new york city by a freak storm, but we're not going to give you the answer. watch it to find out. is the on syfy at 9:00 p.m. eastern. i can't wait! loved "sharknado 1." >> it's a good one. take care. and welcome to the "closing bell," everybody. i'm kelly evans here at the new york stock exchange. >> and i'm bill griffeth. as anticipated, a very busy, newsy day, a lot for the market to digest. first thing this morning a much stronger-than-expected growth number for the second quarter, 4%, very big, and that sent the stock market higher, but we went lower after some troubling news out of russia came our way. >> and interestingly enough, we've also been whip-sawed by the federal reserve's meeting. its latest statement which hit around 2:00 pushed us positive, since given some of that back.

we continue to move to the down side. we should add as we enter this hour, we're off about 41 points. the nasdaq, though, bucking that trend. >> we should show you the ten-year yield as well. that's been up ten basis points today. that gdp number had a big impact on that. it's up nine basis points to 2.55%, and the 30-year's 3.2% right now, so moving quite higher. but i'm stealing -- oh, now it's at 3.30%, as a matter of fact, $ 3.31, do i hear 3.32? i'm stealing rick santelli's. >> troubling reports out of russia and ecrane, things that may be escalating. stocks may have lost early gains on those worries. we'll talk about all that coming up. also, forget tax inversions. now outversions are the new corporate tax trick. >> oh, that's right, yeah. you've got to look up on

cnbc.com. >> you wrote about that on cnbc.com in a story that's getting a lot of interest right now. it involves companies spinning off their real estate holdings into real estate investment trusts, all, of course, blessed by the irs. some stocks already getting a big boost from this move, and you're going to be following that a little bit later. >> and relatedly, it's master limited partnerships, another one of these tax-free structures in the news today. you can look at shares of hess, which is pursuing this kind of thing. so, there's inversions, there's outversions. >> when we talk to a lot of money managers about where they're finding good income these days, mlps, master limited partnerships come up quite often, so plays into that very much. >> absolutely. it all ties together. let's look at where we stand here. as we kick off the final hour of trading, the dow's off 46 points at this hour, 16,865 is the level there. earlier at the lows, we had gone negative for the month of july, so we'll keep a close eye on that. the nasdaq still adding about 14 points. strength in twitter certainly helping today.

and the s&p 500 off about two, 1,967 is the level there. >> all right, a lot to talk about today. let's get to hank smith from haverford investments, abigail doolittle from peak theories. two of the strongest bulls we know, jack bouroudjian from index financial partners and anthony chan from chase. and of course, our own rick santelli joining us with the market response to all this. anthony chan, go ahead. you said it'd be like this. you can gloat. you can tell us you told us so. were you as pleased by the fine print as you were by that number that we got this morning on gdp. >> i really was, because you basically saw that nice upward revision to the prior quarter making the first quarter not as bad, and certainly, the second quarter a lot stronger. but keep in mind that from 2011 to 2013, the government did revise down the numbers about 0.2%. so, we still have an output gap of about 4%, if you used the congressional budget office numbers. and i love the congressional budget office because they've

got democrats and republicans, so there's no political ax to grind. that tells me that there's still more room for the economy to expand before we really have to worry about serious inflation in this environment. >> jack bouroudjian, you say we should all say thank you to the federal reserve here? >> absolutely, kelly. look, you know, not only are we getting growth, we've got a low interest rate environment, we have got inflation under control, and anthony's absolutely right. i mean, this is turning into the best of all possible markets. you know, if we didn't have putin, maybe the market would be even higher. so, i think what we need to do is accept it for what it is. this is the proof in the pudding. what the fed has been doing is working, and that is absolutely good news. >> so, rick, i'm sure you want to jump in on those two comments. >> no, not really. not really. we've had 4% gdp before. the average is 0.95%. yes, we're pleased as punch we're only down 2.1% in the first quarter. i would rather concentrate more on this statement. once again, i think that the notion of, you know, how much of

the labor force can work that is working has been a big theme on this trading floor. it hasn't been a very big theme at the federal reserve. they've really pretty much gloated about a lot of improvement and the dropping unemployment rate. but of course, as it gets to the point where we definitely do have solid growth compared to a crisis economy, i agree with jack, but we still have crisis economy type zero interest rate policy, and the fed is probably going to acknowledge things like labor force participation rate a lot heavier in the future. as for the market, all the volatility was really on the extremes, the two-year and the 30-year. ten-year is up ten basis points, looks to be the highest close since july 8th, and the curve actually steepened a couple basis points today, either though every metric is still pretty much at rather historic flattening, anywhere from 1.5 to 4.5 years, depending what part of the curve you look at. >> hank, do you think the fed's doing the right thing here? >> oh, absolutely.

i think they have been doing the right thing. they have not gotten enough credit. i think everyone is worried because we're in this new environment where the fed has used so many tools that haven't been used before, and we're worried about how do we get from extraordinarily accommodative to neutral? can they do that successfully? but you know, the fact is, fed policy has been spot on, and it continues to be spot on. but let's not confuse this bull market. this bull market has been born on fundamentals. the fed has been helpful, but it's been earnings growth that's driven the bull market. >> so, what do you tell your middle class neighbor whose wages haven't gone up, who still can't get credit to get a mortgage, who has to take out a subprime loan to buy a car, which is his new house? you know, a car is like the big investment now because you can't get a house. so, as long as you're long in stocks, federal reserve gets an a-plus, right? >> that's not the federal reserve's fault, rick!

that is congress's fault. >> jack, i was talking to the other guy. we know you're a bull and long stocks, too. >> but that's the problem. that's the problem in this congress -- >> i have no problem with anybody being long stocks. >> not the federal reserve -- that's not the fed's problem. you know what you tell those people? you tell them not to vote for those people they're voting for. >> $4.4 trillion. they're pretty much an authoritarian boureaucracy with no bridle, no rules base. sounds like putin! >> i have to jump in here. i absolutely agree with rick. i don't agree with jack today, surprise, surprise. and when we look at the jobs report, the last jobs report, the quality is really pretty weak. it was a big surge in part-time jobs, not full-time jobs, so that was one of the bright spots talked about by the fed today, but i don't see it. and if we return to gdp, today is 4% print. yes, it's impressive, but put in context of the first-quarter contraction, we're back to equal at the end of 2013.

bill, you often talk about these near-term markets being herky jerky. i think we're looking at a long-term herky jerky economy. it's up, it's down, it's up, it's down. we had lousy housing data come out this week in addition to the positive gdp print. there's so much uncertainty. it puts a lot of pressure on, you know, the second-half recovery. i don't think that's going to happen this year and i think that stocks are going to connect that reality. the fed is running out of tricks. >> here's one point -- >> anthony. >> i agree with kelly that last month most of the jobs were part-time, but you really have to look at the base when the economic expansion began. it began in june of 2009. we've created 7.8 million jobs. if you look at all the part-time jobs from june of 2009, i hate to disappoint people, but they're down 397,000. and by the way, if you break them down, what you'll find is the number of part-time workers for economic reasons down 1.48 million. the only ones that were up were the part-time jobs for noneconomic reasons, people that

want to work part-time, but the net number is minus 397,000. >> you're referring i think to what abigail was just saying -- >> in june, it was 800,000 part-time jobs added, 533,000 full-time lost, so you have all these part-time people who don't have benefits -- >> can you answer rick's question a while ago as well, when he was saying what do you tell your neighbor who may not be doing that great here in this economy? >> well, the answer to that -- >> yes, i'd tell them we have elections coming up this fall -- >> that's right. >> and we'll have a presidential election in 2 1/2 years. >> bingo! >> and elections make a difference, because the key to monetary policy, the success of monetary policy moving to neutral would be pro-growth fiscal policy. in terms of tax reform and regulatory reform. that is what we need to help monetary policy. >> hear hear. that's exactly right. >> you know, that is one piece of it, but one thing we're all looking for is for an interest rate rise.

the federal reserve is excellent at communication. they have all of us looking at when will rates go up. it's positive in the fact that it steers us toward thinking that the economy's improving, and yet, they keep pushing it out. you would think it's positive for stocks. but the fact of the matter is, we still haven't had a true economic cycle. so, to put an interest rate cycle would be like putting out a fire that never started. and more importantly, it's easier said than done. jack and rick would know more about this than me, but because of the liquidity, the fed can't use its typical market operations to sell bonds to raise the federal funds rate. they're experimenting with a reverse repurchase facility, but it's very risky -- >> right. but let me ask the broader question to everybody here. would you have any objection to saying to americans out there, middle-class americans, however you want to classify it, they should get involved with the stock market here? because i see everybody from hank saying we're in a secular bull market to pretty much every guest we've had on here lately thinking this thing could still have years of room, of space to run. >> if it's an advice question, i think it's a financial question.

probably half of america cannot afford to invest in stocks. >> all right. i just remember jim cramer living out of his car when he was investing in stocks back in the early days. >> jim will tell you about that, exactly. >> thank you, folks. we've got to go at this point. thank you, though, for a lively discussion, as always, as anticipated. see you later. heading toward the close here with 50 minutes left in this trading session. the dow is down 42 points. it's been a wide-swinging day. at the low it was down 94, at the high it was up 72 on the open this morning. so, volatility's still around. we're wondering whether this strong gdp number will force janet yellen to boost interest rates sooner than anticipated. that may be what the bond market was signaling today. we have steve liesman and former fed governor randy kroszner joining us with their takes coming up in a moment. also ahead, the financial fallout from vladimir putin's aggression in ukraine. new european and u.s. sanctions on russia. fitch downgrading more than a dozen foreign banks. we'll have the latest

developments and how it's impacting your money. and a new batch of earnings due out after the close tonight. kraft, metlife, whole foods and yelp on the plate. we'll tell you what numbers to watch out for and how they could move the markets, coming up. stay tuned. more "closing bell" right after this. over 20 million kids everyday in our country lack access to healthy food. for the first time american kids are slated to live a shorter life span than their parents. it's a problem that we can turn around and change. revolution foods is a company we started to provide access to healthy, affordable, kid-inspired, chef-crafted food. we looked at what are the aspects of food that will help set up kids for success?

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minus signs right now. the nasdaq's higher. twitter's earnings last night helped some of the social networks stocks go higher today. technology overall is doing pretty well. nasdaq's up about 0.3%. the dow down 35 at the moment. it was up 73 in the morning, down 94 at the low of the day, so we're wondering whether it will be finishing positive or negative. same thing for the s&p, down just two points right now. >> this as the market's digesting a barrage of news on the macro front. we've had the gdp report for the second quarter come in stronger than expected. the federal reserve, meanwhile, tapering by another $10 billion, and there was a dissent in that decision as well. so, on the back of that, let's get the take now from steve liesman, who's had a good hour to digest what the fed has now done and said, and what do you make in light of that, on the gdp number this morning?

which is more important? >> i think it rolls into one. the fed tapers by 10 billion, bringing the monthly purchase down to 25 billion and it had been 80 billion, so there's a ways to go, probably ending in october. looks like in my opinion a slightly hawkish tilt to today's fed starmt, certainly brought about by the better economic numbers. i just got a report in the new york fed, who says this is neutral, but here's my reasons. the plosser dissent saying the current language doesn't reflect the economic progress. the fed saying the likelihood of 2% -- below 2% inflation has diminished somewhat. they made better comments about the labor market. the one dovish comment is the introduction of this new concept that there remains significant slack in the labor market. "the most significant shift in the fomc statement, which went further than we expected was the recognition that inflation has moved closer to the fed's target and the fomc has more confidence and will likely remain close to the 2% target." 4% gdp growth, expecting 3%.

first quarter originally expected down and now down 2.1% and the jobs report estimate is 230. the friday number and their-quarter data now very significant. a repeat of a strong quarter like we had in the second could prompt the fed to accelerate its pace of tightening, either when it begins or how far and fast it goes when it starts, kelly. >> i don't know, steve. steve, stay with us, because i want to get perspective from randy kroszner from the university of chicago booth school of business. randy, steve just said to what extent could the better spate of data lately pursue the fed to adopt a faster exit policy tuned what extent would that sort of being burned by the first quarter and some of the other headwinds out there, including the labor market slack, keep them from being so hasty? >> i think that change in the language is quite significant, because really, the main change in that statement is the

significant underutilization of the labor resources in the economy. and so, i think what they're trying to do is pivot from the strong gdp number to focus on the labor market. now, of course, the unemployment rate has come down, but it's janet yellen said in her first press conference, she was focusing on a broader measure of labor market utilization, the so-called u-6, which looks at people who are marginally taxed to the labor force and people who are part-time who would prefer to be full-time. so, i think that still gives them a fair amount of leeway to wait. >> steve, why do you think they're focusing, or at least publicly acknowledging the slack in the labor force now? this is not a new phenomenon. we've talked about this before. the guys on the trading floor have been buzzing about it, so why the acknowledgement now, do you think? >> let me pivot off that question a little bit and tell you, there are a couple ways for a boss to come in. he can fire everybody at the beginning or hang around for a few months and then fire a few people. this is sort of yellen hanging around. she had introduced this concept of labor slack for a while, talked about it in her

nomination hearings, and now she's made it part of policy. so, over time, she's talked about it. the significance, as randy suggests, is that now it's part of the statement, which makes it part of policy. but randy, i just want to push back a little bit, respectfully -- >> sure. >> -- to the former governor here. if the economy goes the way it's going, 6% nominal, we're doing 200,000-plus jobs that's double what's needed to bring down the unemployment rate, it seems inexorable to me that we would begin soaking up slack at a reasonably fast rate. my point is not that there isn't slack now. my point would be, if the pace continues, which is the way i put it, then we'll see a fed that's going to have to accelerate because the slack is going to be less. >> and that's the key thing, i think, to focus on. if you look at this broader measure that janet yellen and others focus on, it's at 12.1%. the unemployment rate is at 6.1%. that's a 6% gap. there's always a gap between

these two. >> right. >> but we've been collecting this data for about 20 years or so. until mid-2009, the average gap was 4%. so, i think the people focusing on the labor mark slack, they say we have another 2% to go before getting back to nianythi close to normal conditions. >> does it require in order to get there, i mean, do we have enough lift-off to get us there already, or does that require more? and is fed policy the right prescription here? >> a lot of questions there. so, i'll try a little bit on those. so, i think the con sencensus o the fomc is that the policy they're pursuing now will allow us to get there, to a reduction of the gap between the broader underutilization number and the broader unemployment number, but that's going to take a while, probably by some time next year. we still haven't seen pressure in wages, and actually, if you look at the gdp rescissiovision

reduce the wages and salary growth over the last three years, so we haven't seen a lot of pressure there. >> randy, i'm just wondering, though, acknowledging that 2% gap that's in there. the fed can't wait until that gap is entirely closed to bring -- >> for sure. >> -- to begin bringing policy back to normal. some time between now and the closing of that 2% gap, rates have to move. >> so, i think -- and in some sense, they're gradually doing that through the stepdowns in the asset purchase program, which i agree, as you had mentioned before, are likely to end in october, and it will be in a little bit of wait-and-see mode. then obviously, we have to see which way the inflation pressures are going. if they heat up, the fed will have to move a little bit sooner. but i think the consensus is that there is a fair amount of slack. and one metric to look at would be this gap between the u-6, that broader measure, and the normal unemployment rate. it's only one measure.

also, very low labor force participation rates. those still haven't bounced up. they're back at levels of 1978. >> before we let you go, today notwithstanding, the yields are moving up and the 10-year, the 30-year especially, but for the most part, long yields have remained stubbornly low, even as the fed continues to taper. why do you think that is? >> well, i think broadly there's a concern that we're not going to have a strong takeoff. maybe we will see more of that, and certainly, the 10-year rate moved up nine, ten basis points when the gdp report came out. it really hasn't changed since the fed statement came out. so, i think they don't see a lot of inflation down the line. they don't see a lot of really robust growth. so, that's why i think the 10-year rate hasn't moved up as much as it would if we had stronger growth expectations. >> all right, governor kroszner, good to see you. steve, thank you, as always.

thank you both for your thoughts on the economy today. apparently, the traders enjoyed what they heard on the economy as well. just kidding. heading toward the close, we have got 40 minutes left in the trading session here. the dow is down 31 points in what has been a pretty volatile day for the markets. pitney bowls es is trying t reinvent itself into an e-commerce company. it was a metered supplier and its cfo tells us exclusively how the business is going when we come right back. how long have i had my car insurance? i don't know, eight, ten years. i couldn't tell you but things were a lot less expensive back then. if you're 50 or over you should take a new look at your auto insurance. you may be overpaying. actually that makes a lot of sense. old policy. old rates. and thanks to your experience behind the wheel, you might save $404

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and here's where we stand with markets, 35 minutes to go on the session, and we're seeing red arrows for at least the two major indexes, the dow and the s&p 500. now, just a little while ago, we heard from the group of seven leaders that they're warning russia of more sanctions. recall they rearranged earlier this year to exclude russia, and this comes a day after the u.s. and european union announced new sanctions on russia. so, some geopolitical pressure certainly getting attention here this afternoon. all right, let's go to bertha coombs following the big movers today. >> a lot of earnings movers in particular. start with twitter, soaring after posting better-than-expected quarterly profits, up 2 cents a share, that on strong user growth. despite all the haters, twitter today up nearly 22%. hum humana falling after second-quarter profit declined 18% as it saw a surge in benefit costs offsetting a bigger than

expected increase in revenue. humana is down over 4.5%, sending down a number of other insurers as well in sympathy, although we heard different results from wellpoint. we'll end with pitney bowes, higher after posting second-quarter revenue that beat street forecasts and it raised its outlook for fiscal 2014. pitney bowes trading up nearly 5% on the day. let's get more on the second-quarter results now from pitney bowes. >> with us now is their executive vice president and cfo, michael monahan. good to see you again. welcome back. >> well, thank you. good to see you again, kelly and bill. >> where was the strength? was it the old technology or the new technology that you guys are talking about? >> well, what we're really happy about is this is a combination of a strategy we laid out. it's pretty simple -- stabilize our core mailing businesses, take cost out of our business, but really grow our digital commerce business. and we're very excited about 27% growth in our digital commerce business this quarter, 25% growth in that business for the

first half of the year, and it has become almost a quarter of our total revenue base now. >> michael, how much of your business is cross-border? and this seems to be the place of so much upheaval lately. i mean, whether it's the u.s. trying to figure out what to do with the ex-im bank, whether it's the international tensions we were just describing. does that help your business? does that drive solutions, or is this a hurdle for you potentially? >> if you think about the e-commerce marketplace, there's a huge potential for domestic sellers to sell globally. so, what we're really looking to do is open that global market up to a lot of domestic providers today. and we've seen tremendous growth in that. it's really the key driver behind our digital commerce growth. >> i was looking at a chart of pitney bowes today and it went back ten years even. i mean, a lot of volatility. 2007 you were at $50 a share. just before the financial crisis hit. you hit a low in the beginning of 2013 of $10, a huge decline

there. but in the last 18 months, you've gone from $10 to $28, and i'll bet you're going to lay that to your new ceo who's been there exactly 18 months now, mr. lautenback, yes? >> yes, absolutely. mark came in with a clear strategy and we've been implementing on that strategy and its balance. >> what's different? you talk about a new culture he implemented. what is different now? >> yeah in terms of the culture, mark believes in people that are fit for purpose in the jobs. he's brought in a number of new business leaders, really focused them on a few key initiatives. and we've really been able to drive growth, drive costs out of our business, really manage our core mailing businesses effectively for cash and profit. >> well, that will do it. michael, thank you. it's good to see you this afternoon. >> thank you. good seeing you. >> you bet. >> and we've got 30 minutes to go until the close here. >> yes, we do. >> the dow jones industrial average off about 32 points, the s&p is now positive, albeit

slightly. the nasdaq up 17. >> so, we had gdp, we had fed and we had russia. when we come back, is the financial fallout from the new sanctions on russia hurting your portfolio? it sure didn't help the stock market today. the pros weigh in on that when we come back. if energy could come from anything?. or if power could go anywhere? or if light could seek out the dark? what would happen if that happens? anything.

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the dow is still negative, but the s&p's now turned positive. the nasdaq has been on the heels of twitter's better-than-expected earnings last night. the industrial average, you know what? we've got 30 minutes. anything's possible. >> and we were down almost triple digits at the session lows. >> yep. so, we will see as we head toward the close. >> the fed helping bring stocks back this afternoon, but before that, jitters about russia and ukraine saw some good gains erased this morning. >> this coming as russian stocks maybe ironically steadied after widespread investor dumping of russian stocks late in anticipation of broader economic sanctions to hit the russian economy. let's get more on what it means and whether these guys would invest in russian stocks right now. dennis gartman, founder, editor and publisher of "the gartman letter" and cnbc contributor lash larry mcdonald, both joining us. you both sent us notes ahead of time on your thoughts on russia, and both of you, interestingly, gave us a history lesson about

russia. dennis, why is that significant to know about, you know, russia going back 150 years to understand what they're going through today? >> bill, you have to understand who the russians are. these are a patient people who have survived unbelievable problems. let's think about what they did in st. petersburg during world war ii. let's think about that they lost 20 million people in world war ii. let's think about the fact that they have survived communism. they have overcome almost everything. they are a very patient people. >> so, these sanctions will mean nothing to them in the aggregate, is that what you're getting at? >> i think by the time it's all done, they will survive the advantageo sanctions very well. and even though they can't move crude oil perhaps to their old clientele, they will be moving crude oil to somebody. >> larry, is it possible this becomes a buy russia, sell europe kind of event? >> well, we were on in march and were very bullish on russia on

cnbc. but i would say, you know, if you think about putin, he's a 21st-century czar. >> bingo. >> and his oligarchs are his princes, essentially, his lesser lords. and we're hearing, if you listen closely in the global news flow, the head of the german cia said that his inner circle is crumbling right now. not all of it, but some members are putting pressure on him. so, we think there's a rising probability of a putin deeper invasion action into the ukraine. >> larry, unfortunately, because we're in the business of investing in markets here, let's boil this down to whether or not russia, you liked it last time. would you buy russia today? or are there other ways that people should think about the consequences of everything that you're discussing? >> well, i think this will set up for a phenomenal buying opportunity. i think you want to buy fear. right now there's not as much fear. i think dennis is right, it's

the cheapest market in the world. you want to buy in on fear, but right now i'm moving to the sidelines on russia. >> and what about those commodities that are so tied to russia in many cases that you might follow, too, dennis? >> well, i think one of the things we have to understand, the russians are huge suppliers to the world of wheat and corn, predominantly wheat. they're going to be sellers of wheat, they're going to be sellers of crude oil any way that they can, even though they won't be able to move much of it to europe. and i think that's going to put downward pressure on commodity prices. but i have to tell you, bill, i would be looking at russian stocks. the old rule is, you want to buy when the trumpets are sounding, when the war is being fought, as they used to say, when the streets in paris run with blood, that's when you want to buy stocks. i don't think you want to be short the russian market, and if you have to do anything, you probably want to be a buyer of it instead. >> that's what james grant told us the other day. i regret that this is so macabre, but this is the reality of the situation, i guess, larry. are you surprised that crude oil and gold haven't been popping

more to the up side, given all of this? >> especially gold. >> yeah. >> well, that's the thing. i mean, i think if you look at crude, you look at gold, then you look at the s&p, the market is numb to this. this market has grown so numb. everybody's focused on the fed. the market is blind to these risks. and that i think is very disturbing. so, i think the risk-reward in, say, equities here is poor because the market's not focusing on these possible substantial downside risks. >> and dennis, what do you do, just buy a russian etf? jim rogers told me for years, you've got to watch out for russian accounting practices, you know. when they report earnings and things, you've got to be careful for individual corporations. so, do you just buy the overall market instead? >> i think that's the only way to do it, bill. you could look at vimplecom, but i think the best way to do it is exactly that concern. you don't know when a russian corporation is going to cook its books something fierce, so look at the etf. that's the best way to do it. and i suspect i'm going to start

thinking about buying the russian etf. i haven't done it yet, but i may start thinking about buying the russian etf and selling our own stock market against it to hedge it. >> just in a word, dennis, for gold, for oil, same question, does this show you more about how weak they are? >> i think, kelly, it absolutely shows you how weak they are. look at what the term structure in the crude oil market is doing. front-month presents has gone to contan contan contango. look what's happening to crude oil today. i think it's telling you that there's an abundance of crude oil out there and it's telling you that the russians will be great sellers of it. they have no choice. >> wow. thanks, guys. >> i hear a contango. thanks for your thoughts today. >> thanks for having me on. >> you bet. big day for argentina, as we all know, trying avoid default on billions of dollars on bonds. kate kelly has the latest. what's going on? >> bill, argentine bonds are trading at multiyear highs this hour as the country's officials try to hash out a deal to settle their differences with some powerful hedge funds. argentina's economy minister is meeting with representatives from elliott management in

midtown manhattan as we speak. in a last-ditch attempt to avoid entering a state of default first thing tomorrow. argentina owes elliott and other hedge funds nearly $2 million most immediately in debt payments, in this case by midnight, and the country spent recent weeks name-calling and avoiding negotiations in violation of u.s. court orders to pay up. at issue, the ability to access international capital markets really for the first time in 13 years. and on the other hand, the risk of a raft of demands from creditors for additional payments if argentina does settle. we'll be watching the clock tonight, bill and kelly, to see where it all shakes out. >> yeah, kate, for sure. by the way, why isn't argentina paying creditors? is it posturing or because they truly don't have the money here? >> it is posturing, kelly, albeit with perhaps some legitimate legal concerns. they have roughly $30 billion in reserves now, so they technically do have the money. the problem is, if they pay today these hold-out creditors, that could trigger additional payments that they hadn't owed up until now under a sort of

obscure clause in their creditor agreement. so, some folks think they're trying to avoid that, some folks think they're just posturing. there could be issues of national pride here, they don't want to cave into the, their words, vultures and extortionists. >> taking out the full-page ads. >> absolutely, ongoing within the last few days, even. >> set that precedent there. thanks, kate. keep us updated if you hear anything. heading to the close with 20 minutes left. the dow's down 20 points. the nasdaq's still up 22 and the s&p has turned positive here in just the last few minutes. shifting from macro to micro. up next, a top wall street pro names three stocks with potential for big gains. you'll want to write these down, just named one of barons' top stock-pickers. >> then later, eamon javers' next installment on his reports on a growing safety problem in the trucking industry, and this problem is costing more and more lives on american highways. stay tuned for that. chocolate is very individual.

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stock-pickers, right? they're everywhere. you meet them all the time. but at "barron's" and zacks investment research, they have put together rankings of the top stock-picking firms on wall street based on their performance for the first half of this year. >> and snagging the number one spot on that list for 2014, rbc capital markets. they've get a 10.2% return, which out-performs the s&p 500 and most others in the race. >> with us to talk about his top stock picks and investment strategy, the guy with the hot hand, marc harris, co-head of global research at rbc. what'd you see that nobody else did? >> look, you know, obviously, it's just inside our brilliance, all these great analysts we have across the platform. it goes without saying, right? so, we did have some themes. first of all, we started out looking at the year and saying, all right, we need to pick names that haven't run as much. find the relative underperformers, but keep a cyclical bias. our market strategist who you've had on the show, jonathan's view is that this market continues to run. we've got a lot more to go,

cyclicals amongst those early in the recovery, with a steady eddie performance ahead and more to go. >> so, of the top-performing sectors this year it's been utilities and energy, but it was really the energy sector where you guys saw some winners. and i'm just curious, you don't change the list for the back half of the year, so what do you think happens from here and what are your top picks? >> that's actually an important point because that is tough to do, set your list and not do anything. >> and you're good. >> right. that worked for us. it's something we're trying to take a long-term investing view with this list. it's intended for our big investors. in the back hat, there are a number of names. >> let's name names. cbs. >> cbs. one of the great ones, right? here's a company that honestly is spinning off a reit business, so we've got catalysts ahead. they're continuing to turn capital. they've got opportunities to take some of the shows they have, "csi" and others, generate more money from them by putting them into other avenues. >> price target's $60 and it's at $57. >> a lot more room to go and les moonves, brilliant at doing what

he does. >> okay. johnson controls. >> johnson controls, jci. here's an opportunity to basically see a company that's going to dramatically change its portfolio over the next couple years. you have a got that in three years will look a lot different. they've took their electronics business and sold it, there's more to come, possible return to shareholders, other elements we liked along these themes. >> and finally? >> and finally, our other favorite, aap, advanced auto parts. here's a company that, again, has great opportunities, i think, to just continue to operate their business. they bought another large retailer that actually has a big commercial business. that commercial business we think is higher margin. we think that shows the way for their existing business. higher margins equals higher earnings and a better stock than we had. >> you're not worried about tapering by the fed, you're not worried about russia, you're not worried about the bricks in the wall of worry right now keeping people out of the markets? >> you look pretty comfortable. >> i do, very, very comfortable.

the reality is, let's think about it. you would have expected ten years ago oil prices to spike on what's happening in the middle east. oil prices, yes, up, but certainly not the way you'd expect. i think it's a similar effect across the global markets, where in essence, you have a great performing u.s. economy, a safe place to be, and the u.s. stock market is still a terrific place to be as a part of that. that's why this list is heavy, although we have picks from around the world. >> underpinning that is a view that the stocks will continue to rally. a final word on that subject of much debate, how much further do stocks, generally speaking, rally? >> i think we still have a significant amount more to go. another 20% run? look, that might be overdone. but in any one year, i think we all know, 7%, 8% is great. if we saw that this year, which is not out of the realm of possibility, i think everyone would walk away pretty happy in their portfolios watching on tv. >> we've called it the most unloved rally in market history, right? >> best ever, absolutely. it is. it is. nobody wants to believe it and it keeps going. >> but you believe it. >> i'm a believer. call me a believer.

>> so important, so good. >> isn't there a song about that? >> i believe so, yes. >> or a belieber. in any case, we have 13 minutes to go. thank you, marc harris, rbc. the dow struggling to turn positive, but the s&p and nasdaq have already to the tune of about 1 and 21 points respectively. and another full plate of after-the-bell earnings at the top of the hour. we'll tell you what numbers to look out for, so get your pencil and paper ready again, coming up. and when you hear mcdonald's and grimace, you might think of this loveable purple thing. >> of course i do. >> but now, mcdonald's executives might have a grimace of their own, due it a new ruling from the national labor relations board, and it could change the fast-food industry forever. >> isn't he cute? what age you are.aves de take them on the way you always have. live healthy and take one a day men's 50+. a complete multivitamin with 7 antioxidants to support cell health. age? who cares.

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welcome back. about eight minutes left here. the dow down 28 points, holding steady. the nasdaq's up 22. technology doing well after twitter's earnings last night. and the s&p is up a point. and we have earnings coming your way momentarily. bertha coombs has the names and the numbers to watch out for. bertha? >> yeah, i've got my earnings caffeine already, that jolt all ready for this afternoon. we have a lot of consumer-facing earnings this afternoon, beginning with yelp. investors will focus on its ability to try to monetize all

that advertising for small businesses and improve its mobile traffic. the street is looking for a loss of 3 cents on revenue of about $86 million. and for kraft foods, the issue is going to be the top line. it's been soft since the split from mond lees back in october of 2012. rising commodities are also a major headwind for the company. most likely, the three key ingredients that are going to be a problem for them, cheese, meat and grains. and before you watch "sharknado" tonight, get the popcorn out, because we are going to be watching for amc entertainment looking for a gain of 29 cents on revenue of $737 million. and we're going to end on whole foods. this was once the darling. this company could not miss. this year it's lost 35% of its value, making it the second worst performer in the s&p 500. recently lowered its outlook for a third straight time. investors want to know whether they can deliver on expectations and at least maintain. and they're looking to earn 39 cents on revenue of $3.39

billion. we'll have all the numbers for you as soon as they come in in the next hour of the "closing bell" with kelly. >> yep. standing by. thank you, bertha. and when we come back, we'll get you to the closing countdown, see how we do here with the dow down 28. after the bell, we'll talk about a new tactic used in corporate america to cut taxes owed to uncle sam. kelly has an article on cnbc.com. it's called "outversions," and you'll hear more about it later in the show and why the irs says it's a-okay to do right now. you're watching cnbc, first in business worldwide. collection. ♪ ♪ during the cadillac summer's best event, lease this 2014 ats for around $299 a month

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with thinkorswim from td ameritrade. welcome back. coming up on the three-minute mark here before the closing bell, here's what happened today. we did get volatility as anticipated. the dow opened higher on that stronger-than-expected gdp report for the second quarter, 4%, up 73 points. down, another issue involving russia and the sanctions being imposed there. that for a second day brought the market lower. we were down 94 points at the low of the day. here's where the fed made its announcement at 2:00, that they were continuing the tapering. as usual, we get this stutter-step move. the dow turned positive briefly, and now we have moved lower since that time, down 27 points. so, the volatility continued today. twitter, the stock of the day

after that blowout earnings report last night, up 20% today. best day in a while, holding on to most of those gains. it was up more than that earlier, but now at $46.40. now we watch for the earnings coming out in a few minutes. bertha just highlighted them. here they are. kraft foods and amc entertainment, both of them fractionally lower today. whole foods, yelp and metlife are up. look at yelp, especially up 9%, helped, you could imagine, by twitter's numbers. joining me, bob kaiser from s&p capital iq and bob pisani as well. and the earnings really have performed well, haven't they? >> earnings are outstanding, you know. we started the season with expectations for about 6%. now we're up to about 8.5%. excluding the financials sector, we're 10%. originally, s&p earnings weren't supposed to hit double digits until the end of the year, so we're dancing the timetable now in terms of earnings growth. >> gdp today, good numbers, but it didn't change the narrative, modest growth.

the fomc comments came out today, the most important thing in that sentence there, labor slack. >> slack in the labor force, yep. >> that's the signal from the fomc. they're going to continue to keep rates low. that's why we saw that pop there. so, the whole trend today has been modest economic growth, and that's why i like it. choppy, yes, but modest economic growth, that keeps the market slowly moving forward. now, if we get 300,000 jobs on friday, we're expecting 230,000? is that the number, the consensus number? if we get 300,000, now you're going to get the bulls come out and say, wait a minute here, now we're getting strings way above expectation economic numbers, now we're a little more concerned about the higher interest rates. >> the adp number this morning for the private payrolls less than expected, looking for 281,000, they got 218,000, but we quibble. we get herky jerky numbers every month, right on a lot of this data? >> bill, we're looking at the market as being a completely different place today as it was a year ago. you had the fiscal cliff, sequestration. all the economy had to do was

avoid recession and produce a decent earnings number and the market would go higher. today's a very different situation. 2015 expected earnings are actually moving higher. and you're not going to get that with a 2% gdp growth environment, which is where we've been since the beginning of this recovery in 2009. >> that's exactly what we're going to get today. >> the gdp number today is very encouraging because the market needs stronger growth. 2.5% would be better if we see $130 a share in the s&p 500. >> we had marc harris from rbc on. he has the hot hand for stock picking, the best performance of all the houses. and he said, they're just investing in growth and holding steady at this point. >> if you look today -- >> that's their theme here. >> stocks, energy stocks, industrial stocks, those were the ones up the most. and we had declines in interest rate sensitive stocks on some concerns about higher rates, which i don't think are going to materialize any time soon. >> all right. good to see you both. thank you. see you later. we're going out with the dow not telling the whole story.

transports came back today to some degree, so the russell 2000, those had been weaklings earlier in the week. stand by. we've got a lot of earnings coming your way here as we pointed out. that's all coming your way on the second hour of the "closing bell" with kelly evans and company. i'll see you tomorrow. thank you, bill. welcome to the "closing bell," everybody. i'm kelly evans and here's how we're finishing up the day on wall street. take a look across the major indexes. looks like the dow's still down about 31 points here at the close or about 0.2%. the nasdaq up 20 points. even the s&p 500 turning slightly positive there, hugging that 1,970 level. we'll talk about what that all means as we await big earnings, as bill just mentioned. let's get to today's panel. joining me on set, kevin roost from "new york" magazine, cnbc contributor stephanie link, our own sara eisen, and from the nasdaq to talk markets is "fast money" trader tim seymour. welcome to everybody. stephanie, how significant is this 1,970 level for the s&p, do you think?

>> well, i mean, today was a really active day, and i actually was expecting that friday was going to be the more active day, right? because we've got the big nonfarm payroll numbers. it still is going to be a big day, but i thought the fed's statements were really very, very encouraging in that they're starting to tell us what the reality is, that jobs are getting a little bit better, that inflation is ticking up a little bit, wage growth, though, still nowhere to be found, so that's going to be a very key number for me on friday. earnings continue to come in pretty okay. so, i kind of think it's steady as she goes. we've got to get through friday, though. that's a big, big milestone to get through. >> yeah, there's a lot of data to digest. what do you think stands out? >> gdp numbers were more interesting than the federal reserve statement. the fed made it pretty clear it's in no rush to change policy. saying yes, we're seeing labor market improvement, but there's still plenty of slack, indicating they're pretty much on their set course. gdp was interesting to debate. the headline number, 4%, much better than economists were looking for, indicating that, yes, first quarter was an anomaly because of the weather.

we saw it across the board with consumer spending. the one thing economists are looking at is can that kind of growth sustain itself into the following quarters, especially with the build in inventories, which could be sort of a temporary phenomenon, but look at what happened in the treasury market today. higher yields. you saw the ten-year jump the most since march, a sign that the economy is on a better trajectory, no matter what the federal reserve is going to do or change policy about. >> and as you said, a lot of that was in reaction to the news this morning as opposed to in the afternoon, but kevin, maybe the big news of the day is still twitter. i don't know. it's a 21% move. >> it could be. it's an amazing move and i think the narrative about twitter is changing. investors were nervous they were going to be able to monetize in the same way that facebook does. now we have a little bit more, you know, clear guidance on the fact that they have a plan, they have a strategy. who knows if it will work in the long run, but at least it's there and seems to be working now. >> after seeing the improvement in facebook, in twitter, there's a little halo effect across the social media space to help the nasdaq out-perform today. we'll get earnings this hour

from yelp. those shares were up better than 9% i think today when all is said and done. and you can see linkedin, groupon, facebook, groupon and facebook only up 1%, but it's a difficult tape. and if you want to talk about relative strength in this market, we can also talk about relative weakness. i raised that question with dennis gartman last hour about oil and gold. they weren't well bid today on a day of plenty of news that could otherwise be supportive of it. >> but you bring it back to the fed and people are concerned. the bond market, the three-year highs on yields. i think you have to believe that the fed -- i mean, let's wait until jackson hole to hear what underutilization means by janet yellen. i think people really don't know how quickly the fed's going to run back into the table, but there's a little more descension on the fed board. i would not be scared with the bhps and the alcoas and integrated miners and the industrial metals. i think if we have the kind of growth and the inventory build we saw out of today's gdp, those are trades that still have a valuation argument and i think

they've got the global economy behind them. >> are we making too much of this dissent at the fed? just to remind viewers, we've had two dissents this year. the one back in i think march, was to the dovish side of things and now one with plosser more hawkish. >> which is more surprising. people thought it would be richard fisher, especially in light of his recent speeches. >> it kind of was, yeah. >> when it comes to the "wall street journal," they transcribed his speech, sort of going against what's happening right now and talking about the inside for higher interest rate policy. you have to see more people dissenting to really see a split and sort of the change in balance, clearly. and i think peter summed it up nicely, the doves are still in charge at the federal reserve. >> but i think it's very important to recognize that the economy, there are underlying pac pockets of the economy that are getting better and if they do start to tighten, which i don't think they will, not this year, maybe in the beginning of 2015. we'll have to see what the data looks like, but i think the economy is in better condition, better shape to handle them taking away the american

emergency -- >> they are. this is goldilocks. >> -- the emergency fed. i think that's a good thing. >> tim? >> i agree. i think you have the best of all worlds here. >> right. >> i think the economy was totally misjudged in the first quarter and i think the fact that the fed has to err on the side of caution means you've got an opportunity where this market's going to grind higher. the bond market will try to lead the way, but in the meantime, you'd be a seller of utilities, you'd be a buyer of big-cap valued tech on a day like today, and that's the trade that i think you have to look at. >> you know, the interesting thing, though, is that it's precisely the opposite of that that's worked year to date. i wonder about the dollar today and that linking some of the weakness we saw in the commodities space. if the dollar's rallying because maybe people are seeing a world beyond the fed and a stronger u.s. economy relative to other parts of the world. stephanie, do we need to start thinking about companies that will be a headwind for, or is that too small a factor or too marginal one? >> i think you have to watch what the dollar's going to do. it wasn't just the commodities that got hit it was kind of the industrials and multinationals

that would be impacted from a stronger dollar, but i think you've got to look for your opportunities. if demand, in fact, is getting better, you do want to be in some industrials, and they can be global or they can be domestic, but you want to be a part of that leverage to a better economy. >> yeah. >> the dollar's been in an upwards trajectory since the last payrolls number, so much stronger than everyone was expecting, so obviously, it will be good to see what happens on friday, but it's also following yields. we've got a higher yield story. >> i'm excited for friday. i think we're going to get -- i mean, we know which metrics the fed is watching. they're watching wage growth, the participation rate. they don't care so much about headline numbers, but the market's reaction is another thing entirely. so, i'm excited. i think it's going to be one to watch. >> and i know the wage growth is going to take a while until it's there. i have a feeling the debate, as it's already starting to shift, will be about how convinced are you that it's coming, that it's out there and that the fed needs to wait until it's absolutely sure that it's there to kind of fully back off here. kevin, i mean, i think a lot of what's happening across the tech

space is places where wages are being bid up and we could see a knock-on effect from all that. >> it's true. what's funny about the market's reaction to yellen's call about social media stocks a couple weeks ago has just been dead wrong. since she made that announcement, facebook's up 10%, twitter's up 20%. i mean, the market -- whether or not you think these stocks are overvalued, the joke going around in silicon valley circles is that yellen capital management is doing pretty badly on its tech investments. >> oh, for the love -- >> i don't think she was giving stock tips. >> that's great. we're going to send it out to bertha coombs here, who's going to start off the slate of earnings alerts that we should expect this hour. go ahead. >> yeah, another mixed quarter from whole foods. it's $3.38 billion revenue on the top line more or less in line with expectations. it did beat on the bottom line, 41 cents versus 39 cents. its comp-store sales up 3.9% for

the second quarter. that's well below what the street was looking for, about 4.6%. in the commentary, though, they do say they are seeing signs of stabilities in sales trends and they say for the current quarter to date, at least through the first 27 days of july, comp-store sales are up 3.1%. back to you. >> bertha, thank you. stephanie, this company already one of the worst performers this year. we remember when it was down 29% on its last earnings report. what is going on? >> competition. everybody. everybody is getting into this space, and it's on the margin, hurting them, obviously, because that's what they do, right? but if you go to not just a king's or a stop n shop or a kroger, i mean, it's everywhere. it's even at costco's. this is a problem. they had to do 4.5% comp for the stock to do well and they just did 3.9%. i don't know what gross margins are, so we have to see how aggressive they were on pricing. if they held, that's encourage 'but i'll be looking for that number.

>> you have to look at that number because they've been taking hits on pricing, right? that was their whole strategy is reduce to try to deal with the competition, and this is going to be a kind of long turnaround. the stock, as you mentioned, is down 35%. >> but they've missed the last six out of seven quarters and the stock is still trading at 23 times forward estimates, so it's not really cheap just yet, unfortunately, because the estimates are coming down pretty rapidly at the same time. >> what do you think this means for the rest of the consumer space? anything? i mean, is this a whole food-specific story? do we have to start to look at -- just talk us through the implicatio implications. >> i think that the consumer's very choosey. go back to wages. wages are only running around 2%, 2.5% annualized, so we need that to get better, we need the job market to get better for them to have incremental spend. for now, they're either going to go buy the car or go to home depot for the housing goods, or they're going to go get that sweater. it depends, but they're not going to be buying all three at the same time. this group has been beaten up, though, and it's underperformed, and i think there are some

laggards that you can look at on the declines. >> kevin, do you think on the margin it makes the difference, all these services like fresh direct that are out there now, kind of reinventing the way people shop and cook and consume? >> i don't. i think we're seeing a glut of delivery services, same-day delivery is one of the biggest trends in tech, but no one's cracked the code yet. no one's figured out how to make it profitable in the long-run. i tried out some shopping services and they're great for the consumer, but on the investor side, i don't think it's something companies are ready to release widely yet. >> tim, thoughts? >> getting back to whole foods, i think it's a company-specific problem. so, it's competition, as has been said. it's valuation, though, that is starting to get interesting. some time around 12 times ebitda, they're not trading at a premium anymore, but i think there are so many other people who can get into the space that already have the infrastructure. all the price investments these people have made and the efficacy of them, i don't think anybody cares. the stock, technically, if it breaks $36, it's in a lot more difficulty.

i think it holds, but it's not a good day for these guys. >> i'm thinking about we had yesterday a discussion about panera relative to chipotle. when panera first hit the scene, it was the hottest thing around. it kind of started to reinvent the fast, casual space and it's struggled lately. stephanie, would you put whole foods in the same category or is that too strong? >> i think -- well, panera has certainly their own issues, right? they have to invest aggressively, so as a result, their earnings are depressed in the near term, but i think they are fixing it the right way and adding technology into their stores. and the expectations are extremely low for that stock. it's been a massive underperformer. whole foods, they're getting their lunch eat, really, at this point. so, it's a company-specific -- >> got to go. hang on one second because we have yelp earnings hitting the tape now and bertha's going to rejoin us. yelp was up 9% today, so high expectations. >> and extending here after hours. yelp posting its first profit of 4 cents a share on $165.2 million in revenue. its unique monthly visitors were

up. it is raising its outlook for the third quarter and for the full year as well as it's launching a number of new things on their platform, including the ability to post videos, which we've all talked about. so, really a surprise profit there from yelp, sending shares up better than 6.25%. back to you. >> thank you, bertha. kevin, this just feels like a moment for these social media names. >> you know, they're having a good month. and i think part of that is because investors are realizing that these companies are actually thinking seriously about growth, and you know, not just sort of user growth but really bottom line growth as well. >> perhaps still a legacy, tim, of the last time around. >> sorry. yeah, i think if you're talking about where these guys can grow and also where they can make a difference now, the international footprint to me is the other part of this story. if you look at the stock also technically on the charts, $80 it's running up to right here in the after-hours. let's watch that. i don't think you have to jump and grab this one, but i think it's a week where people are

seeing top-line growth, reaffirmation of why people are buying these names. >> and so, after beats by facebook, twitter notably yesterday, yelp today coming out posting its profit. we'll leave it there for now, guys. thank you. catch tim seymour coming up with the "fast money" crew at the top of the hour at 5:00 p.m. they'll be talking to the ceo of the company that helps track movement in smart devices, invensence, she said. that's next, don't miss it. the economy growing 4% in the quarter. will that force jantet yellen t raise interest rates sooner than expected? what that means for the market, next. and the market may be outraged about tax inversions where offices move overseas to avoid their tax bills, but a new trend in tax avoidance may be sanctioned by the irs and that's straight ahead. tdd#: 1-800-345-2550 trading inspires your life.

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welcome back. philadelphia fed president charles plosser, the lone no-vote from the federal reserve today. he says the committee isn't taking into account economic progress that's been made when considering when to raise rates. will janet yellen have to move up her timetable for raising interest rates? rick reiter's fixed income cio at blackrock. also joining the conversation,

ellen zeddner from morgan stanley with thoughts on the fed. welcome to you both. rick, first of all, you guys changing your projections for a rate rise? >> it's interesting. you had two conflicting pieces of data today. you had the gdp piece of data that clearly showed the first quarter was aberrational, then you have a fed that many interpreted as hawkish that we thought is more dovish when you include the comment on labor. so, we're not changing. we think the fed will be moving and the data will support moving early in '15. >> first part of next year. ellen, are you in the same camp? does anything today, whether gdp or from the fed, change your view? >> no. i would agree with rick, nothing has changed our view in terms of the timing of the first rate hike, but we are beyond his expectation, early 2016 is when we expect the fed to raise rates, and nothing i saw out of the gdp revisions or fomc statement would have changed our view today. >> wow, that's a big difference between where the two of you see the fed moving, rick. why do you think they could raise rates in the first part of next year? we're talking about just over

six months' time from now. >> so when you think about where we are today, and when you think about this discussion of why are we at a 0% funds rate? we're at a 0% funds rate because we were in unusual times if you go back two, three years ago. today you look at what is happening in terms of the payroll numbers, we're going to run at 230,000 average payroll. we're talking about we could have a 5-handle on the unemployment rate. the job openings are surging higher. these are not unusual times. the lending market is open. but i think that the data is going to influence the fed starting to move, and they recognize the inflation data is actually starting to get to their target level. >> and we saw a little bit of a reaction in treasury yields moving higher because of that, but why hasn't there been a bigger move? if we're this close to the rate hikes you've been talking about and the better economic conditions, shouldn't we be higher than we are now? >> i think there are two parts. first, the front end that will start to move up as the fed moves, but then the back end of the curve is also reflecting the fact that you have great uncertainty in the world today. what's happening in the mideast, what's happening in the ukraine. so, there's a flight to quality and there's a premium. and you look at where europe is,

where bunds are and you look at where jgbs are. u.s. at 2.55 ten-year is not bad compared to the rest of the world. >> ellen, what's interesting is this means the fed is perhaps getting lower interest rates than the economy might otherwise merit. shouldn't that actually mean that their policy today is much more stimulative than models alone would suggest? do they have to react to that here at all, do you think? >> well, i think what we have to remind ourselves is that this is a fed operating post financial crisis, where the potential gdp has been damaged and policy accommodation remains in place much longer than anyone suspects. the fed did acknowledge they're getting closer to their dual mandates, but they did so grudgingly and in a way that would insure little market reaction. they're going to find that when they go to raise rates, financial conditions tighten, and it's going to end up delaying that mid-2015 rate hike they've been promising. that's what our base line is, that's what happened going into

1993's tightening cycle, and we think something similar will play out. >> ellen, do you share the view of blackrock about the fundamental strength of the u.s. economy or are you more wary? >> we're definitely more optimistic about the economy. we're expecting stronger second-half growth. so is consensus, so is the fed. where we differ is how strong that growth is. we think we're more realistic in our growth expectations for the high 2s in the second half of this year and beyond because we don't have a consumer that's releveraging, that's leveraging back up. so, there's only so much growth in the economy you can expect without debt accumulation. the fed's got a pretty lofty forecast. and remember, them expecting to raise rates in mid-2015 is predicated on hitting growth forecasts that are beyond 3%. and so, they've got to hit those pretty lofty growth forecasts in order to do what they've promised, raise rates in mid-2015. we just don't think they're going to get there. >> rick, do you think investors should be short or long bonds? >> so, we think rates are going to drift higher from today's levels and you'll have a

significant flattening of the curve. we think the belly of the curve will head up and the back end will hang long. you're getting paid for taking long in interest rate rios. if you said where will we be in six months? we think rates are going to drift higher. >> drift higher, but are you won over perhaps to the view that they're lower generally speaking for much, much longer than anybody would have thought? >> oh, there's no question in my mind, we're going to be in a low-rate environment for some time, even though i think the fed is going to move. when they move, they're going to be i think quite clear about how long they're going to be still at lower interest rate levels. and the big problem in the system today is we live in a delevering world. there's not enough fixed income assets relative to the demand, and so you keep this headwind on interest rates. so, i think it's going to be a low interest rate environment for a long time. >> yeah. broad implications about that as well. >> completely agree. >> we'll leave it there for now, then, point where you agree. thank you this afternoon. we'll send it right out to bertha coombs for another earnings alert. >> hi, kelly. weight watchers posting a

significant beat on the bottom line, posting 90 pents ex-items. that is 20 cents better than what the street was looking for. on the top line, revenues came in at $397.5 million. now, this is down significantly from last year, which the company does acknowledge their membership is down, their paid memberships are down. however, they do say they do feel that a restructuring is in place. as a result, they are raising their outlook for the next quarter and for the full year, and the street is rewarding them for that. this afternoon, the stock after hours up 14.25%. back to you. >> a big move, bertha. thank you, for now. now, companies have been doing tax inversions and they've been called unpatriotic and corporate deserters by the white house and other lawmakers. there's another tax trick that could yield profits as well. and it's approved by the irs. stocks soaring on the news that they can do it. that story is next. and the federal government ruling mcdonald's can be held

liable for labor violations by its franchise operators. some say it will put the franchise model in jeopardy. coming up, larry kudlow weighing in on if the ruling will stand. just take a closer look. it works how you want to work. with a fidelity investment professional... or managing your investments on your own. helping you find new ways to plan for retirement. and save on taxes where you can.

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[ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ welcome back. let's start here with an earnings alert and our bertha coombs. >> yep, vistaprint printing a pretty good quarter, earning 75 cents on the bottom line versus an expectation of 53 cents. also, its revenues came in ahead

of expectations at $338.2 million versus $323 million. the company says part of the results and the revenues in particular driven on new pricing and stronger pricing in the u.s., the uk and germany, and they think that's going to help them moving forward here. taking a look at akamai, coming in on the top line for revenues mrks $476 million even, 58 cents on the bottom line versus 55 cents. no guidance for the third quarter, but the street will be looking for at least $484 million on the top line. despite the fact that the company says they seem to execute well in every geography, not getting a very good reception here at this hour. the stock now down 8% after hours. back to you. >> okay, bertha. thank you for now. windstream's stock shooting up earlier this week after announcing it's going to spin out some real estate assets into a real estate investment trust, particularly known as a reit. reits have tax structures that can save companies millions a year.

the move is dubbed as a tax outversion. oppenheimer managing director timothy horan, welcome. >> thank you, kelly. >> you wrote this was a game-changer for the industry. why? >> the industry we think can reduce their taxes substantially as a result of this, possibly 30% to 50% on average. and about a third of their free cash flow goes to taxes, so it's a very important move. >> are you surprised that the irs more or less approved this, at least with a private letter indicating that that's the case, at a time when washington has been trying to crack down on some of these tax practices? >> well, the irs has to go by the letter of the law, and this is the first time that we've seen transmission lines like this in the communications space, so it definitely was a surprise to the street. >> and you said it could boost the value of a lot of the companies in this space. we saw the rally in windstream and some. others as well. this is outside your coverage area, but why couldn't some of the other major retailers in this country pursue the same thing, then, spin off the real estate assets to lower their tax bills? >> absolutely. that seems to be the case. but i think it is complicated.

at&t and verizon could also do it, but they would rather see the overall corporate tax rate lowered to something more reasonable, like 25% from the 35% we're at. >> i wonder if that's just fear of headline risk, stephanie, from some of the blue chip names. >> when we saw the timber industry go through this, weyerhaeuser, potlatch and those kinds of companies. one, it was just like one announced it, and right away, another one and another one and another one. do you think it's going to be pretty quickly that we hear about another company doing the same thing, or is the interest rate going to kind of step back and say, let's see how this progresses. >> we've seen this a couple times. the wireless tower companies have done it already and it took a couple years. data center companies, it took a couple years. our industry's going through a huge amount of consolidation right now, so companies like frontier is very busy, they're buying an asset from at&t, at&t's buying directv, and everyone i think wants to see what happens to windstream. they have to go through regulatory approvals at the state and federal level. how smooth does that process go?

then what happens to the stock valuation when they are separately traded? >> we should note, kelly, you wrote this up for cnbc.com today. you took on this issue. what did you learn? >> i think the interesting point is that it's just a matter, i guess, of taste, or the way this all eventually plays, but from a shareholder point of view, if there's something in the existing tax code that allows you to significantly lower your tax rate, and the only thing holding companies back is kind of fear of looking like they're dodging their taxes, well, frankly, we're going to start to see the dominos fall one after the other, aren't we? what's to stop them? >> we absolutely are, and companies won't have a choice from a fiduciary perspective and from a free cash flow perspective. windstream really needed the cash to invest in the network, beef up the broadband speed, so they didn't have a choice. >> some of the companies, when buying an overseas company to lower their taxes, they'll argue that we have to stay globally competitive, and we see that in the tech space a lot. but with a lot of these u.s. players, this is frankly just a u.s. story about a way to use a reit structure to lower their tax in this case. >> it's at no timely craz lly -

kraid crazy. what is the fiduciary duty? because this was possible a year ago, this was possible two years ago, as long as we've had our corporate current tax structure, inversions were possible. were they neglecting their fiduciary duties then by not inverting? is there anything in the corporate structure that makes it necessary if my competitor inverts or spins off for tax purposes? why do i have to do the same thing? >> well, you'll be at a cost disadvantage, but inversion's different. that's companies going overseas. this is a reit inversion, where we've been kind of pushing the envelope over the last few years. towers, billboard companies, timber companies and on and on. and i think there's going to be a lot more of it. >> but those who didn't in the timber industry traded at a discount for a long time, and people really did bid up these reit structures because they viewed it as very shareholder-friendly. and oh, by the way, a nice dividend yield. >> and you also have some talk that companies that wouldn't

ordinarily go to the mlp could now do that as well for tax incentives. doesn't it all speak to how messed up the tax system is? >> yes, and that's the fund maintainal point that comes out of all of this. tim, thank you for being here. important issue. we have breaking news on yum! brands. bertha coombs, what can you tell us? >> yum! brands raising the red flag here, saying that as a result of their problems with osi group, that chinese chicken and meat handler, that they have seen some significant negative impact when it comes to same-store sales in china for both their kfc and pizza hut brands, despite the fact that osi is not a big supplier for them, and they have seen minimal disruption to their menu. nonetheless, the blowback on this from the public has been tough. the company says it's too early to note how quickly sales will rebound, but if it continues, it's going to have a significant sales impact and material effect on full-year earnings. they say they're outraged and reserve the right to take full legal action for this, kelly.

back to you. >> here we go again, bertha. they're trading down on the news. should a company like mcdonald's be held responsible for labor violations of its franchises? the national labor relations board says yes. up next, larry kudlow says they've got it dead wrong and that decision could have negative implications for the fast-food industry and for the economy. and nearly 4,000 people were killed in long-haul truck crashes last year. critics say the trucking industry's underregulated and they point to this as proof. some companies simply have to change their names after deadly accidents to stay in business and avoid costly crash litigation. our eamon javers has this outrageous story of these so-called chameleon carriers later on the "closing bell." in a world that's changing faster than ever, we believe outshining the competition tomorrow

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when it comes to the national labor relations board, it is likely safe to say mcdonald's not lovin it. yesterday, they ruled the fast-food giant can be held jointly liable for labor violations made by franchise operators. if upheld, it could bring major disruptions to the business, as people can bring their complaints up to the mcdonald's corporation, not just the franchise operator. among the consequences could be a corporation like mcdonald's

not offering as many franchises for sale. let's discuss this with cnbc senior contributor larry kudlow and labor notes director mark brenner. welcome to you both. larry, why is it that people are calling this ruling, if upheld, a game-changer? >> well, this is going to be a very important ruling. let me just say, the parts you've got to focus on is 14,000 versus 1. the seiu labor union has been trying to organize the fast-food industry for years. they can't do 14,000 franchises. it's too expensive, too many resources. they can do one, though, walmart. if it's only walmart -- only mcdonald's in the head office, they can go after that. so, that's really at the bottom of this. the national labor relations board is a very pro-union board under this administration, and essentially, i think they're trying to break 30 years of franchise law and custom. they may get away with it or it may go to the supreme court. >> mark, what are the implications? >> well, the question we have to ask ourselves is who's the boss here? when mcdonald's corporate headquarters is setting the

price ease, they're dictating how many buttons are on your shirt, they dictate how you take your order. they're clearly in the driver's seat. so, of course they should be liab liable. that's what this is about, inserting a modicum of sanity into our labor law. i think it's a really good deal, hopefully for workers on the front lines, but it remains to be seen. >> well, look, that's the argument. i appreciate the argument -- >> it's the facts, larry. this is not an argument. >> i don't think it's a fact. i think mcdonald's -- >> ask the franchise owners, they'll tell you, they cannot control anything about their business except the wages that they pay and the pricing structure that mcdonald's set for them -- >> they can control their food prices, they can control the -- >> that's not true. mcdonald's sets the prices on their menu and they also are in a box. they can't do anything -- >> they're not in a box. >> they have fees to pay back to mcdonald's. they are in a business model that is built to -- >> let me get a word in. that's your point of view. i respect your point of view. i do, however, want to make a different point of view. >> all right. >> if you're talking about a

walmart, all right, they control everything that the walmart stores do. if you're talking about a mcdonald's with 90% of them franchisees -- >> that's right. >> -- they do not have -- this central office does not have that control. they've never had that control. it's the franchisee who puts up the money. the margins are very, very thin, the profit margins, and they have to make lots of decisions about labor and pricing and menus and so forth and so on. the central office at mcdonald's -- >> everything that matters about running the business is in their hand. >> the central point about mcdonald's, mcdonald's central headquarters can make suggestions, but whether it's equipment technology or labor prices, wages, they can't make the final decision because they don't own. the store is owned by the local group. >> let's, if we can, put up a chart to see how mcdonald's has been trading on this news. and i'm curious, stephanie, implications for investors as they're digesting it. shares up about 0.1% today. >> well, one of the advantages of when a company has a lot of

franchisees is that the cost structure is a lot lower. and so, if this all of a sudden is going to change, this is a real big change for the company, but also for the industry, as larry is pointing out. it's a very, very big deal and something that we're watching very closely as well. >> see, they're legal decisions. i mean, the reason this troubles me is, well, first of all, the nlrb is so totally pro-union. >> right. >> the last we heard from them -- >> yeah, that's exactly what it looks like. >> -- opening up a plant in a right-to-work state in south carolina, all right? we know they're biased. going back to 1982, "the new york times" story had it right. there was a legal decision, very important, by i think a federal circuit court, that had a narrow and a broad definition of the issue of control. for 30 years, we've used a narrow definition of control, giving it to the franchisees. what the current nlrb wants to do is use the broad definition of control, that if two people run a bunch of employees, then it is a matter of control and they run the operation. now, this probably is going to have to go all the way to the

supreme court. the national retail federation said today they are not going to give in to this. >> mark, even if it does, and i want to give you the last word on this, even if this happens, is it possible it just depends on how the company runs its franchises? >> well, i mean, i think the question larry started with about what are workers going to be doing here in response to this is really where we need to end, and i think this is good news for folks. 90% of the workers in this industry suffer from wage theft. they're, you know, routinely being forced to clock out before they clean up at the end of the shift. these violations are endemic, they're baked right into the model, and i think this is going to give them some new tools to try and fix these problems. and so, i think this is good news for working folks. >> the seiu wants a $15-an-hour wage. >> i do, too. >> even obama is at $10. right now, the fast-food industry is about $9. >> because you can't live on $10 an hour, larry. >> let me tell you -- >> i know, even ted strickland said that.

he just had a piece in politico saying you can't live on the minimum wage. >> if you go to $15 an hour, you will decimate that industry, as stephanie link suggested. >> we have to leave it there. >> that business model cannot accommodate that and the labor market supply-and-demand -- >> they have $5.5 billion in profits. of course they can afford it. >> i'm going to keep listening during the commercial break because they're going to keep going at it. mark, larry, we appreciate it. keep an eye on mcdonald's. if you drive on the hoidz, and that's most of us, a story you can't miss. a special investigation into the dramatic rise of the fatalities involving long-haul trucks. eamon javers with an eye-opening, investigative report is next. ♪ when the world moves, futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with paper money

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welcome back. the government accountability office has looked into what happened at the obamacare launch last year and the results aren't pretty for the folks at healthcare.g healthcare.gov. dan mangan has details. >> the gao came out with a report that will be talked about tomorrow at the house energy and commerce committee that's looking into the debacle of the launch of healthcare.gov. the gao found lax oversight of contractors, a rushed schedule and change in requirements led to both significant overruns in the launch of healthcare.gov and also the flawed rollout where effectively nobody could sign up. specifically, the gao said the site was launched "without effective planning or oversight practices, despite facing a number of challenges that increased both the level of risk and the need for effective

oversight." >> all right. important moves. thank you very much. our dan mangan from cnbc.com. there's more on the website. and a cnbc investigation "collision course" has followed the growing problem of truck accidents on u.s. highways. they're responsible for nearly 4,000 deaths in 2012, which is the last year statistics are available. our cnbc investigation has found there is one type of trucking company experts say is three times more likely to cause severe crashes, and eamon javers joins us now with more. >> thanks, kelly. critics call them chameleon carriers, trucking companies that change their names and reregister with the government to clear dirty safety records. listen to this. kelly linhard, a truck driver who had over 15 years of experience and was the father of four, was doing a routine truck inspection in september 2008 when he was hit and killed by an oncoming truck veering out of its lane. >> fell asleep on a mission, ran off the road and ran over kelly

linhart, dragging him to a terrible death. >> michael is a attorney who represented the family and deposed daniel clary, the driver of the out-of-control truck. >> you admit you were driving under the influence of methamphetamine at the time of this crash, right? >> in my system, yeah. >> reporter: he pled guilty to criminally negligent homicide and driving under the influence of intox accountants. he was sentenced to 40 months. in his deposition, clary admitted to prior convictions for meth and marijuana. who would let a driver with that record behind the wheel of an 80,000-pound truck? this man, forrest rangelof. >> range transportation did have some safety concerns? >> yes. could never pass. >> reporter: he says the company was nothing more than a chameleon carrier, a trucking company that shuts down and refiles with the department of transportation under a new name to avoid liability or government fines. forrest's company, range

transportation, had a conditional safety rating from the government. that's a warning to companies that they need to improve. even after the linhart crash, though, he was able to file for a new company that he called range it express. >> i see too often in this case and other cases that i handle where the owner of the company simply closes down, refuses to pay the fines and starts another company. >> reporter: forrest rangelof did not return cnbc's requests for comment. >> there are legitimate reasons to have separate companies, absolutely, but when we're talking about a chameleon carrier, we're talking about a truck company that is so unsafe, the government fines it. instead of paying the fine, the owners close it down and start another company. >> reporter: forrest rangelof isn't alone. in one year in 2010, the government accountability office found over 1,100 new trucking company applications that appeared to be changing their name to clear their troubled records. and gao found 18% of suspected

chameleons were involved in severe crashes, triple the rate for nonchameleon carriers. an farrow is the outgoing head of the fmcsa. gao found in 2010 her agency only checked 2% of new applicants for being potential chameleons. now the gao and farrow say more is being done. >> but what we have done is created a system we call vetting. are there patterns in this company's operation that show that they actually are sharing the address with a company we've shut down before? >> reporter: so, what's the penalty for a chameleon company? >> well, there are a series of different penalties. the highest penalty is we shut them down. we say very clearly, you are not authorized to operate. >> reporter: as for the linhart family, they were able to arrange a confidential settlement with the company that hired forrest rangelof in the first place. forrest was dropped from the lawsuit. kelly linhart was one of the nearly 4,000 fatalities that happen on our roads every year, and you can see more from our special report "collision course" on

investigationsinc.cnbc.com. >> eamon, it's great work. and the fact that this is a known industry practice but there hasn't been a national outcry about it suggests that's where we have to start, tamping down on some of these practices he's drawing our attention to. i wonder if this reminds us of what judge rakoff said about the financial crisis. he said, if you're going to as prosecutors go after companies instead of people, you're not ever going to be able to totally get to the heart of some of the wrongdoing here. and i wonder if this -- >> this is just absolutely devastating to hear. great reporting by eamon. i would just say that the truck industry in itself has been -- we've seen shortages of drivers. we've seen very old -- the age of the fleet is at 20-year highs. that's one of the reasons why you want to be bullish on the truck companies themselves, because you're seeing that better demand in the replacement cycle, but this from a personal point of view is just horrible. >> kelly, part of the problem is

that there is such economic pressure on the trucking companies and truckers themselves. the economy's been improving. that's why they say we've seen the spike in truck fatalities since 2009, because as the economy improves, more stuff is on the roads getting more accid happening. and the trucking companies tell us they're under huge pressure to hire. there is about 30,000 empty jobs right now in the trucking industry. they'd like to find that 'new drivers. they can't find them. so there is some pressure here to maybe take somebody who has something on their record and give it a blind eye. >> when we spoke to the ceo of ryder, he said part of the reason they were having trouble finding drivers is because of some of the tougher regulations that have come down the pike. emon, thank you for that report. we appreciate i. much more on our website. let send it over to bertha coombs for another earnings report. >> reporter: hi, that crash, the top and bottom line posting earnings of 80 cents a share, and light on the top line as

well at 4.75 billion. the expectation was 4.84 billion. the company dealing with rising info costs, meantime, yelp posting its first profit ever. the company coming in with a 4 cent profit on a $165.2 million revenues. it is boosting its outlook. whole foods, meantime, a small beat on the top line. 375 million. 98 cents x items also beat, a huge beat on the bottom line, but it's outlook is weak. so kind of a mixed reaction there on whole foods. it's down about 5.5%. back to you. >> bertha, up next, are things heating up? stocks are like cards, you have to foe when to hold and when to fold. coming up, a poker player who should not turn his head at hot lists. what does the future retail look like? tomorrow we'll tell you on

"closing bell" in a special report." we'll be right back. .

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for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. see car insurance in a whole new light. call liberty mutual insurance. welcome back. time to check in with the hot list, editing manager alan wasler is joining me now.

>> hey, if you add up, 50,000 people have trampled through it. right now we are looking at how people might start looking at data more than listening to the fed. that will be a change. number two on the list, you heard from eamon javers. he has the truck concerns, people have been eat tack one up. finally, number three, this has been hot all day long there was a major poker championship last night. these guys had to put up a million dollars to buy if. one guy, a 2% chance of losing. guess what, he nailed that. it's the most heart breaking video you will ever watch. there you go, kelly. >> alan, thank you, i'm glad to hear his story is getting the attention it deserves. we will squeeze in final thoughts with the panel, look ahead to the rest of the week, coming up on friday, we will talk to john tapper. he joins our all star panel here on "closing bell." we'll be right back.

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of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. . welcome back. let's get final thoughts on a busy afternoon and a busy day, guys. >> there is some fuse to talk about today. it feels like a summer of for the volume, no motion, for the news. we are finally getting maybe an

indicator that things are about to get a little more interesting. >> yeah, everyone that has been long vol has been hoping so, sarah. >> a few things you need to watch, tomorrow morning, you will continue to get consumer news, kraft with a disappointment. in a statement, they talked about top line growth challenges because of the consumer and economic environment. are you seeing on the low income the packaged food guides. whole foods a disappointment when it comes to lowering guidance there. so continuing struggles with these big companies. on the economic side, we're looking ahead to jobs day friday. international front, we're watching argumenty fa. >> absolutely. it looks like they are ruled in a selective default. all still entirely to be determined, stephanie. we could be hearing from argentina, what are you keeping an eye on? >> i want to look at energy reports, that has been one of the best performing sectors in this quarter, right? so we get marathon, oxy and we get a slew of different kind of companies in energy.

i want to hear what they say about global demand. >> we want to see if they can keep it going this year. >> keep it there. thank you. "fast money" is coming up in just a few moments with pell lisa lee. what's on tap? >> tech following that enables motion sensors and swiping. we got the company that has the technology for half tech technology, it's supposedly in the iphone 6 and the iwatch. we have the ceo and we are pressing him if he is one apple as a customer. >> thank you. >> "fast money" starts right now. new york city's time's square, straighters are tim seymour, guy adami, whole foods share sink as guidance comes in below expectations. a conference call is just beginning. we'll bring you the latest throughout the hour. a social turn yarnd, yelp taking a turn to the downside as an official pop in after hours for a 9% of stock for the day