lori: good afternoon, everybody. top of the hour. i am lori rothman. melissa: i am melissa francis. war room for stocks to run even higher. lori: lou dobbs weighs in on a different record. we will ask lou why we still have a trillion dollar deficit. melissa: american petroleum, jack gerard says -- lori: you may not know the e

aerospace by name. look at the airline industry. melissa: let's get to nicole petallides on the new york stock exchange. nicole: we are looking at the dow jones industrials holding off on some very stellar game. we have not seen these highs since 2007. we have now surpassed those highs. the s&p and nasdaq all up over 1%, as well. as far as what we are seeing here, big picture, we are watching sectors here in the united states. i wanted to also take a look at the dow intraday. we have most of the components well into the green. just a few now participating in today's rally.

i wanted to take a look also at the vix, the fear index. we have certainly seen it quite volatile over the last couple weeks. today, you can see a serious pullback. we had big games. we pulled through our record. back to you. lori: you said it, we are hanging in there. thank you so much. is there any room further to the upside? joining me now is scott from wells fargo. thank you for joining us today. can you pinpoint the exact reason why investors decided today should be the reason for the dow to hit an all-time high. >> i think it has been building a little bit. it has been building since ben bernanke. the fed is going nowhere quick. there are a lot of macro things

going on. the federal reserve will remain very easy. they will pump hundreds and hundreds of beautiful dollars into the economy of the foreseeable future. lori: where does the dow go from here? >> i think, in the short term, we will continue higher. there are a couple reasons. we had two nice pullbacks last year. nobody was looking for a pullback and nobody was chasing. this year it was different. we have everybody looking for a pullback. that typically means that the market will trade a little higher than what you think, at least in the near-term. the fed wants to push up stock

prices. we have some enthusiasm here around the dow hitting a new all-time high. that is exciting. you want to remember, there are some underlining fundamentals. there are some positives out there. for right now, i thhnk in the near-term, the market is likely to grind. lori: investors are shrugging off higher gas prices, the higher payroll tax and, of course, the dysfunction in d.c. >> normally, confidence isn't really affected by gas prices. i know you guys are paying probably more. people are used to some of these

shocks. the payroll tax which i thought would be more of an affect. they are shrugging that off and they are paying more attention to their house prices rising, their employment situation seems to be getting better. the federal reserve has the markets back. surprisingly, to me, you know, gasoline prices have not played into that at all. this rally has surprised me. it has been led by defensive sectors. the target that we have out there, we are right in the middle of it right now. we are expecting a 10% year. you see a little bit better news out of china and europe. that target may prove conservative. dagen: always a pleasure. thank you. melissa: a new poll by fox news.

70% of american voters support building the keystone pipeline. there would be no significant impact from the pipeline construction. what is the holdup? there is no one better to ask than jack gerard. he is joining us now on the phone. thank you for joining us. >> thank you what is significant about it and i hope the president is paying attention to it, it is now the fourth comprehensive view. everyone of them has shown there is no significant impact. he will now make the decision which is his role to determine if it is in the national interest. clearly, it is.

this is a no-brainer. melissa: obviously, he has environmentalists who say they will protest any move towards the pipeline. the president has final say. unions are in favor of it. how do you think it shakes out in terms of pressure that is on him? >> i am more hopeful that they will do the right thing. there is a small minority group that is very vocal on this issue. it is in the best issue of the country and consumers. it is clearly in the best issue of the economic recovery. we could become energy secure if we could produce our own oil and natural gas.

melissa: we talk about the man from mit. he has been quoted saying he is alarmed by climate change. what do you make of him so far? >> my view is, i have met him a few times, i think he is a very thoughtful individual that understand energy. he sees a future global vision for natural gas to help reduce carbon emissions. the reason we are at 1992 levels is because we brought so much cleanburning natural gas into the energy equation.

melissa: he sounds like he is an improvement. >> our hope would be that they would follow the stated vision of the president. he has now said we should have an above energy strategy. we need to produce or oil and natural gas. if gina mccarthy is a new administrator of epa, assuming she is confirmed, we will follow that fundamental direction. we have a game changing opportunity. melissa: we will see. jack gerard, that was a lot of information in a short period of

time. thank you for doing it. lori: another day, another crisis in washington. can congress come to an agreement before the congress runs out of cash by the end of this month or is this truth too good to be true? rich edson has the very latest. rich: the house introduces a bill later this week. we will vote dependent on the snowstorm down here this year. depending on what the snowstorm does, they will vote either wednesday or thursday on this boat. there are some on capitol hill that want to address those spending cuts. you can say that we will stop giving companies spending breaks to let company shipped jobs overseas. you can make those choices.

those are the parties. nowhere have the republican said that their choice and party is to let us invest in our people. >> the silk luster is not the smart way of accomplishing the reduction in spending, but it seems it is the only kind of reduction that the president lives with because he has to. it is the law. rich: if the house passes this this week, it is up to the senate. there are some democrats in the senate who want to do that for some other government agencies. the general consensus is it will get done before march 27. back to you. lori: hank you for that, rich edson. melissa: charles payne coming up. whether we will go even higher

or any lower. lori: you are seeing a little bit of strength in the metals market. we are back after this. ♪ dad, i'd put that down.

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future. american bullion. piece of gold, peace of mind. call 1-800-gold-ira now. lori: let's check the markets. that dow is that record territory right now. >> it is a lot of fun to take a look at the market that is moving to new highs. breaking through those 2007 levels. hitting new all-time highs.

we also want to take this opportunity to look at some etf's. some of those names are involved in this particular group. also hitting a new high. this is posting a gain of nearly 2% today. you see the price there at 109. i just checked on a few names. union pacific has a new high. fedex has a new 52 week high. back to you. lori: i have not seen you have this much fun on the job, no cool, well, said yesterday. [ laughter ] melissa: charles payne is here now. charles: we are also excited.

you know, listen, i have been talking about this all day long. there is a lot of cynicism out there about the rally. every time i look at these income statements, you know, i do see companies that are growing and doing extremely well. the dow is not a direct correlation of our economy. the greatest threat to this rally is the u.s. economy. melissa: the fed is what is fueling this. charles: at some point, the fed's policies have to trigger that cycle. the cycle where, you know, i feel better.

i spend my money, they hire people. that cycle that that bernanke has been trying to dribble for so long. he has been so frustrated with this. i think his focus really has been on housing and perhaps maybe that will be where people start to feel richer. the rally becomes self-fulfilling. lori: you raise a good point of getting in and chasing the rally. what is your advice? charles: i still think you have to be an investor in great american companies. if you look at last year, a record year out margin expansion. the markets have third quarter 2011. only 5% penetration.

china, they have a platform there out of this world. there are some stocks out there. do not buy one stock and give it a shot. i guarantee we have a lot of people watching right now. you have to be an owner of the stocks. we know the diff is coming soon. lori: charles, thank you so much. long lines and planes delayed in chicago. is the sequester to blame? melissa: lou dobbs weighs in expert. record revenues for the federal government. ♪ i'm a conservative investor.

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>> at 22 minutes past the hour, i have your fox news minute. the u.s. ambassador to the

united nations as north korea could be facing some of the toughest sanctions ever ordered by the un for its latest nuclear test. anticipating the sanctions, but korea is threatening to cancel the 1953 cease-fire that ended the korean war. john kerry is confirming to fox news that the u.s. is helping to train opposition forces in the area. the hope is to convince syrian president to change his current calculations. venezuelan tv is reporting that top officials and military officers are meeting as president hugo chavez's health is worsening. he is having trouble reading and is said to be in a very delicate say. he recently returned from his company from cuba. those are your headlines. back to melissa and lori. melissa: a trillion dollars.

that is your money, by the way. why do we have a trillion dollar deficit? time now for lou dobbs. lou: i like that. what an intro. delighted to be with you, as always, at this time of day. any other time for that matter. that is a lot of money. the argument that is underway in washington, d.c. right now is it is disguised. this is an argument in washington, d.c. right now about who will have the greatest claim on taxpayer money. right now, with medicare and medicaid, it is our aging population which is set to double between now and 2040. the claim will get even greater. the younger generations in which we should be investing money,

the youngest of those folks, who are in public schools, we should be investing in. that money will be siphoned off as it is. i can hear not the people saying, wait a minute, i paid my social security. we do not need to have another broken contract. we need to write a new contract for those who are under the age of 50 right now. we need to prepare for a future in which we do not have the money. we have to have some adult leadership in washington, d.c. right now, there is a void. lori: democrats, you got your tax increase. are we holding steady? lou: right now the principles

and the republican party. i am excited for the first time in years that the republicans have the opportunity to lead and do so. this is a time where they understand they have to go to regular order. we will see deals cooked right out in the open. you would have meetings, you would have hearings. john boehner has promised exactly that. i think that means a clear, new direction for the republican party. more importantly, for the american government. think back to this. healthcare was cooked up behind closed doors.

every piece of major legislation. now the president comes forward and says we have to do this with a continued resolution. we are just going to have a grand organ. the president has dropped to the lowest approval rating since last year. he is at 46%. there will be no grand organ. they need to measure up their accomplishments. it would be appropriate for them to be somewhat more modest rather than -- lori: i will hold out more optimism that we will get a grand bargain in my lifetime.

lou: i do not understand why that would be a grand bargain. right now, again so we are dealing with here, this is a time for people to deal with small simple things. it is time to start looking responsibly at what we are asking our troops. why in the world are we investing so much in other programs? instead of fussing over all of that, $115 billion for these programs and fraud over $100 million in medicare alone. this is a time for leadership to get its head on straight.

melissa: thank you, lou. you can always see it lou at this time and at 7:00 p.m. and 10:00 p.m. eastern every night on this channel. tonight you have former mayor, rudy giuliani. lou: i do. lori: i look forward to it. i just hope that all of those -- lou: you want a happy ending. you want a candy rock mountain. lori: brushing aside the sequester. the ceo of ge aerospace is our guest next. melissa: march 5 may not be martha stewart's day. she is headed back to court.

lori: who is up and who is down. most of them are up. we are back after this. ♪

lori: time for stocks. back to the floor of the new york stock exchange and nicole petallides. dow closing in on session highs on this report setting day. >> this is exciting day. we're up 155 points. it look at this. it is green up there. green across all of this. gold is in the green. bank stocks are in the green as we talk about obviously setting new record highs on the dow jones industrials up 1%. i want to move to financials and look at jpmorgan chase, up 1 1/2% for this dow component which year-to-date is up about 13%. we'll look at some other names in the financial realm. as i noted the banking index has an up arrow.

they really haven't been the leaders per se. you have seen bank of america now move into the green with today's move, finally flat for the year. it was one of the losers for the year 2013. goldman sachs on the other hand has been a great performer for 2013 up over 20%. there is a look at some of the financials including jpmorgan, dow component. back to you. melissa: i can in coal, thanks so much. this may not be martha stewart's day. nine years ago she was convicted making false statements on the imclone stock. today she is in court testifying over dueling deals with macy's and jcpenney. they are suing martha stewart living for breach of contract. she was in a exclusive deal with macy's when she was wood with another deal by jcpenney ceo ron john. quite the drama. lori: she should go on vacation in march. quite a bad history for her. e -- bea aerospace is

the leader in commercial aircraft interiors, seats an gal list. they reported record earnings and revenue for 2012. in the face of sequestration, boeing dreamliner's woes and overall sluggish u.s. economy will the company keep up this pace of growth? we're pleased to be joined by the chairman and ceo of bea aerospace. aim minute currie. thanks for coming in. that is in large part why, you guys have been so successful over the last year for sure but really over the last couple years. when you get an analyst call by goldman sachs upgrading your shares to 68 bucks each saying this is the best multiyear growth story in aerospace that has to be quite satisfying. lori: obviously it is. and we are fortunate to have had very successful engineering and r&d organization which has developed a lot of new

products which boeing and airbus and our airline customers have determined they like to have on their aircraft in the coming years. lori: we can show our viewers some of these new upgraded, latest and greatest if you will in airline interiors. seats, cabins as i said, off the overall introduction. tell me what types of things airlines are ordering from you? >> we're the largest supplier of super first class suites for the front ends of large commercial airliners such as the triple 7 or the a380. those are small privacy partments actually. dining for two. lay flatbed, small refrigerator, tv, accept lighting. so very high-end flying for the privileged few. also business class seating. we're the largest in the world and manufacture of food, preparation and storage equipment. we recently have been awarded a program by boeing to be their exclusive supplier of lavatories in

the 737. lori: that's a claim to fame. >> that is claim to fame. lori: boeing lava tories by be aerospace. >> it is a big deal eboeing has been in the news with the 787 dreamliner and batteries, delays. why do you think they continue to order from you? >> i think boeing is one of the best engineering companies in the world. and i think the problems with the 787 should have been expected. it is an incredit whether i complex, almost all-electric aircraft. so now they have a battery issue. i think boeing reported yesterday they believe they have a solution and they're awaiting faa approval. we are very confident, giving the competency of that organization that aircraft will be flying very soon. it is an important aircraft for us as is the 777 and the

747 and the a380 and the a330. we're on pretty much every aircraft in the world with our systems. lori: sorry to interrupt you. one final question. as you know we're down to a handful of legacy carriers. with the domestic economy sluggish at best right now, part of your success right in the last year has been the solid backlog. are you expecting that to taper off at all just for the simple fact there aren't as many airlines out there anymore? >> you know, we're not. in fact there are more airlines globally than there ever have been. and what's drive being the growth in the world, basically the economies and airline travel is structural growth in travel in the developing parts of the world. so asia, pac rim, middle east, africa, latin america, more than hatch our business is international business now. we truly are a global company. so airline travel grew last year by 5 1/2% and although u.s. travel was very low and

european travel was noncommit tent, global traffic grew by over 5%. lori: a key distinction. >> that's right. lori: thank you so much. amin khuory the chairman and ceo of be -- be aerospace. >> thanks for having me. melissa: is the "oracle of omaha" losing his midas touch? charlie gasparino on buffett's investing performance that is coming up next. lori: what is going on in the bond market? are they selling treasurys today? they sure are. 10-year up a little bit at 1.90%. we're back after this. friday night, buddy. you are gonna need a wingman. and my cash back keeps the party going. but my airline miles take it worldwide. [ male announcer ] it shouldn't be this hard. with creditcards.com, it's easy to search hundreds of cards

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>> i'm dennis kneale with our fox business brief. it's a big day for the markets with the blue-chips hitting an all-time high and blowing past it. the dow is up 149 at 14,277. bailed out and government owned fannie mae and freddie mac teaming up in a joint company venture for overseeing home loans, the first step towards shrinking the government's role in mortgage finance. the new company would merge fannie and freddie's bond units and would be a separate entity spun off from those two. same day delivery failing to lure online shoppers. a survey from boston consulting group says one. hottest e-commerce trends is too expennive for most americans. when would get them to shop online more, nearly 75% surveyed said free delivery. thank you, amazon. that is the latest from fox business, giving you the power to prosper

lori: say it ain't so. is the "oracle of omaha" losing his midas touch? fox business senior correspondent charlie gasparino here with a look at the performance of warren buffett. >> you know, he is supposedly a great investor. i'm sure he is. he doesn't return my phone calls. people who don't return my phone calls i usually do stories about. in any event here is my little story about warren buffett. all you have to do i think when you crunch the numbers. he called his last year performance subpar. i would say the last five and 10 years are pretty subpar, when you're an investor, you look at five-year performance. that is the key benchmark that takes into account the financial crisis back in 2008. look at that. not beating the indexes. we should point out that the s&p 500 is a growth index as

well. so a lot of different stocks in there. when you compare them apples to apples with the value, remember berkshire hathaway is a value fund, still beating that. still losing to that. hear is the key measurement on the side. that is deviation. that is not anything to do with what mr. buffett like to do in bed. that is called standard deviation. it's a measure of risk. and when you look at the measures of risk, he is pretty high up there. berkshire hathaway is a fairly high level of risk for the amount of return that you're taking. that means, he is a value investor. he goes in there. he buys companies, allegedly by the markets. he rolls the dice on companies like lubrizol or, what is the other one, burlington-northern railroads and, you know, he loses sometimes and he wins sometimes. the problem with his numbers, that based on the risk that he is taking, he is not

generating the type of returns. we should point out that berkshire hathaway is obviously very profitable. in his, i believe his letter came out on friday. i think they made this year something like $24 billion. he is also said that his company may be too big to manage, right? 250 -- $240 billion market cap, right? that is hard to produce outsized returns when dealing with that much money. you have to make bigger and better bets. that said, he can easily return mon to shareholders. he is loathe to give dividends. clearly, you know, something is going on there we should point out he is 81 years old. melissa: he called his performance subpar. you put that at the bottom of the screen. >> one year performance. here's what the, thing that strikes me about this analysis, is that the notion that over, that buffett is supposed to be very good in the long term, right? that's the whole thing. you know, he beats everything over 10 years. well he doesn't beat the s&p over 10 years. he beats everything over

five years. he well he doesn't beat the s&p over five years. his long-term performance is actually not that great. as a matter of fact, he had a couple years recently where he shot the lights out. i think that is what people have to realize. there is pr game here. he is obviously a great investor. he has been doing this a long time. very smart man. president obama, i guess you could say favorite fat cat calling for tax increases things of that nature. that said, it is kind of interesting. he is not exactly a guy that doesn't roll the dice. he is a guy that does roll the dice. investors should know that. if you look at his investment returns, you know he is not making it. what we should point out, one other thing i think when i say 81 years old, he could be any age and invest in my view. the. the question does become should he be transitioning? ever since mr. zokol left, i can't remember, the guy that left in the big, big david

sokol. melissa: david. >> he was the heir apparent. he got in trouble, there was an issue involving lubrizol of all companies. melissa: right. >> that he recommended that stock, that buffett should buy which buffett ultimately did buy and he owned shares of it. there is disagreement whether he told buffett or how well he described it. buffett said it wasn't very well. sokol said he did what he was supposed to do. in any event that guy was the heir apparent. i don't know who the heir apparent is now. this is kind of interesting. lori: work those phones, charlie. >> like i said, he doesn't return my calls. lori: appreciate your report today, charlie gasparino. melissa: let's check the markets. nicole petallides on the floor of the new york stock exchange. nicole, up 142. here we go. >> it is pretty amazing, melissa and lori, that we have the day we're having. the market is breaking out, setting record all-time new highs on the dow jones industrials. we're 20 points off the highs of the day. so we're holding onto some

serious gains. the dow jones industrials up 1%, much like the s&p 500. the nasdaq, tech-heavy nasdaq, up 1.25%, which brings me to tech winners we're following, qualcomm and apple with up arrows. when i think of apple, you have to remember after a four-day slump you have an up arrow here. qualcomm raising dividend and issuing a $5 billion share buyback. that is obvious performer as well. back to you. melissa: nicole, thanks so much. lori: when the small screen means bigger bucks, apple is looking for the next big thing and banking on i-watch. melissa: this all-time new high on the dow so why not celebrate with one of these? a look at lamborghini's $3.9 million supercar ahead. ♪ .

melissa: the dow hitting a new all-time high intraday. the white house declining to comment on the dow's performance. they say the economy, quote, is poised to do well. the big question of course is can we close at these levels? don't miss chriz claim live from the new york stock exchange just about an hour from now for the last hour of trading on this big, big day. lori: it is historic, that's for sure. forget the sequester causing delays. flyers in chicago are stuck on the ground because heavy snow is moving its way from minneapolis down to the other cities. it is dubbed the snow-qester. jeff flock has a look. >> i like that, lori. we were here yesterday at the impacts of sequester. doesn't see much yesterday.

you will not sigh impacts at tsa lines. can you see all the way down to that line? it's a line, but that is no worse than typically is on a typical day like today. there you go. i want to get you outside if i can before we run out of time. i heard you first talking about warren buffett. look at airline stocks. they're actually doing well today, but of course everybody is doing well today. but you know what warren buffett said in airline stocks? said if a wise investor would have been around at kitty hawk he would have shot orville and wilbur down. look at the scene from outside of o'hare, out in the beautiful snow, the worst snow fall of the season in chicago. happy business traveler day. lori: what a hassle. you're not worse for the wear, jeff. melissa: no. he is always cheery. looks like good timing for apple as the rumored i-watch could mean big bucks for the company. shibani joshi has all the details. >> hi, there, melissa. big buck indeed. this is $6 billion opportunity according to an

analyst at citigroup saying the i-watch would generate a big categorigoer for the company. piper jaffray believes it will be even replace your smartphone one day. i'm not even kidding about this. piper jaffray is issuing a this week saying we believe wearable technology is a became changing trend as we believe will ultimately replace the smartphone. as far as what the i-watch could look like here are some rumors we're hearing today heart right monitor and pedometer. mapping and ios integration. big companies tried and failed. i don't know if you remember microsoft and fossil unveiled a new watch. that is one on amazon.

the iwatch doesn't look anything like that. the name your price and everything else matters here. that is the pebble watch i took a look at and interviewed the ceo at ces that is some competition that apple stands to face. 6 billion bucks on the line though. melissa: very cool. shibani, thanks so much. lori: super cars come with super price tags. in honor of its 50th anniversary the lamborghini is introducing a $3.9 million car at the auto show. veneno has a go from 0 to 62 miles an hour in 2.8 section. you need that in manhattan. can reach a top speed of 220 miles per hour. it is v-12 engine, i'm speaking greek at least to me. it has 7-speed automated manual transmission. don't rush to the bank to withdraw a cool 4 million. only three will be made and they're already spoken for. melissa: is one of them for you? lori: yeah, sitting in my

garage. you're kidding me. i'm not a car person. melissa: that is really something. lori: that is obscene to spend that much money for a car. melissa: if you have money to burn, why not. lori: that is all the perspective. the dow at a new record. what is the best money move to make right now? big fund money manager michael cuggino weighs in with ashley and tracy. keep it here. ♪ [ male announcer ] this is karen and jeremiah. they don't know it yet, but they're gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, they'll find some retirement people who are paid on salary, not commission. they'll get straightforward guidance and be able to focus on other things, like each other, which isn't rocket science. it's just common sense. from td ameritrade.

you are gonna need a wingman. and my cash back keeps the party going. but my airline miles take it worldwide. [ male announcer ] it shouldn't be this hard. with crediards.com, it's easy to search hundreds of cards and apply online. creditcards.com. ashley: good afternoon, everybody. i'm ashley webster. tracy: i'm tracy byrnes. we're kind of raising the roof on the dow 30. the blue chip index smashing through its record high. the dow is up a whopping 136 points right now. so how high will it go? and should you adjust your portfolio right now? we're looking for some answers ahead. ashley: several airline stocks by the way are hitting a 52-week highs with reduced capacity boosting profits so is there any

limit on how high these stocks can fly? one leading airline analyst is here to tell us about it. tracy: and the first step in getting the government out of housing finance. freddie mac and fannie mae are merging some operations. how will this affect the housing recovery? we'll have that coming up. ashley: first up the dow is breaking the record high which it held for nearly six years. nicole petallides on the floor of the new york stock exchange on a historic day, nicole. >> this is a great day. it is an historic day, obviously. record-setting day for all the bulls out there. i say this cautiously. some people are betting the other way or their particular stocks didn't necessarily participate in this rally. however, today is the day, the dow broke through and hit all-time record highs, even took out those highs, that we set back in 2007. there is a nice five-year chart for you. you may remember obviously in 2007 we were at 14,000. when it came to 2009, our bear market low, closing low

was actually 6500 and change, 64547. we rallied. 118% since that time. -- 6547. names like united technology, hewlett-packard, american express, cisco, bank of america are some of the top performers in percentage terms but about 28 of 30 names are in the green this year and hewlett-packard being the best of the bunch. back to you. ashley: nicole petallides in green as well. thank you so much, nicole. appreciate it. tracy: so what is the dow's new record mean for your portfolio? our next guest says diversification is key. he says for the long term a multiasset class strategy will pay off. michael cue gene mow -- cuggino, permanent portfolio manager manager joins us now. you don't believe this. based on gdp numbers, recession could very well be possible? >> what we're seeing right now is stock market outperformance, you know,

because corporate earnings have been strong, companies have squeezed profits out of very little revenue growth. and dividend yields are supportable by those earnings and there is nowhere else to go really for return at the moment. so investors have been going towards stocks, for the better part of last four years. and you know with a couple of blips in between. and you know, last 18 months as well. and so, the issue though is that the underlying economy is basically flat lined, based on the latest gdp numbers. so in the short term you would have equity outperformance, but in the long term, for that next big leg up, that sustained growth you need the economy to be stronger and i just don't know if i see that right now given what's out there. ashley: but, michael, you could argue, look, this bull market isn't going to end anytime soon as long as the fed keeps pumping in this cheap money and with unemployment not improving at any great rate what is to stop this market from moving higher and higher? >> can you say bubble ultimately? no, i mean the, you're

absolutely right and you know, if you listen to the fed comments last week you know on one hand they say that their dual mandate says they will pump money into the economy until unemployment is around 6, 6.5% and then in separate comments you hear commentary they don't expect unemployment to get down to 6% until say, 2015, 16, whatever. what that tells me you have potentially a multiyear scenario here of 85 billion plus in bond subsidies, plus practically zero fed funds rate going on ad infinitum here. that is just the u.s. never mind the rest of the world. and so that is a tremendous amount of liquidity. that liquiditity has to go somewhere and the return is in stocks and that's where it is going. tracy: we should try to make money off that. whether it is right or wrong the investors should be part of this. your fund is know load fund. real estate is one of the top sectors you hold is that

because of the fed pumping all the money in trying to pump up the housing market that you're trying to take advantage of it? >> it is part of our diversified strategy to hold real estate related invests. so we think it is a core part of an investor's diversified strategy. no question is outperformed lately and should continue to going forward. hoisting has picked up a little bit although i don't know if i quite believe the strength of that recovery. it could easily be choked off by a rise in tra interest rates based on market rates. we have seen improvement there. real estate investment trusts have done well. landlords make money, raise rents, fully occupy the buildings and lease to own thing on the residential side has remained to the benefit of apartments as well. so there has been some benefit there but real estate, you would also expect to capture some of this liquidity that is out there right now and we've certainly gotten that. ashley: do you hold, according to the notes, michael, 25% in gold and silver. isn't the strong dollar

killing you? >> well, the strong dollar has not helped us. all the currencies are going, you know, racing to the bottom if you will. and the dollar has been racing to the bottom because of our intangible value rule of law, whatever it is in the u.s. that investors come here for. that's helped the dollar vis-a-vis everybody else, that reserve currency. and so basically in our asset balanced portfolio right now the permanent portfolio, to the extent our equities have outperformed, that has been offset by the decline in say, gold and silver the first couple of months this year. ashley: yeah. >> so it has been basically a break even proposition in the short term. but we're longer term investors and we view this as a core part of an investors longer term strategy because stocks will not go to the moon. they will correct and other asset classes will perform at some other point in time and you need to be properly spread out at least for a core part of your portfolio. tracy: michael, thank you for being with us. michael also holds materials

and manufacturing, so also a play on housings as well. ashley: yeah. >> thanks. tracy: so oil trading higher. look at it. not much. up about 45 -- look at that, about 45 cents right now? ashley: yeah. tracy: i can't see that far. a day when it dipped below 90 for the first time since september and recorded lowest settlement in 2013. people getting a pump break at the pump? who? gas is down a penny. 3.74, a quarter a month ago. i brought my rye seat. paid $3.79 a gallon. to fill my little acura. ashley: are you driving a hummer? tracy: i wish. this is once a week. ashley: $374 a month.

ouch. tracy: that is like my little sports car. my kid tell me is the penny is going away. that's what they learn in school these days. so sad. so there goes the penny. now for the newest deadline for washington, can washington come to an agreement before the government runs out of the money before the end of the month? here with key ills at that -- with details from capitol hill is rich edson. >> they're working on it. there is optimism they could avoid a government shutdown. the funding runs out on march 27th. the house will vote tomorrow or the next day to fund the government for the rest of the fiscal year. the timing depends on the snowstorm we're supposed to get tomorrow, dubbed the snow-qeester named after the sequester, unfortunately, the automatic spending cuts that kick in. this includes the spending cuts. funding levels consistent with all that. plenty on capitol hill who want to roll back the cuts. >> we don't want the cr used to further the sequester

cuts. the republicans are using the cr, continuing resolution to fund the government to put in their sequester cuts. so they're playing games again. as i said, this is the new normal for our republican colleagues, but i had shut not be the business as usual for our government. we should do this the right way. >> this battle of having cliffs and having these deadlines this, is no way to run a government. but until the president goats serious about the serious structural spending problem that we have, we're going to have to deal with it. >> now the house includes a handful of change to this when it comes to the automatic spending cuts. for the department of defense and military construction, allows a little bit more flexibility, funds things that are cut in the sequester, those automatic spending cuts by cutting elsewhere. funding levels do remain the same but it is a much better construction of those spending cuts and that funding when you talk to folks here on the hill. over on the senate side, if the house does manage to pass this, there is sense of optimism they could pass

this through the senate as well. there might be tweaks to it. the republican in charge of counting votes on the senate side, senator john cornyn says he is hopeful we're end iring the age of aquarius. there will be hope, peace and love on this bill. wow! back to you. ashley:. wow!. tracy: get out the bellbottom toms, baby. rich edson, thanks very much. ashley: $85 billion in spending cuts on sequester. how much is the fed pumping in every month? 85 billion. tracy: that's a great point. ashley: much more on the market ahead. the dow as we know hitting a record high. so how high will it go? you have to keep it right here to find out. >> plus several airline stocks trading near 52-week highs. is there more sky to climb, at least in these stocks? first as we do every day at this time of day, let's look how oil is trading. as we mentioned, slightly up, 55 cents. $90.67 a barrel. we'll be right back. she's still the one for you -

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ashley: time to make money with charles payne. it is a huge day for the dow hitting a new record high. so what do you make of this rally, charles? ultimately it is a psychological level but what's the biggest story here? >> the biggest story is that it happened. in other words, i just think some people have given up on the country, given up on the market. and i think there's a big problem when people sort of still make the correlation that the stock market, particularly the dow, is a direct example or reflection of the u.s. economy when in fact --. when i my book, be smart, act fast, get rich. that was more of a correlation but that is changing rapidly. caterpillar gets 70% of the its revenue from outside the country. apple 66%. and on down the line but it is good to see that it happened. as your last guest, the valuations are still much, very, very reasonable. ashley: yeah. >> we're not anywhere near

frothy. no one is talking about it at the watercooler. there are some doubters out there it kind of makes me feel good. tracy: let's talk about that you always talk to people at home. the people at home are afraid. they have been ought the whole time. we erased everything. we're back to square one. do we get in now? >> wrote a piece about two weeks ago. no one remembered who the guy was, michael frog. ashley: i know michael j. fox. >> the cartoon when the construction worker found a frog inside of a thing, and did the song and dance. every time he took him to audition and sat there? michael j frog. ashley: you're my baby. >> hello my baby. hello, big-time gal. anyway how the market is for so many people that missed it. it looks fantastic when you're not in it. as soon as you jump in, ribit. ribbit. in other words, i'm telling people that, if you do get into this market, we have some sort of a correction, don't say woe is me.

don't buy one stock. 40% of the people who are in the market have one stock. that is when it becomes a casino. you buy one stock and give it shot at the top. make this lifelong thing. my subscribers are more 20% cash. i'm riding this. i sent out a few alerts to take profits. i do believe the fundamentals justify where the market is. don't be afraid. don't expect there won't be some sort of a up did but don't let that dissuade you from owning great american companies. ashley: of course. you know what is ironic, charles, thinking it through, i think the sequester was very market positive. ultimately all the prediction of the lost jobs means the fed will have to keep pumping cheap money into the market with lost jobs. >> there is not a lot of fed money in the market yet. i think a lot hit the housing market. when it gets frothy, volumes will be up. people who were negative will turn positive. everyone will have an investment. could be dow 15,000. at some point you know what will hit the fan with respect to the federal

reserve but right now look for great american companies with global tentacles. michael j. frog. tracy: love it. quarter past the hour. let's ask nicole if she remembers michael j. frog. down on the floor of the new york stock exchange. >> i missed the question. i was reading they will have bon jovi radio on sirius xm on the channel. tracy: that is way more important. >> keeping up with headlines. michael j. fox? i'm not sure. talk about the dow. dow jones industrials up 141 points. that is gain of 1%. s&p also up about 1% and tech heavy has deck, the best of the bunch -- nasdaq is up. we're hitting numbers we broke through in 2007. look at google. on february 19th broke 800. here it is today at 837,

hitting an all-time high today of $840.15. you may remember back in 2004, the ipo was under 90 bucks. it was $84. here it is at 837. back to you. tracy: thank you, nicole. i meant what i said. jon bon jovi way more important. thank you very much. ashley: whatever. we're tracking the markets every move with the dow closing close to a new record. tracy: plus big travel delays? well don't blame the sequester. we're live from o'hare next. but first this is how the dollar is moving right now. ash will tell you. ashley: there you go. look at this. all of these currencies are up against the dollar. in other words the dollar weaker, the euro coming back at 1.3046. the pound is a hit, to hit 1.49 just a day ago, is back up to 1.51. we'll be right back. ♪

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ashley: welcome back, everybody. the dow is up 141 points, blowing out the all-time record high, intraday high of 14,198. that was in october of 2007. we continue to seat new highs as we move along. the market is up 141 points at this point. tracy: so all right.

forget the sequester causing delays. travelers in chicago are stuck on the ground because of a "snowquester" moving its way from minneapolis through the windy city. jeff flock yet again in the snow. i hope you're inside this time. o'hare international airport. no, there he is, of course not. jeff. >> "snowquester" impact as lot bigger than sequester impacts. this is the tower at o'hare. perhaps you see it. the impact is not that strong here because of the snow either. if you look at flights getting out, a lot of flights are getting out. a lot of them are canceled though. what they have done prohibitively canceled a lot of flights so there are not really a lot of delays. they spaced operations out. folks are actually, ones that have a flight, are getting where they need to go in the worst snowstorm of the year in chicago. take a look at numbers though. a lot of flights have been canceled. look at the latest numbers. these are from flight stats. o'hare alone, over a

thousand cancellations. midway acrosstown, 241 cancellations. and minneapolis-st. paul airport, 114. that is the latest numbers right now. take you inside the terminal. we'll show you the tsa lines before we get away here. take a look over here. maybe you can see. not a lot of people in line. no sequester impacts that i see. more "snowquester" impacts. tracy: jeff flock, you stay warm. thank you. ashley: stay right there, jeff. all right. airlines have enjoyed a story book run in the last year as mergers helped reduce capacity. the question now whether pricing discipline will continue to prevail in this notoriously difficult sector. here to discuss the future of airline stocks, bob macadoo, managing director for imperial capital. thanks again for joining us. we've seen the airline stocks move nicely higher. it can't all be down to cheap crude oil prices,

right? >> no. i think you're seeing the history that's changed a little bit here recently. and the guys that are running airlines are now thinking about profits rather than market share. and so, keeping a lid on excess capacity is really what is driving a lot of those, the better numbers. ashley: you've seen household incomes taking a hit with these payroll taxes moving higher. could that hurt the airlines moving forward as consumers rein in spending? >> doesn't seem like it is happening. we talked to a number of airlines recently and nobody seems to be seeing that the tax increases are really hitting anything. so you know we've seen in the last day or two the revenue results for a couple of the airlines and everything seems to be right on track. tax problems is not the issue. ashley: all right. so is consolidation in the industry essentially over? we had the big america american-us airways. we knew it was coming. it actually happened. now is that it for the industry? >> i think so. there are really, if there are any others it will be

small guys and they aren't going to be big enough to have a real impact. we have all the big ones put together. we are down to the four. we'll have american, delta, united and southwest airtran coming together. once you get past that, jetblue, frontier, and a fuel smaller guys none of them see it geographically such it makes sense or even more importantly the managements don't seem too interested trying to put things together. so i think this is probably it. ashley: fewer options for the consumer normally means higher prices. can we expect air fares to rise slowly? >> i think you will see modestly, maybe with inflation. but i think more importantly what probably will cause people to complain as if there were higher prices, it will be without new capacity coming on and with a little bit of growth in gdp, you probably see that it is tougher and tougher to find really cheap seats. occasion 59, 79, $89 seats will be harder to find.

you will be stuck with middle of the road $200 seats more often than not. ashley: many investors wouldn't even look or touch the airline sector as an investment with a 10 fool pole. is that changing? is there some real good business strategy going on now that they could be a attractive investment? >> there will always be volatile. there is probably still some risk there it is not for everybody but it certainly seems like we've kind of turned the corner. we have the consolidation. we have a group of guys running airlines which as one guy said the other day, no longer are larger than life guys running airlines. the guys running them are former accountants, former cfos, former lawyers. so the business is now, let's make some money. so you still have the risk that something breaks out in the middle east and price of oil spikes real quickly. ashley: right. >> that could cause a problem. generally the business has changed. it is a different business now. ashley: better times ahead. bob macadoo from imperial capital. thanks for joining us. >> good to be here.

tracy: only didn't have pay for cookies. ashley: i know. prices aren't going down basically. tracy: that's for sure. we have an hour and a half left to go in the trading day. we're going to continue to watch today's rally for you. what will the new record for the dow be? keep it right here to find out. ashley: plus a dire warning from one investment icon about the one thing that could threaten this rally and our economy as we head for the break, take a look at some of today's winners and losers on the s&p. we'll be right back. friday night, buddy.

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all pretty much green. let's head down to the floor of the new york stock exchange. nicole petallides standing by. nicole: and exciting day on wall street. we have liz claman with us today to celebrate record days. liz: you can only imagine. we were both talking to traders five seconds ago. one trader just said to me, we do not want to talk you down, but really you would look for a moment where you would pause and refresh. huge records today. smashing. nicole: i know you will have a great 3:00 p.m. show. liz: yes. very busy. "countdown to the closing bell." tanner fitzgerald will talk about the overall picture about what really happens next.

will the banks continue to be the leaders? should you get in right now? he has three picks. that is something you really want to hear. we also have a contrarian. what is he buying? what is he selling? wait until you hear what he says you should be doing today. it was just a couple days ago that that they got out of china really spooked the markets. we will have all of that and much more as a lookup here here at the board. the dow jones still up 120. back to you guys.

tracy: we will see you at 3:00 o'clock. thank you very much. ashley: a storm is coming and it could be worse than what we experienced in 2008 or 2010. dyke. gerri willis joins us now with more. gerri: people listen to her because he is all over town. he says that in 1960, total government outlays, to entitlements were 28% of total spending. by 1994, they were 50%. this year, they will be 67%. that is going to entitlement programs.

that is not really something we can afford. no one is talking about it. he does say this will end badly. why can't we get washington to talk about this? because they are afraid. you get tossed out of office. so insistent on this, you have to touch the entitlements. this problem is going to be so severe, it will cost us so much money. ashley: he says he is not against seniors, he is against

stealing from future seniors. gerri: he is making the argument of keeping seniors save. we have to stop spending the way we are now. ashley: what you have coming up tonight? gerri: we are looking ahead. what happens next. what happens with interest rates? what happens with people's money? it is nice being at 14,250, but i would like to see 15,000. i would like to see 16,000. we have to do better. tracy: absolutely. ashley: think you very much, gerri. do not miss "the willis report" tonight. tracy: oil closing up $0.70.

$90.82 a barrel. ending the three-day losing streak. gold futures trying to rebound from their longest streak since 1997. sandra smith has more in today's trade. sandra: a lot of these commodities getting a boost today. janet yellin said she believes that bernanke and the fed to continue the money policy for some time. gold going up with the equity markets. on track to break a long losing streak in the market. look at gold, the actual metal itself, versus the dow jones industrial average. gold prices this year, down 6%. then, you look at the data which is outperforming anything in the precious metals.

then, you take gold, the metal itself and you compare it to the gold stock, the gold miners, for example. 24% so far this year. trading at a pe of 17. gold corporation is down. trading pretty cheaply. if you do not want to play those gold miners, you can also look at the gld. certainly a gold trade to be had there somewhere. tracy: thank you very much. ashley: the dow smashing to its an all-time high.

how high could it go? tracy: big changes for fannie mae and freddie mac. how could that impact the housing market? your ten year up one basis point. your 30 year moving slightly, as well. up to basis points. we will be right back. ♪

>> i am shibani joshi with your fox business brief. it is a bullish day on wall street. blue chips hitting an all-time high. the dow is moving higher. martha stewart testifying in court. macy's is suing martha stewart living. ikea's parent company is teaming up with marriott international to open up a new hotel chain aimed at young travelers on a budget. they planted about 50 hotels in europe over the next five years. the hotels will not use ikea furniture, but will keep cost down. that is the latest from the fox business network. giving you the power to prosper. ♪

tracy: big changes for ready mac and fannie mae. it could mean higher mortgage rates for you. ashley is giggling. >> a lot of people and congress are taking this very seriously. the government overseer has put forward a plan to merge the first in breaking up and expanding spending. this would be used as a foundation of the mortgage or get of the future. look at this. you have mel martinez on it, you have henry under clinton, they have forwarded a plan.

they have taken this idea very seriously. they will turn fannie and freddie into a major mortgage bond insurer. it would just be an guarantor of mortgage bonds. what they would do is, they would break up fannie and freddie, put their ballots sheet up for auction and that is how you pay back. you will see rates go up a half percentage point. you are able to charge fees. for the first time, they would have to pay state and local taxes.

that is already kind of melting away. fannie and freddie could turn into a major government -- they are taking it very seriously. sixteen months. already, the cbo is saying you can expect mortgage rates to go up a half percentage point if this moves. tracy: i have to buy something before rates go to the moon. >> that is a great point. the obama administration has put forward a plan. they want to see fannie and freddie resolve. you know, this is a first step.

you will see these two housing giants possibly broken up. that is how taxpayers will get paid back. ashley: very interesting. >> interesting stuff, right? ashley: great stuff. thank you. an update from jeff flock and our crew in chicago. southwest airlines canceling all flights. they are resuming service this evening. just a travel update there for you. southwest airlines canceling flights out of chicago things to the snow. it was called "the wizard of oz ," but let's face it, the film was all about dorothy. dennis kneale has this story. dennis: here comes the great and powerful. reinventing the most-watched movie of all time.

oz opens this friday. just one week after the disappointing debut of another costly fx extravaganza. that film took number one at the u.s. box office last weekend. it grossed only $28 million. "all of" -- consider one measure from the hollywood reporter. there is no dorothy or cowardly lion in this one. there are three hotties which. giving all new meaning to "i

will get you my pretty". nobody in hollywood does a better job of turning that into billions of dollars of revenue. toy story, pirates of the caribbean and "the avengers." ashley. ashley: great impersonation. tracy: will the adults go see " oz"? >> the kids will. tracy: it is quarter till. time for stocks as we do every 15 minutes. nicole petallides on the floor of the new york stock exchange. nicole: the highest ever for the dow jones industrials today.

jcpenney at a four-year low. macy's is at a new annual high. they are both battling it out for martha stewart's products and core. another blow to jcpenney's which is obviously been suffering. ashley: liz claman will be taking you through the last hour of trading. do not miss it. tracy: what does the payroll giants say about our job market pusher mark we will ask the companies chief financial officer next. first, let's take a look at some of the winners and losers.

the dow is up 133 points. we will be right back. ♪

ashley: welcome back. there it is, the dow up 128 points. it was up 140 earlier. just easing up a bit. we have gone through that. how high can we go? let's get liz claman down at the stock exchange for the last hour of trading. tracy: our next guest has his finger on the job growth both big and small.

what hiring trends is he saying? chief financial officer of adp. the largest payroll processor in the world. 600,000 plus clients at this point. >> that is right. tracy: with all the regulation that reporting standards healthcare now having to be reported, what are your clients saying about all of this? >> the amount of regulatory change, including the affordable health care act. it is good for us. they are looking for adp to help build and release them from the regulatory pressure. ashley: small businesses, i think, are realll struggling. the bigger companies that have a global footprint can actually were alive, but for the small companies that rely on the economy, credit is still tight

and they are not spending as much. it is a very tough environment. >> political uncertainty is certainly contributing. if you look at our national employment report last month, small businesses have generated a large amount. tracy: you are working with booties to get your report more in line with the government. i we talking about apples and oranges a little bit? why the constant pressure to get them in line? >> those two reports use two different methodologies. we use our real-time payroll data for more than 400,000 clients in the u.s.

we know at the date of running the report what the employment numbers should be. they have to choose and the numbers are just different methodology. tracy: they are a couple days behind in their report. >> they are a little different. what we like to focus on is really, well, our numbers have been a little bit higher. we have seen really stronger growth from our perspective the government. trading up. tracy: small business guys usually carry the weight. good stuff. thank you for coming in. >> thank you for having me. tracy: the voice of the little guy. that is what you need.

liz claman is going to take you through the last hour of trading live at the new york stock exchange. "countdown to the closing bell" is next. do not go anywhere. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade.