you'll replay that a million times. all right. in the markett now, the big sell off all about preparing for life without the fed, how investors are k looing ahead to when ben bernanke and company cash out and stop pumping the cash. the hour.k about that throughout what to do with the guys, republicans looking to use the ongoing irs targeting scandal as a reason to just reform the tax system. we have new ideas for you straight ahead. tim cook talking taxes again, the apple ceo says his company is paying its fair share, new comments from him in california, and then more and more mothers becoming the chief breadwinner for the entire family. ♪ >> dagen off today, but we have a lot to talk about with the

drop in the market, all the discussion about the federal reserve. the question you see at the bottom of the screen, we put out on twitter in terms when will ben bernanke pull the punch bowl, so feel free to tweet in answers to that because it's really, as we bring in at the top of the hour for stocks now, nicole, the central question of the market, and, boy, are we selling off now, nicole. >> right, when do you pull the punch bowl, take away the kool-aid, whatever you tall it, and that was front and center last week. it took a break yesterday. we are seeing that, obviously, reas faras far as -- resurfacing today. down 1.1% on the dow jones industrials, the dollar's actually lower, which often is a proponent of good news for the markets in equity, but not today, you all see three major averages to the downside, a few gains, hp and bank of america, but the rest of the names on dow

are lower led by mcdonald's, johnson & johnson, and verizon. the losers at the moment. back to you. ugly out there. >> the chairman of the critics speaking at the economic club in new york next hour coming on the heels of the announcement of the fed calling the tapering of qe, basically an annoying term to describe winding down of stimulus could begin as early as next month, this tapering. peter barnes live in washington with the latest, peter? >> here's a preview for you, connell, a the lot of central bank speak today, starting with the chairman at the economic club of new york speaking in an hour from now, sounded a bit critical of ben bernanke's easing money policies warning exiting the fed's $3 trillion in quantitative easing bond purchases will be hard especially in inflation climbs, quote, saying, there is no central bank that i know of

exhibited the capacity for that kind of fine tuning, he told an audience at the atlantic economic summit here in washington in mar. the spokesman says we'll talk about the economy and monetary policy saying this will be, quote, a complicated speech. i think we might see news today on his thoughts on the future of qe and monetary policy. now, one of the fed's big supporters of qe is also speaking in the next hour, and eric, the president of tte federal reserve bank of boston, a voting member this year, and we'll also hear from a fed copy cat in japan who is the new head of the bank of japan that embraced aggressive quantitative easing itself, and, obviously, investors here and japan have been enjoying the ride from all this economic stimulus. we may get clues as to whether that ride is coming to an end

soon. back to you. >> exactly. that's the basis for the twitter question on the punch bowl peter bringing chief investment officer for trust to talk more about this. ugly day, obviously, for stocks. today, interest rates talked about throughout the hour as well. what do you think of the relationship between the federal reserve, the easing money, when the policy ens, and as i said, the annoying word here the last few weeks, "tapering." >> right, fist of all, the market's due for a pull back. no question about that. it's been on the up trend the past five mounteds so pull backs of 4-6 #% should be viewed as healthy. view the market as fundment tally driven, not fed driven. the fact is the market just caught up to fundamentals because for the previous three years, fundamentals, that is earnings growth out paced returns, and know returns are catching up to where they

probably should have been, and we think that has more to do with earnings growth and fed policy which helped. >> this is an interesting case that hank makes because it's different than what they heard the last couple weeks, and it's a market that's fundamentally driven, not fed driven, what you just said. >> right. >> back that up with concrete examples what was you talk about, everybody educational say -- else saying, hey, once the party is over, the punch bowl analogy used earlier, this rally is over. you say, no, no, no, it's completely different? >> well, look, off of the lows, there's tremendous growth confirmed with dividend growth and dividends don't lie, and so that's why pe's have, for a long time, have been well below average and only recently in the past four months have pe's

caught up and now at the historical average, not over valued, probably fairly valued, and if you take in the low level of interest rates, the low level of inflation, you can make the case that stocks today are still cheap, so we do not think the market has gotten ahead, and i think the other concept column will theaf with keep in perspective is it is going to be a long time before the fed is at neutral, so even when they start tapering off the bond buying, you still have two more years of low interest rates, 2015 at the earliest, and the equity market should do well in a period in which the federal reserve is in an accommodative mode and accommodative for several more years as well. connell: there you go. dow down 170-plus, people are going crazy, therr's the perspective. hank, thanks for coming on. >> great to be with you. connell: the growing scandal surrounding the irs, some on

capitol hill screaming for tax reform, and john, the. 's editor at "forbes" talks about that. are you screaming, john? >> yeah, i mean, i never understood why the irs scrutinizing groups was as much as a scandal. that's what they do all the time, particularly those deemed their enemies, but, to me, the big scandal has always been that the irs exists at all. we're a nation founded on skepticism of politicians, and, yet, once a year, we have to cor -- cower and prove income to them. it's time for reform of that. connell: somebody yike low, supports reform, okay, we need a flat tax or sales tax or things talked about for a number of years. how do you turn this scandal into political opportunity? how should republicans and others who support that, what do they do now? >> it's fairly easy to point out the group that, again, it's is

unelected, scrutinizes unfairly that we want to abolish it. one way to do that is to say we're not going to penalize income as a way of raising revenues for the federal government. we're just going to create a national sales tax, and how that appeals to voters is then suddenly they will not have to prove their income to a group. the federal government will not eeen know what they earn, but when they go out and consume, that's how they'll pay their taxes. it will be great. it means they'll understand with each purchase the cost of government, awe also rather than penalizing income and production penalizes consumption, a better way to grow the economy. connell: okay. if you take off the advocacy hat for a minute and put on the analyst hat, the clear markets, hey, odds on this, do you think -- well, you push for it, say, yeah, we need the sales tax, will it happen? are there strong odds, or, no, no, no, it's never going to happen, is it?

or not now? >> great question, and you are right. what i described is why we'll never see a flat tax. connell: right. >> politicians compass to hand out favors. they need to raise money. connell: exactly. >> to support their campaigns. if we have a flat tax code or national sales tax, politicians would have taken from them their reason for existing which means they are never going to give it to us. connell: i understand the point of view, is there another policy to push forth? not -- it's like the old saying, like the administration used it, never waste a good scandal, if you have something like this in the news all the time, you could get it done opposed to push for something by your own admission does not look likely. >> you make a great point. what's hard to say is what that would be. you don't want to let the scandal go to waste. the iring's -- irs is discredited. is there a way to make taxes or make the tax code a little less

complicated as a result of this? again, when you say you want to do that, you are telling politicians we want to take from you or politicians must have to agree. we're going to give up power to make the irs, basically defang it. thatts hard to imagine so it strikes me that history says this scandal will go to waste. we won't get the reform that we want. connell: more than likely, yeah. john, thank you as always for coming on. >> thank you. connell: all right. another story everybody seems to be talking about today, new data reveals america's working mothers are now the primary breadwinners in a record 40% of u.s. households with children, up from 11% back in 1960, huge increase over the yyars with the working mother category. within it,6 # 2 #% single mothers, 37%, more than 5 million, were married earning higher incomes than their husbands earn. that's a big stat in that

research study today. we're still a few days away at this point from the official start of hurricane season, but there is, today, a storm already churning off the pacific coast of mexico, tropical storm barbara nearing hurricane strength, winds at 65 miles per hour now. it's about 70 miles south of mexico. those are the other big stories today in addition to the big market drop that we're seeing. also eric holder now plans to make the rounds of major news organization talking about protecting the first amendment. how about that? we'll get into that as we continue. as the class of 2013 is set for the real world, the next generation of college students are tried to beat the system, locking in tuition for four years. we'll have the story on that as well. liberty reserve, the government serving notice to the digital currency traders around the world is a hot topic lately, and now because of the arrests that liz reports on, people in that world are worried or thinking

about it. that's all coming up. again, the dow is weighed down. oil is dropping. we're down now 1.3%. there's a lot of red out there. we'll be right back on "marketings now." ♪ ♪ ♪

connell: it's "markets now," a big down day for the the markets, but quarter past the hour, smithfield foods, a big story in stocks now. how's it doing now? >> interesting. still doing very well today. we see the stock to the upside

by a significant amount, 25% gains, 32 #.48, hit the high today of 32.65. this is a big deal. it's a 4.7 billion deal, the chinese meat producer looking to acquire smithfield foods, as i said, 4.7 billion. this would be the largest take over of a u.s. company by a chinese buyer. there's scrutiny and hurdles, and what we saw with the food contamination in china with bird flu and the like, we'll continue to follow, but regulatory scrutiny likely here. connell: nicole, thank you very much. now, this is a very interesting story. we know the cost of college tuition continues to climb, but rick perry has a plan to help students lock in a four-year tuition rate. correspondent is in dallas, and we have more on that story. casey? >> hey, good to see you. you know, a lot of college kids graduate this month heading on

out into the big world with big bills. in fact, we know that college debt is now at about $1 trillion. that is more than all of the american credit card debt combined. can you believe that? lawmakers here in texas are taking steps to make the cost of higher education not only more affordable, but more predictable. the legislature passed a bill that requires state universities here to offer students a tuition freeze meaning they lock in their same rate for all four years. a huge advantage when you consider college tuition rates serge every year, up to four times above the regular rate of inflation. >> the institutions have incentives, and now it's not based on providing students with a good value. right now, they are based op getting students in the door and getting students to pay as much as they can. >> this bill now has to clear the state senate, but schools already doing it voluntarily

like on the ut dallas campus, for example. it only offers fixed tuition, and the students there say it eliminates a whole host of hassles. >> it extremely important for students like me to have a university that comes in and says, hey, when you start university, you pay x amount, and when you finish, you pay the same amount allowing me to plan my entire financial future that way. >> texas governor perry urges state schools to offer a $10,000 bachelor's degree and nine schools here already started doing that for certain majors. the governors of florida and wisconsin have also announced rolling out similar con cements in those states because, connell, as you know, the price of going to college these days is just outrageous. connell: lock it in. interesting con cement. thanks. >> yep. connell: tesla shareholders smile, but they wonder if the price is justified.

we'll talk about that in a moment. the latest chinese hack at the pentagon now being used to campaign for more defense dollars. is that justified? the spending? first, though, more on the markets. you know, we asked on twitter whether it's time for ben bernanke to pull the punch bowl. david says, "when is the good time to stop defacing our currency? now!" currencies, here they are. we'll be back in just a moment. ♪

at 23 minutes past the hour, this is your fox news minute. in pakistan, a u.s. drone strike has reportedly killed four suspected militants including the number two commander of the pakistani taliban. the drone strike near the afghan border is the first since president obama announced his new counterterrorism policy last week. the last reported drone strike in pakistan was in mid-april. minnesota congresswoman michele bachmann will not seek reelection in 2014. the tea party favorite and republican presidential candidate narrowly won a fourth

term in 2012. michele bachmann says she'll spend the final 18 months in office opposing obamacare. maybe former nba star dennis rodman had a diplomatic impact meeting with the north korean leader and basketball fan last month. according to reports to south korea, north korea's state television is proposing a basketball tournament with players from both koreas, china, and japan. well, there you are. those are the headlines. get you back to conne lerks connell: that solves everything. >> done deal. connell: tesla's stock topping hundred bucks after gaining 200% so far this year, the question is can it go much higher? you see it there, just below 10 4 #. jeff flock in a store in illinois to report more on the story. jeff? >> one of the 37tesla stores, at

the mall, if you spin larpd, next to tiffany, but in the midst of all of this, there is a tesla store, and very careful not to call it a dealership because there's laws against company-owned dealerships in 48 states around the country, but this is not the typical dealership. first of all, that's the model s, what the buzz is about. the stock today,,down, but, of course, it's the only day it's been down and the rest of the market down too. this had an incredible run, the stock. the question is can it keep up? well, came out to the dealership today -- i foolishly call it that, but 24 is a place where you cannot buy a car, by the way. you can take an order, they'll tell you all about the car, can't come in, for example, or take a test drive without scheduling it in advance, and, oh, by the way, there's no negotiation on the price of the car either, and, still, the sales have been tremendous. you know, you talk about can

this stock keep up? look at the other auto makers out there. where else could you put your stock investing dollars? general motors, ford, toyota, the market cap on those companies, gm's market cap is $46 billion, ford $60 billion, toyota, 188 billion. tesla, their market cap is now $12. $12 billion. it's impressive. a quote from twitter, one of the reasons the stock continues to have appreciation. he says, you know, there is a way for the the tesla mote eel s to be recharged throughout the country faster than filling a gas tank. a mysterious tweet getting the attention of investors, something probably about battery swapping. more about that, we'll told, later this week. that's why they still love this stock. connell: we love tweets, and it's a store, not a dealership. all right, jeff, out in

illinois. we'll have the latest on the digital currency bust in the news and what it means for the virtual currency exchanges out there, of course, including bitcoin, not involved in this, but that is what everybody's focused on. what was the effect? attorney general eric holder plans to make the rounds of major news organizations and talk it through, apparently talking about protecting the first amendment, we'll get into that with the judge. before all of that, we have to work hard to get this list together today, and on a down day for the markets, here's are the winners on the s&p 500. ♪ ♪

connell: markets now continues. digital currencies are coming under fire. elizabeth macdonald will cover that for us. meeting up with news organizations and talking about first amendment rights. we will have the judge on to talk about that. as we are at the bottom of the hour, let's go down to nicole petallides for stocks now. nicole: gsw, designer shoe warehouse, it is all about the shoes. the current quarter, not that great. same-store sales the client. footwear accessories.

their outlook are looking good. they raised their quarterly dividends 39%. extending a share repurchase program. that was set to expire in june. they are extending that. new high at these levels today. connell: there you go. and up stock in a down market. five suspects now under arrest. the biggest digital money laundering scheme in history. the suspects are from literary reserve. elizabeth macdonald is covering this story. she is joining us now. it puts this digital currency world in the crosshair.

liz: in case anyone has been going in their personal wallet, they will want to pay attention very carefully. law enforcement is telling fox business there are more liberty reserve type businesses out there. >> liberty reserve was intentionally created and structured to facilitate criminal act committee. it was, essentially, a black market bank. liz: anyone can set up a similar type of account using just their name, date of birth and an e-mail.

this is law enforcement going and in a covert operation. they would be using virtual currencies. the fear is that there are more liberty reserve type operations out there. there are concerns that drug traffickers and the like are using virtual currencies as well. they are talking about countries including malaysia, russia, vietnam and nigeria. connell: crazy stuff. elizabeth donald off in the newsroom today. we will get back to that.

the cyber leaks are now being used by the defense department to demand more government money. we bring peter brooks and. he joins us from d.c. is there a simple equation? >> you have to be able to defend your self. i assume that will cost money. private industry has to do it. it is in their own interest. all of your hard work and labor is being taken away.

connell: we have that chart of defense spending. there are assumptions that that would be going down now. because of the cyber threat, will it flatten out or continue to go up? >> it will continue to go up. there are more than 100 countries involved. it is the cutting edge of warfare. it is the cutting edge of espionage. we need to fund our bill to defend ourselves against it. connell: president obama is about to meet the new chinese california. how should it come up? you have all of these cyber

threats. maybe they are not in the background. how do you bring that up if you are president obama? >> it has been brought up before. they will probably talk about it. the chinese say that they are not doing it. i do not think that it will go anywhere. occasionally, we will see a drop-off. we are not sure exactly why that is. connell: it is always tough to look at it from someone else's point of view. what is happening to them? their response is you guys are manipulating you are currently more than we are. that has been their response in these types of meetings. is there any legitimacy to that? how do we then counter that? >> deny everything and then

nothing. that is what the chinese are doing here. spying happens. this sort of thing will happen. cyber in some ways is replacing the human eye. this is a very sensitive subject. people do not talk much about it. it is state sponsored. that is a huge difference here. they are going after our firms in taking away all of this intellectual property. this is not just a business issue, this is a national security issue. they are able to put trojan horses or viruses into our system. if things get ugly, u.s. defense capabilities may be direly affected. connell: thank you, sir.

>> thank you. connell: the attorney general getting set for a goodwill to work. talking about first amendment rights. we will have the very latest on that. we will talk to the judge about it. there is tim cook. he is talking about paying taxes with our friend walt mossberg. adam shapiro will have a report out from that. let's get back to the markets. the treasury yields have been destroyed the last couple days. we pulled back off of highs. certainly higher than where we have been in recent weeks on the ten year period we will be right back. ♪ [ whirring ]

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♪ >> i am lori rothman with their fox business three. u.s. bank reporting a record profit during the first quarter. that is nearly a 15% jump. the headquarters at the new york stock exchange may soon have a new owner.

cme will continue operation out of its trading floor in new york. the nations largest funeral home and cemetery operator is joining forces. the deal is expected to close by the end of the year or early next year. that is the latest from the fox business network. giving you the power to prosper. ♪ ♪ [ male announcer ] every car we build must make adnaline pum and pulses quicken. ♪ to help you not just to stay alive... but feel alive. the c-class is no exception. it's a mercedes-benz, through and through. see your authorized mercedes-benz dealer for exceptional offers through merdes-benz financial services. i did?

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you think? >> it almost seems that good news has turned out to be good news for the market. stocks, in response, has started to weaken a little bit. yields will start to rise. that could be bearish. it could stifle the housing recovery. we have seen a meaningful move out of lot of the sect tours. the market is down half a percent, it is still largely defensive. it will be interesting to see what happens in terms of this tapering. if this leads to a market pullback, that could take the pressure off the fed to taper. connell: your point about housing, we will report more on that. rates are historically low. people start to think these mortgage rates will stay low

forever. mark newton, thank you. eric holder is planning some visits. he will make the rounds in washington and have meetings and talk about first amendment rights. who better to talk to us about all of this than the judge. judge andrew napolitano. he will meet in washington. they will have a discussion about how to move forward. he apparently feels remorse. he is in a tough spot. >> it is unlikely that he will be prosecuted for perjury. he certainly misled the congress. lying requires an intentional effort to -- with regard to

prosecuting media people. a fair reading of his one line, i did not know anything about it, misled the congressman to believing someone else decided to authorize a search warrant for the private e-mails. we now know that mr. holder himself authorized the pursuit of james rosen. connell: this idea that you go around shopping for different

judges. >> i think some of our colleagues have jumped the gun. here is the brief history of what happened. when they sought the search warrant, they made an application to judge k who granted it to them. they were not shopping around for judges. the first and only judge they approached gave it to them. he then wrote on a copy of the search warrant, checked in error. they said what does this mean? judge kate did not resolve that himself. he asked another judge to resolve this. the judge saw no reason to seal it. he thought he should reveal it. two years later, the judge

change his mind and said it should be open. fox has the right to know this. connell: it is a long story, but you did a good job explaining it. it sounds like your analysis is this is a huge political problem for mr. holder. >> when the government seizes property from you or property about you, they have to tell you what they have. that was the dispute. the real problem was whether or not the justice department misled the first judge when they told him that they had evidence that james rosen was involved in a criminal conspiracy. when will the president start feeling the heat?

whether he technically told the truth or not, he clearly gave an inaccurate presentation. his office prosecutes people for doing what he arguably did in this case.% connell: only time will tell. your analysis is very valuable. as always, judge, a pleasure. we will get to tim cook. adam shapiro will have a report for us. tough to find winners in such a down market even though we are off the lows today. here are some on the nasdaq. ♪ with the spark miles card from capital one,

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connell: let's talk about the apple ceo, tim cook now. he touched on his thoughts about the future at the company, he talked taxes, adam shapiro is live at that event. >> first, as we are speaking, cheryl sandberg is actually on stage. she is talking about her book. before she spoke, we were

hearing from mary meeker. she said global smart phone penetration is at 21%. tim cook addressed the situation with samsung last night. they have sold 42 million ipads. all of that money that they are raising drew attention from congress, of course. here is how tim cook responded to that accusation last night. >> i think for multinational, the right approach would be simplicity. none of us could read it and make sense out of it.

>> the date team here is mobile first. now it is the rise of mobile technology and monetizing that and making money. lisa jackson joining apple. back to you. connell: thank you. their conference ran by our friend walt mossberg. dennis kneale and cheryl casone will be up next. the response to a major cyber attack could very well be on the ground. we will also talk about jcpenney who cannot catch a break. this billboard of a teakettle, apparently, a lot of people think it looks like hitler. great. just what jcpenney needed.

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dennis: hello. i am dennis kneale. cheryl: i am cheryl casone. the market is down triple digits. all that stimulus will disappear. that pullback is definitely coming soon. dennis: plus the cyber threat. jcpenney just cannot catch a break. the stock is down 5% for the year. a jcp billboard of a teakettle that some people say looks like hitler's hairline. can anything be done to save this brand? dennis: nicole petallides on the floor of the new york stock exchange.

nicole: down 116 points. right now we are down three quarters of 1%. the u.s. dollar has been to the downside all day. watching the ten year very closely today. the majority of the dow components have been to the downside. the banking index is squeezing out a game here. we have seen some names, obviously making some news. i also want to take a look at facebook in the light of some headlines that we are getting. you remember last may, when we have that ipo. it was a complete debacle. nasdaq will settle with a payment of a $10 million penalty. obviously, it was a really big deal and a lot of facebook shareholders were very disappointed that day. it went up and it went down. there was a lot that went into

that. back to you. cheryl: certainly a lot of memories go back to that day. nicole petallides thank you so much. fed tapering. certainly one of the things that is shaking the market today. we have robert luna here. fed chairman will be speaking soon. he is one of the critics of the feds bond buying program. he says this is stimulus and it has to be pulled away. does that hurt the markets, or are they expecting it? >> i think it has been telegraphed that the fed will be slamming on the brakes pretty soon. right now, the buying program is

$89 million a month. they are talking about the potential of slowing down. i do think that there are some areas that are very vulnerable. the traditional safe havens out there. with or without fed stimulus they are just a very overvalued sector right now. when you see the decline today, it is those stocks that actually leads the way down. the ones that have underperformed but have better .ua shins are the ones that are leading the way on the outside right now. i think you are seeing a rotation. cheryl: the s&p has had record after record. if you have say a 4% correction, for example, that is the timm to buy a newer opinion. >> yes. i think so.

the 50 day moving average has been some good support for the market. you want to be a little bit more selective. i don't think you go in and by the s&p as a whole. even some of the financials right now that will lead the way up. do not necessarily jump back into a procter and gamble or a general mills. cheryl: we do not have any big data coming in. it was positive, it was huge. we still have this shaky market. a big piece of that is china. one group saying that china will slow down. that kind of seems to shake the market so easily. is that still a problem, in your opinion? >> china has been a big story for the last decade. we are a little concerned.

market, in particular, rizzo, russia, india and china, that is kind of a last decade story. the smaller more faster growing emerging market like turkey, mexico, the philippines, i think those will be the next wave of growth. traditional areas like china, i do not think it will be as big of a deal as they are right now. cheryl: you picked a company that actually has soared. the stock is actually performed, especially in the last six months. do you still like it? >> yes, i do. obviously, not as much as i like it last year. as part of an overall portfolio, it still makes sense. it is trading at about 14 times

earnings. you can still get a good dividend at about 3%. i think it makes sense for investors. cheryl: i know you like cisco. we will keep an eye on all of it. thank you very much, robert. >> thank you, cheryl. ♪ dennis: cyber threat fallout. the u.s. should go on the cyber offensive. this is new details. where does u.s. policies stand in terms of retaliating? our producer sat down with former cia director general michael hayden. >> we have officially stated that it is our policy that we

will respond to an attack we will respond to the attack based upon on the affects of the attacks. not the means of the attack. if you cause grave physical harm and instruction by taking down critical networks, even though you have used a cyber weapon to do that, we do not confine ourselves to cyber weapons in response. the five joining us from milwaukee we have former security advisor to president obama. thank you for being with us, howard. a new report comes out. the chinese have cracked into 40 pentagon weapon systems, 30 other defense systems. what should we do about this right now? >> one of the things he really need to look at is not where it is coming from. why are they able to get into these systems to begin with.

1998 president clay and signed an executive director. again, president obama in 2011 signed an international strategy for cyberspace. yet, the vulnerabilities exist and while china is the noisiest, these systems are so wide open. so vulnerable. dennis: we have not closed yet. i get the feeling that government and industry are doong a whole lot of fiddling while cyberspace burns. what needs to happen to get people off the dime here? >> i think we have to take it seriously. we have upcoming meetings between the president and china and the u.s. hopefully, that will be part of the discussion. in the past, there really has not been a good entry point to sit down with other nations and say this is something we need to deal with internationally.

we also need to make sure we make this a ceo issue. the vast majority is owned and operated by private sector. it is still valid today. we need to get the ceos to another and say, listen, it is good for business, but it is also good tt protect ourselves from cyber threats. trying to shut down some critical infrastructure within the united states. dennis: it has always been described as more of a corporate espionage interests. is the bigger threat from china on the hacker front defense and warfare? >> that is interesting. there is no really good business reason for china to do a cyber attack against the u.s.

there are all kinds of reasons why that should not be the case. it is not a matter of people slinking around in the shadows and leaving rocks under bridges and things like that. china has been looking at defense contractors. looking at subcontractors. they are trying to get on classified designs and plans as shown in the report. it is a focus of not only them, but anyone else looking to be competitive in the defense world. we need to look at the issue of why are they able to do this. identity management. the world we live in today is based on user id and password. that would help keep people out of the system so they could not even get access to this stuff. dennis: thank you for being with us. >> thank you. take care.

cheryl: your online passwords may not be as secure as you think. a team of hackers was given 16,000 passwords to crack. they managed to crack between 62 and 90% of them in less than an hour. one cracking about six every minute. obviously, you better be checking your password right now or all of them. i do not know how many you have. that is pretty surprising, though. dennis: she is the first hispanic to co-own a major-league team. colorado rockies owner. live from the white house conference of hispanic business leaders. cheryl: plus bob dilenschneider on a award of a tea kettle that someone says looks like hitler's

hairline. kent jc pennies ever get a break? we will be talking about that. let's take a look at oil as we head to break. we will be right back. ♪

cheryl: taking a look at the fox business heat map. for the most part, we are in the red right now. robert luna was just on the show. cisco is up 40% over the last year. we have now given back. dennis: the markets giveth, the market taketh away. it is quarter after the hour. let's go to nicole petallides.

nicole: continuing to follow the market very closely. here is the latest. we know now that the nasdaq will pay $10 million in order to settle securities law violations about its mismanagement of the facebook ipo last may. obviously, it was a heavily traded public offering and the sec said for systems, poor decision-making. shares or stock. if you are buying and you do not know if you have bought, dubai more? that was the issue that people were facing on that day. you had so many investors so frustrated that day. it also kills consumer confidence. sec settlement on facebook is an important step forward. we have carefully viewed the

event. the nasdaq, of course things positive comments. this is the largest ever against an exchange. cheryl: thank you very much. nice coverage on that story today. we are also looking at this stock. it is jcpenney. they are down about 5% year to date. the ceo has been replaced. now they have a new issue they are dealing with. a user notice something strange. a billboard of a tea kettle that looks, in their opinion like hitler. that is a teapot that has been selling, actually very well. jcpenney does not like the publicity. twenty me now is robert

dilenschneider. they came out on twitter and said this was unintentional. should they have said anything at all? >> no. the more they talk about this, the more they will reinforce a negative image. they should say they made a mistake, which they did and get behind it and move n. they have bigger problems. you have the former ceo, now ceo again that does not seem to be able to catch a break from the shareholders or the buying public. >> i think what he does every morning is he wakes up and thinks about walmart and costco and kmart and everybody else that is trying to eat his lunch. those companies wake up and we think about the jcp customer and how we are going to get them. he needs to present a strategy. he should do it sometime in early september, late august.

cheryl: they come back with sales, they come back with discounts. you are mentioning other brands like sears. are they gone? >> jcpenney is right now on the brink. i would announce a major strategy in july. i would freeze everybody right now to get them speculating and thinking about what the strategy is. it is a high risk game, but it could work. macy's, walmart, target, kohl's, they are all eating their lunch. cheryl: do you think that jcpenney's will be around. number one was jcpenney to disappear. >> i do not think that they will close as a company. the potential for them to really lift off is quite good.%

he has to come up with a strategy. cheryl: are they behind the martha stewart controversies? >> complement to terry. he played that extremely well. i think it is behind them now. will martha stewart rise? cheryl: we will certainly see. cheryl: robert dilenschneider. thank you very much. dennis: will the coin be the next to be up in smoke. elizabeth macdonald investigates ahead. cheryl: eric holder now plans to make the rounds. reasons why coming up in the fox news minute. here is a look at the world currencies and how they are faring against the u.s. dollar. ♪

we went out and asked peoe a simple questn: how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, e thing that hasn't changed much is the official retirement age. ♪ the question is how do you ke sure you have the money you need to enjoy all of these years. ♪

♪ >> 23 minutes past the hour. i have your fox news minute.

in afghanistan, militants launched an attack. one guard was reportedly killed by a homicide bomber. a gunbattle followed. afghan police say seven foreigners working for the red cross have been rescued by security forces. the red cross provides humanitarian aid in afghanistan. the u.s. drone strike has reportedly killed four suspected militants in pakistan. it is the first since president obama announced his new counterterrorism policy last week. attorney general eric holder will meet with washington chief of the major networks and news organizations over the next two days. it is part of a review of doj guidelines. those are your headlines. get you back now to dennis.

dennis: thank you very much. let's talk bitcoin. are they going to go belly up? the biggest digital money laundering scheme in history. our own elizabeth macdonald is here. liz: good to be with you, dennis and cheryl. you will want to pay attention to what happened yesterday. here is u.s. attorney in manhattan on the shutdown of liberty reserve. take a listen. >> they deliberately operate in a way to attract criminals to break the law and launder the proceeds of their crimes. liz: these companies are moving capital anonymously using digital currency. there is over 100 anonymous payment systems. that is what is in the government sites.

here is what they found at liberty reserve. hacker accounts. what we are learning from law enforcement is, what happens in cyberspace will not say in cyberspace. u.s. law enforcement needs to go after cyber finance. breaking news, okay pay, they recently suspended all transactions with bitcoin. it is not commenting on this at all. officials who work with bitcoin. we reached out yesterday to get more comments about this case.

was going to be looking atement digital currencies. more to come. more investigations will be coming. dennis: thank you very much. cheryl: she is the first hispanic to own a major-league baseball team. dennis: gold is down over 10% this year. the rally is coming. meanwhile, take a look at some of today's s&p winners and losers. ♪ my mother made the best toffee in world.

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dennis: bracing for life without the fed. investors are looking forward to with bernanke and companies stop filling the punch bowl. the woman who owns -- advertisers pulling out of facebook after their ads appear alongside offensive post. details ahead in my media minute. cheryl: it is the bottom of the hour. we have nicole petallides. >> there are so many parts of this story. a stock is hitting a new 52 week high. take a look at where it is right now. 25%. that is a huge move. the deal is for a chinese meat

producer to acquire smithfield foods. of course, this faces regulatory approval. there are a lot of issues that go with this. there are concerns about control quality. you may know him from names such as farmland and healthy ones. a possibility of being acquired by a chinese meat producer. $4.7 billion. back to you. dennis: thank you very much. gold is trading higher today. it is down over 10% from this time last year. natalie pace joins me now. thank you for being with us, natalie.

gold is down almost 20% year to date. you say it is ready to run. gold investors tend to race into wall street. , over the summer. we will have a horrible gdp report. it is predicted to be 1.4% this year. we also have a potential that downgrade. i think that will make investors scared. ten year treasuries ended up going lower. they are seen as an even stronger investment. why would this downgrade make people nervous. >> it is because of the fed buying that the rates went down. however, the other thing that happened was old when to its high right after our downgrade.

i predict that will happen again. gold is an emotional investment. dennis: the. thing is gold is kind of a. , split personality. which is the reason that gold goes up? >> people will fall out of love with wall street. we have already preached the debt ceiling. no one is talking about it. i think that is the first level that will send us back up to the

highs of the 1900s. we could go much higher. dennis: you can buy gold physically itself. dennis: gold coming back. who knows, maybe. former federal reserve chairman, one of the biggest critics of the fed stimulus program is right now moments away from speaking at the economic club of new york. he is just taking to the podium. he will be speaking about a new initiative. of course, he will be talking about, most likely, the criticism of the fed. let's bring in peter barnes now. he is about four blocks away from us right now speaking to a very esteemed roup of

economists. peter: yes. he has just got started with his remarks here. i do not have them for you. we believe that the speech, according to a spokesperson will weigh in on monetary policy. he has been critical of quantitative easing. warning that quantitative easing may cause inflation down the road. winding down the feds $3 trillion m bond purchases will be hard, especially if inflation starts to creep back up. now, we also have some other, central bank speakers on the tape today. one of the biggest supporters is also speaking in the next hour. he is the president of the bank of boston. we will also be hearing today from a faxed copy cat.

it has embraced quantitative easing aggressively. basically copping bernanke and company. investors in japan and the united states have enjoyed this ride because of all the economic stimulus out there. we will get the remarks. they were supposed to e-mail them to us, we are not sure they are here yet. cheryl: as you say, this will be a very interesting discussion between the two. the bank of japan governor will be coming out and he has been talking about stimulus. many countries around the world are now talking about pulling back stimulus. i wonder if they will address that today. peter: we will see if he talks about stopping quantitative easing altogether. he has agreed that the fed

needed to take extraordinary actions to help the economy, to help it grow. he thinks whatever round of quantitative easing we are and probably will not be very effective. cheryl: peter barnes will be monitoring that. thank you. don: okay. dennis: advertisers pulling out of facebook. details ahead in my media minute cheryl: the colorado rockies. the first major league team to be owned by a hispanic. as they go to break, take a look at the ten and 30 year treasuries. ♪ ♪

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cheryl: the colorado rockies. the first major league team to be co-owned by a hispanic. we are joined by rockies co-owner. she does a lot of things. welcome to you, linda. thank you for joining us. first, i would like to focus on

this conference. do you feel that this first conference is productive as far? >> well, it has been amazing. it is not just the first. it is not just the beginning of hispanics innbusiness. it is the important roles that we are playing in the betterment of the american economy in terms of business leadership coming together. cheryl: one of the things that is unfortunate is the poverty level. i know that you are talking about jobs. is there any solution you have heard thus far that you are buying into here? >> well, first of all, there are

dropout rates in certain areas . i understand education being a challenge in this country. we used to be number one. we are 17th. coming together so that everyone has the opportunity for equal opportunity. the talent pool will be available for american businesses going forward. all businesses are focused on that educated talent pool. one of the things that you do run is your own franchise businesses. you have that lower services employee underneath you. what do you want to see done for that group and also what are you asking for today at the white house? >> it is a discussion.

yes, we are in a service position. people do not understand that many people that started a front lines are now managers. they are area coaches. you know what, i tell them to look up the street and down the street where they live and find another person that manages a $2 billion business. it is not just about preparation of food. it is technology. it is labor-management. it is inventory and one day to own your own business. how are you feeling about the team? do you feel like it will be there? how are you feeling about the astros? especially big game tonight? >> well, we are feeling great. we have great pitching and great hitting back. certainly, you make changes. we are looking great.

you have to make change sometime. one of our first players is back. i have to tell you, the rockies focus on, not just winning, but winning in the ways that are right and getting back to the community. cheryl: it is great to have you on the show. thank you, linda. >> you are the best. thank you. ♪ dennis: a setback for facebook. sponsors have suspended ads on facebook. the protests spawned 5000 e-mails to facebook sponsors. 60,000 twitter posts. facebook is out with an apology saying it needs to toughen its

restrictions on hate speech. the long slow death of newsweek magazine continues. seeking buyers for the magazine he wishes he had never bought in the first place. it is now buried inside the daily beast website. the beast itself, still not making any money. the critics reviews are blistering for netflix's resurrection of the old sitcom that fox canceled seven years ago. the stock has been off almost another 1.5% today. let's head to the trading pits of the cme with phil flynn. >> hi dennis. right now, oil is getting crushed. concerns about economic growth in china.

the operation for economic development is saying that the demand for china will be weaker and that is driving us lower. they are getting hammered right now. that is bringing down the entire complex. back to you. cheryl: he has already said, basically that the impact is limited and diminishing over time. let's listen for just a moment. >> they also approved to be more fragile. >> shadow banking, developer declined, rapid and innovation of new instruments. one simple logic remains.

the basic responsibilities of a central bank is to maintain reasonable price stability. and it is an extension of that concerned that means it must take account of the stability of markets generally. those functions are complementary. they should be doable. we will be monitoring those comments. ♪ ♪ [ lighterlicking ] [ male announcer ] you've reached the age where giving up isn't who you are. ♪

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cheryl: it is time for your west coast minute. median home prices in las vegas are close to $250,000 per unit. home prices aren't out of 19% from 2012 levels. land prices went towards the 350 range. a bubble could once again deforming. san diego seniors are more and more dependent on the local food banks. university economist found that at least 85% of residents depended on the program to eat. a tough economy has forced many into early retirement due to lack of jobs. hawaii hoping to boost business.

the sender has struggled to meet revenue targets. the goal is to boost business travel. that is your west coast minute. dennis: business travel to hawaii versus going there for fun. seems like or businesses want to go there for fun. let's talk gender gap. it is getting a bit narrower. america's working moms are now the primary breadwinner. that is up from 11% of those households. 63% of them were single moms. the rise of the breadwinning mom credited to rising education

levels. cheryl: that is great. i love it. would you ever be the dad that stayed at home? dennis: never. [ laughter ] cheryl: okay. dennis: i just won't. cheryl: i am reading cheryl sandberg's book right now. she talks about being a woman in the workplace. dennis: i think it is hard to be a woman in the work place when you work at walmart. let's let that woman write a book. cheryl: are you desperate to purchase a home right now? the shocking number of americans who cannot find a house to buy. we have century 21 ceo coming up. dennis: the attorney general is making the rounds with a major news organization. market now with melissa and lori

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♪ >> i'm melissa francis. lori: i'm lori rothman, what's driving the stock market after the run higher coming to a screeching halt today, why ubs is vetting the fed's tapering will not cause a significant correction. >> one of the biggest critics of the fed stimulus program speaking out. what federal reserve chairman says now. >> plus, the spring housing outlook, century realize ceo ahead why it's a seller's market now. >> tempest in a teapot. outrage over the ad lighting up social media and has kettles flying off the shelf. lori: let's head to the floor of the new york stock exchange for the check in with nicole. what's everyone talking about,

nicole? all right. i think we have an audio issue as you can tell there with nicole. melissa: i'm sure it was great. we'll go back in a second. as markets go back and forth over the feds' plan, the former chairman is weighing in. he has been critical of the central bank's policies in the past, and this time it's no different. peter barnes in washington with the e details. peter, what does he have to say? >> that's right. about to start the q&a session with the commission club of new york, but he did, again, lay into the fed for its bond buying program, and three or four or forever, whichever one you want to count, take a listen. >> beneficial facts of the actual and potential