lori: it is getting good. good afternoon. i am lori rothman. ashley: i am ashley webster. we will see and preview what may happen tomorrow. lori: the nsa data gathering program being defended on capitol hill. lou dobbs weighs in on how to defend what. ashley: you can get satisfaction. airlines actually getting some positive customer satisfaction reviews.

we will tell you who is at the top of the list. lori: let's bring you up to speed on the markets. we do have another day of strong gains. nicole: the policymakers, what will they say? what will they decide? those are the questions that everybody wonders. the truth is, you are seeing the market shrugged it off, at least at the moment. of at least one full percentage point. we have a lot of action here today. we are also watching hewlett-packard. a name that has been a leader on the dow jones industrial average. today up 1.1%.

they are announcing printing and personal computers. watch hewlett-packard. today, a great day on wall street for the bulls. back to you. ashley: thank you very much. all eyes are on bernanke. this is all after reports that the fed chief may be ready to ease up on its bond buying program. peter barnes has more on this story. peter: the market seem to think that the fed will remain business as usual. analysts say that tomorrow, the press conference, after the

meeting is over, will give fed chairman the opportunity to clarify his views on all of this. he said, yes, we can and quantitative easing in the next couple of months. >> he did imply that they can start tapering within a couple meetings or so. i think it is important to remember, i think the chairman has a tendency to maybe not be very accurateeor careful. peter: we also got a statement from the committee tomorrow. analysts say that that will give them the chance to communicate its plans. former fed buys chairman said the statement could make it clear that the fed has no plans for reducing qe in the very near

term. any start in reductions remain dependent on labor markets. the statement could point to slowing inflation. now, as for whether or not bernanke will stick or round. >> bernanke is a little bit like the head of the fbi. he has already stayed a lot longer than he wanted or he was supposed to. peter: handicappers still give it to janet yellen to succeed. she would like to continue his policies. other names have popped up from time to time.

even tim geithner, former treasury secretary. back to you. ashley: thank you very much. lori: the press conference 2:30 p.m. eastern tomorrow. that dollar is gaining here against moche major currencies. the market seeking some kind of clarity. let's bring this discussion to michael. welcome to you. this is kind of a silly way to start an interview. my hairdresser was asking me about the fed and what it means for her. she is actually seeing a lot of changes in her consumer rates in the last couple of months.

>> it has been blown out of context. lori: .may 202 miscommunication. we have seen so many gyrations in markets. also, this whole dollar / yen bank. do you think it is a reflection of poor management? >> i think the reason why the market and others outside of the market ave put so much focus on this decision is because it marks a turning point in monetary policy. we will be entering a bear

market for bonds would not happens. we have seen that carry trade come off in a vicious way. it has been sure again and long equities. that has reversed. we have seen some remarkable moves since then. lori: the yen has been showing some incredible games. you are saying that is not a reflection. it is confusion. are you confident we will get a clear message? i am not confident. there is still a lot of uncertainty. business as usual. i think he senses he will be stepping down in january. it will be a messy proposition.

lori: i want your take on the messaging from the fed. nobbdy could really understand what he was getting at. he was going to have a clear and transparent said with these press conferences. it is almost like this organization and chaos. >> they could be doing a better job. i think that history will paint bernanke in a positive light. i think he could make an effective argument for having been the best chairman in history and perhaps the chairman that saved the economy from the second grade depression. like him?

>> i think that there are other candidates out there that are very give to obama. one of the least popular candidate's co-op one which could be a very effective chairman to engineer a monetary turn would actually be larry summers. he has the intellectual credentials. he has the experience. he would be a good choice. i think a close runner-up would be someone that obama will look very favorable oo.

lori: lots to keep our eye on tomorrow. you set us up beautifully. ashley: fed watch hitting the commodity markets today. phil flynn is in the pits of the cma. some may even argue that the physical demand is drying up a little bit because they are waiting to see what the fed says. it is not just the pressures battles. take a look at platinum. that, of course, is a major driver for demand of platinum. of course, copper is down big as

well. there is also talk about the end of a line straight. bring on the fed. ashley: the play on gold -- >> i agreed with that. i think that the trade is very very nervous right now. i do not think that they are buying it. better safe than sorry ahead of the meeting. ashley: thank you so much. homeowners fighting back against bank of america. claims of its employees lying and denying.

elizabeth macdonald gets to the bottom of it next. a lot of folks have already skipped out on their vacations. we will have a top-rated airline for customer let's have another look at oil. back after this. ♪ announcer: where canan an invesr be a name and not a number? scottrade. ron: i'm never alone with scottrade. i can always call or stop my local office. they're near aeady to help. so when i have questions, i can talk to someone who knows exactly how i trade.

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lori: stocks are holding up here above the fed. let's go back to the markets and check with local. a massive protest in brazil. we are looking at pictures of that right now next to you. austerity measures are put in place. in this case, they have raised the bus fares over in brazil. it is thinking today. it is sinking year to date.

it hit a 52 week low today. your candidate, it it is down 15%. as i noted, increasing the bus fare. we will continue to follow this story. lori: thank you. ashley: bank of america is being hit with a nasty class-action lawsuit. another black eye for bank of america. elizabeth macdonald joins us now. allegations are that bank of america purposely forced borrowers into foreclosures in order to get more fees.

bonuses, gift cards given to things like target, bed bath and beyond and restaurants. essentially, they were steering tte hand. as much as three percentage points higher than the loan modification rate. let's look at this quote from a former worker. site leaders regularly told us, the more that we delayed the process, the more fees bank of america would collect. bank of america is denying the allegations. they are saying the allegations paint a false picture. here is the problem for bank of america.

eric schneiderman is already threatening to sue for violating the foreclosures settlement. this is bad. lori: the banks came under such criticism. they paid a huge settlement. cut through it all. what is the difference? it just seems a little frustrating. >> that is the allegation. they are alleged to have moved too quickly. and lots of legal fees come out of foreclosure. lori: thank you. ashley: u.s. airline passenger

satisfaction improved for the second year in a row. scoring 69 out of 100 points. not exactly flying colors. jetblue taking the top spot among all u.s. airlines. the airline sector is near the bottom. the major airlines are traded mostly higher today, as you can see. i do not want to get into it. i got kicked off a plane on christmas eve because they overbooked. it was years ago and i am still in therapy. lori: i hope that you get over it soon did a terrorist target.

new info revealed. we will get lou dobbs take as he joins us next. ♪ is different tay. money has to last longer. i want to travel, anir want the income to do it.. ishares incomes etfs. low cost andiversified. find out why nine out of ten large ofessional invesrs choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus, whh includes vestment objectives, risks, chaes a expenses. read and consider it carefully before investing. risk includes possle loss of principal. took my son fishing every year. we had a great spot, ot easy to find, but worth it. but with copd making it hard to breathe, i thought those days might be over. so my doctor prescribed symbicort. ihelps significantly improve mlung function starting within five minutes. symbicort doesn't replace a rescue inhaler for sudden symptoms.

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♪ >> @23 minutes past the hour, i have youu fox news minute.

after 12 years at war, they are ready to make their first new towards peace talks. this announcement comes on the same day that the armed forces are taking the rain to begin leading the country's security efforts. all of this happening 18 month ahead of the complete withdrawal of american troops. the g8 leaders issuing a declaration to fight the surge of tax evasion. they are also calling on my multi- corporations. that is a look at the headlines making news right now.

edwards noted telling the guardian the truth is coming ann cannot be stopped. lori: what is it with the guardian? secret surveillance is working and has prevented over 50 potential terror attacks since 9/11. >> it is interesting. the washington post, i think, interestingly enough has withdrawn the rather dramatic tone that it set with reporting on mr. snowden and the reporting that he brought to them. the guardian itself has had to pull back.

general keith alexander said he would much rather be here today defending his agency then tried to explain what had happened because they had not done enough or as well as they must in this war against terror. i think we are watching this rather dramatic exposé on the part of mr. snowden. he has been revealed more than the secrets of the nsa or the united states government. i think that is a good thing. there are those that you can actually see salmon -- selma dating. our congress has a 10% approval rating. you have senators and congressmen sitting there

pointing their finger at a four-star general. they are beating their chests about the balance between civil liberties and security. those decisions have already been made. these are children waxing ignorantly and also excitingly about matters that are frankly resolved. i think we have watched several people lose their potential in their political careers here. lori: when this story broke, libertarians far and wide -- lou: they decided he was a hero. they did not understand what had been agreed to. a way to keep this country safe. it is silliness.

lori: we know more about the nsa and what it does. do you think that now that all this information is out there that we have taken several steps backwards? lindsey graham, making decisions about what is the quality of our security in this country and the balance against our civil rights rather than, let say, the chief of staff, the nia, this cia -- i mean, we are watching a bazaar spectacle unfold. to view our pointing out what oats are represented. it is disgusting. it is appalling.

they are not drawing any kind of equation. they are focused on the agencies that try to keep us safe when what we should be talking about -- chinese cyber attacks against the united states. this is our government. lori: you really type that altogether. ashley: discussing the white house mounting scandals.

ashley: not trimming the fat. trimming its profit forecast. the pressure is on. ashley: revenue jump in the last year. the stock price down 10% over the same period. going one-on-one with ceo gary evans next. let's take a look at who is up into his down on the dial. ♪

lori: all right, triple-digit gains on the

dow right now. let's head back down to the floor of the new york stock exchange to check in with nicole petallides. you have one big mover on your radar. >> i do. this name is weighing on the s&p 500. looking at hormel. look at the stock right now. it is down 4.25%. lowest point here on the new york stock exchange, right now at 38.93. they had to cut full-year numbers. they're seeing increased costs in the meat sector. they recently bought skippy to diversify and offset margins. not good news for hormel, when you think of spam and skippy peanut butter. outlook will be wwaker-than-expected. as a result the stock is tanking today. back to you. ashley:. lori: nicole, thank you. ashley: oil prices getting closer to $100. natural gas prices are rebounding sharply off the mid-june lows. the rally helped drive shares of e&p companies like magnum hunter resources higher. the question is, can the rally continue?

joining me gary evans, chairman and ceo of magnum hunter resources to talk about that very subject. gary, i was just looking at your company's most recent report, very impressive. seems like you're making gains across a broad spectrum of the business. how are yoo doing that? >> well our company is in a fast-growth mode predominantly in the shale plays which really revolutionized the oil and gas industry here in the united states. in the next 10 years we could maybe be energy independent. companies like mine are drilling horizontally into shale formsmations. it is creating tremendous growth. our production will actually more than double this year. ashley: where are you drilling? >> we're predominantly in marcellus and utica shale in west virginia and ohio. we have a large operation in the williston basin in the bakken in north dakota. ashley: very good. great this time of year. not so much in january. natural gas prices rebounded nicely. do you expect that to

continue? you're so affected by mother nature, aren't you? >> yes. natural gas prices are dictated more by the weather than any other commodity especially here in the united states because we can't yet export the product overseas. we're hoping to have lng facilities approved. we have two now that the obama administration finally approved and we have more coming. but today really it is a captive commodity in the lower 48 u.s., united states. so, we're hoping that because we have low gas prices for so long. in fact a year ago this time gas was $1.90. we have more than doubled in a year. it has a huge impact on companies likeeourselves. that is all profit driven. ashley: you talk about exporting, gary. there is talk about exporting natural gas to asia and europe and in particular to japan. what kind of opportunity would that present for you? >> countries like japan and other asian count is are paying 12 to $14 a thousand

cubic feet. we're selling for four. ashley: you expect that to happen? >> it has to happen. why wouldn't it happen. to be able to drive all the employment here in the united states, to drill the shale plays. we have 200-year supply. ashley: in april of this year you saw sold one of your assets, eagle ford asset, $400 million. what did you do with the money? why was that a good move for you? >> well the primary reason -pfor selling it we truly believe to be successful in the oil business in the shale plays you have to have what is called shale scale. we didn't have enough acreage. we had only 19,000 acrers up in appalachia. ashley: not enough. >> and 14,000 and 180,000. it was the most mature asset. delever and pay down the debt. with the 401 million we paid off our bank debt and sitting on 100 million in cash. ashley: very good. it is nudging towards $100 a barrel in wti.

>> actually it is amazing how well oil has done. ashley: yeah. >> i think that's a testimony to other countries around the world that have such a thirst. the united states is using less and less oil because we're --. ashley: doing it ourselves. >> we're doing it ourselves especially in the eagle ford and bakken which are oil plays. hopefully oil prices stay up. i will say this. i protected our company by hedging almost all oil production next couple years. ashley: so you're covered. gary evans, ceo, chairman, magnum hunter resources. >> appreciate it. ashley: thank you. let's talk about detroit. we know it is on the brink. the emergency manager has a plan to suspend $2 billion of debt payments. that is posing a huge threat to the muni bond market. charlie gasparino with richard larken says there will be hell to pay for the default. >> are you ready for some football? yahoo! is sure is. the company's deal with the san francisco 49ers next. let's look at all important

10-year benchmark treasury a day ahead of the fed. that is about as high as we've seen since the last session. we're back in a moment. you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed much is the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪ your chance to rise and shine. with centurylink as your tsted technogy partner, you can do just that. with our visionary cloud inastructure, global broadband network and custom communications solutions, ur business is more reliable - secure - agile.

and with responsive, dedicated support, we help yo shine every day of the week. >> i'm cheryl casone with your fox business brief. royalty pharma dropped its $8 billion hostile bid for elon when it with drew appeal of ruling by

ireland's regulators on takeover panels. they said they couldn't modify the terms and bid after the fact. meanwhile, georgia pacific is extending its roughly 1 1/2 billion tender cash offer for buckeye technologies again, this time by a week. the paper products maker says this extension is being made to satisfy regulatory requirements. georgia pacific says 82% of buckeye shares are tendered to the offer. retail me not.com has its sights set on wall street. the online coupon company plans to list on the nasdaq under ticker, sale. we love that. that is the latest from the fox business network, giving you the power to prosper.

lori: all right. well does the default in detroit foreshadow a bigger implosion in the municipal

bond market we've been waiting for and waiting for? fox business senior correspondent charlie gasparino joins us with his take. >> ask you finally? ashley: meg whitman? >> meredith whitney. ashley: that too. >> whether she is right or not. no. lori: still not right? ashley: when we come as surprise when we talk about detroit, charlie. >> good point. there are two ways looking at it. it is detroit. it is a basket case. it has been a basket case for a long time. when the auto industry imploded even though there was bailout it would have an impact on revenues for the city, high-taxed city. this has has been going into the fiscal abyss for 30 years. think of it this way. this is big default, might be the big default ever in municipal bond market. they're defaulting on go bonds, general obligation bonds. somewhat of a precedent. you think the general obligation are highest rated,

first lien on taxes. they're stiffing bond holders in a major way. this is when i've been talking to analysts for last couple days trying to figure this out. we should point out municipal bonds are investments essentially held by our viewers. people with a few bucks to invest who want to escape taxes go and buy municipal bonds. lori: best thing about them, they're tax-free. >> that is why the story is important to them. i would say this, following the financial crisis you had to know detroit was in big-time trouble. dick larken, bond analyst predicted it in 2011. we'll try to get dick on sometime day. i think he is lost in traffic. i think he is is having a cafe at the versailles trying to figure out. lori: stay on track. stay on track. >> anyway, dick, i'm sorry, just annoys me when people don't show up when they're supposed to. here is the way to look at it if you're an average investor, states and cities are coming under tremendous

pressure following the financial crisis. the municipal bond market is not one market. it is many markets slowed holding a diversified portfolio. if you don't know detroit was in trouble you shouldn't --. lori: a lot of people look at that as an opportunity. look what is going on in california. people are scooping up mine unanies left and right. >> here's the thing. this is why meredith whitney's prediction will never be right to the extent she said. i'm not saying her premise about physical problems on states and cities is not accurate but, translate that. that is what she is supposed to do as an financial analyst to an investment, to say the market will implode or beginning to implode is not right because california is actually seeing increased revenues from what i understand. job growth. the state's fiscal issues --. lori: they change the way you book the pension obligations. >> that's right. lori: even larger cities like los angeles and san francisco have higher sums they owe and increasing credit risk. ashley: there is the savings. >> i'm just telling you that

the notion that these are investments that will implode overinto it is ridiculous. and you play the game until you can't. ashley: what domino effect could detroit have? >> i think zero broadly. at least according to analysts i talk to. i think where it could be an issue if you're in michigan, when a general obligation of a city, a big city is defaulting, those bonds in that state will pay a price. investors will be learry about other bonds. they will demand higher yields, i.e., lower prices. that will cost those cities more money. this will happen. we should point out if you're ever going to pick a city that would implode in this recession it would have to be default -- deit from. should point out one other thing. detroit, for example, it's main industry was bailed out and it didn't survive. new york's main industry, the banks, and did survive fairly well and we have -- there is lot of reasons for that. the big reasons banks make a

lot of money. lori: do you get stood up often by guests or others? >> it has happened to me in the past in my life. in high school a few times. >> sorry. ashley: still hadn't gone over it. >> i know where he is is. he is on sipping a cafe. lori: what is the crab restaurant. >> joe's. that is miami beach. that is in miami. little havana. get it right. lori: great speech. >> don't stand up charlie gasparino, is what i got out of that. as we do every 15 minutes, let's check the markets. keith bliss on the floor of the new york stock exchange. the keith, the general consensus the fed is putting up these trial balloons with regard to pulling back of qe. you think that is what is really going on here before we hear from mr. bernanke himself tomorrow? >> yeah. the market has been trading off of qe rumors, innuendo, facts you name it, for the last month. the is px, the s&p hit all

all-time high high may 22nd. i'm sure chairman bernanke and other fed officials got worried about an asset bubble inside equity markets. they came out may 23rd and bernanke had the his owner rational sub brant moment. you saw the equities markets sold off. this was pretty easy one to trade. we kept bouncing off the 50-day moving average. we caught the markets quantitatively oversold at 61 on the s&p. we may hit 1655 today, but even positive sign on the fred and reevaluate on the spx at that point. ashley: it will be interesting day. keith bliss, thanks so much for join>> my pleasure. lori: it might still be baseball season but yahoo! is making a play for the san francisco 49ers. in a new partnership with the team the internet giant will handle all online sports content, social networkings and it will

provide entertainment with the flicker and. the deal begins in 2014 when they move into the new levy's stadium. ashley: change the name to to the san francisco yahoos. lori: a lot of people already called them that, right. ashley: i didn't say that, for the 49ers fans. tv may be king. but the internet is the future. ad spending to go up by double digits next year. dennis kneale up next with the power of the web. lori: here are the winners and losers on the nasdaq as we send you out to break. we're back after this.

ashley: a new and widely

followed forecast for ad spending around the world has some good news and a huge new milestone. dennis kneale is all over the story and joins us now. >> hey, ashley. so half a trillion dollars, that is how much global ad spending is expected to total next year according to a new forecast from global magna. owned by interpublic, one of the biggest ad agencies in the world. they figure in 2014 we could have ad growth up to 6.1%. that is double the growth for this year when they expected to go up 3% that is revised down from the first forecast in december from this firm. look at online digital ads, up 13% expect this year to 113 billion. look how it breaks down by advertising category. television still the big king of all advertising. they expect in 2013 to approach almost 200 billion, up 2%. but look online. it is now the number two category ahead of print. newspapers will be down 3% this year.

magazines down 5%. ahead of billboards and even ahead of radio and that is a huge surge for online ads. they're up to 23% share. that is close to what percentage of time we spend online. ashley: that is interesting. hard to know who are we actually targeting. hard to get ads online to target the exact customer the person wants. they know they look for search information to narrow it down but it is interesting? isn't it, 20% number two behind television is very large number for a world, if you like, which is still not totally understood how to monotize. >> they're still growing like crazy. online, there are two big problems, one invisible ads don't get seen attall. ashley: right. >> yet sponsors pay for them. the othee thing is click fraud. they set upbot nets of automated computers to watch ads when they're not. 113 million, 10% may be wasted. there are firms that want to

fix that. that means marketers are beginning to believe in the power of online and targeting. ashley: even if they don't want to get where they want to go? >> when you throw up an ad for chevy on big broadcast network and reach millions of people and only a thousand are shopping for chef voice. online is the one to put the stuff october together far outstripping all other media. ashley: going at the same time. thank so much. dennis. lori? lori: launching a website, for a quarter you can send messages to a star 17 light years away. the company aptly named lone signal will send signals from the a famous either in the hope that it might read it. the tweet something so high pitched, i don't know how you feel, ash. it is like a video i am today. the company has more ambitious goals. if it sparks more interest they hope eventually to raise money required for a

full-scale transmission project. an effort would cost $100 million and would rrquire satellite dishes in each hemisphere. that is cool. be down with that. ashley: get a tweet from pluto. lori: can you imagine? ashley: no. where the heck is pluto. lori: i'm on board with tracy byrnes. ashley: yes you are. very impressive. how to reform fannie mae and freddie mac. congress finally tackling that issue after kicking the can for years. former fannie mae exec ed pinto will be weighing in on what happens. he will join tracy byrnes and me on the next hour of fox business. stick around. we'll be right back [ male announcer ] the mercedes-benz

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tracy: welcome back. i'm tracy byrnes. ashley: i'm ashley webster. fed decision now just 24 hours away.

the dow is up nearly 138 points, trying for the second straight triple-digit gain. tracy: oil prices climbing back towards that $99 a barrel target. with traders keeping a close watch on syria, iran and, the fed and more. we have oil expert john kingston from platts. we will break down thest factors for crude. ashley: a bomb threat foiled for the new york stock exchange. federal surveillance they said helped them stop the plot. time for a look at these stocks. let's talk to nicole petallides on the floor of the new york stock exchange. the dow hanging in there, nicely up 230 points. >> another triple-digit day. you may remember months ago when they started to say we whoevered around the unchanged line. now volatility is back. we see the 100 point moves from top to bottom. in this case our third 100-point move to the upside in four days. here it is up 138 points

that is gain of a full percentage point. we have a winning month again for the major averages. june is doing well. every single month this year has up arrows. all the folks got nervous and every time pulled back and folks that booght on the dips, they're pretty happy about it. the dow is 15,313. tech-heavy nasdaq is also higher today. look at dow leaders, i say that, because all the names have up arrows. you know the dow is comprised of 30 names. every single name is a winner. here is american express and ge. the best performers, general electric up 2.25%. as you noted every single name in the dow whether financials or energy or industrials or materials with an up arrow today. back to you. ashley: strong day for the market. nicole, thank you very much. tracy: this is like when the kids play telephone if you ask me. there are rumors of the fed cutting back on easy money everywhere. federal reserve chairman ben bernanke and the fed may well be ready to ease up on

the bond buying program as the fomc meeting gets you know way today. peter barnes is in washington, d.c. with all the details. you wonder if they planted some of this little stuff on purpose, peter. >> well, tracy, most analysts i talk to do not expect a change in fed policy. they expect continued easy money. expect continued quantitative easing. but, the press conference tomorrow after the meeting, the two-day meeting ends, gives chairman ben bernanke the opportunity to clarify or even walk back some of the comments he made last month about the possibility of tapering the bond purchases by the fed, the $85 billion a month, to comment on slowing quantitative easing. >> he can't say too much because he doesn't know himself when they're going to start tapering. but i think he needs to sort of make it clear, no it is not imminent in the this meeting or the next meeting. >> we'll also get a

statement from the federal open market committee and that will also provide members an opportunity to talk about their plans for monetary policy going forward. and perhaps better communicate it. former fed vice chairman donald kohn says that tomorrow's statement, could, for example, reinforce that the pace of reduction in bond purchases would be gradual. it would be data dependent and could be reversed if the economy were to suffer some kind of a problem. that the statement could reinforce policy decisions about bond purchases and that short-term fed funds rates, any changes in that, those are two separate issues. the state could clarify that. finally the statement he says could clarify the fed's strategy for eventually selling that $2.5 trillion of bonds it has purchased in its quantitative easing programs. now, there is also a question of whether or not fed chairman bernanke will actually stick around past the expiration of his term

in january to see all this through. sounds like president obama doesn't think so s. take a listen. >> well, i think ben bernanke has done an outstanding job. ben bernanke is a little bit like bob mueller, the head of the fbi. >> yes. >> where he has already stayed a lot longer than he wanted or he was supposed to. >> handicappers give the edge for replacing bernanke to janet yellen, the current vice chairman of the fed. she would be expected to continue bernanke's policies. other names that have popped up in speculation as a possible replacement for bernanke, let's run through a couple of them. roger ferguson, a former vice chairman oo the fed, now running tiaa cref. jeremy stein, a harvard economist who joined the federal reserve board of governors last year. throw in tim geithner, former treasury secretary and former president of the new york fed.

tracy, back to you. tracy: you peter barnes, you said here on set and said that the fed should give the markets benchmarks. when they do x, the market will do y. that is what the market needs to hear. peter barnes in d.c., thank you. ashley: the major averages extending their gains as they await the fed's statements tomorrow. for his prediction what the fed will do and why he think it is will be a bumpy summer is brian belski, bmo capital markets chief investment strategist. brian, thanks for joining us. what do you think the fed will do? a lot of mixed messages. ben bernanke putting a cat among the pigeons thinking they may be close to tapering. what do you think they will do ttmorrow? >> at some point they have to taper. you have to think about what taper is, right? taper means gradually decreasing. it doesn't mean we're increasing interest rates anytime soon. and you have to think about the pace of economic growth during this overall recovery

has been slow. job growth has been slow. so the ammunition to change the current policy, we think, is rather moot. so, we don't see any kind of a major policy changes for at least the next two or three fed meetings. ashley: that is interesting. you're also calling as i said just now for a bumpy summer. what exactly are you expecting? >> well, think about this. you know, trends in stock prices or bond prices or asset prices in general are never linear for long. we have seen that the acceptance of this bull market has been very strong the last couple of months. in our view we've been bullish for five years and where has everybody been? you want to buy stocks when fear is very high. well, fear is not high anymore. all of sudden we entered a bit of a complacency among institutional investors. kind og around to see what happens with the fed. in our perspective, ashley,

that is not investing, that is not process, that is not discipline and anytime in our 24 years experience on wall street when we see investors move away from process and discipline, usually means we'll see some sort of a pullback. we've been cautious the last couple months. we think that we're going to get a better entry point. but on a longer-term perspective we think we have enter ad 15 or 20-year bull market. very exciting for equities. we think this will be very positive for u.s. stocks in particular. ashley: with that in mind, which sectors are you keying in in on and which ones are you avoiding right now? >> from avoidance side of things, defensive areas of market especially high yield areas will be hurt is specially telecom and utilities not just because of the next direction of interest rates is higher, ashley. we think from a fundamental perspective those sectors suffer in terms of valuation and growth. from a longer-term perspective and intermediate term perspective we really like industrials, energy and

technology. we think they have the growth engines for the u.s. economy. as the u.s. manufacturing renaissance comes back in the second half of the year. we do anticipate a very strong cap-ex recovery which will clearly benefit industrials in particular. ashley: quickly, we're almost out of time, brian. we think the next leg up requires some sort of unwind in the bond market. we're not seeing money pour out of bond market, are we? >> no. in fact we still see bond inflows. we don't see any major great rotation out of bonds until we see several months of bond fund losses. that will be a 2014 event. ashley: very good. -pbrian belski of bmo capital markets. thanks very much for joining us. >> thanks for having us. ashley: don't forget fox business is the place to be for full coverage and analysis of the fed decision or fred decision and economic projections at 2:00 p.m. eastern tomorrow. we'll also bring you federal reserve chairman ben bernanke's news conference. that should be interesting beginning at 2:30 p.m.

eastern time. you can't afford to miss it. certainly the markets are paying a lot of attention as we all are. tracy: one of the most anticipated meetings in a while, right? ashley: certainly feels that that way. tracy: word after thwarted bomb plot on the new york stock exchange. liz macdonald is all over that story. ashley: plus a dire warning from honeywell's chief about baby boomer retirement. but first, yes, time to check on how oil is trading right now, with the dow nearly up 150 points now. oil, continuing to move closer to that $100 mark, up again 65 cents at 98.42 a barrel. we'll be right back

ashley: big breaking news for you. we're getting a first look at treasury secretary jack lew's official signature for printing on u.s. currency. we'll all get to see it. there it is. treasury department just releasing this picture. as you know, loopy lew was what we were calling him before because --. tracy: hostess cupcake icing swirl. that is what it looked like. thh vanilla part on a hostess cupcake. i want to know what happened? did he go to penmanship

lessons? does he take time to accent eight letters? ashley: he clearly changed. looks far more dignified. tracy: we need a penmanship --. ashley: much better for the u.s. currency. first look. tracy: still very loopy, a little girlie if you ask me. well the fbi deputy director testifying before congress today saying the nsa surveillance programs% actually helped foil a bomb plot targeting the new york stock exchange. liz macdonald has details. that adds validity to this, doesn't it? >> came before the house intelligence committee. let's take the sound bite. here is the deputy director at the fbi. take a listen. >> in recent years these programs, together with other intelligence, have protected the u.s. and our allies from terrorist threats across the globe, to include helping prevent the terrorist, the potential terrorist events over 50 times since 9/11. >> nsa utilizing 702

authority was monitoring a known extremist in yemen. this individual was in contact with an individual in the united states named khalid. he and other individuals that we identified through a fisa that he applied applied for through the fisk were able to detect a nascent plotting to bomb the new york stock exchange. >> at this hour, this is still a developing story. we're working with the fbi, trying to get information to see if this plot was linked to the plot to bomb the nyse last fall and also the new york fed. bangladesh individual was arrested in that attempted attack and it is separate from the 2004 plot to bomb the nyse and also citigroup and prudential's building in newark, new jersey. tracy: right. >> what is at issue here the united states law enforcement officials are monitoring terrorists here in the united states in cone tex with individuals in places like yemen.

they also revealed at the hearing that the surveillance did uncover the 2009 new york subway bombing plot and also 2008 terror attack. the culprits in that attack in a hotel in india. this is what we have at this hour. also more developing breaking news coming out of this hearing. essentially law enforcement is saying they do not break into the servers of u.s. companies. that they file a court order to get information from u.s. companies and those companies are compelled to basically give the information. and they're also, mike rogers, who is the house committee, of the intelligence committee what is saying going on with mr. ed snowden, former nsa booz allen individual. ashley: he is leaking everything. >> this is equivalent of cleanup in aisle nine of the intelligence world. he is basically playing it down, that it is not an issue compared to the terrorist plots we're catching and stopping around the world. tracy: verizon basically ran

a fiber-optic pipeline from here to quantico. you're saying the goveenment asks for it and they have no choice to comply. >> i didn't hear about the pipeline. i'm only reporting what the committee --. ashley: they thwarted over 50 plots through their surveillance program. that is the point. tracy: it adds validity. it is working..3 if they want to listen in on our phone calls, let them. ashley:. >> intelligence officials say when a plot goes through to the end and people hurt and killed, that is wwen the complaints come in. ashley: that's right. tracy: makes sense. ashley: makes sense. tracy: that is a great story. ashley: a little after quarter past the hour. time to check on markets. nicole petallides as always down in the thick of it on the floor of the nyse. nicole. >> worth taking a look first here at the markets. you see the dow jones industrials up 150 points. up a full percentage point..3 s&p five00 not too far behind. also gaining as well as nasdaq composite. we're seeing big moves and 100 point swings since may 20 seg when we heard ben

bernanke and possibility of tapering. we had back and forth swings. we're seeing once again another 100-point move to the upside and vix to the downside. looking quickly at jack-in-the-box and chipolte mexican grill. jack-in-the-box will shuttering several stores. the qdoba mexican restaurants. 67 of the company operated restaurants. they are looking at cash flow and looking at status and lead status. miller tabak says may be a positive for chipolte and raised their price target by five bucks to $400 for chipolte mexican grill. certainly worth watching both. ashley: i'm thinking about both of those. i'm very hungry. we'll be back with you at the bottom. hour. tracy: this question lingers, what to do about fannie mae and freddie mac. it looks like congress is finally attempting to tackle the future for the government-backed mortgage giants. former fannie mae credit

chief ed pinto will tell us what should happen next. ashley: first, let's take a look how the dollar is moving right now. as you can see it is stronger against most of these currencies. just the euro edging out a slight advantage now. the yen also down against the dollar. we'll be right back. change makes people nervous. but i see a world bursting with opportunity, with ideas, th ambion. i'm thinking about china, brazil, i'm thinking india.china, the world's a big place. i want tbe a part of i ishares international etfs. emerging markets and single countries. find out w ninout of ten large professial investors choose ishares for their etfs. ishares by blackrock. call 1-800shares for a prospectus, which includes invement objectives, risks, charges and expenses. read and consider it carefly before investing.

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>> i'm gregg jarrett with your fox news minute. on final day of the f summit. leaders are calling for syrian peace talks to be held in geneva as soon as possible. for syrian authorities to commit to destroy and expel all al qaeda affiliated groups. taliban leaders announcing they are prepared to initiate peace talks with the u.s. and the afghan government after 12 years of war. this announcement comes on the same day that afghan president, hamid karzai said his forces are taking the reins from the u.s. coalition to gyp leading that country's security efforts. senator claire in cast kel is -- mccaskill is endorsing hillary clinton for president in 2016. she is the first u.s. law i

can mayor endorsing. it is a grassroots support campaign if she decides to make a presidential run. is there any doubt? those are the headlines. you don't doubt it, do you, ashley? ashley: i do not. interesting, even so. gregg jarretttwith fox news. appreciate it. breaking news from the auto world. chrysler and the national highway traffic safety administration have resolved their differences with respect to the government's request to recall 1193 to 2004 jeep grand cherokee and two they have jeep liberty vehicles. chrysler will conduct a voluntary campaign with respect to the vehicles and have visual inspections and provide upgrades to rear structures if necessary. tracy: all right then. con grace may tackle issue with washington argely ignored last five years. what will they do with

fannie and freddie? our next guest said the proposal to set up the mortgage giants to fail again. joining us a former fannie mae chief credit officer ed pinto at aei. you're basically saying it is like deja vu all over again? >> it is, tracy. fatal flaw many of other proposals that the government mortgage complex continues to push. a government guaranty is a central feature of the proposal. and, that, guaranty, ends up with three problems. first, it, the government can't price for prifk. -- risk. it is incapable and many cases unwilling to do that. we've seen that time and time begin. second the fact there is mispricing creates distortions in asset allocations which seeds of pts own future problems.

and then third, congress eventually wakes up some day and says, wait a minute, we're giving something away for nothing. we need to get some benefit so they politicize the lending process. they have got it backwards. what you need is, a housing finance market, that is based on sound underwriting. that is what provides stability. and that stability is really gotten from having, the preponderance of loans being high quality prime loans. >> i agree completely, how do you unwind this thing? can't take away loans from people, right? do you stop issuing them? >> i think what you do is, you wind down fannie and freddie by, continuing to raise their guaranty fees. by forcing them to bring in private capitaa in front of them. by lowering their mortgage limits. you also have to limit fha

because otherwise the business will just shift over there. tracy: right. >> then as that happens the private sector steps in. and if you have a market based on loans that perform, in a, you know, with very low default rates, historically we had very low default rates. we threw it all away in the 1990s in the at years in the name of affordable housing and putting people into homes they doesn't afford. tracy: makes so much sense. but the problem is it also taaes so much time and by thh time we get to a point where it could potentially be feasible, oh, what do you know, it is an election year and nobody wants to rock the year. to the point they politicize it, they put it into politics all around, don't they? >> absolutely. i was at an event yesterday, so-called bipartisan policy center put on and they had all of the usual people there talking about how you needed government guaranty

and you had to provide access for as many people as possible, affordability. well, these terms, we've been through this process. this is exactly what they tried in 1992 ann it was a tremendous failure. and the result is, as i said, you put people in homes they can't afford. you have to have underwriting that people can actually afford the loan when they get it and afford the usual things that happen down the road. they have some problem, health problem or other problem that may happen. they're not living so close to the edge. tracy: right. >> that they go into default. the government isn't capable of running a housing finance market under those terms. you have to get the government out. tracy: right. everyone needs to have skin in the game. i know you have testified time and time again about this. has any, are you starting to at least feel like the tables are turning a little bit towards your side? or is it still completely, no one wants to deal with it, let's move onto something else?

>> i think it is going to be up to the house of representatives to really craft a bill that follows many of these principles. ironically, the safety and soundness regulators, the fdic and the fed and others two years ago put together a definition of a qualified residential mortgage and they had many of these concepts. the government mortgage complex has been furiously pushing back on that proposed rule ever since. tracy: that's the problem. ed pinto, i hope they're listening to you down there, sir. thank you very much. >> thanks, tracy. always a pleasure. tracy: yeah, you too. ashley: all right. coming up, a waaning from a big-name ceo who says the baby boomer generation, they're getting old and they could derail our economic recovery. tracy: dam it, they need to spend money. a look at today's winners and losers as we head out to break. the dow is up 143 points.

here are the winners. cliff natural resources, a charles payne favorite. we'll be right back

speak 30 minutes until the close. nicole: hi, tracy. these 100-point bills are no stranger to folks on wall street. let's take a look here at a name

that has been weighing on the s&p 500. they have been facing competition. giving an outlook that is weaker -@than expected. smithfield foods is another one that we are looking at. back to you. tracy: all about lunchmeat today. excellent. ashley: giving a dire warning about baby boomers. gerri willis is here to explain. gerri: the baby boomers are retiring. they are all retired. they are not prepared for

retirement. boomers are going to crush the system. i think we have a chart of medicare paymentssover time. look at that. look at the fever line. look at the fever chart. it only gained momentum in the coming years. the drain on the federal government will be substantial. he loves being a ceo. he sat on a simpson bowles commission. he was surprised at how slowly action takes place.

ashley: i do not know why. to be honest. it is washington. it is interesting. he really did not say he was super frustrated. all he said was it takes a super long time. ashley: what you have coming up for us tonight? gerri: the impact on your wallet if interest rates start to rise. what happens to you and your wallet. we are also talking to a woman who represented the victims in the newtown connecticut tragedy. what her recommendations were to the state government for dealing with contributions.

ashley: do not visit. tracy: ashley is doing double duty. oil is closing. aaain of more than half of 1%. apparently, i cannot speak either. the fastest growing trend in the food service industry. jeff flock is live with the latest on this new culinary craze. get yourself on that truck, jeff flock. jeff: you open a food truck

because it is cheaper. now, you have the big dragon border restaurants starting to get into the food business. let's go inside. tracy wants to see inside the truck. come on inside and maybe we will see what this looks like. i have the executive chef here. a fully functional kitchen. >> yes, it is. jeff: for a while, the big restaurants, they fought food trucks because they saw them as competition. i see it as providing -- tap

them to order, to specification in the truck. jeff: two and a half minutes. there you go. great capitalism at work. what used to be competition, now you see it opportunity. a rolling billboard on michigan avenue, you can out by that. tracy: anti-italian birthdaa

cake, jeff flock. jeff: you know, that is originally what they were. and italian wedding pipe. tracy: that one looks good. ashley: that is really good. [ laughter ] jeff, you are awesooe. thank you. oil prices back on the rise adding to the 6% gain of june. we will weigh in on crudes next move. ashley: let's take a look at the ten and 30 year treasuries as we head to break. ♪ my mantra?

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it is workinggwith a public offering reporting to the offstreet journal. striking out with san jose california. the city is suing mlb over the new ballpprk. the san francisco giants also jumping to the park on territorial rights. that is the latest from the fox business network. giving you the power to prosper. ♪

tracy: the oil is up nearly 13%. one hundred dollar oil or crude right around the corner? our next guest says these prices are probably not sustainable.3 a lot of this has to do with the non-fundamental stuff that you

call. >> serial produces very little oil. there are some other fundamentals. crude oil is up. that really makes it a little weaker and maybe the refineries do not buy as much because maybe it is not as profitable as it once was. there has been a loss of about, 400-$600 a day. it has not gotten a lot of publicity. in a market that is sort of tightly balanced, that is a lot of oil. you need to replace it with even more perils. i think the libyan situation as

had more of an impact than people are giving it credit for. lori: what happens tomorrow? does it fall? >> i spent the morning debating with various people. what if interest rates start to rise? it makes it more difficult, more expensive to hold inventories. on the other hand, it could show a sign that the market will get better. that will have an impact on the dollar. we debated ll morning long what would be the impact of rising interest rates. that would be the consensus. tracy: we have a lot of oil here.

we have already offset a lot of this. if you took 2 million barrels a day of increased production off the market tomorrow, we would have a total fiasco. a lot of people seem to think that the u.s. has not benefited from it. the fact is, very few non-opec nations have increased their oil production over the last couple of years. tracy: we were talking about the rail system here in the united states. >> the rail system is essentially making the oil system work, but it is temporary. you need to build pipeline infrastructure. still supposed to be made sometime this year.

tracy: do ac $100 a barrel? >> i certainly think that we could. i think that rising u.s. and canadian production could affect it. tracy: john king stand, thank you very much. ashley: it is a quarter after. time to look at the stocks like we do every 15 minutes. keith, what are you expecting to hear from bernanke tomorrow? >> i think we will just go ahead and trade sideways. right before we came on the air, though, some of the work that we do, we went neutral because the rally has been really nice this afternoon. we are at a point where we have to decide.

i think we will hear that the economic fundamentalssare not where they need to be for them to pull out completely. it gives them a very short window to take a look at some economic fundammntals and redirect. i think we will hear reevaluation in a month. ashley: i think that is the consensus. thanks again. former u.s. comptroller telling congress how to eliminate billions in duplicate spending. he is here next. ashley: the dow is up. take a look at some of the winners and losers on the nasdaq. we will be right back. ♪ 3

ashley: do you ever feel like nothing gets done in washington? 81% think that it should be a high priority for congress and the president. politicians are taking notice and held a hearing today. our next guest testified that that hearing. he joins me now. david walker. ttank you for being here. i found a speech of yours in which you said "we have an obligation to address much-needed entitlement and other reforms. that speech you gave was on march 203, 1999. more than 14 years ago. nothing changes. >> there is no question that we need to reform social insurance

programs. i would like to see some of that stuff happened this year. i am not optimistic. the american people deserve a government that is economical, efficient and effective. we clearly need to improve in that regard. there are huge duplication overlaps. we cannot afford for that to continue and that is what they hearing was about today. ashley: what was your plan to address this, david? what is the first critical step? >> the congress and the president came together on a bipartisan basis and agreed to set up a mechanism that would take a look at the organization and operations of government that would make recommendations.

there is a lot of findings that come out of the judeo, but all too frequently, they don't get acted on. ashley: they would maximize the influence to operate behind-the-scenes to advance their agenda. how would you respond to that? i would argue that it is the exact opposite of that. if you do not think that they are lobbied, you may have to worry about raising money to get a leg did. they have to worry about a variety of special interest. this is exactly the opposite. they would make recommendations and be elected representatives of the people. the people would have the final

decision. congress and the president would make the final decisions. you need to set the table for that to happen. >> we have -- we do not have immigrated and open primaries. right now, in the house of representatives, there are only 35-45 swing districts out of 435. we need political reforms, as well as operational reforms. this is a mechanism that can help make those operational changes. ashley: we have about 30 seconds. how hopeful are you of getting something tangibly done on this issue? >> we had very good attendance. they were very engaged.

the hearing went longer than expected. i am cautiously optimistic that this is something that can get bipartisan support. congress and the president can% work together to improve government performance. ashley: we wish you the very best of luck in that effort. thank you for joining us. >> good to be with you. ashley: what a concept. ashley: nearly a month after super storm sandy, making their debut across the city oday. "countdown to the closing bell" is coming up. make sure you do not go anywhere. sprint, dish, clear wire, a big debate.

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♪ liz: deadlock, no longer a case of if but when and how the fed will begin to bring its bond buying program. we are giving you ways to protect your investments against any fall back. clear wire, what is the deal with this deal? sprint is now deciding to sue dish. to has the edge? can you be the one endo can you private? a countdown special report. and get to go is nothing you -- nothing new, but food on the go is everywhere and testing of real food fight between trucks and restaurants. "countdown to the closing bell" starts right now.