stock is selling off. >> this is not the first time they were involved in the merger. this hour, hear exclusively from frank lorenzo, the man who saved and steered continental airlines through bankruptcy and tried to do the same with the airlines, and they stepped in when he tried to merge with eastern. >> off the board at jcpenney, cutting a deal to get what he wants. >> number one in the u.s., des moines, iowa mayor on why "forbes" ranked his city as number one. >> the privilege not to be americans as the u.s. cracks down on global tax evaders. >> live coverage and analysis of dennis lockhart's q&a coming up. >> busy hour. let's get you updated on the markets, floor of the new york stock exchange, and, lauren, stocks turning higher.

what's driving it? >>s in past 20 minutes, there's been a reversal, dow and s&p snapping a two session losing streak, up arrows across the board right now, and dow's up 48 points, and, well, we have more declining stocks than advancing ones, but up arrows. this is what happened. moments ago, the atlanta fed bank president essentially said this tapering that we are talking about and expecting to happen next month might not fully happen because the economic data that we've been getting is relatively uneven, so, perhaps the qe continues longer. up arrows right now. back to you. >> take it while we got it. >> headline with attention, the department of justice and states suing to block the merger of american airlines and u.s. airways. we are joining right now live by capital chairman and fowppedzer, also former continental airline ceo, frank lorenzo on the

telephone. thank you for being here on fox business to help us understand what the ramifications of the doj move are, and what are they? >> caller: well, adam, to be fair, i have not read -- i have not read the suit so i really don't know what the government's up to here, whether they just step up the bargaining or whether it's an attempt to outright stop the amalgamation. stopping the merger is not in the public interest. adam: why not? >> caller: because we need a more efficient system, having four major airlines, which would be the result of this merger does not leave an uncompetitive system. the fact they compete over connections is not really the significant thing for the consumer. we will pay higher fares over

time if we have a less efficient system, and, of course, this is very -- a very unfair for them to stop this emergencier -- merger when they didn't stop united continental which was headquartered in chicago, and we all know the political significance of chicago. adam: certainly. >> caller: as well as delta northwest, which also went through pretty easily. to not allow this company to be competitive within is very unreasonable. adam: the timing of this is particularly incredden considering that both airlines, especially american, in such bad shape. >> caller: that's correct. also the fact that american is just within a couple weeks of having completed its bankruptcy plan, so for them to come at this 1 # 1 # -- 11th hour and have this action

does seem to be very incredible. adam: do you think, perhaps, there's a negotiation or some kind of gain that the department of justice is trying to extract from this deal? might there be politics involved in this? >> caller: well, that's what -- that's what i said when i started my comments. i have not read the complaint, and i don't really know, really, what government's up to, whether they are just stepping up the bargaining or whether they they have a goal to stop the amalgamation. we just don't know. they sure could be just trying to play, oh, what the doj loves to do from time to time and play out their bargaining, but it would seem to have come as a surprise to most involved. adam: wrapping up, who gets hurt most in this? the employees of american and u.s. air, the investors of the potential merged airline, or the flying public? >> caller: it -- i think in a way they all three get hurt

because the employees get benefited over time by working through an efficient company, and investors get hurt because, of course, and, in fact, i think you see it in the market reactions today to airlines that are down fairly sharply, and the flying public, as i said before, gets hurt over time because there's a less efficient system when you don't have -- these two carriers have spent a lot of time putting their systems together, have been running joint ads, and at this 11th hour to stop this would be a travesty, in my opinion. adam: death note for both airlines? >> caller: i don't think it's the death note, but i think it'll be a travesty in the way we administration the department of justice and merges, and, again, assuming that's the end game that the government has in mind here. adam: all right, frank, the capital chairman and founder, the former ceo of continental

airlines, we appreciate you're become here exclusively on fox business. thank you, sir. >> caller: thanks, ads m. lori: breaking news, the latest fed official making comments on tapering plans taking questions from an audience in atlanta. it could be market moving, so let's listen in. >> the beginning of the recovery to date and over the lasttyear, we made substantial progress. certainly, there are some underlying aspects of the employment picture in the country that remain somewhat of a concern. under employment is one as we have a fairly large portion with the working base, and that means that these people would like to have a full-time job, but can't find a full-time job, and, therefore, work part-time. that's not true of all part-time workers. you have students.

you have stay at home parents who want to work part time, but there are many who are looking for 40 hours a week, if you will, and can only find 30 or fewer hours a week. another aspect that is somewhat concerning is the -- the increasing use of temporaries within the economy, temporary workers, who, in effect, work for some per then get laid off and go to some other employer, so i have to be somewhat concerned with that picture as well, so there are underlying aspectings of -- aspects of improving labor markets that we have to watch and try to understand their longer term everyone cation -- implications. go back to part-time, increase number of companies are using part-time work forces or trying

to increase their number of part-time workers for a variety of reason. some of that is flexibility. some of that relates to the affordable care act, but, you know, certainly, we have to watch that, so here's the bottom line from my perspective. we have made a lot of progress. yet, the underlying health of the labor markets looked at in every dimension are not nearly where we want them to be. we still have a lot of work to do. yes, sir? >> how important is the role, and particularly in a time of transition in that, with the new chairman increasing the ability? >> i think you all heard the question, but the question was, how important is the role of chair, particularly in a time of

transition? >> well, it is a consensus process on the committee. the chairman or chairwoman does not dictate policy, but leads a process to come to consensus. having said that, the role of the chairperson is extraordinary respected, both the institution of the role and, in this ccse, the incumbent in that position, and so in a situation where we're not coming to a clear con -- consensus, the chairman provides leadership at that point making the chairman's role decisive in many cases where there's a fair amount of controversy over the direction policy should take. this particular chairman is just an extraordinary good leader in building consensus, but when necessary, he will weigh in and say this is what i think we should do, and the respect for

the chair has a great deal of weight in the decision of some people on the committee. yes, sir? >> [inaudible] lori: that's dennis, the atlanta fed official comments on ben bernanke's replacement as well as all things tapering. pointing big time to the trouble in u.s. labor markets saying that there's still a lot of work to be done. market reaction? the dow is higher by 53 points. meanwhile, back to the stock market, bill ackman is out at jcpenney, off the board. the activist investor resigning over disagreements over the turn around plans and leadership choices. with more on that and this morning's retail sales number, jeff green, owner and founder of jeff green partners, jeff, great to have you with us. hi, jeff, it's lori with fox business, great to have you. >> hi, hi, how are you? lori: off the jcpenney board,

but how much a distraction has the squabbling been? did jcpenney lose focus? >> oh, definitely. i really think that who gets lost in the equation is the consumer taking the eye off the ball in terms of what the consumer is looking for, what plans are going forward to get consumers back, i think it's really been a political nightmare, if you ask me. >> what do they do now to refocus? >> what they have to go back to, what ron johnson talked about, i mean, it was not a, you know, all was great, all was horrible. there were nuggets of changes there that really, i thought, were quite promising so i hope they don't throw it out totally. lori: interesting. bullish on johnson's ideas. do you think mike, the current ceo, who has been reaffirmed by the board, by jcpenney, has what it takes to initiate that? >> i hope so as long as he realizes the store within a store con concept, bringing

better brands to, you know, reach the american consumer in the land, those were really good ideas. i hope they don't through them out. lori: retail sales report came out earlier this morning. core sales, so minus gas, materials, highest rights since the end of last year, but department store sales actually outpaced coming in six-tenth a percent of the core retail numbers. is that a good sign for a company like jcpenney? >> i think it is a great sign for jcpenney, but i think if you look at how department stores performed over the last several months, it's been disappointing, so i wonder if there was pent up demand there that we're kind of seeing now. lori: car sales, breaking down the report, and home furnishing sales disappointing. is that a harbor of troubling signs? >> no, actually, i think what we see in the future is that with

the housing turn around, even though tepid as it is, i think that home furnishings should see rebound here shortly. lori: okay, maybe just to your point, pent up demand in the segments? >> yes. lori: okay. it's consistent with the level of economic growth we're having right now? >> it is, it's tepid, slow, but growing. lori: jeff green, a pleasure, thank you. >> thank you. adam: the country sees the light, on the verge of opening up production to private companies. lori: oracle ceo speaking out, which ceo he thinks is, quote, irreplaceable. adam: and take a look at metals as we head to break. ♪ [ male announcer ] how do you get your boue?

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lori: it's been 15 minutes, down on the floor of the new york stock exchange, lauren is covering action for us, and we know that atlanta fed officials say tapering should be initiated slowly, could be helping the bulls with the dow up 65 points, and big tech names for us?

>> turns out we're not fed up about talking about the fed, but i am watching tech names today. the number one performer all day on the dow industrials is hp, certainly up today, nearly 3%, up about 90% this year, and getting positive analysts comments and citi group and morgan stanley, and the loser, microsoft, down one-half of 11%. nicholas cutting the tech giant to hold from a buy saying microsoft faces pricing pressures, and, also, marketing of the windows, software, all that. a winner and a loser in the tech space for you. lori: from our own winner, lauren. >> oh, thank you. adam: back to the day's big headline. department of justice filing antitrust lawsuit against u.s. airways, american airlines merger. we want to bring in darrell jenkins, founder and president of the airlinezone.com, and former aviation institute director, all the airlines trading down this afternoon. can you explain to us why this

is either a very good move by doj or a very bad move by doj? >> totally and completely a political move. only thing they really announced in their briefing was that they were worried about fares into and out of washington national, which is the slot controlled airport, and all of these things are usually done in negotiation with the doj and the parties. i think the fact that it is washington and politicians fly in there is the concerns point, but as we know, politicians fly in on highly discounted government fares. adam: let me ask you this. the industry lingo is efficiently, which in english means layoffs. this is an attempt to save jobs so in the midterm elections they say, we stepped in, stopped this merger to save jobs? >> no, i don't think so. the job losses that will take place in the merger, people have already left american airlines in groves who think they will

lose their jobs. i don't see that as -- if that is the point, it's not realistic. adam: make sense for doj to come into this and put up a hurdle at least so late in the game? >> well, this is surprising. this is my 12th airline merger. usually they are negotiated behind doors and they come up with something, then there's slot sales afterwards which we have seen before in washington national, so this is very surprising and perplexing, i think, to all of us. adam: is it about congressmen who want to preserve flight statuses at reagan national? >> ask them that. i have no idea. i think this is completely out of blue. u.s. airways just released the comment they are going to fight this. they will fight it. i think they will win, and i think we'll see this closing by the end of the year anyways. adam: you expect it to close by the end of the year, so there's going to be a negotiation, perhaps a compromise? i'm trying to think if there's an be situation like this where doj clubs everybody over the

head, gets what they want, and merger goes through. >> welsh everybody getted clubbed over the head by doj and the merger. it's not new. it's always behind doors, politically motivated, things will happen quickly, and we'll see the merger close. adam: could either survive on their own if the merger dis not close? >> oh, sure. they are both very well-run managed airlines now. american's seeing a lot of improvement since the bankruptcy. what they will be at a disadvantage is their global alliances will be weak compared to delta and united, so they will be -- have less connecting opportunities on international, and that is the theory in which they are both hurt if the merger does not close. don: why are the other airline stocks down today? i think this would have been good for them at least. >> well, as we've seen, since airport spikes, consolidation is the thing. a healthy industry really is a function of consolidation, and i think everybody's worried about

this one messing up the overall good effects of consolidation. adam: thank you very much for joining us here on the fox business network. >> my pleasure. lori: so, as the u.s. faces an oil production boom, the neighbors to the south, mexico, looking to cash in. details on that, next. adam: remember these books; right? choose your own adventure. going high-tech, and the author needs your help. details coming up next. ♪ with the spark miles card om capital one, bjorn earns unlited rewas for his small business take theseags to room 12 please. [ garth ] bjors small busiss earns double miles

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>> at 25 # minutes past the hour, i'm patty ann brown with the fox news minute. firefighters remain on high alert with the chance of thunderstorms today that could pose problems for crews fighting a fast moving wildfire near a . the elk complex fire, sparked by lightning, burned 141 square miles near pine forcing hundreds to evacuate, and some refusing to leave. an autopsy performed today on a man who was killed last night when he fell more than 60 feet from the upper level in

atlanta's turner field. 29-year-old ronald homer, and police say the fall appears to have been an accident. federal officials have signed off on a temporary fix for cracked safety bolts on the san fransisco oakland bay bridge. the move means the bridge's new eastern span could open as scheduled on labor day. steel plates added near the bolts to prevent movement in an earthquake. those are the news headlines on the fox business network. back to lori and adam. lori: many thanks. >> thank you. lori: u.s. faces an oil production boom, neighbor to the south, mexico, looking to cash in. a country proposing an overhaul to the oil industry could open huge reserves. phil flynn the price futures group in the trading pits of the cme, and, phil, is it a game changer? >> oh, mexico is praying that it's a game changer because if not, the country might go bankrupt. the state owned oil company of mexico really funds a big part of their government with the declining production and the

lack of expertise from the rest of the world. their energy industry is in shammens, and, in fact, mexico, one of the great parts of the north america with all the oil reserves could be a net oil importer without this help so they need it desperately praying that it will. lori: what's the impact on world oil prices? >> i think in the short term, not a lot. if you look at oil prices there, excited about this? no. the big picture is the big oil majors getting in there, start projects, and they turn around decline of mexican production. it's going to make north america a power house with energy production, and it's good for the entire region. lori: that's the goal. thank you. >> thank you. lori: breaking news, hearing first word now from u.s. airways and american airlines in a joint press release. they will fight the effort by the department of justice working to ham their merger saying they'll have a strong defense against the government's

lawsuit and basically denouncing the government's claim this is anticompetitive and cuts jobs, and, in fact, it benefits flying consumers. adam: people question the timing of the announcement from the doj. more to come on this one, but making headlines, small business feeling more optimistic. the national federation of independent business index edged up, and small business owners thinking about hiring, but they are having trouble trying to fill current openings. nfib chief economists breaks down the numbers with burns and webster next hour here on "markets now." eli lislely shares jumping 4%. people in happy in indianapolis. a company says a late stage study of lung cancer treatment met the primary goal that increased overall survival. the drug maker expects to submit the study to regulators before the end of next year. hyperloop hype, musk unvailing the first plans for futuristic

modes of travel transports people from city to city at warp speed. the design includes a tube suspended aboveground with crash proof pods, and he drafted the plans for the loop after a midnight binge, he's leaving the building to others. lori: as long as they don't beam us up or tear atoms apart and rebuild them together. that's the transporter technology from "star trek." adam: absolutely. lori: americans passing up their passports. those abroad renapsing their u.s. citizenship in record numbers. adam: others rocking in the usa. the mayor of the city that "forbes" calls the best for business and careers. the mayor of des moines next. ♪

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states for cities and careers. the city at the top of their list boasts an unemployment rate of 5% and hundreds of millions of dollars of exexpansion plans coming from huge corporations and a cost of doing business well below the national average. joining us is the mayor of city. the mayor of des moines, iowa. pleasure have you here. congratulations. what did you guys do this and what can we learn in new york from you. >> i wish we could reveal all of our answers. des moines has been a great place. we have a collaborative effort that goes on between employers, residents and local government. we really planned, from the last decade, to, to work together, plan together and thing together and we're not employers exactly but we're facilitators at the local government level. and we have been proud to work with these businesses and having such a strong, base, in insurance and financial processing, you know has kind of

kept us out of the lows and, really strong through the years, and we're proud of it. adam: let me ask you about this. i'm looking at some of the statistical breakdown of des moines. a city of almost 600,000. top employers especially in the financial area. wells fargo 13,000 people. principal financial group, 6,000 people. insurance, nationwide al lie, 5,000 people. some cities commodity pete with other cities to lure businesses there but sounds like organic growth in des moines? >> we've seen a lot of growth in business not onll that are here but we've recently seen google look at this area. microsoft specifically. facebook, those two last companies have made announcements. and, certainly they play a piece in that financial insurance area as well. so, as you say, that organic growth that occurs is supportive

of industries, kind of circle around those that, they work with closely. i think it has been good for us. we're also thinking about what the 21st century looks like because iowa is still strong in agriculture. a great base in that and des moines is home of some value-added industries in that sort of an area. adam: i want to ask you about thaa. >> pioneer hybrid -- yeah. adam: i want to ask you about that. you have an unemployment rate in the des moines area of 4.6%. you talked about iowa and agriculture. i lived in the midwest several years. i always wonder when people move south for various reasons will realize they have to come back to the midwest, whether for water or because of life-style and climate. is it the tax base that keeps you guys competitive or is it something else? >> well, i think, what keeps us competitive, i think again, is the strong base in those three or four industries that we've

been so strong in. certainly, circling around the ag base, that insurance and financial processing that des moines grown out of, thinking over 100 years ago we used to be big in coal but they found it had a lot of sulfur in it. so it, kind of, was not as popular of a way to power and height. so we went away from that. got into manufacturing. but slowly but surely built our base in that insurance and financial processing but certainly we've got a great center here, health care industry for iowa here here with unity point and mercy and a great base of all kind of research. also not far from the university of iowa. iowa is a great place to live. adam: yes. >> we have great cultural things. 24-hour a day city and every now and then every, three, four years, people come and watch caucuses and see iowa grow.

adam: not only that my first trip to des moines, i think it is the septuplets, i'm dating myself, that was late '90s. it is a great city if you have six children born at once or a business with a unemployment rate of 4.6%. >> absolutely. adam: thank you very much for joining us. >> thank you very much. adam: frank connie of des moines. lori: the septuplets are already -- adam: if you want to date me. it was in the '90s. the brain is the first thing to go, right? lori: oracle's ceo talking about apple and company's prospects without steve jobs at the helm. listen to what he told charlie rose on cbs this morning. >> he was brilliant. he was our edison, picasso. >> what happens to apple without steve? >> we already know? >> we saw, we conducted experiment. it has been done. we saw apple with steve jobs of the we saw apple without steve jobs.

we saw apple with steve jobs. now we're going to see apple without steve jobs. lori: that's tough. okay, ellison, going on to call jobs, quote, irreplace ab, predicting apple, the company will not be as nearly as successful without him. apple shares up just about 20%, since tim cook officially took over as ceo following the passing of ceo. adam: for the record, mccoy septuplets are 16. lori: we're sort of close. adam: 1997. number of americans are giving up their passports that is up by an astounding 600 percent this past year. peter schiff what has those living abroad renouncing their citizenship. lori: look ahead at interest rates hire. this is the benchmark 10-year note and its kneeled on heels of comments from the federal reserve official, dennis lockhart. good retail numbers so that is why there is selling pressure. 2.71% on the 10-year.

back in a moment.

>> i'm -- here's your fox business brief. h.j. heinz cutting 600 jobs across the u.s. and canada including 350 in pittsburgh, nearly one-third of its operation there company was sold in june to warren buffett's berkshire hathaway. it was a $23.3 billion deal. pittsburgh will remain heinz's headquarters when it was founded back in 1869.

workers at south korean automaker hyundai voted to go on strike. a strike last year cost hyundai, $1.5 billion in production. the greek economy reported 20th consecutive decline. now the economy has been shrinking since the third quarter of 2008. the jobless rate there reach ad new peak of 2.6% in may. that is the latest from the fox business network, giving you the power to prosper.

adam: are you ready for this? americans are renouncing their citizenship in record numbers at u.s. cracks down on global tax evaders. those tough new laws are aimed at recovering almost $100 billion the u.s. government it lose in unpaid taxes every year. is it forcing americans out of the country?

peter schiff, ceo and chief global strategist for europacific capital and he joins us now. which is it? seems like this might not be the best thing for the government to be doing or is it? >> i think it's a terrible thing they're doing and a disturbing trend that will continue. the government is making it very difficult for americans who happen to be living and working abroad to function. a lot of people are having to give up their u.s. citizenships even though they would prefer to retain them. but it is not just expatriates. even if you're living in america and you want to bank abroad, i own an offshore bank. i won't accept american customers at my bank because i don't want to be subjected to the enormous expense that i would incur if i tried to accommodate a u.s. customers. adam: the fact that people are giving up their citizenship, i think number is approaching almost 2,000, is anyone taking note other than the network and a few of the news organizations? is anyone in the government saying we need to rethink this? >> oh, i doubt it.

i think the government is deliberately trying to prevent americans from leaving the country. i think they will make it much more difficult in the future than it is today, both to get out of the country or get your money out of the country. you know, there is a form that you have to fill out in order to renounce your citizenship. up until a few years ago the form was free. now it costs $500, just to get the form, to give up your citizenship. who knows what that form may cost in the future. maybe it will cost $5,000? maybe so thousand. they already have big exit penalties f you're wealthy, you have a lot assets and privilege no longer being an american citizen you will have to pay a lot of money for that. it really tells you something, that now an american citizenship, instead of a badge of honor, is like an albatross around your neck and people are willing to pay huge sums of money not to have to be an american citizen. that is a very troubling development. in countries trying to build a

wall, to keep their people in, there's reasons for that. instead of examining why people want to escape an changing those policies, they're just trying to prevent people from leaving. >> peter, the profile of the average person who renounced their citizenship in this predictment. what do they look like? are they like you and me? or are they like you, extremely wealthy or more like me, middle class, by new york standards but middle class? >> a lot of people who are expatriates who are giving up their citizenships and they're they are middle class. they can't afford to the complexity of filing a return offshore. they're having trouble with bank accounts, insurance policies, home mortgages. their lives are difficult. over time more and more entrepreneurs, young people who want to make something of themselves and find a lot more difficult to do it here because of taxes and regulations they will want to leave and i think a lot of americans will want to get their money out of the u.s. because of inflation i see

coming and weakness in the dollar as the u.s. government will try to find ways to mitigate that by making it more difficult for americans to get out of the country either fizsy or -- physically or get their money out. adam: peter, we thank you for joining us to discuss this issue. it is not going away anytime soon. >> sure. lori: let's update you on the markets. stocks off the best levels of the session. we had feed speak today. and decent retail sales coming in month of july. steven guilfoyle joins us from the floor of the new york stock exchange. what is your take today? >> we are at the top of the chart. it's a very quiet day. i thought we would get more reaction with retail sales and mr. lockhart speaking. if we close above that that is very important and i don't think we're done with retailers, okay? we still have macy's tomorrow morning. it is trading $48. if you can get it below 48 tonight, sell a call against i think that is your play tomorrow.

lori: what else besides that tomorrow morning should you keep an eye on? what could be the next catalyst? >> as we get towards the end of the week we do have industrial production and consumer send mane. consumer sendment will be very closely watched and that could make for your friday -- consumer sentiment. you might get a move midday friday following that. lori: sentiment, retail sales huge component of economic growth. thank you, stephen. >> anytime. adam: talk about choosing your own adventure, the author and publisher behind some famous books is looking to capitalize and share those stories with a much younger generation. their pitch to get your help is coming up next. ♪ (announcer) scottrade knows our clients trade and invest their n way. with scottrade's smart text, can quickly understand my arts, and spend more time trading.

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lori: choose your own adventure. you know the books. they are classics. they were a big part of childhood for many, myself included. well, now they may be headed to your tablet in the form of a cartoon. choose your own adventure author, ari montgomery and publisher shannon gilligan are here with details on the new tie tech project. we're seeing you by skype by the way to let our viewers know. i enjoyed these growing up and i can't wait to choose your adventure with my children growing up. if it ain't broke don't fix it so go lie tech with these? >> lori, ray montgomery here, thanks for having us on your show. i love to talk about choose your own adventure and always have. let me tell you one thing about choose your own adventure, why,

choose tunes, we call the cartoons we're developing are even more powerful. choose your adventure always relied upon game theory, the interactivity is, like, simulation design and role-playing where you, the reader, or the viewer, are part of the whole story and part of the whole experience. we all want to be that. we all want to have something to say. lori: so, shannon, i know you are the mrs. you are a couple, correct? >> that's correct. lori: you wristen some choose your own adventure chapters as well, volumes, rather. >> yes. lori: basically this will be an app. i'm curious how the developer community has embraced you? >> the, first, so far, they have been terrific and a huge help. we used an animation studio. we're culting with some engineers about the code, and about user interface design. and you know, we have, and

especially large overlap with the nerd-geek community who were former fans. they're jumping in with both feet. everybody wants to see this i think it's a natural extension of reading. you know, we went away on vacation and brought an ipad right after they come out. i saw ray playing with an ipad with the little kid. the kid was so engrossed. all of sudden a light bulb went off. finally if almost the technology caught up to the point where we can bring our stories on to a new platform, in a way they really deserved, that is really intimate and immediate and emersive, as ray was saying the role-playing aspect is important. lori: as mother of 6 and 4-year-old know-how to use ipad, they walk up to billboards and swipe things. this will be so empowering to them. >> yes. lori: but have you been able to, ari, maintain control of your content? because these are such classic stories. i loved to read them so many

different times to get as many different endings as possible? >> you want to answer that? >> sure. we started out with your very own robot, which curved to slightly under kids. it is a rollicking story about you making a robot out of spare parts. and the robot does all sorts of things, including totally unpredictable things. and you can turn the robot on, turn the robot off, send the robot a mission here and send the robot on a mission there. so it is fun for kids. let me say one thing, but i can go on for a long time, getting a pinch to shorten it up. there is the oral tradition. there was the written tradition. then came along print. then came along movies. now we've got to, the whole digital world and now, the ipad. lori: you can't ignore it. can't ignore the wave of technology. you have to embrace it.

congratulations to both of you for doing just that i look forward to these apps. ari montgomery, shannon gill began. >> thanks. bye-bye. adam: so coming up, american shoppers and the fed. stern ag economist lindsey piegza weighs in how today's retail sales will affect the fed's paper timing. she joins tracy byrnes and ashley webster next hour here on fox business. don't miss, "markets now." ] at his current pace, bob will retire when he's 153, which would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a mortgage. luckily, he found someone who gave him a fresh perspective on hisortfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age. it's not rocket science. it's just common sense. from td ameritrade.

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[ villain ] well mr. baldwin... it appears our journey has come to a delightful end. then i better use the capital one purchase eraser to redeem my venture miles for this trip. purchase eraser? it's the easy way to erase any recent travel expense. i just pick a charge, like my flight with a few taps, it's taken care of. impressive baldwin. does it work for hotels? absolutely thank goodness. mrs. villain and i are planning our... you scare me. and i like it. let's go what's in your wallet? tracy: hey, welcome back, i'm tracy byrnes. ashley: i'm ashley webster. a 10 billion-dollar airline deal, denied. the white house says, american-us airways tie-up would boost air fares and hurt flyers. airline stocks are plunging. more on the fallout straight ahead. tracy: new drama for jcpenney. will the boardroom shake-up help or hinder the struggling retailer's turn around plans.

ashley: boost in retail sales for a fourth straight month. economist, lindsey piegza says behind the headlines there is cause of concern. she will be back in a now moments. tracy: yeah, good to see her. airlines stocks are tumbling, right? ashley: doj blocks us airways and from teaming up. lauren simonetti with the story. >> hi ashley, tracy. the markets have gotten better. unfortunately the airlines have not, still deep in the red. us airways a huge loser, certainly down nine plus percent down over the past two days, about 8%. so, big declines today. let's look at some other headlines you can see. delta, united, jetblue, all down substantially. so that's an ugly board. in terms of the markets overall it's looking a lot better. the dow is up 60 points. nasdaq and s&p 500 are higher. s&p is about five points away

from 1700. so for the blue-chips and for the broader market we're certainly snapping two sessions of losses. back to you. >> we'll take it. thanks, lauren. american and us airways promising to fight the government to keep their merger alive. rich edson has the latest on this saga. hey, rich. >> hey, tracy. the government says passengers are better off with u.s. and air and american remaining independent. department of justice suit joined by several states attorneys general. the merged airline would lead to substantially reduced competition, higher fares and package and less consumer choice. they shea they can arrive independently. absent the merger u.s. and american will continue to provide important competitive restraints on each other and other airlines. american and us air say they will offer a vigorous defense and pursue all legal sop options in order to complete their merger. in a joint statement the companies say, we believe the

doj is wrong in our assessment of merger. blocking this pro-competitive merger will deny customers access to broader airline networ them more choices. one analyst says this deal will eventually go through. >> i think it will go through. i don't think that this, this merger will be blocked. i think that overall the concerns that doj has can be addressed and that american airlines will emerge as a large, number one carrier in the world. >> familiar government strategy is for the government to file suit to win concessions. in this case from airlines, maybe change the structure of the merger though the justice department says it will entertain settlement proposals, in this case, prosecutors say they will ultimately want a full denial of the merger. back to you. tracy: wow, rich edson, thank you very much. you can see the consumer angle here though. we haven't had a merger that has gone well. ashley: no. don't forget they believed that the airport, one of the airports

hit hardest, reagan national, washington, d.c., department of justice because the combined airline would control almost 70% of the slots available. tracy: right, right. ashley: that means fewer planes to choose from and prices going up. that's the concern but certainly reagan national, ou can argue because, you know, a lot of people in washington, d.c., the government are affected we've got this, you know, denial at least for now. tracy: always lose your frequent flyer miles in a merger. ashley: you do. that's true. don't get me started on airlines. to the economy. atlanta fed chief dennis lockhart says it has improved but the labor market is still not where the fed wants it to be. lockhart also saying that the initial tapering should be a cautious first step. joining us is lindsey piegza, chief economist at stern ag. great to he sue. normally we have you here in studio. you're in chicago today. mr. lockhart was saying that a lot of the data we're getting, it just doesn't provide a lot of clarity. today we had retail sales which

were, eh, at least on the up side, but what is the economic data telling us? >> that's right. starting with retail sales the headline report came in a little less than expected but the prior month was revised up so what this says on net the consumer is little changed from where they were at the end of the second quarter but this is not to say they're on much firmer footing because remember the consumer was able to spend through the first quarter, despite those onerous tax increases but we lost a considerable amount of momentum going into the second quarter with real consumption up just a few tenths. what lockhart and most fed officials are saying we've seen improvement in the economy but not the type of momentous improvement we need to see in order to start talking about the tapering timeline. ashley: it is all about confidence, isn't it, not only for consumers but small business owners? for everyone to start investing back into this economy. i still get a sense what is not going on in washington, d.c. we have the budget battle.

the new health care plan. the prospect of taxes going up even more. i still think there's a lot of ground needs to be made up on the confidence side of things, would you agree. >> certainly is. you see that in the job creation numbers. if small businesses were confident, they would start to bringing on new hires but we're not seeing that. sure the unemployment rate continues to decline in part because we're seeing part-time workers come on. we're seeing participation continue to decline. but that is juxtaposed against that weakness in headline job creation. it is still in positive territory, but again, it is that loss of momentum that we've seen over the past several months that fed officials again are commenting on saying this is not the type of continued strength to warrant that tapering in sent. ashley: looking at today's retail numbers. it showed weakness in the howing related categories, furniture, appliance, building materials, stores all declining. where do you think the housing market is? there is this concern, prices are rising. but so are interest rates and

already people may be priced out of the housing market? >> that's a really great point. there was a lot of sideline demand and that demand jumped into the market in order to take advantage of locked-in rates over past 45 days because they were anticipating further upward pressure in mortgage rates the problem it remains to be seen if we continue see demand move into the market if mortgage rates continue to push higher the problem is right now the game has changed. you can't put the zero percent down so the timeline for home buying is pushed out into the future. if you come out here making 60,000, a home is 150,000, average savings rate at 3%, that puts the timeline for savings at five to six years. that is putting considerable pressure on would-be homebuyers aside from the continued rise in mortgage rates. ashley: you bring up a good point. mentioning down payment, we're hearing now it is 20%. that is very difficult for many people. what about the banks? are they likely to perhaps relax

lending standards just a little bit to give more people an opportunity? or are they too snake bitten from what happened before? >> actually looking at fed senior loan officer survey, we have seen banks lessen their standard and begun putting money out into the marketplace the problem it is a double-edged sword. banks want to loan to consumers who are able to pay back loans. those are not necessarily consumers or customers knocking on the bank doors. that is still the chicken or egg story depending on what customers are deamending that credit opportunity. ashley: that's a good point. one point about the fed, sinned say -- lindsey, if they go ahead tapering that is good sign because they believe the economy can stand on its own two legs but could you argue by what the fed has been doing buying all these bond maybe not filtered down to main street? maybe great for the markets but for the overall economy what

impact has it had? >> going back to your point it depend on size of tapering. we have five more weeks of data and another employment report for the sent fomc meeting. if we have outsized incredible august employment report very likely we do see a sizable tapering. on the flip side, if we see a very weak employment report it is likely they postpone that to october, december but it is the third option, that mixed report that's really going to be an exciting time for the market, and very likely we see a mini tapering, maybe, five, 10 billion. i don't think that necessarily justifies or exemplifies the fed's confidence in underlying momentum for the economy. ashley: very true. lindsay piegza, stern ag. thanks for joining us. we appreciate. >> thanks for having me. tracy: more on the economy, retailers hope to give a jolt with back-to-school sales, already? dear god. jeff flock at sears automotive in schaumburg, illinois with more. hey, jeff.

>> this is one of the parts of sear's business doing well. look at this. they brought back the road handler tire, the sears road handler. i'm live with the man who brought it back. president of sears automotive. joe finney. this is legendary tire. you're a tire expert. >> i have a little experience in the tire business, yes. >> you personally used to work for michelin. you brought this one back. you think it will be a big seller? >> this is great product. has 100,000-mile guaranty. outstanding wet traction performance backed by a great guaranty for sears. if you haven't been to sears automotive lately, there are 700 plus around the country this is area of the sears world growing that you're investing money in, correct? >> yes we're investing in service technology. we're investing in upgrading stores and making a better experience for our customers. >> look at retail sales numbers. these have been lag pardons. home furnishes, auto sales and parts and building and garden have been laggards of late. tell you, year-over-year, actually automotive has been up.

what am i looking at, things on the tires? >> this is our quick chick alignment system. three dimensional aligners. allows to check alignment in 90 seconds. >> you spent at love money on the technology. >> we did. most expensive piece of equipment in the store and great value for our consumers. >> i want to ask you overall about your sense about retail. look at retail etf, which in the last month hasn't done much but year-to-date, up about 30%. do you feel good about retail, about your piece of it here going forward? >> it is certainly trending in the right direction. i feel good about our piece when retail numbers are down, people hold back on automotive purchases. so when they're up we're very encouraged about that. that means people will spend more on vehicles. >> i was going to say sears automotive does everything from tires to alignment, to batteries. you do at love stuff. look at company stock. it stablized year-to-date. look at sears holdings. this is a the past the business that you're making money at. not true of all the other parts

of the company, no offense. >> we're working really hard to provide great service and build this side of the business. we're tied in heavily with shop to wait program. members of sears get more with the program. for example, in automotive we offer 4.99 oil change for vip members. >> 4.99. they have a special, back to school special. 9.99 oil change if you're not a member. normally 30 bucks. >> 9.99? you're talking $10. >> 10 bucks. tracy: i'm so coming for oil change. why do i pay $80. see me coming and raise prices every single time. >> got too fancy of a car. tracy: just saying. i need that little alignment thing, because so not aligned. ashley: we're just saying. that will wear your tires out quickly. tracy: and bying tires from sears. ashley: small business confidence rising just a little bit but nfi-b

chief economist bill dunkelberg says there are too many obstacles to job creation coming up. tracy: is mexico about to shake the global oil market to its core? we'll talk about that. see how oil is trading. up a little bit, $106.86 a barrel. we'll be right back.

tracy: quarter past the our. got to check on the markets. lauren simonetti on the floor of the new york stock exchange. >> hi, there. we have upparrows continuing today. the dow is up 58 points. retail sales report out earlier this morning, certainly disappointing but the bulls gaining some momentum here after non-voting member of the fed but atlanta fed president dennis lockhart essentially said that the fed likely won't have enough date to support a sent taper. so that is igniting the bulls here today. we've got to talk about when do we not talk about jcpenney lately, right? the stock is down 3/4 of a percent on news that activist

investor bill ackman resigned from the board. so this is a story we continue watch. back to you. tracy: thanks, lauren. we'll see you at the bottom of the hour. >> all right. ashley: after 75 years of a government-run i will industry mexico may finally be ready to open up the oil reserves to private companies. what does that mean for the oil industry as a whole? that is interesting one. fox business phil flynn, price futures group in the pits of the cme with details. what do you think, phil? >> oil companies got kicked out of the country 5 years ago you would think they would think twice about embracing mexico and going back in there but they will. they're desperate ily need in more oil receives and they will move in there as soon as they get the opportunity. for mexico, this is sign of desperation. their production is falling. we've known for years they have been having problems. they need to do this not only to save the own industry and save the economy. one thing that could save the

economy, sent crude right now, up 88 cents right now. now a lot of this has to do with the brent crude. brent had been leading the way. production, even concerns that european refiners will go into maintenance early because they don't want to wait around for the lack of crude. we're moving up strong but this talk of tapering e're getting a little bit of a taper cutback rally as well after mr. lockhart. a little bit of everything. back to you. ashley: very interesting. phil flynn, thank you so much. we appreciate it. >> thank you. tracy: we are digging deeper into that jcpenny story. we'll have more on that, coming up oppenheimer analyst brian nagel says there is a big question remaining after the ackman board drama and he sis ahead. ashley: small businesses are struggling with obamacare, taxes and more. nfib chief economist bill dunkelberg is telling us how it is holding back job creation. first, look how the u.s. dollar is moving on this tuesday. guess what? another day of a strong dollar.

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>> at 21 minutes past the hour

i'm patti ann browne with your fox news minute. an atlanta braves spokeswoman is not answering questions how a fan fell to his death from the upper deck of turner field. he fell 65 feet during a game between atlanta and the philadelphia phillies. they say it appears to have been a accident. mayor cory booker cast his vote this morning in today's new jersey primary. leading up to the october special election to fill the senate seat of the late frank lautenberg. booker is running for the seat. he and republican steve lonnie began are leading in the polls. those are the headlines from the fox business network. back to tracy. tracy: patti ann browne, thank you very much. >> thank you. tracy: confidence for the american small businesses rose fraction alley but way below average. bill dunkelberg says there are too many obstacles. your notes were hysterical. small business optimism kind of

sighed. that's is what you wrote. where are the big obstacles or still all of the same? >> pretty much all the same. as we mentioned before, the top issues for the small businesses, the nfib's owners are number unone, rising heelthcare costs, two, uncertainty about economy, three, energy cost, four, uncertain about government policy and five the cost of regulations and red tape. six, seven, eight are all federal tax code. so what has gotten better there? the president said he woull be willing to do dealing on corporate taxes. most small businesses don't pay corporate tax schedule. that won't help them. he is still demanding more tax revenue as a result of it. that is more taxes. that is not very good. based on their outlook we don't really see enough good data coming from the fed to even think about tapering in sent. if they do start tape every, they will probably cut treasurys purchases rather than the mortgage-backed securities since they will try to continue to

support the housing market. tracy: you're right about that. i mean, you wrote that someone suggested you name it the small business pessimism index because, based on what you're saying, none of this is going to change anytime soon. so we're just in like this doldrums, with these small businesses and like, there goes the job creation. >> that's exactly right. you know to create jobs we need customers. you saw retail sales numbers this morning. they weren't very strong. then if you look at owners expectations about sales, more of them think there's going to be weakness in sales and propertied weakness in sales quarter on quarter than think it will get better. so there are no sales reason, there are no customer reasons to hire. consequently that translates into inventories where 1%age point of the firms plan to reduce inventories than order new stuff from the big producers. so that is not going to be good. capital spending stayed flat, and kind of recession levels, and plans to make capital outlays also stayed flat at very

low levels. so, there's no gdp coming out of that sector. tracy: right. >> we hope the big half will get the job done. tracy: i guess. you know what? i think the inventory part worried me the most in the survey because if inventories are as you say, hiitorically lean, we're coming into back to school, we're coming into holidays and if they're not anticipating a rise there our or a knead to bulge up on inventories, that doesn't bode well at all. >> exactly right. we need, these firms had a lot of inventory going into 2008. they had to get rid of it. we also had a massive sale on main street and price cutting everywhere. so now they're kind of happy, but with a very reduced level of inventories and we still have more owners saying they're cutting inventories over the last six months than adding to them. of course, more planning to cut than to add. so that's very weak for, you know, from manufacturing orders and wholesale orders. not going to happen. tracy: interesting though, that the hard to fill job openings

are, were somewhat on the rise. i think it ticked up a small bit. there are still jobs out there that our small businesses can't fill. so what is it? lack of education? is it industries that we don't have the people for? >> well, it's a little bit of all of that. that was the good news in this little, gain that we had in the indexes that the two labor indicators, plants that create jobs and job opening, hard to fill, led us to predict before last friday that the unemployment rate would tick down a little bit, still, not enough jobs to really, really help the economy a whole lot. it's a number about things. one of course, a lot of workers can't move because they're stuck in their houses. so that's a one problem. at love jobs being created are in that texas to canadian border energy strip. and so takes time for workers to find their way out there. so that's not happening. and the job, the new jobs in housing are not coming back as

quite as fast as we hoped because actually, builders are having trouble putting their building teams back together again because people took other jobs when they could. tracy: right. >> so there are a lot of impediments including the usual ones. applicants don't know how to address. they have a bad attitude. tracy: yes. >> and there's that. tracy: there's that. -@that s something we have to work on in our educational sill. bill, always gadd to see you. we'll see you next month, sir. >> thank you, good to see you. ashley: good points there. airline stocks by the way getting crushed on d.c.'s move to block the american-us airways merger we'll have the very latest next. tracy: plus jcpenney shares under pressure amid the boardroom shake-up. brian nagel says bill ackman's exit could actually leave a dark cloud over the company. he is here ahead to tell us why. first let's take a look at some of today's winners. as we head out to break the dow is up 58 points. s&p 500 winners are up right now. we'll be right back.

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>> breaking news for you, billionaire investor carl icahn tweeted he has a, quote, large acquisition in apple and believes the company to be extremely undervalued speaking to tim cook today, he tweeted, promises more to come, and you see the stock is up today, some 33% oven this news. spoke to tim cook today, more to come. we'll continue to follow thatt >> yeah. >> i have a large acquisition and i want the stock to go up. >> exactly. you can't help but think he wants to make money by dinner so he puts a tweet out. >> i think he just did. >> he did.

hopefully he'll buy somebody dinner. nicole on the floor of the new york stock exchange. >> talking about the airlines again, and, obviously, the companies, u.s. airways, and american, are disappointed by the attempt to block the merger of the two airlines. stocks selling off. u.s. airways, where it trades down 10%, 1694 is the level, and the larger group, all the names here, they are rallying back. most of them down, jet blue, however, in the plus column, so all of these stocks were down dramatically after the news broke, but coming back now. back to you. >> thank yous, lauren, see you in a bit. >> joins me with more on the markets, big reversal this afternoon is chad morganlander, portfolio manager of steven nicholas, a good friend of ours, and there's a hopeful ora in the air. i love that. what's the hope based on, chad, and welcome. >> well, thank you for having me. the hope is based off a third

and fourth quarter revival with an aggregate demand not only here in the united states, but globally. the hope is that european economy will no longer be in a deep recession, but will gradually improve. the u.s., of course, will also continue to accelerate their growth, which will lift markets across the board. >> emerging markets too, those say, looking emerging market offers europe any day right now. >> emerging markets are deeply undervalued. the concern is china with the rapid deacceleration of activity, but at one point, the multiple in the evaluation for the emerging markets is pretty much out of line with, perhaps, the developed markets. one should look at emerging markets for scenes of opportunity. >> bringing you back to this country, these markets, we have head winds ahead of us, the budget battle in washington, german elections, tapering, any cause of concern? >> well, yes, actually, they do.

okay, at this point, inflection point, even though the economy is improving, we think that multiples evaluations are fairly valued so going into september, october, the federal reserve starts tapering. we would not be surprised to see a pullback between 5-10% in the markets, and, again, you take advantage. >> that's a buying opportunity? >> it will be because the economy here in the united states seems to be in a self-sustaining recovery. at this point. >> okay. so we want to buy, where do we put the money? >> large cap technology stocks as well as perhaps large cap discretionary and staple companies so look at budweiser for example, a brussels based company, we know it, and you can get 15% return in the next 2 weeks, that's the expectation. we are looking for a price target of $112-$113 a share. >> based on the turn around? >> the turn around.

southwestern division and a global growth story, a bit of a turn around in europe. >> you also like triumph group. >> okay, try triumph group, aerospace parts company, you play the whole aerospace, boeing, air bus revival there. you have over, well over several billion dollars of orders on hand, and so you know there's going to be this gradual improvement within revenues over the next several years. >> what about the bond market? fixed income? >> right. >> avoid it like the plague or still opportunities? >> bonds, there are opportunities, you just have to be careful how you place ma tourties in the market and as well as what you invest in up endown the quality spectrum. we would be looking at corporate bonds, investment, great, move from junk bonds, go to, perhaps, down to three years on ma tourty level opposed to 15-20-year paper. >> got it. cyclical stocks in favor, mining stocks have been among the

strongest recently. what do you think about the mining -- >> well, mining stocks you play off a chinese revival. i'm not so certain that that's going to happen, come to fruition in 2013-2014, shy from that at this point. be in sectors and companies that are very stable, consistent. that's what you are looking for here. move up the quality spectrum and be in consistency. >> very good. quickly, financials? >> equally weighted, but with the tapers, pivot to underweight. >> very good. great information. chad morganlander. appreciate it as always. >> thank you for having me. >> breaking news, oil extending gains for a third straight day, closing up 72 cents at $106.83 a barrel. all right, coming up. another obamacare delay. this one is hitting americans directly in the wallet. really, within months. >> yikes, first, the 10- and

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>> more controversy surrounding the affordable care act as president obama delays part of

the law that keeps consumer costs down. we'll have live team coverage now with fox news in martha vineyard and liz macdonald here in new york. why is this limit on the out of pocket expenses delayed? >> actually, it turns out some insurer use separate companies to administer medical coverage in drug benefit, and the computers don't talk to each other and because different companies have different limits on out of pocket costs, they have to figure out a way to keep track of all the out of pocket costs that people are incurring. the result is some people with complex chronic medical conditions like multiple sclerosis pay more than they would have if the $6300 a person cap was in place. this delay imposing a limit on out of pocket costs was actually approved in february, but it was buried in legal and bureaucratic language on the labor department website, no one noticed until the "new york times" picked it up recently. >> interesting.

what's been the republican response to all this? >> well, some say it's broof the affordable care act is too complicated. they called it broof the obamacare train wreck is coming, and paul goes further than that accusing obama 6 political favoritetism calling favors. >> the president cannot call legislation and it's illegal and unconstitutional for him to change legislation by himself. if he says, oh, you're a political cricketer of mine and obamacare is hard on you, you get an exemption. that's not equal protection under the law and illegal. >> senator paulments to defund obamacare with no limit on out %-benefits of the affordable cae act. ashley? >> very good. thank you so much from martha's vineyard, where the first family is vacationing. how nice. >> that's right, because here of

us in work, in town, and we have members of congress working out a better deal for themselves from it comes to coverage. they are getting a better deal than you, the taxpayer. how do they they we're not going to figure it out by now? >> you're right. they had to pass the law to see what was in it. >> of course. >> and panicked about it, and the white house reversed it; right? what happened was, you know, and i tell you something, there is an element here that's controversial. it's not what you think. no one's forced or mandated into the exchanges as if you lose coverage at work; right? you are forced into it; right? what the congress did under chuck grassley, put in provisions saying members of congress and their official staffers have to be in the exchanges; right? they didn't put in the tax credits for them to buy the insurance and exchanges so low and behold, went bananas say, hey, wait a second, we don't want that deal, but 75% subsidy.

do the math. watch this. say you're a congressman, make $174,000, go for the silver plan. that costs you $5300. the subsidy we pay for for members of congress and staff everies, they get out of pocket, only payy$1300. we pay $# 4,000 for that subsidies, taxpayers, for those guys to be in the exchanges. the regular guy doesn't get a subsidy at that level or a tax credit because they make too much money to get the tax credits; right? this is such a mess the way they tried to fix this for members of congress and staffers where they can still preserve the taxpayer funding for the health insurance. the other thing, too, is that it's really controversial. congress gets to pick and choose which of their 20,000 staffers will be in the exchanges. >> how convenient. >> they have to be official workers, working in the official offices in congress. you know, this is, again, a messy roll out, on and on, we're seeing them trying to fix something that's, like, basically a big pile of spaghetti that falls off the

plate. >> again, i come back to, do they think we're stupid? at this point, we uncovered everything, or -- and i say "we," but mean you, basically, we know you'll get to the bottom of it. we can't do it behind closed doors. >> that's right, tracy. the next big fight is the debt ceiling fight. you know, the budget resolution. >> right. >> g.o.p.'s talking about defunding health reform, linking it to that. wow, that's going to be an amazing fight to see if they are successful. they may not be successful, and, also, we have louisiana republican senator david viters complaining tiredded of the self-dealing going on with health reform and the waivers and favoritetism. >> yeah, yeah. >> we all are. liz, thank you. >> thank you. >> keep finding problems with this thing, i know it. >> guarantee it. >> a quarter till, time for stocks now, every 15 minute, down to the new york stock exchange, steven guild joining

us. good to see you. the market looks a little tired, but i wanted to mention carl icahn with a long position in happen l, and low and behold, the stock goes up. >> how about that, huh? look at the price, 12, 13 times earnings, the stock may be undervalued. i, myself, bought it in the 390s and sold at 424. i look at my trade like a loser. >> well, you're smiling. you did well on the deal. >> back to the markets as a whole though, steven. it looks a little tired. we are up, but see what happened in europe and japanned today, there was a strong day of trading, and as we look ahead, it's not always a great month for the market, and so what are you expecting? >> well, you know, we got to pay attention to the fed here. if you go ahead with a taper, but if they do taper, you got to look at the treasury, issuing less debt going forward for the rest of the year. as long as they buy enough debt in order to control interest

rates and keep control of the interest rates away from the bond market itself, well, then i think things are going to be okay, ut that's important. >> yeah, good point, steven, thank you so much for joining us. appreciate it. >> any time. >> he's still smiling. coming up, jcpenney shares falling after ackman resigns from the company's board. anything that can turn them around? >> as we head to the break, look at today's winners and losers. >> we'll be right back. ♪

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>> jcpenney's public battle coming to a head with the persing square activist investor

actually resigning from the board. what's next for the struggling retailer? brian, senior equity strategist, research analyst, brian, thanks for being here. i mean, howard from starbucks comes out and says, like, this guy, he's got to go, it's that bad. is it going to make a difference? >> well, look, i think the good news for jcpenney today is that it takes a lot of noise away from the story. you know, last week, last few days or so, this has been a big distraction sphrt -- for the stock. where we go from here is hard to say. ackman with a big acquisition, and i guess there's the risk now exists with him leaving, and maybe at some point he starts to lighten up on the position of the stock. no indication yet. >> he probably can sell for a few months. there has to be a period of time because he knows too much insider information as a board

member. i don't know we have to worry about that too quickly, but worry about the shareholders holding this thing. i mean, why would they still be holding it at this point? because you got nothing else to lose but hope for a miracle? >> well, no, look, i'll give my perspective. >> please. >> i publishedded a piece on jcpenney weeks ago, and we spent time in the store, and basically, the point of the report was that things look to be weak at jcpenney. we see a lot of clearance activity in the store, and that's hurting margins, under inventory, bringing product into the story, the use of capital, and in the new areas of the store look better, don't seem to be getting the traffic yet. the net-net of that jcpenney is still having a tough time here. why people would be in the stock now? look, long term, you know, if you believe the ultimate earnings or believe there is ultimate earnings power of jcpenney, the stock could be really cheap right now. i'm not remming that to clients, but i recognize, you know, with the retailers over time, you get a few things right and build on

itself, it rebounds nicely. >> you know, a lot of the problems people point at ron johnson coming in from apple, an i didn't i understand how to translate sale of iphones to shorts and t-shirts, but they lost old customers, trying to get the new people, can't get the old customers back. where's the value going forward, then? >> well, again, hard to say. look, i follow the story closely now for a year, and all through, you know, most of the ron johnson tenure there. still maintain that ron johnson was doing some of the right things, and i think its execution was flawed, doing too many things at once, way to abrupt in changing the prices, and i think there was probably some mart to that, and that's bringing better product to the stores, better looking stores, so now what we said is we have a very disruptive store, to your point. there's consumers confused. you know, there's some who walked from jcpenney permanently, some coming back

now, but they are confused what's going op in the store, but, again, i don't think the damage is ire repair l at this point. >> stock down 70% since february 2012 high. is there any reason that you would say, to your point earlier, the stock is cheap, could have long term value, go buy it. >> at this point, no. i'm not telling clients to buy it. my line is this, watch it, sit on the sidelines, wait for evidence of a turn before you buy it. frankly, if the stock's going to work or the company is on the rebound, we have a long ways to gorks and i don't mind missing the first bump. to answer the question, no. >> if i own it, don't sell it? ride it down to nothing and take a tax loss? >> it depends on the time perspective. in the near term, we got the company reporting second quarter results next week, the report's going to be soft to say the least, and that could be a potential negative to the stock. depends on the time frame. >> yeah, i guess it's got to be long term.

brian, thank you, sir. >> thank you. >> all right, forbes released the list of top earning authorings and there's a new queen topping the list, rounding out the top five with earnings of $26 million is romance writer, dan jiellesteele, and bill o'reilly, made 28 million bucks on his books, third place, suzanne collins, and coming in at second place is megamystery author, james patterson with a cool $91 million, and the top spot is el james who made $95 million off her "50 shades" romance novels. >> wow. >> all right, talking of romance, call her a real life princess leya minus the galaxy far, far away. george lucas and his wife welcomed a baby girl, everest hopson lucas born through

surrogate, the first bilogical child for both very accomplished parents. she's the president of ariel investments and chairman of dreamworks animation. >> 69. >> yeah. may the force be with him. >> it is. >> it was. >> something's working. >> still is. >> going to gymboree classes and stuff? >> i can picture it. >> bringing the light saber. >> yeah. >> oh, boy. all right. coming up on "countdown to the closing bell," a deal to create the world's largest airline suddenly hits a major hurdle after the justice department sues. we will break down what it means to u.s. airlines and american airways and what that means to air travelers. thaction is all next on "countdown to the closing bell." don't go anywhere. ♪ right now, 7 years of music is being streamed.

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>> mergers grounded, the justice department in six states try to slam brakes on american airlines and u.s. airways attempt to create the world's largest airline saying consumers will be hurt by reduced routes and service. will airline investors be left holing the bag, and what does this mean for travelers? forget seacrest, ackman out, three years after setting out to turn around jcpenney, bill does his own about faith after failing to oust the retailers' interim ceo. we'll look at what the defeat means for jcpenney and investors. retail wars. who has the edge when it comes to making a buck? the low end or high end retailers? we'll debate it for you and tell you which retailers are killing it. "countdown to the closing bell" begins right now. ♪