're saying that the washout that we saw and a lot of the momentum stocks last week, that caused all this -- >> a couple weeks ago.

>> excuse me, a couple weeks ago. that wasn't enough for you. >> i wish it were, but no, it's not enough. i still think that we've got more. i still think we've got a lot of weak hands out there and i think we've got people that held on through that, but there's still a lot of nerves and we're just waiting for one or two extra shoes to drop and we're going to see more people pull back. it's a natural correction. but again, it's pushing this bull market more forward into the future. >> right. but michelle, don't forget, that was really the nasdaq that we saw suffer the most. the s&p was maybe three and a half percent. that's not even an adjustment. >> all right. >> nasdaq was down almost 10%, 9.7. but the s&p and dow were down just three, maybe 3.5%. >> it's the nasdaq that's leading this charge right now. >> did he raise the point about momentum stocks looking for washout in momentum stocks. that's where we really saw a lot of the pain. rob, you like this market. >> i do.

of all of us, i guess i'm the most bullish. i wouldn't be surprised if we saw they pulled back because we are overdue for one. stocks are still cheap here. i disagree with the statement, that the fundamentals aren't there. we're 15 times earnings. even though earnings season hasn't been necessarily spectacular, the economy is improving. earnings are going up. the estimates are going up. technically the market looks good. retail investor hasn't gotten back in and that's going to happen too eventually. so yeah, we're overdue for a pullback. but at the same time, in the long run, i think we're going higher here. >> what do you do, do you sit on your hands and wait for that correction? the market could get away from you here if it's not already doing that. >> no, no. that's the thing. we're not sitting on our hands waiting on this. there's still good buys. one of my favorite areas is going to be the area of old technology. that's a beauty right now. you've got things that are undervalued or just kind of boring that's not respected. but again, you've got good,

solid quality companies out there, strong balance sheets, ample liquidity, great size of companies. and i think this is where you hunker down, go towards some of the past proven areas. intel is a great example of a company. last week, absolutely annihilated earnings. looked terrific. and they've got a great business model going forward. they've got some great legacy investment with their windows. but on top of that, you can also look at what they're doing in the mobile market. so again, look for things that have proven track records in the back but are also marching forward into some new areas, again, intel being one going towards the mobile markets. >> rob, where is the best place right now? is it small cap versus large cap? international versus u.s. domestic? >> yeah, i like the small cap growth space for domestic, and i do like the international market. i think russell made the comment earlier that diversification makes sense and i would certainly agree here. >> steven, you're the russell he's referring to. >> i am. they have been charging higher

here. >> my apologies, stephen. >> he gets that a lot. >> mr. russell. >> mr. russell, thank you very much. >> proud to be. >> small caps had been powering higher. they sort of lagged here lately. but what do you think? >> yeah, they have. our call right now is when you look at large versus small, the russell 1,000 versus russell 2,000, from a valuation perspective, you're looking at small caps being more richly priced. so from that perspective, we would look in large cap space. but also from the fundamental perspective, my point earlier was there hasn't been this huge volatile swing either way in fundamentals that would justify the heights right now. it's been chugging right along, but we do think it's going to be more active management, more security selection. we're looking at the russell 1,000, large cap being up six, seven, eight-ish percent. we think coming from active management and security selection. >> kenny polcari, i think you and david einhorn might agree on this.

have you heard what he said in the last hour? he put out a letter to investors and said he's got a basket of stocks that he's shorting. he calls them the bubble basket. so he's also looking for a pullback. >> but listen, i think if you heard everyone on this panel today, everyone's expecting this pullback. not a collapse, but a pullback and an adjustment of prices. i think everyone's on that same page. and so therefore, it's just a matter of how much you think the pullback is going to be, right? >> yes. >> i asked mr. hobart, he's not sitting on his hands, he's investing. are you playing this market at all, kenny? >> listen, i am invested, so i stay invested. i'm not one of these guys that's in and out and in and out. i've got a long range plan. i'm bullish on america and the future, but we're talking about what's going to happen today, tomorrow, next week. i think that's kind of what investors need to be kind of careful about.

>> got it. all right, guys, thank you very much. stephen -- or should i say mr. russell, we'll see you later in the hour. we'll bring you back and see how this market closes out. thanks, guys. >> we've got 15 minute 50 minut the closing bell. remember the record high is 16,576. >> should investors buy when stocks are trading near all-time highs? who better to talk about that and where these markets are headed than the legend himself jack bogle with us. wait until you hear if he's a market bull or bear these days. he speaks with us exclusively. we always enjoy our conversations with mr. b coming up. also coming up -- >> how does someone kind of basically know that there's going to be a bid and be allowed to accumulate stock? that would be front money, if we had an sec that was on the case, i think that they would opine on this. >> is jim cramer right in calling out activist investor bill ackman's joint bid for

allergen as a legal scam? we'll talk with harvey pitt in another cnbc exclusive. see what he says. and then citigroup executives have been facing off with shareholders today for the first time since the failing of the fed's latest stress test and uncovering fraud at its mexican operations. how should chairman mike o'neill be? a disgruntled citi watcher weighs in. cog up. we've got a lot to get to, so don't touch that remote, coming up.

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hedge fund manager david einhorn has a warning. >> david einhorn is making some waves in the market. this time, his letter to investors, a recap of the first quarter performance. in it he disclosed that green light capital had taken new stakes in a number of companies, including sun edison and

appliance and home furnishings retailer kahn's. both those stocks are up near session highs. 10% on the day here. he also said that they continue to make money on their stake in micron technology, another chip company, and they lost money on their bet against keurig green mountain. the funds also closed out money-losing propositions on long positions in general motors as well as short positions in chipotle, as well as michael coors. einhorn also made mention of recently making a bet, and michelle mentioned this earlier, against a group of "high-flying momentum stocks." he also said that we're in the second technology bubble in the last 15 years, and that investors who are worried about the effects of high frequency traders should route their stock traders to iex. that's highlighted in michael lewis's book. einhorn also said that green light owns a small stake in iex. michelle, back over to you guys. >> he wasn't specific about

which stocks are in the bubble basket. >> he didn't mention -- why would you if you don't have to tell people about what you're doing. >> of course. especially a short position. >> absolutely right, michelle. >> you can talk your book. >> bill ackman, the reason icahn went after herbalife. >> otherwise we have green arrows on wall street again today, putting the s&p on track for its longest win streak since last fall, and we are closer to record territory right now. >> yep, mary thompson, nice run, huh? >> nice run for all the major indices, michelle. we want to start with the s&p, which is on track for its fifth gain in the last six sessions. as it stands right now, just about 34 points away from its record closing high. of course, the dow recovering from those april lows. the s&p 500, as you mentioned, on track for its sixth straight gain. right now, it is just about nine -- call it eight points below its record close of 18,

90.90. it has come up nicely from that low, led by strength and energy. health care given all the deal news that we've heard today, and the remember we've seen in biotech along with industrial stocks contributing to the s&p's rebound. and the nasdaq up for the sixth straight day as well. two sectors were behind the decline that pushed the nasdaq into correction territory, leading the way over the last two days. those being the social media stocks, as well as biotech. back to you, michelle. >> got it, mary. thank you. so, is it smart for investors to get in as stocks approach new highs? >> joining us to weigh in, our friend, the legendary investor jack bogle. let's hope the microphones work this time around, jack. >> we'll keep our fingers crossed, bill. and i'll try and keep my hands still. >> okay, good. maybe that was the problem. we're approaching new highs the day after we get this survey out that said that 73% of investors

who were surveyed would not go to the stock market even though certificate of deposit rates we all know are so minuscule right now. there's still an implied lack of trust in the stock market on the part of the average investor out there these days. i guess that's an oxymoron. but do you blame them after what we went through starting in 2008? >> well, i don't blame them, but i think the bad behavior has very little to do with the long-term prospects for investing in inequities. what investors have to realize is the stock market creates nothing. it's a derivative of the value created by our corporation and the stock market subtracts its cost from those values. if you focus on corporate america, be worth a lot more on the day you retire, let me say, 20 years from now. for me, maybe 30 years from now, bill, i don't know. but that's the important thing. the amount of capital you've

accumulated when it comes time to draw it down. in the interim, you know, when you think about it for a minute, you really want stock prices to be lower. in other words, the high prices are good for sellers and bad for buyers. and low prices are good for buyers and bad for sellers. so this market going up -- i mean, i think probably here at vanguard, maybe as much as a third of our investors are investing regularly for retirement. and, you know, the rising market creates a larger capital value admittedly for what they have accumulated. it also creates higher prices when they buy in. so i think we should spend a little time less on the market. >> the investors also heard a couple of weeks of the market's rigged, the market's rigged. high frequency trading means you are losing to people who are in the know. what do you say to folks who think that it's just not an honest game? >> well, i'm a little disturbed. we started to talk about this before about michael lewis's

book "flash guys." it takes a subject, which is a legitimate subject, an important subject for discussion. high frequency trading. very important to understand its strengths and its weaknesses. and he talks all about the weaknesses. because balance books about strength and weaknesses don't do very well, and polemics do very well. i've got to admit, as an author, i'm jealous of all that early publicity. >> but still, when it comes to high frequency trading, it's not an evil, necessarily. the game is not rigged in your eyes? >> no, i don't think the game is rigged by any standard that i know of. there are insiders that are taking this inside information going on, people with knowledge of orders that are coming, and they can bid up a penny so the buyer has to pay a penny more. and that's not good. i think it's illegal and it ought to be stopped. i think many -- there must be much more disclosure. but every single trade ought to

be disclosed. i think there ought to be regulations about how much trading you can do order cancellation. some of the real weaknesses in the high frequency trading system. but it's to reduce trading costs and that's good. it's helped to create liquidity. i think that's good. and it probably has helped in the area of price discovery, and i think that's good. so when i balance it all out, i think it's better to have high frequency trading than not. but i'd add this kind of caution. and as we live in an area where we want everything yesterday. speed is the name of the game. nano seconds is the time period we think in. and the stock market is never going to be exempt from those societal trends that drive our lives every day. so it's not going to go away, no matter what anybody wants. >> i ask this knowing it's a mug's game, but i'll ask you anyway. do we belong at all-time highs

right now? is this a matter of the market sensing the fundamentals getting better in the economy, or is it simply just taking comfort in knowing that the federal reserve is still going to be there for them to keep the money flowing into this system? >> well, i'd say that the market is probably a little on the high side of fair value, but not enough to make me take an investment action. i heard one of your commentators say 15 times p.e. it's 15 times expected earnings, expected operating earnings for the coming year. and if i look at actual realized reported earnings for the last year, the past year, previous 12 months, i get 20 times earnings. and that's a little above the norm. but over the next say ten years or even longer, dividend yields are going to contribute 2% to the return and they'll probably grow at the rate of earnings growth, which could be as high as five. so i think something like a 7% future return is going to be what people are going to have to

accept, and the long-term return is nine, because the long-term dividend yield was not 2%, but 4.5%. so we have to -- dividends are very important in the equation as i look at it, we just have to be prepared for lower returns and historical norms. >> it all sounds so logical when you say it. >> because it is. >> the voice of reason. >> it is logical. >> always good to see you, mr. b. thank you. >> thanks for having me on, guys. >> jack bogle joining us from pennsylvania. heading toward the close, about 35, 40 minutes left in the trading session here, the market hovering. we're up 90 points right now. we need a gain of about 127 for the dow to hit an all-time high. the nasdaq is up 41 points. that's the big gainer today with a gain of more than 1% at this hour. coming up next, how comfortable mike o'neill should be for the fraud uncovered at its mexican operations. a frustrated citigroup pro weighs in. plus, gilead, amgen among

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so let's see what we can do about that... remodel. motorcycle. [ female announcer ] some questions take more than a bank. they take a banker. make a my financial priorities appointment today. because when people talk, great things happen. citigroup shares higher today even as top executives face shareholders for the first time since failing the most recent fed stress test and also uncovering fraud at the mexican operations. >> kayla town had a front row

seat. i guess a tense atmosphere, yes? >> it was, bill, but actually wasn't as tense as expected for a few key reasons. number one, the meeting took place about a thousand miles away from citigroup's headquarters, and far away from where most of its investors are clustered. it took place in a hotel that citigroup actually owns. number three, there are actually more citi employees in the room bussed in from local offices rather than shareholders. there are a couple of hours of very tense managing for citi management. the lines of questioning were why did they fail the feds' stress test? when will the massive restructuring pay off? and why haven't they met certain key benchmarks that they put in place over a year ago? you can imagine the chairman mike o'neill and ceo mike corbat answered as best they could. they said they're trying to slim down to become a safer bank so they're not too big to fail. they are actively trying to hunker down their risk management to resubmit in 2015

for the fed. they hope to meet those shareholder benchmarks in 2016, even though they're asking shareholders to be a little bit more patient than previously. the big items on today's agenda were of course, the vote. the big questions were rather shareholders would affirm kpmg as auditor, even amid some auditing issues. that vote sailed through. also, they affirmed corbett's pay for 2013. $17.6 million, even in a year where they failed the fed stress test and, of course, shareholders were expecting more capital. so michelle and bill, i think what you can take away from this is shareholders are willing to be patient for now. but we'll see what the company actually ends up doing and whether it can deliver. >> all right, don't move, kayla. we want to discuss this even more. let's bring in jeff hart, he's principal at sandler o'neill. you just heard what kayla was reporting from that meeting in solution. are you satisfied with what they said today? >> yeah, i think so. historically, i'm used to dealing with institutional

investors. they kind of view annual meetings as nonevents almost. not a whole lot comes out of it. we used to call it evolutionary, not revolutionary. if you look at the problems citigroup have, it's very disappointing they did not get approval. but really all that does to me is delay the capital returns. the numbers that came out are still very strong. i think we're still looking at donating tens of billions of dollars of capital return to shareholders. while fraud is never a good thing, the order of magnitude is pretty small. they'll be subject to fraud from time to time. it doesn't strike me as that bad. >> can i push back against that? it's a very small percentage of citi's revenue. i got it. but $400 million worth of fraud in one spot is a very high level of fraud. i mean, you don't have concerns about overall controls in auditing within the company? >> in general, when you cover the globe like they do, i always have concerns about how well you tie things together. but given how global they are, no, i don't have a lot of

concerns. it doesn't strike me as that big a deal. if you look back historically, i'm talking over decades with citigroup, from time to time, things like this come up internationally, but i think the key here is you still see international growth in revenues and profits. they tend to grow right through them. i think they're going to do that here as well. >> kayla, you know, the issue comes down on the failing of the stress test whether it's an operational problem that they have or just a failure to work with regulators. i mean, they had a damaged reputation -- a damaged relationship with regulators for a time that they were trying to repair under mike o'neill and mike corbat. were they wrong? what happened there, do you think? >> that was a question, bill, that came up today, and chairman mike o'neill said that he was confident in corbat's relationship with regulators and his relationship with the board. it was simply a matter of not having the resources that other banks had behind this, not really having the fine tooth comb that other banks had. j.p. morgan hired 7,000 people

just in risk. they have more than a thousand people working on just c-car. citigroup didn't really have that heft, but now it does. jeff raised the question about their global reach, but that's sort of the elephant in the room at this point because citigroup has 35 local banks that it's trying to merge under one roof. it's in over 90 countries and has the most global reach of any bank, but there comes a point when you have to wonder okay, are they too diverse? are they too big? can they really manage what's going on in each of these various localities or do they need to do a better job at simplifying what businesses they're in, what countries they're in and how they're operating there. >> are they too big? that's an amazing question. i was reading your tweets today from the meet chg weing, which fantastic. the chairman responds at one point where he says, enough. we have already sold $90 billion in assets, we have arguably done more restructuring than any other company in history. they're approaching the restructuring level of greece, an entire country at this point with the size of that

restructuring. jeff, are you satisfied with that answer, $90 billion or do they need to sell even more stuff? >> they still theed to do more. i think they've made a lot of progress. but when it comes to structuring like this, the old saying haste makes waste. i think they're making rapid enough progress, but i don't want them to go out and do something too quickly, make a mistake, sell assets and take losses they don't need to take. i think it's going to take time to work out, but they've made a lot of progress along those lines. i don't think there's such a thing as too big to manage. you can be too complex to manage, but i really don't think citigroup is too complex to manage. citi's underperformance here and right now year to date really strikes me as a buying opportunity to get in. i really haven't changed my opinion of the company at all over the last six months. >> we all know that when they're putting dodd-frank together and working on this too big to fail portion of the regulations, that citi was one of the companies they had in mind, you've sort of

answered that question right now. but do you think the government still believes that citibank is too big to fail right now? is that another reason they might have failed the stress test this time around? >> let's also be clear here, the thing citigroup did wrong coming into the crisis and what almost led to the failure of the company was u.s. mortgage lending. it wasn't proprietary trading, it wasn't their international presence. it was u.s. mortgages they kept on the balance sheet. that is right under regulators' noses. that's where the problem was. i think they're working hard to fix that. they're getting it fixed. but really that global platform is not where their problems came from. >> all right, thank you, both. >> the irony of that is we're in st. louis, which is where that's headquartered, so they're really bringing light to that issue and it's been a pretty weak business, and one that almost costed the company. >> good point, kayla. thank you. >> thanks, jeff. heading toward the close, 30 minutes left in the trading session here. kind of gradually pulling back here. you know, if you look at a

longer term track of the dow, the previous high, 15,576, if we fail to get above that in a reasonable way in a reasonable amount of time, we are in danger of doing a double top here. >> that would be technical analysis. >> there we go. >> and that would be bad. >> the calls -- >> and there it is. >> we're getting back to that previous high set earlier in the month. >> it's these kind of moments i wish we still had the telestrator. >> terry duffy is with me next. wait until you hear what his take is on the markets, which we just spoke about with jim bogle. up next, though, get your green on. no, it's not st. patrick's day, it's earth day. happy earth day, by the way. to mark the occasion, we are talking to the head of a top green mutual fund, which has seen some pretty green returns over the past year, as a matter of fact. back after this. all stations come over to mission a for a final go.

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a rally day, the sixth up day in a row for the major averages on wall street, although we are off the highs of the session, but we were gett tg precariously close to all-time highs earlier in the day. need gain of 127.

the nasdaq continues to power higher with a gain of about 1% at this point. >> that's why we've got it in yellow at the top of the screen. sheila is right there at the nasdaq market site. what's moving these markets? >> the winning streak here is continuing. the nasdaq on track now for six straight days of gains here. 1% on this session. and look, it's really been a 1-2-3 punch of some solid earnings, good corporate news and of course, all of this merger mania. let's start off with those earnings, because both netflix and comcast are two of the biggest winners on the nasdaq today after better than expected earnings. but take a look at the biotech index. rebounding big-time today. up about 3.5%, really after this pharma merger news, helping out the biotech sector. also don't forget, we do have gilead earnings after the bell. and finally want to end up on facebook, because this stock is single handedly the biggest reason the nasdaq is up. it's having the biggest influence to the upside.

upgrading its rating on the stock to outperform. the company does report earnings tomorrow after the bell, so it's going to be watched. but credit squeeze does think all these credit introductions will be helping out its average revenue per user. michelle? >> thank you, sheila. on this day, earth day, nbc universal is going green, raising awareness and encouraging our viewers to make environmentally friendly choices. >> did you know, though, that you can also make green investing in ways that are green and friendly to the environment? leslie samuelridge is here to talk about that. leslie, what we used to call socially responsible investing, the hallmark of that was avoiding things. you didn't buy gun makers. cigarette makers, things like that. your method of investing, though, you're more of an activist investor in the green arena. you work with companies like kellogg to change their supply chain. you work with bed, bath & beyond to eliminate some harmful chemicals. you take a more proactive rather

than reactive style of investing. >> right. in green century, we both screen out the worst polluters in both our funds, but also invest in environmental solutions. and as part of what we do, we do a lot of shareholder activism. so as you mentioned, we worked with kellogg this year to get them to change the palm oil supply chain. >> do you do any cost benefit analysis along the way as you do that? >> sure. i mean, when we are working with one of the companies in our funds, we are always looking at what is the business case for them to make this change. as well as the environmental case. and when there's a reputational risk to those companies, we feel it's in their benefit to make a change that both will help their overall performance in valuation, but also will help the larger environment, and that's what our investors are looking for. they're really looking to align their values with their

investments and make an impact through their investments. >> let me ask mitchell's question a different way. how do you rank -- i mean, where do you place the cost and benefit analysis on the list of priorities to invest. one of the knocks for years on socially responsible investing was that you were missing opportunities. or that you were ignoring financial difficulties simply because it meant your screen on your social responsible portion of where you were investing. so where does the financial angle fit? >> well, we evaluate companies based on both their financial performance, but then integrate in the environmental social and governance records. so it's fully integrated into the stocks and bonds that we choose. >> but do you look first for good investments and see if they fit? >> yes. well, with our balance fund, we start with the large universe of

2,000 companies, and eventually it gets whittled down through both the economic and the esg performance to about 70 to 80 companies, and then some green bonds and other bonds. and then our equity fund, we invest in the longest running sustainability index. so it's about 400 companies minus fossil fuel companies. >> got it. leslie, nice to see you. happy earth day, by the way. >> thank you, happy earth day to you, too. >> thanks for joining us. >> thank you. we've got about 17 minutes before the closing bell. the dow jones industrial average right now is up 80 points. so we are fading from the highs of the day. the nasdaq is up roughly 46 points. earnings coming up at the top of the hour. we have at&t, yum brands, amgen, we'll tell you what the numbers are and then we'll bring you those earnings the instant they hit the street tape. keep it right here. also coming up, don't miss my exclusive interview with

former s.e.c. chairman harvey pitt on whether bill ackman's joint bid for allergen is a legal form of frontrunning that ought to be made illegal. stay with us. ith us. especially if you're thinking of moving an old 401(k) to a fidelity ira. it gives you a wide range of investment options... and the free help you need to make sure your investments fit your goals -- and what you're really investing for. tap into the full power of your fidelity green line. call today and we'll make it easy to move that old 401(k) to a fidelity rollover ira.

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another very busy after the bell session expected. >> we have mike terrell. >> that's right, we've got two of the big four biotechs reporting after the bell today. analysts look to the big companies with earnings growth. we're looking at amgen and gilead today after the bill. gilead's hepatitis c drug is the big one to watch. the whisper number they say could be double. so it's going to be really hard for gill yacht to top expectations, but that is the big driver to watch. the other one is amgen. analysts say it could be harder for amgen to have a beat on revenue. they're going to be looking at the pipeline for potential updates on their cholesterol drug called pcsk-9. >> meg tirrel, by the way. meg knows everything about everything on biotech.

she is terrific. then there's at&t and yum brands, among the other big names reporting results at the top of the hour as well. >> dominic here to tell us what to expect. >> with at&t, one of 11 dow industrial components slated to report numbers this week. average analysts here looking for earnings of 70 cents per share. special attention with at&t will also be paid, as always, to trends in the wireless subscriber business, whether there's additions or subtractions from that number. and while not a volatile stock around earnings days itself, at&t shares have fallen in six out of 11, the last seven reporting days. so at&t, a volatile one. not as much. but still a downside stock. and then there's yum brands, owners of taco bell, kfc, pizza hut. here analysts are looking for shares of 80 cents a share. of course, the big story here, always -- will always be about china where yum gets around 60% of sales. traders are gearing up for some volatility on this stock, though, post-earnings. options markets are already

pricing in an expected 5% move on the stock, so keep a close eye on those yum earnings. back over to you. >> he knows everything about everything, too. >> he does. >> ask him anything, he's got an answer for you. >> i try. >> 13 minutes left in the trading session here. we could get an all-time high if we get a little buying here at the end, right? >> yeah, it's possible. possible. after the close, the head of the chicago america tile exchange is going to join us, terry duffy on the markets and high frequency trading. plus, former s.e.c. chairman harvey pitt gives us his take on bill ackman's play for allergen. harley davidson surging after the motorcycle maker's bottom line blew past estimates. going to speak with harley's president and ceo about his plans to take harley to the next level and the next generation. ♪

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welcome back. back to dom now for this quick

market flash. >> the shares are risings up, after it became the target. it continues to add to its positions. they believe that shares remain dramatically undervalued and is urging to initiate a share buyback program with its cash balance sheet. those shares rising up to session highs. back over to you. >> okay, dom, thanks very much let's talk about this market. the dow up about 83 points with about eight minutes left in the session. about 40 points now from an all-time high. we were pretty close to it earlier in the day. but we've since been pulling back. joining me once again, stephen wood. we have terry dolan now of benjamin and gerald joining us. what have you been doing with this market? >> up around these ranges, we start to sell. i think we talked about it earlier, that if you took out the low in february, and you look at the market since january, really trading between

16,000, 16,600 if you want to call it that way. for me, it's following the trend. i suspect that the nasdaq needs a little work. i wouldn't think we're going to be off to races right now. it's a nice rally and it's nice to see the strength come back. >> you'll take what you can get for the moment. looking forward to trading back down into the range. >> was it you that said we were at 15 times earnings? jack bogle took issue with that. he's looking at trailing -- the fact that the earnings that have come already were at 20 times earnings at these levels. he thinks we're a little expensive in this market. >> that's the point i made. when you look at the small cap space versus large cap, the valuations have been rich coming into 2014. less so in large cap space, so from our perspective, when you look at it from a capeningle, i think that the smaller cap would be a little more pricing. but you also want to look globally. what would be a global credit strategy looking at currencies, looking at security selection and not just taking interest

rate risk within a bond portfolio. i think a global one on top of that. >> why did we get this rally right now? six up days in a row. what is that about? >> you know, the dow traded down to the lower end of its range. and there's no real rhyme or reason to my view. market trading with confidence. looks like it's not ready to fail. at the same time, it's not ready to break out. the longer it trades within that horizontal range, more positive, if it's positive, the longer the breakout will be for sure. >> we're going to take a quick break here. i want to show you guys a chart of the dow. we'll get your comments on that, as we head toward the close here, and then after the bell, get ready. here we go. amgen, at&t, yum brands among the big names unveiling their latest financial reports. we'll get these stocks. could they be the big movers in the afterhours session and could they affect the markets tomorrow? we have full team coverage coming your way at the top of the hour. we'll see you then. stay tuned. ome over to mission a for a final go.

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february, or at least the decline. wasn't a full-blown correction. came back, had the selloff, and we've come back. this is the high i was talking about. if we fail to get above that i think we could be near a double top. a reminder again, earnings coming out of the top. four biggies to keep an eye on. they're going to have their hands full watching for numbers for gilea gilead. will be very interesting to see about the pricing. will that put pricing pressure on their margins going forward. won't be affected by congress, but in the future, it will be interesting to hear what they have to say about that. meg tirrel will have more on that coming up at the top of the hour. we've got terry and stephen still with me here. possible double top. what do you think? >> i think there's a lot of technical work that would suggest that the market is in for a slight downdraft. i wouldn't say the whole place is going to fall apart, but the

moving average has certainly deteriorated. the nasdaq rallied quickly. >> the nasdaq is what we should be focusing on. that's where a lot of the action has been, this year especially. and biotech has been one of the leaders in that sector as well. >> in terms of high fliers, yeah. being mr. russell, i would look at the russell 1,000. >> the smaller biotechs, right? >> there's a difference between a peak and a high. when you look at the highs being put in by the market, that doesn't necessarily lead to the precipitous dropout. so highs are being placed in, but i think it comes back to fundamentals. when you look at that broad asset allocation. i think top line is going to come for a lot more than bottom line. security sector is going to drive a lot more value. >> we've got a good sampling of what corporate america is going to tell us here in just a

moment. good to see you guys. thank you for being with us. heading toward the close, well-off the highs for the session for all the major averages. are we putting in a double top? we'll find out. but these earnings will have something to say about that. coming up. stay tuned for the second hour of the "closing bell." i'll see you tomorrow, michelle. >> see you tomorrow, bill. all right, welcome to the closing bell. we are at all-time high wash today. higher by 67 points, well-off the highs with still positive day. nasdaq higher by 37 points. let's bring in today's panel. the inflation rotation fund joins us. our own sharon epperson. kevin o'leary. also with us, "fast money" trader brian kelly. brian, what explains this rally? have earnings been good enough? is the economy good enough?

>> the bar is very low for earnings. so they are good enough to get over the bar. i actually think today wasn't that great of a day. >> why? >> great news from netflix. we had china cut reserve requirements. for me, i'm not sure this is an incredibly strong market. i wouldn't be going all in right now. >> michael, do you believe this rally? >> no, because i don't think bonds believe this rally. to brian's point, the fact that yields are still not really rising substantially, it's kind of troublesome. the fact that utilities, in particular, which my colleague and i wrote about in an award-winning paper, are still strong, is kind of problematic. i don't think this is the right kind of environment here. we could, you know, just be seeing this conditioning effect here. every single time we had a dip, we had this v formation in u.s. equities.

at some point, it's the last v. >> what is it about utilities that bothers you? >> look, utilities are not supposed to be outperforming in a broad bull market. going back to 1926, what we found out was that utilities tend to lead and increase corrections. that's over many, many decades. they're the best performing sectors. >> so when they do well, we should all be worried. kate kelly, i see you nodding your head. >> i'm just clueing in to what he said about the disbelief in this rally. if there's one consistent theme i've heard from the traders i tend to talk to, is that there's going to be a lot of volatility. so in general, i think people are optimistic about 2014. i think they think we'll end higher, although it's not going to be as visible as last year. but whether or not we're going to see such ongoing euphoria. >> you need this to keep rallying. >> absolutely. what we need to see right now is what we're seeing. the volatility is what everyone's been talking about all yearlong. what i've been looking at as well is what we've been seeing in the commodities mark. where today we saw a significant

pullback in oil prices. not looking at the paper running the market, but also looking at some of the fundamentals of this market. maybe we're seeing that in equities as well as commodities. oil case in point. >> i know you're investing in portable cupcakes. but what about stocks. how do you feel about this market? >> we could get somewhere around 7% returns out of the market this year. about 2.5 of that coming from dividends. the reason we didn't get a whole lot of follow through today, even though it was merger tuesdays, and this sector in pharma, people like me remember back, you know, almost over a decade ago, fizer was inquisitive. they brought warner lambert. it was all about execution in the end. that was dead money for years and years. so i'm not that excited about these deals until you can show me where nature is. just because merger participants say it's going to make more money, doesn't make it so. >> you know what, though, kevin?

health care brought a lot of strength to the market today. i actually spent the day looking at this valiant allergen proposed deal. >> can you hold on one second? we've got to go to dominic choo. he's got the at&t numbers. >> so michelle, what you should know right now, the stock for at&t is up marginally -- we'll call it a half a percent after hours. at&t with a 71-cent earnings adjusted earnings per share number. that beats the average analyst investment by one penny. revenue coming in at $32.5 billion. that's in line with analyst estimates. wireless revenues come in at $17.9 billion. they do see 2014 consolidated sales growth of at least 4%. so 4%-plus consolidated sales growth for 2014. they also see adjusted earnings per share growing in the mid single digit range for 2014 as well as the capital expenditures slated for this year to be in and around the $21 billion range.

so again, a beat on earnings, inline sales. they say revenue growth will be about 4% or more in 2014 with earnings per share slated or expected to grow in mid single digits. right now, shares are up about -- we'll call it a percent and a half now. >> we're still looking for subscriber numbers at this point. >> that's right. but wireless revenues, the total number is up $17.9 billion there. >> got it. let's see the net ads when we get them. let's go over to meg, who's got gilead earnings. >> michelle, a big quarter for gilead here, as we told you earlier. the new hepatitis c drug was the one to watch, blowing estimates out of the water $2.27 billion in first quarter revenue for sovaldi. that's gilead's new hepatitis c drug. that compares with analysts' estimates of as high as $1.38 billion. so really blowing estimates out of the water. looking at the top line at revenue, $5 billion. first quarter revenue for gilead. that compares with $3.98 billion

consensus estimate. you get 1.48 a share, compared with 91 cent estimates. this is a big quarter for gilead. the shares have been halted, looking like they're going to open again at 4.30. >> i'm glad you explained them being halted. i was wondering why we weren't getting a reaction. thank you, meg. brian kelly, are these numbers enough to support the move we had in stocks? >> i think it's hard to extrapolate gilead's earnings to the rest of the market. what i will say, what you can extrapolate from it, it's not so much the news that matters. it's the reaction to the news. let's say at 4:30, we get a pop in the stock. if that starts to fade and we wake up and that stock is fading, that's a very bad sign for the market. >> brian, what about at&t? what's your take on that? >> i think at&t is fine. i would look as we get into the conference call what they're saying about how much they're going to pay apple, because i think it has more of an effect

on apple than necessarily at&t. certainly a surprise here on at&t, but we saw it with comcast this morning, it's not that bad in that area. >> kevin o'leary, i want to go back to you. what we were talking about in terms of mergers going on in the pharma sector. because historically, when we have seen a lot of m and a, people have said okay, that is really good for the markets. other companies are seeing value. they want to buy. that's lifted the entire market. you're suggesting, though, that there's an historical memory here, that we remember the last round of pharma deals that didn't turn out to be so good, and does that not maybe give us the same boost this time around? is that what you were suggesting? >> pharma is a core holding for me because i'm a value hold investor. i only buy securities or at least equities that buy dividend yields. that's what pharma has done traditionally well. i was feeling better about pharma after we got through the whole obamacare thing because we have more certainty. but the only reason you do a deal in pharma, and if you address me as a shareholder, is

tell me how it's creative. don't tell me the vision and how -- show me how it's -- >> acreedive means when you buy that company, it immediately adds to your bottom line. >> absolutely. >> a company will say this will be acreedive in two years, in other words it's not going to add to our bottom line in two years because there will be costs involved. but oftentimes, a deal can be immediately acreedive. the day we buy it, that means it's going to add to our profitability, right? >> absolutely. if you're telling me it takes two years to become profitable, or make me more free cash flow, that means you overpaid for it. that's why you're not seeing as much optimism as perhaps you thought you'd get. people like me are elephants. they remember. i remember. >> amgen is out with earnings. >> we just saw a blowout quarter from gilead. not the same for amgen. looking at revenue for the first quarter, 4.52 billion.

compared with analyst estimates of 7.76 billion. eps also missing, 1.87. earnings per share adjusted figure there. compared with 1.94. looks like some of the drug sales were light, that's what's driving sales to miss on the top line. enbrel is a little bit light. >> don't move, meg, we want to bring in david nelson, get some reaction on the biotech earnings. i understand you're a gilead shareholder. the numbers, the numbers from amgen and gilead, tale of two different stocks. amgen missing, gilead a really big blowout. >> i'm looking at these numbers for gilead. it is a blowout. not only did they beat the number, but they took out the highest estimates from everybody out there, and the more important number, the sovladi number, that's a blowout as well.

i think consensus was around 1.3 billion. so over two billion, that's pretty good. i think what investors will be looking for in the fall is any discussion of discounting. we all saw what happened to the stock, received the letter from the house subcommittee. to pricing is key. >> folks who are watching the screen. meg tells us it's not going to open until 4:30. that's why we don't see any activity. why such a huge blowout number? what did they sell so much of? >> this is such an important drug for them. really, gilead -- it's really gone from being a gross stock to a value stock at this point. people have to understand with this drug, it may be very expensive. we're talking about a cure. this is not a chronic treatment that we'll go after years and years and years. when people take this drug 12 weeks later, 90% of them are cured. it's a big deal.

>> amgen, your thoughts? >> amgen is a miss on top and bottom line. what is the inventory drawdown look like. they raise prices at the end of the year. there was a lot of restocking at the end of the year to beat that price hike. >> in other words, google loaded up at the end of the year. you see the stock lower by about 3.5%. >> both amgen, both gilead, very different stories. what do you do when you have a bundle and you have all of these stocks? >> the earnings on an individual company really don't make a difference to you as a shareholder in an xbi or an ibb. it's really the sector as a whole. i think on average, the

sector -- most of the etfs are down about 25%. so it's a lot more attractive at these levels right now. >> what do you think gilead's going to do when it finally opens in 20 minutes? >> if it doesn't ramp higher right when they open it, i'll be extremely surprised. there's something in these numbers that we're not seeing right now. >> wouldn't you think there's a huge influx of buyers at this point, which is why they had to put on the circuit breakers? you'd think we'll see a big hop. >> is that why -- i'm not even sure. >> it's usually when there's an imbalance in one direction or the other, so you would assume it's buying it. >> or could be halted for news pending or they want to wait for it to come out. >> i haven't seen the short position. i've got to believe it's going to open higher. >> dominic choo has more on at&t. >> you mentioned the subscriber numbers. we have an indication what those look like now. perhaps some of them coming in maybe just slightly below some analysts estimates. what we do know is that wireless revenues were up 7% post-paid

net additions of 125,000 for the best first quarter in five years, says at&t. post-paid subscribers. not the ones who prepay and have those go phones. post-paid subscribers added 625,000, the best in five years. total net additions of more than one million. also more than one half-million editions, both post-paid and prepaid, along with the 13,000 tablet subscriptions for those particular products. 1.1 million new postpaid smart phones added, and again, 92% of those new smart phones are -- 92% of postpaid phone sales are also smart phones, so it just goes to show you where the direction at&t is going in in terms of customers. they're all buying smart phones. they're adding new customers. but they've got 625,000 postpaids for the best first quarter in five years. michelle, back to you. >> all right, dom, thank you.

stocks lower by 27 cents in after hours trading. thank you, david nelson. super helpful on the biotechs. be sure to tistick everybody coming up at 5:00 p.m. eastern time. the rest of the panel is sticking around. bill ackman took a big stake in allergen. then he launched a takeover bid for the company. that's got cnbc's jim cramer up in arms. >> how does someone kind of basically know that there's going to be a bid and be allowed to accumulate stock. classically, that would be fraud money. >> is cramer right? that's next when we speak with former s.e.c. head harvey pitt exclusively. also, talk about high on the hog. investors loving harley davidson's earnings beat. the stock up more than 7%. find out what's revving up sales when we speak exclusively to the motorcycle maker's president. and then former minnesota governor jesse ventura going off on ceo pay.

>> ceos, just because they're the boss, that doesn't mean they work any harder. you think they sweat more? you think they need a different deodorant from the lay borer because their work is harder? i don't think so. >> he'll be here to discuss those comments. i have a feeling kevin o'leary will have something to say about that, right, kevin? we'll talk butt that later in the show. don't move. ve. and what they've been through lately. ve. polar vortexes, road construction, and gaping potholes. so with all that behind you, you might want to make sure you're safe and in control. ford technicians are ready to find the right tires for your vehicle. get up to $120 in mail-in rebates on four select tires when you use the ford service credit card at the big tire event. see what the ford experts think about your tires. at your ford dealer. today is tuesday today, we greet you. treat you. care for you. today, you can come to cleveland clinic

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the story of the day on wall street is easily billionaire investor bill ackman and the deal he made to try and take over allergen. for the past two months, ackman has been buying up allergen's stock. kate kelly, what have you been seeing, what have you been talking about? you were at the investor presentation today. >> it was a four-hour extravaganza. >> ackman style. >> i thought he was going to come in under the length of time, but he did not. anyway, we heard from mike pearson. we also heard extensively from ackman. in terms of the insider trading

session, there were a number of questions about that to ackman. i thought one of the most interesting came from one of valiant's trading partners. said you've put $4 billion into our company, but we think with our math and the options structure in this deal, it's only 30 million. when is the 4 billion going to come or the rest of it? ackman said look, because of s.e.c. rules and some of the procedural things we had to observe, we had to do options. we had to exercise those. he says he's going through the proper channels on that. very interesting deal for him, michelle. in the past, he's gone active, but not with the assistance or really the back of a corporate takeover company like this. so really, for him, it's an enviable position for an activist hedge fund. not only does he make a bold statement, and he earns 10% now, so he has the ability to control his own destiny, to some extent. >> let's bring in now, we have an exclusive interview with harvey pitt. he used to run the s.e.c. and explore more of the question. he's now a ceo at catalrama

partners. jim cramer has been very critical of ackman. will be to what he said this morning on "squawk on the street." i heard it -- no. okay, basically -- we don't have the sound, mr. pitt, but bottom line, he said, how is it legal for -- okay, we're going to play it now. >> how does someone kind of basically know that there's going to be a bid and be allowed to accumulate stock? classically, that would be front money. if we had an s.e.c. that was on the case, i think that they would opine on this. they're not going to. this is going to be blessed, i believe. everything's going to be fine. it's unfortunate because i don't think it is the way that things should be done. but being right and being legal are two different things. >> what do you think? is it illegal? >> i don't think there's enough of a basis to suggest that what happened is illegal. one would have to know when

ackman started negotiating with valiant. but what is clear is that prior to his consummating an actual deal with valiant, he was in the marketplace, and my suspicion is the s.e.c. will look at that. and try to determine the facts to see whether he was front running valiant's bid. that's the real issue. >> here's what i don't understand, though. the minute you're going to do a hostile, you start accumulating the stock, right? and you know there's going to be a hostile coming. you could never do a hostile if you weren't permitted to buy the stock of the company that you were going to bid on. >> that's if it's your information. the way that you have a problem, is if you know somebody else is going to make a hostile bid and they are searching you out as a possible partner and you're not yet their partner, then you're trading in advance of their information and that can be problematic. >> well, i can help with the chronology here. as far as i was told, there was

a mutual friend involved. but essentially, mike pearson, who runs valiant, sought act man out. i believe they met and agreed to go forward around late february. ackman began amassing shares of the takeover target allergen. today he now owns 9.7%. >> so what do they argue, that they have a deal? >> they didn't reveal it until late last night. >> harvey, based on those facts, what do you think? >> i think based on those facts, it would be hard to say that the front brand valeant's offer. the difference here is ackman has never learned the meaning of

deferred gratification. he's a short-termer. one of the issues is this bid, at least his part of it, really serious. or is he just trying to profit from a quick up flow in the price of allergan stock. >> i think four to six years is their average. look at jcpenney. he rode that almost all the way to the bottom. and in better cases, he rode general growth properties all the way to the top. so he has been a longer term holder in a lot of cases. herbalife, he started amassing that about two years ago on a short basis. he expects it to go to zero, but i wouldn't say of him that he's a short-term guy. i know hedge funds tend to be. he has a shorter list of holdings and i think he's committed to them on a longer term basis. >> i think in both the case of jcpenney where he lost a fortune, and in the case of herbalife, he held on because he

didn't get the short-term bump in stock prices that he was looking for. that's a place for the marketplace to decide. whether any bid by ackman will have the credibility that he needs in order to pursue this to the conclusion. >> hold on. the herbalife position, for example. he starts amassing a short position knowing he's going to do a massive presentation and try to punish the stock. based on what we're talking about here, that could be considered front running. that could be -- i mean, when you become so powerful yourself that you could drive the stock and trade, what do you do? are you not allowed to trade at all? >> well, in the case of herbalife, he seemed to be moving from trying to inform people about problems with the company, which is a positive, and actually just trying to get the stock price to move. now, he succeeded in generating at least some investigations, but there's still no facts that

support his positions, and everything he did was simply trying to get the price to move lower. >> even amassing his billion-dollar short took seven months. the question is, as the old adage goes, can he stay solvent as long as if he's right, the market stays irrational. >> kevin o'leary, you want to weigh in here, please? >> yeah, absolutely. i think we should take a history lesson on what he did with cp, a company that he took a long-term view in, went to shareholders, brought his case. i listened to him and he said look, i see tremendous value, i'm going to make massive changes. but in the end, you're going to make money right beside me. and that's exactly what happened. i'll reinvest with this guy any time he comes to town. i think he's a very good operator in terms of finding and mining out value and doing something about it. he has the guts to take the

criticism. >> insider trading, the fact that he's going to take a position one way or the other, the minute we know his position, it's going to move the stock. >> you are making the assumption -- >> it's ridiculous. >> you are making the assumption right now that he has a done deal and he will exit at a profit. >> exactly. >> there's no certainty. this isn't front running. the front running is when you move and sell and you can show your profit in an untoward basis. that did not happen here and it hasn't happened yet. >> and he strenuously made the point that he's going to be a long-term investor in valeant. we'll see if that is the case. i would say there are a lot of investors in the audience and they pummelled him on this point. what's your exit strategy, how long are you going to stay with us. he kept repeating "i'm here for the long haul." >> thank you so much for joining us. >> if you read his actual agreement, you'll see he is not committed to being a long-term investor. that is one of the things that he omitted from the agreement.

>> harvey, in the long run, we're all dead. >> all right, final word, thank you, guys. really appreciate it. mr. pitt, thank you, it was really great to have you on on this important issue. catch more on activist investors when david faber sits down with carl icahn later today, from the active passive investor summit in new york. sounds psychological, doesn't it? we're going to stream it live on cnbc.com at 6:00 p.m. eastern time. coming up next, don't miss an exclusive interview with terry duffy. he's going to weigh in on everything from the bill ackman allergan controversy to high frequency trading. if you don't pay your taxes, you're going to get fined or you go to jail. but if you're an irs employee, apparently you get a bonus. yes, this unbelievable story is going to make your blood boil. and then later -- we're going hog wild with the president of harley davidson.

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volume is about 414,000. now about half a million shares. so the share trading, the volume is picking up, but you can see there towards after market session highs, up about 5%. of course, very nice numbers in terms of sales and revenues from the likes of gilead. we'll keep an eye on the stock as the afternoon progresses, but for right now, a nice 4% to 5% move on gilead in early after hours trade trading. it's been a bumpy first quarter for the market, as michael lewis's controversial book put a spotlight on high frequency trading and caused public outrage over his comments that the markets are rigged. terry duffy is president and executive chairman of cme group. we want the talk about high frequency trading in a second. but first, weigh in on the conversation that we just had with harvey pitt, referenced bill ackman and his position in allergan ahead of this takeover bid. >> it will be difficult for me to weigh in too much, because i only caught bits and pieces where they were talking about

the transaction. it seems to me that there's a fine line that everybody seems to be walking here. i'm not completely up to speed. >> are you suggesting -- dill ackman joining valeant, building stock. >> i think any time they try to out the it in a certain direction, try to manipulate the price of the product. >> cnbc couldn't exist. >> cnbc couldn't exist. >> i mean, every person who comes on probably owns the stock that they're talking about the position on. we debate buying and selling every single day here. >> all the presentations me made to certain investors. >> it's really difficult to start prosecuting insider trading at this point. >> listen, i agree with you. you asked me my opinion, i'm saying that if somebody -- you called it during the interview, is this front running? and i said i wouldn't call it

frontrunning. i'd say someone trying to manipulate a price. mr. pitt, former chairman of the s.e.c., said this guy has made certain trades for short-term gains, really not a long-term investor. others say it differently. so this is not in my ballpark and i will stay out of the conversation. >> high frequency trading, is the market rigged? >> absolutely not. >> 525%, according to cnbc. had that statistic out there, so it's really difficult to say something like that would be rigged. the market has created a lot of wealth for a lot of people. created a lot of opportunity for companies to grow. and in return, it gives companies that opportunity to hire more people and help with unemployment. >> i see you nodding your head. >> i agree. i think the issue of rigged or not, if you don't have high frequency traders in there, i think it would be fairly wide. we used to trade in teenths. something like half the volume of the united states trading is driven by high frequency

traders. if you remove them completely and remove some of the arbitraging they do, which does in turn benefit the retail investor, you'll have issues with how you're trading overall. >> the trading that we're seeing here in the stock market and the trading and commodities market is very different. when you talk about high frequency trading, it's a very different animal. when you talk about how it works differently. >> it's a great point. i wanted to raise it. when you're looking at fragmentation in the marketplace, you're looking at 13 different exchanges, 40% of the volume being traded in dark pools. now you're trying to determine the real price, as brad was referring to it on this show. in our world, you're operating in a vertical silo. when that order goes into one of cme's markets, the only person that knows about that order is the person who entered it. it's actually impossible to front run that order. but when you put an order into another securities exchange that's fragmented, if it gets partially filled and goes somewhere else, the allegation by mr. lewis is the high

frequency guys are chasing that order to a different pool of liquidity. is that true? i don't know. but if people are front running any client, that is against the law and should be penalized. >> can i just ask a kind of devil's advocate question here. you've had some questions raised at the cme i believe about issues of blatancy -- >> where's your mic, kate? >> no mic. >> to be continued. >> i think the issues, there's still people out there that say some of the things that have been going on in terms of with electronic trading, if you have your server right next to the exchange of severs you're going to have a better price, it happens on the cme group's exchange as well as the nyc. is that true? >> no, what's important about location and where it's located is really important. so when brad referred to looping the shoe box on the show here, what we do at cme group, is every box in our co-location has the exact same length cord, so whether you're on that side of the room or right next to the server, it's right -- they're

all the same distance, so it can't be any different. and, what's really different about what we do, we will sell a single sliver of a server to a small participant if they want to be co-located. we have commercials in agricultural products and energy products and other products that are co-located with us, at a very affordable rate. >> a lot of terminology here. >> my audio problems are fixed now, i apologize. i was just curious. you've had some concerns raised about issues of latency -- >> a reference to speed. >> some people having faster technology than others. not necessarily in an attempt to frontrun. but what ends up happening is those with the faster technology get more favorable prices. do you disagree with that that happens? >> its doesn't happen. no one knows about their order but themselves. i think someone received their market data before they got their fill. or they received their fill and the market data went up. we have shrunk that latency into what is called the speed of light. you can only go so far. but if it's order for order,

market data for order comes out the same time. you have to realize there's thousands of contracts and thousands of messages getting pushed out to certain clients, they might get their confirmation first and then the quote goes up on the screen. they know they got filled. and then they see the quote. but they're the only ones that got filled. they don't have an opportunity to go run around the 13 other exchanges that have the same exact product. it's impossible in our world. so there's a huge, huge difference here. >> thanks so much for joining in on two controversial subjects. >> i wasn't good on the first one because that's not my topic. >> you did fine, i think. thank you so much. what a ride it has been for harley davidson shareholders today. shares revving higher after very strong earnings. so what's driving sales, and can harley keep sozooming past the competiti competition? we'll speak to the ceo next. jesse ventura is no fan of american ceos. >> ceos, just because they're the boss, that doesn't mean they work any harder. do you think they sweat more? do you think they need a

different deodorant from the laborer because their work is harder? i don't think so. >> he says physical lay borers should earn the same as ceos. jesse is here and kevin o'leary is ready to talk back. that showdown is later on "the closing bell." ♪ [ male announcer ] when fixed income experts... ♪ ...work with equity experts... ♪ ...who work with regional experts... ♪ ...who work with portfolio management experts, that's when expertise happens. mfs. because there is no expertise without collaboration. mfs.

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harley davidson shares revving higher by 6.5% today, easily beating wall street estimates tha s thanks to strons overseas. the chief operating officer joins me now. good to have you here. >> thanks, great to be here. >> tell us about the strength overseas. considering that still, the vast majority of your sales are domestic. >> well, clearly, investing in international growth. we've added over 120 new dealers outside the united states over the last four years. and our distribution channel is one of the strengths of harley davidson, so being able to reach customers with our powerful brand and our products, which are increasing more tailored toward the tastes of what we call our outreach segments here in the united states, as well as our international customers. we're able to realize the potential of the brand, wherever it is around the globe. it's a fantastic story, but only

part of it. >> clearly, the stock is reacting really well today, but robin farley, she's at ubs, puts out a note and she cautions a little bit. she says maybe sales weren't as good as they look because of your early shipment of piglets? what are piglets? >> i have no idea what robin farley is referring to there, but i can tell you that, you know, the u.s. is clearly a big part of our business. >> she explain that you ship these -- motorcycles that you can ride in training courses and aren't necessarily for sale? >> yeah. we just launched the street motorcycle, which is an all-new platform for the company. it comes in a 500 cc version and a 750 cc version. we're just now shipping those to support our rider training program here in the united states. just a fantastic gateway into the brand for new people to the sport. but importantly, the street motorcycle we see as a huge opportunity for us outside the u.s. back to your point about

international, given that the international market is much more heavily oriented toward a smaller displacement of motorcycles. this is great for harley davidson to reach people here in the u.s. through rider's edge as well as direct sales at retail. plus, all those international opportunities that we have around the globe. >> all right, well thanks so much for joining us. >> that's the street product, yeah. >> okay, thanks so much for joining us. and the stock obviously reacting really well to your number today. >> thank you, we're very pleased. just ahead, you cannot make this up. you just can't. the internal revenue service gave $2.8 million in bonuses to problem employees, including, are you ready, to one million workers who didn't pay their taxes. how does this happen? we're going to try to explain that next. and still to come, he was first known as wrestling's "the body." then he was elected governor of minnesota. now jesse ventura is a self-fashioned man of the people and he's coming up next. tdd#: 1-888-648-6021 there are trading opportunities

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appropriately last week on april 15th. in the report, they found that irs employees, over a thousand of them, got bonuses, even though they had federal tax compliance problems. those workers received more than $1 million in total altogether and more than 10,000 hours in time off. the irs says in this report that it plans to conduct a study on a possible new payment policy. the irs has also told cnbc that none of these bonuses went to executives. yes, it's apparently true that if you're not current in your taxes, you can still get a bonus as an irs employee. >> amazing. only a thousand workers who didn't pay their taxes. >> the treasury secretary had some unpaid taxes. >> yes, timothy geithner. >> these things do happen.

>> it goes around. coming up next -- i'm not going to go too far -- the heavyweight match-up we've all been waiting for. jesse ventura says ceos should make just as much money or the same amount of money as physical laborers. good thing jesse is off the grid and kevin o'leary is on remote because the sparks are going to fly when we come back. [ male announcer ] what if a small company became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked?

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all right. kevin o'leary. i want to get thoughts on this story about irs employees that got paid bonuses even though they didn't pay their taxes. >> well first of all, i'm very happy that we have a mechanism in place that can discover this and shine the light on it. that's the first thing i'm happy about. but every time we go through april, every year, we start to focus on the irs and taxation and usually there's a senator or congressman, this year it's cart pillar. wet as a nation we never fix the problem. $1 million of overpayment to

1,000 employees is immaterial. we needed a president -- the next one perhaps will say, look, i'm going to make it my task the next four years whoever that might be, man or woman, to fix this fundamental flaw in our economy. taxation is broken in america. >> all right. you know what, we got jesse ventura ready to go. first we're going to go to break next. and then jesse ventura's camera is good. he's going to tell us why ceo's should make the same amount as physical laborers. at the active passive investors summit in york, cnbc will stream it live at 6:00 p.m. eastern time, 3:00 p.m. pacific. we're back after this. life less complicated.thise

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>> ceos just because they're the boss, that doesn't mean they work any harder. do you think they sweat more? do you think they need a different deodorant from the laborer because their work is harder? i don't think so. so it's all in what you define work and as i said before, it seems if it's physical work, it seems to be viewed as unskilled. where if it's mental, then you have all these skills and we pay more for skills than unskilled. >> so can we be clear. we have been teasing that you think laborers and ceos should make the same amount of money. is that true? >> no. no. i didn't say that at all. naturally the ceo runs the country. i'm making the comparison that we seem to cheapen physical labor. we call that unskilled. and therefore, we pay that minimum wage. when the point i'm making is most ceos are incapable of doing physical labor. they sit around with suits on

all day pushing pencils. the point i'm making is anyone that works a 40 hour work week, if you work 40 hours, you should not have to be subsidized in any way, shape or form by the government. you should be able to earn a living if you work 40 hours a week regardless if it's physical labor or pushing a pencil as a ceo. >> kevin o'leary, what do you think of that? >> jesse do you think you have any right to tell a ceo what his pay should be when you don't own a single share of his company? >> no, i'm not saying that at all. i love main stream media, how you people love to put words in people's mouths. i will repeat again. i was making the point that we somehow diminish physical labor. we call that unskilled and therefore, we can pay so much less for someone who has to physically sweat and labor,

digging a ditch, whatever it might be. >> i got that. look, that's a -- i understand what you're saying. >> well, then you make big money. i'm just saying i don't say the ceo should never get paid the same. if you own the company, you make as much as you want to but ceo pays have gotten way out of line compared to -- >> kelly has got a question here. >> governor, very interesting point. i think many people would agree. but i feel like you're making two different arguments. one is to say the system, the free market should reward this physical labor much better than it does making unnecessary a government subsidy such as minimum wage. on the other hand, we're in this capital system where some of that labor is not well compensated therefore, we have a minimum wage and movement to raise it. it seems like there's an impasse there. >> well, there certainly is.

like i said, anybody that works 40 hours a week should get paid at a rate that they shouldn't have to go to the government and be subsidized. i don't care what you do, if you put in 40 hours a week. >> why wouldn't the market decide that. >> the market -- >> guys, hold on. if you go to home depot and want to hire a physical laborer to do work around your house, guess what? good luck. he gets more than minimum wage. they get paid much more than minimum wage in most cases. >> yeah, that's right. >> well, then why -- >> i don't understand -- >> wait. wait. >> tell me why -- >> look, i want to know why you think raising the minimum wage creates one more job in america. how does that help the people unemployed who you say you want to help? >> raising the minimum wage stimulates the economy. that's what it does. it stimulates the economy. because the people at minimum wage spend that money.

they need that money. it goes right back into fwoogoo and services. that helps to stimulate the economy. >> jesse, we have got to cut you off. we are running out of time. >> i got to run, too, because we have got drones down here and they kill people who speak out against the u.s. government so i got to duck. >> "fast money" is coming up. melissa lee, what do you got? >> i'm going to take it. "fast money" starts right now. in new york city's times square. a solid day for the markets. well the s&p 500 seeing its longest winning streak since september. both the nasdaq and biotech industry swinging back. not only that, but the momentum barometer is back in play. take a look at the moves and the following names since aprilish