where are the jobs? dennis: big brother is watching, listening, and reading. the obama administration under fire after a second massive surveillance project is revealed. president obama is not apologizing for it. he is, in fact, defending it and says is not even directed the u.s. citizens. lori: of course, the president looking to punish hackers from abroad. this case mr. obama will make that china's president in california starting today. former white house stivers are howard schmidt is our special guest. as did you updated on the markets as we do every 15 minutes, add to the floor of the new york stock exchange and nicole petallides. clearing recent losses. >> reporter: an exciting week on wall street. very volatile out back-and-forth action. we get our jobs report, our monthly jobs report which is a little better than expected. that helps stocks along. bring back the uncertainty of whether the fed may tighten said that later. and then that puts a damper on things, but you do have the

rhetoric happening. we have watched what went on in japan to this week. just to name a few things that have occurred. we really have had a lot of back-and-forth volatility. the dow jones industrials up 165 points. let's take a look. right there, the dow jones industrials, for the week, winning week on wall street. 15,115. almost 100 points to the upside. the other two averages, the nasdaq and the s&p 500. closing at 1630. to the upside there for the s&p and the nasdaq. at 3455. and look at that. of five. cain. that was more of a nail biter. lori: thank you so much. giving us a clue about the fed's next step. the economy adding 175,000. the under employment or the it fixed rate falling to just under

14%. but the unemployment rate ticked up the seven and a half percent in april. so in talk of fed tapering moving to the back burner. let's ask wells fargo senior economist. let me get your take on the jobs report. overall this is show me full improvement or not someone's? >> i don't think it shows a meaningful improvement. it was really more the same. the headline number. >> good. another 75,000 new jobs. when you got into the details, the quality was pretty lousy. 60 percent, 58% to the jobs were either and retail trade, leisure and hospitality which is largely restaurants, and staffing. our home health care. those jobs is don't pay a whole lot. so the mix of jobs is not going to be consistent with the income growth. lori: to add to that, the higher wage manufacturing jobs, we lost 8,000 of them last month.

what does that say to you about the future payroll report and whether not really in a summer slump. >> it was not just manufacturing . anything that was involved with making or moving goods, we lost jobs in manufacturing, railroads, trucking firms, shipping companies, and warehouses. i think what that tells us is that the slowdown in the global economy is weighing on u.s. economic growth. we are likely to see slower gdp growth the second quarter. looking for gdp to rise about one and a half% annual rate. i think we will be hard-pressed to grow much faster than 2% through the rest of the year. lori: that is amazing. did you just downgrade your economic outlook because of today's jobs report? holding about two and a half%. we will lose of 000 basis points of economic growth is because of this? what about other sectors of the economy. >> we did not downgrade because of this report. that is pretty much where we have been. pretty much status quo. even though the number of jobs was higher than we expected.

it is just that the quality wasn't there. in terms of the unemployment rate, that was not that much of a surprise. the last blood years we have seen this weird trend, even though the numbers are seasonally adjusted. the unemployment rate seems to go down in the fall and winter and rise backup in the summer. when you get into may, schools let out and you have to return students and recent graduates into the workforce. somehow it is overwhelming, the seasonal adjustment process. it is likely to cause the unemployment rate to rise over the next couple of months. lori: that makes a lot of sense. obviously rallying because it looks like this talk of tapering and the fed taking the foot of the gas pedal, moving the punch bowl, pick your phrase will be pushed off probably for a little while. zero down, to zero in on what you think the fed next course of action is over the year? >> i think that the fed really has not adjusted their timetable at all. they still have to see what is going to come out and happen with the economy between now and the end of the year. and most likely overall growth

will be relatively sluggish. when i said we are going to be hard-pressed to grow faster than 2%, a big part of that is the government is contracting. we are seeing the federal government spending going down, state government spending going down. if you look at the private sector, it is going closer to 3%. lori: we want a smaller government, right? >> it is a good thing. it has some distributional effects. areas around washington d.c. are slowing. norfolk virginia where the navy is big. san diego. defense contractors are hurting. so there are some distributional effects. overall we want to get a smaller budget deficit. overall, we want to get a smaller budget deficit. it does not mean that there will not be any pain along the way. if a private sector is growing 3%, then the fed probably can back way. not all at once, but they can begin to.

by late this year, you will see an announcement by the fed. they may not start doing it until 2014. dennis: no u.s. citizens are targeted in the prison program. that has a government tapping into every e-mail, google search, etc. rich: this is an attempt to reassure americans that the government is not monitoring them. they are preauthorized and think that the courts are also involved.

>> with respect to the internet, and e-mails, this does not apply to u.s. citizens and it does not apply to people living in the united states. again, in this instance, not only is congress fully apprised of it, but what is also true is -@the visor court has to authore it. >> from here the president begins a two-day summit with the chinese president. one of the topic, according to officials will be the reports of chinese hacking into american commanies and the american government. perhaps the news that has come out, the u.s. stands when it comes to cyber security. ashley: thank you very much. president obama not apologizing

for the internet and phone surveillance programs. how will that play with the american people? m paul is here now. the president made sure to tell us that first of all, congress knew, this secret court new. he is basically defending it, not denying it. for once, he is saying that he knew about it. you say that the president has yet to stand up and say that the bulk stops here. i think he needs to say that. he is the president of the united states. he is the president. what we see here also is a lot of american people not looking at it at a perspective of that. you are looking at me. it does not matter if you are targeting one group or another. when you are thinking about tax

dollars, will we think about some of the other ssues, they do not really care if it is inside the beltway. they are saying it is my pocketbook, it is my phone, stop doing it. ashley: do think that the government turned out to be way out ahead of the people? it looks like most people are kind of shocked by a lot of these revelations. >> think about the average american today. what are some of the areas that you are most stressed by. not understanding. not being able to protect yourself. thinking that you have a little bit of privacy left. this is something that we had to do. i guess in the wake of the irs scandal, one worry that some people have is, once you have

all of my files and all of my communications and google searches, how do i know that it will not leak into some non-terrorist stuff? >> we also see this as a lame duck presidential move. they knew that they did not have to go for obama again. that is very important. he does not have to take the same type of accountability. ashley: he can take a harder line. should the president -- you have the irs targeting.% you have the government going after the associated press. now you have verizon spying. which one is the worst for the president? >> it is all of them. when you think of it from a public perception, they are all mixing in with each other.

ashley: this guy walked on water. he did a basketball shot from way past the three-point line and nailed it. today his prompter was not working. does the president need to come out and apologize to the american people for any of this stuff? >> if i was advising him i would say, look, there are two perspectives. they should be the same, but as a lame duck president, there are many things that he does not think that he needs to be accountable for. their risk in doing so is that this continues to be a hot issue for him in the media and political spotlight is not off of him. people will be asking for more information. the more transparent you are, the quicker that you release that transparency and accountability, the more that that crisis will go away.

ashley: yes or no, should president obama apologize to the american people? >> yes. ashley: thank you so much for being with us. lori: stocks climbing here. we are invited to the cme next. ashley: tropical storm andrea. disrupting travel and business along the way. lori: it could be a wet weekend. the new federal money being spent to clean up struggling neighborhoods. ashley: take a look at oil as we head to break. ♪ ♪

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ashley: we check stocks every 15 minutes. let's go to nicole petallides at the floor of the new york stock

exchange. nicole: you are absolutely right about that. a household name. 76.53. this is on the announcement of a buyback. this is big news. they completed a $14 million buyback of their stock over the last two years. they continued their share repurchase program with 15 billion-dollar authorizations. walmart continues to do that. they talk about the fact that they are very sensitive to customers. in turn, they have had smaller packaging which is more affordable. also the fact that they have been putting out some less expensive products.

the ceo of the company will promote nearly 500 people each day. that is good; right bush mark everyone likes being promoted. that is good news out of walmart. ashley: billion-dollar buyback. thank you, nicole. ashley: meadow selling off. no surprise. phil flynn is in the pits of the cme. is this a classic trade on the jobs report. >> absolutely. this is the worst report for metals that you could possibly give. the jobs are in the mush zone. it was not so strong that you really fear that the fed will pull. we are going back to the plate that we saw earlier in the year with the metals. sell your metals and get long in

the stock market. right before the report came out, there was a lot of selling in both gold and silver. someone either knew what the report was or they wanted to cover their positions. lori: more jobs created, the expectation of more demand on oil. the first weekly gain in a month. >> there is no dow that oil is linking onto the stock arc appeared we have been talking about tropical storm andrea. it will slow imports into the goals. a lot of the forecasters are warning that andrea may not be the end of the story. next week, we could be talking to more storms. you do not want to be short when the weather is changing light that. lori: they are calling for a busy hurricane season.

ashley: financial health is coming detroit's way. the federal money is from the hardest hit fund created in 2010. currently, detroit has more than 30,000 vacant and abandoned homes. detroit is $16 billion in debt. an emergency manager has been appointed. lori: rooting for detroit, that is for sure. how the dvr pioneer managed to win and lose a major legal battle. tropical storm andrea speeding up the east coast. severe weather threat and what you can expect this weekend. lori: check out the dollar. we are fast approaching the

canadian dollar. the ollar is stronger here against the euro and again. back after this. ♪ ways go the extra mile.

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♪ >> 23 minutes past the hour. republican senator john mccain of arizona and democratic senator have both entered the detention center. president obama again announced to close the prison there. where 166 terrorist suspects are being held. in arizona, maricopa county sheriff says he is suspending their crackdown on illegal emigration. he has been one of the supporters of local police cracking down on illegal immigration. newark new jersey mayor cory booker will announce his plans tomorrow to run for the late frank lautenberg's senate seat.

those are your headlines. that to denis and lori. lori: thank you so much for that. onto the weather now. tropical storm andrea made landfall yesterday. dropping heavy rain and spawning seven tornadoes. the storm now speeding up the east coast. let's check in with fox's mary quinn. >> hey, lori. fortunately, what we are dealing with is not nearly as bad as what they were seeing in florida yesterday. we are still dealing with the tropical storm warning. if you look at at the ocean you will see the waves. they are choppy. there is an isolated reports of flooding here in myrtle beach down towards charleston.

they got up to 5 inches of rain last night. we had a few tornado warnings as well here in the carolinas. i actually have a family with the right now. they have lived here for 12 years. what do you think about the past 24 hours? >> it was not as bad as i was% expecting it. we really just went to bed and woke up to a heavy rainstorm. >> do you have any fears about it being a very severe hurricane season. >> i have a little bit of fear. it is the nature. >> that has been the mentality of most of the people that we have met. everyone is just kind of ready to go to the beach.

it still is not safe yet. please, be careful even as the storm makes its final path through the carolinas. lori: thank you. the storm is headed right of the northeast. it is amazing how we are all of the sudden hurricane territory. dennis: i feel like we gave enough last year. skip us. message to china. you cannot spy on americans. lori: let's asked that question to howard schmidt. he is our next guest. dennis: taking a look at who is up and who is down on the dow. look at all that green, baby. ♪

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tdd# 1-800-345-2550 help you get started today. lori: all right. rally mode here. let's get an update on the markets as we do every 15. back on the floor of the new york stock exchange you have a winner and losers in today's session as well. >> it is always so interesting, lori. when i have to talk about gamestop and videogames because my children are addicted to all of these things. myself don't play the videogames but i know it is hot and it is big business. so let's take a look here. microsoft and gamestop both have up arrows. this is because the new xbox, xbox one which i'm sure will be on the holiday list, there were some reports originally that the company would charge a fee to play preowned games. microsoft is clarifying what the use of these games and that you can have, use the old games, turn them in, seems more amenable to doing so. so there is celebration here for gamestop.

it is up 5 1/2%. that is good news. then we're looking at tivo. not such good news for tivo. that is because they did settle some litigation. here it is, down 17% at the moment. they get a lump sum payment of $490 million from google and cisco systems for patent litigation. some people thought it would be over a billion, 1.7 billion. this seems very small compared to what a lot of folks were expecting. that is why you see the stock lower. back to you. lori: good perspective. appreciate it, nicole. dennis: president obama is preparing to get down to business with chinese president xi jinping. especially hacking into u.s. businesses that seems topical. jo ling kent has the story. jo? >> this is a with backdrop of sunny california, president obama and president xi are actually the first-ever of these two presidents to hold a meeting like this. now cyber attacks like you mentioned will be at the top

of the agenda. for xi jinping his priorities are more likely north korea, u.s. role in tear torlt disputes between japan and china and trade and competition. you have to remember china will not be told what to do. although xi represents a new type of leadershii in china, a man traveled to the u.s. as a young leader, who goes off script and doesn't like talking points his priority will be taking care of internal stability. making sure their growth is steady. so they may be a fast-growing power but they are insecure. they're constantly trying to strengthen and find their footing in asia. why they don't enjoy president obama's pivot to asia. this is about soft power or face time, guys. dennis: soft power, or face time. that is nice, nice phrase. jo ling kent worked in china as a journalist for a u.s. network. she kind of knows what she is talking about. we hear first lady michelle obama will not be traveling

to california, jo. >> a bit of a snag in the grand master plan. she was related to join xi's wife who is famous opera singer. she won't be there because of family obligations. chinese are very disappointed about this. face time is the most valuable you can give to a relationship. they're not pleased. many were excited two popular first ladies side by side but that will not be happening. dennis: nice job, jo ling kent. thank you very much. >> thank you. lori: we'll continue with the topic here. will the meeting accomplish anything? no one better to to ask, howard schmidt former cybersecurity coordinator for the obama administration. welcome, sir. >> hi, lori. how are you? lori: i'm fine. thanks for joining us. first thing the people are wonder whether the nsa prism controversy will overshadow this summit, what do you think?. >> i don't think it will overshadow. what it will happen to give leverage it chinese, listen you've been talking to us about civil rights and freedom of expression and now this announcement's made. what are you guys doing? are you talking out of both

side of your mouth or something you're serious about. lori: my colleague dennis kneale is shaking your head in agreement with you. the chinese get leverage here. what best scenario could come in favor of the u.s.? to your point exactly how can the president, give the president of china a hard time for their hacking and cyberissues, espionage, if it looks like the u.s. is government doing it to its own people as well? >> yeah. i think there are two pieces of this that is one of the problems we see when we talk about cybersecurity. so many of these different issues get conflated together. cybercrime, intelligence, intellectual property theft, norms in cyberspace it all comes in one big ball. in this case the discussion with china, we recognize reported more than 120 countries around the world do some cyber espionage. that is pretty much a give. we always have the spy versus spy. but as noise is as you guys are, as much as you're going after commercial entities,

stealing intellectual property, giving it to your companies to become more competitive in the global marketplace, that is too far. that is a bridge too far. so if you want to be part of that global economic community, when we look at, technology, you really have to back this off, take some control over it. have some responsibility to those that are doing it, not doing it sponsored by the government. hopefully you can be part of the inside community and not outside the tent looking in. lori: is it too much to wishful or pollyanna situation to say, hey, let's come together. china is having some of its own economic issues. we have our own economic challenges. how can we better work together especially given not just economic challenges but geopolitical threats with north korea and other hot spots? >> that is not too much to hope for and that is the part that is really important is the ability to sit there and say, okay, we may disagree on all these other things, the straits of china, all the taiwan issues,

devaluation of the yuan, but let's separate them from the china security issue. from a economic perspective we all benefit from it. u.s. companies want to do business over there worry about it because they wind up losing their intellectual property. they don't want to yell too loudly because it becomes more difficult to do is. it is in their best interest to join us find common ground, develop norms in the cyberspace, develop confidence building measures and move forward as a stand-alone issue as it relates to cybersecurity. lori: do you think that goal could be better achieved with companies like google who had their searches spied onto a simple word by these governments, if major u.s. internet companies do push back here? would it help foster a better relationship between our two countrys? what should the corporate world do? >> yeah, the issue in the corporate world is, hey, we're not going to take it anymore. the problem if it is just

u.s. companies complain and seen a u.s. conspiracy in the mind of chinese, this has to be a global issue. we've seen international companies from, eastern europe, nordic region, different parts in asia been intruded upon. intellectual property stolen that don't say anything because they're afraid of any repercussions from china. this is where the private sector voices need to come together. the ceos, board of directors, have to better understand cyber risk. they have to be more vocal about it. not only just the united states but to other nations but you guys at the government level better get your acts together, discuss this, solve it. because we're the ones that are suffering in the business community. lori: i have to go, but i'm so curious, howard what you think of michelle obama saying she had other plans not being able to make it? is it a slight to the chinese? >> well i don't know if it is a slight. once again, and i know from my time there, ffmilies are very important part of their lives. if it is family environment she has got a commitment i

salute her for that. i would hope the chinese would understand that is part of the way we live our lives. family is more important. lori: howard schmidt, we'll leave it there. a lot of people would agree with the last statement, right? dennis: absolutely. the may jobs report settling to investors that the economy is expanding but in the fast enough for the fed to wind down easing that would be good news. lpl's jeff klinetop talks about the huge rally on wall street and how long it might last. lori: what is going on with interest rates? they're up too with a big selloff in treasurys as people come back to the riskier stocks. 10-year is up and 30-year with a. when visa signature asked everybody what upgraded experiences really mattered... you suggested luxury car service instd of "strength training with patrick willis." come on todd! flap them chicken wings. [ grunts ] well, i travel a lot and umm...

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>> i'm cheryl casone with your fox business brief. the bulls are charging their way on to wall street following a better than expected jobs report from the government. today's rally is lifting stocks into positive tear for the week. look at the dow. we're up 165. investors are betting on scientific games. after the company landed a contract to provide a lottery system for states in hungary. they signed a five-year contract with south carolina for lottery services. they provide end to endgaming solutions for lotteries worldwide. target planning a to roll up its, starting

organic plan, simply balanced. this is the outgrowth of existing products within the existing archer farms program. they will start with drinks and snacks like corn shims chips among other things. that's the latest from fox business, giving you the power to prosper.

dennis: today's jobs report lifting all the major stock averages to positive territory for all week long as a volatile week. is it enough to keep the rally going? joining me jeff klinetop, chief market strategist for lpl financial. thanks for being with us, jeffrey. looks like the u.s. added 175,000 jobs. we need 200, 250 to match population growth. we need 350 to start reducing unemployment. in that sense it is a great number, is that right? >> well, listen, we are seeing better private sector job growth here. and that's the important thing. over the last 12 months we've seen it begin to pick

up as government job growth begins to fall away including sequester adding to that, we're seeing fewer and fewer government jobs. those are declining. private sector is picking up. private sector gdp is growing 3 1/2% rate when you add the 1% greg from the government spending back into it. as the government steps back, getting out of the way, the private sector is stepping up. that is good news potentially for the economy rest of the year. dennis: we've been for three years, private job growth each month averaged all of 178,000, which is reaaly subpar what we need to match the population. is that in essence a good thing? because the fed is not going to pull back anytime soon? >> yeah, dennis, it does mean this recovery is not yet self-sustaining enough that the fed can step back and leave it to its own. they tried that in 2010. didn't work. tried it in 2011, didn't work. they had to bring back qe each time. hopefully they give it enough time towards the end of this year they begin to

slowly test pulling back quantitative easing maybe towards the end. fourth quarter, maybe early next year once the economy has gotten on a better footing and see better job growth numbers. dennis: we added 175,000 jobs in may. the participate race, 420,000 new people getting back into the workforce searching for work. good thing or bad thing? >> dennis, as you know, as we start to see job growth pick back up again, it is good thing to see unemployment rate tick higher because it means previously disgorged workers are coming back and looking for jobs again -- discouraged. that could be a good thing as people feel more confident they can find a job. dennis: talk to me about shadow job workers. you think there is hope there. explain. >> there might be. so there are two survey that track the amount of jobs being created in the u.s. economy. one we talked about this morning already. we talked about today already, the establishment survey, looking at big businesses asking them how many jobs they might have

added. other one is calling people up. asking householdings did you get a job, did ou not get a job? that showed a big increase, 319,000. maybe a lot of booming home construction jobs are engaging a lot of individual workers that aren't captured in the big large company surveys. that could be a sign that there's better employment growth really showing up just below the surfaceeof numbers we watch on a regular basis. dennis: let's talk about job quality. does this worry you at all. 57,000 new jobs in services. 38,000 new jobs in bars and restaurants. 28,000 in retail. this sound like jobs for high school seniors. >> yeah. this is not a good trend, you're right. the composition of the job growth is not super encouraging. we didn't see much in finance or other areas that tend to be more higher paying. we've seen weakness there. even in manufacturing we saw a drop in jobs this month. not a good trend we want to see. let's see what happens when graduates come out here over the course of the summer. hopefully we get bettee job numbers and higher earning

categories. dennis: nice job, jeffrey cline top thanks for being with us. >> thanks, dennis. dennis: keep it here on fox business. i host "money" at 5:00 p.m. tonight. i have economist, peter morici and jeffrey cleveland with the fax fixes for job. that is tonight at 5:00 p.m. eastern. lori: let's get a check of the markets as we do every 15. jonathan corpina, you were listening with the conversation with jeff klinetop. rally on our hands. start of the week it wasn't so great. does the job report change sentiment here? >> i think it does. everybody was waiting for today and waiting for this number. all the economic data we got this week kind of builds up and leads to today. numbers we got today, not horrible, not great, kind of right down the middle. i think that adds more confidence to the investor and to the community. moving forward not a lot of economic data next week. so investors will be kind of grabbing for headlines and other areas that might show us signs of strength in this

market. lori: what do you think is in store for the market? who you would you characterize the current valuation of the stock market and even if there isn't anything headline driven to it, what does your gut tell you how healthy think it is and whether or not to buy or sell at this juncture? >> taking out economic data, taking out earnings season, i look at the headlines, i see a lot of merger and acquisition news that's out there. i think that is healthy for the market. company buy backs out there. healthy for the market too. when you look where we were and where we've been with a small pullback over the last week and a half, i think market will continue to be healthy as we run through this summer. lori: jonathan, thank you very much. stay dry this weekend. >> thank you. dennis: taking care of our veterans. but for two employees of the veterans administration, the real focus is taking care of the union. that is coming up. lori: two thumbs up or two thumbs down, why not the whole hand? typing in google searches a box-office predictor is just ahead. dennis: that is nice tease.

look at some of today's winners over at the nasdaq. lori: did you write it?

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♪ or go online to lifelock.com/planahead. use promo code planahead, and get 60 days of lifelock protection risk free. enjoy your vacation, knowing lifelock never takes one. lori: two top senators sent a letter to the secretary of veterans' affairs, why 188 va employees were paid taxpayer fund. salaries and benefits to do union work full time? with more exclusive detail, liz macdonald's emac bottom line. >> basically workers employed by the va to be nurses, school gifts, therapists and security gads to protect va hospitals. they're doing work full time. what the senators are upset about, rob portman and tom

coburn. the workers are basically doing full-time union work. here is what they said in the letter a day after press secretary jay carney saved the president is deadly serious about claims backlog at the va. senators are blasting the va. this is troubling. compromising the well-being of our nation's veterans and undoubtedly will negatively impact veterans. issue, va is he will telling fox business it will prepare a response to the senators letter. they are saying that they are aggressive trying to cut back that claims backlog and they're saying though, that too many vets have to wait too long. this comes as, the unemployment rate among 18 to 24-year-old veterans is running higher than the national average. terrible homelessness among military veterans. what is going on too, what these union workers, essentially, va workers doing union duties, they do, they do basically grievances or disciplinary matters. it is illegal to strike if

you're a federal worker. pay and benefits are set by law. mostly grievances work. the senators are upset that the va is basically using an overtime surge to cut the backlog at a time when they have a lot of workers doing union duties full-time. dennis: 188 workers doing full-time union duties. is this afscme? which union? >> a number of unions across the board. there are 80 federal worker unions and sub unions, subsets of unions. overall $156 million it paid out by u.s. taxpayers to workers in the federal government who do full-time union work. that as of 2011. up 12% from the year prior. this tags onto the story we broke in february finding out how many full-time federal workers are being paid by taxpayers to do full-time union work and not the jobs they were hired to do. lori: good investigative work. >> sure. dennis: in today's media minute, a new study from google, says google searches for movie trailers are

insanely accurate predictor how well a movie opens at box-office. search volume in the four weeks of a movie premiers could have accuracy rate of 94%. predicting box who was haul. if one flicks draws 250,000 more than a other film in week before it opens it will rake in $3.4 million more. studies -- magic mike, the stripper film. the surprise hit for warner, trailer searches in the four weeks before it opened forecast a startling, $40 million opening for that film. and the real number when it came in? $39 million. and the four-week predictor, that is, that is pretty accurate. lori: what was magic mike about? what is the premise? dennis: it is about male strippers. based on the life story of channing tatum. you can't to keep that going. lori: keep it going, fellows. dennis: vo, means voiceover

video. lori: keep it going. dennis: hollywood forecasters, betting on $40 million opening. google is predicting below $30 million bucks. film came in opening weekend, $25 million. a flop. way to go google. this will help google sell more movie trailer ads. lori: absolutely. interesting how you get the aggregate --. dennis: what our u.s. government and spooks in the nsa are doing. lori: you're right. fed taper talk winding down for now. like the talk is literally winding down, getting more quiet but it will return. how can you protect your portfolio when it does? convergys joins us with adam and tracy byrnes on fox business next. stay with us.

tracy: welcome back, i'm tracy byrnes. adam: i'm adam shapiro. with two hours to go stocks are surging on the hope that

today's jobs report will keep the fed money printing press rolling for now. we're headed for a winning week. we'll break down the jobs report to see if it is anything to cheer about. tracy: the market doesn't really care. first it was reporters phone calls. then regular americcns phone calls. then the government is reportedly tracking what millions of americans are doing online. that means they know i bought shoes this week. that is ahead. adam: president obama to meet china's leader on a critical summit on cybersecurity and and more. mary kissel believes china will deliver all talk and no action. tracy: as we do every 15 minutes, let's go to the floor of the new york stock exchange. i wore green today everywhere. >> crystal ball. tracy: absolutely. >> so far so good. we're up 151 points here on wall street. with these moves we will raise the loss -- erase the

losses of week. one day we took a hit down 216 points. some of the main factors still remain. i mean the jobs numbers that came in today were slightly better than expected. that's good news. the big picture is that the economy is gaining only moderately across the board. the questions about the fed and quantitative easing and whether they will be tapering off sooner than later, that wild card still remains. there is a nice chart of the dow jones industrials. we noted up 1%, 153 point gain. but last friday closed at 15,115. s&p 500 at 1636 that is a winner for the week. up over six points for the week. tech-heavy nasdaq closed last friday at 3455. 3457. two points and that is squeezing out a gain as well. so far so good. not only does this erase a lot of losses throughout the week this week but also snaps the losing streak we've been on recently,

weekly losing streak. so good news there for the bulls. back to you. tracy: lots of good news there, nicole. we'll see you in 15 minutes. adam: investors like today's job report but what will the fed think of it? will it encourage bernanke and company at least to begin tapering or pulling back on qe? peter barnes breaks down the numbers for us. he is washington. peter? >> hey, ad many today, this seemed to be not too hot, not too cold goldilocks number today. low enough for, high enough to give people encouragement that the economy is still creating jobs at an okay clip but not so high that it would convince the fed to start scaling back, tapering its quantitative easing. we also saw the unemployment rate inch back up as well to 7.6%, which might keep the fed from tapering, but, the economists say that this happened for a good reason. about 4000000 more people returned to the labor force to look for work.

and that can be a good sign if more people are optimistic about their jobs prospects and more willing to accept a job. let's look at some of the sectors where they might find a job now. professional and business services people added 57,000 jobs. leisure and hospitality up 43,000. education and health care was 26,000. here are sectors that cut jobs last month, where you don't maybe want to send in an job application. manufacturing, down 8,000 positions. nondurable goods downings 6,000. government down 3,000. one sector that added jobs last month, construction, was up 7,000 in may. and home construction, one of the bright spots in this economy. >> we remain focused on digging our way out of the mess caused by the great recession. what we would like to do turn some of these headwinds into tailwinds. we're seeing that in the construction sector now. housing has finally turned

around. home prices are growing. home construction has been up. we're seeing a rise in construction employment for residentialal construction. >> but republicans said this job creation is still not good enough. house speaker john boehner quote, today, said, today's modest job growth is a positive sign but we can do a lot better. millions of americans have been out of work for more than several months. wages are stagnant and the unemployment rate is still far higher than what the obama administration promised. adam, lori, back to you. adam: peter barnes, thank you. tracy: hi, peter. it is okay. >> hi, trace. tracy: it's friday. let's keep talking about this. today's rally lifting major averages into positive territory for the week as nicole petallides just said but our next guest says today's investor sentiment a little too bullish for his lyinging. we have the chief market strategist with con very gist -- con vir gist groups joins us. why.

we've been i had rooing the wave. >> this rally began in november last year and continued until the last 10 days almost uninterrupted. that kind of move is unnatural. you need pull backs in the market. so the current level of market activity still feels a little frothy. underlying fundamentals are still good, let's not steer it the wrong way. we're in a frothy period and corrective phase. adam: corrective phase, you're positiving stocks. last six months of the year. is it time to be on sidelines or wait for the next dip and buy in. >> time for the next dip which is the pros test we're going through right now and buying in. the underlying fundamentals of the economy, while that jobs number wouldn't wasn't great it wasn't bad either. underlying gdp is good enough to put profit growth higher and that is the mother's milk that drives stocks. tracy: are we out of the woods? housing is doing better. people are starting feel better. maybe get out and spend some money? >> absolutely. ultimately the upper say 20%

of the income distribution in the u.s. has been doing better. that's why car sales are better. house sales are get better. would be great to get the middle class, middle part of the economic distribution to gain as well. that they are affected by the high jobs number. adam: i have a statistics from an analyst, 76 companies out of 108 are giving negative guidance for the second quarter. sounds as if companies are preparing for a bigger slow down than perhaps the stock market is preparing. >> that is interesting and important point. corporate profitability is at all-time record levels against a sluggish environment. if i told you i had a car could beat every other car on the racetrack with four cylinders instead of eight would you like that? you probably would. adam: i have that car. >> we're running corporate profitability at very high levels even though we don't have all the cylinders going yet. tracy: at the same time market is somewhat anticipating a second quarter pull back, right, a little bit? especially from earnings we

knew the sequester kicking in, taxes are going up. people would start to feel this. if the market is epaing this, couldn't we keep going up? >> think we will. i think we have this period of churn because of a period of too much euphoria we had before. ultimately corporate profitability is good. let's face it. if the federal reserve eventually does taper which they will have to at some point. they can't keep going and going and going, then bond rates begin to rise and investors look at stocks as viable opportunity to invest in. adam: you mentioned taper. just as we came on air, plosser, one. members of the federal reserve, says it is too soon to actually started a justing the size of qe and talking about the taper. is that going to be a signal to people trading right now, hey we've got a long way to go? >> the fed has a really tough road to hoe here. they put in place this logic whenever qe goes up stocks go up with it. they don't want to the stock market to crash the minute they pull qe back. you will hear different voices for a long period of time. the overall trend to accustom the market to understand qe gets pulled

back because the economy is getting better and shouldn't sell your stocks at the same time. tracy: capital markets are improving. we're starting to see money flow into the system. how do you feel about where the capital markets are right now? >> overall, we've come back so far from that horrible period in '08 and '09. the market bottom in march of 2009. it has been a long slow grind back. i was at a conference talking to over a thousand different clients. really those are folks that have to make buy decisions. they are now after four years of market rally, feeling comfortable with their client and individual investors, it is okay to go back into stocks. as long as fundamentals continue to improve, even modestly corporate earnings rise 4, 5, of%. you're pointing that out exactly right. tracy: unfortunately they missed big run, right? >> always works that way. tracy: sure does. thank you so much. >> thank you. tracy: behind the eight ball all the time. adam: not all the time. tracy: average guy it is often. sometimes maybe when you start to change your

investment outlook too. adam: you have to stop trying to time the market. tracy: and there's that. adam: on deck, wal-mart trying to win over shareholders and employees, stock getting a boost. details next. >> president obama fights back against a growing surveillance in america, but first, it is that time of day. we have to check how oil is trading with this market up 18 points. oil is up as well. -- 148. oil $95.86. we'll be right back. my mother made the best toffee in the world.

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tracy: it is friday. markets are up. we have to make mo money. charles payne is here. this hour looking at online rettiler overstock.com. as i was telling you chars, i bought a fabulous pair of shoes from overstock. >> that is great. i'm not a big online shopper out of amazon. good that someone validated

that the website does exist. i have to tell you something, the guy who founded this company, patrick byrne, i love him. he love the guy. he comes across as a loonie tune. tracy: sometimes. >> for years he battled shorts, crushed the stock, really unmercifully. that's what shorts do, they get ahold of the stock. have you ever see the nature show when the cheetahs get the antelope in the back and they crushed this guy's stock for years. he is finally getting his revenge. last two quarters beat the street by 220%, 113%. last quarter grew by 19%. they say the industry grew less than 15%. gross margins increased. profits per transaction were up 26%. this stock made a gigantic move. i see it here. i think there is whole lot of room on upside. float of 33% is still short. patrick, you know what, man? i think you may get your revenge even more. be able to really squeeze the knife. if they keep up this

performance. adam: why are so many shorting him though? >> well, you know, a lot of shorts get on you, they have problems with his accounting perhaps in the beginning. they thought the stock was overvalued. -pbut, i have always tended to see shorts in two camps. one where they see stocks, stocks that are relatively defenseless, like no major firms out there hawking stock. keep selling and keep selling it at some point it cracks. then shorts who find a story and buy into the story. they don't care about anything else. i do find the great shorts are often right but there are also very, very stubborn and they will take a long time. look this year all the great short squeezes this year. lulu little mon, rms -- lululemon, tesla, green mountain coffee and they keep coming back for more. i think we'll add overstock.com. next earnings report i think the stock breaks out to over 30 bucks. tracy: go order shoes. >> you got it. adam: quarter past. we'll check in with nicole petallides on the floor of the new york stock exchange. we're still holding above,

what 150 now on the dow? >> looking good. we're up 1% at the moment. we got in the jobless claims. i almost said weekly. monthly jobless numbers. we saw number of jobs added exceeded analyst estimates. saw unemployment rate pick up slightly to 78.6%. most interpret this as good news. the labor force obviously expanding ever so slightly. as i looked at one week charts as we moved into positive territory for major averages some of the best performers on the dow were actually some drug stocks, pfizer and merck, led the way this week. talk about dow component wal-mart. they're announcing a new $15 billion repurchase plan. that is to tack on what they have been doing over the last couple years. wal-mart authorizing that. in addition to the fact that the wal-mart ceo is out saying a lot of things including they plan to do some promotions, promote nearly 500 people each day. so wal-mart right now up 1% at the moment. back to you. adam: nicole. thank you very much.

we'll see you again in just a bit. tracy: chock-full of good news today. we'll break down these jobs numbers. today's report sparked ubs his year-end target on the labor market. we'll tell you what they are next. adam: first we'll look how the dollar is recall toing right now. there you go. my mantra?

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>> 20 minutes after the hour, i'm rick folbaum with fox news minute. tropical storm andrea racing through the carolinas dropping heavy rains and wind as strong as 45 miles an hour. but the storm is weakening slightly losing tropical charactericses. no immediate reports of injuries or major damage but 6,000 customers reportedly lost electricity in charleston county, south carolina. the national hurricane center says andrea could cause tornadoes from carolinas up through virginia. national weather service issued flood watches across most of those states. the storm is moving 28 miles an hour up the east coast. it is expected to hit jersey

and new england tomorrow. speaking of jersey, cory booker is running for u.s. senate. he will be vying for the late frank lautenberg's seat. the long time senator kind monday at 89. booker is a yale law school grad who served two terms as mayor of newark. back to adam. adam: thank you very much, rick. today's jobs report may not be a game-changer for the fed's upcoming policy decision it caused our next guest to significantly cut his year-end unemployment rate forecast. joining us now, drew mattis, deputy chief, u.s. economist at ubs. good to have you hire. you've cut your forecast. i wail read it here, 2013 you expect unemployment 7%. 2014, 6.3%. why do you think we'll fall seems pretty quickly to hit those numbers? >> i think if you look at, look at you the way jobs have been growing about 200,000 a month for the last five months. that's really right on top

where the fed said they wanted them to be. if you assume that the labor force doesn't grow, which is our basic assumption. really what we're looking for is any sort of change in that today. any sort of thing that would kind of warn us off lowering numbers. we didn't get it. we got a healthy report. we got up tick in the unemployment rate. that was largely caused by students coming out of school looking for jobs. so, today's report was good. it was a nice solid report. around so in that context, we were able to go ahead and just -- adjust our numbers to account for the doesn't seem like the labor force is expanding at this point. adam: from investing standpoint, a lot of people will look at your numbers, if they agree with you, that is signal the federal reserve pulls back. 6.5% is the magic number. when unemployment hits 6.5% they need to be out of the q e-business, accurate? >> well, that is actually when they said they would have to hike rates. out of qe is probably a year in advance of that. and since we have them hitting about 6.5, the end

of 2014, that means the beginning of 2014 is when they have got to taper, which, obviously the rest of the market is looking for earlier taper. we think low inflation and concerns about the sequester will keep the fed on hold a little longer than people expect. adam: forgive me and permit to challenge you. peter morici, economist south of here said we need to see a job creation number over 35,000 every month to% get as close -- 350,000, to get as close to the unemployment numbers you're talking about. why is he wrong and why are you wrong? >> he hasn't adjusted for the fact or made adjustment demographics are working against the participation rate. has nothing to do with the economy at this point. has to do with the fact baby boomers turned 65 starting 2013 and, or 2010 and going forward. and we're beginning to see those trend develop. if every age group kept working with the same attachment to the labor force that they had right now, over the next two years the labor force participation rate would fall simply because of

demographic factors occurring in the u.s. economy. that is an, i know peter is pretty well-respected economist and professor. maybe he has to get away from regressions and move back towards algebra a little bit. adam: talk about what seems to be a pretty simple metric to look at for those who had to repeat pre-algebra. how us worked ticked up slightly. that is an indication that companies need to start hiring, isn't it? >> it tends to be, what is interesting that is an aggregate number. when you look at individual sectors within the economy what we find that actually most of the work weeks are above average. it is just that we've shifted who is being hired where. so that brings the number lower. if you look at the individual segments within the economy, most of them are at very high work weeks relative to their norm. adam: last question for you, there was one thing i thought was a little bit startling. the loss of manufacturing jobs. and the fact that housing, construction, we didn't have that big increase in

construction jobs of the is that troubling you? >> it is not. if you look at manufacturing where the weakness was a lot of export oriented type areas. capital equipment and where the strength was a lot of consumer driven stuff. what we're seeing is impact of the global weakness. but if you look at all the things u.s. has going for it, housing, shale story. u.s. consumer, i think we're in pretty good shape. adam: all right. drew mattis, thanks for joining us here on the fox business network. tracy: i loved algebra. i swear. adam: says the taxxattorney. tracy: whatever. me and my little calculator the been together for a while now. the job market is getting better but would you call it really good? i don't know. jeff flock is with the head of a staffing firm in chicago who says now it is. jeff, where the heck are these tobs jobs? >> one of the places are here in this coffee bar. this is new concept for them. sort of like a diner. they're in a major hiring mode.

which is why they hired tom gimbel's company, lasallee3 network, founder and ceo. you think this is a really good job market. tell me why? >> what we're seeing companies are making more money than ever before. we're seeing people getting optimistic about the economy. the fear, the unknown of obamacare is really kind of passed a little bit. and now companies are saying let's get people on board. >> look at staffing companies. look at the stocks of staffing companies. they have been really running. i guess that is really points to a better job market. if you look at specific companies like manpower, kelly, actually year-to-date, manpower is up 32%. a lot of people are coming to you to hire people because they are really looking to find particular workers and finding themselves they get flooded with applications these days. >> when you need people you're getting tons of resume's. you need someone to expedite that for you. when you're bringing on

larger volumes much people because of mass hiring of special projects you want to make sure you have people there. >> i want to get specific. there are people, for example, working here. maybe they weren't studying coffee brewing in college. are people more willing now to take a job that is not in their specific field? >> more now than ever. that is what we're seeing. people will do that they're humbling themselves. they have to realize what they moved past what they thought their field was and get back on their feet. >> that's true. put up a list of tom's clients, some of tom's clients. major big companies. quickly, last question. people that have not got a job. out of work for a year of the prospects for them? >> have to look at it, time to find a new field, go back to school, improve their skills. >> honest answers from main street. i'm actually having tea. that is one of your favorites, trace. tracy: i am italian. >> maybe not. tracy: i drink cappuccino and expresso. actually, i don't really

drink expresso. i have to go coffee all the way, jeff flock. you have a great weekend, you and your tea. adam: on deck, president obama staunchly defending uncle sam's tracking of phone calls and web activity uncovered in an escalating scandal what has been a brutal week for the president coming up.

tracy: 90 minutes to the close. this rally losing a little bit of steam. nicole petallides on the floor of the exchange. what is happening, girl? >> 15,170. still holding up arrows but pulling back. two retailers worth looking at we'll look at quiksilver. talk about surfing and skateboarding. my kids love these clothes. here is look at what it is

doing today. down almost 12%. one their main reasons why their loss widened in the latest quarter, weaker european sales. they have had to do a lot of promotions. they had some impairment charges as well. on the other hand, take a look at fitch fismt. problems in the first quarter were temporary according to bank of america. and actuaaly given a good outlook there, saying that numerous areas where abercrombie could beat expectations particularly next year. they have a buy rating. they boosted the target six bucks up to $60. back to you. tracy: nicole, thank you very much. we'll see you in a bit. adam: president there is actually some, president obama is responding to the nsa scandal, telling the american people nobody is listen in on your phone calls. rich edson at the white house with more on that. rich? >> good afternoon, adam. the president is trying to reassure the american people there is no spying going on when it comes tt every day americans and their conversations. laid much of it on congress, saying congress approved

this program. reauthorized this program and has oversight of this program along with federal courts. critics argue that there is still way too much information that the federal government is monitoring with a number of american companies and servers. the nsa still has way too much oversight and way too much communications. however the president argues his administration, when it comes to privacy and keeping americans safe has struck an appropriate balance. >> i came in with a healthy skepticism about these programs. my team evaluated them the we scrubbed them thoroughly. we actually expanded some of the oveesight, increased some of the safe guards. but, my assessment and my team's assessment was that they help us prevent terrorist attacks. >> president obama is headed to southern california now where he will have a two-day

summit with chinese president xi. on the agenda for those two, is chinese hacking claims and cybersecurity claims and some critics argue that this latest news coming out the national security agency undercuts what the president is trying to do with reports out of china they are hacking not only u.s. companies but the u.s. government. back to you. adam: rich edson, washington d.c.. thank you very much. tracy: we're going to talk more about what rich was just talking about, china. we've got high-stakes. u.s.-china summit over cybersecurity coming up. north korea and more all being discussed. will president obama tackle tough issues? we'll have a preview of that next. adam: first time to check 10 and 30-year treasurys. everyby has different investment objectives, eas, goals, appetite for risk. you can't say 'one size fits all'. it doesn't. that's crazy. we're all totally differe. ishares core. etf building blocks for your personalized portfolio.

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>> i'm lori rothman with your fox business brief. the bulls charging their way on wall street following a better than expected jobs report. today's rally lifting stocks into positive territory for the week. right now the dow is up 147 points to 15,188. liberty global officially becoming the world's largest cable operator today with the closing of the $24 billion deal to buy virgin media. the company now has 25.3 million subscribers compared to 22.3 million for second place comcast. and it is national doughnut day, otherwise known as ditch your diet

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tracy: president obama meeting with china's new leader in a critical security summit. cybersecurity is a hot topic today. they agreed to hold regular meetings about cyber hacking. china claims to be a victim. we're only a victim. we haven't done anything wrong. who do the talks actually help? we have mary kiss sill, "wall street journal" he had material board. >> you have to love that

claim. you have to love the administration's response. what they're proposing arms control for chinese hackers. we promise not to do this, if you promise not to do it. let's hold regular meetings and talk about it. tracy, this is absurd. tracy: right. >> there is nothing in china's history or behavior that suggests that is going to work. tracy: it is laughable that we're holding monthly meetings. it is, i mean, you've been to monthly meetings at work. you know nothing gets done here. >> look, i think it is good we're talking about hacking. it is a major problem for u.s. industry and the u.s. military and for u.s. government concerns. at least it's out in the open. it is public. we're talking about it. mandiant security did a big report a couple months ago. got a lot of press. it is on people's minds. that's great, the problem is china has realized under this administration we are a weak actor in asia-pacific. they're taking advantage. it is not just in hacking. it is picking fights with our allies and friends across that region. so i would hope that the

president would have a very tough conversation with xi jinping this weekend. tracy: you and everybody else. unfortunately your point is a good one. the fact that we're seen as week bothers a lot of americans. you make a great point, to the chinese hacking is profitable. >> it worked for them. they looked at our first invasion of iraq and some of that activity in the '90s. they were getting more prosperous. they were starting to build their military. they realized we could invade iraq so quickly that they had to develop some sort of power, right, to counter us. they didn't have a conventional force. they said we'll do something that is asymmetrical. for them that is hacking. it also has commercial uses for them. look, again, it's out in the open but i just, you know the president's proposal is kind of arms control agreement, not something that is really going to fly. tracy: at the same time, though, this is at the heart of our economic relationship with this country, right? how do we fix it? the slap on the wrist, starting tonight is not

going to make a difference. >> the ultimate fix is for china to become a democracy. this administration hasn't talked about that. they have been in fact, somewhat determining, they said china will not change its behavior and it is a peaceful rise. if we prevent -- pretend everything is okay, we'll eventually middle class will get wealthy and rise up and things will change. that may very well be true but that shouldn't preclude us from talking about it to explain to the chinese people what country we hope to see. tracy: to your point the way they view the president, as long as he is in office can anything possibly get done? >> i think what they will do is push the envelope they can, whether stealing intellectual property from u.s. businesses or whether it is breaking into a multitude of government systems that they have already broken into. they have, they have compromised some of our most advanced technology. tracy: part of the problem too when you get guys like

jon huntsman coming out saying what the president is doing is a joke. he has no support here at home. >> huntsman also has business interests in china. tracy: clearly. >> huntsman chemical is also a very big company. yeah, that is a problem. look, you compare this administration to what george w. bush used to do which would be to sit in front of the previous chinese leaders and say to them, we want to have open trade with you. it benefits both of our country. eventually we want to see democracy. we'll talk to you frankly but don't mess with us. bush would be rather feared than love. this president is exactly other way around. tracy: it is about kumbayah. at the end of the day, aren't we hacking too? >> of course we are. but we're hacking with a government that is responsive to the people. the problem with china is that, many of these hackers are free agents that the government is getting. we don't know if they're professional team. -pyou could have arms control with the soviet union

because it was professional force. you could have a professional relationship there. this is not the same with china today. tracy: right. >> this an evolving situation. at least we're talking about it, if we haven't reached the riiht solution. tracy: mary, you're talking about it, thank you goodness for you. "wall street journal" editorial board. thank you. >> thanks. adam: breaking news for you right now. oil closing up for the third straight day. prices rising $1.27, to $96.03 a barrel. coming up quarter till. we want to check stocks again. we're heading back to the new york stock exchange. this time jonathan corpina joins us to discuss what is happening with investments. we seem to be holding i'm not sure i want to call it much of a rally. 137 points up is still pretty good that brings a lot of smiles to a lot of people's face. >> we'll take it especially with the follow through from yesterday. what i think we'll see happen toward the end of the day the market might soften up a little bit. just short-term profit-taking coming off the table from investors heading into this weekend.

next week not a lot of economic data. we have retail numbers coming out that investors seem to look at. seems like holding onto the numbers we got this morning out of washington will be short-lived. next week could be a choppy week. as things move on the tendency for this market to move higher. adam: jonathan one of the things people are worried about at least in the market if the fed pulls back on easy money policy, we'll start to see another selloff. we had a guest on from ubs 10 minutes ago, bet on it. we'll see unemployment fall to 7.0% end of this year. that puts us in line with the fed's end and beginning of raising interest rates. they have to start tapering and start tapering soon. >> that is good problem to have. our economy will be getting better. it is showing signs of stability. at some point qe will have to pull back and we'll have to ride the bike without the training wheels. when that happens is the biggest concern. the fed gave us a little bit of an inkling last month it

is on their radar screen and will come up in the future. i think we should plan on something, end of third quarter, beginning of fourth quarter when we start to see effects that of that. adam: jonathan, on the floor of the new york stock exchange, thank you very much. >> have a nice weekend. tracy: coming from the sander o'neill global exchange brokerage conference. as always, has inside details on this major battle between the nasdaq and head of knight securities tom joyce. this is funny, charlie, because tom joyce totally teed off at the nasdaq over this batched facebook ipo. now here he is getting all annoyed again. >> you know, i love these wall street pissing match stories. that is, i don't know any other way to describe it. that is essentially what this is. part of me, why can't these grown men just get along. here is what we know right now. what is the nasdaq saying on its sales pitches which is pretty interesting? they're saying the knight meltdown in 2012 occurred on

the nicely's watch. what that means nyse's trading system can't be trusted. they're taking this to clients. they're pitching for new business, listings business. what joyce is doing, this word made it back to joyce. joyce is the chairman of the new company that is owned by the proprietary trading firm. joyce is telling nasdaq, stop, enough. stop dragging us through the mud. i'll tell you this while interview nicely chief, duncan niederauer. joyce isn't the only guy really annoyed by this. niederauer is not liking this. what this occurred inside boardrooms, very rich men with very sharp elbows how they act. what is interesting. you have two players. you have the nicely. nasdaq, both publicly-traded guys. guess what? they're fighting increasingly for business and using everything at their disposal to get new listings. companies that pay the listing fee to list on the exchange using everything at their disposal. it is a lot of money at

stake here. what the new york stock exchange is doing, this is what nasdaq would tell you, by the way we wrote this. it is on fbn.com. you can read the entire story. the new york stock exchange is using the facebook debacle, remember, ipo blew up because of a technical glitch and nasdaq. guess what? companies like time joyce's lost a lot of money in that thing in that fiasco. they're using that to say, don't go with the nasdaq their system can't be trusted. go to us. nasdaq is fighting back, listen what happened tonight? they flowedded on the new york stock exchange's watch. i will say this as someone, this is somewhat opinion, but i've been doing this a while. i think new york stock exchange has a better case on facebook because that clearly was a trading glitch that occurred at the facebook system than they have on this. knight blew up because of its own technology. traded on the stock exchange.ake the case stock exchange would have known better and saved it. that is more of a stretch. that's what we have.

we have basically a bottom line, knockdown drag-out fight between all these entities with tom joyce back at it attacking nasdaq and really pissed off in the process. back to you. tracy: good stuff. pot calling the kettle black a little bit, to your point, charlie. >> absolutely. >> don't miss charlie's interview with nyse ceo nurd nurd. he talks with -- duncan niederauer. he talks with. this is good stuff charlie has what is going on. nyse has upper hand. nyse a lot of companies were affected. there was fall back on both sides. adam: a lot of fall back. good news charley has the connections. he knows when these different parties are going after it. he cuts through the word i can't say on air. tracy: one of those black

and white referee shirts. adam: don't want to box with charlie. he knows how to box. tracy: that is very true. adam: the escalating white house scandal a new report says the government is tapping directly into internet servers. what does that mean for your privacy coming up? tracy: market is up 138 points. pulled back a little bit. let's look at some winners on the nasdaq as we head out to break though.

adam: are you on google or

facebook? do you as you apple or microsoft software? the u.s. spy agency may be watching you. a lot of people were shocked at the latest revelations. dennis kneale is looking at all the fallout. >> the dragnet is known by the code name, prism. it may be the widest most indiscriminate fishing expedition staged by the u.s. government and snaring millions of americans in the net inadvertently or other wise. they have been tapping into systems directly of most visited tech companies and web sites in the world, microsoft, yahoo!, google, facebook, aol, skype, youtube and apple. the feds are able to collect millions upon millions of facebook posts. video chats and e-mails and life google searches. as you look for the cure of the strange rash on inner thigh. they claim they're not letting feds tap into the servers or don't know about prism at all. making you wonder which side is lying?

verizon comment sent out to own employees yesterday that the crunch tech employees are caught. we can't confirm anything bit because it is against the law. second of all we have to comply with the law. we're doing best we can. we have the comment if you want to see it. maybe it will run later. take steps to safeguard customers privacy but the law authorizes federal government to order certain information under certain circumstances. what are we going to do? we're required to comply. "wall street journal" as credit card accounts getting sucked up into the digital dragnet. fox news confirmed the fall rout is tremendous. my twitter account blew up with 100 comments. republicans and democrats joining to defend the snooping as necessary and other dems and republicly cans are saying it is going too far. in the spice business, you have spearfishing. firpd the shark and go after it, spear the one shark.

with electronic eavesdropping the government is putting out 50,000 mile wide gillnet and pulling up all the fish and deciding are there any bad fish we want to look at? that presents some problems. one more thing given this all started earlier yesterday when the guardian overnight is reporting verizon turning over billion call records to the government. that led to washington post to come out with prism and "wall street journal." justice department was investigating associated press for leaks the then investigating fox news reporter jails rosen. you have got to wonder is the government going to use prism to go after "washington post", guardian, "wall street journal" for all things they're reporting on prism which is supposed to be a secret? makes it illegal for government officials to talk about it. two guys in congress warned us in december 2012. this is big problem. we can't talk about it. no one was listening then. you know what? a lot of people are listening now. apparently our government is doing a lot of listening as well.

adam? adam: i hate to be person at government going through all the facebook posts. >> software, baby. adam: how many times can you look at i'm here. i'm here. >> and i like. adam: thanks, dennis. tracy: car buyers becoming increasingly loyal to their brands. this according to a study by auto industry data company. polk. more than 50% of the people now loyal to their car brand. 13 automakers posted a larger than average increase. porsche saw the biggest improvement while american-made ford had the most loyal customers of any automaker. you want to know my theory on this? i lease. it is easier to stay. adam: perhaps. we had ford fusion hybrid on stories on the road. great car. i can understand why people are being loyal to not only ford or other makes. tracy: i can understand why you're loyal to a porsche. adam: "countdown to the closing bell" is next. charlie gasparino will talk

with the current and former ceos of the new york stock exchange, duncan niederauer. and dick grasso, are coming up. you've known? gave people a sticker and had them show us. we leard a lot of us have known seone who's lived wl into their0s. and that's a great thing. but even though 're living longer, one thing that hasn't changed much is the official retirement age. ♪ the question is how do you make sure you have thmoney you need to enjoy all of these years. ♪

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