here is the video we showed you before the break. this is -- >> mike lucarelli, former wall street outside investor relations professional accused of insider trading. >> our cameras caught up with him as he was leaving court. he ran off, and his flip-flops came off, but he kept running barefoot down the street. >> kind of what we're doing right now. thanks for watching, everybody. >> "closing bell" coming up right now. welcome to the "closing bell," everybody. i'm kelly evans at the new york stock exchange. >> i'm scott wapner in again for bill griffeth. the stock market taking a breather after making history with s&p 2,000 yesterday. there's still a lot of news on this late august wednesday, like the continued strength of the u.s. dollar and what that could mean for earnings for american companies, and it might not be a good thing for the bottom line. we're going to take a closer look. and the inversion debate raging on in the wake of burger king's purchase of canada's tim

hortons. we'll speak with two freshmen congressm congressmen, one democratic, one republican, about what washington is prepared to do about it, or if all this rhetoric is now just election-year politics. is bigger better? apple seems to think so. a bigger iphone coming and maybe a bigger ipad as well. could this be the tablet that finally allows you to throw out your laptop? i hope not, mine's kind of new. as apple stock climbs above 100 bucks, we'll investigate what apple might have up its sleeve. >> i'm rather attached to mine as well. i'm with you. in the markets with an hour to go, the dow jones industrial average off seven points, further away from its all-time closing high of 17,138, i think, if i'm not mistaken. the s&p 500 yesterday closing above 2,000 for the first time, today giving up three points. the nasdaq giving up about five. there has been -- there have been headlines, we should say, about tensions between russia and the ukraine, scott. but frankly, markets here have been more or less jogging in place all day.

>> yeah. volume's light. obviously, you get later in the week on what's an already light and short week, people are heading out for the labor day holiday, not a real surprise. >> and a big rebalancing day friday as well. that maybe could have some impact. at least volume has picked up a little bit from yesterday and friday, but in any case. >> joining our "closing bell exchange," an dale doolittle from peak theories, keith fitzgerald, jack bouroudjian from index financial partners, and our own rick santelli. great to have everybody with us. abigail, i'm going to start with you. everybody's allowed to have an opinion, abigail. yours seems to be getting a lot of conversation today, a 50% to 60% correction in stocks. i mean, we laugh, but you've got to come on and justify how you're making a call like that. why? >> absolutely. but first, you know, i want to make a shout-out to my buddy jack. recall, jack, two weeks ago, you said that after labor day, we'd be talking about new all-time highs. you're a week early, not a dollar short. great work there. second, relative to this correction call -- >> don't deflect the attention.

that's what that's called. >> yeah, you got me there. but second, relative to the correction call, i've been making it for some time, and clearly, stocks have only gone up, so it is a very difficult position to defend. however, i think that when you look at the technicals of the markets, you know, this overshooting that we've seen to the upside, i just don't think that it's supported by the underlying technicals. i think we have this overreaching forward yield. i think it's an overconfidence on the part of investors, really driven by a lot of the central bank accommodation. you know when we look at just the fed, $4.4 trillion into the financial system alone, but you know, that's an important point. it really hasn't trickled into the economy. >> okay. >> when we look at the velocity of money, all-time lows. s&p 5002, 200% off, that disconnect will come together and i think in a sell-off. >> someone may say, okay that makes sense, except that 50% to 60%, i mean, the s&p going to 800 from where it is? i mean, come on.

>> truthfully, scott, that's teuf being kind. i think we could see it closer to 600. >> come on, don't be mean. think about 1999 and 2000, okay? nasdaq doubled five months before it crashed. i mean, anything is possible. >> thank you, rick. >> well said, rick. >> but you're not suggesting -- you don't believe this, rick, do you? >> no, i really don't, and i've never advocated selling stocks, because i think that until we run out of forest that central banks can turn into papeer i think the game's going to go on and on. there is no incentive for investors to challenge the current derangement. there isn't. and i don't see any major xbox nous shocks out there, and it's a moral issue, but it's never been a market issue. german 10-year at 90 basis points, french at 125, spanish 10-year at $2.13. i rest my case. >> it's incredible, rick, every time i look at levels on the european -- here's what's

interesting as well, once we saw the big sell-off in the eurozone crisis, everyone looked and said how could we ever have had bonds trading so low? >> but they're not trading -- >> the yield so low. >> see, that's the thing -- >> that's what's interesting about today, we're right back where we started and it's worse. >> yeah, the bunds trade, but you know, just think about it this way. would a euro at 1.32, okay, so you've got to pay $1.32 for a euro -- are you going to invest $1.32 in any of those yields i described, or are you going to take your buck and get $2.38? there's a lot going on. it's the spread on inflation, it's the spread on everything, but all the metrics are under the control of central bankers, and i don't see it changes in the near term. although when it does, abigail -- >> absolutely, when it does -- because this whole thing is on confidence, overconfidence, cockiness at this point. >> no, wait a minute -- >> and could turn on a dime. >> the only thing i would say, and i'll let jack and keith respond, but it would be one thing if all this was happening and the u.s. economy was losing

momentum or heading into recession. instead, the u.s. economy, i'm sorry to say, is reasonably well. that makes it a different story as one that's fragile as if the economy were here behaving like it was back in december of 2007, when it was peaking and heading into decline. >> perhaps. i think that's a great point, kelly. i think that there are areas of shakiness. we are seeing the consumer maybe slide. we had a good confidence number yesterday, but three big-box retailers did guide down. also, housing is starting to slip, but i think we really need to think about the 10-year yield. there are smart investors pushing that yield down as bonds rally, and it's not for without a reason -- >> no, the europeans that rick's talking about, looking at relative value trade. >> yeah, there could be huge room on that 10-year yet, trust me. there could be 75 basis points! >> exactly, rick, and if that happens, people need to understand why it's happening. if it's happening because the 10-year looks cheap relative to other places where you could buy government debt in the world -- >> forget the raise -- [ everyone talking at once ] >> no, wait. >> it's a 140 spread. think about it that way. doesn't matter if it's 4%

against -- >> exactly. >> relative value trade, it's just about spreads. >> sorry, jack. go ahead. >> no, no, you know what, i'm just listening to it and i'm loving this, because it tells me there are people still very skeptical out there, and that goes right along with what's been happening with this rally for the last five years. you know, we keep seeing new all-time highs, and we keep seeing these yields, which are keeping people out of the market. they are now looking at that 10-year, and they're starting to preach armageddon. and abbi, i love you, but that's exactly what you're talking about. when you're talking about a 60% move down in stocks, that's an armageddon strategy, and that's not an investment strategy for me. i'm not looking at the technicals, i'm looking at fundamentals, i'm finding value. i see this market trading at 16 1/2 times earnings, not the 30 times that it was trading back in '99. it's trading where it should be at a very reasonable level, especially when we're talking about a zero interest rate environment, we're talking about record operating margins for corporate america, we're talking about balance sheets that are

healthier than they've ever been, and everybody keeps looking at this and coming up with the wrong type of scenario. they're coming up with an interest rate scenario that, by the way, is right now all risk and no return. i think what we have to do is ignore the bonds. >> i don't know, 19.4% year-to-date 30-year. sorry, jack, you're wrong! >> oh, come on, the only reason that's happening, rick, and you know that -- >> wait a minute -- [ everyone talking at once ] >> it's numbers. they're called numbers. it's real. you can't -- >> just like the 2,000 print we saw on the s&p. you're absolutely right. >> look, you guys -- >> i think what both of you are saying, and please, keith, correct me if i'm wrong. rick, you're saying look how well bonds are doing, so jack is wrong, but i think you're both saying the same thing, that bonds are performing well and that stocks are performing well, and that's not necessarily inconsistent. >> listen -- >> there you go. >> you find a healthy 80-year-old, i'm a good runner. find a healthy 30-year-old, i am not. it's all relative. i don't agree with jack that the

fundamentals match up, but when you throw in all of the sugar cane that's being sprinkled around, jack's been right for a very good reason. nobody votes out central bankers that look like santa claus. come on! >> keith, you want to get in? come on, keith. >> absolutely. this is like a game of musical chairs. people are lacking confidence in the fundamentals. technically speaking, this market is about average. it's at 18 times earnings, 16 times earnings. who cares who will you run the numbers? but if you look at the correlations, when the market is fractured, the market is scared, the correlation is very high. 95%, 97% of securities move all at once, but right now, correlations are about 70%, saying there is still a lot of room to be selectively targeting certain things. energy, for example, some parts of that look cheap. some parts of technology. ali baba just tripled revenues. that's going to give a boom to all the broader technology stocks. as much as i hate to say that, you've got to be along for the ride, and why? because team yellen is still continuing to make this up as it goes along, they're pulling at

strings, they're inventing new theories to explain the unexplainable. that to me is why you've got to be here, even if you're cautious. >> abigail, i mean -- who wanted to get in on that? >> it's jack. i just want to say, one of the problems we've been having, by the way, is if people are not as smart as rick and keith and abbi and a few other people here that we're talking about, people either look at bonds or stocks. they don't think they can buy both. when they see the yield in the 10-year, they get scared. >> good point, jack. >> and what's happening is they've been getting scared as we've been making new records and they're missing the biggest rally that we have had in our lifetime. >> rick, history suggests that bonds and stocks can go up together. there's no reason why they can't. >> well, look -- >> well, you're right, you're right, but it's mostly a bad news historical perspective, because under the perfect scenario, historically, when equities are making passes at record or historic benchmarks going up, usually that's associated with higher rates, and everybody co-habitats in a very happy way -- >> that's right. >> because good things are

driving rates up. but see, right now, good things are driving stocks up that are mostly relative value against poor things in japan and europe and central banks. and the u.s. 10-year not only is disappointed in u.s. growth historically, but it's impressed when compared to other sovereigns and their rate. so, it gets kind of the third dimension on this stuff. >> and abigail, i started with you. that's where i'll finish, anyway. i mean, you suggest a rug pulled out from underneath us sort of scenario, where there's no fundamentals whatsoever in place to support the fed getting out of the ball game, when in fact, as kelly has noted, as some others on this panel have already noted, there are some fundamental underpinnings at work here that certainly make it a less dire scenario than the one that you portray. >> perhaps, but when we look back at 2006-2007, i don't think many people were talking about the rollover of the credit markets and the housing markets. >> but -- are you suggesting

some sort of crisis of that -- >> in 2006-2007, they were. >> -- of that magnitude to get to the levels of 60% down, if not more? >> i think it will have to be a pretty significant risk-off event, systemic, and i continue to believe, despite all of the great points you're making about the sovereign yield, i continue to believe that the move in the 10-year, the move down in yield, is based on some sort of treading water at the very least on the part of smart investors. so, yes, they may still be in stocks, but they're moving out of stocks and putting it into the -- >> abigail had rosy glasses on -- >> [ everyone talking at once ] >> i'm sorry, rick. >> they had a lot of rosy glasses on. i remember greenspan stephing, worried about credit spreads, worried about housing being a piggy bank. there were lots of issues ignored. no regulator, no central banker ever, ever wants responsibility of saying the party's over, and that's why dodd/frank and all the regulations are absolutely meaningless. >> there you go. >> fantasy island.

>> exclamation point right there. guys, thanks. >> thank you, everybody. >> thank you. >> we have about 45 minutes to go and the dow off about three points as it hugs the 17,100 mark, and the s&p tripling now off its 2009 lows. yesterday, notably crossing that 2,000 milestone, today about 2 1/2 points off. >> yes, so, that was the big milestone yesterday, sputtering a little today is the s&p. got us wondering when the nasdaq is going to revisit 5,000, last seen in march of 2000. wall street's top market pros are going to weigh in, coming up. and also ahead, can orbitz and american airlines afford to play hardball in their fee dispute, which led american to pull its fares from orbitz? we'll find out why the two sides may have no choice but to come to terms. and up next, some notable short sellers saying they'll go in when the fed gets out. will the market really drop that much when janet yellen and co. stop printing money? [ woman ] the cadillac summer collection is here. ♪

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but this special financing offer ends labor day at sleep train. ♪ sleep train ♪ ♪ your ticket to a better night's sleep ♪ 'til labor day you doto reward yourself.t get a queen size serta mattress and box spring set for just $397. not to labor the point, but this sale ends monday. ♪ mattress discounters welcome back. picking up on a theme here. yesterday on this show, notable short seller bill fleckenstein revealed he's not getting back into the short game yet, not until the fed gets out of the

game. here's exactly what he said. >> the fed is the problem, it's not the solution. but if you're going to make money as a short seller, as a dedicated short seller, like i did it in the past and i intend to do it again when the time is right, you really need a certain backdrop to allow the fundamentals to matter. and quite frankly, even though the fed has been reducing the amount of money it's printing, it's still printing enough money that, apparently, the stock market continues to go up. >> well, reaction now with our own steve liesman and lee munson from portfolio asset management. guys, good to see you. steve, you know, what do you think about what fleckenstein said? i mean, it's hard to make the argument that the fed hasn't had a dramatic impact at the very least in where asset prices have gone, and the difficulty in trading on the other side of what the fed is doing. >> you know, with all due respect to bill, i can't help but think he's contradicting himself in there. i mean, he says the fed is the problem, and you need a certain fundamental backdrop. so, fundamental backdrop means

to be a fundamental backdrop in the economy, which, if he means the fundamental backdrop in the economy and the fed is the problem, then what's he saying? is he saying that the fed is helping the fundamental backdrop in the economy or hurting that backdrop? and if all he's saying is he'll get in when the fed gets out -- i mean, i wish investment were that simple, but if that's all you're going to do, it seems to me like you could be making a mistake in that if the fed gets out, it will be getting out at a time when the fundamentals of the economy are improving. >> steve, remember it actually was that simple the last couple times the fed tried to end quantitative easing, so it's been the case in the past -- >> that's true and an excellent observation, although i might point to the recent history of the stock market, which has been much less concerned with the commentary coming from the federal reserve. i mean -- >> yes. >> if anybody knows anything, we know the qe's going to end in october, and some time next year, a debate about whether or not it's spring or summer, and i think given what's been happening, it's more springy than it is summery, and the market doesn't seem to care! in fact, what's been happening

is bond yields have been falling and stock prices have been buoyant. >> well, and especially the price about -- >> so, bill's wrong there. >> -- seems to indicate that this time, the back drop is more resilient. lee munson, is it? have we reached that point right now where the backdrop of the economy or the fundamentals are more resilient, so the market's not so freaked that the fed might exit here, or is exiting here? >> well, no, i think that, you know, it's one of those things where -- i would rephrase this thing about the fed. the business cycles don't end on their own. the fed kills them. but that being said, it's not about qe. we all know that qe's going to end. it's really about what kind of hikes we're going to have next year. but the bottom line is that, you know, it's summertime right now, and you've got to invest -- you've got to go out and play. you can't be worried about winter coming and say i'm not going to go out and invest in stocks, because eventually, the fed's going to raise rates and that's going to cause a problem. we've got so much slack and we're letting a few hawks on the federal reserve try to convince us that they're going to push

yellen's hand because they want their next speaking engagement at a big rotary meeting. so, i think you've got to still be invested. you don't have to worry about, you know, what's going to happen a year or two from now. >> part of the issue, though, steve, and i think it speaks to fleckenstein's point, is that with the fed doing what it's doing, it's awfully hard to figure out why certain things are happening in the market. i want to read you a couple of things i got sent to me today from people we all know and respect who appear on this network. one big trader says, "confusing is an understatement" in describing how to trade this market or why it's reacting the way it is. another one, "qe manipulation of global interest rates has been the most significant effect to capital markets since the listing of the first shares on a public exchange." what's your reaction, steve? >> you know, when people say that, i hear that a lot. the federal reserve, no matter where it is, it is manipulating interest rates. and the idea that it's manipulating interest rates more now and it's somehow crossed some, i don't know, heretical threshold in the capitalist

handbook, i really am doubtful of, because where would you set interest rates appropriately for the current environment, when basically, people are willing to lend the italian government money at less than they'll lend it to the united states? that speaks to me of a highly risk-off mentality that's out there. and so, the federal reserve should be leaning against that. that's appropriate policy. that's what we hired the federal reserve to do. there's always manipulation going on by the federal reserve, and the idea that, somehow, there's a limit to it, given the backdrop of the economy, it doesn't strike me as they've hit it. >> and fair points, but lee -- >> but the fed is also -- >> using different tools to try and get that interest rate passed to the zero bound. and the question is, will it be as smooth on the way out as it was on the way down? >> that's a legitimate question, and i think that's not written. i think bill has a point, and it may be just that simple, that when the fed gets out, you want to get out of stocks. it may be that simple. i would only point out that ostensibly, that's at a time

when revenues are growing at companies, which has not been the case for many years, and the economy is growing more strongly. >> yeah. lee, you want a quick last word there? >> but you also have to have some -- yeah, here's the thing, you have to have some sense of history and look back. when the fed starts raising rates, usually it's anywhere between 6 to 24 months afterwards that we head into recession. so, once a fed starts raising rates, that's not the time to panic. that just means it's fall and you should be thinking about winer but you shouldn't be getting your winter coats on and heading indoors. so, i think you've got to relax. you've got to remember, i don't think we're going to see a huge hike. i think it's going to be fairly smooth. and i don't think that the end of this cycle is going to be nominally really high. so, the idea that we're going to have 5% federal funds rates in two years, i think people are out of their mind. the fed is part of the fundamentals. >> all right. >> most days. >> guys, thanks. kelly, i think part. issue here is that there have been many events that have been

in front of us over the last couple weeks that would give a short seller and anybody who wants to be bearish reason to be. geopolitical and otherwise. and yet, the market closed above 2,000 yesterday for the first time ever. so, it's a throw up your hands, and as i said in that one quote, confusing is an understatement, because you would think that, yes, this is the opportunity that we've been waiting for, and don't fight the fed. >> but look, i have to say, there's been a rather populist -- it's been the big guys, the big money, the smartest guys in the room who have all been wrong, almost to -- who's been a macro fund that's had the right call on this market directionally? >> it's been a tough market to read, and it's been because some would say of what the fed is doing. >> scapegoat, maybe. >> some would say. >> i don't know. 35 minutes before the bell rings. the s&p just below 2,000. dow is at 17,107. a gain of one point! coming up, american airlines pulling its fares from orbitz, causing orbitz stock to lose altitude this week. will travelers start going

straight to the airlines' websites now to book flights? our pros will weigh in. march of 2000, the nasdaq hits 5,000 and it all went south very fast, but is retaking nasdaq 5,000 finally within reach more than 14 years later? our seema mody has a special report coming up. thank ythank you for defendiyour sacrifice. and thank you for your bravery. thank you colonel. thank you daddy. military families are uniquely thankful for many things,

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about the performance of stocks relative to bonds, scott, the 30-year u.s. treasury yield just hit a new 52-week low, 3.105%. three years! all right, orbitz bouncing back just a bit, despite yesterday's news that american airlines severed its ties with the site over a pricing dispute with american taking a stand. will other airlines soon follow and fight the fees and hope people just book on their win sites? >> mike miller of miller air group and benchmark's dan concern kernos. welcome to you both. mike, you say airlines have lately been held hostage by these travel companies. but i mean, look it, they all try to drive traffic back to their own websites' la american. is that ever going to work from the consumer point of view? >> right. well, they can't drive everything back to their own website, but what they're faced with is akin to mcdonald's making a $1 hamburger and somebody reselling it for $10.

the producer of the ticket, american airlines, knows their costs. they sell them on their own website. when somebody is telling them for ten times the price of that and trying to reap a huge reward when they're not economies of scale that are being factored in, you know, american is a much stronger airline than it was even two years ago. so, they are the aggressor right here and they're making a strong and i think solid move. >> yeah, but dan, who needs who more? you could make the argument that american needs orbitz more than orbitz means american, right? a lot of people are buying tickets on these third-party websites or independent sites, however you refer to them. >> yeah, that's a great point. i mean, if you think about it, clearly, american accounts, with u.s. air, for probably about 7% of orbitz revenue. so, it's certainly impactful. but american is now losing a very quality, tried and tested distribution channel that's becoming increasingly sticky. orbitz has had a lot of success launching loyalty programs, and

so, american might end up shooting themselves in the foot here if they can't come to some sort of mutual beneficial decision -- >> i have to disagree, because -- >> mike, please explain, because -- and i don't follow the hamburger. what are you saying is the problem with pricing that orbitz has for american airfares? >> okay, so, basically, it costs american airlines between $1 and $2, is basically industry benchmark for an airline to sell its own ticket. that's the i.t. cost, the delivery cost and the legal cost. and the resellers, the middle man, the orbitzes, expedias are charging $6, $8, $10 a ticket, some even for international tickets. so, american knows the cost and it's, again, they're a solidly managed company now. that wasn't the case two years ago. they're solidly profitable. that wasn't the case. so, we're seeing a really aggressive move, and american is really representing the entire industry with this move. >> look, but i mean, mike, they might not want to pay the commission fees to orbitz, but

the fact of the matter is, their sales are going to go down overall for their tickets by not listing on orbitz, expedia, or whoever, right? >> right, but if we look at the 20-year history of this issue, there's been a constant push by the airlines to lower their overall costs when it comes to ticket distribution, and this week's issue is no different. so, a lot of people in history have talked to me about this. there's going to be a resolution, and it's going to be fairly quick, because both sides will suffer, but the fact is, american is a much stronger position than they ever were to make this move. >> and dan, what might that resolution look like, if it comes under the existing sites, like orbitz that exist, and if not, is there any option for the airlines to get together and try to back or create something that they would feel more comfortable with as a consumer-facing site? >> before i answer that, i do want to address a point that mike made. i'm not sure that he understands just how slim the margins are for the otas. we're talking revenue tank rates

that are 4% and cash flow margins for air bookings. so i don't know why he feels the otas are squeezing the airlines. american just came out of bankruptcy, so clearly, they're not the most punishmeefficient themselves. in terms of the revolution that could occur in this space, i think it's obvious that the otas are the technological leaders in this space. i think the issue comes down to the gdss and the ability for the airlines to upsell a lot of premium products, like seats and baggage and things like that. so you know, ultimately, we could see the otas start to -- >> and otas, the online travel agencies, you're talking about, just so we're clear? >> yeah, the online travel agencies, yes. >> ultimately, these are the airline's customers, and right now they're in the driver's seat making huge profits and trying to dictate more of the cost to the industry. >> dan, it's not the first time that we've seen this dance, right? i mean, other airlines with expedia or orbitz have had disputes in the past. is that just the way that it's going to be?

>> i mean, look, you know, you see this across many industries. look at the tv industry. you've got the broadcasters and the networks and the cable guys. they'll go dark for a period of months while they're negotiating retrans. this is just how it works. american just got some more negotiating leverage. we saw this happen three years ago. it came to a mutually beneficial conclusion, and i think the market reaction today after the sell-off yesterday indicates that most investors feel the same way that we do, that this is going to get resolved sooner rather than later. >> i agree with that. >> and even if it does, it's probably not the last time we'll see it, sounds like. mike, dan, thank you very much on this afternoon with 30 minutes left to go. and stocks just slightly lower again. we've hit some historic highs this week. intraday trading highs, also closing highs, milestones to the s&p 500. today some consolidation. well, nothing screams bubble more than nasdaq 5,000, but 14 years later and the nasdaq less than 10% from that milestone. is it really bubbliscious? and later, what will a strong u.s. dollar do to

american corporate profits? the lifeblood. what is it, the mother's milk, larry kudlow calls it, of the stock market? corporate profits could they be hit by the stronger dollar? our panel weighs in. helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial.

quick look at the markets.

the dow edging higher by a couple of points. trying to see if the s&p can close above 2,000. again, has a little bit of work to do, down two points with a little less than a half hour to go. >> the dow has turned positive. with the s&p hurdling the 2,000 level yesterday, seema mody has a look at how far the nasdaq is, seema, from revisiting 5,000 back in march of 2000. >> that's absolutely right, kelly. let's take a trip down memory lane, shall we? because the nasdaq trading at 14 1/2-year highs, and the nasdaq was flying high back in the late 1990s. then came, of course, the big sell-off, the tech crash, if you will, in the year 2000, in march of 2000, to be specific. since then, the nasdaq, as you can see, has been, i guess you could say steadily rising, hitting new multiyear highs, again, a 14 1/2-year high today. but what's interesting is we looked at biggest winners since the nasdaq peak of march 2000. and while tech has played a big role, it certainly hasn't been the only sector powering the

nasdaq. in fact, consumer names, monster beverage and keurig green mountain coffee are the two best-performing stocks on the nasdaq 100 since the infamous bubble burst. biotech has also been a source of strength as investors focus on drug innovation. gilead sciences up 4,700%, cellgene up 1,765% since march of 2000. given that apple, of course, has a big weighting on the nasdaq 100, it, too, has played a significant role in the nasdaq's out-performance, up triple digits over the past five years and gaining about 2,000% in the last 14 years. currently, nasdaq sitting at around 4,560, so less than 500 points from breaking that psychological level of 5,000, kelly and scott. of course, the key number to watch is 5,132. that would be the nasdaq's intraday all-time high. >> yeah, hard to believe we've been talking about it again. seema, thank you. and stay with us. >> let's bring in paul meeks, senior analyst and director of

institutional investing at citerna capital. how should investors view nasdaq 5,000, if and when it happens? >> i actually think it's not a 2014 phenomenon, but i feel very strongly that we'll break that level, not 5,000, but the all-time closing high of 5,049, some time next year. >> next year. i mean, i guess at this point, it's only what, a 10% move? and is there anything in this move and the behavior now that reminds you or worries you like it did the last time around? >> back in the day, is there there are some big tech drivers that i think indicate that the total addressable market are bigger now than they might have been back in march of 2000, and also growing faster things like cyber security, the internet of things and cloud computing for certain companies, not all of them, but for certain companies, make me still pretty optimistic. >> i just wonder, paul, and

we've been debating this throughout the day, when snapchat, a company with no revenues and no clear business model, at least according to some who are writing on it today and understand that business better than me -- >> you're not a snapchatter? >> $10 billion valuation for that, that doesn't make you nervous as the nasdaq approaches 5,000 and we wonder if it's nasdaq 2.0, back to 2000? >> scott, that's a great question, and that's clearly an issue. and when i take a look at stocks, even though they're tech stocks, i always look at them with a pretty keen valuation eye, and that would be one that i would ignore. there are plenty of opportunities out there, profitable companies generating a lot of cash flow, accelerating revenue growth, that i'd much rather invest in. >> seema, what about snapchat? that's definitely the one that people are, again -- seems like every week there's a new one that people sort of hold up and say this just can't continue. >> yeah, listen, we're seeing the highest amount of tech m&a since the year 2000. we've also seen a flurry of tech ipos this year. so, of course, signs or, i guess

trends to look at when comparing nasdaq or technology versus the late 1990s and the year 2000. is snapchat a good example of being given a high valuation, a company that has no profitability? i will say it is a very interesting app, one that i use quite often. i know many of those that are in the millennial generation find it to be an app that they use. so, we have to see if the users are there. will that one day drive profitability? >> paul, if you have to make a distinction, clearly, between what you may consider new tech versus old tech, and aside from let's say a facebook and even twitter, i guess to some extent, lately, it's been the old tech names that have performed much to the surprise of investors, maybe yourself included. intel up better than 30% this year. microsoft, you know, new life in that company and a new ceo, for that matter. what's your take on that? >> scott, another interesting

point. one of the things we have seen, particularly this year, has been a resurgence of some of those client-server '80s and '90s it nk c-oriented darlings. intel, microsoft, dell, of course now a private company, hewlett-packard, but i would say some of that is based upon microsoft deciding to end support for windows xp last april. and so, at least with a corporate pc refresh, you'll see a couple more quarters of some great fundamentals in that space. however, i don't think they last. >> and scott, to your point, i mean, large-cap tech in some ways, from some of the fund managers i speak to, still seen as attractive as rates continue to stay low. a lot of these large-cap tech names, of course, offer that attractive dividend. and you've also got to look at momentum stocks. facebook today being downgraded by montgomery scott due to valuation concerns, so that continues to be one of the worries when it comes to some of the new tech names. >> true, yeah, and that stock underperforming today, off 1.6%.

>> yep. >> thanks, guys. >> yeah, thanks. >> paul, we'll talk to you soon. seema, see you soon as well. we have about 20 minutes to go before the bell rings on wall street today. dow's barely holding on to a gain. maybe not a big surprise that after hitting and closing above 2,000 for the first time, taking a little bit of a breather. >> i'm just amazed that we're up six points when the long end of the treasury curve is, you know, we're seeing yields fall further because of this unrest potentially between ukraine and russia. we'll have to talk about that next more. why does that seem to be ponding and the stock market is moving higher in the final minutes? we have about 18 to go. coming up, do you want a bigger ipad? that's the buzz on what apple has in the works. it's also a question we're asking at cnbc.com/vote. be sure to participate in the next hour and tell us what you want. you will see the results realtime when we talk about it. also ahead, why an ivy league education may not be all it's cracked up to be. are you better off at a state school? a former yale professor says so, and he's here. find out why. the worst in peopl. but the m-class scans for danger,

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pretty calm market day, this after the s&p closed above 2,000 for the first time ever yesterday. that doesn't mean some individual names aren't on the move, though. >> that's right. dominic chu rounds up the names making some noise today. a little bit of a whisper, but nonethele nonetheless, some noise. >> and maybe some partying like it was 1999. so, let's start off with what's happening with tiffany, gaining ground in today's trade, although off of its highs after posting better-than-expected second-quarter results. the luxury goods company also raised its 2014 forecast, citing improving sales. you can see they're up about two-thirds of 1%. facebook moving lower after janney montgomery scott downgraded it to a neutral from a buy, citing valuation. headwinds in 2015 will be a factor. facebook there off about 1.5%. then chicos slid after the retail operator reported weaker than expected profits as they went down about 4%. mobile eye continued its strong run since going public back in the beginning of this month.

it makes cameras that are used to avoid auto accidents, so you think driverless cars. its trade up 8% on the day. and garmin losing ground after the gps maker had a neutral rating and a $59-per-share price target, shares down 5% on the day's trade. back to you guys. >> thanks, dom. ten minutes or thereabouts to go. right now the dow is holding on to a gain of seven points. the s&p 500 has a loss of a point. so, it's going to be another fight for that 2,000 level as we approach the last ten minutes or so. >> i know, art cashin did mention there were buy orders on a close here, so we'll see if that pushes it over the level. coming up in the next hour of the show, two freshmen congressmen, a democrat and a republican, will weigh in on the tax inversion controversy, reignited on burger king's buyout of canada's tim hortons. will they together push for tax reform? a plan to target and stop tax inversions, or will nothing get done, as usual, in washington?

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welcome back. we're on the floor of the stock exchange. there's a look at how the markets are shaping up. art cashin says there's some buying orders out there. well, with ten minutes to go, we'll see if the s&p can close above 2,000 for the second time

ever. of course, after doing that for first time yesterday. here on the floor with david zear, jonathan golub. jonathan, i'll go to you first, put you on the spot. last time we spoke, you made the argument, a couple weeks ago, that stocks are cheap. >> they are cheap. you know, if you look -- >> i haven't heard from many people who look at this market and say they're cheap. >> if you look at this compared to the beginning of the year, expectations for growth are higher now than they were on january 1st. the discount rate for stocks are looking at, you know, what bonds, yields are compared to stocks, much less attractive. on either basis, stocks look better today than the beginning of the year. >> you're a buyer even at these levels? >> 100%, and i'd be a buyer if the market was at 2,100. >> dave? >> i'd agree with that. i think that based on where interest rates are, you know, when short-term rates were less than 2.5%, the pe multiple on the u.s. market is usually around 22, rather than 18, where

it is today. however, i think the market is due for a short-term correction. >> you'll hear people say there are too many bulls out there. where are the bears? >> they're obviously on vacation. >> isn't that a problem? you start to get worried when everybody's bullish. >> right. i think we'll see the true character of the market once the holiday's over, because volume has been ridiculously low. and you know, once all the players are back, we'll see what the market really looks like. >> what parts of the market are attractive here? i mean, you must be placing your bets on things like cyclicals and banks and techs and industrials, yeah? >> yes. >> well, i mean, you have to be if you're going to say 2,100 is cheap. >> what would be the natural biggest winner, if interest rates rise, banks have to be your biggest winner looking out over the next year. industrials should do well if the economy continues to look forward, and health care i think continues to run, even though it's been doing great. >> i think the best opportunities are outside of the u.s. right now. so, looking at china, china's come 20% off the bottom. its pe is like 8 and its yield

is 4%. so, half as expensive as the u.s. and twice the yield. >> that's an interesting thought. i want to look at my notes from earlier today. emerging markets to your point, brazil up 7% this month, vietnam 5%, mexico, india. what about that argument, that the best opportunities at this point from a value standpoint, jonath jonathan, are outside the u.s.? >> if you look at the companies in -- you know, if you look at the global footprint, especially let's say you look at someplace like europe, the big multinationals are trading very similar to what large u.s. companies are trading. i don't see that much of a valuation gap, and i think if you're buying u.s. growth, you're still going to do better. >> what about the fed? i mean, what are the risks to being as bullish as you guys are? there still are geopolitical concerns, although no one seems to care from a market standpoint, dave. >> well, i think until the fed stops keeping rates where they are, so, once the rates start to move up, that's a bigger concern, but the market doesn't usually react until about 15 months after that. so, i feel like we still have

somewhere around a year or two left in this bull market. >> so, what you're telling me, then, guys, is no matter what happens, as long as the fed is still partying, we're partying, too? >> no, i mean, there's always things that can go wrong. i mean, first of all, and i agree with what dave is saying, when the fed starts moving, it normally takes a year, two years before it's a problem. but if inflation starts to pick up and they get behind the curve, that would be a problem. and also remember, this is unconventional wei unconventional way in with qe, it will be unconventional out. >> there's got to be a lot of risk -- >> 100%. do i think it's going to be bad? no, i think they're going to be overly cautious, but is it a risk? of course it's a risk. >> i think short term, your viewers should be prepared for a correction. the market has gotten a little bit ahead of itself. >> we've been waiting for long. 4.5% is as much as we've gotten, 5%. >> i think we should see something in the magnitude of 8% to 10% over the next two months, paving the way for a nice fourth

quarter and beginning of next year. >> all right, guy. good to talk to you. we'll take a short break. we'll be back right here on the floor with "the closing countdown." and then after the bell, find out how much pain corporate balance sheets could feel from a stronger u.s. dollar. you're watching cnbc, first in business worldwide. a card that gave you that "i'm 16 and just got my first car" feeling. presenting the buypower card from capital one. redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac - with no limits. so every time you use it, you're not just shopping for goods. you're shopping for something great. learn more at buypowercard.com i quit smoking with chantix. before chantix, i tried to quit... probably about five times. it was different than the other times i tried to quit. along with support, chantix (varenicline) is proven to help people quit smoking. it's a non-nicotine pill. chantix reduced my urge to smoke. that helped me quit smoking. some people had changes in behavior,

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drama's building because the s&p 500 is going for two days in a row closing above 2,000. it's about a third of a point in negative territory, so we'll see in the next couple minutes where we go from here. back with bob pisani, dave zier and jonathan golub. i thought you brought up an interesting point, the broadening, so to speak, of the rally. >> on a day when volume is well below normal, one of the lightest volume days of the year, much stronger than average volume in etfs around emerging market companies, so brazil, mexico, indonesia, philippines, all are sitting at or near new highs right now, and the rally's brad e broadening out. people who are looking for relative values are moving into that. so, on a light volume day, suddenly, emerging market etfs are high. by the way, news on ipos today, lending clubs announced this ipo. we think ali baba will be coming. either friday they'll announce terms or next week. things are going to pick up very, very quickly. >> i just wonder, because you know, the kind of thing bob just

said, if this idea that the u.s. is the best game in town, there are other places that are starting to look a little attractive as well, dave. so, does that change some of the money that's been flowing here? does it start to go elsewhere? >> i think that is changing. the emerging market's index is up more than the s&p so far for the year, up almost 11%. you referenced a number of countries that are doing very well, and all of those countries are far cheaper than the use a valuation basis, so we should see money flowing into the emerging markets. >> fair point, jonathan, isn't it? >> yeah, i mean, there's always opportunities outside the u.s. i don't see that big a valuation gap between the two, and the u.s. economy i think is in great shape. so, is there fast money that's attacking this using etfs? probably. is it sustainable, i don't know. >> the key here is low interest rates, if we get a sudden rise is the problem, and profit margins remaining high. if you get an attack on profit margins, then you've still got a problem. >> forget about that, i was going to say is there a problem with low interest rates? >> not for the stock market. not now.

>> yeah, the stock market -- >> okay, guys, thanks. bob, dave, jonathan. thank you so much. ten seconds to go. we'll see where we go on the s&p for the second hour of "the bell" begins in five seconds. and welcome to the "closing bell," everybody. i'm kelly evans. and let's go right to where we're finishing up on wall street, because the s&p 500, after closing above 2,000 yesterday, made a late-minute, we should say, go to try and do that again today. doesn't look like it's going to get there, 1,999 and change looks like where we're finishing up. the nasdaq also negative by a point. the dow, by the way, finishing up by about 13, a better performance, certainly, throughout the hour. we started off with red arrows across the board, but we get a green one on the close. let's get right to it with today's panel. joining me now, our own susan li. welcome, susan. cnbc contributor stephanie link, nathan backrack and with us with more on today's market action,

"fast money" trader jon najarian. welcome, one and all. stephanie, first to you. we hit some major milestones this week. today we had headlines from russia, from ukraine, we had the 10-year and the 30-year yields hitting new lows, and yet, stocks are, i guess resilient, would you call them? >> for sure. what i think is happening in the last week is that you're starting to see the consumer be part of the equation, right? so, we have seen manufacturing impro improve, housing has been mixed, jobs are improving. now we need to see the consumer, what's happening with the consumer? because it was very, very mixed. and over the last week, we've seen very good earnings from the likes of home depot, from the likes of tjx. today it was tiffany, express. so, i think that we're not in a panic situation that the consumer is going to really be the drag. i think they're very choosey, but i think it's an important part of the economy about 72% of gdp. so you've got to have the consumer in order to get the

economy to continue to move, and i think that's building confidence as we're seeing good results from these retailers. >> i feel like you almost just verbally pushed the s&p. look at that, stephanie, 2,000 and change. i mean, if we close at a small positive here, which it now looks like we could do, this will be, correct me if i'm wrong, a new closing high for this index. >> yeah. the u.s. economy is seeing improvement, there's no doubt about it, right? and we have global stimulus happening, probably more global stimulus is coming from europe, as we've all kind of speculated upon. i mean, draghi was clear about that. so, you do have kind of the best lot in a neighborhood where i think you want to still invest in. that's not to say that there aren't values around the world, which i actually think there are, but i still think you can invest here. and as i say, consumer stocks have reacted very favorably to some okay numbers, and i think that's encouraging. >> i just love this. just to bring everybody back in here, on the close, it looks like we're now going out at 2,000 and enough pennies to be a new all-time high here. i think yesterday it was

2,000.02, right? it was the palindrome we closed at. now it's 2,000.09. by the way, as we watch pennies tick in, unsubstantiated, but making the rounds is today the s&p remained in a one-penny range for 18 minutes. that's the longest on record. the previous max was apparently 10 minutes, nathan. so, each penny counts. >> each penny does count. how about if it's christmas in the middle of august, and all of a sudden, you've got everything you wanted? let's see, you've got qe, which i think is quantitative europe, all right? then on top of that, you've got low interest rates. and so, all of a sudden, this should be good for the housing market. and you saw oil didn't go up in value. you go, well, that's going to put more money into the consumer's pocket. you've had two days of s&p 2,000. you go, gosh, i got everything i wanted. could the market really kind of go from 2,000 and actually not do what it did at 1,000, go up and back, up and back? i mean, if you had an s&p 1,000

shirt and you washed it every night, you wore it out. you couldn't wear it in public anymore. now all of a sudden, everything is lining up. i've got to -- stephanie doesn't believe i can actually be this guardedly enthusiastic or optimistic about where things are headed. but you know, money's going to be cheap, and the only thing -- >> is this a new nathan backrack? >> this is going to be the new me. we're always going to have -- >> better late than never, nathan. better late than never. >> but you know, i've got some survey data. we survey 1,000 people and i can tell you some things going on out in the world that i'm cautious about. >> it's a wall of worry, which is why we keep on rising. >> but everything's lining up really nicely to continue to sustain a solid growth forward. that's the trick. >> all right, so susan, dr. j., temper your enthusiasm a bit. >> i could also talk about the emerging market space, because we have seen gains in recent weeks, and some have been saying, well, given the stall we've seen on wall street, maybe it's better to take a look at the valuations elsewhere, where you can get more value for your dollar, but right now we're

looking at these record closes and people are taking a second look, i think, from the institutional side, at least in asia, and thinking maybe it's something that maybe we're past selling the summer here for the s&p. >> that's interesting. dr. j. what do you make of it? >> well, steph talked about express, and those were very impressive earnings, i thought. also take a look at best buy. yesterday it had that washout, traded beneath $30. today it's the top performing stock in the s&p 500. turns over about 14 million shares. so far today, kelly, i think in the after hours a couple thousand more. that's almost four times normal volume for that stock. so, investors came in there, as many of them do. the time to buy these retailers is generally from labor day or thereabouts to black friday. you hold it about that length of time. and if you do, you get that kind of outperformance. certainly, people that bought on best buy yesterday are betting that the consumer is still flushed. >> and it's an interesting point

to raise, dr. j., because we know september is typically a weaker month, especially after a strong august. do you think if there's a storm that some of the beaten-down retailers could be important in it? >> i think if we start to see a recovery in some of them, especially the bigger ones, you know, the macy's and the like, then i think a lot of the smaller ones start getting into a roll-up. not with macy's. i'm not saying that. but a lot of these that have been beaten up, retailers, whether it's aro or aeo or a&f, a lot of those "a" stocks. i think some of those could be part of a roll-up strategy by private equity. >> that's an interesting play, steph. >> i think that retail is generally underowned. and i think that people were very skeptical about the consumer in general, because we had seen strong auto sales, for example, but we hadn't seen really great apparel sales, right? it was like one or the other. they were either spending on their house or the car or on apparel. and so, i think it's very encouraging to see that the

results are coming in the way they are. >> it goes back to the debate we've been having all week, nathan, about whether the middle class, however that's defined, however it exists today, is back in the game or not. >> well, we survey 1,000 consumers across the country. xavier university, sent them a survey. we found that the consumer is saving more money and they're very happy about it. that grew by about 5%. when you say to people, how confident about your savings? when savings grows by 5%, that says to you, well, i'll have a sale down the block, i'll go to best buy. you know what? i think i'll save the money instead. if that kind of constraint, which long-term can s good, it's put assets available to the banks, if they ever decide to lend. in other words it says they're going to be cautious. so, that will be a little bit of a constraint. i think the stimulus for this market is going to come from outside the united states at this point. it's going to be europe. it's going to be asia. >> but the lower interest rates, lower commodity prices, better jobs sets up better for the consumer in the second half of the year.

>> i actually, on a point that may tie this together, i ask about the lending club ipo. that's a peer-to-peer group that basically tries to match investors looking for yield -- we know how many are looking for yield in this environment -- with borrowers offering to borrow -- using technology to try and offer borrowers lower rates than they do on credit cards. they've been growing like a weed since i think 2007, when it facilitated its first loan. now going public. people on the board include john mack, larry summers, you know. so, dr. j., is this a threat to financials at the a time when financials might otherwise be setting up pretty good here? >> i don't think it will dent financials, but i do think it's a great idea, kelly. and that's why you've got summers and mack involved. those are two very bright guys, and i doubt if they're just lending their name to the idea. so, it is an idea whose time has come, but you know, to get the kind of volume you need to impact citi or wells fargo or bank of america or any of steph's favorites, the regional banks, i don't think they get to

those levels as far as to hurt them. but another player in the game? yeah, it's healthy. >> yeah. healthy on a macro level. and again, competitive threat, maybe? who likes the financials here? >> i do. >> we like the financials, yeah. >> yeah? >> yeah, we've been actually building out, broadening out within the financials. we had started kind of with the regionals and money centers, but the insurance stocks are actually acting quite well. you still need yields to move higher for these stocks to really take off, but i think a better economy will lead to better lending, better loan growth. >> but that's what's so interesting today, susan. you have the 30-year u.s. interest rate hit another 52-week low, i think the lowest since spring of last year, 3.1%? >> yeah, that's right. so, the yields are coming down. i mean, where else do you go, right? i want to talk about what's happening in japan as well, because yields have been coming down pretty dramatically there, and this is because of the weakness back in the yen before looking at those markets once again, but it is interesting that the fixed income side -- i mean, you're looking at some pretty low yields around the world. so, does that money go into

equities, especially on expectations of more stimulus coming from europe or japan? >> how much lower can the spanish 10-year go? >> jgbs are at 151 basis points for years -- >> this is financial limbo. i'll tell you, it's given janet yellen a reason to not have to do anything and she's not going to have to talk markets down. interest rates are going to stay low. so, she gets to coast. we've got the east coast, the west coast and the yellen coast. she doesn't have to do anything now! she doesn't have to have a press conference. we don't have to go over minutes. she can simply let it sail. rates are staying low for a while and that's good for the economy. that's what makes stephanie smile. >> we'll leave it there with that smile. thank you, all. dr. j. coming up with the "fast money" crew at 5:00 p.m. we'll be talking with billionaire investor mark cuban about his snapchat rival cyberdust, a day after snapchat is valued at $10 billion. don't miss it. dominic chu has a quick "earnings alert." >> all right, kelly, what we're watching right now are shares of guess, because guess which way

they're going, to the down side. moving lower in the after-hours here. the apparel company posted weaker-than-expected second-quarter profits and offered fourth quarter and full-year guidance below wall street analysts' forecasts. shares are off their after-market's low, down 8.5% on the after-hours trade so far, kelly. back to you guys. >> all right, dom. thank you very much. the almighty dollar flexing its muscles. the buck is back at an 11-month high, on pace to surge higher potentially, but a soaring greenback is usually a red flag for the stock market in earnings. up next, we'll discuss if investors should be concerned. and bigger supposed to be better, but not everyone's sure if that's the case for the new iphone and ipad. we'll look at apple's big new moves, next. you're watching cnbc, first in business worldwide. bulldog: if you're like me,

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well, king dollar wearing his crown once again, hitting new highs against a number of other currencies. if the dollar's strength persists, how might earnings be affected? for more, let's bring in john blank, chief equity strat jiegi at zacks investment research. and john, first of all, the dollar's had quite a run here.

what kind of impact do you expect that to have? >> well, it should have an effect on q-3 earnings that come out in october, because clearly, the u.s. companies that are selling into europe are going to have to mark down what they think they're going to get for what they're selling there, about 5%. and the other thing that's going to happen is taking the prices up on european, for consumers in europe, and they're going to have to start buying less. so, it's going to hit them twice over. >> jeff, how much of this depends on the dollar staying this strong? i'm seeing a few notes here that now actually think maybe most of the move is behind it. >> yeah, kelly, i think that the move in the dollar is suspect, and i think it's basically trading in a range now. but for the sake of arguing, if you did look at a stronger dollar going forward, i certainly agree with the arguments that john made, but i think there's three things to consider of advantages to a stronger dollar. number one, it would give american consumers some of their purchasing power back again. that's been the missing link in the recovery that consumers still feel constrained. the number two thing is that it

would make the u.s. attractive for foreign dollars, which is very important, too, to get some of that money abroad coming here. and third, you know, we haven't had this argument in a while, but it's important to talk about the dollar as the global reserve currency. it's very important, and i think it would put some of those worries to rest. >> and john, the fact that the dollar's been rallying, even as u.s. yields, interest rates have been headed lower, is a little bit unusual. do you expect that pattern, can that pattern persist? >> well, kelly, the way to think about this is when we had our crisis, the euro/dollar rate was one-sixth to the dollar. when they had their crisis in 2012, it went down to 1.2. so, what we've seen here from may to august is a move from 1.39 to 1.32 today. that's a 5% move. i think, you know, we get concerned about europe when we see a two handle on that number, and we haven't got there yet. >> a two handle on which number? >> on the euro/dollar. we're at 1.32.

we get to 1.29 later this year -- >> oh, got it. >> -- that would get me worried. >> got it. i thought for a minute you meant that it was going to $2. and i thought, wow! yeah, that would be quite a move. >> that's the other issue. if it goes up to $1.6, we've blown up again. >> nathan, let me ask you a question. the worst-kept secret is that every euro is going to weaken and every big company has got a currency desk. this is not a surprise that all of a sudden the dollar is strengthening and the euro weakening. is this the time to start looking at companies and saying you guys are not very good at hedging, you're good, we're going to beat you up because you couldn't see this coming? >> yeah, hedging is a tough game when you talk about currency moving because it's so volatile, but i do think that, yeah, you want to look at companies that do have some type of protection and can be a little bit more nimble and, you know, have that ability to sort of, to be able to kind of turn on a dime, and also, you do have some hedging going on. and also, more

consumer-dependent companies that as the consumer gets stronger, their business base will go. >> we'll leave it there for the time, guys. thank you so much. we're going to send it over to dominic chu here with some earnings alerts. dom? all right, so, here's what we have. williams-sonoma, which is down big in the after-market, this after the home furnishings retailer is really getting hit. it reported second quarter earnings that basically came in line with wall street forecasts, but what rattled investors was the third quarter earnings and sales guidance, which is below what wall street was expecting. those shares currently near their after-market lows. you can see there down by about 11%. so, wsm shares really had been stars for a while, but at least in today's trade are down by 10% on the heels of at least an earnings forecast that's disappointing for investors, kelly. back over to you guys. >> all right, dom. thank you. we'll keep an eye on that during the hour. remember the rage over the ipad mini? they seem to be a distant memory for apple, reportedly looking to make a bigger and better ipad after lags for the 7.9-inch

versions. b as we go to break, head over to cnbc.com/vote and participate in our online poll and weigh in on whether or not you want a bigger ipad. we'll show you the live voting when we come back from the break. your 16-year-old daughter studied day and night for her driver's test. secretly inside, you hoped she wouldn't pass. the thought of your baby girl driving around all by herself was... you just weren't ready.

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welcome back. well, it wasn't just the s&p 500 today. apple's stock also trading at record highs, in part based on speculation the new iphone hitting stores soon.

there are also reports of a new, larger ipad, due out next year. so, we sent our josh lipton to shake the apple tree and see what he could find out. he joins us now. josh, what did you find? >> well, kelly, when it comes to apple's new products, you're right, the theme looks to be big. expectations of an iphone with a bigger screen, reports of that bigger ipad on the way. but is bigger, kelly, always better? that's what we asked shoppers. here's what they had to tell us. >> it would be better if it was bigger, so then if i wanted to watch netflix, it would look like i was on the ipad. >> that's too big. i don't want a tablet on my ear. >> his is too big. that's like a mini tablet. it's embarrassing. >> reporter: now, a bigger product could also, though, mean a bigger price tag. question is, is apple, in order to protect its profit margins, would it raise the prices of those products? we could soon find out. the expectation is that apple does host this big media event on september 9th. that big ipad on the way, reportedly on the way early next

year. kelly, back to you. >> josh, thank you, for now. so, everybody who's watching, go to cnbc.com/vote, because we want to know, do you even want a new, larger ipad? and joining us now with their thoughts on what a larger ipad could offer, aside from a larger screen, lance ulenoff and colleen taylor from tech crunch. lance, what do you think this is all about? >> well, you know, i know everybody's pointing to the slumping ipad sales, but i think apple operates a little bit differently. they don't basically set their product strategy basised on a sort of market blip, but i think that they see a big opportunity. you know that they're spending a lot of time looking at business. they made the big deal with ibm on the enterprise. and i think there's an opportunity for a giant 12.9-inch ipad in that space and in education, which doesn't mean that it's the ipad for everyone, but apple's looking at an opportunity. >> you know, colleen, that's an interesting point. if that's the case, though, does it matter if this is a deviation from what -- you know, i think

of apple as sort of having that one product for everybody kind of category, and this would be more of an expansion into more niche areas, i guess. >> exactly, an expansion into the niche areas is what we're seeing here. you know, the tablet market is pretty saturated. i think we're finding, especially among consumers that bought this device as soon as it first came out, people aren't replacing their ipad as quickly as they replace a laptop or a phone. and so, this could be something that would put a little more spice into the market and get some more, you know, companies interested in buying these for their workforces. but i think overall, a bigger screen isn't going to make a big difference for apple's numbers. they need a new product to come out here to really spice things up. >> i'm looking at nathan, and i'm not so sure this is about enterprise or education. you are hugging your apple -- >> you know what, you can replace all of this. it's all about vanity. nobody wants to pull out their bifocals, so the screens keep getting bigger, so you can say i'm good, i don't need your cheaters.

i'm fine. whatever happened to when steve jobs put a cross on a piece of paper and said, we have something for designers and we have something for the consumer, we have four different products, and that's it? we're a long way from that, aren't we? >> are you suggesting that apple -- go ahead, lance. >> i was going to say, this is tim cook's apple. this is no longer steve jobs's apple. you see that things are changing. and certainly, steve jobs said you never want to touch, you know, a laptop screen, but if they come out with a 12.9-inch tablet, guarantee there are going to be a lot of keyboards made for it. maybe apple would make one, i wish. but that's going to look a lot like a laptop with a touch screen. so, this is tim cook probably going his own way, and i think that's just fine. >> i think in a lot of ways, this reminds me of, you know, every time budweiser or miller lite comes out with a new can or a new bottle to kind of convince people to keep buying their product, i think that's sort of what we're seeing here from apple with these small, little upgrades, a little bit bigger, a little bit smaller, but it's basically the same thing. what i think the larger market really wants to see is something

brand new from apple. >> great point, and we may see some wearables next month, who knows? everybody here, because i asked during the break, has an ipad, correct? >> yep. >> susan, if they come out with, what is it, a 12-inch one that we're talking about rumored, do you buy it? do you upgrade? do you need one? >> yeah, i wanted to talk about the asian consumer, because with the success of samsung, the note and the galaxy. i think asia and the consumers there have proven that bigger is better, because people are thinking, well, people want the lighter, smaller cell phones or the smartphones. that is not the case. you see them on the subway, walking down the street with their massive screens, and they want bigger right now. given that, china is the fastest growing market for apple. give your consumers what they want. >> but would you carry it around? >> i wouldn't, although we could, because we do have purses, right? from the male perspective, where would you put it? >> would you carry one around, stephanie, if you had a bigger -- if you upgraded the ipad to one that was 12 inches? >> probably, because i think we spend so much time using these devices, we want that instant connection in terms of, if we have a question, we don't know

something, you google it. you go on your ipad. and you know what? the more we're using these things, if it's easier to read and easier to forward display -- maybe i'm just getting old and i'm biased -- i think it's a big deal. >> this is not about ease of reading. this is about productivity. and believe me, if there's a keyboard that goes with it, you will carry it around just the way you do your macbook air. the other thing is we need to stop saying they and people want, because the reality is, the market is turning into these columns, these niches of people. enterprise is one, consumers and their different use cases are another, education's another. you know, different needs, different uses, different sizes. apple has recognized that. that's why you have different sized products. and obviously, samsung, that's their whole game plan. >> you put a keyboard along with a big ipad, and you know what, they wind up weighing about the same as the laptop. then the only reason you're taking the ipad is because you can actually keep it on when you're descending in an airplane. and now you're getting to a pretty small group of people you're trying to target. >> look at the surface pro and what it weighs.

it's not really true. it could actually be lighter. >> given that we did ask people to vote, the results are now in. do you want a bigger ipad? only 56% say yes, nathan. >> you know, i've run out of devices, you know? i mean, if i'm the stratified random sample, i'm done. >> are you saying if they introduce this bigger ipad, are you for it or not? >> i'm not buying it. >> you're not buying it. >> look, i need big, i've got big. i need convenient, i've got convenient, you know? >> you'd rather have three different ones -- >> no, i'd rather get down to two, if the airlines would let me keep one on the whole time. >> lance and colleen, thank you. appreciate it. congress has earned its reputation for dysfunction. up next, congressmen messier and horsford are working across the aisle, trying to bring bipartisan sensibility to stopping tax inversions. and later on the "closing bell," it's championship week, not for golf or tennis or football, for the air guitar championships. find out what it takes to be a guitar hero, coming up. ♪

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welcome back. the tax inversion issue has been reignited this week as burger king is buying canada's tim horto hortons. of course, it's an election year in washington. lawmakers are among the most vocal with regard to the deal. joining us with their point of views are representative luke

messer, republican from indiana, and representative steven horsford, a democrat from nevada, both the floor and next to each other on the the new york stock exchange. you guys are members of the freshmen class at the house, and you're working in a bipartisan way on this issue? >> yeah, i mean, there's no reason for many issues, particularly in the financial services area, to be partisan, and so, we're working together in a bipartisan way. you know, the issue with the tax inversion question is this. obviously, no one's going to defend these tax inversions, but at the same time, it really is a warning signal that we've got to reform our corporate tax code, make it competitive, globally competitive, to attract investment and jobs to america. >> but it's actually been the gop mostly defending tax inversions, saying these are companies that are ultimately doing what's right for corporate profits, and that's going to mean more jobs for the american workers. >> well, i think what folks have defended is the fact that what we need to do, rather than work on just this technical glitch is try to do what we can to make our corporate tax code more competitive around the globe. >> and for you, that means

lowering it, correct? >> well, i think that means lowering it, unquestioned. >> what about you, representative horsford? >> i'm open to the discussion about lowering the tax rate, but we have to also address deductions and other loopholes in the tax policy. that's why we need a comprehensive plan. there is bipartisan recognition that this is not a problem we can solve with just one effort, and so, we need to work together in a bipartisan way to do that. >> well, i'll tell you when i hear bipartisan and comprehensive tax reform, i think this is going nowhere and going nowhere fast, because it's true. i mean, make the case that you can actually get comprehensive tax reform to happen. it seems virtually impossible. >> but it's important to our economy, to the ability -- >> of course it is! >> -- of companies to grow, to create jobs. i have major companies in las vegas with our gaming industry that are directly affected by this issue, and so, we want to make sure that they can continue to be incentivized to invest here in america. >> what i agree with is this, that in the rest of the world, people start where they agree and move forward to reach an

agreement, demand washington, sometimes we start where we disagree and stop. we all recognize that our corporate tax code is one of the highest in the world, it's bad for american investment, it's bad for american jobs and we need leadership to start to address it. >> and you're president of this freshman congress, so i appreciate that the leadership at least is coming from that direction. so, let's put a couple proposals out there. what if we took the u.s. corporate tax rate to 22.5%, period. any objections. >> without addressing deductions and tax loopholes, that would be a nonstarter, because you can't continue to incentivize business without getting them to reinvest in america. we can't continue to ship jobs overseas and give them deductions for sending those jobs overseas. so, if we're open to addressing all of the tax reforms, then we can have a discussion. >> so, what would your plan in a nutshell look like? >> first, i think we have to start with the issue of the deductions and these tax loopholes. i recognize the need that we need to be competitive globally with our tax rate, but we also

have to make sure that we're able to invest in the things here in america that require it. >> yeah, i mean, i would have a much lower corporate tax rate. i think it needs to be the lowest in the world. the bottom line is, is that we all recognize that there are loopholes that don't really add value to the economy. nobody's here to defend corporate tax inversions, only to say that these folks have the fiduciary responsibility to maximize profits to their shareholders. what we need those leadership, frankly, that starts with the preds. >> but if you took it -- let's say it was the lowest in the world. in fact, i hear guys on wall street say take it all the way to zero, but you lose 10% of federal revenues overnight. so, is that why you're talking about -- >> we don't have funding for infrastructure for roads and highways. we already have a $15 billion deficit in our highway transportation fund that needs to be addressed. we don't have proper investment in job-creation. so, that to me would be taking us backwards, not investing in our future. >> of course, the tax inversion question shows you that we could lose that revenue anyway, as these businesses go overseas.

>> absolutely. >> that's why we've got to get globally competitive. >> but we have to be careful that burger king, and they said so in their release, this was not simply about tax inversion alone. there were other issues, primarily about them growing globally their business model, and that had something to do with greater than just their tax policy. >> so you have no problem being a burger king customer? >> well, i try to cut back on the fast food anyway. >> see, look, but quite seriously, i feel like we haven't accomplished anything. you've said what you feel and you've said what you feel. i don't feel like anything's going to happen. >> but it requires us to have this discussion and members are prepared, and luke is right, we've got to have leadership, both in congress as well as with the executive branch. and the more that we're having the conversation talking about the need to reform, hopefully, we can get to that resolution that the american public and businesses expect. >> and if, based on the latest polls -- i don't know whether the senate gop retakes the senate come the fall. if they do, is it your -- what do you think happens with corporate tax reform then? >> i think we have a real

chance, frankly, under either election scenario, from my perspective, having a republican senate would happen. that gives us the opportunity to have a legislative fix, even in the absence of presidential leadership -- >> which would look like? >> well, i think it would look like a reduction -- something like the camp bill that you saw come out of the house, which would lower rates for everybody, try to close loopholes. listen, this is complicated work. the last time we had major tax reform happened under president reagan with strong presidential leadership. in the absence of that kind of leadership, it's going to be hard to get this done. my hope, though, is this, is that these kinds of stories, like what we've seen with burger king, can become a call not to use corporations as a punching bag but to understand that we've got to have a globally competitive corporate tax rate. >> and again, that seems to be the case. what we're missing though is the action to get it done. i trust you both will get it done, so i'm glad we could at least agree to that. >> yes. >> while you're here and taking a look at the new york stock exchange, which is driving so much of this, representatives messier, republican from

indiana, and steven horsford, democrat from nevada. thank you both. really appreciate it. up next, "the hot list" gives you meaning to life on the run. check out this guy. he can't hide, so what else is there to do except run? even as he loses his footwear. the video is burning up the "hot list," and we'll tell you who he is and why he's running, next. and still ahead, another edition of "school days," just in time for the students' return to college this week. a yale professor turned author will be here to tell you why you may be better off going to a state college than an ivy league university. we'll be right back. ♪ when the world moves, futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with paper money to test-drive the market. all on thinkorswim

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and it's made with ibm. work day. dominic chu has a quick "earnings alert." >> a number of our twitter followers here at cnbc wanted to hear about work days earnings, so here it is. it's moving higher in the after-hours. the company reported a 74% rise in sales, helped along by strong growth in subscriptions for its web-based human resources software. they're the company that has cloud-based software to help you manage your company and human resources. they are losing 11 cents a share, which is 3 cents better than what wall street was expecting. that stock, you can see there, currently up about 2.5%, but off its after-market highs so far this session, kelly. wday. back over to you. >> dom, thank you. on the heels of yesterday's record-smashing day with the s&p 500, the bears have come out. they climbed to the top of the cnbc.com "hot list," and allen wastler has that and the rest of it. hi, allen. >> how's it going?

definitely a couple really strong bears today. we had two separate interviews on air today, abigail doolittle of peak theories, and david tice of tice capital, and beth oth o them predicted that sooner or later we're going to see a 50% or 60% correction. so, we wrapped it up in one neat little story for our readers, and they're paying a lot of attention to it. it's burning up the chart right now. number two, this story kind of picked up in the last couple hours. there's been an ongoing concern about ukraine and russia and what's going on between the two. now there's news out of sort of a stealth invasion by russia into ukraine territory that they hadn't been into before. we took "the new york times" write-up of that. they're our content partners. and people have really until the last couple hours really been diving into that story. so, a lot of concern there. then finally, i don't do this a lot, kelly, but we have a video that's burning up the charts right now. >> uh-oh. >> you showed a little bit of it in the tease. >> is this the barefoot? yeah, okay. >> this guy here was arrested on charges of insider trading.

his name's michael lucarelli. and the prosecutors say he allegedly, you know, did 13 counts of insider trading. anyway, he saw our cnbc cameras down there and he just took off! and people are really having fun downloading that video and watching it over and over and over again. here's a hint for everybody out there. if you don't want the cameras and you don't want the airing, be boring. be boring. >> yeah, well, that's a point. that is a point. allen, thank you. i just want to get some response from the panel here. i don't know where to begin, though. anybody? >> the ukraine. everything that's going to affect our market, i believe, for the rest of the year is really going to be beyond our control. janet yellen's done everything she can. american businesses have done everything they can. and now you're going to see quantitative europe or qe over there. you'll also see, vladimir putin could wake up tomorrow and mess up the whole apple cart for a while. and certainly, if you look at the growth or the no growth, nongrowth is taking place in germany, it's all going to be about whether or not the ukraine

and the russians can figure out how to play nice in the sand box, and that's going to have a big effect on europe, which already has plenty to worry about. >> and we have workday and williams-sonoma hitting this hour, steph. >> workday was quite good. looking through the numbers, the new accounts that they signed up, the revenues, the billings number. they just grew revenues 74%. expectations were for 65%. so, a much better-than-expected growth number. and it just appears to me that these kind of cloud-based names that weren't earning -- by the way, they're still not earning, but they earned a little bit less than people thought, or a little bit better than people thought. it seems to be that they're getting back in favor. you can see the momentum. service now, salesforce.com, workday. you've got to keep your eye on these stocks. this is really the growth area in the market that people can still find some, i don't want to say value, but at least they pull back enough that they're starting to deliver, and i think you still see better results going forward. >> it's going to keep attention focused on that nasdaq. we were talking earlier, susan, about the 5,000 mark maybe being

next. the s&p 500 again, we almost missed it because it didn't happen until several minutes after the bell rang, but it did close today 2,000.12, new high. >> it's interesting, we were talking about david tice, who was one of the bear claws calling for a decline of 40% to 50%, because i spoke to him in 2010, and he said that the s&p would fall back down to just about 600 back then. >> right, so both he and abigail saying the same things they've been saying for years. >> basically. so, the clock does strike 12:00 twice a day, right, at some point. but yeah. >> those stories, as mentioned, and we talked a lot about it that last hour as well, all available on cnbc.com. you may want to lose that ivy itch, though. up next, a professor reveals it may be time to ditch the ivy league education for state schools. and he'll explain why. also, get those old records off the shelf. it's air guitar championship week. what, you say? yes, it's taking place in finland this week. and we'll tell you what's at stake, coming up. tdd#: 1-800-345-2550 trading inspires your life.

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welcome back. well, the reverse story of last quarter, williams-sonoma gapping downward after reporting earnings, talking about a weaker outlook than was expected. shares off 12% after hours. and in today's edition of "school days," the changing face

of education, we continue our closer look at the real cost of college. for years, harvard, princeton, yale have been looked upon as the top elite universities in the world. well, forget about walking through those hallowed halls. our next guest suggests the ivy league may not be was the toy go. william deresowitz is a former yale professor and author of "excellent sheep: the miseducation of the american elite." welcome. william, a lot of people will say, wait a minute, former yale professor? >> yeah, i've been on the inside. i've seen it. i've seen what it does to my students. it's not -- yeah. >> what is it? >> well, right. and it's not even so much the schools. it's what you have to do, who you have to become, who you have to make your kids become to be able to get them to one of these schools. that's why i call my new book "excellent sheep." that was actually a phrase that came from one of my students at yale to describe herself and her peers. >> here's a line as well that you say "our system of elite education manufacturers young people who are smart and talented and driven, yes, but

also anxious, timid and lost with little intellectual curiosity and a stunted sense of purpose, trapped in a bubble of privilege, headed meekly in the same direction, great at what they're doing but with no idea why they're doing but with no why they're doing it. some harsh words, some say you should direct them to the local church, not the state college motivated ha, ha, ha. actually, where they're going increasingly is is to the student mental health services. these kids have been sent through one hoop or another since they were 12 or 5 or whatever. they're cracking. they're turning into hoop junkers. it's no surprise they have trouble finding a sense of purpose or taking risks and failing. they don't know how to fail, which everybody knows is an important skill to develop. that's the problem. >> bring in the panel here. >> professor, gallup survey find out what business leaders know is when you look very important or somewhat important in 90% of them think that knowledge is important and only 80% think a

degree is important. so when you get the wisdom in a crowd, let's say you are absolutely right. it's what you know, not where you went to school. >> yes. i would also say there is a very well researched study that shows just in terms of lifetime earnings, where you go doesn't matter for most kids. what matters is who you are. smart, talented, creative. ambitious. can you go to a state school, an ivy league school. it makes the same difference. >> what about the university paying six grand a year? what do you think of that idea, professor? >> i don't know as pump about canadian schools as i'd like to i hear great things about them. i think for american kids, that could be a great option. >> and great products, too. how do you see this whole thing playing out? >> well, you know, i wrote my book for everybody, but it's especially for kids and tear families because they can't help. they can't wait for the adults to get their act together and change the system. so half of my book is about how kids can find a sense of purpose for themselves and direct their

own education. what we're going to do as a society, you know, i've got some ideas about. load them for us, few would. i'm interested, actually. >> yeah, sure. >> i wonder to what extent you would identify the willful state of the student body you encounter and describe at some of these institutions as the effect of those institutions or as the effectf other factors in life that contribute to them going will? >> look, there are a lot of factors. i think the main thing is the admissions process. everybody knows that the admissions process shapes the way kids are raised. at least in the upper middle class suburban, you know, rich neighborhoods and cities. this is determining how kids are brought up through adolescence. that's water creating these kids. it's not school per se. it's the admissions process. so we can start by reforming the admissions process, but what i really think we need to do is rebuild our public higher education system by funding it the way we used to motivated is

that possible? i mean, i understand all of the things that you are talking about. i agree with so many of them. but if our lifetime, is it possible to really change the system? >> well, i think things are possible that we can't even imagine now and anything is possible if if you have people want to do it motivated this is crazy. >> the first ting we should do is get rid of decals on the back of cars, when i see all these decals, i go 30 document, 45,000. my gosh, those people paid a fortune to get tear kids through school. we got to get rid of the decals. my daughter could have gone to hofstra, she went to miami university or miami of ohio or university of miami. i tell you, the price was half as much as she's getting a bright education. dad's very any, too motivated so much of this is about status competition among parents and, you know, they need to look at what they're doing to their kids with this. >> get rid of the decals. >> william, how much of this is price? i mean, so what i don't quite

understand about your argument is what is really the difference between the ivy league schools and the state colleges? >> again, it's about what you need to do to become the kind of person who has to get into an ivy league school. we can talk about price. there are issues in price. a lot of the ivy colleges have generous aid packages if you come from a low income family. most of the kids on the other hand going there are from wealthy families. state schools can be a bargain. there are a lot of public campuses i think are great places to go. it's the sort of whole system of status-seeking hoop jumping craziness that's the root of the problem. >> i read a report, though, professor, that says the economic versus not changed at all when you look at the ivy leagues, the poor hasn't changed at all if 20 years. >> correct. it's extremely unequal. the vast majority of kids that go to schools are from affluent families. they're the ones that can afford to send you through the hoops.

>> we can only pope e hope to respond to your points and author of "excellence sheep, the miseducation of the american elite." sounds like an abum. thank you for being here. al judgment has one, today they will join other air guitar championships. the winner gets more than just air. we'll tell you what next. being a keen observer of the world has gotten you far,

motivated welcome back. get ready to tune your air guitars everyone, told kicks off the world championship in finland. the four-day event begins with the winner and final round of friday. get this, the winner takes home a real guitar so maybe they can learn to jam on that. nathan. >> well, i'm trying to figure out when, you know, we know when the first video store opened up if california. i'm waiting to see, kelly, when we get the first proof of where the air guitar came from. i think it started out in the '60s and people went to concerts. they didn't know what to do with their hands, next thing you know, they were like. >> one of my favorite old stories is about the japanese judge, the wise japanese judge

trying to repay the man accused of stealing the smell from the guy making this delicious dish and eating it with his rice. the guy said, i should be compensated. you are using my smell to make yours taste better. they went to the judge. the judge said, well, for the guy stealing the smell, okay, take your money and transfer it from one hand to the other. so for stealing the smell, you will pay him with the sound of money i can say i lost the panel on this. >> wait a minute, kelly. >> what do you give somebody who wins the air guitar championship? do you repay them with the sound of money? >> a good point. >> we are over thinking this, right? >> you let him go to colorado for the weekend for a ten-day vacation where they can get stoned and have a ball and act crazy in public and nobody with care. >> they're happy playing air guitar.

>> that will be great. >> he's like walking right back. >> i'll show you my rockstar slide. i perfected it with the pads. then we can go ahead. >> that i would like to see. thank you, everybody, "fast money" is coming up right now. over to you guys, melissa lee. >> you know who rocks air guitar on this stuff, kelly? >> i'm guessing it's guy adami. >> you are right. >> amongst the disappointment, guys. >> you know we have coming up "shark tank" dallas maverick's other than park cuban will tell us what he thinks about the tobacco and his invention. >> we are all ears, over to you. >> "fast money" starts right now. live from new york city and time's square, i'm melissa lee, the traders are pete najerian, guy adami, a big show tonight. apple hitting an all time raising to 102 per