♪ lori: good afternoon. i am lori rothman. melissa: i am melissa francis. 135,000 jobs added to the private factor last month. what this means for the fed next move. lori: a shortfall over 30 years. melissa: susan rice asked to replace as security advisor. lou dobbs weighs in on that pic. lori: we want to start you off with a check on the markets.

nicole: we do have a broad-based selloff from sect or to start there. we know about esther george and the fed. we have talked about the adp reports and that being less than. we talked about the concerns of a computer-driven hedge fund. that is something from abroad. watching that story, as well and just watching that from abroad. he said that is one of the reasons the market sold off like it did. the selloff is bringing the dow and s&p very close to their 50 day moving averages. as far as the vix, sitting here

getting closer and closer to 18. this one would be the highest close of the vix in the year 2013. melissa: interesting stuff. is this worry some sign? >> i think it does put some downside risks to the number that we will get on friday. last month it under predicted the number 550,000. this report, it was actually stronger than it was last month. we could still get the number close to the consensus number. melissa: we always say that adp is so far off. is it as far off as we think?

believe it or not the adp actually comes out ahead. melissa: what is really going on? >> on a month to month, it is not the actual number of employment. it is suggesting that we may get a little bit softer number. when you look at the track record, we can still get the consensus, believe it or not. i think that right now the market is trying to taper in what it means. there is risk in surgery.

melissa: you could die on the table. [ laughter ] it is that risk that i think the market is jittery about. there are two reasons to taper. it is not a bad reason to taper. once the market get that feeling, the market will react a lot more positive. melissa: do you think that the fed can get out clean? i think a lot of people are worrying that the exit strategy could be painful. >> i have seen a lot of things happened before. nothing like this. we have never seen as much quantitative easing as we are seeing now.

in some senses, it is an experiment. am i nervous? i am not. is there a risk? of course there are risks. do not taper before you have complete proof. the economy is moving towards what they like to call the escape velocity. i think the fed will be careful. if they taper a little early, they will not feel bad about reversing. >> we should be growing at at least two and a half 3%. we are nowhere there. we, of course got enough evidence from the isf and the isn service index.

nowhere near 3%. second quarter, i think we are probably in the neighborhood of growth. melissa: thank you for coming on. lori: peter barnes is on this story today. peter: this report is raising fears about a bailout. the most recent annual audit found out it had a capital shortfall because of older mortgages going bad. the committee then went to the auditor for more information and discovered this stress test which showed the shortfall could be as much as $115 billion.

the same test that the federal reserve uses on banks to see how they would hold up in a severe economic downturn. it is designed to make sure that banks have enough capital to get through another crisis. >> the stress test is just another indicator that if fha were to come under stress, these scenarios that they put out, very quickly go and incur large losses that would have to be paid for by the taxpayer. >> documents and communications clearly show that the fha was determined to avoid disclosing the stress test results.

he wants to interview her and other top officials. the agency did not respond to our requests for comment. back to you. lori: okay. many thanks. melissa: the market spreading. phil flynn is on the pits of this cme. that inventory report was so bullish. >> i think it is because of where the drawdown came. a lot of it was in the gulf coast. i think that is why the market is somewhat calm right now. that is amazing considering the fact of if you look at the gulf of mexico, it looks like we have a tropical disturbance down there. there is a little bit of nervousness. part of it is the weakness in

the stock market. we still have the highest level since the end of may ever. melissa: thinking so much. >> think you. lori: more problemm for toyota. toyota saying there is a break design flaw which could reduce the cars braking power. toyota shares sinking on the news. looking for a job? apple may be a good place to start your search. the ap saying apple is expanding its work force ahead of the completion of its new headquarters. currently, the company has 16,000 employees in that area. more changes for the obama

administration. you will definitely want to keep it here. lou dobbs will be weighing in. he is sure florida. do not miss it. melissa: a new poll revealing americans are not feeling all that positive when it comes to our government. we have the details on that straight ahead. lori: racking up a $20 million bill out the park. we will tell you who spent the big bucks. first, take a look at metals. back after this. ♪ ♪

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lori: let's make money with charles. why he likes markets moving lower on bad news. charles: it is so frustrating in so many ways. what happens is, you look at yesterday. g3 of payroll licenses, incline. the stock was up 21% yesterday. on monday, cracker barrel explodes to the upside. you think there is one person out there that bought an extra order of chicken fried chicken? [ laughter ]

you have been to cracker barrel, i know; right? i happen to like when the market comes down on bad news. i would be so thrilled once we get the whole set thing out of the way. lori: is there a historic correction setting in? charles: we have had these spring swoons. the year before that, we had a 12% correction. we are like a month late from what has been the norm for the last three years running. every time we had a reversal and

the markets went up. welcome to pull back. to your point, i do not think that they will. i think bernanke has been over backwards. every time they do that, i think they make a mistake. if you think we can take the training wheels off, take them off. take them both off. if it happens to hurt the markets, i think it would be temporary. i kind of like what is happening today. maybe we can sort of take the fed out of the discussion. melissa: that is never going to happen.

lori: bring us some stock picks tomorrow. those are fun. melissa: left check the markets as we do every 15 minutes. you are watching some winners. nicole: i am. i want to bring you what richard fisher said moments ago. an abrupt stop to bond buying would be very disruptive to markets. we have a roaring housing market.s of things that could bring the market back. just talking about monetary policy versus fiscal policy. we know that bernanke feels that trying to taper what they have been doing would not be good for the recovery that we have been seeing. the retail winners that you discussed, walgreens.

up 1.7%. we are showing you a winner on a day of losers. we are also taking a look at bed bath and beyond. it is up 1.7%. they lifted the price target. that is bed bath and beyond. they have a valuation well below its peers and market. lori: thank you. americans not feeling all that great when it comes to the government. only 31% of respondents said they were generally optimistic about the system of government and how well it works. i cannot say i am all that surprised by those results. melissa: no. it is kind of never ending.

lori: lou dobbs is on his way in. melissa: the white house set to announce susan rice as the new national security advisor. lou dobbs joins us on that. lori: let's check the dollar. back after this. ♪ this is america.

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♪ >> 23 minutes past the hour. i am patti m brown with your fox news minute. in philadelphia, crews are still working to find people trapped in a building collapse. officials say 12 people have been transported to hospitals with minor injuries. possible penalties could include hundred game suspension. at the white house, president obama was presented with a

jersey. the ravens beat the 49ers. those are your headlines on the fox business network. melissa: replacing tom donnelly and. it does not exactly come without controversy. time now for lou dobbs. >> it was very kind of the president. we all have a lot of controversy to talk about. the idea that susan rice, before

sunday talk show hosts will breezing around to becoming the national security advisor. certainly, it will be with great comment and . this is a real slap in the face. of everyone who is concerned about what happened in benghazi. >> we cannot really bring any fresh blood into this position. >> i think it is a very good point that you make. if he had had his -- at the outset, he would have moved them both into his inner circle.

he had other considerations. now, samantha going to the united nations to replace susan rice. this moment is an international liberal. she thinks the security council is undemocratic. other than that, she will be perfect to represent the united states before the united nations. >> she does not sound like an emissary from the states.

it is a troubling, troubling selection. the fact that the president has chosen to be this the fine, this insulting, i just think this -- he is in real trouble on this. melissa: it is no surprise to get that full report. lou: i swear to you, i read those polls. that one shows an uptick. it has held steady. what does this man have to do for the american people to say we are worried sick about this country. your political leadership has

resulted in the insinuation of politics into every agency and department in the government. there seems to be only two explanations. there are a lot of people in this country that just do not give a dam. i am disappointed, frankly. melissa: lou dobbs, thank you so much. we love to see you here every day at this time. we also love to watch you at 7:00 p.m. and 10:00 p.m. eastern. lou: which one do you like the best? melissa: i like 7:00 p.m. >> three great americans. i cannot wait. lori: we look forward to that.

melissa: no commercials for you. melissa: still holding above 16,000. it did get below that. bouncing back slightly. be careful. you may not want to stay there for too long. melissa: take a look at who is up into is down on the dow right now. cisco systems. go, cisco. we will be right back. ♪

melissa: time for stocks now as we do every 15 minutes. let's head to the floor of the new york stock exchange. our own nicole petallides standing by. nicole major averages hovering near one month lows. >> at their lowest point getting to the 50-day moving average. dow jones industrials down a full percentage point with 164 points to the downside. s&p 500 is also lower sitting at 1516. i want to look at goldman sachs, $180.50 a share. jpmorgan, that is down 1.4%. we're seeing financials coming under pressure. goldman sachs in particular one of the reasons why i brought you there to take a look at that one. that is because wells fargo actually cut goldman sachs and their earnings per share forecast citing weaker at bank . bank of america is down 1.4% at the moment. of course, among the biggest losers on the dow jones industrials.

so financials which are so economically sensitive, selling off across the board. back to you. lori: nicole, thanks so much. with this selloff in the stock market no surprise really, treasurys are advancing. with here how to invest best with fixed income. jeremy hill. great to see you. so bonds are coming off their worst month in something like nine years but just look at today's performance. stocks selling off. investors go back into the perceived security of u.s. government debt . what do you see is going on with the bond market and where rate levels are now? >> the upside for rates is definitely higher than we are but the bias is up longer term. bonds you have to trade them in a bit of a nearer term scenario. so we think that rates at 2.10, going up to 2.20 are probably a buying opportunity. we've seen pretty impressive market participants. jeff came out in last couple

of hours said, hey, he is backing up the truck and he is probably going to be buying as well. lori: you're looking at near term range on the 10-year which we'll use the a benchmark here. >> right. llri: 2.10 where we're at right now to 2.20. yet the economic data today, talk about the fundamentals before we talk about the fed. people are getting a little exhausted with this line of conversation. the fundamentals, the job situation, the housing situation, factory orders were a little bit light. a lot of forecasters are still looking for the 10-year yield to drop back below 2% by year's end. >> actually, if you did this, interesting exercise which was look at what the consensus economic forecasts was for the 10-year, a year ago, but for today. lori: okay. >> it would be 1.75. so we're nowhere near that. basically economists ge wrong over and over and over again. lori: why is that? >> well, economics is a soft science. it's part psychology. it's part market movement. lori: but in this particular

cycle why are we missing it? is it because the fed doing things historically unprecedented? >> yes. there is nontraditional monetary easing you can not even conceive of 10 years ago. it's happening today. and the fed has really introduced, just in the last couple months, even more, kind of uncertainty and volatility to credit trading. that is across the board. not just the u.s. 10-year but we're talking about high yield bonds, investment grade bonds and so forth and so on. lori: i mean you have to talk about the fed when you consider your fixed income investment. >> right. lori: so how are you figuring that in? what is the balance between the fed, the economy and your overall portfolio. break it down. not just treasurys as we were talking about, corporates. high yield as well. put it all together in a portfolio. >> right. rate, risks is the risk. the risk actually right now, the overhang, for all risk markets today is the jobs number tomorrow okay? it doesn't matter what you're trading today. you're focused on that number. so notwithstanding what we

say today, tomorrow will really be the dispositive information. but for us right now we like treasurys trading between, sorry, 2.10 and 2.20. we actually think that is a buying opportunity. that is very, i think --. lori: look at junk yields coming up as well. is that also a nice risky buying opportunity at this point? >> actually we have a different view on high yield bonds, okay? lori: okay. >> we think high yield bonds actually trade weak from here. we think there is a lot of risk in high yield bonds because we have so many tourists in the trade. meaning people who don't traditionally trade in those asset classes but it has been the global search for yield. they have to trade those assets. lori: this is jeremy thinking we'll stick around these levels, trading range on the 10-year before the end of the year. thank you so much for coming in. sharing that with us. >> thank you. melissa: so banks need more time to implement the volcker rule. despite what paul volcker is saying. charlie gasparino will tell us why. that's coming up. [ male announcer ] in your lifetime,

you will lose 3 sets of keys 4 cell phones 7 socks and 6 weeks of sleep but one thing you don't want to lose is any more teeth. if you wear a partial, you are almost twice as likely to lose your supporting teeth. new poligrip and polident for partials 'seal and protect' helps minimize stress, which may damage supporting teeth, by stabilizing your partial. and 'clean and protect' kills odor-causing bacteria. care for your partial. help protect your natural teeth. >> i'm jo ling kent with your fox business brief. the market selloff continues for the second straight day pushing the blue-chips below the 15,000 mark. after a disappointing jobs report did little to ease concerns the federal reserve may slow the pace of its stimulus program. right now the dow is down 165 points. the treasury department will start another round of sales this month of the general motors stock as it

continues to wind down its investments in the automaker. along with the uaw retiree trust, the treasury will sell 50 million shares in a public offering. come january latvia will become the 18th country to join the eurozone after getting the go ahead from the european commission. the decision comes a decade after bulk of nations voted in favor of joining the e.u.. that's the latest from the fox business network, giving you the power to prosper.

melissa: years after the dodd-frank act was signed into law, several pieces of regulatory act have yet to be implemented. what will happen to the bill and well-known volcker rule? fox business senior correspondent, charlie gasparino joins us. i know you want to update. >> armed, prepared.

melissa: your own water after stealing mine three days in a row and almost dying on the set. are you ready? is that water by the way? have we tested that. >> it's vodka. i will be on your show later on today. melissa: yes, 5:00 p.m., eastern, "money". >> he with will get the redemption numbers at that point. what we'll hear from sac most of the money is gone. melissa: wow. >> this is tragedy i said yesterday. melissa: it is unfair. you made a great point. >> might be charged. might not be charged and still the guy is losing his business. he still has his 9 billion. melissa: we don't feel too bad for him. >> he will not have a problem with that, excuse me. but it is definitely the end of one of the biggest trading firms ever. he can manage his own money. but, you know, this is it. that is really sad. melissa: are you choked up there? what was that? lori: end of an era. >> what is interesting about steve cohen. he is not a bad guy personally. he despises me because i

keep writing stories about him. he is a decent guy. people freak out about him, before we get into this hit he is one of the world's great investors. take the insider trading out, which is a small portion, this guy cranked out 26% returns since 1992. melissa: you are getting choked up. you're about to cry. he is going to cry. >> let's get to dodd-frank. melissa: okay. >> we talked to sec commissioner gallagher, dan gallagher. he says this. this is going to get everybody in congress really blown away. he says it will take years to implement dodd-frank. he basically says they are less than halfway through writing the rules on dodd-frank. and the bottom line is, there is a good chance, as you know, paul volcker came out said the thing will be written i guess by july, right? three-year anniversary. he says no way. it is years and years away based on how far they have gotten an infighting the between the fed and sec what

the rules should say. i say this to wall street. you think you will get a dodd-frank and volcker rule? you will not get the stroller rule for at least the next year. this is scary thing. you could write a rule and basically not implement it. maybe it looks like it will be implemented in its entirety not probably for couple years. lori: can banks take advantage of that through trading practices? >> i can tell you this from jpmorgan chase. they are interpreting it basically as they go. they are implementing what they think it should say, what will not get them in trouble. obviously they had the london incident. melissa: they're self-correcting before the rule is in place and we don't even know if or when we'll ever get the rule. >> yeah. they're interpreting it while there is infighting between the sec and fed. i think this is fascinating story. i have never seen a law, major financial, sarbanes-oxley implemented when it was supposed to be implemented. this is three years after the fact, we don't have it

implemented. according to gallagher we'll get on monday it probably won't be implemented. lori: look down the road five years. there will be all the backpedaling. certain institutions probably not have self-corrected as you put it. >> right. lori: they will face -- >> i think one promise is when you have like the london whale situation trading bank portfolio, where does that fit within volcker? nobody knows. lori: nobody knows. you have your finger on the pulse. melissa: a lot of people saw you choke on the air yesterday. they were commenting about it? >> i won't get into what they said. there were sexually provocative comments. we'll talk about this off-camara. lori: charlie, thank you. melissa: charlie gasparino, holding his tongue. who knew that was possible? not me. why don't we check on the markets. keith bliss is on the floor of the new york stock exchange. keith, we're here at a session, coming back a

little bit, if you call down 146 that. tell me what is the tone? what is everybody talking about right now? >> actually a selloff is actually healthy for the markets if we want to push higher. there was a spate of indecisiveness, if you look at technical charts over last couple weeks. this selloff was in the tea leaves if you will. what is interesting, we call today the vix, the vix index is definitely overbought at this point in time. it is really rallied strongly this week. implied volatility especially across some of the defensive sectors put up substantially. the s&p is oversold at this point in time. short term oversold i want to stress that. if we hold at levels and stay here for next day or so. could be quite healthy and push back up to higher highs. melissa: really. you don't think this is the beginning or middle of a sign of a real correction? >> i really don't. if we hold at 1610, a lot is depend end what i'm saying a stronger jobs number on friday will give people the

feeling that the fed will pare back their bond buying. which is what is driving this selloff today. i don't think we'll get that. i think people would just calm down. we'll analyze each and every data point over next two weeks al until the fed meets, fomc meets. we'll hold 1610, 1605. that will set us to rally up to higher highs. melissa: clarify, traders worried about a good jobs report on friday? that would be bad for the market. yeah, that is the old behavior. what is interesting, we'll seeing bad economic data combining thinking that the fed will pare back bond buying what is driving this market. a kind of different behavior where bad economic data is good for the market. people are getting concerned, the fed is thinking maybe policies are pushing too much and counterproductive at this point in time. they will pull back and try something new. it is clear the economy is soft and not getting better no matter what the fed is doing. melissa: that's right. simple but true. keith, thanks so much.

>> my pleasure. lori: being doved the hollywood of the south. how big tax breaks in the peach state are attracting tinseltown's movie studios. melissa: first take a look at some of the winners and losers today. as we see the market down 1.52. micron and bed, bath & beyond at top of losing charts today. we'll be right back

melissa: could georgia become the new hollywood? the peach state luring film and tv production with tax credits. that is proving just too good to pass up. fox's jonathan serrie is

live at screen gems studio in atlanta with more. >> hi, melissa. studios like this permanent studios, are becoming more and more common here in georgia. watch this. georgia may seem an unlikely place to make movies. >> action. >> but the peach state now ranks among the top five for tv and film production. >> we are the hollywood of the south in a way because we have the hollywood infrastructure here. before we were a nice place to shoot that had a tax credit. >> the industry receives tax incentives up to 80% the studio say that georgia is among the most attractive among 44 states that offer incentives. critics of the tax police say it disrupts the free market. >> states are bidding against each other. they are bidding higher and higher exemptions for the film industry. at some point all states offer exemptions, where are we but back where we started. >> figures from the georgia department of economic development show tv and film

production spending more than doubled in georgia after tax keds went into effect. governor nathan deal sees it as an investment to keep the state a growing industry. >> it is a little difficult to calculate how many jobs are produced. we know it is significant and it is growing. >> melissa while out here on the movie lot we met many film members who say they moved to georgia permanently because of the low cost of living and high number of jobs. back to you. melissa: jonathan, thanks so much. good story. lori: sticking with entertainment, disneyland in california may have raised the price of admission, almost 100 bucks a ticket if you can believe it. melissa: crazy. lori: that probably wouldn't stop prince al-asad, he spent 50 million euros, $19.5 million u.s. dollars to rent out the entire sections of disneyland paris to celebrate his new degree. this is according to the french news agency afp.

the prince's celebra included special events involving rare disney characters. melissa: that begs more questions than it answers, doesn't it. rare disney characters. like who would that be? lori: not the princesses. those are not rare. they are the most popular. melissa: are there rare princesss?. lori: certain prince senses in my household more popular than other prince senses. i'm curious what sections or lands he rented out. fantasy land. frontier land. melissa: i wonder why i didn't get invited. were you invited? did you steal my invitation. $20 million the. lori: did you say you ran into him at few opec meetings or some member of his family? melissa: yeah. again. where was my invitation? i don't know. coming up tonight on "money," bonnie herzog from wells fargo investment joins me to talk about the booming business of e sigg grets -- e cigarettes. these ads are everywhere. they are expected to become a billion dollars business.

we wonder when traditional companies get in on the action. we do a taste taste test. i don't smoke. i'm not a good candidate. i can't compare to anything. we went out and asked smokers. lori: all you have to do is go out front. melissa: that's exactly what we did. we let people try them out. that is booming business. everyone is making one and ads are everywhere. we want to get in on the action 5:00 p.m. eastern on "money". lori: we'll fill in for liz and dave on the "closing bell.". melissa: nice. lori: numbers as we close out the hour look where the markets are. we have a giant selloff with the dow dipping below that. back at 15,000. this is the support investors are putting in. the vix is off the charts. a lot of action. disappointing economic news. your guest said combined with disappointing economic news along with fed's tapering. a recipe for selling.

that's where we're at. how should you shape your investing strategy. there are opportunities but not the big name banks you might be looking at. tracy byrnes and ashley webster are here to guide you through the next hour here on fox business. vo: traveling you definitely end up meeting a lot more people but a friend under water is something completely different. i met a turtle friend today so, you don't get that very often. it seemed like it was more than happy to have us in his home. so beautiful. avo: more travel. more options. more personal. whatever you're looking for expedia has more ways to help you find yours. your chance to rise and shine. with centurylink as your trusted technology partner, you can do just that. with our visionary cloud infrastructure,

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ashley: welcome back, everybody. i'm ashley webster. tracy: i'm tracy byrnes. we're back. we're actually below the 15,000 mark right now. the dow shedding more than 1% in a widespread selloff, sparked by economic fears. the fed's beige book is out in moments. what it found and plus market reaction all in this hour. ashley: meantime a debt ceiling battle plan. both parties drawing up the strategy for the war ahead, obamacare, sequester, entitlement reform and so much more could be targets for cbo director doug holtz-eakin forecasting the likely winners and losers

straight ahead. tracy: so much going on but it is deja vu all over again. speaking of winners, the big reflt lottery ticket holder finally come forward. no, it is not me. three weeks after the record powerball drawing. we'll have new details who won. we have to go to peter barnes down in d.c. hey, peter. >> hey, tracy. plenty of ammo in this beige book for fed members who want to keep quantity quan going at its current pace of $85 billion in bond purchases each month. supporters of tapering, we heard a lot about that in the last few weeks probably have a tougher fight now with this beige book report. this is the report that the fed members will use in two weeks for their next policy meeting t says, quote, overall economic activity increased at a modest, to moderate pace since the previous report. there were slight to moderate gains in consumer spending the beige book says. real estate and construction increased at a moderate to

strong pace in all districts. on jobs the report says, quote, hiring increased at a measured pace in several districts. and here we see some impact of the sequester. budget cuts that started on march 1st with job reductions in richmond and atlanta, quote, due to cutbacks in government orders or staffing at government offices. on inflation, quote, districts reported level prices to mild price increases. ashley, tracy, back to you. tracy: peter barnes, thank you very, very much. i don't know if the market will like that. ashley: not a lot to get excited about. to peter's point, maybe that just keeps fed money printing going at least in the short term. nicole petallides where we go every 15 minutes. we're right at the 15,000 level on the dow, nicole. >> obviously you want to hear what they're saying pertaining to our economy and basically the overall idea here that things are improving. though, slowly, very slowly,

right? there is not saying that things are great and there is extreme growth. on the contrary, moderate pace, moderate pace. slight increase. it is showing things are going in the right direction. there are concerns even with the sequester. we're talking about areas with job losses including richmond and atlanta. the dow is not reacting too much at the moment, sitting at the 15,000 level, down 1.1%. all three major averages are down 1% today. we've seen the vix, fear index is grabbing attention today. closing at highest levels of the year in 2013. financials are among many groups with down arrows. they're so economically sensitive so today they're selling off more dramatically. name like bank of america is big lag sword -- laggard. top of the fact that wells fargo cut earnings outlook on goldman saks because of investment banking activity. so concerns there about that for goldman. overall the financials to

the downside and just about everything to the downside. back to you. ashley: no kidding. exempt for the vix, nicole, up more than 7%. nicole, thanks so much. tracy: it seems all the market can focus on when the fed will ease its bond buying program. our next guest though sees opportunity in the financial sector and not with some of the big names you might think. rob morgan, chief investment strategist with fulcrum securities joins us now. part of the reason you're playing in financials because of all the liquidity the fed is pumping in. >> oh, sure, tracy, that factors into it. let's keep in mind. it was the sector that was really bashed the hardest in 2008. and even though it has come back some, it is still one of the cheapest s&p 500 sectors. not only that, technically, it continues to look good even though today isn't a really a day to write home about in the financial space. and the earnings per share estimates continue to rise. so, i do think there are some opportunities in the

space. tracy: you're not buying big banks though, right? >> in my opinion, they have really run up quite a bit compared to what their earnings projections would be. so my favorite spaces are really are insurance space, the proccssing banks. maybe some of the regional banks, but yeah, the big money centers i would be a little wary there. tracy: you're overweight consumer staples as well. i find this so interesting. it is so you, rob. you go against the grain in some things but a lot of people selling the staples saying you have to move yourself into the discretionary. how come you're staying? >> well, and you're right, tracy. a lot of people, are saying hey, jump into all the cyclical years. >> right. >> of course consumer discretionary would be one of those but consumer staples with that criteria i talked about before, a cheap sector. earnings estimates continuing to rise. and at the same time it looks technically sound. i guess you could call it in a way a equity barbell strategy. i have cyclicals, financials

and defensive consumer staples. so --. tracy: i like it. i like it. again, against the grain, you are underweight energy and materials. again we're seeing a lot of people jump on the energy bandwagon. how come? >> sure. so i mean, if i like sectors that are technically sound with, that are cheap and growing earnings really well, i would dislike those that are doing the opposite. i think energy and materials are the poster children there. and anecdotally i think dollar will continue to push up from here, which it has an doing this year. that hurts all commodities. and obviously, that would hurt energy and materials as well. so i would underweight those two spaces. tracy: we were talking about the fed and liquidity. it seems that uncle ben handed his playbook out around the world, right? everyone is pumping money in. as a result there are a lot of opportunities overseas, aren't there? >> oh, yeah, absolutely. i'm overweight international space in general. obviously japan is really just getting into in some

ways, a big qe program. the ecb keeps hinting about cutting rates. emerging economies around the world are cutting rates. even though we can debate when our qe programs end and when our rates go up, probably not going to be anytime soon, the next move in rates here will be up. because they can't go down. tracy: sure. >> so i think the u.s. stock market is going to do well but i think the international space, probably, if you measure by the efa index probably will do better than the s&p 500. tracy: rob, quickly before i let you go. are you in the international space v. -- via etfs or stock specific? >> etfs definitely, tracy. certainly for an individual investor that is the way to go. tracy: rob morgan, love talking to you. fulcrum securities chief investment strategist. thank you, sir. >> my pleasure. ashley: new fallout over samsung's huge legal victory against apple that threatens to the stop the sale of certain apple iphones and ipads in the u.s. with more

let's get to liz macdonald in emac's bottom line. can apple overturn this ruling? >> it is really tight. i'll tell you something this case raised stakes in the ugly patent wars that does not just have an effect on u.s. technology sector where a lot of jobs are created but presidential policy coming out of the white house on this issue. also house and senate policy. it is $294 billion market. what happened was samsung won basically on a one patent case, one patent that apple was basically, is not allowed to use at the international trade commission. what that means is now apple can't get imported into the united states the older models of its iphone. so iphone 3 and 4. older models of the ipad. so it is not the iphone, 4 s or the iphone 5. anitisoti-fi ips at a afcted the is a reeas why saung nt t the it its eier toet a b on

goods that they wanted to a ban on rather than going to a federal judge. was this a smart move for samsung? no. it will create more legal costs for samsung and shareholders in samsung because typically these fights end up in courts anyway. so a federal judge would have said no to samsung. there's a likelihood overturn at the appeals level. apple will likely go to the appeals process. let's tell you what apple is actually saying about this. they do plan to appeal. they're saying what samsung did is against consumer interests and that the courts and regulators ought to reject samsung's move. samsung is saying that apple, this shows apple has a history of basically free riding on samsung's innovations. but you know, this is the name of the game. will this all be tossed aside because apple will then put out a great iphone that will, you know what? forget about the iphone 4. don't worry about it. it is an old model anyway.

this is what is at issue in this case. here's the deal. apple has yet to make a cheap iphone. it is relying on a business model that gives discounts on prior iphones. will this push apple to issue a cheaper iphone? it could. so that is the fallout. ashley: a victory for samsung but maybe not in the long run? >> it is a short-lived victory, that is exactly right, ashley. will it cost samsung shareholders? could possibly, yes, with more fights. these two are really going at it. hammering away at each other. it has huge implications for jobs created from the tech sector. that is why d.c., senate is holding hearings. that is why the white house put out a statement saying they don't want these fights at international trade commission because you don't want a patent infringement case ruled on by a six-member panel of political appoint east. white house wants to raise the bar. they don't want automatic bands issued by the itc on products like this. ashley: very interesting,

liz. tracy: first good thing i heard come out of the white house in a long time. ashley: if you wait long enough. tracy: i suppose. ashley: thank you very much. emac's bottom line. much more ahead on the very complex patent market. adam shapiro reports on a new way to buy an sell patent rights. that is pretty interesting coming up. tracy: we're keep track of the market's every move all hour. stocks are selling off. we have that 15,000 floor in it. investors are keeping it. plus we have a pair of automaker stocks dropping for two very different reasons. ashley: ready or not, another washington spending battle is many looking. former cbo director doug holtz-eakin tells us what stands to get cut when the debt ceiling goes up. first, it is that time of the day to check how oil is trading right now with the markets moving down. oil actually moving higher. up about 80 cents. $94.13 a are barrel. we'll be right back. you hurt my feelings, todd.

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ashley: it is time to make money with charles payne. he is looking at business to consumer e-profits company, based in china. sounds interesting. what is your stock? >> this could be the chinese amazon. ashley: the chinese amazon. >> i remember when it came public. the symbol is dang. it made a big move and you said, dang, i missed it. china's dang. the earlier volume started to percolate and stock was breaking out. yesterday had good volume. normally trades over 4 million shares. looking at data. first quarter gross margins are 17% from 12% a year ago. losses are 5% of revenue from over 9% a year ago. essentially what they have done, they do the books. they are doing ereaders but they have general merchandise. but, it is not the kind of industry amazon already built in here. you see the amazing

traction. by the way not only for them but some of their competitors. china has a chinese amazon. there are some others but this stock is acting absolutely phenomenal. people should know, if you look at a one-year chart, golly, i missed the move already, i'm chasing it but in january 2011, this was a $34 stock. ashley: wow. >> made another huge move as an ipo made another huge move. it pulled back because fundamentals were not there. it looks like it could be at an inflection point where it is on the cusp of being profitable. dang dang. tracy: the name is fun. >> if goes to 10 bucks early next week and people didn't get in they will go, dang. tracy: you usually don't like stocks with cute tickers. >> i usually don't the i don't think they did that one on purpose. tracy: charles payne. thank you. ashley: thank you, charles. tracy: all right. it is quarter past. we've got to get a check on these markets. nicole petallides on the floor of the new york stock exchange.

we are slightly below the 15,000 mark, nicole. >> we really can't break up and out at all. you start to think when you heard from richard fisher, from the dallas fed president, we got decent fed beige book, it showed moderate growth. these are types of things that probably could have helped us along the 15,000 mark. yet we're still not able to break through. keith bliss for example, said he is watching the jobs numbers very closely and saying the opposite. if on friday the jobs numbers come out great, traders will not like that. that will give the fed more reason to tighten. let's take a look here at some automakers in particular. looking at both general motors and toyota. so the general motors story at 34.20 today, down 2% is you have the treasury selling more gm shares in order to wind down their stake. don't forget they saved the u.s. automaker with a $49.5 billion bailout. i want to tell you about toyota motor recalling 242,000 gas-electric hybrid

vehicles including prius models from 2009. tracy: thank you, nicole. we'll see you in 15 minutes. we have debt ceiling deja vu all over again. we have another battle brewing in washington. will it lead to another big ol' deal over the deficit? who knows. former cbo director douglas holtz-eakin will weigh in on that next. ashley: let see how the u.s. dollar is moving right now. a down day on the markets. pretty mixed on currencies. the dollar is down against the euro and pound but up against the canadian dollar and peso. yes it is down against the japanese yen. we'll be right back.

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>> at 21 minutes past the hour i'm patti ann browne with your fox news minute. one person is now confirmed dead in the philadelphia building collapse. a four-story property is being demolished. it collapsed onto the salvation army thrift shop at 22nd and market streets, injuring at least 12 people. crews are still searching for others who could still be trapped in the rubble. major league baseball investigators are interviewing more than a dozen players with possible links to a now closed florida clinic known for performance-enhancing drugs. included among those players, new york yankee alex rodriguez and milwaukee

bruin, ryan braun. after three weeks the winner of the $590 million powerball jackpot has come forward. lottery officials say a woman bought the sole winning ticket near a supermarket near tampa. she is claiming the smaller lump sum payout. she is the largest sole lottery winner in u.s. history. those are the headlines. i'm patti ann browne. traysy, back to you. tracy: i'm thinking i never bought a ticket. >> could have been you. tracy: everyone is saying, see you should have. i don't know, maybe next time. >> thanks. >> house republicans are working on a gameplan for upcoming negotiations on the debt ceiling. rich edson is on capitol hill with more. you can't help but feel like this is deja vu all over again. >> tracy, it is, and we're not that close to a debt ceiling increase. the bipartisan policy center says we have until probably early september, early october. republicans are in the beginning stages of formulating exactly what their approach to the debt ceiling increase is going to

be. they have already started holding meetings on this they have not decided yet what they're going to attach to any debt ceiling increase but the world of possibilities for themmis quite vast. they have floated tax reform, entitlement, reform. approval of the keystone pipeline. domestic energy production, curbs to federal regulations, continued spending cuts or delay changes to obamacare. now, a number about republicans see this as almost an opportunity. one congressman, the chairman of the ways and means committee, chairman dave camp told us in an interview a couple months he sees this as way to get tax reform done. there are others like senate minority leader mitch mcconnell said he wouldn't sign off on any increase in the debt ceiling until there is entitlement reform and one republican senator agrees. >> i'm only open to raising the debt ceiling if it is tied to measures that prevent us having to raise the debt ceiling in the future and what is driving our debt is the entitlement programs. it is not discretionary

spending. what is driving the national debt, medicare program and medicaid program that is spending a lot more money than it is taking in. >> plenty of options on the table for republicans. still no way forward for them. they have a number of months to figure this out on their side. that doesn't mean this is a policy we'll get in place. whatever house republicans come up with on how to raise the debt ceiling, president obama and democrats have their say. they said when it comes this round of debt ceiling negotiations they refuse to negotiate on anything. congress should pass an increase in the debt ceiling because only allowing more borrowing for spending congress already approved. back to you. tracy: rich edson, pull up the beach chair. guess what we'll be talking about all summer? >> yeah, again. tracy: a little singh oxide under your nose. beach ball and a chair. thanks, rich. >> okay. tracy: that's a good look. that is the summer though. ashley: we'll keep talking about it now. for more on the debt ceiling

and whether a budget deal can indeed be reached in this volatile political climate we're joined by former cbo director and director of. doug, there doesn't seem to be this sense of urgency this time around to get the debt ceiling issue addressed. as rich edson said sometime in early september when we really have to take action on this what will the republicans try to do do you think? i know they're trying to form formulate their approach. we heard of tax reform, entitlement reform. maybe concessions on obamacare. we have the keystone pipeline thrown in. bottom line will we get any deal? >> you have to get a deal because you have to raise the debt ceiling of the trouble is, that even when there was a great sense of urgency and that's gone away with good news reports on the budget, the stonewalling by the democrats on entitlement reform was very real. there was no such progress made. so now, republicans i think are pivoting to recognize

that better economic growth will improve the budgets. and anything they can attach to the debt ceiling that improves growth, whether it is regulatory reform, or more rapid energy production, or, tax reform, then that should count toward improving the budget outlook. that should be attached to the debt ceiling. ashley: ward to tax reform, doug, does the scandal at the irs give anymore weight to the republicans call or those that want across the board reform of this very, very onerous tax code? >> i don't think so. i think that if you look in the public polling, people are by and large sympathetic to the fact that the irs have a broken tax code. they are concerned about the clear violations of the impartiality of the irs. they want to know how many people were involved. they want to know why it got ordered to be done. all those fact will come to light. i don't think it affects tax reform. the only thing it really

affects is in fact obamacare, where a program that is probably impossible implement successfully has to run through an irs that is under a lot of scrutiny. they want to hire new people to do it. that will be tougher. ashley: we hear all the time, entitlement reform. many democrats say absolutely it is broken but yet nothing gets done. is there anything that's tangible, you think that can happen this year with regard to entitlement reform? >> i think republicans have to look at this as a serious of opportunities for small improvements in policy. we're not going to get a radical revision to medicare. it is desperately needed. we won't see a big fix in social security. but in the context of a debt ceiling increase, you can get about a year's worth, $600 billion worth of reforms. that is something that is important to try to get your hand on. ashley: there are also, doug, i know, one of 111 top economist whose signed a letter supporting broad based immigration reform. >> right. ashley: why, what's the most

key aspect of that in your opinion? >> well, the central opportunity is to use immigration reform as a tool of economic policy. we clearly need to have better growth policies. we're, in year five of a very bad recovery. there are millions of americans out of work. if we choose our immigration reform carefully and there are elements in the senate bill already that change from immigration on the basis of family relationships and political asylum, instead do it on the basis of economic merits and skills and productivity, we can grow more rapidly. the letter was a reflection of the fact that economists recognize this opportunity and hope congress takes it. ashley: does it give the estimated 11 million illegal residents in this country a pathway to citizenship? do you agree with that? >> it certainly gives them a way to earn legal status and they would have to pay penalties and learn english and certainly recognize the fact that they have done

things wrong. at that point there are some who simply will never remain in the united states. they will have felonies. they will have misdemeanors that are too severe to allow them to remain. but there will be a fraction that can have a path forward. it is a long arduous path. they have to stay employed at 10-years with a job that pays more than 125% of the poverty line. it would be a food thing if they make it down the journey. ashley: interesting stuff. doug, thanks so much for joining us. >> thank you. tracy: all right. coming up we've got to talk about these markets. we're down over 200 points right now, hitting new session lows in the last few minutes. we'll have a live update from the new york stock exchange next. ashley: plus, a potential game changer for the patent market. we'll tell you about a new way to buy and sell them. that's coming up next. first let's look at some of today's winners and losers. yes, there are winners on a tough day. look at the s&p 500. we'll be right back. we know a place where tossing and turning have

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we have helped over 7 million people fall in love with their tempur-pedic. a[whispers]everyone loves freef the samples. ♪ tracy: 90 minutes until the close. stocks another dip lower. well below the 15,000 mark. nicole petallides on the floor of the new york stock exchange, what is going on, nicole? nicole: i have a chart right here which shows you all of the red. sitting around 14,955 right now. a dramatic turn to the downside. for all of those folks waiting for some sort of a pullback concerned if it is the fed,

japan selling off 18% in the last 10 days, job reports weaker than expected, all these things put together. moments ago we were talking about 15 day moving averages. i am watching that as well because that is where we are pushing up again. here is dollar general for you. up 2.7%, a name that sold off dramatically yesterday, they came out with quarterly numbers within outlook the head to lower the top line of the top area of the guidance. still not that bad. now some of the analyst today say the weakness is an entry point and it is bouncing back a little bit. dramatic selloff we ha. ashley: thank you very much. tracy: this is the steepest intraday drop since april 15 when the new chip average plunged 266 points following the boston marathon bombing.

ashley: we will keep an eye on it. patent rights on a new exchange created just for them. very interesting. adam shapiro with the details. adam: this is the offering. intellectual property exchange international, think of a patent and take that and create a unit licensing rights, that is what you are going to be buying when the trading starts on this exchange. it is not exclusive, but it gives you essentially a contract to use the patent in any way you like as long as it is under the guidelines of your patent for the product. they are getting ready to launch all of this. you can then sell it, it might even be an alternative investment. when you look at what is behind this, 600 unit licensing rights being offered, 225 of them for organic light emitting diodes.

the things you see in screens, the touchscreens. who are some of the companies behind what is called the ipx i? ford global technology, hewlett-packard, jpmorgan chase, panasonic, and sony corporation of america to name a few. there are far more. the offering, starting with the data room for buyers who look at what you might be getting and trading could begin 24 hours after they have a subscription to the offering. this is up and running. they hope to be trading pretty soon. when we talk about alternative investments i heard on the earlier shows people talking mode are you one of those investors who chases yields, we will be exploring tomorrow throughout the day on fox business perhaps unique ways you can invest and make money. this could be one of them. one of the reasons they launched

this exchange was to make things a little bit more transparent, to make it easier and avoid the pitfalls like apple, samsung. ashley: interesting. adam, thank you very much. adam: you got it. tracy: in a summer of blockbusters, a new low budget horror film may be the sleeper. dennis kneale has more on "the purge." dennis: what would you do if one night all the crime was legal. your family coming under attack. would you kill or be killed? that premise in "the purge" had ignited a lot of debate online. comcast universal can turn social media buzz into ticket sales, it may have a surprise hit. "the purge" opens this friday. shot on a shoestring budget. online "the purge" is soaring.

548,000 likes on facebook. on twitter, three different hashtags, mentions her up 180% over 16,000. just the hashtag "the purge" u up 150% in two days. they had set up the facebook and twitter pages tooget the conversation started, but organic chat room fans have taken over and made the conversation their own discussing "the purge"'s apocalyptic scenario. the summer box office has been gorging on big-budget action flicks for weeks now. iro"iron man 3", "star trek," ft and furious six, the new superman film coming up later this month. some $200 million just for production. the guy who started paranormal activity made $15,000 on fancy

effects into a $200 million blockbuster. the most profitable flick in hollywood history, apparently. that we will see if he can build this into a big-budget payoffs franchise. this set up could be told again in many sequels. tracy: have you seen it? dennis: i have not seen it. it will open friday. i don't like going to films that scare me, there are enough scary things in real life. tracy: i got tricked into seeing "pet cemetery." that is the last time i saw a scary movie, that is a true story, and this deal. sunshine and lollipops, that is what i want to see. ashley: breaking news, oil climbing up $0.43. today's close equals higher reverses yesterday's losses. oil on the way up.

coming up, stocks off their worst levels but still under pressure. a live update from the new york stock exchange with the dial off 200 points. tracy: and what michael douglas hpv comments could mean for the multimillion dollar vaccine markets. dr. manny alvarez is here next. the dow down 200 points. let's check on your 10- and 30-year treasuries. 2.09%. and your 30-year down the same, 3.5%. we will be right back. 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, one thing that hasn't changed much is the oicial retirement age. ♪ the question is how do you ke sure you have the money you need to enjoy all of these years. ♪

>> this is your fox business brief. a sharp selloff continues after the relief of the federal reserve facebook as we reported at the top of the hour the central bank says economy expanded at a modest to moderate pace since mid-april but hiring remains the view. concerns of safety implications on the proposed takeover of smithfield group by chinese company. she is urging federal agencies to take china's troubling track record into account when considering this merger. and spirit airlines is thinking ootside the bottle. starting this week passengers can purchase wine out of aluminum cans as an alternative to the many bottles it currently

sells. containing 7% less alcohol by volume. that is the latest from the fox business network giving you the power to prosper.

tracy: today's medical dollar ds segment, michael douglas bernini renewed attention to the human papilloma virus at any given time 20 million people in the u.s. are affected with hpv. it can be prevented for the vaccine is causing controversy. fox news health.com managing editor joins us now. why the controversy? >> when the vaccine ca came out there was a controversy about increased promiscuity among teenagers, people against vaccines altogether, but look at the end of the day hpv is a very common virus, millions of people

are infected and i think by michael coming out, even though he took it back, he got throat cancer from hpv exposure, a lot of people are questioning whether or not there is a validity to a small adult or children if you will with hpv vaccine. i think they should think about it. 100 strains of the virus, sexually transmitted type of disease of course. not all hpv gives you cancer. when you talk about cervical cancer, you talk about strains like 16, 18, those hpv can create cellular dysplasia and could turn into cancer, the same thing for head and neck cancer. there are other factors, of course. smoking, drinking, all sorts of things. tracy: all the things he did. >> when you put it together, 35% of head and neck cancer are

probably due to hpv exposure. tracy: du fo do you believe tees should get the vexing? >> yes, i do. data is coming in from pediatricians and i happened to interview for some of the interviews for fox news health, it is on the rise dramatically. you have to take protection because if you have the vaccine, you have a fighting chance to minimize the chance will be embedded with these types of hpv that could later in life create cancer problems for you. nothing is full proof. that is it. anyway. ashley: thank you, michael. tracy: dr. many, thank you very much. ashley: a quarter until the hour, let's go down to the new york stock exchange.

a very turbulent day. starting to come back, down 188 on the dow. >> people were really taking a look at the economic data point we got this week in particular today. no denying we have a soft economy in the u.s., but at the same token we are getting noises out of the fed what they're doing on the bond buying program because it doesn't seem like it is doing much for the economy. one of the main data points is moderate to modest growth across the country, that is adding support the notion the fed will buy back the bond buying program. letting the market trade the way it needs to to clear the market. without support from the fed in the equity market, people start

evaluating based on the company fundamentals and that is why you will see the money coming off the table right now. ashley: if we get a disappointing jobs report on friday, what does the job market do then? >> it will go back to the positive side. it will get it back into the conversation. ashley: we shall see. thank you for joining us. >> my pleasure. tracy: to you who is doing well, the luxury market. they took a big hit during the recession, but have a bounce back? the ceo of a luxury hotel. on the pulse of the uber rich. ashley: take a look at the winners and losers on the nasdaq. up 2% in a tough market. am up $1.60. we will be right back. it's a brand new start.

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tracy: will come back. let's take a look at your market right now. down 182 points. we were down 231, almost 232 points, our session lows, everything down 1% right now. to drink back and forth over the 15,000 mark. ashley: fox confirming to irs stockers put on leave for receiving free food and other items while attending a 2010 taxpayer-funded conference. to irs employees on leave. our next guest with the ultra rich consumers around the globe. operating luxury hotels in thailand, india, new zealand and soon china. joining us now, ceo of the hotel

and resort. thanks for being here. you were here seven months ago now. you were talking about before we get to the other properties you are saying we start operating in the united states, we begin with restaurants before we get into luxury hotel business. where do you stand now quick mark >> same. very advanced stage looking at the service restaurants. that is what teaches us the behavior. it is about destinations experience. most of the experiences come from the irs. ashley: i'm sure they have had those experiences in the past. you have been looking at china.

we get a lot of reports the chinese economy could be slowing down. have you seen any signs of that? >> we don't see that from the consumer spending the chinese economy not slowing down. spending has become number two. germans are still the number one. chinese are spending a huge amount of money. they are going to change the landscape and spending the next 10 years not an issue. talking globally. ashley: talk about your indian operations. india has all the attention in the world. we'll talk about it for so long but there's always a question of infrastructure. is that still an issue? >> infrastructure is an issue. we have to put $100 million into infrastructure. i think you are talking about these us. what india has to do is have to

start making people getting to india more easy than before. so that is what india needs to do. they take a long time for travelers coming out of the united kingdom. domestic demand is huge. very populous nation so the demand is there huge, and that is what is driving the business. ashley: you always say you talk about the experience. you think luxury high price, you say forget that, it is about the experience. expensive experience? >> it can be expensive, it can be cheap, everything is relative. it is expensive for me, maybe cheaper for everybody else. ashley: thailand, policy operation going in thailand? >> thailand is doing very, very well. each and every business is

booming and we're very optimistic. ashley: stabilized. >> very much stabilize. ashley: and new zealand. >> a property we have kept, it is by invitation. it is by invitation. ashley: that is ultra, ultrarich. we really appreciate it did look forward to hearing about your plans for expanding in the united states. thank you. >> thank you. tracy: okay, ash. our lottery winner has a name. 84-year-old gloria mckinsey is now ultrarich. the largest soul winner in u.s. history. god bless her, i am sure the grandchildren will come out of the wood works and i know ashley is one of them. call grandma. ashley: somewhere on the family tree we are connected.

84. ashley: fantastic. tracy: love it. ashley: coming up, "countdown to the closing bell" with liz claman. recalling 3 million jeeps. we will look at the long battle against the government and what it will mean for the stock. and the fallout apple losing a key battle with rival samsung straightahead on "countdown to the closing bell." to make the call. to treat my low testosterone, my doctor and i went with axiron, the only underarm low t treatment. axiron can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all

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