all right. we're back. we're down 64 points on the dow jones industrial average. that's the low of the day, the s&p down 3.3. nasdaq is bucking the trend, simon, up nine points on the trading session. >> thanks to the biotechs. that's it for "power lunch.." >> "street signs" begins right now. simon and i will see you tomorrow. have a great afternoon. the number of the day is 116. it's a big number that involves your money. we're going to explain what it is and why it matters in moments. plus the great e-mail debate. is it product activity or time-sucking soul killer. the reason that the government wants to tax e-cigarettes. it's not your health, it's theirs and why are we so stalled on the march to 17,000 again. >> that's a good question. we're at session lows, brian. if the three inadditions can manage to close higher, it will

be the seventh trading day that they have done so. they jumped so much, that they had to double take and recheck the data. diana, the number is so big, some people are questioning whether it's for real. absolutely they did. did they jump 18%? probably now. it rounds up to the neari thousand, but the number are so incredibly low right now, you're working off this small base. one number to keep in

perspective, new home sales are still down 64% from the peak in 2005. so there's your perspective for you. are we improving? were people out buys in may? yes, probably not that much. we found that the builder are focusing on the higher-end homes. but we also got the case shiller home price report, which is very backward loose, but did show a big drop in the annual gains. they were up over 12% march, now just up over 10% in april. robert shiller, the professor who created this index said earlier today on "squawk on the street" that we really shouldn't worry so much about prices. i'm going to beg to differ a bit. we were seeing prices inflay a lot over the past year, affordability weakening by a lot. you have to remember that even though we are well below the peak of home prices in 2006

we're not buys today the way we did back then. so homes -- >> not yet. >> not yet, but because of the mortgages we're using, homes are more expensive. so we could look to that 2006 peak number and say we're fine, we're below that. we have to look at what it is today and how much costlier homes are using today's mortgages. >> all i know is i saw fonzi selling reverse mortgages on television the other day. true story. everybody is looking at the home building stocks, right? but when you have a house there's a lot of stuff that goes in the house. door nobody else, carpeting. armstrong worldwide, a big floor maker, mohawk industries, fortune brands, those three companies together can almost get you a house. >> that would be really -- i'm sure there are some houses on you there that do have a mohawk.

let's bring in joe. you tweeted that latest data corroborate what vehicle sales have been telling us that harsh weather temporarily impact gdp. how strong is this snap back going to be? >> it looks great. relative to q1. there may not be a lot of new home sales, but that reflects the fact there hasn't been a lot of building. what we've seen recently is a lot more building. you see thing like vehicle sales that show the same thing. the first quarter was dampened by weather, and we're seeing this natural spring bounce back, which has been pretty powerful. >> the fed did recognize the economy is improving, but perhaps it ignored inflation, but my question is, to what extent if we keep getting these strong numbers and all kinds of indication, will they have to get really real.

>> i wish i knew the answer to that. we're so close to the long-term average for the unemployment rate. i mean we're going to be 40, maybe 50 points closer to the man dade from where they were just in march on inflation. we're almost there on unemployment, yet the fed still sounds very dovish. the only thing i can say is things like housing will not slow with rates as slow as they are. the real or inflation-adjusted funds rate will barely be positive in 2016, so the cyclical drivers of things like housing, what it means for the economy, all the ancillary industries, motor vehicle sales, very cyclical. these sectors i think will do very well, because the fed will be very slow, so when he raise rates, rates will be extraordinarily low. >> joe la vornia, a real pleasure. >> thank you, guys. stocks turning around.

let's get to bob pisani. we're down 55 points, bob. hardly a collapse, but in this market we're at least finally seeing some volatility either way. >> yeah, and that's because we're seeing some movement on housing, as well as on energy. that's what's moving the market. put the s&p 500 up. you see the move up right here in that's the home building numbers. diane was talking about the great -- this is oil and energy stocks dropping. take a look. i want to show you exxon mobil. they have been weakening before about 1:00 on that recent downturn, but exxon mobil, chevron, all the big energy names started moving down very quickly. that's why we saw the downturn, partly the downturn in the dow jones industrial average. want to talk about one or two other things quickly here. a look at they ipos 18 coming this week. the first one was a chinese energy that was priced today at

$12. kay public, a little over $14, this is the first of the big wave of ipos. you see it holding up around $15. good start for the ipo business this week. finally i just want to point out. walgreens got the same problem a lot of the big retailers have. a lot of additional market share, but no profit margin. guys, back to you. >> bob, thank you very much. so, as we told you at the top of the show, the number of the days, 116. no, it's not the nim in death valley. it has to do with stocks. we ran a stock screener this morning, and 116 is the number of to bes in the s&p 500 that are up more than 10% just this quarter. truly an incredible stat. it got us thinking, if you missed this run, is there another opportunity ahead?

let us bring in art hogan, chief market strategist and one -- we're going to save you time. i'm sure you're getting call after call, having say, have i missed the run? now you can address them all at the same time. if they haven't bought stocks until right now, can they still make any money? >> i think you hit it right on the head. the interesting thing, though, and jeff will probably acknowledge this, is the same people saying the market has gone too far too fast were say it at 15,000, 16,000. i think it's much more intuitive to look at companies and say, well, what are they trading for now? can i buy a 20% trading at 15 times?

if that's the case, i think there's great opportunities. if the beyer mar is oversold, then there is no plates to go. we're not anywhere close to that. we're trading about 16 times this year, 15 times the next earnings, and by the way, it would be july in a week. you know, in terms of multiples, so i think we're in a reasonable place, but the same core of investors has been saying too far too fast , yeah, it's been saying it all the way since the generational lows. but jeff, we're halfway through the year now, and i believe we're only halfway to the s&p target for the year. >> i agree with art. we can often get distracted. but the reality is if you're really worried about a major pull back in the markets, none of the signs that have always

preceded those, are with us, and inversion of the yield curve, it's called 7 out of 7 of the last. nowhere need that, and the index, that has to turn negative for us to see a bear market or recession. that's been true for 50 years. so a bit of a pullback, perhaps a buying opportunity, but more likely we see continued gains, remember we're only less than two weeks away from the start of the earnings season, and most of the gains have actually come during the four-week earnings season. >> art, i don't know if you sat the last world cup game, but if you had to sink your teeth into -- in what investments do you have real bite? >> i they enp in general. when you think about energy and the shale revolution, there's a great opportunity for us. this is an opportunity for the next two or three years, so think about everything that comes with that. whether the shell plays are finding new oil or they're

getting into the place where is we need it. gulfport and matador, they're trading -- >> art, i'm going to jump in for a second. i researches that 116, the third best performs stock. new field exploration. you have some other drillers already up there. some of these names having real hot. >> and the bottom line is if you look at a gulf port, a matador, all the names, you know, that we really favor at emp, you're getting a real valuation. it doesn't mean it's trading at a crazy valuation. it's how fast it's growing its production. these are examples of companies that you can really get behind. >> good to see you, gentlemen. mississippi voters are heading back to the polls for a u.s. senate primary runoff. we'll have a live report on that

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the outcome should shape the future of the gop, that is, if voters actually show up. you know who showed up? john heaarwood? will they come out? >> reporter: that's the question of the hour, brian. a steady stream of people have been trickling into the neighborhood center, but the real question is, who is going to show up? you had a -- you've got about 1.9 million voters in mississippi. on the june 3rd primary 313,000 showed up. they had a runoff, because nobody got 50%. usually the runoff elections have them going down. if ire chris mcdaniel, who is challenging that had cochran, he's counting on tea party support and his voters' superior youth and energy. >> as i was saying early, i believe the best man should win,

and we need some new blood. we need to be revived, you know. you know, back in the day, a new generation is coming. i believe we need somebody at the forefront for that. >> if you're that had cochran, he's been in for six terms in the senate. he is the traditional establishment candidate. he hopes his arguments that he brings money home to mississippi will resonate with an older group of proven voters. >> he's done just some wonderful things for mississippi. we talk about seniority, and i hate to lose that seniority. chris mcdaniel, you're right, people have got to start somewhere, but i don't think this is the time for mississippi to start over. >> now here's the wild card, brian. it's not only republicans who can vote. democrats and independents vote,

so long as they didn't vote on the primary on june the 3rd. so it is a wide-open situation. that had cochran is trying to expand the electorate temperature be fascinating to see if he can pull in enough to get over the hump. >> while we've got you, a quick question -- do you do yoga? >> reporter: i don't, but i know people who do it an awful lot. so i know where you're coming from on this d.c. yoga tax. they're going to get heavy push back. >> there's already a lot of push back. the yoga enthusiasts are about to pay more for their downward dog based on the d.c. plan to expand a sales tax to exclude services, and there's a lot of activists out there calling it a wellness tax. you want us to be healthy, obviously not to have to be a burden on the medical system bulk we're healthy and you're

taxes that what? what do you think? >> reporter: taxing authorities and government that either get or don't have income taxes have moved increasingly to services taxes to cover that are shortfalls. i think the d.c. government is calculating the people who do yoga may not be some of their core constituents, some of more affluent parts of the district who won't complain so much, but i think there are going to be complaints. i wouldn't be surprised if the thing, especially the pull back from the vice president iny-- vinyasa yoga. >> or you can't spend lest. namaste, or no mas stay. joining us is former chief

marketing office jim stealingle. we had need to do something about health in america, right? we know we have a obesity and diabetes crisis, but yet americans say one thing and do another. how do we fix that? >> people do want to eat healthier, but only if it tastes great. and by the way, this is a big societal movement. people are choosing healthier options even at fast-food restaurants. >> i just returned from the cannes fest till of ads and create activity. every brand is seeking to be on a health and wellness program. i believe they're trying to do moth of the right things, cutting salt and fat, but it has to taste good. and by the way, they donnell always talk about it. if you're mcdonald's, you want for talk about fun and family.

>> i don't know about you, about you if you take the salt and fat out, it doesn't taste as good, does it? to what degree are restaurants and also food chains just not telling their customer they've made any changes, healthier changes to their recipes, because they don't psychological want mime to stay away? >> a lot of food companies are cutting back things incrementally, and people don't -- they adjust to a taste change over time. so i think these companies are doing the right thing, giving consumers a lot of options, but putting a lot of r&d money getting things that are better for you and taste good, whether it's nestle, pepsi, coca-cola, mcdonald's, they're all working that, and i think we'll see significant innovation. i was catching a lot of those conversations with all of those companies at the cannes festival. >> jim, a pleasure to have you on. i hope you're right.

>> i like those after my yoga class. >> there you go. airline fees gone wild. sure prices are sky high, they stink for travelers, but are they great for investors and airline stocks? we're digging in. plus the one thing we use every day that's killing our souls.

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i can only speak for myself. but it was a very tiny soul to begin with. you know what i mean, e-mail was designed to enhance product activity, and now e-mail seems to be their job. so that was the lighthearted part of our conversation with dilbert creator. they're so caught up with e-mail, twitter, they're getting overwhelmed.

i urge everyone out there, though, to remain from reply all. >> those are a pile -- unsubscribe. they didn't like that. echblgs that's great. perhaps another soul killer is the airline fees. a whop -- wait for it, 97%, the highest since 1999. s over a billion in baggage and cancellation fees during the first quarter of this year. man, we are paying, but let me give you a high tech

presentation of how airline stocks have done over the past five years, brian, are you watched? that is exactly what they have done. >> that's high tech. >> i couldn't put in a graph. you know, a cup of water, we might as well make a buck off the stocks, right? so where do we put our money in the airlines, consideration they've already had an amazing run? >> i think certainly airlines do a better job at collecting -- certainly it's a more important part of the business model for spirit and aliegian, which is low cost type strategies, and then make up the difference with

higher ancillary retch, you but delta, all do a very good job, particularly over the past few years at growing the ancillary base. do you cover the small ones? >> yes, we do. these names have been money generators. why don't they get more love? and focus more on higher margin, you know, alignment

rather than some -- so i think that's had a big part to do with it. alaska is one of the best operators so our top pick in the space remains delta going forward. >> in terms of the costs for us, though, do you see this picking up? have they now reached also a peak ticket? you'll pay for what you prefer, that's not going to change over the next couple years. >> joseph, thank you for joining us.

>> sdwlar a conveyor pretty soon in the lavatory. >> you're like twice my size. >> do you know, what does that have to do with what i was just talking about? >> dollar per square? >> oh, my -- no. >> oh, square of toilet paper. i thought you were talking about square foot. >> that has nothing do do with my size. >> sorry, two completely different plains. we'll tell you more ahead. [ laughter ] plus another clue about the mystery chart. your second hint -- >> yeah, it's at a ten 1/2 year high, but the yelp time high was twice where it is now. some of you already got it. i need to go. to a commercial break. ♪

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s. currently we're at session lows, be careful what you wish for. you can see that it gained -- now we've really lost steam. >> stocks can't go up every day and not healthy if they do. >> time for street talk. >> what's street talk? >> stocks news, views, and analyst and -- stock number one. piper jaffray sees the name of releases, maybe you think towards, rating remains overweight. the hat broke echblgts stock number two, bumped up f going to 62 a share.

they note long term supply history, sand fundamentals continue to be strong. that's a real statement. the stock has rocketed up. up 4.5%. wow. >> methanol maker getting an upgrade. the target on meoh goes to 73, stocks at 63-30. stock number three, ebay, estimates and target cut. >> i don't like they calls necessarily about 54 bucks a share, but believes increasing competition and a margin expansion, they remain at hold. so topeka says hold ebay.

this one is kaymerix. and it's been initiated by -- cmrs is only the ticker. there's year under the radar name buffalo wild wings. people waited more than an hour. >> oner lick securities to buy, a price target, stock's at 163. richard ross, and david seeburg, i want to start with you and the technicals. how are they looking? >> brian, yesterday's breakout was -- i would not be a buyer of

the stock in here. >> then to over 160. and of course we see yesterday's breakout. i wouldn't chase it on the breakout and here's why. you can see a fantastic move in the stock. over above that -- now we're into resistance at the high end of this trend channel at the tail end of a fantastic five-year run. don't chase the stock, consumer discretionary and restaurants are under pressure somewhat this year. this one has been an outpurchaser. use that strength to sell into it, take some proves on this

world cup hysteria. >> fundamentally i agree that it's did -- i think it's a great company, and definitely deserved a premium, but they've benefited from a few things. chicken wing prices have come in. but the valuation in my pin stretch. if you look at the s&p 500 restaurant index, this is trading at roughly ten turns higher. if you look back five years, it's traded historically at roughly 6 1/2 turns higher, so by all metrics i'm looking at, it seems very expensive. i would agree with rich. i would stop here and not get involved in the buy side. >> one of the major restaurant with that kind of valuation. david, thanks very much.

in worse news, shares of radio shack, trading at levels not seen since this was the cover of their catalog. the year was 1977. annie hall, and this was the hot song, you know ♪ looks like we made it >> barry manilow, yes, his best song, "mandy." after putting a zero dollar price target on the stop, let's welcome in a guy who always gives, scott thomas. thank you for coming back here. any indication -- >> thanks for having me back. so far, no indication. were still see light n torrie in the stories, fairly light

marketing, all the drivers them. just don't seem to be there yesterday. they're getting a lot of lip service, being handled in select markets, but when you have 4400 stores, it's difficult to touch all of them. >> i think you put the chances just over 50%, would you say it's higher now? >> we're see no change in the trend line. you know, as we continue to burn through the cash. we soon seen the lenders ease up on some of the restrictions they have put in place. with respect to store closures. so the bankruptcy odds seem to keep climbing.

>> when you look back at radio shack, right? obviously a lot of good people work there, a once great company, but is there anything to target where you can say they really screwed up. >> i think there are two fundamental problems. first is much longer term. that's just that the company hasn't evolved with the time. theyant have been on the forefront of that adoption curve. they've some trouble getting some you know, that's been a key issue for them. the second is a bit more recent. if we go back to the digital tv transition, they had a natural traffic driver. they were the go-to spot for the converter boxes. they did not have to market

heavily. they were able to upsell the customers, enjoy the wireless residua residuals. they expected those customers to come back and now they've been searching for a traffic driver. >> is crunch time july/august, back to school, sort of inventory building time? is that the crunch time do you think, scott? >> that's one of two. that's the smaller crunch time. obviously back to school was not quite as big of a season for consumer electronics and wireless as the holidays are. if they can make it through back to school, the critical time period will be october and november. ultimately they need to have the support of the vendors to continue to make progress in their turnaround. right now that's a big question mark. we've had comment tear from them that they've got nervous, and that will be critical. >> thank you, scott.

we're about to get back to unveiling the top list the states for business. cohn-heads have been tweeting with their guesses at the top state. up next scott will be joining us from a secret location in this year's top state. >> from a mystery electric to one again today's mystery chart. a ten-year high today. some folks have already gotten it. tdd#: 1-800-345-2550 searching for trade ideas that spark your curiosity tdd#: 1-800-345-2550 can take you in many directions. tdd#: 1-800-345-2550 you read this. watch that. tdd#: 1-800-345-2550 you look for what's next. tdd#: 1-800-345-2550 at schwab, we can help turn inspiration into action tdd#: 1-800-345-2550 boost your trading iq with the help of tdd#: 1-800-345-2550 our live online workshops tdd#: 1-800-345-2550 like identifying market trends. tdd#: 1-800-345-2550 now, earn 300 commission-free online trades. call 1-888-628-2419 or go to schwab.com/trading to learn how. tdd#: 1-800-345-2550 sharpen your instincts with market insight from schwab

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the mystery chart is intel. that was the name of one of the their first random access memory. some of you somehow got that. i always say, mandy, we have some of the smartest audience out there. i don't know where they come up with the stuff. they might have use the google. >> i'm sure that's a faster, but some of them are just clever. >> or they work at intel. >> that's the other one. we're almost there. it is time for the runner-up. scott cohn, who does this study every year is live at the top

state. scott? >> mandy, you talk about a smart audience, there's interesting guesses out there. and we'll see where these people have them right. remember, we rank all 50 states on 56 metrics in ten categories of competitiveness. im time for the runner-up. here is state number two. texas, the lone star state is number two this year. texas scores 1641 points. that's an improvement over last year when texas also finished second. but texas is second to none for consistency. in the eight years we've been rating the states, a three-time winner of america's top states for business. 2008, texas. >> 2010, texas, and 2012. >> yeah, you've got it, it's texas. >> governor rick perry has

practically invented the personal war between the states for jobs. >> texas is calling, your opportunities awaits. and he relishes the competition. >> it makes you get up every day and work harder. we don't take any time off. >> the best category, the economy and infrastructure, and texas comes in-second for technology and innovation. the worst category, quality of life. it comes in 37th, hurt by the lowest percentage of residents in the nation covered by health insurance. unemployment in texas is below the national average at 5.1%. texas has no individual income tax and no corporate tax, just a state franchise tax that tops out at 1%. the state sales tax, 6.25%. texas's largest employer is the h.e.b. supermarket chain with 830,000 employ crease statewide, the largest industry is mining, including oil and natural gas.

>> so close, but no cigar for governor perry, who leaves office in january with a possible eye toward another white house bid in 2016. he's never finished below that in our study. who is number one? where am i? here is your last diabolical hint -- can't get it out of my head. where is state number one? we will recap the top hints coming up in about an hour in "closing bell", and we le reveal where i am, america's top state for business on the second hour of "closing bell" today iflgts can't get it out of my head, i think is a song by elo. so you're not in not in england. >> maybe it's a cover, but. ♪ i can't get it out of my head ♪ no, crickets?

crickets? the big reveal will be on your show, bill. any guesses? >> don't play poker with scott cohn. look at the poker face the he's not giving anything away. i should probably know this. he mentioned south dakota already. that was last year's surprise number one state. >> i don't think he has. i'm keeping out for virginia, because virginia had done so well. >> has he mentioned colorado, they're famous for brownies now. can't get it out of my head? uh? huh? i don't know. >> john defer kind of stuff. >> maybe. maybe with the new law changes there, you never know. but i have no idea. >> that's the whole point. we keep you in suspension. we also have the ceo of the vertex on today. we're going to talk to him about that as well. >> thanks a lot, bill. h.e.b., formerly h.e. --

that famous texas grocery store chain started as c.c. but. because of that 1998 lawsuit, in other words, they might need you to actually buy more spikes, but a new technology is a new technology is threatening all that. we'll explain. plus, a mental mover on the solar surge. [ male announcer ] the mercedes-benz summer event is here. now get the unmistakable thrill... and the incredible rush... of the mercedes-benz you've always wanted. ♪ but you better get here fast... [ daughter ] yay, daddy's here! here you go, honey. thank you. [ male announcer ] ...because a good thing like this... phew! [ male announcer ] ...won't last forever. see your authorized dealer for an incredible offer on the exhilarating c250 sport sedan. but hurry, offers end soon. share your summer moments in your mercedes-benz with us. but at xerox we've embraced a new role.

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i would. switch to comcast business internet and get the fastest wifi included. comcast business. built for business. you probably don't normally think of silver as a solor play, but it's expected to double over the next five years and drive demand for the industrial metal. why? using solar cells. silver is slightly out-pacing gold, up just over 8%. now, tobacco bonds about to go up in smoke. now, smoking is on the decline, but e-cigarette use is on the rise. that means less money for big tobacco. but what it also means, and you might think that's good news, is that it means less money to 46 states that struck a bond deal with the big tobacco companies 16 years ago. so, are the cheap and high-yielding tobacco bonds about to go belly up?

joining us with steven with the manhattan institute. steven, this is a great paradox. we want people to quit smoking, but in some weird way, governments need people to keep smoking so the tobacco companies can afford to pay the bonds that they have now come to rely on for income. >> well, we just want them to stop smoking at a slower rate. basically, if you look at the way a lot of these bonds were structured, they anticipated an average decline in cigarette usage of about 3% a year. suddenly, with e-cigarettes, we've gone above that. so, it's more of a decline even in government borrowing form. >> but you're saying, do not help big tobacco out. you've actually made a lot of money in not counting big tobacco out, right? >> yeah, if you look at the last, what was the best performing stock from last half of last century? that was philip morris. and the reason why is it's always a value stock, always being beaten up.

what we're concerned about today is big tobacco eastman kodiak themselves. meaning, eastman kodak was in denial of new technology. i wouldn't count the bonds out, and also from the stock position, this is the time where you make your money, where there's a lot of uncertainty, there's value out there, and you buy it before we have confirmation that big tobacco figured out how to get their hands on e-cig profits. >> so steven, the expectation is, obviously, e-cig taxes are coming as well. pretty much everybody we've talked to says it's a matter of time. do you believe those tobacco bond revenues ultimately are safe? because people probably hate big tobacco, but guess what? it also pays for a lot of government services, believe it or not, on the back end. >> well, yes. well, the thing is, i don't know about safe. you know, just a couple of years ago, in 2007, when a bunch of states put out new bonds, they used projections from global insights. that projection was that

cigarette sales would only decline 1.8% a year. the problem is these bonds are very long-term, and it is a risk trying to predict. if you can get in and out of these things, if there's a market to get in at a low price and get out at a low price, you might be saying, but this is a very uncertain market right now. it's one thing to buy another stock, it's another thing to invest for, let's say a decade or more in their bonds. >> so, lee, considering to his point the states need the money, is there any chance e-cigarettes will be taxed like tobacco is? >> please. they're taxing marijuana in colorado. those states need these revenues and need these bonds to work out, period. they're going to figure out how to tax those e-cigs, and that's where you're going to get the industry consolidation. do you think philip morris understands how to work with bureaucracy and lobbyists? yes, they do. so, if you're doing e-cigs and all of a sudden there's a tax and it's regulated, you're going to sell out to big tobacco.

the reason you want to be in now is because there is uncertainty and that's where you find value and value is where you find higher expected returns. >> steve and lee, thank you for joining us. up next, the nerdiest athletic scholarship ever. you may not believe this one, and you're not going to be able to stand it either. [ male announcer ] what if a small company became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading.

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get this, a university in chicago is offering 30 athletic scholarships to students who are really, really good at the multiplayer video game "league of legends." yeah, the school says the game is a team sport, it involves strategy just like a traditional sport. robert morris has apparently received hundreds of inquiries from prospective e-athletes. >> on that note, thanks for watching "street signs," everybody. >> "closing bell's" next. and welcome to the "closing bell," everybody. i'm kelly evans here at the new york stock exchange. >> and i'm bill griffeth, once again camped out here at cnbc global headquarters. kelly, what started out as a decent day for the bulls in the equity market turned south in a hurry. around midday, between 12:00 and 1:00 eastern time, those reports that syrian warplanes had launched an attack inside iraq, killing at least 50 people. going to ask you to stick around to f