these young people they're so clever. >> melissa lee. what's on "fast money" tonight? thank you, jane. >> the ceo of shazam. we have got him tonight. >> that's cool. i'll know what he's saying. thank you very much. "closing bell" starts right now. hi and welcome to "the closing bell", everybody. i'm kelly evans. >> and i'm bill griffeth. stocks modestly higher but only modestly. the s&p is on track to close at a new all-time high. that would break a two-day losing streak. as for the dow, it's higher for the fifth time in six trading sessions, although we're still a few points away from a record close for that one. the nasdaq is finally in the water, trying to end at a new high as well. that's something we haven't seen from that index in nearly a month. coming up over this next hour at least, much more about this market and what's moving it, or

not moving it these days. >> also fed chair janet yellen she's already required to appear before the house and senate twice each year to test a monetary policy. apparently that's not enough. coming up, house financial services committee chair jeb hensarling to explain why he wants to see her double her appearances on capitol hill. >> hewlett-packard and gap, we'll have the incident analysis of all the numbers as soon as they are released. both those sectors. hewlett-packard has turned out some great numbers the last cup of quarters. gap, retail been very mixed. >> and hewlett-packard. david faber will join us on that one as well after the bell. first, let's get right back to this market. the dow up 17. the s&p adding six points. the nasdaq 20 points. the nasdaq by far the

outperformer today. >> let's get to our closing bell exchange for this thursday. joining us cnbc contributeor heather hughes. how are you? >> good. >> james lu is with us here at the new york stock exchange. joe duran from united capital financial advisers is with us. and so is rick santelli. joe, two sectors that are so important to the economy. housing and retail. both have been so herky-jerky recently. one number that's so encouraging and then some retail sales numbers that are not so encouraging. what do you make of those and what it says about the economy right now? >> i think what we're seeing is the economy is still in reasonably weak shape. what we're seeing with housing prices, it's one place where maybe they're keeping rates really low. increasing demand. it's increasing home values. and it's making people feel

wealthy. it's not translating to retail. where people are spending is different than it was in the past. it's very technology-focused. it's very luxury focused. trips, vacations. so not as much in clothing and apparel. so the way the consumer is spending is very different. >> do you guys like the home builders here? >> yeah. again, i think there is -- when we look at the weaker retail sales right now, they're not buying sweaters, they're buying autos. they're buying a lot of cars and they are buying homes. although existing homes, the data was a little bit softer this morning. we're still seeing the average trend a little bit higher. which would help the home builders, as long as the trend in home sales remains higher. but the housing market let us into the recession in 2008. so we need the housing market to lead us out into the recovery

that we're on now for a sustained recovery for the markets to sustain higher highs as we might hit again today. >> that's just not happening. although there are anecdotal signs of some really hot markets in real estate right now. we'll be covering that a little bit later when we look at silicon valley is now becoming too expensive. >> they're coming to a neighborhood here with you. >> where do you look to buy right now? >> i do like equities. have some upside surprises, but it was still a failing grade for the earnings season. information technology is still pretty much undervalued.

consumer discretionary. i think it's the same story. our view is retail sales and consumer pocketbook is going to be strengthened later on this year despite the weak first quarter that we're seeing. what i don't like are utility stocks and bond areas of the market. they're very very expensive at this point. in the energy sector you're seeing stability in oil prices. only about 20% of stocks in the energy sector are cheap relative to their husry. ryhistory. >> i would have thought that number would be much higher. only 20% of energy stocks are historically cheap after we've seen about a halving before the recent rebound in the price of oil there. >> rick santelli what's on your radar today? we haven't seen too much in the way of economic data this morning. what's going on in your world? >> i like the comment about cars. but consider this. if you have very low standards with regard to getting a loan

for a car, you now can space them out 72 months and sometimes beyond. i have daughters in college. when i talk to their friends that have graduated who have no credit score to speak of and i see some of the rates some of these dealerships are giving these kids, it's really high. i don't think it's a big stretch thinking yeah the cars are good. the payments are long. and everything suffers. whether it's a sweater or whatnot. i think it makes perfect sense. if the housing market wasn't good in silicon valley that would really speak volumes about the economy. >> rick i was looking through this auto trader magazine at the diner the other day. every single page -- it was probably a 40-page document -- was beginning by advertising just how low their rates were. how credit was available to everybody. competing with 1% handles on it. it was astonishing. >> i was amazed. >> the housing market and the

sub prime market and the auto loan space today. not as we were in 2007 with housing. we're not with housing overlevered, oversupply and low quality loans, due to the restrictions in the financial sector. imposed on higher restrictions for people to get mortgages. which can you blame the banks for doing so. but yet rick's point is that we are seeing that in the auto loan space. anyone with shoes on that speaks english, i guess. >> i'm just trying to picture this picture of kelly sitting in a diner reading an auto trader. >> i took a picture of every single page. >> where they all break into song like that commercial. >> a hemingway short story in there somewhere. let's talk about another important part of the economy. that would be crude oil. that's been building on yesterday's gains. jackie stepping in from the nymex a couple blocks from here. >> a 3% jump in crude oil prices today. we closed over 60. that was a key psychological and

technical level. what happened here to give us this little push-up? you had a little bit of a weaker dollar. that's supportive. the market's digesting the production declines the inventory declines as welch that's part of it. also, we're going into a holiday weekend. that causes a little volatility. traders like to you know, make some money. buy, sell get their positions settled before they go away. meantime, most traders are still saying to the upside the upper limit is probably around $65 this summer. and let's talk about gasoline for a moment because it continued higher as well. aaa saying the national average 273. that seems a little bit high from some of those numbers under $2 that some states were seeing, but at the same time that is 91 cents less than it was a year ago. so maybe some of that money will start to go to spending. we'll see. >> joe duran, a lot of talk over the last 24 hours about the transports yesterday. what do you think is going on here in the overall market in terms of the rough patch they've been in and the fact that

meanwhile we're at all-time highs. >> i think what you're seeing is a lot of cross currents. so oil, it has been going up. that obviously hurts transports. now there's a concern that instead of ending the year in the mid 60s, we might be heading to the low to mid 70s. that's a huge cost burden and the economy is still not really strong. when you price in that it might be a good summer but after that what happens, i think there's a lot of uncertainty about just how much stability and traction the economy really has. and i think you'll get one rate increase before year end. a small one. that will be it. i think we still are not out of the woods. and what you're seeing everywhere is where do i invest to make sure that i'm protected if things continue to be a little bit messy.

>> where are you going then? >> we've had a very interesting shift in interest rates. but not a commensurate move in the stock market. so what you have to think is if rates continue to go higher where do you want to invest? you want to invest with large companies with very flexible balance sheets. i think we've got much less interest rate risk than we used to have. as far as how it affects currencies i think you want to be larger cap. really good balance sheet. that's an interesting area. stay away from long-term debt and risky debt. so really pulling a little as far as risk appetite goes. >> heather, what are you buying? we'll wrap it up with you. >> there are two key catalysts on the horizon other than housing data. that's yellen's speech tomorrow and the jobs data. the may jobs data june 5th. i think right now money managers in our industry are sitting on

their hands. if you look at this notion of a rational exuberance in the marketplace and does it exist, i will tell you in the mutual fund and exchange etf fund world april had the largest monthly outflows in the equity markets that we've seen in any month since 2009. that skepticism might be the market's best friend for the short term. >> we'll leave it right there. thank you, everybody. good to see you this hour. take a look at that auto trader magazine in the diner. >> yes, indeed. fascinating reading. >> 50 minutes to go into the close. the dow hanging on just about a one-point gain. the s&p is up four for the broad index. the nasdaq there just about four points shy of closing above its recent all-time high. >> a lot of pictures in that thing. mixed messages on which way oil may be heading in the longer term. goldman sachs predicting a drop. so who's right? our transport experts will put

the pedal to the metal. >> soaring costs are driving start-ups away from silicon valley. a top real estate pro tells us just where they're migrating in maybe you're neighborhood. we're back in two. your mom's got your back. your friends have your back. your dog's definitely got your back. but who's got your back when you need legal help? we do. we're legalzoom, and over the last 10 years, we've helped millions of people protect their families and run their businesses. we have the right people on-hand to answer your questions backed by a trusted network of attorneys. so visit us today for legal help you can count on. legalzoom. legal help is here.

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this year of home building stocks. this is one of the etfs that tracks home builders. a pretty good first couple of months, but it's been sideways since then. yes, up 6.6% year to date. but much of that was achieved early in the year. home builders have strayed in the last few months. >> even as we just saw a 20% pop in housing starts. a lot for people to think through there. >> the ideas may be flowing, but talent is fleeing silicon valley right now. according to red fin, the median sales price in silicon valley just crossed $1 million. the median. and many cannot afford to stay as a result right now. >> for more on where they're going, we're bringing in red fin ceo glen kelman now.

welcome to the program. good to see you. >> thanks for having me. >> where for the most part are you finding people priced out of silicon valley going and how is that affecting other communities? >> they're going everywhere. denver, portland austin seattle. they're absolutely changing boston. they're coming onto these markets with different expectations and buying $500,000 homes so they're just blowing them up. >> i'm sure they're skewing those markets where they're going. but let me ask you more about silicon valley first. i mean did this happen during the dotcom boom as well? why is this happening now, do you think, where the markets are pricing a lot of people out? >> well i think we've run out of room here. there's just nowhere to build. if you look down by the bay bridge, it looks more like

manhattan. you've seen home prices rapidly accelerate much more so than the rest of the united states. so people are just beginning to make sense of the madness by looking elsewhere. we saw one in seven people looking outside the bay area. now that number is one in four. so approximately double the number of people are looking to leave silicon valley. you still have plenty who are coming in. >> would you call this a bubble and how does it compare with what happened during the dotcom era? >> i don't know if it's a bubble, because people are making so much money in silicon valley. facebook is a very valuable company. linkedin. google. it's just that the wealth is becoming much more evenly distributed across the rest of the country. you can write code anywhere.

there's so much technology for engineering teams to work virtually. you have people saying why do i need to buy a million-dollar house here that isn't very nice when i can get a mansion for half the price somewhere else and google has an office there. linked in has an office there. i just think you're starting to see the wealth of silicon valley, which was so concentrated. that's going to allow these tech giants to grow even more. they were bumping up against the physical constraints of this place. >> what do you think will happen to those other places? bostons, denvers, seattle. will people eventually be priced out of there? >> in seattle, there are cranes everywhere. buildings are going up as fast as they possibly can. and still, prices are shooting through the roof. many people in seattle, which was once a middle class city where regardless of your income you could really have a nice house, are now looking to other

cities. you're seeing this gradual migration to the center of the city, because the coastal markets are being priced out. my twin brother in boston says this place is totally changing because there are so many folks from the valley from california coming and changing the landscape. it's not just the residential real estate market. it's the coffee shops. it's the pizza parlors. it's everything. >> glen, is it just this exodus or sit the fact that some of these other cities -- they're probably going there because there are other real hot beds of innovation and technology in this country, aren't they? >> what ultimately drove it was the housing crisis here. finally people are saying i can build a start-up anywhere. evan spiegel going to l.a.

it's starting to be a meaningful amount of money to stay here. so people are asking can we do the same thing, but in seattle. the same thing, but in portland. increasingly, the answer is yes. >> very interesting. good to see you. thanks for joining us. >> thanks for having me. thanks. >> there are plenty of countries around the world that would love to create just one other silicon valley. we're lucky to have so many. >> we're going to head to the close. 40 minutes left in the trading session. the dow has turned negative now. s&p up three. same thing for the nasdaq which is up 15 now. >> five points shy of the record it needs there. coming up is it more of anything really is good thing? jeb hensarling making the case of janet yellen to double the appearances on monetary policy.

keep it right here. >> transportation stocks indicating a sharp rooigise down the road but goldman still predicting a decline to $45 a barrel by october. so we've got a debate on oil coming up. stay tuned.

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how does 60% gains sound? that's what shopify is doing. >> lately you see that. >> it can be a rough one, but a strong start. >> dominic is covering the other movers for us. >> let's start here with lumber liquidators. robert lynch has unexpectedly resigned from that post. this comes amid a government probe into the safety of some of its flooring products. shares of shake shack hit another record high. more than quadruple its ipo price. the company filed for a trademark for chicken shack. it could be adding chicken to its menu. we don't know yet, but it's causing buzz.

the deal is valued at about $10.4 billion. that's without the debt side of things. cvs says the acquisition will significantly expand its ability to serve the senior population. back over to you guys. >> that will do it, dom. thank you so much. mixed messages. who's got this one right? >> let's talk about that. jason is joining us. thank you for joining us today. which way do you see oil going right now? >> our view on energy is pretty simple. we just look at energy to continue the climb. i'm not looking for any material spikes. that's what we have in our model. i think as energy rises, you'll probably see the railroads as one potential beneficiary as

they haul more energy related items and they see potentially some creep on the intermobile side. >> donald, what about you? >> i'm looking for moderate oil prices as well. i would tell you there's two ways to dissect this. one is to look at the cost input. one is to look at the economic benefit or deterioration of the cost, the price of oil, and natural gas. >> right. so moderate. you say moderate. do you disagree with goldman's assessment that it could go down to $45? are we going to continue to pump that much more oil in this country and outstrip demand right now? what doo you you think? >> as rig count continues to fall, it's hard to argue that we'll see more gushing of oil coming out of the ground. on the other hand, demand looks like it's moderating, as it

trips over the higher price of the dollar and the cessation of fracking activity. >> so jason, which names appear to you most attractive regardless of the wiggles and the price of oil between now and year end? >> you know i think over the long run, the rails are a pretty good place to be. on their worst day. the weakness in the near term i think that's just more of where you are in the cycle. difficult year over year comparisons for volumes. so the rails have taken a breather here. i think it's potentially a good spot for investors to become involved because the story's not broke. we're still seeing rails raise their prices. this quarter, rail pricing ticked a little bit higher. i think also over the next few years, on the truckload side of things, i think we're gearing up for sort of a multi-year cycle on the truckload side despite the little bit of a slowdown that don referenced there as

well. i think we have a pervasive problem with attracting qualified truck drivers in this country. i don't think that's going to change. and that could potentially change for the worst if you start seeing home building take off. one, it takes away potential drivers for the trucking marngt inging market and it adds demands for the trucking market. >> donald, who are the winners and losers those that benefit from the price of oil? what about airlines too? doug parker of american seemed to suggest a little softness was coming here. >> i don't follow the airlines. i don't follow anybody that moves people. it's a lousy business. that said we respectfully disagree. we think the value of the dollar accelerating the way it has, we think the cessation of fracking activity, and the cessation of all the other industrial activity that follows that is a death nail for the rails in the short to intermediate term. we've gone through 11 straight

weeks of negative rail volume. petroleum volumes are down. ag volumes are down. no matter how you slice it and dice it, what's happening with the lower relatively low price of oil and the strength of the dollar is a death nail for the u.s. based railroads. >> donald can i just ask you -- you said i don't follow anybody that moves people. it's a lousy business. we heard this from ed hamburger when we were talking to him about freight rail and asking why isn't passenger rail profitable. what is it about passenger rail or passenger airlines if you will, that you think is just never going to be a good business model? >> well i hate to reduce people to chatle but if you looked at the yield to fly any of us across the atlantic or the pacific, and you looked at what we weigh and what our baggage

weighs and you reduce that to a per pound yield and you compared that the per pound yield that fedex or ups gets, they get a much better yield. by the way fedex and ups can stack their packages like cord wood unlike us. and fedex and ups don't have to water and feed their packages. they don't have to let them go to the restroom. >> i get it but at the end of the day, if it's valuable for us as people to be moving around, aren't we going to pay for that? >> yes. >> the historical pattern is no. look at trailways and greyhound. bankrupt. what a money-making operation that is. look at the billions and billions of dollars that have been destroyed over the year. >> it's been run by the government of all things. tell me the last thing the government ran that was profitable. i mean we're out of time on

this. they're going crazy in the booth. this is a bone of contention for kelly and i. we think that you could run a railroad profitably. >> you're mistaken. the reason the government's involved in it is because the regular freight railroads didn't want to do it anymore. moving people en masse is a lousy business. that's the long-term historical record. >> jason, last word to you. anything you want to disagree with on this front? >> well listen. i actually done think don and i are in a different boat. we've been saying the railroads in the near term are going to run into trouble. but if you look at the next 12 months, i think we'll be in a good position in 2016 and i agree with him. i don't think freight transportation for people -- excuse me, passenger transportation is really a good place to be. that's why you see it all over the world, pretty much heavily subsidized by governments. >> if something came out of silicon valley that solved this one, render me really impressed. >> somebody get elon musk on the phone. >> thanks guys.

>> when this tv thing doesn't work out anymore -- >> we're going to start a passenger rail. >> time for a cnbc news update with sue herera. >> town me in on that one, bill. here's what's happening this hour. the state department says it will release some of hillary clinton's e-mails relating to the attack on the u.s. embassy in benghazi, libya, "very very soon." senate lawmakers holding a hearing on the president's policy in iraq and syria. senate armed services committee chairman john mccain criticizing the administration policy for failing to adopt what he calls a successful strategy to defeat isis. japanese prime minister shinzo abe announcing japan will give $110 billion over the next five years to develop infrastructure in asia. the move is to try and counter chinese influence in the region. and doctors in california are roreporting a major advance in prosthetics. a paralyzed man is able to move a robotic arm just by thinking about it.

the video is of 34-year-old eric soto drinking a beer by himself. a gunshot wound left him paralyzed from the neck down when he was 21 years old. pretty amazing stuff, guys. right? that's it for me. back to you. >> you got it. thank you very much. see on the back here? 30 minutes to go until the close. the dow is up about seven points for the moment. the s&p up five. the nasdaq 19. just about two points shy of its closing high. >> maybe we'll ask jeb hensarling about running rails. house financial services committee chair jeb hensarling will speak with us exclusively. find out why he's pushing for fed chief janet yellen to double her congressional appearances on monetary policy. and then another flood of earnings after the bell. hewlett-packard into it. we will preview the numbers for you and deliver the results the moment they hit the tape. we're back in two with more "closing bell."

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welcome back. capitol hill wants more janet yellen. house and senate republicans leading a charge to bring the fed chair before congress more often, ip creasing her current appearances from four to eight a

year. >> joining us we welcome back the chairman of the house financial services committee representative jeb hensarling. chairman, thank you for your patience. thanks for joining us. we always appreciate having you on. >> you're welcome. glad to be here. >> this goes back to a provision in dodd frank that would create this vice chair of what oversight and regulation, and that person hasn't been designated yet, so you want janet yellen to fill that position in the meantime right? >> correct. in many respects this is not your father's fed. whether you're a fed admirer or barber their powers have been vastly increased beyond their monetary powers. one little attempt to show some accountability was for the president to appoint a vice chairman for supervision over their role. now huge swaths of the committee. this is separate and apart for monetary policy. but five years later, the

president never filled that position, so congress has not had the ability to have the formal hearings twice a year. so myself and senator shelby the chairman of the senate banking committee, are simply requesting that chair yellen start to fill in the role. the fed has had their powers vastly increased due to dodd frank. but the transparency and congressional accountability to the american people has not commensurately increased and it needs to. >> i would note that a lot of the questions do seem to revolve around this when chair yellen does appear. would this be a patch? as soon as the position is filled, you wouldn't expect the fed chair to continue to appear more often, or would you like it to be that the fed chair is the person who we do hear from more frequently on these issues as well? >> well this is one more instance where we wish the president would actually follow the law.

i don't know again why it's taken five years. i do think that the fed should be testifying before congress more often. people often interject questions about independence. i would note. by statute, meets with congress four times a year versus a weekly meeting with the administration. and so particularly when this is not your father's fed, and we have this kind of gray area between monetary policy and fiscal policy. when you're sending so many seniors on the historically long artificially low interest rate environment, the fed needs to be accountable. i want them to be independent but they need to pull back the curtain and let the rest of us know what they are doing. and so number one, independent from their supervisory role so they are in charge of dictating

what happens in large insurance companies. maybe asset managers. so we need more testimony on monetary policy. but right now, we're just asking that the law be followed and if it can't be followed literally, if we can't make the president follow it literally, figuratively we want to follow it and we need the fed chair to testify on these supervisory matters. it's just congress doing what we're supposed to do and that is our oversight. >> and as you know mr. chairman not all of dodd frank has been implemented yet. it's still being formulated right now. >> oh i know it better than most. >> yes. i think of the volcker rule for example, which has been you know kicked down the road. what's taking so long on that and do you expect it to be eventually introduced? >> i think the volcker rule is incomprehensible to the mind of man. you know the only way i think to implement it is to have dr. phil at your trading desk to ask you what were you thinking and what were you feeling when you made this particular trade. but put that aside, dodd frank is a completely complex piece of

legislation. the sheer weight volume complexity, uncertainty of this load on the financial institution. there is a reason that we are mired in essentially two, two 1/2 percent gdp growth. that's one of the reasons the fed, they need to testify before congress and they need to tell us what's happening on the bond markets. >> on that point, to what extent can you just compel the fed chair to appear more often. are you doing this as a gesture of deference to some extent to them, or do you have no power to bring them more often to perez them on these issues? >> well we want to be respectful of the fed. want to be respectful of the fed chair. but i would remind them that the fed is a creation of congress dating back to 1913. within our constitutional power is the power of oversight. so we are making a formal

request. i would see no reason why the fed chair would not comply. if she doesn't, then we're going to have to cross that bridge when we come to it. >> last question for me at least. i know that you -- i mean you'd rather just see dodd frank go away in its current form. it's way too complex. it's way too far reaching. but yet the climate, anecdotally we hear on wall street hasn't changed a bit. you know you've still got the currency manipulation charges that have been settled. >> a very serious charge. >> fines are being paid there. we just had a survey out yesterday that suggested that people on wall street are still witnessing unethical behavior out there. if regulations can't do it how do you change the climate on wall street? >> well again, i think it goes to the fact that dodd frank on many levels hasn't worked. it's been a huge burden on the economy and low and middle income people are suffering. >> understood. >> it supposedly angered wall

street and it has failed. >> what would work? >> i think number one what we need is high levels of capital. prudent levels of leverage. we need greater transparency as you know a lot of these vehicles that were used before the crisis were off balance sheet vehicles. in many respects, the regulators didn't do their job, but there's no substitute for having the appearance and reality of your own money and risk and having a very competitive, transparent, innovative capital market that's vigorously policed for force and fraud and deception. we want robust capital markets. and we need greater economic growth. and what we see is after almost five years of the passage of dodd frank, the big banks have gotten bigger. the small banks have become fewer. and middle income people are falling behind. i'm not sure there could be a greater indictment of the law than that. >> we'll leave it right there,

congressman. thank you so much for being here. >> thank you for having me. >> jeb hensarling. we have some breaking news on general motors. phil lebeau has details on that. >> theth inth in national transportation and safety board has announced it will extend its oversight of gm's vehicle safety program. communications, recalls, how they handle safety issues. they will extend that oversight for another year. remember, it was a year ago that general motors entered into a consent agreement. basically a consent order saying that it would agree to have oversight in terms of how it was handling recalls, and then gm went forward from there by recalling having 84 recalls last year totaling more than 30 million vehicles in north america. now the federal government is saying there's been some progress here but they still want to have general motors under their watch for at least another year. one last thing, guys. this is the third announcement this week from the national highway traffic administration

saying it is serious about safety recalls. big week in terms of sending that message. back to you. >> yeah, we would hope. thanks very much for now, phil. we're going to flip it over to dominic for a quick market flash. >> tobacco companies are spiking here although modestly here at the end of the day on a dow jones report saying that the federal trade commission is expected to clear a deal between the two tobacco companies, possibly as soon as next week. renee zellweger announced its $25 billion acquisition last july combining the nation's second and third largest cigarette makers. major changes to the merger details aren't expected in the company's settlement with the fec to get approval of that merger, so that's why those stocks are moving toward the end of the day. back over to you guys. >> thanks very much. heading to the close. 15 minutes left. speaking of modest. modest gains. the dow is up 20 points again. the s&p up seven. and the nasdaq up 24. >> almost half a percent now. and it is in record territory now. up next, dom will come back.

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another wave of after-the-bell earnings heading wall street's way. >> dominic is back with the names and numbers to watch. >> let's start with hp analysts predicting earnings of 85 cents a share. hp has warned the stronger dollar on its results. those are the shares to watch there. intuit also is projected to post a quarterly profit of $2.75 a share. you can see those shares up by three quarters of a percent. gap stores. analysts are estimating 56 cents a share. the retail reported a fall in same store sales earlier this month. gap has been struggling with slower sales as well as banana republic. it's focusing more on its old navy brand. back over to you. >> all right thank you very much. almost ten minutes left in the

trading session. just signaled $300 million to the buy side as we head toward a close. he didn't think it was going to have much impact. >> true. the dow is up about 19 at the moment. the s&p up seven points. the nasdaq up 23. it has to hold about 5092 to notch a high closing today. which it may be poised to do. kevin o'leary will be here to share his thoughts on a host of issues from the state of play in retail to a new app developed by a graduating college student who did appear on that "shark tank" show we all know and love so much. kevin o'leary coming up. we're back in two.

we are near closing highs for the nasdaq and the s&p right now. not so for the dow. it's got a little ways to go. see how we close here. >> joining us we've got jim keenan and larry mcdonnell. welcome, guys. >> welcome back. >> and you both have high yield on your minds right now. but what happens when the fed starts to raise rates? does it become less attractive? what do you do with that? >> our basis is that the fed is going to start to raise rates.

the economy is still in pretty good shape right now. that bodes well for corporate earnings and high yield spreads are pretty decent. >> you're not the only person who points out the fed is going to gradually raise rates but that won't be lost on all the market participants who are going to want to get out the exits. >> some of it's around transparency and what the fed is going to do. if the fed was to tighten rates to a level that was going to squeeze the economy enough that you're not going to see growth that's going to present certainly the equity market as well as the high yield and corporate spreads. if the market is improving, that's how we view it. there's been a lot of deleveraging going on. rebalancing of the leveraging from the private sector into the public sector. and so if the economy is marching along at a 2.5, 3% inflation number, it's still leading to good corporate

earnings growth. >> would that ultimately support stocks here? >> i think stocks are supported by the fed's guidance and the fed has been obviously weaker. the stocks have been very strong knowing that the fed is out further. there's an interesting divergence between the hike. >> so what are you saying? who's most vulnerable to a rate hike by the fed, equities or treasuries right now? and that would include high yield in that. >> i think equities because we've done some math. some people make the argument that 42%, 43% of earnings have been through financial engineering over the last five years. so rate hikes are definitely a problem for equities. a little bit more so than bonds.

>> thank you both for your thoughts on today's markets here. we'll come back with opposing countdowns. see how we do in just a moment. cnbc. first in business -- >> worldwide. when the moment's spontaneous, why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. 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 symptoms of an allergic reaction

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other very carefully. goldman sachs saying it sees oil down to $45 a barrel by october. and they thought the selloff in airlines was overdone. that put a bid under the transports at that time today and they track pretty evenly here. >> it's pretty remarkable. i think the amazing thing is what happened yesterday with the airlines highlights the fact that a lot of people are hiding out in certain areas where they anticipate business is going to be fairly good. biotech is another area with a lot of small cap and mid cap names. these are not huge companies. so you have a lot of people just sort of sitting there waiting for them to move up and then you have certain problems here. by the way, best buy is very interesting because it indicates our online buying habits. people will go to stores and buy phones appliances televisions, but they are not going to buy tablets or computers or games anymore. best buy really was completely lyly lyly bifurcated on those lines. not so good in games or tablets.

>> very good. >> see you later. bob pisani there. stay tuned. a lot more earnings. gap and hewlett-packard coming up with their latest quarterly report on the second hour of "the closing bell." welcome to "the closing bell", everybody. i'm kelly evans. it looks like we've got some new highs for the index. let's see how we finished up the session on wall street today. the dow jones industrial average needed a level of 18,312. didn't quite get there. we're about 22 points below the high that was notched on may 19th. the s&p 500 looks like we're going out at a new high. actually correct. a record close here. the nasdaq just shy -- a little bit more rare for the nasdaq which hasn't hit a closing high

since april 24th. not quite enough to get there, closing at 5090. courtney reagan has the numbers. >> gap is reporting its first quarter results with earnings coming in at 56 cents, exactly in line with what analysts had been expecting. gap reaffirming its range of $2.75 to $2.80. we already knew gap's revenue of $3.66 billion for the quarter compared to analysts' estimates of $3.75 billion, we also already knew those comparable same store sales down 4% because remember gap does still report on a monthly basis for those comparables and the revenues. kelly, back to you. >> all right, courtney. more retail earnings to come. but for right now, let's look at the gap reaction after hours and bring in today's panel. joining me around the set is

michael santoly from yahoo finance, and kevin o'leary. guy adami joining the fray. guy's not there quite yet. let me turn mike to you. what do you make of the gap earnings? shares are slightly higher after hours. >> yes, slightly higher. the rule with rule tailers is it didn't have any visibility at all. this is not really a growth name. it got a little bit of a reprieve with the new ceo. the stock's really been for sale for over a month now. so it seems like you know taking a little bit apart in the outlook to firm up the stock a little bit. not really a big surprise on any front. >> the big story still remains the record highs. almost there in the dow and the nasdaq again. what do we make of this? >> record highs with lack of conviction. really on buying or selling. we were just talking about this all week with these fractional moves in either direction. the path of least resistance,

though points to the upside. i would look for the action in m&a. we came into another more than $10 billion deal with cvs this morning. at least if we're not getting a straight picture on the economic data, you are getting signals like that. given the expectations were pretty low. to keep this market churning. >> kevin you like it? >> i do. i look at where else can i deploy capital? you're an investor and getting 2%. and it looks from these numbers so deep into the quarter's earnings now. we can look to 5% inherent growth in this calendar year. things stay just relatively calm. that to me is a 7% return. i can't get the fixed income. i can't get it anywhere. >> you sound like rick santelli. >> that's the fed's fault. and you can blame yellen for that. >> a lot of people are bonding outside this country. the u.s. has been an afterthought on global asset markets. europe's been the story, both

bond and stock side. it also makes sense for the u.s. market to hold in here. we have the holiday tomorrow. it seems like this market does nothing unless it's grudging. >> guy, you feel any differently about all that? >> i think everything you guys are saying is okay. i'll add a couple other things. we've been talking about the weakness and transports for a while. that came to a kri schenn doe with the move in airlines. couple that with the move in rails. that is somewhat concerning. what is good on the other side of the ledger is the fact that the russell, the iwm, held that level that we talked about numerous times on your show. transports need to participate at some point. otherwise we're going to have an issue. the fact that the russell holds in there gives me some optimism on the upside. >> this transport one is interesting. just to explain to people what's going on. we have the market at all-time highs. the transports, especially yesterday with the airline action at six-month lows.

we asked people about this and it's not often that this happens. it does tend to coincide with market tops. but you do have the airlines responding to some capacity issues. how much of a tell is that for example, about a bad economy. if anything it sounds like it bodes well about how they perceive customer demand. >> you heard doug parker the other night on jim's show talking about the fact that they're going to start adding capacity. it's not just the airlines kelly. go back and listen to some of the things that federal express has said. couple that with the fact that the railroads have been under significant pressure. if it was just the airlines for the reasons you cited, i would agree. but since november the transports have not participated in that so it's not just a now phenomenon. >> yeah. mike, would you agree with that? >> i would agree with that although i would hesitate to say the transports in their behavior are telling us anything we don't already know.

we knew about the oil crash. and we kind of know what's beginning on in terms of the dynamic with airlines. so i'm not that concerned from a very technical perspective. but it's a narrow kind of rally. not had universal participation. it's certainly more negative than positive. i just don't think you have to be that alarmed. >> for anybody wondering about the fundamentals is this market supported by fundamentals? what happens if the economy or the consumer is topping out? it's kind of pointed in every which direction. >> retail earnings and sales. it's been a foggy picture of the u.s. consumer. i had the kroger ceo on yesterday, asked him about it. he said you're still seeing a pretty bifurcated consumer. doing well at the high end. some strength at the low end. nothing really going on in the middle. that's going to be the biggest question about whether a lot is riding on this idea that the economy rebounds. very weak first quarter. and the view on wall street is that it still will. and that the earnings recovery

will happen and the economy will pick up because that's what you're hearing. >> hold that thought for just a moment. hewlett-packard resolves are hitting the tape now. hi, sue. >> here's what we know. hewlett-packard on its earnings has beaten. it came in at 87 cents per share adjusted versus 85 cents, which was the estimate. in terms of the revenues though, it looks like a miss coming in at $25.5 billion versus an estimate of 25.64 billion. and also hewlett-packard issuing some guidance that is a little bit on the weak side for q3. now, in addition to that there is a new hp enterprise company that's being created, and hp cfo will become the cfo of that new hp incorporated company. and in addition to that they are naming not only the new cfo, but also a new coo of that enterprise company.

dissynergies will come in at 400 million to 450 million due to that separation. it's a beat on earnings. it's a miss on revenues for hp. and there you can see the reaction in extended hours, a little bit to the upside there. kelly, back to you. >> thank you very much sue. we want to bring david faber in now for more context on these results. the street taking it pretty positively. some more information in here about the split-up. >> exactly, and my apologies for not being on time. don't ever get stuck in a stairwell at "30 rock." you may be there for quite some time. but you heard, of course a lot of the headline numbers from sue. let's drill down on a couple of things. the separation for this company is in the offing. they still say they are confident that they will complete the separation into hp ink, namely the personal systems group in printing, and hp enterprise, all the other businesses by let's call it november. and for the first time they

gave us these dis-synergies numbers, namely listen you've got a higher two of a lot of things. two treasuries, two this. frankly, that number is less than many people who followed the company closely had anticipated. that would be an annual number split between the two companies. but they also for the first time are starting to give us a sense for the cost savings that they see from the separation. and kelly, they point that towards about a billion dollars a year when fully realized. now, it's going to be a number of years before they fully realize those cost saves of as much as a billion dollars. let's call it by 2018 2019. nonetheless, they're going to start to creep up enough to offset these so-called dis-synergies that they're seeing. the big overhang for this company continues to be the dollar. it was last quarter. it is once again this quarter. down 7% overall in revenues. 2% in constant currency.

really impacting some of their businesses in terms of their price competition. for example, in printing where the japanese given the weakness in the yen have been able to be very strong competitors. so that's an overhang as well. not bad in printing. not bad in pcs in terms of market share gains. although overall, things are not moving very well in pcs in terms of the growth or lack thereof with that business. and industry standard service was okay. >> david, we didn't hear how you got out of the stairwell. >> i went all the way down to the bottom floor. to the street. i just walked out on to the street finally. the elevators are not working here at "30 rock" very effectively today. so i thought i would get here more quickly, but -- >> hey, we appreciate your effort. i was wondering if it was a cell phone thing. david faber thank you so much.

don't miss david's exclusive interview with meg whitman tomorrow, 9:00 a.m. on "squawk on the street." we'll leave it there for the time being. guy, thank you. we're coming up with guy and "fast money" at 5:00. they're going to be talking to the ceo of shazam about whether they plan to go public. you don't want to miss that one. gap the latest big retailer to release their results. but what are they saying about the state of the consumer and the economy? we'll talk more about that. a california auto dealer group suing true car for allegedly acting as an auto broker without a license. we'll hear from true car in what is shaping up to be a bitter battle. you're watching cnbc, first in business worldwide. small businesses every day through programs like mission main street grants. last years' grant recipients are achieving amazing things. carving a name for myself and creating local jobs. creating more programs for these little bookworms. bringing a taste of louisiana to the world. at chase, we're proud to support our grant recipients

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♪ your ticket to a better night's sleep ♪ welcome back. gap now just the latest retailer to report its earnings. courtney reagan wrapping it up for us. >> we had a couple more including gap, but let's start there. gap's earnings in line. also reaffirming their guidance range for the year of 275 to 280. we knew previously that the first quarter revenue was 3.66 billion. that was lower than analysts had expected. the team retailer down sharply.

i do want to point out it's just a $200 million market cap stock. a larger than expected first quarter loss of 56 cents that is a penny worse than analysts were looking for. comp sales down 11%. that's about half a percent worse than consensus. q2 guidance also worse than expectations. a much different picture. earnings of $1.37. also stronger than expected. 5% comp increase. stronger than analysts were looking for. but the second quarter comps and earnings guidance a little bit light there. but there's a lot to choose from. the losers keep on losing. if you're investing if retail you really have to be a student of this game and be careful what you're putting your money in. >> i like exactly how you put that courtney. stay right there, we're going to talk a little bit more about it.

stacy, my point is simply this. is this a market you can do your homework on and try to figure out what's happening? it's not like it was three years ago where all that mattered was what the fed signaled or whether greece was going to exit the eurozone. so who do you think are emerging as the clear winners here? >> this is really company specific here. you're seeing obviously the teen space really get hurt. h & m opened their biggest store in the world yesterday. you're seeing the likes of tjx and ross stores continue to outperform the consumer shopping differently here. you can really start to drive a mack truck between the winners and the lose ersrs. >> best buy just put a great quarter. >> i will never know how much to extrapolate.

i wonder if you have any insight about exactly how we're seeing -- what could we see about what people want to buy, the whole question of are we buying less just clothing buying it in a different way? >> yeah. i mean you've really seen apparel just lose market share the last couple years. not only has it been a bad fashion cycle. retailers need to breathe some life into what they're doing. but people are shopping differently. they're shopping on athleisure wear. they're dining out more. look at the retail sales. and the higher consumer continues to spend on their home on appliances and big ticket items. >> you know what they say. a lot of guys, maybe us girl tooss, too, just tend to wear the same thing. >> i remember the day that gap would get slaughtered. it doesn't happen now. could it be that the energy dividend hasn't cycled through the consumer yet? i was saying look we had a horrible q1 weather-wise in the

northeast. that's huge for people like gap. it takes a couple of quarters for people to take the money they're saving at the gas pump and redeploy it. these stocks do not get punished. >> you know, i'm glad you brought up gas prices because so far, i mean gas prices started to come down in november. we've seen no flow-through. and imagine how bad the numbers would be if we didn't have that gas give-back to the consumer. so i mean look at wal-mart's numbers. the comp was 1%. and by the way, these are against really really easy comparisons from last year. >> you expected that we just haven't seen the benefit here. do you think investors are giving some of these names the benefit of the doubt? >> i think interestingly on that gas price point, i think we are seeing some benefit. but again, it's not in the traditional apparel retail players. we saw some of the movement in the government's retail sales number. in restaurants, bars. those experiences which also hearken back to the structural change and what we're choosing to spend our money on. so i think that's going to be a very interesting thing for

consumers. and your other point about folks perhaps not buying what they used to or changing where they're buying it i still think the dichotomy is so interesting, with many people, millennials or perhaps even baby boomers buying from h&m or maybe forever 21, but also pairing it with a very expensive handbag. so you have the lower price players doing well as well as those higher end brands the brands that really stand out. but the guys in the middle are going to continue to fight for market share, especially as these structural changes just sort of exacerbate as we go into the future. >> so in this confusing consumer environment, i keep hearing more and more about this idea that a lot of these retailers could spin off some of their real estate into wreaths. >> most of these retailers lease or storage. there's definitely some value to be unlocked there. and despite the fact that they missed their quarter and they

have seven major initiatives this year. so that raises execution risk. the stock is up. because that real estate play is out there. >> they've got very valuable real estate. >> before we go, quick question to both you and stacy. who are we watching for now as we move through the rest of the retail reporting season? >> we're almost at the tail end, but foot locker is still to report. that's a big one too for that athleisure trend. it also gives us an indication of what's going on with those brands. the nikes, the under armours of the world. we also have some executive transition. that's one that we'll be watching friday morning. >> and we've got abercrombie next week coming up. so i spend a lot of time in europe and those comps have not turned the corner. and of course handbag market has decelerated. but i think it's really in there in terms of michael kors. >> okay, we'll wait. we'll see.

mcdonald's has been serving up some big sales for a while now, but do the investors think the new ceo has cooked up profits at the fast-food giant? we're going to talk about that next. also, drexel university has a program paying students to build a business. one was so successful it landed a deal on shark tank. but it wasn't with our kevin o'leary. we're going to hear from that student and find out why kevin didn't bite coming up. [ male announcer ] your love for trading never stops. so if you get a trade idea about, say organic food stocks schwab can help. with a trading specialist just a tap away. what's on your mind lisa? i'd like to talk about a trade idea. let's hear it. [ male announcer ] see how schwab can help light a way forward. so you can make your move wherever you are. and start working on your next big idea. ♪ ♪

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the annual shareholder meeting, where investors are hungry for a turnaround. kate rogers has been monitoring the events and joins us now with those highlights. >> at new ceo steve easterbrook's first shareholder meeting, the biggest headline was a win for those shareholders in the passage of a proxy access bylaw. this allows those who have held at least 3% of mcdonald's stock for three years to nominate director candidates on company proxy materials, making the board more accountable to shareholders. the mcdonald's board did not want this to pass yet it did with 61% of the vote. but for the second day in a row, hundreds of protesters demonstrated outside of the shareholder meeting. the group is continuing to push for higher wages in the fast-food industry. mcdonald's did announce in april it would be raising wages to an average of $10 an hour at its corporate owned locations by the end of 2016 but the move does not impact its franchise locations, which are the majority of its stores

nationwide. saying mcdonald's raised wages because that's what they could control as independent owner operators make their own decisions. the new ceo touted paid time off and high school degrees. back over to you, kelly. >> all right, kate. thank you for now. let's talk about just what mcdonald's is doing right and what it's doing wrong. joining us now, josh mason. economics professor at jon jay college, and the president of lake view asset management and professor at seton hall university and also mcdonald's shareholder. you guys wear a lot of hats. scott, let me start with you as the shareholder. are you seeing what you want? >> not really. this company has a lot that it needs to do. i don't think that really they're addressing yet. the big problem i have is that all these changes are coming from people who have been at the company for a long time. they really need to bring fresh thinking from outside the company into the fold.

>> there are so many different aspects. what they're doing with capital return. the store plans. the raising wages. the move to change its menu. what is it that you like and don't like about what they're doing here? >> well, what i don't like is that they're not thinking outside of the box. mcdonald's needs to cultivate some new concept that it can expand. look they did it with chipotle and handed the keys to chipotle mexican grill to shareholders and other people. a company that we own that we think is right for such an acquisition would be krispy kreme doughnuts. >> josh, the merits of mcdonald's and doughnuts aside, what do you think they're doing right? >> the bigger issue here is the

change many american finance from a system of getting money into productive enterprises, to a system for getting money out of enterprise. you look at mcdonald's. this is a company that earned $5.5 billion last year and paid out almost $6.5 billion to shareholders. >> let me just jump in. because critics would say that mcdonald's is not necessarily being productive with this capital. so they might as well return it to shareholders. do you disagree? >> if you want to rebuild the business, you need to invest in the business. you're not going to make the business succeed to the tune of a billion dollars out the door for shareholders. that's bad news for businesses that want the business to succeed. the people who want to be paid more need to see this business successful. it's bad news for franchise owners who are putting their life savings, sometimes putting a lot of hard work on the assumption that this is going to be a successful business. that mcdonald's, the corporation, is going to do its part to build it. if every dollar puts in just goes out the other door to people like scott, it doesn't

seem very wise. >> kevin o'leary? >> i don't want an expanded cap ex program at all. the reason i own that stock is the succulent dividend payout. it's a hamburger. what i want is to take the existing budget get the right people in place to make a fresher burger. don't even think about dropping that dividend. i would dump that stock so fast and so would a lot of other investors. that i don't like as an idea. >> i think what we saw at the meeting here is a lot of institutional investors think the pendulum swing too far in that direction. a company that's focused too much on payoffs to shareholders and not focused enough. >> you want him to buy krispy kreme? >> i hate that. that's just deep fried bread. the whole trend now is we need healthier options, so 18-year-olds that i know in my family go back to mcdonald's. they're going elsewhere because they care about what they put in their bodies. >> i don't. >> they can figure that out. they have the distribution. they've got the brand. don't cut the dividend.

i don't want stock buybacks. >> scott, you were trying to get in there? >> i love the stock for the dividend. we own it. i don't think that mcdonald's as a brand can bring unhealthier options and attract people. i also don't think -- we stopped over on our way here. we got a sweet tea on the dollar menu. how much are they going to make by selling more things off the dollar menu? not much. i think they need to come up with a concept which can compete against the shake shacks the in-n-out burgers. all of these new higher end fresher concepts. and doing it with the golden arches over a restaurant is not going to do it. they need a fresh concept they can roll out. >> they have the sirloin. >> i think the question here in time how much time do you give the new ceo to do this to see if menu simplification can turn a mark cap of like $100 billion around? >> well, if they want to reinvest in the business by coming up with new concepts

then they'll need some time to incubate that. i will give them some time. if all they're going to do is take the current menu and tinker with it and maybe change the fat content of foods and change how much salt they're putting on the fries, that's just not going to do it. you might as well just get rid of them. i'm hoping they can take a fresher look at everything. in the meantime allow the cash they have from their franchise business and from the real estate to help feed growth in the future. >> josh last word to you. >> you know the other thing we saw are these workers demanding higher wages. the truth is you can pay people higher wages and benefit from that in terms of greater loyalty, reduced turnover. but you have to be committed to people. you can't do that with the mindset that says we're focused on what happened six months or the next year. you need to be focused on building this in ongoing ways. >> fair point. we'll leave it right there. thank you both for coming. appreciate it. josh mason on mcdonald's this

afternoon. and it's time now for a cnbc news update with sue herera. hi, sue. >> here's what's happening at this hour. reports filed with federal regulators show that plains all american has reported 199 accidents and being subjected to 22 enforcement actions since 2006. the company operates more than 6,000 miles of hazardous liquid pipelines in at least 20 states. two people were killed in a suicide bombing attack in libya, isis claiming responsibility for that attack which targeted forces whose troops are allied with a self-declared government controlling tripoli and western libya. the florida man who landed a gyrocopter on the u.s. capitol lawn pleaded not guilty in court today. 61-year-old doug hughes was indicted on six charges. he could face nine and a half years in prison if convicted. afterwards, he said he would never do it again. i bet. north carolina governor pat mccrory signing a bill into law that will ban all teenagers from

using tanning beds in the state. doctors say there is a direct link between indoor tanning and increased risk for skin cancer. and that is your cnbc news update this hour. back to you. >> it feels like we've known about that one for a while. >> absolutely. >> seeing some movement now finally. true car being sued for allegedly operating as an auto broker without a license. does the lawsuit have any merit and how will it impact against the company. later, you won't believe how much money banks are now raking in from overdraft fees. the eye-popping stats coming up on "the closing bell."

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law? >> in our view true car should be licensed as a dealer and auto broker in california based on their business activities. and the lawsuit merely asks the court to declare that that's the case. >> okay. brian. why not be licensed then? johnny i'm sorry. >> because we're not a broker or a dealer. the statutes in california are very clear about what it takes to be a broker or a dealer. we don't do those things. the lawsuit that's been filed is wrong both factually and legally. we don't sell cars. our dealers do. we don't set prices. our dealers do. we don't offer guaranteed savings. our dealers do. we are the communications platform through which our dealers communicate with users as a new way of doing business. i understand a lot of dealers would prefer this new way not come about, but it is. 50% of the members of the trade association have filed this lawsuit do business with every day. they are our partners.

>> so brian what's the issue? >> the issue is respectfully we disagree with mr. stevenson and truecar. we've done extensive legal analysis. we've distributed memoranda on two occasions, in 2012 and 2014. had outside council look at it. the litigation firm we hired to represent us in this case and all have agreed that based on true car's activity they're acting as a broker. they're arranging to put dealers and buyers together for negotiated price guaranteed that's brokering, they're not complying with california law and we want the court to confirm that that's true. >> i'm just bringing kevin o'leary in here. >> i say to myself this new crew car platform provides an eloquent way of price discovery in a market that's antiquated in terms of many buyers' preferences. i have no problem with litigation.

i get it. if you're changing someone's business model, they have the right to pour boiling water on you and test it in the courts and they are going to do it. particularly in california. i would like this market to clear itself. if you really have a service that works, you'll grow you'll survive litigation and people will use your service. and i say to brian out there, i appreciate what you're doing. i tell my kids when i teach now and undergrads if you have trouble with your competitor sue them. slow them down. but the courts don't just give you merit for nothing. you've got to prove your case. that's what's happening here is it not? >> it's exactly what's happening. i made my living for 30 years as a trial lawyer so i believe in lawsuits, too. and the truth will come out. we are all about truth and transparency so we'll resolve these issues. this is a lawsuit not filed by consumers. not filed by dealers. and most importantly, not filed by the very regulators who are charged to enforce the laws that are at issue in this lawsuit. it's filed by trade associations. it reps a lot of hard working,

honest people that would prefer this new way of doing business not come about. but we're not going anywhere. and as you say, the market will decide. >> what about other states and what happens if california does decide you have to be licensed as a brokered dealer? >> well whatever the court decides we'll comply with. if we needed to tweak our business model for some reason we would do that. we don't believe it will happen. these issues have surfaced twice before. in 2012, we addressed them directly with dealers, with regulators, and with all the constituencies with which we do business. they were raised in 2014. sitting down with the regulators in california, walking through our business model, walking through these issues. >> do you think you're wasting money on continuing to press true car in this matter? >> no we don't. we took this extraordinary step

because we believe that the law is clear. it's a very broadly drafted statute. it's a couple protection statute. consumers right-hand turn getting the transparency of knowing that dealers are paying truecar 299 or $399 per transaction. that needs to be disclosed and that's what the lawsuit is about. >> a lot of folks are watching this to one to see which way it goes. johnny stevenson and brian mass. >> thank you for having us. >> if you've been hit with overdraft fees recently you're not alone. banks are collecting big bucks from customers. you could graduate with a business degree or a successful business. drexel university in philly is one of the schools supporting entrepreneurial students with money and mentors. we'll be joined by a soon-to-be drexel granddaughter who's already making money with an app he developed. that's coming up on "closing bell."

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if you've been hit with an overdraft fee lately you are not alone. jeff cox has the numbers. >> if getting overdraft protection on your bank account sounds like a great idea that's because it is. for your bank. in fact, banks are raking in money from overdraft fees. the first three months of this year alone, banks collected more than $2.5 billion in overdraft fees from their customers. you want to put even a finer point on that the top three

banks, jp morgan wells fargo, and bank of america collected more than $1.1 billion in fees from their clients. this is the first time that banks have actually broken out these numbers as a source of revenue. but it's very interesting to see how much they're getting $34 at a time. this also reflects a trend that banks are looking for other forms of revenue. one of those forms, definitely bank overdraft fees. it will be interesting to see if this trend continues as a major fee generator for u.s. banks. >> that's our jeff cox. what's interesting to me about this is we've known it for a number of years. it's persistent is what i find surprising. >> everybody knows these things exist. the onus is on you as a couple to know that you're getting into an overdraft situation. bank of america, for example -- i have a checking account there. if my balance drops below $25, it e-mails my mobile device and says hey we want you to know

that you're running low on cash. please top it up. i know that because it's my daughter's account. >> i was going to ask how much you're playing it close -- >> i say to her, listen. if you get dinged with an overdraft fee, you're paying for it yourself. that motivates her. i see nothing wrong with this. i'm a shareholder of these banks. please leave them alone. let them make some money. this is getting ridiculous. >> i think the lesson is it's a back door credit outlet. it's basically people able to skate and play a little bit where they otherwise wouldn't be able to. typically what we see is the average person who goes paycheck to paycheck is going to basically take that escape path they don't think about the fee. >> this is something the new consumer financial protection bureau is actually supposed to be going after. people who aren't even aware that they're getting into these overdraft situations. i wonder as the whole idea of thin tech which you're hearing a lot about. these new alternatives that are appealing to millennials instead of banking. instead of the traditional

route. can deal with these sort of problems. because it is all done digitally. >> or going back to the point that you were making, which is if there's a real need for somebody who will let you float close to the line what new ways might that entity look? somebody get upset with your bank. >> you really can't go anywhere because there's a cost of capital. if you're lending somebody money, you have a risk that's not repaid it also has cost. i think our infrastructure in america today is the best it's ever been after being overregulated now for basically eight years. i bought a japanese knife yesterday because i'm going to make escargot and i wanted a very special blade. love the stuff. i didn't have enough dollars in my paypal account. i had five options in which to pay. all of them were going to cost me money. >> how much was the knife? >> a lot. a lot. >> we've got to go. but listen if the banking industry moved towards a we're just going to charge everybody

for a checking account. would that be a better move? >> i think it would be less palatable to consumers. when you can't pay interest and earn interest it's an unusual world. resorting obviously to charging fees because you can't do it the traditional way. >> exactly. maybe that will start to change. >> leave the banks alone, kelly. >> i know what you're thinking. thousands of college students are graduating this month with a degree in hand but at one school you can graduate with an operating business as well. drexel students have an opportunity to build real business as part of their studies. up next, we'll talk to one student who went from the classroom to the boardroom to "shark tank." we'll find out what grade kevin o'leary gave this student entrepreneur.

there is an ancient rhythm... [♪] that flows through all things... through rocky spires... [♪] and ocean's swell...

[♪] the endless... stillness of green... [♪] and in the restless depths of human hearts... [♪] the voice of the wild within. . drexel university is admitting the next generation of entrepreneurs with its entrepreneurship co-op program. students who qualify get 15 grand and extensive mentorship over the next six months to develop their company. joining us is the program's dean with drexel student christopher gray who is in the program and the success of his app company even landed him on "shark tank." a warm welcome to you both. tell us how successful has this app been? >> it's been really great for

"shark tank." we had a lot of success and since "shark tank" we've had cities get the output of students and even dealt with obama's my brother's keeper initiative. >> we'll bring in one of the sharks in just a moment and tell us what this app is and how it works. >> yeah. so it's a mobiling web app that instantly matches high school students with current college students and graduate students that they instantly qualify for. and students are matched with hundreds of different financial aid opportunities. >> dean what did you think of this idea and how critical is this program for chris' success? >> chris had a great idea found a problem and worked his way to solve it, and so our program, we were just so pleased at the school of entrepreneurship at

drexel to be able to support him and both financially and with incubation space and with mentors and he's been a great success and inspiration to other students, and we're looking forward to many more. >> you know kevin o'leary over here apparently didn't bite when this app came to "shark tank." . why not? >> not sure that i didn't bite. i'll say something about christopher that i think everyone can learn from, including business leaders outside of "shark tank." he was extremely articulate in explaining the merits of his business plan. he was able to explain in 60 seconds what this did. every shark got it right away. think there's a lot of merit and understanding that no matter who you are, doing so caused a feeding frenzy in the "shark tank" because not only is this on trend as a socially conscious idea, i could see the probability of it making money one day if you actually turned it on to be a very profitable business. i looked at it that way and quickly the valuation i would have paid for it went way past what i would do and i'm very disciplined about it.

i think he was masterful. people should watch his pitch before they go on "shark tank" this year. >> chris, what do you think about that? >> thank you i'm flattered. >> i deserve it. i wouldn't give it to you if you didn't. >> thank you. >> how do you duplicate the success and tell us what kind of other apps have come out of this program so far and if it's going to get any bigger for you guys at drexel. >> oh, it's absolutely going to get bigger. there's such a surge of interest and entrepreneurship across the university, and that's why drexel university created the school. we wanted to capture that passion in students, that energy, just like christopher has. we have many students applying for the entrepreneurship co-op where they work six months for their own company, and i think christopher may agree that greatly helped his success in getting the app started. >> chris are you talking to any other colleges and universities about doing it? >> yes, yes. it's been -- it's definitely

been a good experience. i had six months through entrepreneurship co-op where i got to work on my university full time. the university gave me $15,000 and office space and actually one -- i was able to connect to "shark tank" by drexel so it was actually a really really good experience and played a huge role in the app's success and it's continuing to do so. >> do you get a cut of the successful apps? do you take a stake in the business? >> no, no drexel doesn't take any equity in these businesses. our reward is the students who go out and spur employment and create new knowledge. that's the best thing for drexel university. >> we congratulate you chris on your success and dean decarolis on building the program. >> thanks much. >> thanks guy. if you didn't feel like paying $200 -- $200 in the

mayweather/pacquiao fight a couple weeks ago you're in luck because people were live streaming the bout from their smartphones. up next nbc sports president dick even sol giving his take on the app. when we come back. here at td ameritrade, they're always working. yup, we're constantly making thinkorswim better. like a custom screener on your desktop, that updates to all your devices. and you can share it with one click. wow. how do you find the time to do all this? easy. we combined every birthday and holiday into one celebration. (different holidays being shouted) back to work, guys! i love this times of year. for all the confidence you need. td ameritrade. you got this. more and more, data is visual. in fact, the number of mris has increased by ten percent a year.

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last night some of the biggest names in sports gathered for the business sports journal award in manhattan. among the biggest issues in the sports industry, the ever changing media landscape. we asked some of the power place about the live streaming apps and here's what nbc sports dick even sol had to say. >> it's just wrong. to me it's robbery, and i know to the young i probably sound like an old fossil but to me it's theft. >> wow. it's wrong. it's robbery. it's theft, guys. >> i can see somebody who has to pay a lot of money for sports rights believing that that's theft, right? they paid a lot of money to broadcast it. >> doesn't he have a point? >> he does. you're at that point deciding your a broadcaster, relaying in some form a signal that somebody else paid for. >> my whole thing with this it's stupid because if you really want to watch the fight you're not going to turn -- you're not going to tune into periscope. you don't get a very clear picture, like you're there.

it's a much better experience. >> but then the principle is as long as you have a lousy screen and it's really small it's okay? >> i think the genie is out of the bottle on this one. here's what happened in vegas. periscope feeds all day long. you could set up dozens them. >> and you're the biggest periscope user. >> and it whetted my appetite for the fight and it ended up being a really boring spectacle regardless of the screen you want on. >> i will not pay anything on a rematch, zero. that's what those guys did to themselves. >> we know area was defeated in the supreme court. should people be allowed to re-broadcast even with interior technology stuff that -- that everybody else is paying for? >> i don't know how you're going to regulate it. what are you going to do? put everybody who holds up their iphone, not knowing whether it's periscoping or -- you let them take pictures you let them do videos. >> can see in a sports venue. >> i say let's throw all these kids in jail for life. that's the answer. >> we'll leave it right there on that sardonic note.

"fast money" is coming up in a few moments. thank you, guys. melissa lee is on tap. >> what do you hear when you hear a song and can't identify it? you hold up your phone and you shazam it. >> that's right. >> we've got the ceo of shazam on tap. >> straight over to you guys. >> thanks. "fast money" starts right now. live from the nasdaq market size overlooking new york city's times square tim seymour brian kelly, karen fishman and guy adaem s.apple set to jump another 50%? that's what morgan stanley said today. we'll explain why they could be right and how you can profit. plus shopify shares soaring in its debut and we have the ceo of what could be the next huge ipo and here's a hint. the company is on your iphone and you use it at least once a week. hmm. let's start with the biggest story this hour. hewlett-packard moving higher in the after-hours session after reporting a mixed quarter. beat on the bottom line and missed on the