prove itself. >> ian morris live from london. ian, thank you! interesting stuff. appreciate it. >> thank you. >> thanks for watching "street signs," everybody. "closing bell" is coming up next. don't go away. >> we'll see if s&p 2,000 can hold. stick around. and welcome to the "closing bell." i'm kelly evans at the new york stock exchange, where it's another day, the bulls are in charge. >> and mihitting a new mileston. scat wapner in for bill griffeth. the s&p 500 crossed 2,000 for the first time ever. now the question is, will it close above that mark? a lot of people today giving credit to mario draghi over in europe for the reason why we were able to push past 2,000 today. took us a long time to get here from s&p 1,000. >> feels a bit like a tree falling in the woods. it's like, if the s&p hits 2,000 on the quietest week of the year, is there anybody there to hear it, to see it? where are the gazoos?

>> in what may be the quietest day in the quietest year, or the quietest week of the year. >> and i'm sure people will be skeptical about it for exactly that reason. nevertheless, it's interesting to sit here. i remember when we had our dow 11,000 hats, we had repurposed one of those and here we are dow 17,000 and change and s&p 2,000. >> well, the top sector since the s&p hit 1,000 back in 1998 is energy. >> ah. >> in an hour of fast facts about the market, that's one. >> yes, and they will be flying, so stay tuned. we will keep them coming. and if atlantic city is dying, why is the borgata firing on all cylinders? we're also going to be speaking with boyd gaming's ceo, keith smith. that's the parent company of borgata, about what he's doing right and why others can't seem to catch on. and the king takes on the president. burger king defying president obama's call for economic patriotism, pursuing an inversion deal with canadian coffee and doughnut chain tim

hortons. wall street seems to love it, the deal sending both stocks, at least talk of it, much higher, but what about the fallout from d.c.? we'll have a much closer look, straight ahead. so, here are the numbers to watch as we had the last hour of trade upon us. the dow is all 83 points to 17,895. the s&p, and that's the one we're eyeing closely, almost up 10 points to 1,998. and the nasdaq looks to be underperforming again, up about 18 points to 5,586. joining our closing bell exchange is dine dooian garnick, david pearl, john manley from wells fargo funds, mark la sh n sheeny and our own rick santelli. john manuley sitting next to me are you impressed by dow 2,000? i know it's a psychological level, but it's got to mean something. >> i'm delighted, but i was also excited when i turned 60. we've come a long way, but i don't think it's a milestone.

i think there's more to come. >> most people turn 60 and are filled with remorse because they feel their best years are behind them. >> that's not me. >> it's the new -- >> i can't live forever, but the market may be able to. >> so, mark la sheeney, what about you? >> kelly, we kind of feel the same way. obviously, it's a milestone. it's also indicative to those who still are waiting on the sidelines for an opportunity to step into this market. how far we've come, not just in the past couple of years, but since 2009, we're up a couple hundred percent on the s&p 500. but like john, i also think that we have room to grow here as profit growth continues on the back of improving economic fundamentals. >> rick santelli, i mentioned it's been some 16 years since s&p 1,000. more recently, some would say we've gotten here on the backs of the federal reserve and central banks around the world. what do you make of this talk today, that the reason we were able to push past 2,000 on the s&p is because of mario draghi and the threat of doing more over in europe?

>> well, i would say that that's probably got a lot of truth to it. i don't think it's a coincidence. to strip out away all the useless white noise and look at what evolved over the last several sessions. jackson hole, mario draghi. and yes, you know, he's had a bazooka, now he's going to have quantitative easing. i'm not so sure they can do it, but the words seem to be buying the central bank some time, and i think that's really at this point very important. i don't think it's a coincidence. you know, i wish it was a friday and we saw a big jump in the labor force participation rate, and that's why we were going through 2,000, but it isn't. but it is what it is. and i'll tell you what, as a technician surrounded by other technicians on this trading floor, i don't care even with a light volume session, to see the way this market's trading, you have to be very careful. it easily could pop. i think that there's a lot of global dynamics that not only could support the cac and the dax in the face of really weak fundamentals, but what does that

say about the u.s. market? believe me, if you can make a relative value argument for our interest rates based on theirs, think about it from an equity perspective. >> some would say the thing that could very easily pop is what's taken place in treasuries, that if people look for what's overvalued, it's bonds more than stocks. >> well, i'll tell you what, i really find it hard to see an overvalued treasury market. i know that the year-to-date total return of a 30-year bond as of yesterday's close was 19.2%. but to me, i think a lot of the dynamics that have pushed us there are counterintuitive but still somewhat logical when i see a 92 basis point bund. what i fail to put together is why the cac and the dax can do so well and especially why our equity markets -- i understand supply and demand of stocks, but it would be nice if there was a better fundamental story to tell. >> it's interesting to bring up the supply-and-demand dynamics, too. david pearl, as the "journal"

notes, i think today, we saw the pace of corporate buybacks slow in the second quarter. that's happened here along with the rally. so, if companies are buying fewer of their own shares, does that potentially mean that one of the props beneath the stool here for the market is wobbling? >> no. actually, i think the market was driven in the last couple years by qe, which forced investors to look for yield and take more risk, so they bought dividend stocks and companies that return capital share buybacks. now companies are feeling a little better about the market, and they're reinvesting. they're spending some money on capex, or they're doing acquisitions, which are very accretive in a low interest rate environment. so, i think you've seen a leadership change as of maybe july, where more economically sensitive stocks are leading in the s&p because they are going to benefit more by the economic recovery. i mean, it's still one of the worst recoveries since world war ii, but there is clearly an economic recovery. we can argue about the magnitude and the duration.

but as long as the economy's getting better, you are better off owning the economically sensitive stocks -- technology, industrials, consumer discretionary, and even financials -- if the economy gets better and, eventually, rates start going up. so, those stocks are undervalued right now. they're at a discount to the s&p, whereas utilities and telecoms, reits are overvalued. >> i'm reading through this, and it's fascinating to the extent to which the u.s. think it's the only game in town. i think that's what scott was saying, it supports valuations of u.s. bonds and equities, but overnight, at least for us, the bank of israel cut interest rates, surprisingly, because it cited some of the issues it's having, of course, but also, the backdrop of a slowing domestic and global economic environment. if anything, it feels like more central banks around the world are cutting rates than responding, john manley, to better conditions. >> i think they're cutting rates because they want to encourage the economies of the world to do better. when the central banks wants the economies of the world to do better, they push money towards them. that money flows through the

capital markets and everything else being equal, it makes us go up, and that's been going on since i was born, for 65, 75, 85 years. it will keep going on, i think. >> diana, i think -- >> this one's a bit different than the last 65 or 70 years. i mean, the balance sheets reflect that. we've never seen balance sheets like this throughout europe or the u.s. >> well, at some point in the future -- >> we have to talk, too, about the fundamental story, rick. that's so key. one of the things we're finally seeing from the 2008 crisis until today, lo and behold, we are finally seeing the recovery of the middle class. and that's why we're seeing so many companies, like the jcpenneys of the world beating on top line, housing market finally getting better, and that tightening of the labor market. it's going to be very interesting to keep an eye on yellen and watch her comments when she talks about the labor market finally starting to tighten and we're seeing these, you know, this mideconomy -- >> are you talking about the flow funds? what are you talking about, sort of the middle class, the typical american family, that things are

getting better? >> we're finally seeing a lot of discretionary spending coming into individual households, right? we're finally seeing household wealth increase. and a lot of that is because we're seeing the house data improve. i think over time, it's taken quite a long time for that middle class to finally get better, but now the data's convincingly improving in the middle, kind of middle-income -- >> so, new sales are 400,000 today. ten years ago they were 1. -- >> that's not the median home. >> it's certainly not improved in terms of history. and you're the first person i've heard try to peg the improvement to somebody in the middle class experiencing any of the sensations of it. >> that's because the middle class doesn't own the million-dollar homes, right? we can't start with the million-dollar homes and wait for improvement -- >> exactly! exactly! the central banks are fixing those who can afford the million-dollar homes. that we agree on. >> let me ask mark a question, and i think kelly raised a great point, you're starting to hear

talk about, given the statistics, this idea of a financially engineered rally, with the buybacks, et cetera. if those start to dissipate, are you going to have a noticeable change in the ability of the market to keep up this grind that's largely been built on the back of a federal reserve that has certainly, you know, increased the liquidity into the market, and then obviously, companies buying back their own stock, among other things? >> well, scott, i think that is like a support, that if it gets pulled away, it's going to mean that much more is going to be reliant on the economic fundamentals and the backdrop for corporate earnings. and we know corporate america's in good shape from a balance sheet standpoint. global growth, of course, is occurring. as we look around, we see 3% to 4% global growth. the u.s. economy, to us, appears to be sturdy with job growth consistently now above 200,000 on a monthly basis. and that's indicative of, we think, the earnings power that is going to help to support current valuations, let alone

allow equities to continue to advance. now, that will, though, challenge multiple expansion, and i think from full valuations today, it means earnings are going to have to do the heavy lifting. we can't rely on further multiple expansion along with earnings growth to provide the one-two punch to see equity prices move markedly higher, unless the economic fundamentals improve dramatically. >> i just want to make sure, diane, i follow what you're saying. your argument is that what's happening right now in this country is that conditions are getting better for the u.s. middle class? am i understanding you right? does anyone else here on the panel agree with her and think that that's what's going on here? >> i don't think anybody does. and i think that's the point that kelly's in part trying to make, right? you hear from everybody who has come on this network -- i don't know of a single person, frankly, diane, who has made a similar claim, that the middle class of this country feels like they're doing any better, and i think if you look at the recent statistics or data from retail sales or otherwise, except for the fact that people are buying stuff for their homes and maybe

they're buying cars, what else are they buying and who's feeling so good? >> well, homes are a little better than they were, let's face that. it and i think hiring's starting to pick up a little bit. so a lot of it's define who's in the middle class? i think 95% of americans think they're in the middle class. it depends where you look and where in the country you are. so, i am not saying it's driving it, but i think hiring is getting a little bit better, i think the economy is getting better. i'm not sure the middle class ever really does lead a recovery, unless it's a little bit different. >> the point is, they're not leading this recovery. they're finally participating in this recovery with their housing prices increasing and discretionary spending finally increasing. i think we're at the point in the cycle where the recovery has been going on for quite some time, and we finally have greater participation, and that participation is happening in the middle class. >> we'll leave it on that hopeful note. again, acknowledging, it's a contentious point, guys, and we've got 45 minutes to go. thank you, everybody, for joining us this afternoon here. watching the markets with the dow up 86, the s&p up about 10 points, just shy of that 2,000

mark, and the nasdaq up about 19. all right, the drama at the close. will the s&p close above 2,000 for the first time ever? we're going to hear from one pro who worries 2,000 may be a top for the market. and the nasdaq, by the way, also on a run, storming to its highest level since march 2000. in a surprising twist, it's some of the old tech names taking it there. seema mody has a special report from the nasdaq. plus, we're going to discuss which tech names could take the in as to its next leg up.

all right, there's a look at the market right now. the s&p 500 has fallen below 2,000, trying to close above it for the first time ever. it did briefly cross that mark a few hours back. there it is. the dow jones industrial average is still up 80 points, just shy of 17,100. >> yes, it is. in the meantime, atlantic city's luck has been coming up snake eyes, as the once bustling gambling destination has been on a bit of a downward spiral, culminating with the failure of the revel casino that is scheduled to close next week. >> well, but not all of atlantic city is playing a losing hand.

the borgata is bucking that trend, and that hotel isn't even oceanfront on the boardwalk. here in a cnbc exclusive interview is boyd gaming's ceo, keith smith. boyd gaming is the parent company of the borgata resort in atlantic city. mr. smith, welcome to the "closing bell." it's great to have you on. >> good afternoon. thanks for having me on the show. >> so, you better than most should know what's happening in atlantic city and why it's having so many problems. can you shed any light on why you are able to do well and the others seem to be struggling so much, beyond just what you guys are doing as a company? what's the problem there? >> well, look, i think when you look back at the history of atlantic city, when it was started back in the late 1970s, it was a virtual monopoly for gaming on the east coast of the united states. and over the last couple of decades, gaming has expanded to places like pennsylvania and new york, massachusetts just recently approved it. maryland has half a dozen casinos. and so, the product is a little

bit closer to home. the borgata's been fortunate to be a market leader since the day we opened it in 2003. it has a lot to do with the product that we've built as well as a tremendous service delivered by all of our team members there. >> yeah. and so, it's interesting as well to kind of look at the backdrop of this industry, keith. there's so much saturation, there's so much competition now. there's talk -- i mean, we just spoke the other day with sam nazarian, who's open, or just opened over the weekend that first new hotel casino in vegas in five years. do you think this industry can stay healthy? is the pie growing? is it shrinking? what are the dynamics out there? >> well, i think while the industry has seen a tremendous amount of growth in the last couple decades, growth isn't over. we're not fully saturated yet. i think the sls will do just fine. it is the first hotel casino to open in a number of years, but there are several other projects on the drawing board here in vegas, on the strip. once again, i think we'll see a lot more growth here in the gaming industry. >> i want to take it back to ac

and sort of stay on that story for a second. >> sure. >> does what's happening there scare you as an operator of a thriving property? when revel opened, people obviously thought it was going to be successful. they looked at it as a challenge to your business. it was similar looking, and you know, experience-type places. does it worry you? >> well, certainly, we like to have healthy, you know, competitors. we're fine competing with those in the market, and we were hoping revel would be, frankly, an overwhelming success and it would grow out new customers into the market. it, unfortunately, didn't do that, in part because of the product that was built. it was just not attractive to the customer, to the consumer. and so, the borgata has continued to be the market share leader there. look, we want healthy competitors. we want the market to grow, but once again, atlantic city's in a position where it could use a little less supply, a little less capacity for, you know, the number of customers coming into the market. so, the closing of the properties that will be happening in the next three or four weeks will help to

rationalize the market. >> and keith, talk us through what the prospects here, what's next for boyd gaming in this kind of landscape? yes, fortunate to have gotten to a point today doing better, especially in atlantic city, than some of the others. what's next for you guys? how do you keep an edge in this industry? >> well, look, we'll continue to focus on our product in atlantic city. and the borgata doesn't just compete in atlantic city, it competes on the entire northeast corridor, when it comes to casino gambling. we've actually grown our market share in the last two quarters in the northeast. so, we'll continue to focus on that, making sure our product is something that the customer wants to continue to come and, you know, come and take a look at, and we'll work hard at that. otherwise, boyd gaming, we recently launched an internet gaming business back in december of last year. and so, we're watching the rollout of that, and we're absorbing some growth we've had in the last couple of years. >> and last question, keith, before we go. it relates to a discussion we were just having on this show about how the typical american family is doing. who are your customers?

are we talking about the 1%? is that the only way to thrive in gaming? or are we talking about getting a boom from more parts of the u.s. economy doing better financially these days? >> yeah, so, when you look at the recovery of the economy, i think it's been somewhat asymmetrical, when you look both across the united states geographically and when you look across our customer base. the high end of our customer base, the midtier of our customer base is doing quite well. it's the lower end that's not performing as well. once again, when you look across the united states as a whole, different parts of the u.s. are performing better than other parts when we look at our business. >> glad you mentioned that, because again, you know, it's hard to understand what's going on out there a lot, but boyd gaming certainly is somebody who's benefited, as you say, not just from the 1%, but to some extent from these trends. keith smith, thank you very much this afternoon for sharing your perspective. >> thanks for having me on the show. >> really appreciate it. >> all right, 40 minutes to go before we close it up here. s&p still going for its first ever close above 2,000. has a little bit of work to do,

although it is working back towards that level right now, a couple points away. >> and the nasdaq hitting highs unseen since march 2000. coming up, the pros will tell us which names they think will lead the nasdaq back to 5,000 and how soon that could happen. also ahead, new home sales dipping again. our diana olick has the details. plus, we're going to discuss how dependent this real estate recovery is on the rock-bottom interest rates we're seeing right now. from 2000 to 2011, on average 17 manufacturers a day shut down in america. there's no reason we can't manufacture in the united states. here at timbuk2, we make more than 70,000 custom bags a year, right here in san francisco. we knew we needed to grow internationally, we also knew that it was much more complicated to deal with. i can't imagine having executed what we've executed without having citi side by side with us.

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welcome back. so, a historic session already as the s&p 500 trading above the 2,000 level for the first time. overnight, by the way, the hang seng index was at a six-year high, the sensex in india hit an all-time high, so that it's not just the u.s., but certainly, the u.s., which is getting a lot of attention for trading at these levels. the dow jones just off its record high, trading at the 17,080 mark, up about 80, scott. >> dom chu is keeping a tab on the movers today. >> scott, a lot of green on the board so far. let's start with big moves by burger king and canadian doughnut-maker tim hortons, confirming they're in discussions about a possible merger. you can see both shares up by nearly 20% on the day's trade. also, intermune soaring after roche decided to buy it for about 74 bucks a share. intermune up 36% on the trade. then there is ann inc., parent of ann taylor stores, moving

higher after two activist investors called on the company to put itself up for sale. ann shares up about 6.5% on the trade. and let's end with one that's moving lower. grubhub is moving lower on news that online food ordering company who was going to sell 10 million shares of its company in a secondary stock offering. its shares there down near session lows, off by about 8%. so, scott, kelly, lots of green, grubhub, a notable one, to the downside. back to you guys. >> dom, thanks so much. new home sales dropping for a third straight month. diana olick, what's going on? >> scott it was a disappointing number, but these census numbers are really volatile. a very wide margin of error on this. so, you have to look at june to understand what happened in july, so let's do that. the street was looking for annualized sales from june's 406,000 and got 412,000, but june was revised way up to 422,000. so, it's a 2% drop month to month, but up over 12% in july

from a year ago. i hope you followed all that. one note on that, on the year-over-year comparison, last july we saw a huge drop in new home sales because it was right after mortgage rates jumped. so, doing better than last july was kind of pretty easy. now, there are some big regional differences, mainly that only the south saw a gain month to month. the northeast saw a huge drop in new home sales from june to july, the west also a big drop. every region but the south is also down in sales from a year ago. now, all of this on median home price of a newly built home, which rose 3% from a year ago to $269,800. just to give you an idea of the premium on new, that's 21% higher than the existing home price in july. now, the homebuilders have admitted, they are focusing on the higher-end products because that is where the demand is. kelly? >> and diana, stay right there, because it's clear that while housing is doing better than a few years ago, it's still not firing on all cylinders, with rock-bottom mortgage rates still

in place. what happens if and when mortgage rates start ticking higher? >> for much more on how the housing market depends on low interest rates, let's bring in real estate expert tim rude from the collinswood group. tim, rates are low, they're going to stay low. hard to imagine that they're going to move all that much higher in a very short period of time. obviously good for housing, but why aren't they having a more dramatic impact? >> well, thanks for having me. i would say that, i mean, it's indisputable that interest rates had a huge impact on housing. if you think about 2012, when the housing market started to recover, we had like a 7% unemployment rate. so, it was pretty unprecedented to see a rally at that point in time. i think part of the challenge now for interest rates really is, is that there's a universe of people that are right now struggling with the affordability paradox. that means 5 million, 6 million people that basically should be owning a house or used to own a house are now renting, and they're trying to rationalize

what is about a 30% delta between a rental, which, lexus for the sake of example is $2,400 a month, but owning a house would be $1,750 a month. even that gap is not compelling enough, really because of more macroeconomic considerations, like the unemployment rate and consumer confidence levels. >> and i'm glad you brought that up, because i'd like to ask you both to weigh in here on whether for the typical, the average u.s. household -- i don't even know what that necessarily means -- but are conditions improving for them financially enough, diana, that it can and will support the housing market, even if interest rates edge up a little bit from here? >> i think, look, i think the economy's getting better. you're starting to see the first-time home buyer come slowly back into the market. but i would argue that it's not necessarily the macroeconomic factors. when people are trying to decide, should i rent or should i buy, they might say buying is cheaper. the problem is, they don't have that down payment. we're moving away from the investor all-cash market to the mortgage-dependent buyer, and they're sitting in a rental

that's so expensive right now that it keeps them from being able to save enough money to make that 20% down payment, and even if they're going for the lower down payment, then they've got mortgage insurance and all sorts of things. and a lot of home buyers don't know about things like fha, where they can put 3.5% down or those lower interest rate, you know, opportunities. and so, you've got this group of people who might see it more affordable to own, but they simply can't make that move for not macro, but their own personal economic situations. >> tim, you want to respond? >> yeah, she makes a great point. part of the enigma around this whole issue is if you are renting a home right now, you're paying 30% more than you should be paying, which is -- it's already a challenging enough time when you consider real incomes for 90% of americans haven't moved in 30 years, so it's hard enough to try to save up that 10% to 20% down payment. now that you're paying 30% more a month, then it's almost impossible. so, even if you do scrape together enough for the down payment, let's say a minimum for an fha loan is 3%, you've got to find a lender who's willing to

lend on those credit terms. even though they're available, there's so many other considerations -- litigation risk, regulatory enforcement risk around lending to that at-risk borrower. so, they're taking it from all sides, except for the interest rates. >> diana, what happens when more supply comes on the market, but if it happens at a time when rates do start to tick up? >> well, look, more supply is better, because that will take the pressure off of home prices. right now, home prices are still rising, not because of so much demand, but because of little supply. we are starting to see supply come back, but it's at that higher price point. and when we look at even the new home sales numbers that we got today, all of the action was on the upper end. you saw big jumps in new home sales of homes priced well above that median price for the new home. so, you're seeing, again, the higher income people are doing much better in this economy. the middle to lower income not so much, and those are the ones who are dependent on that very low mortgage rate. so, if you start to see the mortgage rates tick up higher -- >> great point. >> -- they're the ones who will

be affected, not like the high-end borrower who doesn't perhaps care about that 50 basis points. >> diana, tim, we'll leave it there for now. thanks for the color on the housing market. we have about 30 minutes to go. let's look at equities here. the dow's up 78. not much movement, scott, since the beginning of the hour. we should say, the s&p's sitting around 1,997. it did hit 2,000 earlier today, but it will need another leg higher here in the back half of the hour if it's going to reclaim and close at that level. >> the nasdaq's doing great, having its first nine-day winning streak in more than a year. so, the nasdaq itself is hitting 14 1/2-year highs. money moving into that space, whether it's straight technology stocks, biotechnology stocks, and our tech pros are going to name some others that could take it even higher. greenline do for you?ur fy just take a closer look. it works how you want to work. with a fidelity investment professional...

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it's been a record day on wall street. the s&p 500 crossing 2,000 on an intraday basis for the first time ever, trying to hold it, as we approach about 25 minutes left. it's been a pretty good month as well, by the way. the s&p is up almost 3.5%, the dow up 3%. the nasdaq 100, as we just spoke

about, has led the way up 4.5%. the nasdaq 100 is. and that has led the nasdaq to a pretty nice month as well, trading at a new 14-year high. and getting a big lift from some old names, it turns out the nasdaq's recent rise has been driven in large part by those old tech names that seema mody's going to walk through for us. >> hi, kelly. that's right, tech has played a big role in the nasdaq's out-performance, most notably, large-cap tech, names like apple. apple still has the biggest weighting on the nasdaq 100, and as expectations rise ahead of the iphone 6 launch, shares are continuing to move to the up side, hitting a new all-time high in today's trade. other old-school tech names steadily rising over the last one week include ebay, oracle and intel. intel's recent earnings report benefiting from the pc recovery. speaking of pcs, hewlett-packard the biggest gainer in the tech index over the past one week after posting better-than-expected earnings thanks to a jump in its personal

computer business. you know, aside from strong earnings, guys, analysts say the dividend growth offered by many of these tech names, plus the strong buyback program are two other reasons investors have stayed hooked on old-cap tech. plus, with periods of rising volatility, experts say this is one way to play tech or one defensive way to play tech and get exposure to this sector. scott and kelly? >> all right, seema. thank you so much. so, what tech names will lead the nasdaq its next leg higher? >> let's bring in ari zoeldan from quantum networks and matt mccormick from ball and gaynor. welcome, guys. >> hi, how are you? >> good afternoon. >> ari, i like your note here, because it says "i'm always bullish on tech." this has been the most volatile of the indexes, so what's an investor to do next? >> look, these are long term. you're talking about the brick and mortar of yesterday, right? so, we have cisco, we have google, we have verizon. we have the companies that are building the foundations for tomorrow. so, to not be bullish on tech is

i think absolutely crazy. i mean, these are stocks that are in the fabric of our life every single day. >> do you think, just following up on that, ari, that the nasdaq, its behavior in the future will look like its behavior in the past, or are you arguing that if tech is getting boring to some extent, if it's the new bricks and mortar, that this index perhaps does act more stayed? >> no, what i'm trying to say is it's the brick and mortar of yesterday, where i think the industry, especially the street, as i mentioned earlier, the street i think is still getting comfortable with technology as a blue chip stock, because they're still not familiar really how technology works, how technology's going to evolve. but i think once they do get it, and i think it's going to take a while, i think things will stabilize. >> matt, you want t weigh in on that? and also, as you look at the tech landscape, some of the stocks that have done the best this year, intel, for example's up more than 30%. there's microsoft, there's hewlett-packard, there are others. is it going to be a so-called

old tech led next leg of the nasdaq's move? >> i believe ari is correct. i believe it is an old tech play. when you look at many of these names, many of them used to not pay a dividend. if they did, they didn't grow it. and now they've drank the dividend kool-aid. and you're seeing companies that are not only increasing their dividend, but they're doing it substantially. qualcomm has increased their dividend 60% in the last two years. you're seeing companies as a sector, tech has the longest street cash flow, the lowest debt, the lowest payout ratio and dividend yield. so, they have ample firepower to give more income to people in case volatility increases or because they've offered great innovative plays. i think apple's the way to play. i like microsoft, qualcomm. i like companies that pay a dividend. i think technology is the best sector now as well as innovation for income growth. >> matt, sorry, if i could just butt in here a second. you know, how about the backbone of technology, companies like cisco, like enterel, like juniper networks, like dell?

those are companies that are not so much on the radar of the everyday investor, and people need to start looking at that very slim-specific sector, because it's stuff that powers the internet and powers every single thing that we do. >> but yet, you guys disagree. you guys disagree on facebook. so, we have an old tech conversation that we morph into where these so-called new technology stocks are going to take us. why do you dislike facebook, matt? >> sure. well, you're looking at the valuation that trailing, it's roughly 80 times trailing, it doesn't pay a dividend. and according to my interns, ian and connor, kids today don't use facebook as much. i look at something with sky-high valuations, doesn't have a pe, the kids today aren't using it, and it's not the backbone of the tech world. [ everyone talking at once ] i like apple, but facebook is not a backbone. >> no one said it was a backbone. i'm talking about companies like cisco and intel. those are backbones of the internet world. >> i agree absolutely.

>> in terms of kelly and scott, in terms of facebook, i mean, they really haven't scratched the surface. i mean, they have a billion users. their ad dollars are going -- i mean, they're absolutely insane what's happening. and i think what's going to happen, yes, matt is right, i think people are getting a little bit bored of facebook, but facebook, you know, again, with its acquisitions of snaptrack and -- >> according to what? i mean, the most recent quarter, they knocked the ball out of the park! the stock's up 38% year to date! i mean, the types of stats that you guys are citing seem to be off base. i mean, they were the things that were talked about two quarters ago. oh, kids aren't using it, they're using twitter. >> yeah, they're using twitter, but look at apple at 16 times trailing, below the market multiple. it has the mother of all up a grades coming out and the io watch. you have a catalyst that's cheap and paying you 1%. apple all day long. >> but what you're doing is you're comparing apples -- no pun intended -- >> you're comparing apples to oranges.

>> yeah, you're comparing apples with oranges. >> just to be clear, you guys agree on old tech. you both like it. you're split on new tech. ari, you like some of these names. you think facebook's the future. matt, you're not so sure. >> and kelly, how about linkedin? >> what about biotech, just to hit the third part of this index that people need to understand if they're going to play it here? what about biotech? where do you guys stand on that? >> i love the biotech sector. like everything, it comes down to the product and management. you know, if you have a shoddy product and a shoddy management, it's not going to do anything. but in terms of the future of technology within the medical space, of course, it's all about biotechnology. >> okay. >> that's not even a question. >> matt, what about biotech for investors who look at the recent volatility there and aren't sure they can stomach the nasdaq? >> i think you need to be selective, but we're a dividend shop, kelly. i like amgen, j&j as a health care mutual fund. i think those areas have had a great run. i'm concerned about the topness of the market. those guys have had a great one, facebooks, they will be a source

of funds if we see volatility pick up. that's why i like companies with reasonable valuations and strong dividend growth, regardless of the sector. >> you don't like amazon, then, matt? >> hell no. excuse me, no way. you have a look at the company that's 853 times training -- >> wait a minute, hell yes. for the record. >> it's way cool, but way expensive there. >> for the record, granted, i do agree with matt, it is expensive. it's not profitable, but amazon's goal is not to reach profitability in the short term. they want to own everything and anybody. so, i think once they do that, they're going to be focused on profitability. but you know, they want to be the internet of everything. they want to have, you know, drones deliveries to your doorstep. so -- >> and twitch. >> i'm pretty bullish on amazon. >> thanks, guys. spirited debate about the nasdaq's next leg. my shanks to ari zoldan and matt mccormick. scott, more people are starting to talk about that 5,000 level again for that index, which hasn't seen that in 14 years. >> they certainly are. 4,560 is where the nasdaq is

currently trading. s&p trying to close above 2,000 for the first time ever with 15 minutes to go. and we're on s&p 2,000 watch. we did hit it earlier in the trading session. we're right now at 1,998. but as you can see, there's some pretty decent bread today. most of that board, the s&p 500, is in the green. and why does that 2,000 number make some investors nervous? we're hitting -- they say we're hitting a top for now. we're back in a moment. om safet, to fuel economy, to quality, today's chevrolet has it all. and it's a good time to see for yourself. this labor day, check out great lease offers on chevy's award-winning, fuel efficient lineup. just announced, get additional $500 bonus to lease this 2014 chevy malibu lt for around $189 per month. find new roads at your local chevy dealer.

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welcome back. 13 minutes and about 1 1/2 points to go, scott. closing s&p 2,000, we did hit that level for the first time, interestingly enough it was in 1998 that the s&p 100 broke through the 1,000 level. at that time, ge was the biggest stock with a market cap of $240 billion. the top five -- ge, scott, coca-cola, microsoft, exxon and merck. so, the world has changed, but not dramatically. >> because microsoft and exxon are still on the list in terms of market cap. the biggest apple, which was 456th back in 1998. >> it's moved up a few.

>> oh, a few things have changed. swiss pharmaceutical company roche is buying u.s. company intermune for $8.3 million. meg terrell has that story. >> that's right, roche is paying $74 a share for intermune and it gets a drug for interpathic pulmonary fibrosis, affecting about 100,000 people in the u.s. and 100,000 people in europe and there's nothing on the market to treat it. it's approved in canada and europe but not yet in the u.s. analysts expect that this year. they think this could be a billion-dollar-plus drug in peak annual revenue and the ceo of roche told us today which is the drug that made intermune a fit for roche. >> it's, of course, the perfect strategic fit. it's a focus on medical differentiati differentiation. it fits very well to our preliminary portfolio. >> now, when you see biotech deals like these, there's a lot of speculation that more will

follow. you've seen record deals in health care, but primarily driven by the tax inversions. now they think we may have a return to big pharma. isi group did a survey of investors today and has a list of names they're looking at, like puma biotech, biomarin, intercept, vertex. we'll see if any of those are next on the docket. >> thanks, meg, for bringing that to us. by the way, now it's the food industry doing the inversion deals. so, pharma is not alone in this fight, shall we say? >> yep. >> 11 minutes to go to the close. dow's up 83, 17,084 as interest rates have taken another move lower in spite of all this. we'll see if the s&p 500 can close above 2,000 for the first time ever, straight ahead. and later -- >> if you're basically still an american company, but you're simply changing your mailing address in order to avoid paying taxes, then you're really not doing right by the country and by the american people.

>> well, tell that to the king. burger king aiming to buy canada's tim hortons, sending both of those companies' shares much higher today. but is burger king biting off more than it can chew by defying president obama's call for economic patriotism? do not touch that remote. cute little guy, huh? this guy could take down your entire company. stay with me. on thursday a hamster video goes online. on friday it goes viral - a network choking phenomenon. why do you care? he's on the same cloud as your business. the more hits he gets, the slower your business may get. do you want to share your cloud with a hamster? today there's a new way to work. and it's made with ibm. is caused by people looking for parking. in a city that's remarkable that so much energy is, is wasted.

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welcome back. the s&p 500 still a little more than two points away from getting close to that closing level of 2,000, even though on an intraday basis, it already was there today. there's the dow as well, not to be overlooked, up 0.5%. jpmorgan and goldman sachs leading the way today at a time, kell, when you're starting to hear conversation about the financials again, which hadn't done much of anything, disappointed people, and they're starting to get moving. there's jpm up 1.5 and goldman up just about the same. >> joining us for more, michael block from rhino trading, kenny biokari from o'neil securities. good morning to you both. michael block, are you buying the banks here? >> yeah, actually, i like the banks a lot and now i like them. we're getting to another earnings season, there will be more capital markets activity, if the markets hold insteading, we'll have more trading, god

willing, and i like where they are. there's supposed to be some multiple expansion. i like them. >> kenny, if that's the case, if the banks are ready to take off a little bit, that's got to be good news for bulls in this market. >> it is. it is good news for the market, the fact what we did today broke s&p 2,000 is also good news for the market. the other thing that concerns me is that there's not that energy, right? there's not that real excitement. when we passed s&p 1,000 years ago, there was this energy, right? >> kenny, half you guys are on vacation. i mean, come on. it's the last week of the summer here. >> there was no energy in this. this was like a thud today when we did it. that being said, the financials start to heat up, the economy's looking better. it's certainly a bullish argument for, you know, further gains ahead, for sure. >> all right, guys, we'll talk to you soon. we're back with the closing countdown right after this. and right after the bell, find out if the s&p 500 is going to make history today by trading above 2,000 for the first time ever. you're watching cnbc, first in business worldwide. ♪

♪ ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade. s&p making history today as we begin the closing countdown. there it is, trying to close above 2,000 for the very first time ever. it hit that mark earlier in the session and then hit a stall. so, we're back with the three amigos on the floor, bob pisani, ken a kenny biokari. what happened?

2010 and then a stallout. >> i'm not concerned. we've had a broad rally the last three weeks. 2%, 3%, 4% up in consumer discretionary, consumer staples. technology's doing well. the reason the banks are lagging is we've got this louzing interest rate environment, although it's good for consumers, low -- >> but banks are starting to pick up, kenny, right? >> absolutely, and i think it's going to be good overall. i think it is going to be good for the market, as we enter into the last half of the year. >> how do you foresee things? >> i think, look, as kenny also pointed out, i think we're the only four guys working this week, but i think when everyone gets back, they'll see where we are, we'll see how the economic data holds up and it may be off to the races. we may get a little blow-off top coming up, but will housing pick up, can europe get back out of the rut? we have a big european inflation number coming friday morning. these things are important. >> but don't kid yourself. everyone's in touch. everybody may be at the shore or the hamptons or whatever, but there was a strong reason to change, if there was a compelling reason to trade, the volume would go up. there is a lack of conviction on

what direction the market's going to go, so there's a little bit of complacency, but more importantly, nobody feels a compelling reason to trade. there is no stock for sale anywhere. >> and there's that thud today when you hit 2,000. there was no excitement, there was no energy. yeah, it's great, but there was not that follow-through. >> i go back to my points earlier in the day. low interest rate environment, low oil. no other place to put money. u.s. still the best market out there. even if europe slows down, the european money will come here. >> part of the issue -- >> it's not insane why the stock market's up. >> i hear you on the low, low, low, but some people look at what's taking place in the market, saying are stocks too high? are bonds too high? in other words, where are the values? it's harder to find values when you're going to hit 2,000 on the s&p. >> that's why i think there will be some catch-up with the value stocks. that's why we talk about the banks. and as for people being in touch, let's hope we get something that gets them back in touch and back rocking by the end of the week. that will be great! >> september they'll be back, and i think you're going to see the volume pick up -- >> let's do it. >> all right, guys, thank you very much. kenny, michael block, bob pisani

is going to be back with us in a moment. s&p 500 trying to close above 2,000 for the first time ever, might not get there today. but kelly evans picks up that story in the second half of the "closing bell," beginning in three seconds. and welcome to the "closing bell," everybody. i'm kelly evans, and i think you guys know what that graphic means by now. i think for the 29th time this year, the s&p 500 is closing at another high, 1,998. in fact, the 2,000 level we were watching, looks like we didn't quite get there in the trading session today, even though we hit that level during the trading day, but we didn't close there. the dow adding about 77 points, the nasdaq up about 18. let's break it all down now with our dominic chu c.

dom, we didn't quite make it across the finish line in the end, did we? >> no, we did not. and if you talk about where the markets are going overall, what's interesting about this particular move higher is traders will debate whether or not the 2,000 level is significant from a technical or even psychological perspective, but what it does is give us a benchmark for how things have gone. it's been 16-plus years since we've seen this particular benchmark be hit again. in the past, that was the 1,000 mark on february 2nd of 1998. if you take a look at where some of the action has been. i mean, some of the big standout stocks on the upside have been the curing green mountains of the world. also on the beverage side, the monster beverages. those have posted, you know, anywhere from 45,000 to 85,000% gains. looking at the worst performers, you think about the bank stocks, right? names like aig, citigroup. those names have yet to come close to getting back their precise levels. they were much higher back in 1998. so, as you take a look at what's

happening with the s&p 2,000, we didn't quite get there, and we're still trying to settle that right now. but overall, it gives you an idea for investor psychology, and what's happened since 1998, a lot has happened since then. we've seen some real negative headlines, including a huge terrorist attack on our great nation, also the dotcombust and also what happened with the financial crisis. and every single time, the dow's rallied back to set fresh record highs. and as you said, you know what that graphic means. every time we show it, there's a new record high for the stock market. that's the interesting thing about this. although i will say, and maybe the panel can weigh in on this as well, i've had a lot of traders say this is still on very light volume. you wonder whether or not there's a real validation, if not that many people are participating. remember, on friday, we had the lowest full-day trading volume of the entire year. so, that's some food for thought, perhaps, kelly. >> i know, and i'm looking at volume levels here, dom. it doesn't even look like we'll get to friday's levels as we close things out. thank you. stay with us, dom, and we're

going to bring in today's panel. join me, yelan moy from the "washington post," erin gibbs, and kayla tausche. also with us is "fast money" trader tim seymour. as i mentioned, dom is here as well. erin, first question, kind of d dom's point here, what does s&p 2,000 ultimately mean? >> you know, for us, i think we could definitely see some consolidation. we still see positives-negatives coming out of economic news. you see one good thing, and then like we had great existing home sales and then really bad new home sales. it's sort of that back-and-forth. another thing is, there really is psychology around these big numbers. when the s&p crossed the 100 and the 1,000 mark, they actually crossed four to seven times and took over a decade to finally move away. tie don't think that's going to be the case in this period when it crossed 1,500 or 500, it was more like quick touches and then keep bouncing off. i think that's more likely what we will see. >> yeah, i love that chart that goes back to 1995 showing sort

of the peaks and troughs. i wonder how it would look overlaid over the size of the u.s. economy. in other words, people saying here's what the stock market's done over this period since the s&p's been at highs. how does the economy stack up? >> i just got back from jackson hole, and one of the things that struck me was the fed spent so much time talking about the factors in the labor market they cannot control, things like demographic changes, things like are robots going to take over all of our jobs or are they not. and so, you know, we're reaching a point right now where monetary policy, in the u.s. particularly reaching its limit, and the fed says we've done all we can. it's up to the fiscal authorities in order to see the next level of growth in this economy. >> i do wonder what kind of attention will be paid to the fact that we even just traded at the 2,000 level today. >> when you look at that chart, it's stunning. i would like to see the 10-year, the privates 10-year -- >> that's another good point. >> today we had 2.38 on the

10-year. so, you're seeing more of a psychological rally with little in the way of fundamentals pointing to this, because people just don't have anywhere else to put their money. we've been talking about this for years at this point, but it's true. we had someone on "squawk alley" this morning talking about apple, and they said just the dividend yield alone makes it a better buy than a bond. and there's so many stocks out there that investors have no choice but to put their money in because the bond market has so few options right now, and that's why psychology's leading them into equities week after week. >> tim? >> i'll tell you what, i think it's more about fundamentals. forget psychology. i think s&p 2,000 is somewhat meaningless, especially at a time when i think psychology's pretty good. but if i look at, you know, the pe of the s&p on a forward basis relative to its history, it's actually very much in line and maybe a slight discount. technology, which has been kicking it, and certainly the best performing sectors trading at a major discount to its forward pe versus history. so, is the market overpriced is really the question to ask yourself at 2,000.

and i would say relative to where we are in the economic cycle, and i typically on the "closing bell" seem to be the most bullish guy up here in terms of where i think the economy is. the economy is not that bad. and if you look at where we are, i think we're mid-cycle here and the fed is doing everything they can to get out of the way. and okay, we don't know what's going on with the labor market, but basically, we are seeing other parts of the economy pick up. that's very good for stocks. >> tim, do you believe -- because we were having a debate at the top of the last hour. do you think things are getting better out there now finally for the average joe? >> well, i think credit's getting better. i think, first of all, people are working, which means they can actually buy things. they can actually enhance their credit. we know that banks are lending. in fact, if anything, people are a little concerned that we're starting to slip into lax credit standards. but if you look at what's gone on in the credit department and what's going on with new issuance, but also the banks' earnings, certainly, they are lending again. i'm not going to tell you they're back to 2007 levels, but i think this is good. >> the people that they're lending to are people who have excellent credit, the same

people who are able to borrow money in the past. one of the big issues that i think keeps the recovery from trickling down to main street is the problem that we have seen wage stagnation, and that's actually one of the issues that janet yellen brought up in her speech, which is, are we seeing pent-up wage deflation, in which case, we're going to see wage growth remain low for an extended period of time. >> i hear that, but then we'd also have major inflationary problems in the economy, and we don't. we probably have a bit of a sweet spot here where the fed doesn't have to worry about latent inflationary forces. i agree, main street may not be doing as well as other parts of the economic spectrum, but to say that the economy's weak because jobless claims are back at 2006 levels and the world is a lot better, but suddenly, we're not growing wages at 5% a year, that's not a bad situation. >> we're still seeing weak confidence, weak retail sales. i mean, there's certainly no clear set of data, tim. i mean, you certainly have positive data points, but not everything's moving in the right direction now. >> well, i disagree on the

fundamenta fundamentals, because earnings have been strong. >> what is the estimate? >> we're looking at 11% growth for '15 over '14. q-2 came in at 5% revenue growths p.m. we had one of the highest revenues growths quarters and we're reaching new highs in earnings. so, the market is moving with those earnings. so, there is a disconnect between the economy and corporate earnings. >> by the way, i would point out also that the stock market, we said is doubled in essence, right? the 1,000 to 2,000 in 16 years? you know how much a gallon of gasoline costs on average in the u.s. back in 1998, february of 1998? >> can i guess? let me take a guess. >> take a guess. >> i feel like i remember this. i want to say, dom it was like -- okay, this is probably way out there, like $1.03. >> you're so close. you're right. you're right in the right wheelhouse. it was $1.06. >> wow. >> that was the average price of gal lean back on february 2nd, 1998. >> and it was too cheap. >> now the average price is

$3.50, down from where it has been. >> but our gas prices are still sort of the cheapest in the world. so, gas prices back at s&p 1,000 were way too cheap. >> you know it's been a boom for the energy sector, tim. that's the best performer since that 1,000 level. let me just ask this before we let everybody go, what do you think happens now? tim seymour, if you look into your crystal ball, what takes us that next leg higher? >> well, i think we, one, have to continue to see earnings to grow. the fact that there's a lot of cash on balance sheets in corporate america means i think they will. this is part of what i think was spoken about in terms of earnings are growing. so, i want to see a lot of the acceleration in the industrial part of the economy. obviously, yes, i want to see wage growth, but i don't want to see any of this that quickly. i think the second half of the year will surprise people to the up side. >> all right, we'll leave it on that positive note. >> right on. >> thank you, tim, for the positivity. catch seymour and the crew on "fast money" at 5:00. all of the traders are giving their top picks for stocks to buy at record highs here. don't miss that. now, breaking news out of amazon and jon fortt has the

details. >> kelly, it is official, amazon is buying twitch. it's a network for user-generated content. $970 million in cash when all sorts of other adjustments are netted out. twitch is 3 years and 2 months old. there are a few stats in the release that viewers would be interested in knowing about. in july, twitch had more than 55 million unique visitors. they viewed more than 15 billion minutes of content on twitch produced by more than a million broadcasters. this is interesting from an investor perspective as well, because a big part of the reason why amazon took more of a loss recently than investors had expected is because investments in content, original content. it's fair to look at twitch as another investment in content. not exactly the same sort of original content like netflix make, but twitch's user-generated video game type

content is the kind of content amazon has been investing in with its kindle fire and fire tv, investing in gaming. this will give them another channel to try to engage those users in prime. and of kindle, amazon expects it to close in the second half of 2014, this year, kelly. >> and quick, kayla, significant, surprising that amazon wound up with twitch instead of google? >> not necessarily. you've got to imagine that as soon as the rumors got out there that google was looking at it, that a company like amazon, so committed to new content, would look at something like this. i have to believe that there was a very well attended auction for this company. you know, $970 million for a 3-year-old company, that's certainly no small price tag. but this is a company, for those viewers who have never heard of this, this is consistently in the top five sources of u.s. internet traffic. so, even if you're not doing -- >> that's where i first heard about it. i think it was a "usa today" chart. i said, what is twitch?

as it turns out -- >> it is an extremely popular service. >> it's huge! >> interestingly, guys, the rumored price hasn't run up from where it started. it was talked about as a billion-dollar potential acquisition by google. it turns out to be a hair under that by amazon. so, some reports out there were that google might have gotten cold feet on this buy, but this is very much a market where content is drawing users, it's drawing engagement. very important that people are sticking around watching this. facebook just today saying they're making an adjustment where they want to make sure that the links that you're seeing in your newsfeed aren't just things that people are clicking on by accident, but they're things that people aren't engaging in. >> right, right. >> and twitch is one of those networks where young males in the demo are engaged. that's important for them. >> jon, did you say that this is going it affect amazon earnings next quarter? is this something that they already allocated for last quarter? how's this going to work from an accounting perspective? did they say anything about that? >> i wasn't talking about how this is particularly going to affect amazon earnings. i was saying that the last

quarter, quarter they just reported, original content was one of the reasons why the earnings were less than a lot of investors had expected. they are investing in content. amazon saying content is expensive. this is another example of content being expensive, and amazon's continuing to open up that wallet to pay for it. >> jon fortt, thank you. appreciate it. on the news that amazon is buying that streaming service, twitch, investors may be cheering s&p 2,000, but is it the sign of a top? we are going to hear from a bear who says that if you're not in the market already, it's too late now, as signs point towards an impending correction. but we also want to hear from you after the break. go to cnbc.com/vote to give us your opinion on today's market moves. and remember what president obama told our steve liesman last month about tax inversions? >> if you're basically still an american company, but you're simply changing your mailing address in order to avoid paying taxes, then you're really not doing right by the country and by the american people.

>> so, where does that leave burger king? perhaps not taking the president's words to heart? the fast-food company reportedly looking to buy canadian-based coffee chain tim hortons. we will have the full story and the fallout. and napa valley getting rocked by the biggest earthquake in the region in more than 20 years. we'll head out west to survey the damage to the wine industry and how it could impact how much you're going to have to pay for that bottle. tigers, both of you. tigers? don't be modest. i see how you've been investing. setting long term goals. diversifying. dip! you got our attention. we did? of course. you're type e* well, i have been researching retirement strategies. well that's what type e*s do. welcome home. taking control of your retirement? e*trade gives you the tools and resources to get it right. are you type e*?

welcome back. well, in case you missed it, the s&p 500 today crossed the 2,000 mark for the very first time. first of all, we want to know if you think this is a sign of a market top. go right now to cnbc.com/vote, and we want to see how you feel about this. in the meantime, with us now is michael gyad from the inflation rotation fund. that's part of pension partners, yes? >> yes. >> just want to make that clear. anyway, you think that the 2,000 level that we have now traded at, that we have now hit, is, in fact, a worry sign for investors. why? >> well, i think it's a worry sign from the standpoint of how long the disconnect between stocks and treasuries has persisted and that round numbers can result in a lot of companies coming into the marketplace,

perhaps at the wrong time, especially with yields dropping, almost as if we are entering some kind of a recession, either in europe or the united states, or perhaps both. i know that sounds very strange. >> no, that sounds right. it's just that what's strange is the environment hasn't corresponded at all with recessionary conditions. and so, does that mean a good thing that we get low rates? >> babe ruth said every strike gets me closer to a home run. every day, we're closer to a realization that the message bonds are sending about inflation and growth is different than what stocks are sending. the narrative out there is that treasury yields are dropping purely because german bunds have dropped, because you have this potential qe in europe, but inflation expectations in the united states are starting to drop domestically. that to me is a big concern. now, equities have been in this incredibly smooth ride. if you have a lot of people starting to get excited about s&p 2,000, dow 2,000, first of all, these numbers are large and meaningless. if you have people starting to chase when you put exposure on

incredibly tight, when nobody is bearish, that tends to be exactly the wrong time for buying -- >> i want erin to weigh in on this, because you've laid out the case in terms of earnings and everything for why the market doesn't look insanely priced, but if we were painting a slowdown scenario, i could see this, strong u.s. dollar. it comes surprisingly enough on the back of lower rates, not higher. but in any case, we're starting to get that and maybe see a hit to prices and corporate profits, especially overseas profits. could that maybe, you know, derail the party here? >> i think also, if we see inflation, typically, you do see less than a 10% correction. i think saying a bear market vastly overstates what's most likely to happen. and also, it's not that nobody is bearish. this, in fact, is the most unloved bull market ever when you look at cash flows. so, you can't say that, but -- typically, you do have an 8% correction when we start to see inflation rise. so, i think that's a big possibility. but that doesn't mean a top.

it just means a correction. >> okay, so, i agree about the top issue. i've been presenting this to the market association advisers across the country talking about papers i co-authored. one adviser said to me, all my clients are saying the same thing, when do i sell my stock? and he says that tends to be a contrarian signal. stocks climb the wall of worry. i said that's a valid point. your clients are asking why do i sell my stock, maybe take the other side of that. and i said, how many are asking when do i sell my 8% leverage loan? when do i sell my junk debt? the answer is zero. >> most of them just did. >> the largest bull market in history is the junk debt. that is a source of fragility, but it has only one way to go with credit spreads widening to come. this issue in europe is not going away. >> but by the way, junk debt did just correct. we had three weeks, one of the -- >> buy the dip came back. >> it was the buy the dippers out in full force.

if you look at jobless claims and the correlation there, it's perfectly logical and normal by historical standards. >> because we've gotten away from the markets being a discounted to markets being a way to chase returns and not a reflection of the economy. nobody can tell me full rates don't exist anymore. >> but i won't use anecdotal experiences. it's a bull market. >> bull market in stocks. >> when i talk to my advisers as i travel around the country all the time, i get the question, is it time for me to put my cash into equities? have i missed out on the bull run? and i hear that a lot more. >> right, and i will tell you this because stocks are much more covered than junk debt and junk debt is more important from a capital structure -- >> well, of course, there's just more retail investors in it. those are the questions you're going to get from financial advisers sh not institutions. >> i would agree and disagree to some extent. that's largely correct, most people focus on stocks that are retail, but most advisers have very, from a demographic perspective much more on the retiree side who need the fixed income, who don't care what they're buying as long as the

yield is a high number. >> yeah, but when you look at holdings, it clearly is mostly institutionals in junk bonds and not retail investors. >> but what we're talking about with s&p 5002,000 is retail investors and -- >> i think what we're talking about is a road show right here. >> i'm ready to do it, let's go. >> because we're going to have to leave it there for now, more or less, but just to understand where you're coming from, michael, you say for the people who have not been invested in this rally, now is not the time to get in? >> i think you have to be very careful in believing that buy and hold is here forever. >> and here's the results of our survey. is s&p 2,000 a top? 69% say no. i don't know if you would put that in your arsenal as a good thing or not. depends on how you view it. all right, thank you. coming up, sony firmly in the crosshairs of a vicious hacker group this past weekend. the group not just downing sony's playstation network but also targeting a u.s. executive's plane with a bomb scare. taking down the playstation is one thing, but what else could skilled hackers with such

intentions take down? that scary scenario may be all too realistic. stay tuned for a report you can't afford to miss. but first, burger king is home to the whopper, but the restaurant's home office may be moving to canada. the fast-food chain in talks to buy popular canadian coffee spot tim hortons. president obama telling cnbc tax inversions not good for the country or for americans. we'll hear from someone who says tax inversions are not just great for shareholders, they're also good for workers. stay with us. this is a burrito made with

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welcome back. there is another company angling for a tax inversion, and this time, it's canada, not the uk. burger king seeking to buy coffee chain tim hortons, and our sara eisen has maybe had a coffee of theirs now, and the details. hi, sara. >> reporter: hi, kelly. sampled the coffee and a doughnut, and i do know what the craze is all about right now. look, we don't have a deal on the table. we don't know anything about price at this point. what we do know is that the companies are talking. they did confirm this. and that if burger king does, in fact, buy tim hortons up north, that would create the third biggest fast-food chain in the entire world with 22 -- $22 billion in system sales, 18,000 chains around the world. you hit on the tax point. that really is the key here. the headquarters would move for burger king from miami to ontario. federal tax rate in canada, the

corporate tax rate, 15%. that's a lot lower than 35% u.s. tax rate we have here. now, it goes higher when it comes to local taxes, but you get the point. certainly, that tax rate is a big part of the story, but you know what, analysts and investors, by the way, loved word of this deal. both stocks went up double digits. said there's a lot more that these two companies could gain, for example, international expansion possibilities for tim hortons, burger king has a big footprint, also getting into coffee, a high-margin business, and breakfast another appealing choice. no question, though, politicians are getting angry, kelly. >> sara, that's for sure. and in fact, senator levin has said that burger king could have a push -- push back some customers that would make the economics of this less attractive. we will have to see, but thank you, sara eisen, outside one of the tim hortons in manhattan. if this deal happens, will that open the door for more companies to invert, despite what president obama says? with us for more on the possible deal and what it means for other

inversion deals is daniel mitchell from the cato institute. welcome, dan. >> glad to be on the program. >> can you clear up something first for me here? the report -- i mean, how much of this is really a tax inversion deal? it looks like the effective tax rate for burger king was something like 27% in its latest period, and that by the time you lop on provincial taxes and everything, it may not be that much lower for tim hortons. >> well, you have to look at not only the effective tax rate, which is the average of what burger king may pay, but you have to look at the marginal tax rate, which is what matters for decision-making about how much new money to invest, how many more jobs to create, but even more important than that, the advantage to burger king of changing its legal home from the u.s. to canada is that canada doesn't have the kind of onerous worldwide tax system the u.s. has. so, all of burger king's operations in asia and in europe and elsewhere, you wouldn't have the double taxation of not only paying tax to those countries but then also having to declare that same income on your u.s.

tax return and then paying a second layer of tax. so, a canadian legal home -- it's not just a tax rate in canada, it's the fact that they don't have the american-type worldwide tax system. >> and i want to bring in the panel on that in just a second, dan. but i mean, the u.s. is one of only a few countries that i think does this kind of worldwide tax system. is it cato's position that it should move towards just a jurisdictional one, or would you instead prefer to see rates come down and sort of solve the problem that way? >> let's do both. the u.s. has the highest corporate tax rate in the industrialized world and maybe even the entire world, higher than cuba, higher than venezuela. i mean, it's ridiculous how uncompetitive we are in terms of the tax rate. but then, as you mentioned, there are very few countries around the world with the so-called worldwide tax systems, and it's almost as if the politicians -- you hear about senator levin demagoguing against burger king. he's one of the politicians who created this system that makes it so hard for american companies to earn market share abroad because they have to

carry the irs on their back, and the rate and the worldwide taxation that is such a lethal double whammy. >> dan, it seems like -- this is ylan from the "washington post" -- seems like the political climate is only going to get more difficult for this. in addition to senator levin, senator sherry brown said consumers should boycott burger king because of this potential deal. what do you consider the state of play for legislation going forward in september when congress is back in session? >> i think the companies are probably safe. yes, there are lots of demago e demagogues in the senate going after burger king. by the way, i'm going to go have a double whopper for dinner tonight just to congratulate the company for thinking about this. but i think the house of representatives -- >> why are you congratulating them? >> because i think companies have a fiduciary responsibility to do what's best for their shareholders, their workers and their consumers, not the politicians! the politicians are the ones who made the problem, so i don't want to blame the victim, because multinational companies are the ones who are disadvantaged by this. so, kudos to burger king, kudos

to walgreens having considered it, kudos to pfizer, and kudos especially to the companies that have already done it. until politicians fix the mess that they made, i think companies have not just a if fiduciary responsibility, but almost a moral obligation to figure out what's best for consumers, shareholders and not the political class here in washington over my shoulder. >> but dan, in this situation, the inversion seems to be the icing on the cake. when you look at tim hortons' same-store sales, it's actually double the growth here in the u.s. as in canada, and it seems that burger king is buying the growth and it just accidentally happened upon the fact that the way the tax code works, it can domicile in canada, even for a tiny, a tiny tax break for the company. but this is a company that ultimately is buying growth, and it just happened upon an inversion. why does that make you think that other companies will follow suit of burger king, and why does it make you applaud them? >> i applaud them because they're doing what's best for their shareholders, which

ultimately is the management's responsibility at any company. and for any multinational company, not a solely domestic company -- there's no advantage to inverting, because you still pay tax on your u.s. source income. but if you're a multinational with income earned outside the united states, having a legal home outside the united states makes eminent sense. now, there could be other reasons to do a cross-border merger, and it might be that burger king, maybe texas is only second or third on their list as they're talking with tim hortons. but taxes are a big burden on profitable companies -- >> understood. we've got to let you go, dan. but just to your question, i'm guessing the answer to is congress going to do anything now on this is no, but i just want to hear it from you. >> no way that congress and the house, i think, does anything other than maybe something cosmetic. >> wow. expect for more of it. i'm looking at twitter, people saying, you know, if burger king moves its headquarters from u.s. to canada, i will never eat at

their restaurants again. things will get interesting from here. dan mitchell, thank you. industries not tairlines no only industry that are fee-happy. hotel guests are now hit with a growing list of surcharges. this story heating up people's tempers. is it enough to make it on the hot list? we'll find out. and the friendly skies are less than friendly after hackers tweeted that a commercial flight had a bomb on board, coinciding with an attack on the playstation network, causing outages. how far could these cyber attacks go? should you be prepared for such a black swan event? we'll be right back. being a keen observer of the world has gotten you far, but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity

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welcome back. the s&p 500 traded at 2,000 today for the first time. that's getting plenty of attention on the web set. allen wastler joins me now. >> you bet you, kelly. when we dance with a record number like that, all the traffic comes piling in. we had help from drudge report. they linked to us over on the market. here's a fun fact, kelly. i watch people who read the market right both on desk top and mobile, and every day on the mobile, market wrap is usually right in the top three.

and today it's already leading the pack. so, that shows you people just checking in on cnbc.com by their devices. along with that -- >> while on vacation, yeah, exactly. >> they're on the beach -- >> they're all on the beach, yeah. >> but they're checking the market, all right? so, along with that coverage, we had dominic chu did this wonderful little stock screen for us showing the best performers on the s&p 500 since it was at 1,000, and also the worst performers. so, people have been eating up that one, too. and then finally, it is a friday -- well, not friday, it's a monday in august -- >> see? uh huh, freudian slip there. >> i'm thinking of friday. but we have this wonderful slideshow of the top-selling comic books, because we had that action comic, the first one that superman was in, sell for $3.2 million. we went ahead and said, where are the top ten? you have green lantern, spider-man, all the greats. so, that's a good one, too. >> i think my father is weeping. my grandmother threw out all of his comics years and years ago.

>> oh, no! >> i think we might have had an endowment if that weren't the case. thank you, allen. >> good to see you, kelly. >> good to see you this afternoon. hackers striking sony again. a cyber attack not only downing the playstation network for the second time in three years, but extending it to the skies to a bomb scare on a commercial flight carrying a top sony executive in the united states. it occurred at about the same time the network attack was happening. as hackers do get more sophisticated, is there a major cyber disaster on the horizon? we'll hear from the security expert on this, next. and move over, oprah. one billionaire's soon-to-be ex-wife could become one of the country's wealthiest women. robert frank is joining us with the details on what could be one of the most expensive divorces on record and an interesting strategy used to try to deny the ex-wife millions. ♪

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welcome back. we begin here with a quick "market flash," and dominic chu. >> kelly, we're watching kite pharmaceuticals, which is soaring in the after hours, up about 12%, 13%, this after the company announced positive test results for a drug they have, an experimental one for non-hodgkin's lymphoma, a type of cancer. that stock currently up about 14% now in the after-hours trade, kelly. back over to you guys. >> all right, dom. thank you for now. hackers hitting sony this weekend, as we've mentioned, bringing down the firm's playstation network, even issuing a bomb scare against a flight carrying a top sony executive. it was diverted because of the

threat. my next guest says hacking against corporate america is gaining momentum and that the next black swan event will be cyber-related. he's joe loomis, ceo of cyber incident response firm cybersponse. joe, welcome, first of all. and look, every time we bring up the phrase black swan, the point of a black swan event is that you can't predict it, but can you give us the sense of the threats that people in corporate america are talking about? >> the latest threat i'm starting to see is the fact that the black swan is real, and the fact that we cannot prevent or actually even understand what is going to happen next. the vulnerability landscape is massive right now, and that's going to be the scary part, is that boards need to understand what we have to react fast, we have to react smart and we have to react very quickly, because you know, the adversary is growing very quick, and if you don't keep up with him, they're obviously going to win the race, and that's what we want to understand, is that this country is definitely at threat, especially for our infrastructure, our health care systems as well as our financial markets. >> but the attack on sony was

actually something that they were already addressing in their last quarter's earnings call and ramping up their servers, and this is a trend that we've seen growing among smaller companies being held ransom. now, the terrorism threat to the sony executive was a new tweak on it, but this is still a trend that we've been seeing. so, i just want to understand the difference between something that's unpredictable versus a very clear trend that sony has been in the process of trying to avoid. >> well, the interesting thing about that is the procurement process is almost really our problem. sony, although is obviously the mind-set that we need to fix this, but more importantly, it still takes the average technology company six months to a year to implement themselves in type of a corporation. so, sony, you know, has a difficult time of deploying these new adversary prevention tools or protection mechanisms. and that's the problem, is that corporate america doesn't adopt fast enough to, you know, the growth and the exponential growth of technology. so, this threat is constantly going to happen because we're

not prepared quick enough. you know, the tools are out there, but they're actually not deployed quick enough. >> but the threats are also evolving at the same type. and when i talk to ceos, especially in the banking sector, which has been very popular targets of some of the denial of service attacks, they say, look, we built our technology to thwart the prior threat, but we didn't even see the new one coming. i mean, how can a company like sony and some of these financial institutions -- how should they be planning ahead for some of these attacks and trying to get in front of some of these threats? >> preparation. preparation is going to be your number one key. planning, executing simulated attacks, understanding what your threat landscape is, understanding where your vulnerabilities are and then understanding that there is risk to be accepted. you're going to have to accept from a board level that you're going to be compromised. it is not possible to prevent a compromise. the only thing that you can control is how well you respond to a compromise and how long the compromise remains. you know, do you want your --

>> joe, let me just ask this, because we don't have much time left in this segment, but as the broader public is affected by these issues -- obviously, anybody on that plane that was diverted -- i guess what you need to know is how quickly can a company respond, even if they're contracted with a firm like yours, you know, how quickly can you guys identify a legitimate threat versus one that's not and then keep, you know, there from being a broader public expense or threat or fallout from it? >> well, with the proper tools in place, you're going to detect a threat and a vulnerability rather quickly. for those that are not prepared, it's a very dangerous game, because it could go on for months, months and months, because there's a lot of antiquated technology and server systems out there that aren't updated, including our infrastructure and our health care system -- >> if sony worked with you guys or contracted with you guys and this tweet was issued and cyber senses working with sony, does that mean that plane never would have been diverted? >> that's actually correct. because the fact is, is the communications with the security

teams and law enforcement would have been more effective to getting to the ceo on that plane or understanding the threat landscape. the bottom line is, is clearly, the hacking group knew that the ceo was in the air. so therefore, they've got a corporate security issue. because how is it that the most important executive -- they understand his travel schedule? that's the scary part. and having proper preventive tools and also the proper channels of communication are critical. and with our technology, that's exactly what we do. we integrate with law enforcement, corporate executives, private security executives, et cetera. >> hopefully, you guys can prevent this kind of stuff from happening going forward, if it is a growing threat. joe loomis, ceo of cybersponse. thank you. appreciate it. california wine country cleaning up and surveying the damage after the biggest earthquake to hit the area in over decades. we'll get the latest and discuss what impact there could be on both vineyards and consumers, next. that bottle of red, well, maybe

it will cost you more. and be sure to tune in to "closing bell" tomorrow to swim with a shark. "shark tank" investor and mr. wonderful himself, kevin o'leary joins me on the panel for the hour. we'll get his thoughts on s&p 2,000 and on that middle class debate we just had throughout today's show, and we'll see what he thinks about the tim hortons deal. we'll be right back.

welcome back. it was a banner day for the s&p 500, trading at 2,000 for the s 500, a variety of factors, perhaps some of the big deals announced going into this monday, perhaps the stronger fundamental also, i don't have laid against the ten year. bond yields globally continuing to reach historic lows. now, california wine country cleaning up after a 6.0 magnitude to rock the area over the weekend. our josh lipton is in napa with the story and the damage. josh. >> reporter: we want to start here in napa by showing this incredible video, under surveillance cameras captured this moment, this was from pence a 7-eleven store. locals here tell me it was horrible.

some say they felt like shoes in a dryer. we met some businesses a bond and wine warehouse the owner visibly emotional. >> we are talking about what we have to do today to protect what's left. later, i will have a chance to physical out what this means for us, where we go from here. >> he says he lost 20% of his wine valued in the hundreds of thousands of dollars. he bharls of wine collapsed in a trapped roof. like many small businesses in this area, he does not have earthquake insurance. back to you. >> so what impact will this have on both wine makers and consumers, joining us is jessica altieri. >> welcome. thank you for having me this afternoon. >> you were saying, you were saying there is already weather to deal with. now there is the earthquake. in some cases, the damage is sophisticate. what does this mean and how much

money to raise the cost of wine produced in this area? >> you know, that's a great point you made. the one thing i got to point out, though, is napa valley and everyone that's there is authentic. there is the generations of families that stick together. as you mentioned, they had the drought this year. they have been through a lot worse. they will come through there and be stronger. it's too early to assess the damages that have happened. but this did happen unfortunately in one of the busiest times of the year during harvest. just this past year i was out here as they were getting ready for cabernet day. they were saying how it was damaged by the weather. this is one thing they will have to get through. they will get through. >> can you give me an idea of the typical pricing for some of the wines, do you test, for example, that lost two 20,000 litre tanks, what is that going to do across the board, do you

think? >> yeah, it's pretty unfortunate. you mentioned hess. i have been talking to colleagues over the last few days. itative lost close to a hundred million dollars of wine. they mentioned they are literally playing pick-up sticks hoping the next barrel doesn't crumble on them t. 2014 harvest will have a big delay this year due to loss of water and tanks. fortunately, though, enough the 2013 vint annual is one of the largest in california history. so a lot of consumers won't be impacted immediately. >> is it more likely, do you think, jessica, that it's a lost revenue for these producers, in other words, they're simply not going to have the wines available that might be people's first instinct. so consumers will shift to a different one. perhaps there isn't much of an impact on prices overall as you mentioned but perhaps more of a hit for these individual producers? >> yeah, i think it will be more for the individual producers, as

i pensioned, i have been talking to wine makers and friends from napa. it's not going to be immediate impact. a fortunate silver lining, i would say, it's only the beginning of harvest right now. so a lot of winerys haven't even begun. there are a lot of empty tanks, that's the one bright side coming out of this. if this would in a month from now, there would be a lot of unhappy people. one lawyer is calling it the king king of divorce cases, billion dollar oil tycoon in the middle of one of the costliest divorces. he has to convince courts he's not good at his job. he is really lucky. robert frank has this story right after the break. with fidelity's guaranteed one-second trade execution, .

welcome back. become dollar oil tie conharoldham is in one could be one of the most expensive divorces on record. robert frank, explain this one for us. >> i'm going to try, railroadham, he, of course, is the ceo of continental resources. his worth is over $20 billion. to keep most of that from his

ex-wife he is making a novel argument that his success in his companies are namely due to luck. couples have two ae set, one is active, one is passive. active comes from work. those can be divided by a court. passive assets they come from luck or passive investing. he actually gets to keep those. ham, of course, would keep those assets from becoming a part of the divorce. he's essentially arguing his wealth comes from luck. if you look at his attorneys, they're arguing that $17 billion he's created from his marriage came from passive assets. he says, look, we happened to discover the bakken oil shale. that was luck. this is a man woes run the company since 1967. he owns 70% of it. he is the chairman and ceo. his leadership alone going from 65 to 154 him i am told a final deal could be between a billion

and 2 million, to be the post-expensive ever, it would have to be 4.5 billion. >> i love this story. normally it's for people like myself that have to do an analysis to determine whether your returns are based on skills versus luck. so i'm actually intimately familiar with how to do the analysis of this. >> using your professional diagnoses. >> yes. >> would you say haroldhamm. >> this is skill. he has done it too many years. there are too many data points. also the test is can a basically a layman achieve the same skill? it's clear based on other companies that they aren't able to achieve that success. >> based on the fuse, robert. >> it will be a big sentiment regardless of whether it's 1 more 4.5 thank you. thank you guys this average.

i appreciate it. "fast money" is coming up with melissa lee. what's on tap? >> hey, seven looking forward to the iphone 6. we got one stock that could be a huge benefit fetchary. it's not apple or any of the parts suppliers. >> i thought you might have an iphone 6. >> okay. >> yeah. maybe. >> over to you, guys. >> "fast money" talks right now. live from the nasdaq markets in new york city's time's square, the traders are pete seymour, steve najerian, guy adami. we are playing our favorite songs from 2000. >> why is that? >> today the s&p 500 hit 2,000 the first time ever. see that record-breaking number. steve grass so, what was it like on the floor during that momentous occasion? >> this is where you are supposed to pitch to me. i'm supposed to say i'm filled with excitement. >> that's exactly what happened. you know, few think about it, though, we're in the