items weighed less than the labels said and some deli items were sold by the pete instead of the pound. there you go. >> why would you not expect to pay for the container? >> don't you always pay for the container? >> i assumed you did. i never imagined. you're supposed to deconduct the container, apparently? makes no sense. >> thank you for watching "street signs." >> "closing bell," an aerial debate coming up right now. and welcome to the "closing bell," everybody. i'm kelly evans down at the new york stock exchange. >> and i'm bill griffiths here at cnbc headquarters. stocks higher today, kelly. investors, i don't want to say they're ignoring the weak gdp report for the first quarter, showing it detracted 2.9%, the worst nonrecessionary gdp report in 58 years. i think that's ancient history. there are economists out there now saying we've had a pretty good rebound so far in this second quarter this year. so, we'll see what's behind the

huge change. talk about it with national economic council director jeff zients. also, media broadcasters winning a supreme court ruling against streaming video service aereo. what that win means for the media industry and for consumers is coming up. let's see what's happening in the markets right now. the dow, you know, yes, we had that horrible gdp report, a pretty bad durable goods report this morning as well, but the markets have taken it in stride. we've bounced back from yesterday's decline. the dow is up 30 points. there's the nasdaq up 23. it's up 0.5% right now. that's the best performer of the major averages so far today, and we're even moving higher into the last hour and the s&p is up seven points right now. let's talk about it in our "closing bell" exchange today with jack bouroudjian from index financial partners, david from mainstray capital management, susan fulton from fbb capital

partners and our own rick santelli joining us as well. david, as we go into the summer here and the market continues to incrementally go higher here, you're advocating just, look, put your eggs in all the baskets right now. i mean, diversify as much as you can just in case, right? >> yeah. you know, 2013, it was easy. we bought the high momentum stocks, we bought small cap growth, biotechnology. you could really throw caution to the wind and do very well. this year we've pulled back our horns and really have looked at this more as we want to hold our own here, be careful, be diversified, large-cap value, small-cap growth, broaden across sectors, diversify internationally, but our favorite sector domestically is still the energy sector. >> okay. >> susan, and we're actually going to talk about some of the energy policy changes that are, that aren't happening in just a little bit, but in the meantime, you know, we get these reports about how the u.s. economy did

in the first quarter. we've gotten data since then that show perhaps things are looking a little better. i think a lot of people, though, look at the sell-off yesterday, wonder if that was part of a deeper correction here? what's your take? >> well, we're very concerned about deflation. we're not concerned about inflation. and one of the reasons is that we don't see the united states being able to raise interest rates, and that's because europe has now created a universe where there are zero interest rates. and so, if you're a european banker or a european that wants to invest money, you can get, you know, 200 basis points over what you can get in europe just by investing in treasuries. that's going to not let this yield curve go up much. so, stocks are about the only place you're able to get income. and americans, as we've reached the baby boomer going into retirement today, they're very, very driven by income. >> jack bouroudjian, you're looking back at janet yellen's comments last week, very dovish.

maybe she new something about the economy, the first-quarter number we were going to get this week, right? >> yeah, bill, absolutely. in fact, everybody was questioning why she was so dovish last week. well, this is the reason, because we're seeing this number. and remember, let's keep it in mind, this last revision is what i call after-the-fact analysis. you know, in fact, if anything, it encourages me that we're going to see real good numbers over the next few months. but these last couple days have really been about the end of the quarter. this window dressing effect today, in fact, is the last day to be able to trade stocks and have them settle in june, but we've picked up on a bit of a pattern and everybody needs to know this. we seem to see strength going into the end of the quarter, and then about a 2% or a 5% correction right after that. now, it's happened for the last three or four quarters in a row and it seems to be a pattern that's developing and one that over the course of this bull market might be repeating itself over and over again, so let's keep an eye on that. but let's keep in mind that any pullback is absolutely a buying opportunity in what is still a secular bull market. >> and i wonder, john rutledge,

what your view on the energy sector is. i saw -- i'm sorry, we don't have john. let me, david, go back to you on this, if i can for a second. you like the energy sector. a name like valero's getting hit today. it's still down 8.5%. perhaps an overreaction to what is coming out of the commerce department on export policy, perhaps not. where do you see opportunity across this sector? >> i think that it is an overreaction to the announcement that there is the condensate form of crude oil that's going to be able to be exported as early as august. it is a symbolic change in policy that has been in place for four decades and it could be opening the door to broader exports of oil, so, that's affecting wti prices and affecting domestic refiners. but overall, when we look at energy globally, the long-term prospects for energy stocks are very good. we look at these developing nations, china, india, countries in africa, where people are

buying more and more petroleum-hungry vehicles. and until a cheaper alternative is developed, fossil fuels are going to power those engines for years to come. >> david, just to be clear, though, does your bet on the energy sector imply higher prices that u.s. consumers are going to be paying in the months to come? >> well, it's the -- the immediate impact of oil as an input to those refiners could be an issue for higher prices in the months to come, but we think in general, we looked at the integrated oil companies, we look especially at e&p, exploration and production, the shale oil revolution, fracking and everything, horizontal drilling, everything that's going on now, what that means for the u.s. in terms of the energy infrastructure, the overall energy complex. that's why we like the energy sector broadly. >> okay. >> and we think that overall we've got strength in that sector going forward. and geopolitical events, iraq,

only causes maybe a rush to a safe haven sector and a broader market sell-off, if it is because of uncertainty because of the geopolitical events. >> rick, i know the bond market's forward-looking, but do you think that the mystery of the low yields along the curve there in part was because they sensed what the first quarter did or didn't do in terms of growth there? >> yeah, i think it's that, but i think the answer is more simple. i think whether you call this old data or not, and i challenge anybody on this panel or any other panel to show me any data that they can release in june that's based on july, august or september ahead of the data we use in the markets alone, just a question of how old. we don't have what we should have, considering where interest rates are, where the stocks are, where half the economy is. so, i think the real answer is we're underperforming, and i

think that's what the bond sensed. and i think the market senses that the underperformance is going to go on, and i think the volatility you see in numbers -- and blame weather, blame whatever you want, but exogenous shocks are nothing new. the recession of the '70s was an exogenous shot over energy. it doesn't dismiss the notion, hey, how many times do we debate a bill where the stocks are not commensurate to the economy, but you're still cashing the check. if the weather is bad and you go in to fire employees, they don't get to cash a check. >> rick, the flash data for june for both u.s. manufacturing and servicing industries that pretty much covers everything has been, as you know, pretty strong. >> yeah, but you know what, i love flash and i love all the feel-goods, the consumer confidence, and sometimes they correlate very well with the economy when you go back and do your beta testing for your models looking forward. but in the end, it's really the hard and fast data like jobs and gdp that i find in my 35 years in this business are the ones you're supposed to pay the most

attention to. and i think that we can't dismiss it. >> the jobs reports have been reasonably strong, too, though. >> yes, they have, but the problem with the jobs numbers are that we're not being honest about the true state of labor, whether it's demographics, whether it's how many people are out of work, whether the skill set of the people out of work more than 27 weeks is ever going to change -- >> come on, rick. >> uh-oh. >> wait a second, you can't have it both ways. you have had an s&p market that's gone up 200 points since february, all right? and what's happened to the bond market during that time? it's basically gone sideways. if anything, it's misled investors, as i've said time and time again -- >> total return on the long end still better than stocks, though, but don't mention that. >> come on, rick. look, look what's happening here. >> i'm coming. where do you want to go? i'd like to go to numbers. >> you have a generation of investors that are left out. the numbers right now, you have got corporate america making more money than ever before. you have got -- >> yeah, yeah, now, too bad we can't say that to the people that live to the left of where we go home and to the right of where we go home. >> you and i know that there's a

big disconnect between wall street and main street. >> and that's what i've been focusing on, jack, so welcome to my world. >> well, that's not a reason to be out of stocks and lose purchasing power parity. >> i never said to get out of stocks, jack. >> that's the problem. >> never said to get out of stocks. >> rick -- >> what i'm telling you is that from the standpoint of what central banks are doing, with the standpoint of how much debt is going on in this country, that the growth that we are trying to pay for in these absurd, catastrophic, strange policies doesn't seem to be worth the price of admission. >> i'd agree with that. >> 2.9% gdp. >> last word from susan here before we go. susan? >> i agree with rick. >> well, that's a way to keep it brief and to the point. >> a concise final word from susan. thank you all. appreciate it very much. >> thank you. >> jack, as always, getting the blood flowing as we head into the final hour of trading. >> and i like susan's point as well. a lot of people are investing in stocks as an income play these

days. >> you bet they are. look at the utilities and how they're doing now. >> exactly. 50 minutes to the close and we are seeing a rebound after yesterday's sell-off. the dow is up about 30 points, a couple to the dow and nasdaq, too, as we watch volumes and volatility, a couple vols in focus of late. this morning's downward recession of the gdp for the first quarter driven in part by a surprise contraction in health care spending. how did the government misread this so badly? we'll look at that coming up. jeff zients, national economic council director and assistant to president obama on economic policy will speak with us exclusively and we'll ask him about that. the other big story of the day, as you heard, the supreme court ruling against up-start aereo for violating broadcasters' copyrights. we'll look at what's next for the start-up and what this means for broadcasters. is there still a business opportunity using the business model that aereo has been using, maybe even for broadcasters? we'll look at that coming up when kelly and i continue after

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the dow up 33 points right now. the nasdaq, technology has done well today, relatively speaking. it's the best performer of the major averages, while the s&p is up 7 1/2 points right now, kelly. now, shares of owners of tv stations gaining ground today on the heels of the supreme court's ruling against aereo for violating broadcaster copyrights. we should note, of course, cnbc's parent company, nbc universal, is among the companies opposing aereo in this case. >> hampton pearson has more on this landmark decision out of washington today. ham? >> reporter: supreme court majority, if you will, slamming the door on internet company aereo and really giving broadcasters and cable companies a kind of slam dunk-type win. now, aereo, we know, is available in 11 major metropolitan areas, including new york, boston and atlanta. it uses dime-sized antennas to capture television signals and transmit them to subscribers for a fee over the internet. today in a 6-3 ruling, the supreme court said aereo is

violating broadcasters' copyrights by taking the signals for free, not paying retransmission fees. speaking for the court majority, justice stephen breyer wrote "aereo's system is, for all practical purposes, identical to a capable system. both use their own equipment, both receive broadcast television programs, many of which are copyrighted." justice breyer also went on to say, the decision has nothing to do with cloud computing, remote storage, dvrs or other technology. that could be a case for another day and another set of issues around all of this. now, also, justice antonin scalia speaking for the court's three dissenters basically said it's up to congress to fix what he characterized as a loophole in the copyright law, reminding his colleagues that about 30 years or so, an earlier supreme court came within one vote of banning the vcr. back to you guys. >> hampton, thank you. and yeah, a lot of the tech community, by the way, seizing

on scalia's dissent, concerned, despite the supreme court's language, this could set a precedent against further innovation across this space, bill. and we'd like to remind you, by the way, aereo is number seven on this year's cnbc disrupter into list. for more on how much disruption aereo could still bring to television moving forward and what this ruling means for broadcasters' future, let's bring in two key players in the story. >> vincent sedusti is lynn media's ceo. they have a merge pending with media general that would create a company that would own 74 broadcast stations around the country. and gordon smith, of course, is the ceo of the national association of broadcasting. good to see you both. thank you for joining us. vincent, let me -- obviously, both of you will be telling us how pleased you are with the ruling by the supreme court. we get that, but i'm wondering, is there still a business opportunity to pursue here? aereo was a growing concern here. the technology still exists. that's not going to go anywhere. vincent, would you pursue a

business model like aereo's, to go after those mobile customers out there? >> yeah, it's a really interesting conversation. the broadcast business has always provided a terrific amount of spectral efficiency in providing one to many technology with these big, tall towers in these markets, reaching a lot of people, versus cellular technology, which is a one-to-one. so, i think as we look forward and think about the future of our industry, we're very excited. having been the original mobile providers, we're very excited about the opportunity we could play. but we do differentiate that significantly from the aereo business model, of course, which we see simply as a company trying to profit without having to pay for this very expensive-to-produce and valuable content. >> gordon, speaking of the future, that brings up something interesting about the past that i personally would like to understand. you know, this goes down to the fact that broadcast is a free signal and the right of who, i guess, should profit on that free signal, but is it a

requirement? is it a hard and fast rule that these broadcast signals be free? or could companies move if they sensed a threat somehow, towards making people pay in other ways for this content, too? >> when you think about it, when we had cable and they were subject to copyright law, and then if satellite, when it came along, wanted to evade copyright law, they could have taken the same position as aereo, but what the supreme court has just decisively said is that if you're going to take copyrighted material and then try to profit off of it, that that's what invokes the difficulty. and so, we're very gratified with this decision. in the end, whatever business model exists for aereo has to be pursued within the boundaries of the law, but you can't take copyrighted material and then sell it to somebody else without dealing with the creator. it's very valuable content. >> vincent, would it be up to

you to talk to aereo about retransmission rights? would you want -- what would you charge them? i mean, i am not going to ask you to negotiate publicly here, but would it be profitable for them, do you suspect, to still have to pay you guys retransmission rights and then turn around and charge their customers? could they make a living at that, do you think? >> yeah, there's been plenty of companies that have been upstarts in the pay tv world. verizon's fios, at&t's uverse. so, there certainly have been some good success stories there, and we promote competition. we think competition and choices for the consumer is a very, very good thing. it provides pricing pressure, it provides i think a more efficient outcome and a more beneficial outcome for the consumer, and it's very good for our business as well. we like to have as many customers for our very valuable content as possible. so, we'd encourage aereo to play by the rules, and if they believe they should get the mvpd designation and become a paid tv

provider, we're more than happy to sit down and negotiate with them what those fees might be. >> gordon, could you address briefly scalia's dissent? this was a 6-3 ruling. his concern is that aereo, as he sees it, is not transmitting, that customers are playing the content to themselves. could you see a congressional or some sort of further legal activity down the road to further clarify if people are playing this content for themselves, that that would be okay? >> well, of course, congress is always free to pursue some clarification in the law, but the truth is that the copyright is invoked because they're charging someone else before they can have a private performance, if you will. and that's what the supreme court said, you can't break that barrier without violating the law. and aereo has a business model, but they have to do it within the legal boundaries. and vincent made the case for a business model going forward.

my job at n.a.b. is to make sure that the laws are fully observed, and that's what the supreme court did today. a law as old as the united states constitution that requires protection of copyright. >> and we have yet to hear from aereo on what their plans are, but they had said, the possibility existed that they go out of business if they lose this supreme court case. >> yeah, sure. >> like to hear what that's all about. gentlemen, thank you. appreciate your thoughts today. 40 minutes left in the trading session here. kind of holding steady as we go toward the close with the dow up about 38 points, nasdaq's up about 24 right now. and cbs, by the way, was up in the range of 6% last check. now google, meanwhile, kicking off its annual io developers conference in san francisco. we'll speak with a couple marketing and tech pros next about google's brand and if the tech giant can steer away from being labeled evil and big brother, especially as a protest disrupted things today. also, jeff zients speaks with us in his first broadcast

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welcome back. here's a look at where we stand with about 35 minutes left to go in the trading session. markets still are broadly positive. again, as noted, one of the worst first-quarter contractions in gdp outside of a recession, and yet, you can see markets

gaining about 0.25%. the dow standing at 16,860. technology doing well, google developers are gathering in san francisco for the io confab. josh lipton with there with details. >> the keynote wrapped up just a short time ago. thousands of developers were here, another million watching along on live stream. protesters, though, were here as well. a couple actually managed to get inside, disrupt the presentation. they had to be escorted out, causing quite a scene here. outside, protesters as well. they seem to be protesting a range of issues, everything from taxing to housing to gentrification. inside, though, bill, the show did go on. and the theme here today was really google wanting you on android at all times and everywhere, at work, at home, even in your car. so, to that end, they introduced new in-car technology called android auto. among other features, voice-activated commands for music and messaging, no more fiddling with your phone while

you're driving. also, google wants to move farther into your living rooms, so they introduced android tv, a new platform to access and organize your content, coming to set top boxes later this year. and a final theme, wearables. google introducing wearables from lg, motorola and samsung. guys, back to you. >> josh, thank you. let's look at what this new spate of products potentially means for shares of google. >> we're joined by tech crunch's colleen taylor and robert luna from surevest wealth management. colleen, is there a theme that we can identify that google is pursuing with the spate of products that they were unveiling today? >> bill, it's really android, android, android. as josh said, that was really the main thrust this morning of the keynote presentation. they're really focusing a lot on this android brand. the new numbers today were that android has 1 billion monthly active users. there's only a handful of products that can give that

claim. and i think google is just putting all of its firepower behind that. two things they didn't mention at all really today were google glass and google plus. the real focus right now is on android. >> i guess, robert, you can see the shares responding positively, but to that point, how can investors be so sure that google is focusing in the right areas going forward? >> well, you know, i think, kelly, right now, the bigger picture is all these companies, whether it's amazon or google or apple, they're in this race for share of your life right now. >> right. >> they're trying to get into your home, into your cars. and you saw that yesterday. this conference has overshadowed the acquisition they just made yesterday with dropcam for $550 million. they're now in your house, in your thermostats with nest, they're monitoring your security, they're in your home. they're basically empowering you over things like your energy, you know, anything, your transportation. and they're making it such a seamless opportunity right now with companies like samsung and any device that you want to use. so, i think google's going to be a big winner in the long run with this.

>> colleen, that's what i was really looking at was the wide range of products that they're unveiling. android is certainly a core theme in all of that, but i guess that the point is, when you have enough money, like google does, you can do anything you want at this point. the question is, are they going to spread themselves too thin here, do you think? >> that's a really great question. i think what's really encouraging here for them not spreading themselves too thin is that they're partnering here. they're not making all of the devices themselves. they're partnering with lg and samsung and other companies out there. android tv is a software platform. it's not a set top box that they're manufacturing and selling. so, i think that they're really focusing on what they're doing well and then partnering with other companies to handle some of the details there. >> colleen, can you just explain the difference between what they're rolling out today with the set top box, what already exists in the form of chromecast? >> yeah, yeah. google has been trying to do television for a long time. >> yes. >> there was google tv, a set top box, didn't go over so well. chromecast is a small little

dogle that allows you to stream video content from the web on to a television device. android tv appears to be a software suite where you can get broadcast information in on your television. it's something that would be baked into the television. it's not an outside dongle that you just, you know, plug in. but it's all in really the same space. this really is google trying to get everywhere that it can. it's no longer when you're just sitting at your computer or looking at your phone. it's everywhere. it's your car, your television and your watch. >> robert, same question to you. i mean, can they spread themselves too thin? can they be all things to all people in all parts of our lives? >> you know, i think they can. and i think she just hit on it right there. where google is either partnering with or acquiring the companies that they don't have the expertise with. and i think the long-term ramifications of that are very positive, because if you look at what apple's doing, i think they just kind of went that direction with beats to kind of give them that secondary product, but who wants to be an apple drone,

where everything you have has an apple logo on it? i think long term, that's not the right solution. but google, on the other hand, is really giving you the empowerment to bring in any technology you want and create a personalized solution, so i think what they're doing is fine. >> hold on, it sounds like the race between apple, google, amazon, is to be your everything solution, because you really can't these days afford to spread yourself across so many different companies that don't allow their devices to communicate seamlessly with one another. >> well, i think google's going to be the platform and the platform that can bring these all together. so, whether it's through the tv or in your car, i think, you know, there are several different products that will be able to connect through one solution. but i think at the end of the day, kelly, somebody as far as the consumer is really looking for one solution where they can bring all of these products together and don't have to think about it in terms of ten different products. >> all right. thank you, folks. nice to see you. >> 30 minutes to go here into the close and markets are moving a little bit higher here. the dow is now up 44 points, the

s&p back above 1,950 at 1,958. the nasdaq is positive by about 28. bill, as you noted, tech doing well today, google's up almost 3%. when we come back, we're talking economics. jeff zients, the president's economic council adviser speaks with us exclusively. we'll get his take, the lowdown on what was behind the huge downward rescission to first-quarter gdp numbers and if the economy really is on the road to recovery right now. and later, gopro is expected to price its initial public offering. after the bell we'll bring you that number the second it hits wall street. we're also going to pick the brains of some gopro experts on whether this is a stock you need to own.

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see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business. built for business. markets coming back here. we haven't gained back what we lost yesterday so far, but the dow's up 49 points right now. that's about the high for the session there with the s&p up 9, the nasdaq up 29. i was just counting up, kelly -- you didn't have to count very far -- we only have three trading days left in the second quarter here. >> wow. >> it zoomed by. >> yeah, and bill, a reaction perhaps contrary to what you'd think with that nasty first-quarter gdp report, but there has been a bit of a flight to treasuries.

if you look at the ten-year interest rate, that today is 2.56. so, the theme that's been playing out here, low rates for longer, more share buybacks. expect that to continue a pace. >> yeah, exactly. >> in fact, dominic chu i think has some of the big movers in the market today. dom? >> it's interesting, kelly, bill. fourth quarter results came in below expectations, so general mills shares, you can see they're down 3.5%. there is also monsanto soaring as they're raising their full-year 2014 outlook and announced a $10 billion share buyback program. analysts expect this move to double their earnings over the next five years. you can see them up 5% on the day. then there's haynes brands, rocking up around 8%. this is the underwear and athletic apparel maker, buying lingerie maker db apparel for $500 million. this will become one of the biggest companies in the industry worldwide, and not

coincidentally, both companies used to be owned by sara lee, of all people. oil refiners also today slipping as a group. the four worst performing. and concern is building that u.s. refiners are now going to have to compete and pay higher prices for crude that they turn into things like gasoline. so, if you look at the overall picture, lots of individual stories in an otherwise market that's really showing some signs that it's trying to consolidate, guys. back to you. >> all right, dom. thanks very much. today's jaw-dropping gdp number, minus 2.9%, compared to the minus 1% preliminary number. according to dow jones it was the worst non recessionary gdp quarter we've seen in 58 years. where does that put us the road to recovery right now? >> well, with us now in his first broadcast interview since assuming the role of national economic council director is

jeff zients here at the new york stock exchange. welcome. >> thank you. thank you for having me. >> what a data point to walk into. you've had a huge career in the private sector, then tackled the healthcare.gov debacle and now this economic debacle. what happened, specifically with the health care piece of this? apparently, the spending went from looking positive in the first quarter to negative. can you just explain how it is we're now faced with one of the first nonrecessionary drops in u.s. output we've ever had? >> if you look at the revision, we talked about whether it was one of the worst winters ever on record. there's also volatile numbers in exports and also in inventories. you know, the gdp, first-quarter gdp is really a rear-view mirror. if you look at what we're seeing today in the economy, when i'm out and about talking to businesspeople, small and large, they feel pretty good about their businesses. as you look at some of the more recent indicators in manufacturing, autos, homes, things look pretty decent, and i think that's why forecasters are

counting on a rebound in this quarter and a solid next couple of quarters. >> do you know what the deal is with the health care spending, though? can you figure that one out, because frankly, it's a puzzle to a lot of people on wall street. >> you have to unpack the health care number. there's good news in that those people who have coverage are paying less for health care. that's part of the affordable care act's impact, and that's a good thing. we want health care inflation to continue to come down. >> just not take the whole economy with it. >> well, the other part of it is more people are getting coverage, but if you think about the ramp-up in coverage across the first quarter, as you know, the 8 million people who now have health care coverage, because of the affordable care act, most of them got coverage towards the end of the quarter. so, we would anticipate, i think people will project that health care coverage will, because it has increased, health care utilization will increase across the next few quarters. >> why are we so confident, jeff, that the economy has bounced back in the second quarter, especially when we were all pointing to the weather, but yet, the biggest drags were health care spending and those

exports, which you call volatile? what is it that's bouncing us back here in the second quarter, do you think? >> well, bill, again, i think it's a combination of getting out and about and talking to people who are in the economy, which i did just this morning. small business owners, large business ceos feel like the economy is relatively strong right now. they have good orders. and you know, if you think about where we are positioned globally versus our competitors, it's really a moment of opportunity for the u.s. economy, given our historical advantage in innovation coupled with the productivity of our workforce. and then this new comparative advantage that we have in energy. we have tens of billions of dollars of cost advantage in manufacturing driven by the boom in natural gas and oil production. >> is that why you guys are loosening up on the export front? >> you know, actually, we are looking at our policies as it results to this boom in domestic production. but i want to clarify that what happened yesterday, the commerce

department, that is not a change in policy. that was a clarification that -- >> i mean, there are a lot of investors on wall street reacting as if it is. valero's down 8.5% today. >> you're always able to export. >> are you allowing oil exports now or not? >> crude exports are not allowed beyond canada and mexico, which is what has historically been the case. refined products can be exported. what the commerce department decided yesterday, or determined yesterday, consistent with current policy, not making any new policy, was that that condensate was a refined product, and therefore, eligible for export. >> that interpretation seems to be what people are latching on. i don't want to spend too much time on that. before you go, you're intimately familiar with the budget, having spent time as a budget official, and the sharp decline in the u.s. deficit has some people now talking about the possibility of a budget surplus as soon as next year, over parts of next year, maybe during the tax season. that would mean that the debt ceiling, perhaps we don't hit in

march. perhaps it doesn't happen until later in the year. and obviously, there are political implications for that. what is your projection for budget finances in the months ahead? >> the way we look at budget is as a percent of gdp. and under the president's leadership, the deficit has been cut in half, down to about 4% of gdp this year. we expect for that to continue to decline to about 3% of gdp next year. so, we have made huge progress on the budget. very importantly for the economy, again, when you go out and talk to business leaders, what we do not need is any more drama coming from washington, d.c. we need stability and predictability, and that allows businesses to invest and create jobs. >> yeah, and by the way, if we could just ask about infrastructure investment, long-term employment, a host of other challenges, just in a quick word, what is your top priority in this position that so many controversial and influential figures in the past have held? >> infrastructure investment, as you said, is a twofer. it enables us to build on that

comparative advantage that i talked about so that we win in a global economy. that's the medium, long-term impact of infrastructure investment, making sure our roads are better, bridges, our airports, our seaports. at the same time, it immediately creates jobs, particularly in the construction sector where we still have elevated unemployment. so, infrastructure's a bipartisan issue, it's a no-brainer. we should invest in our infrastructure. >> just got to get it done. jeff zients, a tall order. thank you so much for joining us. >> thank you for having me. >> thanks for your time. appreciate it. >> thank you, bill. >> over to dominic chu for a "market flash." bill, kelly, an interesting development here. we're going to cite al ylergan shares. reuters cites sources familiar. hedge fund giant john paulson has amassed a 6 million share stake in allergan, about 2% of shares outstanding. so, he, according to these sources, would support a deal to be bought by valiant

pharmaceuticals. bill ackman, hedge fund giant at pershing square, has a 10% stake in this company. now add on a possible 2% stake from paulson, interesting development with that. certainly a name we'll watch into the close. >> we do live in a time of wall street titans, don't we? this takes us back, not that i was there, kelly, to the 1890s with the titans of that era, of the gilded age. we're back in that again with these guys, with ackman -- >> i thought you were going to say the 1980s, yeah. >> even then, yes, exactly. carl icahn was there then, too. very interesting. all right, heading toward the close, 16 minutes left in the trading session here. the dow still continuing to move up higher here. we're up 56 points right now, and the nasdaq's up 32, almost up 0.75% right now. up next, americans are eating a lot less cereal for breakfast than they used to, and that's rocking the food world from general mills to mcdonald's. we'll tell you how your portfolio could get a boost from all this when we come back. okes: the volkswagen passat is heads above the competition,

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in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. welcome back. heading into the close now, 13 minutes to go, in fact, with the dow up 53 today, bill, after a pretty sharp sell-off yesterday. >> yeah, we'll see if that continues. and it will be interesting to

see how we do as we close out the second quarter later. cap'n crunch, tony the tiger, even the breakfast of champions are not meeting the morning like they used to. it's a story rocking the breakfast nook, and our cereal correspondent, sara eisen, has details for us. >> this is a serious consumer shift, bill and kelly. we want protein, we want healthy and don't want cereal. it's hurting general mills today and over the last year, at least. sales disappointing in the quarter for general mills as cereal sales have been slumping for at least a year. this is a company that gets about 20% of its sales from cereal, so that hurts. the ceo today on the call saying we're going to spend more money advertising, saying that our products are healthy, they're going to do more natural products, like more cinnamon taste in toast crunch, fruitier trix, protein granola is also a big focus of theirs. and it's not just general mills. kellogg's is getting hit even harder. here's the picture -- cereal sales and revenues and volumes have been slumping.

part of the reason for that is growth in yogurt. almost half of americans now eat yogurt for breakfast, up from 36% ten years ago. greek yogurt is driving, making up about 30% of the market. and yes, more people are eating out first thing in the morning. there's stunning data that shows that at restaurants, across the day part, breakfast is the only one actually growing in terms of traffic for 2014. no wonder we've seen starbucks and yum bra! brands and everybo else go after mcdonald's. >> dunkin's got my breakfast. >> dunkin's got my breakfast sandwich. >> it's the year of the breakfast sandwich, guys. >> thank you, sara. the dow is up 54 points as we head toward the close. now, yesterday, we revealed georgia as the best state for business. coming up in the next hour of the show, our scott cohn is going to look at the worst state. >> oh, lovely. >> and what it's doing to try and go from worst to first. don't miss that.

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welcome back. about 7 45e6 minutes left in the frauding session with the dow up 45 points. chris wolfe is with merrill lynch private banking. the market's done better, i

think, than most expected. we are not getting last year's big gains, but we're not getting that sell in may and go away and all those platitudes out there. what do you think as we head toward the third quarter beginning next week we're going to see in this market here? any change of tone, do you think? >> i think we're going to see the evolution of our corporate capital expenditures. that's been the watch word since the beginning of the year. companies have spent money on dividends and buybacks. that's kind of played itself out. the next dollar went to mergers and acquisitions, and i think the dollar after that, which is really the end of this year and going into next year is about capital expenditures. i think we're in a place where companies are looking to think about their return on invested capital, and they have the cash to do it. so, i think the tone starts changing for that, and here's the reason it's important. it's important because the large part of the market, say the s&p 500, for example, is actually sensitive to capital spending. so, i think that's the driver. >> you sound like you want to invest for growth, then. so many people are looking still to invest defensively right now, rather than going for maybe a little bit more risk with the possibility of a higher return with the growth stocks.

>> you know, look, we're positive on capital expenditures for a lot of reasons, but i think it comes down to we've had a pretty good couple of years in markets, and where we are today is a rebalancing moment. lots of clients piled into safe things, in equities, or so they think, in dividends, and really have upside down portfolios with lots of risky fixed income. it's really time to rebalance portfolios and look for cheap parts of the market, things that are more sensitive to growth, for example -- materials, energy, autos. now, that looks a little risky right now because you're betting on capital expenditures and business investment to start flowing second half of this year, early next year, but you know, that's our view. and the whole idea that portfolios being upside down need to be rebalanced is what we're talking to clients about. >> chris, stay right there. as we head toward the close, we have the closing countdown coming up in just a moment. and after the bell, gopro gearing up to set its initial public offering price tonight. that should be very interesting. we'll bring you that number, tell you how the wearable camera-maker could trade starting tomorrow morning. that will be setting the tone for that thursday. you're watching cnbc, first in business worldwide. hammer that in.

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[ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. about 2 1/2 minutes left here as we head toward the close. the dow holding on to some gains here. as we said, not gaining back what we lost yesterday, but still up about 47, almost 50 points, as we show you any moment now -- there we are -- up 49 points at 16,867.

yield on the ten-year, some volatility there after the data came out this morning on the third revision, the final one on the gdp for the first quarter. you see that on the open this morning. and then we've crawled back a bit. we're at 2.56% on the ten-year and the volatility index has been coming back, down a fraction now. back with chris wolf, merrill lynch private banking. i don't want to put you on the spot, but gopro's coming public tonight, and they're not alone. we've had, what, 18 ipos this week pricing. is that just a rush to get in before the end of the quarter, or are we going to start to see a glut like this coming down the road here? >> you know, i think if we see a lot more strong performance out of equity markets, you're going to see the calendar fill up pretty quickly. that's typical for a cycle where you talk about companies looking for exits. you had a lot of money put to work in the private space, for example, in the prior five to seven years. so, a market like this is a pretty good one for exits when there's lots of liquidity and

people not really discriminate about where valuations are on some of these companies coming out. >> i'm curious your take on capital expenditures very quickly. what will spark that? we've been waiting for capital expenditures by corporations to begin for months now, maybe even years. it hasn't happened yet. what's going to spark that, chris? >> so, the reality's that it has happened, it just hasn't happened in a big way that's very obvious. we've still seen massive spend on computers, technology, et cetera. the problem is, those things are often priced every year. so, spending $1 million last year is actually $800,000 this year for the same stuff. >> and it's not creating as many jobs. >> so there as a trade-off there. the desire for corporations to protect their margins will drive that. a lot of our survey work with cfoos and ceos show that and they're working to protect their margins. >> chris wolfe, thank you for your thoughts. appreciate it. >> thank you. >> we're going out with modest

gains for the major averages. and don't forget, we get pricing tonight on the ipo for gopro. cool technology. will it be a cool stock to own as well? that's coming up next on the second hour of the "closing bell" with kelly evans and company. i'll see you tomorrow, kell. >> thank you, bill, and welcome to the "closing bell," everybody. i'm kelly evans. and as you can see there, we're finishing up the day on wall street with green arrows across the board after a sell-off yesterday. the dow jones industrial average here at the close adding almost 50 points. meanwhile, the nasdaq adding about 30. the s&p 500 up almost ten. lots of individual moves and we are waiting on one of the biggest gadget ipos, if you want to call it that, in quite some time. that's gopro. pricing is expected later this hour. first, let's talk about these markets with today's panel. joining me, sharyn epperson, jon najari najarian, natalie morris and nathan from sibley money advisers. also with us, more on today's markets, "fast money" trader

brian kelly, and importantly, we've added bob pisani to the mix, bob, because eric schneiderman is going after barclays for their dart pool. what are the implications here? >> well, we're still waiting for the actual press conference to begin and get actual information, but early indications are that they are looking into the concept that barclays may have misrepresented information in its dart pool and may have disadvantaged clients that were not barclays clients over barclays clients. we need to get more information on this, frankly, because the press conference is about to begin. but if that is actually the case, there would clearly be some violations here. the s.e.c. has said many times in the fast that price time priority is very important, best execution. you cannot favor your clients over other clients, even in a dart pool, and if they have some information, if sneiderman has some information that they have, in fact, done that, that's a serious allegation. >> it is. and we're going to keep people posted on that when we hear from eric schneiderman. we'll bring that to you. brian kelly, in the meantime,

whether it's the fact of this particular instance, whether it's people more broadly taking positions off, i guess, how important is it to you that we have seen somewhat of a lack of activity here, just not great volume lately? >> yeah, well, i think, listen, everybody that i talk to and myself included are saying, you know, we have two days here with kind of two different markets. we had that big sell-off yesterday. we had good housing starts, market sells off on great news. we have an awful gdp number, and yes, it's backward-looking, but market rallies. you put the two together and you start to see a situation where there's nice, warm porridge. that's about it. we have the goldilocks market, not too hot, not too cold. that's probably why we rebound a bit today. whether that's sustainable, i don't know. it's only two days, but it looks like for now, you know, the bulls are back in charge. >> goldilocks, nathan? >> i think what you're seeing right now is the effect of only 37% of all investment assets are currently being held in stocks. so, you can't have a lot of

volume when a lot of people don't own a lot of stocks. i think that gets pretty simple. then yesterday, janet yellen was talking about, well, you know, we can get some more inflation. i'm really cool with it. that sort of sent a message to the bond market, which is, you know what, rates going up? i'm thinking 2016. i know she doesn't like the forecasting business. i'll have it your way, ms. yellen and scream 'not a problem. and all of a sudden, today we find that bond rates are going down to a level we never thought we would see. and i keep saying, look at your bond. we've got so many times to do a do-over with bonds and to figure out, i don't now how you want to be long, you want to be short, cut your duration or whatever. some day we're going to look back and say you had five, ten chances to fix your bond portfolio, because it's a huge part of everybody's investments. >> fix it how, sharing? sorry, go ahead, nathan. >> you've just got to shorten up the duration right now and wait until the interest rates rise. >> isn't that what everybody's been doing, though? >> i think a lot of people aren't doing anything. i think that's what you're seeing here. and yes, as nathan said, a lot

of people aren't in stocks. if they are, they're just holding on to what they have. they're worried there will be a correction at some point. and so, just biding time until that happens when what they should be doing is reallocating. what they should be doing, is as nathan said, looking at the fixed income portion of their portfolio or other asset classes they could add to the mix as alternatives in case we do see this, when we do eventually see this correction. >> the most hated rally of all time, dr. j.? >> indeed, it is, and further proof, kelly, because my friends bespoke investment group basically said that the s&p 1500, biggest cap stocks in the united states, they said the short interest to float percentage is at the highest level since december 2012. now, that was, of course, when the government shut down. and going into that, of course, we have a slightly larger short interest percentage of float. we know what happened in 2013, kell. >> well, right, the market was up 30%-plus -- >> a massive rally because you

caught so many people flat footed, i among them at the time, and i think the same thing could be setting up again, as you say, because the hated rally. >> it's fascinating, natalie, the way in which people, i guess if you want to just put it this crudely, keep getting it wrong? >> right. >> but we also have headlines in the meantime today, google's io developers conference. i mean, a lot of interesting changes, i guess, if you want to just find a specific investable story. >> right. when you look at technology, you don't see the holding pattern that you see across other sectors right now, housing, bonds, other things we've been talking about, but in technology, they're still eager to innovate, because like you're going to see today, we've got the gopro, innovation across the board, although i'm interested in seeing what happens with this aereo judgment, because i think that's something that could stifle innovation. but again, like i said, it's just not the same holding pattern. >> we will definitely talk more about aereo and whether that's the case. like you said, the tech community upset about it. nathan what about the fact that we've got a short interest again at a high since 2012 here?

a lot of people keep betting on volatility go up, keep betting wrong. by the way, we're not talking about retail investors, we're talking about some of the smartest money out there. >> i'm going to leave smartest money out there to najarian, okay? i understand i'm way above my pay grade in it. >> no. >> but here's what i'm going to tell you, we've got durable goods numbers today, okay? capital expenditure for the first time, they were, like, absent, awol, nowhere to be seen. all of a sudden, capital expenditures are rising, and if that happens, you'll see hiring, and i think it will be better wages than $10-an-hour service wages as a barista somewhere. there was the really good news to take away for today. the other interesting good news for consumers but maybe not for gross domestic product was that health care, which was expected to rise by 9%, it shrunk by 1.5% or so. but that's saying people aren't payas much for their health care, not surprisingly. we did some proprietary surveying in cincinnati, and guess what? faith in government is rising. and i will tell you, when faith

in government rises, the market does not do well because -- >> there must be something in the water in cincinnati. >> no, i'm going to tell you something, it's a stratified random sample. even our chief economist here at cnbc would go, that's interesting. when people have faith in government and not in business, which is not great for a -- >> i'm saying i'm not sure any of the national studies corroborate that faith in government is rising. it seems, if anything, to be the opposite. >> it would seem that way, but i'm telling you something, when you put your faith in government, you're not putting your faith in business and you're in a capitalistic society, i think you'll see as we stumble through the summer, i'm going to come back and you'll go, tell me again about that faith in government number. i'm telling you, i'm going down with the ship on it. >> give us your -- go ahead. >> that's an interesting statistic that i don't have in my model at this point, but i'll definitely -- i'll update that this evening. >> i was just going to ask, i mean, how much -- tell us a little bit about gopro, because we don't have you for the whole hour and we'll probably get it at some point. this is a pretty big ipo for

this space, so the pricing, is it just going to be a gopro story, do you think, or are there broader implications to draw? >> listen, i think the whole story with gopro is that they're this media company, or some people say they're trying to be. i would suggest they probably already are, because the technology isn't necessarily anything that special. what's special about them is they have their platform, they get the users involved. so, i think it has implications for other businesses, how they run their business. the ipo should be okay. there's certainly plenty of support for it out there. i don't know that i'd go out and buy any of the ancillary names on this, but i think it should be all right. >> it's $17.8 million at 21-24, so it's a fairly substantial ipo. early indications are the interest level's very high. i wouldn't be surprised to see it not only price at the top end of the range, but even a little bit above that. that's quite possible. the thing that this has got going for it is the enormous brand recognition. every trader on the floor knows who gopro is, every single one. that's very rare to get that brand recognition, and that's

why i think there will be a lot of retail interest. i think the volume will be very heavy in that tomorrow. >> when you think about some of the related products in this market, don't forget how often we've used the words wearables on the air in the last year. gopro's the original wearable where you just strap it to your face and then jump off a cliff, right? >> right. >> yeah, that's true. we've got to leave it there for a second, guys. we'll have more on goproce late but brian kelly will be with the "fast money" crew at 5:00, talking with the ceo of hasbro ahead of the "transformers" premiere this friday. but we have breaking news on the barclays suit we were just talking with bob about. mary thompson has details from eric schneiderman. mary? >> hey there, kelly. we have the 31-page filing in our hands right now. in the filing, new york state attorney general eric schneiderman accusing barclays of securities fraud and illegality. within this charge, he is charging barclays that it grew its dart pool through false statements to clients, including that it operated the dart pool

in favor of high-frequency traders and falsified marketing material, also that barclays lied about high-frequency trading activity in the dark pool and gave high-frequency traders information about clients in that dark pool. a quote -- "barclays is courting high-frequency traders and was contrary to barclays representation to clients that barclays operated with transparency and provided a safe venue in which to trade." new york attorney general sneiderman is expected to hold a press conference in just a couple minutes, and when we have breaking news from that, we will bring it to you. kelly, back to you. >> mary, thank you. dr. j., i'm curious, barclays shares, by the way, down about 0.8% today. what do you think of this news? >> well, the best execution that bob pisani spoke about is one of the things at the heart of dark pools because i don't believe they can provide best execution. it's dark because it's opaque. you can't see, there's no

transparency, and they don't put out a time and sales, kell, like this exchange does, like the nasdaq does, like all the exchanges must do. in fact, if they miss a certain percentage of their trades matching them at the correct time between buyer and seller, these guys would be fine. the dark pools don't publish that data for multi minutes after these big prints go up. >> but john, what i'm concerned about is i think that the attorney general, i think mr. sneiderman has got hold of some kind of analysis -- >> yep. >> and i think, i can only conclude that he has determined that barclays, that there is a pattern where barclays is favoring its own clients' trades over other people who are in that dark pool. look at these terms. falsely marketing, falsely underrepresenting, falsified -- i didn't hear falsified analysis, but it sounds like they are advantaging their own clients here. now, you wonder how could this be done. there were incidences in the past, these were called flash

orders, john, you might remember, where people would favor their own clients' bids and offers and put them in the queue first. so, for example, if you were bidding $22.01 for a stock and you were five people bidding $22.01, obviously, the first person there would get the order executed first, but if you put that client first in line, whether they were or not, that used to be called flash orders. the s.e.c. has ruled that you cannot do that. now, i don't know if that's being alleged, but it kind of sounds like that's the kind of allegations that are being made. i don't have the 31 pages in front of me, but those are pretty serious allegations. >> well, schneiderman's office saying they did talk to barclays about what was going on, so great point. we have to take a break. broadcasters winning a supreme court ruling against start-up aereo. we'll look at what the landmark decision means for the television industry and streaming media. the federal aviation industry grounding amazon's drone delivery dreams, at least

for now. the question is when, if ever, that could get reversed. that's ahead. and action sports camera maker gopro could post its ipo any moment now. we will have more when it comes later on the "closing bell." you're watching cnbc, first in business worldwide. did you remember to pay the dog sitter?

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welcome back. a major win for the giants of the media industry today. the supreme court ruling tv start-up aereo violated copyright law. of course, cnbc's parent company, nbc universal, is among the companies that opposed aereo before the supreme court. our julia boorstin is breaking down what this ruling means to the media industry now. hi, julia. >> hi, kelly. this ensures that the media giants will continue to be paid by cable, satellite and internet tv companies for the right to rebroadcast their content. protecting a crucial and growing piece of broadcasters' revenue. >> what the consumer now is guaranteed is that we will continue to do the same high-quality, premium programming that we've done, that we will deliver it to them, and therefore plenty of places to get it. so, there is a very pro-consumer thing, and frankly, for aereo to say that it isn't, you know, is a little bit of sour grapes. >> of the media giants that battled aereo in court, cbs, which is most reliant on retransmission fees, saw the

biggest lift, up more than 6% today. shares of abc owner disney, 21st century fox and comcast, the parent of nbc and cnbc, are all also higher today. iac, which invests in aereo, is down slightly. chairman barry diller saying "i do believe blocking this technology is a big loss for consumers." aereo's ceo says the battle is not over. "we will continue to fight for our consumers and fight to create innovative technologies that have meaningful and positive impact." we'll see if that entails possibly paying media companies. the justices made a point in their ruling to say that this should not have an impact on other cloud services like box or drop box as well as emerging technologies. kelly? >> all right, julia, thank you for now. we want to dig deeper into what this means for broadcasters and disrupters going forward. joining us is bill hague and david ompterback from seton hall university law school. welcome to you both.

bill, were you surprised by this ruling? >> i wasn't, our firm wasn't. i actually was talking to a client of mine, a major broadcaster, who called it a loophole piracy. so, we figured that the folks who owned the content would continue to own it, and aereo wouldn't be allowed to resell it without compensating the owners of the content that sells. >> the language, though, around cloud computing was pretty interesting, don't you think, bill? >> i do. i do. you know, very specific, right? so, it created a very narrow ruling that really -- you know, technology's moving awfully fast, so i think they wanted this to be very specific to relate just to aereo and not to things that we can't imagine nor exist today, so i think that's exactly the point you're making. >> yeah. david, i wanted to ask about scalia's dissent as well, which is getting attention, where he says he disagrees, because aereo, the way he sees it, doesn't transmit content. they allow customers to play that content for themselves. do you think that there could be

a congressional response here that people will feel as though he ultimately has a point? >> i think so. i think there ought to be a congressional response. i think i disagree a little bit about the scope of breyer's opinion. i think he leaves a lot of space in that opinion to suggest that other cloud-based services also might fall within the scope of it. it's really unclear, and i think congress does need to act. >> now, i have a question about the differentiation between a public broadcast and a private broadcast. this was really crucial to defending this case. and now they're saying, basically, if you and i have the same show tunes library on itunes and we play it at the same time just because we have great taste, that's a public broadcast. that doesn't make sense, because we are as the users driving that. so, how are they making this distinction in order to make this very important precedent? >> phil? >> well, i think the precedent relates to monetizing that con te content. you may own the same show as your friend and own it together or separately, but who monetizes

it? i think the question here was aereo was reselling the broadcasters' content, or any of the free over-the-air content, and not giving them those retransmission fees that they are paid by cable companies and satellite companies. >> so, david, if aereo didn't charge $8 to $12 a month for this service, if they provided it for free and somehow made up the revenue with a different, say advertising-driven model, would that affect the outcome here? >> no, it wouldn't. even if they're providing it for free, they still would be, under justice breyer's opinion, violating the transmission and broadcast clause. the question is, in the age of the internet, what does public mean? what is a public broadcast or transmission mean when we can share these experiences online? and i think that's just not clear. >> so, will aereo survive? will any of its competitors, will any company try to do this? we've seen it try to happen in music, napster, et cetera. we've seen it now with aereo. will this model ever be

possible? >> so, i'll jump in. i don't think aereo will survive. i think there's not a lot of wiggle room in this ruling. what i do think will happen is innovation will continue to happen. you know, consumers continue to demand their content when they want it, where they want it, and content's king. so, people and companies and individuals, tech companies will continue to create new services that deliver the consumer ideal. it's now up to broadcasters, cable companies, satellite companies to help facilitate that development. >> and i think -- >> i think this whole thing takes me down an interesting path, because on the one hand, i'm asking somebody to be my bunny ears. >> right. >> in simply maleng, i'm renting my bunny ears -- >> it's a time share. >> thank you. then i want to get what's coming off of my bunny ears into my computer and i'm paying somebody to do it for me because i'm not either smart enough or i don't have the technology. then to cap it all off, i've got barry diller, who is not known exactly for being the consumer's

best friend, saying he's doing this for the consumer. so, this thing's got me turned totally upside down and i don't know what to root for anymore. >> david? >> i think that's a great point. one of the questions is, there will be innovation, but who will do the innovating? will it be the larger media companies? will it be small start-up companies? and what kind of innovation will we have? and i think the question is, who controls the legal framework that allows people to control who does the innovating? >> but every time we see big media companies fighting this kind of technology, it's a bit of a starfish. you can cut off one leg and it grows right back if we take that napster model. yes, mapster did not survive, but the model did. so, are we afraid that we provoke the beast? >> last word, bill? >> no. i think, here's the thing, consumers ultimately will win. they'll demand what they want and you're seeing more cord-cutting, cord-shaving. interesting sidenote, over-the-air broadcast is at its highest in a lot of markets across the country, so people are revolting against the high

cable bills and going old school with the rabbit ears, as someone mentioned before. so, i think consumers will continue to vote with their wallets and with whatever wire comes into their home. >> yeah, this isn't over yet. >> that's where the cable companies need to follow. >> got to go. >> but wouldn't it be a better solution, if you can't beat them, join them, in this case? that's the question. >> aereo, the technology being acquired. we leave it there, but bill and david, thank you this hour for your perspective. appreciate it. you can sense, right, that there's going to have to be more of a response by the television networks. >> right. >> bed bath & beyond out with quarterly results. dom chu, how did the retailer do? >> shares are down about 5.25%, we'll call it 420,000 shares have traded so far. so, what we have are earnings that came in at 93 cents per share. that falls about a penny shy of the 94-cent estimate that wall street was looking for. also, sales coming in at $2.66 billion, just a bit shy of the $2.69 billion wall street was expecting. also, to make it the negative

trifecta, if you will, it sees current-quarter earnings per share of between $1.08 and $1.16. that also falls short of the average $1.20 that wall street analysts were expecting. comparable store sales in the quarter also coming in 0.4% to the up side. the street was looking for 1.9% to the upside. so, four things that are weighing on the stock, and that's why those shares are down about 5% in the afterhours trade, about 430,000 shares have traded so far. so, again, a slightly negative quarter here overall for the company in terms of expectations. also, the forecast isn't quite as rosy as analysts were looking for, kelly. >> dom, thank you. up next, the pulse of the retail investors. jim ross, global head of spider etfs, is going to tell us whether retail investors are still sitting on the sidelines and which sectors he sees money flowing into. also, it was the bite felt around the world. uruguay star luis suarez may be suspended from the west of the world cup after chomping down on one of italy's players.

and now snickers chiming in with a viral advertising campaign. we have the best ones later on the "closing bell."

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your money and where are investors put taking? we are joined by jim ross, global head of spider etfs. welcome. >> thanks for having me. >> it's great to have you here, because etfs have become such an important asset class. in fact, the tail wagging the dog, the dog wagging the tail is the question these days. you've been around since '92. the spider s&p etf was '93. you're practically the godfather of this business. >> thank you. >> what's notable about it today? >> we're seeing a lot of trends in the marketplace today. investors are using etfs for more and more things, a lot in fixed income in particular. flows this year, flows of about $90 billion, on track with last year, split while $46 billion to equity, $40 billion to fixed income. the impressive thing about that from faxed income standpoint, that's about 10% of the overall etf market. so, $400 billion in fixed income. about 10% of flows this year, 10% of that. it's pretty interesting. a lot of investors are looking at fixed income as a way of

expressing their views. >> on the range of concerned to extremely concerned, what do you think about the move into fixed income products? >> i think what we see is, obviously, the concern for the longer end of the curve, and we've seen that shift. that shift isn't new this year. we saw that start at the beginning of last year from the larger duration products into the shorter duration products. again, if that's the right time for the market -- >> well, that's what i'm asking. a lot of these products, people think about bonds, about fixed income as something that's a play on yields and sensitive to interest rates, but the creativity that's being displayed with a lot of these instruments means they're actually quite different from what they had been traditionally, and are you worried about some of these? >> you know, i am not necessarily worried about the instruments themselves. i think the key is really education and investors education. we spend a lot of time and focus on trying to make sure investors understand the etfs. and really, the key there, etf is just a wrapper. they need to understand the underlying and short-term corporate bonds, short-term high-yield bonds and i think

they're well disclosed. the question is, is it the right position for your portfolio in today's environment where, obviously, stocks have been relatively at all-time high. i think the question for investors is really where do you go? >> is there a future for the etf business in a world where we talked about driving fees down to zero on some asset management products. you guys are coming out with a new spate of more actively, if we want to say, that are able to charge more of a fee products, but i mean, it looks like this is a race to zero across the business. >> i think it's really a question of, i think it's going to give the end investor really good transparency into the value of what they're paying for and choices they want to make and how to express that view and how to express that value. so, they're going to see the difference they're paying for, potentially from portfolios and for traditional advice. i think investors today need financial advice, they need a financial adviser to guide them. that financial visor may not be

doing the portfolio for them, but guide them when to be in, when to be out, what types of things they need to do for the outcome orientation that investors are trying to get to. >> what about gold? speaking of knowing the underlying instruments, a lot of people, part of the education process has been realizing that if you invest in the spider gold etf, you're not investing in gold bars. what kind of flows are you seeing into gold today? >> well, i will say there are gold bars involved in london that back up every share in the spider gold fund, so it is backed by physical gold bars, but -- >> but you can't redeem it in the form of gold bars. >> you can't, that is correct. from an investor's stand standpoint, we've seen moderate flow. we had an interesting year. we saw an uptick in flows at the beginning of the year, a little downturn in april and i think just off about $600 million right now year to date, but we have a lot more interesting coming into it. i look at gld and the investment in gold as a place in your portfolio to help with the diversifying effect. it has uncorrelated natures to

traditional equity and fixed income markets. >> at a time when people might be looking for that. jim, we'll leave it there for now, but lots more to talk about. hope to have you back. >> thank you, appreciate it. >> jim ross. the government grounded jeff bezos's high-flying a.m. positions for drone delivery and that story buzzing on wall street. is it heating up the "hot list"? that's next. and georgia won this year's coveted state for business, but scott cohn will reveal which state came in dead last and what its governor is doing to try to improve that ranking. in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.

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the fastest speed dial. the fastest office plant. so why wouldn't i choose the fastest wifi? i would. switch to comcast business internet and get the fastest wifi included. comcast business. built for business. welcome back. aereo, top states for business, the gopro ipo. what's burning up the "hot list" today? we check in with allen wastler. >> hey, kelly. top states has been kicking it for us since we put it up yesterday, and we have a story written by scott cohn, who will be coming up on your broadcast very shortly. >> yes, he will. >> and his story about the worst state for business and why it's the worst state for business. so, i'll let him tell you which is the worst state for business. >> yeah, don't spoil it. >> i will just tell you that over 30,000 people have read about it already, okay? >> wow, i'm sure -- >> they're very interested. like we said before, people love

to see failure on the website. they just go for it. now, i know this will come as a surprise to you, kelly, but my audience for the website tend to be fairly technical, geeky types, right? so, my number two is all about the google developers conference. >> ah, yes. >> and what they introduce, the android systems for tvs, for watches, for cars. that story's been eating it up all day long. and then finally, i've had an ace in the hole ever since the supreme court did us a favor this morning and finally came out with the aereo decision. >> right, weeks we've been waiting on that one. >> so, we've been wall to wall aereo all day long. right now we're leading with a story taking a look at what it means for the tv watcher. it actually means your cable bill might go up a little bit, because -- >> well that was nathan's point about the rabbit ears. >> yeah, that's right. so, going into it. on the other hand, it does mean the broadcast networks are around for a little while, so you still get some of that programming if you like the broadcast programming versus the cable programming. it's all a preference. >> allen, i'll just ask, what are the top tickers on the

website? >> top tickers? cbs is one of them, going in. apple, facebook, and of course, google. >> well, there you go. that reflects the buzz. allen, thank you for now. >> take care, kelly. >> good to see you. remember a few weeks ago when amazon drones were all the buzz? today the faa with a buzz-kill for the e-retailer and potentially many more, saying it will not be able to fly delivery drones. that decision, as mentioned, has some far-reaching implications. it's not just amazon, and we'll talk about it here with the panel. guys, so, natalie, perhaps you can explain this to us. there's some confusion over just how binding this faa decision truly is. >> right. they're saying it has to do with commercial products. we're seeing drones already in use by municipalities. they're being used on the border already. so, they're saying no profit-making from drones. that means no commercial delivery. so, what this means for amazon, we're not sure yet, and it seems as if the faa's just not ready to regulate all of these drones in the air. right now there's a limit of 400

feet. some municipalities are lobbying for that to go higher. so you know, if you imagine what this would look like, galactic city. they're just not ready to make sure we're all safe yet. >> but what i don't understand is how the faa can say that amateurs can fly drones and those with special permission from the faa -- it seems like a very big, a very wide disparity here in the types of entities that are allowed to fly drones, and then why in the middle, even if you have amazon prime, which is free, you can't do it. >> and isn't there potentially an appeal pending for all of this? >> i think there will be. and i think that they're eventually going to capitulate on this. i think they just don't know how to regulate it yet. you don't even need a license to put those in the air. can you imagine what that would look like? and people are afraid of, like, things falling out of the air for them, you know? it's scary. >> sharon, it's okay to take a gopro device, put it on a drone and spy on your neighbor, okay? >> or jump off the cliff and then -- >> that might be titillating, but it's not violating anything that the faa is concerned about.

>> what if you make money off of that video? >> there you go, then you've got a problem. >> i'm thinking about potential business ideas here. >> or live stream it over aereo and then you've broken all kinds of laws. >> exactly. >> i don't think that it's anything more than just what you said as far as that this is a temporary move because they just simply don't have enough air traffic control folks to monitor it either. >> yes, yes. >> even though it's limited to 400 feet right now. >> that's the thing. i mean, in order for this to go forward with some sort of regulation, how can you regulate drones? there are too many of them, they're too small, they're flying at such short spaces and businesses. we're not talking about giant aircraft that need to be monitored here. >> but still, one of those that hits a windshield of an airplane or a helicopter, for that matter, traffic helicopters and so forth, could be a real problem. >> yeah, it's a good point. >> and obviously, safety is a concern. >> how long? >> even if we don't care about our privacy as much. >> how long does it take before some kid winds up with a drone and is taking down other drones and this is how he's doing his

christmas shopping, okay? >> you mean, they're doing drone thievery? >> these will be like somali pirates of packages. >> they're going to plant themselves outside of heebering, kentucky's plant. they'll be sitting here, boom! some guy's going to go, oh, i just got some pampers, can you believe that? i went for the big package, look what i got. >> you put in a quarter and the crane picks out the stuffed animal. all right. we'll leave it there for now. gopro is set to price its ipo any second. is the action sports camera-maker something you should be investing in? we've got two pros closely watching this company who will join us next. and he's known as the cannibal in the world of soccer, truly. it's no surprise. urugu uruguay's louis suarez seemingly took a bite out of another player in the world cup match yesterday. why is one top economist comparing his actions to today's weak gdp report? that's ahead on the "closing bell." being a keen observer of the world has gotten you far, but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform,

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all right, welcome back. we're watching for goproceed. that pricing for the public offering expected any minute here. with more on what we might hear and whether or not this is a good investment, we have mike wolfe along with brian hamilton, chairman of sageworks and the panel. max, this is actually one of the biggest gadget, for lack of a better word, ipos that we've seen in years. is it a good investment? >> look, i think it's a great company with a bright future. it's certainly done well. we're not in love with the 10x voting rights, also insider

selling and a recent fairly consistent pattern of margin decline. that being said, the public loves it, it has great potential here to put out some of its intellectual property on a user-generated content basis. we like the company but we have concerns about how strong it trades in the near term. >> and brian, at what price would you agree that this is a good investment? >> i'd say 21-24. i agree with max mostly. i think he's got it mostly right. i think in a market, as you know, with a ton of ipos with huge valuations, this is definitely a buy, across the board. i've tried to spend about a half a day looking for some dirt on the company financially, but if you look at the fundamentals, it's really strong. think about this relative to other companies we've covered. >> well, all right, i want to hear from the panel on this, guys. but natali, max brings up a couple potential yellow flags here, the structure when it comes down to voting rights, insider selling, margin declining. that's a fundamental piece that

needs to be moving in the right direction to make sense. >> and because they're going more public, we'll have more transparency inside this company, which has been very private. it's a family-owned business at this point. so we'll see what happens there. the larger story here is what happens after all this frenzy on the ipo? we've seen this video before when we saw flip had so much hysteria around it, but it kind of went the way of, you know, dead -- >> extinction, exactly. >> right. >> and the fact that it has so much name recognition, bob has referenced this to people on the floor. brian was just saying right now. is that something we should actually interpret as itself kind of a warning sign? >> some of the positives are these guys have been very innovative. i mean, anybody can make a camera and a dvr, if you will, smaller and smaller. these guys have just done it better than be in else, and they've done it and continued to innovate, making them smaller, making it solid, rather than something that falls apart. i think also the number of shares that they bring out,

kelly, versus the total shares available, it's going to be a squeeze no matter what. so, in other words, if you can get in to the ipo, you take it and you take a $5 flip pretty quick. >> i think where you're going to see the big play here is if they can do what red bull did, because red bull is a media company, they do all kinds of things, and by the way, they also sell a fairly lousy tasting way to get a lot of caffeine down your throat all at once. but it's interesting that red bull is a part of the crew right now and helping them get going. because i think if they can wind up being bigger than just gopro, they're an experience, you know. when you go places, you'll see them. then i think they'll be successful, if they follow the red bull model, but right now -- >> i wonder if this means the retail investor should get involved, because as you said, so many people know the name, they want to try it, want the product, but does that mean they should get into the shares? right now they have a lot of opportunity that a lot of individual investors don't have with the social platform allowing you to get in $100, $10,000. is it worth putting your own money if you're not really that

sure of what the next steps are going to be for the company? i'm just not exactly sure if it's right for the retail investor. >> brian? >> i promise, i'm not a surfer, but look at the big picture here, right? two to three times sales multiple, about 30 to 40 times profitable multiple. they are profitable. they have cash flow. they've got all those fundamentals that have been so lacking in this market over the past year, as you guys know. so, i really see this as a buy among all the other players. i really do. it's a straight-forward play to me. >> but you have to watch -- >> whether or not to buy -- [ everyone talking at once ] >> earbuds, stand-alone gps, i can rattle off all of these stand-alone products that then got gobbled into the tablet and the phone. we just have to be careful here with our enthusiasm because of that. >> i'm not sure it's a technology company. this is a company that comfortably spends at least twice as much on marketing and sales as well as r&d.

>> so does beats. >> they're making use of the cool factor company more than a straight technology company. as for whether it's cheap or not, it does have a basic pe multiple of two to three times its comps, if we're going to call that things like garmin and the camera manufacturers. >> okay. we've got to hop for now. again, we're expecting pricing any second, but guys, thank you for your perspective on this. by the way, i saw a gopro strapped to a bulldog at a farmer's market this weekend, so i don't know what that means. >> where can i find that feed? >> compelling video footage. 49 states are envious of georgia's top state for business win. now the state at the bottom of the list is going to take some major steps to improve its position for next year, and scott cohn has the details next. tomorrow also, we have got nike releasing its earnings after the bell, and we will get you analysis and instant reaction to the dow components' results right here on the "closing bell." there are trading opportunities tdd#: 1-800-345-2550 just waiting to be found. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 bring what inspires you tdd#: 1-800-345-2550 out there... in here. tdd#: 1-800-345-2550 out there, tdd#: 1-800-345-2550 there are stocks on the move. tdd#: 1-800-345-2550 in here, streetsmart edge has

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. welcome back. yesterday we told you georgia took the coveted top state business fooilt title for 2016. what about the worst states? the ones at the very bottom, our scott cohn is rounding them up

for us, what they need to become more business friendly. they got their eye on the prize for 2015, scott? >> reporter: that's right, kelly. we are still in georgia the top state for business. we told everyone about that yesterday. we are at the varsity, which builds itself as the largest drive-in. they serve two miles of hot dogs every day. i had my share, good stuff. yes, there are 50 states. we rank every one [ music playing ] . >> connecticut, the constitution state may want to amend its business climate. connecticut comes in 46th, down a foch from 45th last year. it's one of the most expensive states for business and for life in general. at 47th alaska with the worst state economy and some of the highest calls. state 48 is west virginia. it's legal and regulatory

climates verge on hostile business. one reason the state ties for last in access to capital. hawaii, last year's bottom state for business climbs, just barely, to 49. it's one of america's most expensive states. though that does buy the top quality of life. america's largest state for business has beaches, too, beautiful scenery and a rich history. but it also has high tax, high utility costs high unemployment a. perennial loser in our study, rhode island is america's bottom state for business 2014. rhode island may be no. 50, but it tries harder. at least that's the hope. it passed a lot of number of business reforms. the governor was in chicago. he says the state is reforming based on three basic priorities. >> education, we are putting the money into our infrastructure and work force development, internships, making sure we have a skilled work force. we have a lot to offer in rhode

island. it's a beautiful, beautiful state, a highly educated work force and great history. those are things people like. so we're on the rebound. >> reporter: the ceo of cvs caremark founded in woonsocket, rhode island, he's posted a commentary on our special website top states.cnbc.com. look at all sorts of issue of state competitiveness and keep telling us what you think the twitter hashtag top states. one last note, we have a terrific crew here in the top state as well as a great crew back at the website at cnbc.com. they've done an amazing job. i hope you have checked everything out. thanks for all your interest for 2014. >> yes, scott, a tremendous effort on your pamprt. our scott cohn, 32 teams came to the world 'cutch' hungry for a

world time, but it turns out one of uruguay's players had a different type of appetite. he took a bite out of an opponent yesterday. it has sparked some great advertising campaigns by several big companies. we got more coming up next. ♪ ♪ ♪ [ male announcer ] if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. hurry, before this opportunity cools off. ♪

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welcome back. yesterday, during the fifa world cup, ernie suarez got a little hungry. can you see he took a bite out of an italian player's shoulder. many fans took to twitter seeing it as a marketing ploy. here were some of the standouts. snickers tweeting, hey, next time you are hungry, grab a snickers. cinnamon toast crunch is fine when you are made of cinnamon and sugar. bud lite saying, relax, it's a twistoff. it wasn't just advertisers. ethan harris, number two is saying quote i can't figure the gdp number out. it's like watching suarez bite somebody in the back of the soccer game. we tend to look past it.

is it a part is marketing ploy? i guess we are talking about it. >> if he wouldn't have bitten a piece of his ear off, bite marks on the guy's tra pezious or -- trapeasio trapesious or whatever. >> it's in very poor tais i taste. what will happen to the entorsments he does have. will he be able to represent adidas or the other companies? it will be interesting to see if they want to stay if line with him. >> fifa will look at the steps they will take. >> it's hard to imagine this guy keeps any endorse:s at this point. he has been sign i fined 63,000 for racist comments. he got fined for biting a chelsea player. as they say the guy's got a history. >> i don't think it's one that

any company wants. >> bobby knight good partsmanship award. >> tongue an cheek as we say. we appreciate your perspective. we're awaiting the pricing for gopro, much more coming up with melissa lee and the crew on "fast money," which begins right now. >> for "fast money," we got breaking news on general motors. phil lebeau joins us on the phone with the latest. phil. >> reporter: melissa, general motors told dealers to stop selling immediately the chevy cruze. they are taking this action to prevent the sale of certain 2013 and 2014 models that may have a defective airbag. >> that means that all the models have defective air backs. they seem certain models have airbags built with an infrared part. they are trying to identify those models. they areshop stopping th