people to reconsider. >> you made the great facebook call. you are up. >> mckesson, dnr, denbury resources. >> "power lunch" begins right now .. >> all right, halftime is over. we've got four hours now until the c cnbc special report featuring president obama. it is beginning at 5:00 eastern. we're going to get you ahead of the game this hour with many of the topics on that big interview agenda, including corporate tax rates. immigration reform. the markets, global foreign policy and more. we want b to know what's important to you. so get ready to go on cnbc.com/vote and let us know what you are watching. check out facebook today. it's way up today after yesterday's big earnings report.

look how much it's up, $4. 52. that's 6 1/3% right now. what's next for facebook? sky's the limit. and a luxury car theft ring. range rovers, mercedes, beamers, audis, lexus, suvs and more. you'll never guess where these cars are winding up and how quickly they can go from your neighborhood to where they're going. sue is out today. sara is in at nyse. >> good afternoon. we are starting the hour with one of the major themes of our exclusive interview with president obama today, tax inversion. the pharmaceutical sector has certainly been an industry in the spotlight of this debate. meg terrell is live in the news room. plenty of deals here, meg. >> we're looking at $19.5 billion. that's the estimated loss if aversion deals continue. inversions are setting a record pace, nine deals have already been agreed to this year by

companies including medtronic and chiquita brands. overseas cash piling are growing and now estimated to be about $1 trillion. companies don't want to bring that money back to the united states and face a 35% corporate tax rate here. u.s. ceos have increasingly been calling for changes. >> the current u.s. tax system puts u.s. companies at a disadvantage relative to ous competitors. that's a simple fact. i think some of the companies acting on these inversions and doing these inversions are simply trying to level the playing field. if we've got a concern about inversions, we need to tackle our tax code. >> on the flip side, fear that washington will act to top inversions has helped accelerate m&a. the new proposals are already on the table. already, though, since 1983, an estimated 76 companies have left the u.s. for greener tax pastures. tyler, back to you.

>> that tax inversion debate will be a hot topic when cnbc's steve leesman interviews the president later today. it's a special cnbc program. we will spend all the time we need on it. it begins at 5:00 eastern time. right now, we want to hear from you. what should president obama focus on in the last two-plus years of his term? go to cnbc.com/vote and weigh in. that same question goes now to washington post reporter and joe levornia. elan, you're in washington, the president's second term agenda seems at the very least caught in a kind of bermuda triangle to me. >> yeah. right now his approval ratings are near his personal lows. the second quarter, about 43%. that's lower than president clinton had, lower than president reagan had at this point in time, though better than president bush had, we have

to add that. but what queue ear hearing obama trying to do is recast his economic agenda from one of income equality, sort of an academic and wonky term, to one about fairness, which is one of the reasons why he's taking on this issue of corporate tax inversions. how do you lift the middle class rather than this sort of class warfare issue between the 1% and the rest of america. >> joe, tax inversions, does the president have a shot at getting anything done on that front? >> tyler, unfortunately, no. this obviously is a very divided government. the probability that the republicans pick up the senate in november has been rising. that would arguably make it even more divided. and it would likely push off any kind of comprehensive tax reform really into the next presidential election in '16. although if i was advising the president, i would say maybe let's go back to something we both could agree on. we did have a bipartisan budget blueprint with simpson bowles.

that's where i would start. and maybe if you could tackle the tax inversion issue, but it seems to me the ability to get things done in washington is getting less and less. it's all part of the same thing, tyler in the sense that, everybody can seem to agree that we need broad bipartisan tax reform we have some blueprint of that. the oblem is the democrats have wanted to raise revenues, the republicans haven't wanted to. it seems to me that there is room for some agreement here, but the politics just haven't allowed it to occur. >> as we look at the vote there, what should the president focus on in the last two years of his term. foreign policy, 1% of americans believe that in this week where certainly so much of the news focus has been on nondomestic issues in ukraine and in the middle east. immigration, 9% or 10% but

overall, you see our viewers y saying, half of them say tax reform is the number one priority here. but from i sit, it's the one that has the least possibility of making progress. >> there's not much possible of immigration reform either making much progress. perhaps your viewers aren't a statistically representative sample. what i would say, though, is, you know, the president's handling of some of the more cent issues, such as the issue of migrant children crossing the board e, et cetera, et cetera americans have overwhelmingly disapproved of the way he's done that job. a poll found that 60% of people were unhappy with that. so maybe some of the issue is that he's trying to refocus on the domestic agenda at a time when the international crises seem to keep popping up. >> maybe i goosed the vote. foreign policy has magically moved from 1% to 13%. tax reform has come down from 40% to about 50%.

jobs, 1 out of 5. immigration 1 out of 7 saying that should be the main focus. >> and the job market, tyler has gotten -- the thing about obama's approval rating, it's occurring in a year when the skmi is on track to have its best year for job performance since 1999. >> joe, thank you very much. elan, we appreciate you being with us today. don't missteve leesman who will sit down with president obama on a host of the big issues facing the nation. our cnbc special report begins tonight at 5:00 p.m. eastern. sara? >> on to some corporate news now, bill simon the ceo of walmart u.s., details about his pay package. >> bill simon is leaving the company but he's not leaving empty handed. mr. simon will receive a total of $9.17 million, $8.87 million

of that is in retirement payments. $4.37 million in accelerated, unvested equity using yesterday's closing share price. plus there's that $300,000 that simon is going to make consulting for the retailer for the next six months. while not related to his leaving, simon also does hold $22.3 million worth of walmart stock. sara, back to you. >> and that two-year noncompete is a lot of money. thank you. >> facebook is certainly a big stock to watch today. shares soaring on the back of blowout earnings. as you can see, they're up over 6% right now. the stock at f you add it all up, up over 40% so far this year. one of only five stocks that is up more than 100% in the past year. so what is facebook getting right that other social media companies are not. we're taking a closer look. and we should note, julia spoke after earnings. >> facebook really has seen strong results across the board. both mobile and desk top across

with advertisers big and small. now they have 1.5 million active advertisers, up from 1 million last june. but perhaps most importantly, she talked about growth opportunities. she told me that early tests are seeing a great result and advertiser demand is high but noted they're taking it very slowly. similarly optimistic about the promise in new premium video ads. sandberg said commerce is really important, but it's all about their marketers rather than selling things themselves. >> the messenger app is where facebook was in 2006 or 2007. he also noted there's a billion searches happening on facebook every day and a trillion posts for them to endex. he cause kaugsed they're not going to take a cheap and easy approach and plaster ads, but execute carefully over time.

sarah? >> yep, investors liked what they heard. julia, thank you. earnings also out from the big u.s. airlines and automakers. the recall crisis slamming general mo fors. ford driving growth here at home. southwest airlines flying high. continental and american also out with results. here for all of it is phil lebe lebeau. >> general motors fell short of analyst expectations. the company reporting 58 cents a share, a penny shy of estimates. so much of the focus in the earnings report is on the special charges related to the ignition switch recall crisis. general motors is going to be taking a $400 million charge for its compensation program, that's the one being run by ken feinberg. it could grow to as much as $600 million. so a lot of people are focusing on what that final bill will ultimately be. when you take a look at shares of general motors, down 3% to 4% for most of the day. a lot of analysts say when you strip away the ignition switch

stuff, meanwhile, ford beat the street by 4 cents. reporting a 40 cents per share. and at ford, record quarterly profits in north america. $2.44 billion. the best quarter ever. not just the best quarter ever. its first quarterly profit in europe in three years. if you take a look at shares for ford. this stock has not closed above $18 a share since january of 20 11. okay, let's shift gears now. american airlines, this is a stock that's got a nice pop today because they reported not only better than expected earnings, but also american issuing its first dividend since 19830. yes, you've got to go back 34 years to find the last time that shareholders received the dividend from american. take a look at the other airline stocks today for the companies that reported earnings.

united, alaska, jetblue. united and alaska both posted better than expected earnings. you see a mixed reaction on those. and finally, shares of southwest. southwest beat estimates posting record profits in the second quarter. but like the other airline stocks, having trouble getting much altitude today. so there you have it a lot of news from the autos and airlines. did you hear the ceos including southwest. with a lot of executives talking about the state of the industry. >> they have a lot to be happy about. what a turnaround that industry has made. >> i want to talk about where southwest ended. there's a crazy, controversial story involving a customer's tweeting? >> yeah. and sara, it all started with a tweet from a passenger from denver to minneapolis. here's what they had to say about that tweet. >> we've reached out with that customer. he is a great customer, long-time customer. wonderful fan of southwest airlines.

and i'm very hopeful that we've repaired any hurt feelings that he has. he completed his flight there, of course. >> conflict is going to take place in the world and of course, we want all of our people at southwest airlines who all work very hard, by the way, but we want them to deescalate and not escalate a conflict. >> well, the story does not end there. we're going to show you the tweet, what that customer said, and we'll hear from that custom customer. he joins us live on power lunch in two minutes. stick around. kid: hey dad, who was that man? dad: he's our broker. he helps looks after all our money. kid: do you pay him? dad: of course. kid: how much? dad: i don't know exactly. kid: what if you're not happy? does he have to pay you back? dad: nope. kid: why not? dad: it doesn't work that way. kid: why not? vo: are you asking enough questions about the way your wealth is managed? wealth management at charles schwab

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>> welcome back to "power lunch." computer associates are hitting session highs right now. they're up almost 4%. the company reported a fourth quarter profit, beating estimates by a nickel. the stock maker seeing year over year revenues defree-throw lining for the ninth straight quarter, though. the ceo of the company says he's seeing signs of traction in many areas of their business. >> thank you very much. let's take a look at the sweet that got one passenger and his children kicked off of a southwest flight. there it is. wow, rudest agent in denver. not happy. our phil lebeau is not back. >> i'm here with the passenger who sent that tweet. he joins us in minneapolis. tell us what happened when you went from denver to minneapolis.

what led to you sending out this tweet arun into a problem with the gate agent from southwest. >> thanks for having me. what led to it was i travel with my children quite often. i'm an a-list member and, you know, usually i just board with my minor children on the a-list, during the a-list boarding process. and i've done it literally dozens of times before. and this time she stopped us in our tracks and said you can't board. i just questioned it. i sincerely did not know that was the policy when traveling with minor kids. now, if it was an adult, it makes sense. i'm not going to sneak in an entire family with me on my a-boarding fasz. that was not what this was about. she was rude and she was really dismissive and just very kurt with us. it was like she kind of wanted to pick a fight. >> you said you were going to send out a tweet saying who she is and basically you weren't

happy. you did that and when they saw that tweet, then what happened? >> yeah. well, the irony in all of this is i gave a compliment and called out a first name to southwest airlines, you know, at denver on that same day 45 minutes before. so then at that point, southwest airlines started following me, which we should note when this started, i'm not a heavy hitter on twitter. i have 150 followers. or i did yesterday. it was an effective southwest precedent as a way for me to communicate with them. and i was simply now -- >> what did you tweet out? about the agent? >> what i said was, you know, rudest agent in denver you know, gate c-39 kimberly, not happy, southwest airlines. i've only read it again because somebody was able to recover it off of twitter. >> tyler, real quick here, but

take this to the full story here. you were on the plane, they made you get off the plane and delete the tweet, am i right? >> yeah. so we board and we comply with the agent ses request. and we board the plane and we're called off the plane. we're taking to the jetway and then that's when it really escalated. she made the claim that she's going to call the cops unless i delete the tweet at which point my kids started to cry. so then it became not about the boarding procedure. it came -- the issue now is about, you know, having us off of the airplane and making my kids fly with the threat of, you know, police and jail and it was so bizarre. she told me, you've got to delete the bad one or you're not getting on a plane tonight. with my kids in a puddle of tears, i did what i think any normal person would do.

i deleted it. then they let us board the plane and finish our trip. >> let me ask just a couple of quick questions. >> what do you think should happen to her in this conflict? >> nothing should happen to her than a training opportunity. if you would have asked me yesterday, i would say absolutely not. am i now, yes. i saw the segment this morning on cnbc. and gary kelly, his nice words about myself as a customer. some of the senior members and management have reached out to me directly. >> have they offered you any vouchers or cash compensation. arming the customer service staff with that sort of power to

eject somebody because they don't like the content for something on special media. >> it wasn't a threat. it was, you know, i was doing my best to keep it on the same -- >> will you fly southwest again? i thi >> i think i probably will. there's a lot of choices in airlines. but, you know, we'll see how it goes. >> keep your seat back in the upright position and stou the trey table. sara, down to you. >> we're watching royal caribbean. it's one of the top performing stocks in the session after the cruise line giant blew past earnings expectations by 14 cents and raised guidance for the full year.

>> richard fame, the chairman and ceo of royal caribbean, welcome back to the network, sir. >> thank you, simon. good to be back. the price action kind of says it all. i know you have some costs that fell conveniently for you in the quarter. it's really europe and china that seem to be blowouts for you. talk us through what's happening. >> yeah, i really think it was not only a good quarter but we were able to look forward and see that people are coming back. people are doing more cruising. our family market is growing. china, of course, is a great opportunity for us. >> it is the pricing in europe and china that is the standout, correct? the issue for you guys is you've got fixed capacity. you're going to fell the ships. it's a question at the price in which you fill them.

>> i'm wondering if you're not perhaps giving up on caribbean because of low ka passty, just because of margin or south florida. we have the build-up for your new class of ships. this is the ship that has the 300-foot crane on it, lifts people into the sky on a capsule. it turns out when the ship arrives in november, it's going to spend sick months here, and then you're sending it off to china. so are you giving up on southern florida? >> i love it when my biggest problem is that people worry that we're taking our capacity away from them. you're right. for six months, the ship is going to china. it's going there permanently. but the sister ship is coming to take its place six months later.

it still represents almost half of our total capacity. it's still a very successful market for us. it's been tough this year. the other markets are doing better. but that's what's nice about cruising. we can move our ships and go from one place or another. we can do it in a very successful way. >> this is a very big day for our network. we have an interview with the president at 5:00 where he's going to suggest retroactive legislation on tax inversions, people changing the legal address of their company in order to not pay tax in this country. the inevidentn't question to you is what do you think of the tax structure in this country? how much tax do you play here. >> we are very happy the way we are operating internationally.

>> our globalization has really been successful. and today, this is actually our first year where more than half of our customers are coming from outside the u.s. that's a pattern a trend that's been on the books for quite a while. >> i want to point out on a year to date basis, your performance against your rivals is now an outperformance of 35%. but we have to leave it there, richard. great to see you. >> simon, thank you. >> all right. simon, thank you very much. we are just a few hours away from that interview that simon just mentioned. steve leesman's exclusive sitdown with president obama. you can not miss that. plus crime and punishment. stolen luxury cars in the united states, heading overseas. andrea day on the case. tors likn negatively impact good bacteria?

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don't start humira if you have an infection. if you're still just managing your symptoms, ask your gastroenterologist about humira. with humira, remission is possible. e financial noise financial noise financial noise financial noise >> a lot of important data out today.

diana has some details for us. >> let's start with the huge miss on home sales. down 8% month to month in june. the bigger story is the rescission in may. down from an incredible 504 now annualized units down to 442. now we are at 406,000 annualized pace. that's the lowest since september of last year. and i know this is a very volatile number. but if you look at the second quarter, it is down 6% from the second quarter of 2013. now the sales are down, the prices are up. median home price of a newly built home up 5% year over year. that's behind some of the earnings we saw today. pulte's home prices up 2%, but orders are down 4%. dr whoton targeting entry level home buyers, prices are going to have to come down to get more buyers in. is a lot of market leaders are

here talking about the future of homeownership and that homeownership rate. while they say millennials have huge barriers to homeownership right now, they do believe even millennial generation will want to be home eners. and potentially new build home owners. back to you guy fps. >> your high-end car could be the next target. >> inside this secret warehouse, dozen ps of stolen luxury cars ready to ship out of the country until they were intercepted by u.s. security. cnbc got an exclusive look at what's happening at parts across the country.

>> all the estimates we've seen and investigations of our own intelligence suggests that this is a growing problem. >> hundreds of thousands of vehicles are driven overseas across borders every year. >> if you look around at the mercedes and bmws here in this warehouse right now. they can fetch three or four times that overseas. >> the vehicles shipped to countries in west africa where demand is high and supply is low. >> these are empty container. these containers will be loaded by the organizations with stolen vehicles. what they'll do often times to get four vehicles in is they'll drive do in back to back. and on top of them hang them with chains and put a mattress in between. >> more and more shipments of stolen vehicles are being

stopped short. >> we know that we recovered about 200 vehicles during the course of the investigation. >> assistant u.s. attorney jose almonte helped take down one of the beingest car theft rings in the country. at the heart of it, this woman, now behind bars. her organization smuggling more than $2.5 million of stolen cars to africa. >> there were about $4 million that was flowing through this operation. >> in these audio tapes given to cnbc by the u.s. attorney, you can hear her wheeling and dealing with her co-conspirators about a just stolen range rover. >> hello? >> is it cream with metallic gra i? 2011. >> how much do they want? the most they'll go is 6,500. >> you know, i understand that, but i don't know how long you're going to get there. if they tell you no problem, you

call me right back. >> investigators say after she gave the green light to buy a stolen set of wheels, the operation was set in motion. >> after a period of time, they took it to a show where it would be retabbed. >> changing the vehicle's identification number or v.i.n. and then creating a fraudulent title. >> then they would get permission from customer boarding. >> the consumer always pays the price. whether it's a higher price for vehicles. if you're someone who owns a luxury vehicle you're in tremendous, tremendous danger.

>> homeland security has teams working to attack the problem and put the crime rings out of business. now, as far as hope contetti, she's appealed both her conviction and sentence. >> to the bond market now, higher yields, tracking the action at the cme. >> well, thank you, sara. yields are three basis points higher. these are a big three basis points. remember, we haven't traded intraday this high, close to 252 this week until last thursday. we held the low yield, close of the year, may 28 at 244. five sessions. now, if you look at what's going on in foreign exchange, we're still hovering at eight month lows if it dangles. the pound has lost a lot of ground because they may not tighten.

this is the dollar versus the ruan. >> the president is doing a lot of fundraising lately. so what's behind that? we'll explore that. plus -- >> today's powerhouse is home to seven fortune 500 companies. the birthplace of andre agassi. and the state does not have an income tax. can you name that city?

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>> we have two bigs earnings movers. first up, grub hub. it connects diners with local takeout restaurants. shares up after beating street expect expectations. 51% of 4.2 million year over year. on the flip side, trip adviser shares witnessing its second worst day on record. earnings come in short of expectations. heavy volume, by the way, in that stock. over 7 million shares have already been exchanged thus far back to you. >> painful day for that one. >> s&p 500 setting record highs. let's take a look at the broader

markets how they're performing right now. craig columbus is the ceo an president at first allied management. >> revenues are up 4%, but profits are up 10%. we're in an era when central banking has become sexy. and as a result, more people are following janet yellen then a keeping up with the kardashians. so as long as the fed and ecb keep that punch bowl full, i think we've got a tail wind. >> what about have you? you have been discrepancy call of the u.s. growth story. have you changed your mind? >> i'm keeping an eye on high yield bonds. the spread between high yield

bonds have been widening. i think that could be telling you that we're finally getting to a saturation point on low quality issuance and leverage loans. i would watch that. . >> are you worried about inflation? >> we're not yet, but we want to buy things that are out of favor before they come in favor. we have a move afoot to increase the minimum wage. there have been 19 minimum wage increases in history and 18 of them have been followed by inflation spikes. it's better to be prepared. >> ahead of our interview with the president today, which economic matter is of upmost importance to you as a stock portfolio manager. >> i think from a macro sense, we need to address the wage growth issue. the housing data very weak and the issue of first-time home buyer strike, housing and wage growth are my two big issues i

would ask. >> good to see you both. on that note, do not miss cnbc's exclusive interview with president obama. steve leesman sitting down with the president, 5:00 p.m. eastern time only on cnbc. and that does bring us to the yahoo finance question of the day. what kind of impact do you think president obama will have on the market markets in his last two years in office. a lot say negative impact. and 40% say little to know impact, which sort of raises the question, tyler, about whether he can take responsibility for the 200% rally since march 2009. >> well, there you got it, 15% say positive immakt, but most say negative. the president has been doing a lot of fundraising lately, but why now with two years left in his term? he's not running for re-election. >> that's right, he's not running, but there are midterm elections this year. it is an election year. democrats want to make sure they keep the senate. that's part of the reason why

the president is out on the campaign trail wrapping up a mul multistate west coast fundraising tour just today. presidents typically raise money for other politicians because it's a good way to have increasing your political capital. if you can get out there on the campaign trail, raise that money and donate it to the rest of the members of your political party, you're going to have a lot more loyalty in that political peter. president obama has already outstripped his predecessor, george w. bush. barack obama holding 310 first-term fundraisers, 83 in the second term. compared to george w. bush, 173 and 155 in the second term. but look at bill clinton. barack obama has a long way to go before he reaches bill clinton on the fundraising trail. >> an earnings beat and upgrade has the stock bubbling. plus --

>> the city featured in today's powerhouse is home to the country's largest reservoir. nearly 40 million people visit here each year. and it does not have any pro sports teams. can you name the city? at legalzoom you can take care of virtually all your important legal matters in just minutes. now it's quicker and easier for you to start your business, protect your family, and launch your dreams. at legalzoom.com we put the law on your side. 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.

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even if you're healthy and active. phillips digestive health support is a duo-probiotic that helps supplement good bacteria found in two parts of your digestive tract. i'm doubly impressed! phillips' digestive health. a daily probiotic. >> of look at shares of under ar miles an hour. the athletic apparel company reporting earnings a penny above annual estimates and sales forecast by a bigger margin. underar miles an hour also raised its 2014 sales guidance opinion and kevin plank saying he was especially encouraged by the footware and international business segment. back over to you. >> pepsico upgraded from buy to hold. the price target is now $106 per share. akamai technology got upgraded to outperform from neutral. the firm raising its price

target to $70 from $59. and freeport mcmoran downgraded. also cutting its price target on the stock to 40 from 43. some movers there. tyler. >> let's go to the powerhouse, folks. i bet you can guess the city. birthplace of andre agassi. can you name the city? you got it. las vegas. with cynthia silver. broker with century 21, martinez and associates. welcome. 8600 properties on the market there. average 58 days. today we're going to focus, cynthia, at your suggestion on the area of southern highlands. seven minutes or less from the las vegas strip. about 15 minutes to mccarron international airport. let's go to our listing. $385,000. taxes, a sickingly low $2,800.

four beds, three baths, just over 3,000 feet of living space. what makes this one so nice and special? >> tyler, this is a great example of an entry level home in the southern highlands area. it is obviously gorgeous, but it's also got a beautiful pool and spa. it has a full bed and bed down, a loft up, a master suite with a sitting room and fireplace. a lot of granite, a lot of specialty finishes. tuscan courtyard entry in this one. beautiful home. >> is this a brand-new house? has it been occupied before or not? >> this home has been occupied before and it's approximately eight years new. >> fantastic. second listing, 4015 cactus avenue. it's shocking there would be a street named cactus in las vegas. $699,000. four beds, four booth baths. nearly 3,500 square feet of living space. why is is this so much more than the last one that's four bed,

four bad. it's obviously got a bigger footprint, but what else? >> it does. the home actually sits on a full acre lot. so it's a rare opportunity in this zip code to be sort of a land baron if you want to call it that. it's also a one-story home. has a three-car garage. many upgrades and updates. but again, the opportunity to have such a large parcel of land in the southern highlands area is very unusual. >> yeah, the land could do it. that's a lovely piece of property there on cactus avenue. powerhouse of the week, 4101 villa rafael drive. $1.3 million. taxes $6700. five beds, 5 1/2 bah baths, 5600 square feet of living. this is a big house. >> yes. it is. so this home is located in the guard gaded tuscan cliffs country club. and this property features a 70-foot long dramatic pool with water fall and spa. there's an approximately 450

square foot professional chef style kitchen. there are dual baths in the master sweet that center around a large shower with multiple shower heads and steam feature. it has stone and hard wood flooring throughout. >> look at that pool. this is beautiful, cynthia. keep talking. keep selling me. >> i'm waiting for you. it's got a -- >> i love when you say that. >> it's got a luxe wood panelled office. it's got a casita. a beautiful courtyard entry that's secure, as you can see as well. and obviously, the location is beautiful. >> that looks great. cynthia, i'll be on the next flight. >> thank you, i'm waiting. >> thanks a lot, cynthia, silver, we appreciate your time today. >> it has been a summer to forget for atlantic city. morgan brennan is following new developments in the struggling city, morgan. >> maybe the house doesn't always win. we'll tell you about the latest losing hand that's been dealt in atlantic city. here's a hint.

moody's isn't betting on it. so can america's playground reverse its fortunes moving forward. that's next on power lunch. just take a closer look. it works how you want to work. with a fidelity investment professional...

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>> the horse race for the best

performing sector in the s&p 500 continues today. check out what's happening with energy. it's up about 12% so far this year. exxon is a big energy trader mover, moving at all-time high levels. chevron also trading at record high levels as well. energy and large cap in particular really driving some of the gains in the markets. back over to you. >> atlantic city just can't catch its breath, the troubled town downgraded by moody's just yesterday. how did the city get there. and does the downgrade matter? morgan brennan is here with the story. can't catch a break, morgan. >> the losing streak, it just continues for atlantic city. you've got high unemployment, poverty. crime, all been problems there for years. since its peak in 2006, gaming revenue has dropped, get this, 45% for the is i. that's as competition has increased from neighboring states. now all of that plus a series of negative headlines this year have contributed to yesterday's downgrade. back in january, atlantic club

closed. that was a sign of things to come for the city. next in june, rebel was supposed to usher in a new era for ac. filed for bankruptcy. it was the second time in two years. that same month, caesar said showboat will also close by the end of summer. this month, trump plaza warned its employees that it, too, is likely to shutter its doors in september. now, adding insult to injury, just tuesday, robbers reportedly made off with more than $180,000 from caesar's ac at gun point. and finally, we get yesterday's news where moody's drop in the general obligation debt to junk status. nay ear saying the outlook is negative moving forward. what does this mean for the city? we're talking about $245 million in debt. so compared to, say, detroit's billions, not necessarily to say very much. but the issue here has caused casinos to seek and starting to

win properly tax reassessments. the city now owes borgata, $88 million. and it could owe refunds to six other properties. now, that's money the city doesn't necessarily have. so with atlantic city's bonds rated junk and the potential flight by its current bondhol r bondholders, this could be very difficult. and that in turn could mean service cuts. so analysts tell me default isn't a danger at this point. rather, we're right at this precipice where this could actually be a good buying opportunity for risk prone bond investigate investors. but this could become a death spiral that chases even more money away. so we're going to be keeping a close eye on this, sara. >> sounds like a gamble. no pun intended. >> let's see what's coming up next on street signs. >> what a day for facebook, right? now it's among the 15 most valuable companies in the s&p 500. regardless of the fact that plenty of people out there really don't like it or use it.

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>> i can't think of a more interesting week to have the president of the united states on anywhere, and the only place you will see him is today at 5:00 p.m. exclusive interview with steve leesman. there's so much to talk about from the economy to international affairs and more. and steve will cover it all tonight. our special is at 5:00 p.m. eastern time. sarah? >> yes. looking forward to that. especially on the hot topic of tax inversions. i do want to point out, the markets right now, tyler, before we let you go. we're in record territory. all three major indices actually positive right now. some concerns about a drop in sales. facebook, absolutely on fire. that's got to be your winner today. up more than 6.5%.

double the ipo price. more than double it right now. and we are heading for our 27th record close in the s&p 500 of 2014. >> all right, sarah, thanks very much. that will do it for this edition of power lunch. "street signs" begins right now. >> just over three hours now until the exclusive interview with president obama what do you want to hear? let us know. a look at that big interview, plus another missing plane. this time in africa. we'll give you the very latest. plus, another embarrassing software fail in the federal government. that might be costing you $400 million.