on what this year's mayoral race means for the budget. it is time for stocks every 15 minutes, we head to the floor of the stock exchange, nicole petallides. nicole: doing really great, back on wall street, everybody coming back from holidays, summertime, labor day, day week this week but we're seeing a mixed market, dow jones industrials pulling back while the nasdaq index in peer looking better, of arrows, the tech savvy nasdaq looking well but microsoft is something that has been weighing on the dow jones industrials today on news the deal with nokia flying high 30%, microsoft pulling back 6% on this deal, $7 billion deal in order for microsoft to acquire devices from nokia for that cellphone company and also brings in obviously another player who could theoretically succeed ballmer at microsoft but

there's a 1-year chart of microsoft, something we continue to watch but the big picture on the market, we're down 140 points off of the highs of the day top to bottom swing and a lot of this concern's what may occur in syria as the president has support to move in. adam: john boehner is supporting president obama's call for action against syria following his meeting with leaders at the white house. this as we are less than an hour from the first of the series of congressional hearings on military intervention in that country. rich edson is at the white house with more on all this. please explain. rich: president obama this afternoon leaving for europe and the g 20 and leaves consideration of an attack on syria in that hands of congress. you just said it at 2:30 this afternoon ashore while from now the first in a series of hearings that start on the

senate side continues on the senate committee hearing tomorrow and into a house committee hearing tomorrow afternoon. when congress is debating this they have a leadership especially in the house and right now is supportive. >> we have enemies around the world that need to understand we are not going to tolerate this type of behavior. we also have allies around the world and allies in the region will also need to know that america will be there and stand up when is necessary. >> i'm hopeful as the american people are persuaded this action happened, that assad did it, that hundreds of children were killed. this is behavior outside the circle of civilized human behavior and we must respond. rich: this will be an uphill fight to get the stereo resolution through the house and john boehner's folks expect the white house to take point on

getting enough votes to get this through the house of representatives. we had some tweets from key leaders in congress. first from senator lindsey graham who met with the president earlier with john mccain saying our choices about what to do regarding syria today are bad and worse. he is arguing the administration should have done something years ago. eric cantor in the house says i tend to vote to provide the president of the united states the option to use missouri force in syria should the commander-in-chief decides to use military force of hope he will do so judiciously with continuing congressional consultations so now it is up to the house and senate, democrats and republicans to try to craft this resolution but getting anything through congress is difficult these days especially something of this magnitude. dennis: thank you very much. tracy: we have key leaders coming out in support of the president's plan to strike syria. is action all but a foregone conclusion and what could it

mean for his greatest allies? we have been talking about this, like iran. no one better to ask then a senior vice president of strategic security consultancy that works with government and companies, also former head of the taliban and al qaeda monitoring team. and head of character and terrorism for m i 6 which is military intelligence sections 6 out of england. pleasure to have you with us. do you think we should be doing this? >> personally i think it is a very difficult decision to make. it was always a difficult decision to make. even in march of 2011 when the rebellion started, the decision the united states was in, whether to intervene and help the rebels or not. for many good reasons the united states cut back and western allies the same and that decision has become harder if anything in the intervening

months and years. tracy: the president saying, giving congress the option to make the final say, is that kind of strategic smarts on his part? >> i see it as a smart move certainly because if he does go in now people have done it with congressional agreement if congress agrees and that will make the unintended consequences which are bound to occur from any strike slightly easier to manage, politically particularly domestically politically but also internationally and congress doesn't agree, then he can say i was ready to go in but congress tied my hands. tracy: can we do this alone? maybe we have france, we don't have a lot of support going into this. can we handle this alone? >> it is a great shame the united nations would not pass a resolution in support of this action, clear russia and possibly china would veto that and the arab league itself has not said we support military action but in fact whenever any of these things happen if the

united states doesn't do when nobody else will do it so the united states is doing it. tracy: what we doing? we were talking about this before we came on air, what could you possibly bomb? you can't bomb chemical weapons because that will be more of a disaster. >> indeed. you have an choice between doing too little land looking weaker even then you aren't doing too much which makes you look arrogant and insensitive to the concerns of the syrian people. tracy: the worry about iran retaliating? we are hearing that more and more. >> i see no advantage for iran of american takes action but no advantage for iran america doesn't take action either. i think iran is suffering a lot economically and politically from the international relation it faces from its nuclear program and now it's engage in syria is not helping very much either and also is weakening hezbollah, the key ally in the road.

tracy: do you worry about hezbollah attacking israel as a result? >> a very difficult position because of course it builds its reputation as an arab group prepared to stand up against israel, the shield protecting this in the arabs so that is a real sort of corrosion of its image. tracy: can't if we do and damned if we don't. tracy: >> the united states, iran, syria, everyone is james if you do and damned if you don't. tracy: glad you were here to talk about it. adam: stocks pulling back as congressional leaders voiced their support for action in syria. joining me is the vice president and economist with l p l financial. clearly markets want clarity but how do you explain going to herbal digit swing from being positive 18 points on the dow?

>> one thing is with syria little closer to happening markets are getting a little more nervous. part of the reason you have a big jump up in european stocks and futures overnight was the thought that this action in syria would be a week or a weekend have too way. now it seems closer and that is concerning markets but what is also concerning markets too is data over the rest of the weekend what it will mean for the fed next week and the data we got this morning suggests capering more likely than not and that is also helping knock markets down over the last couple hours. dennis: the jobs report friday, syria for the most part everyone expects that if there is an attack it will be contained and there won't be a spillover. isn't the bigger motivator the federal reserve and the jobs number? >> absolutely.

markets get obsessed by the -- these types of things and it will fade into the background and we are going to be left with these things like earnings and the fed and the economy so markets are rightly focusing on those types of things and the next big hurdle for the fed capering or how much they tabor's the friday jobs report. we think you need a pretty bad report on friday for the fed to hold off on capering. you need a nngative number on jobs and a big increase in the unemployment rate to even consider tapering. adam: it means a slowdown but no one is talking about stopping purchases, they're going into 2014. >> that is right and that distinction is still having a hard time finding its wwy into the markets consciousness. traders still can't figure out capering is not tightening so hopefully along with the message of tapering we get from the fed next week is a little more

clarity on their communications, tapering is not tightening and yes, we have cut back on the purchases but we are adding to our balance sheet data and should be good for equity markets should be good for the economy and more importantly the fact that the fed is not planning on tightening rates, raising rates anytime soon this year, next year or the year after will be helpful. adam: if i were a day trader and heard what you said i would be thinking logically and don't want to apply logic to wall street but there will be an over reaction when we get what we expect which is a slowing down of bond purchases, the overreaction being is not the stopping of the purchases but it favoring. and opportunity to buy in because i would imagine the markets will sell-off between this weekend next week. >> you might get that reaction but you might get the opposite reaction where markets see what the fed is going to do, get comfortable with that and just

move on so say they are going to taper, markets are going to taper by $10 billion, it might be enough to push the ten year yield to 90 to 275 as markets get time to reassess. and you get a knee-jerk sell-off and bonds and stocks right away and on the opposite, you get sort of bought by the rumors of the facts type of affect you often see with financial. adam: we will be watching friday. thank you for joining us. cheryl: other stories in the news. the cbs blackout is over for three million time warner cable customers with both sides saddling their bitter fight. the companies didn't disclose specific terms of the contract but supports a cbs got the

better end of the deal learning $2 a month per home in some of the country's largest markets. both stocks no surprise are popping on the news. adam: one of the largest acquisition ever, vodafone is agreeing to some of 20% stake in verizon wireless back to verizon communications for $130 million, that deal should be completed by the first quarter of next year and will give verizon full autonomy over the wireless unit, verizon will pay $60 billion in cash. the remainder will be paid in verizon shares and loans. tracy: retailer netflix streaming video service that promises access to 15,000 movie titles plus new releases, classics, next day tv shows, has announced a launch date, the service is available on many platforms including windows, x

box. adam: the department of justice steps out of the way and allows colorado and washington to police but when it becomes legal for recreation use. dan riffles of the american policy project joins us with the next step. tracy: a fire under the jargon corp. today, here is a clue. it smells pretty good. adam: we will do you where you can get gold.

tracy: every 15 minutes to check of the markets, nicole petallides on the floor of the exchange with hot deals for us. nicole: a lot of deals going on today, today is tuesday, first trading day of the weekend watching several deals including one with the yankee candle, you may not know jargon that well but they have under their umbrella some really popular names, mr. coffee, sporting gear, baseball gear and they are acquiring the scented candles

co. yankee llion in cash, going to the private equity owners and this is a plan they have been working on since earlier this year but obviously some big news, up 7.5% on this news. back to you. tracy: cu in 15 minutes. dennis: time to make a little money, charles taking a look at a major player in china's social media world and charles, why? charles: why ask why? that is the company. these guys are turning and the war all's 15 minutes of fame thing on its head. you think we have a celebrity culture? there are online game segment doing very well, it really rocking for all these guys but online music and people making music videos and posting on this site, up huge, 89% year over year in the last quarter and business revenues of 100%, their net was up 437% and one of these

things where they have this revolutionary platform. i have looked at it, i didn't post anything but it is pretty interesting. adam: that is youtube in the united states. charles: also online social media and it might be easier to sort of get this done but it is pretty exciting, celebrity culture stuff and taking the top i guess you would say the top five tv shows, superboy or another one, happy boy and make an interactive and it is also interactive news. have been talking about these a lot and the next revolution in china will be birthed through the social media sites. last week they arrested one of the biggest bloggers out there who is one of the biggest investment bankers out there. they said he was trying to solicitous 20-year-old woman but that is not the truth. the fact is -- tracy: she was 24.

charles: she was 18. the thing is this guy -- adam: won't go well with his followers. charles: but the government cannot stop it. it will be an economic and political i think revolution the at the internet for china and the stock should do very well. i will say two things, extraordinarily volatile and in china you can't take 100% us all the members. having said that i think the stock breaks at 45 and goes north at 50. tracy: what do you get out of it? charles: i would look at 54 medium in turn traitor and swing trader and 45, 46. gives me hard targets. tracy: got to commit. got to commit. nobody wants to commit any more. charles: may be later. adam: forget the holly jolly christmas, why this sell spike is for the record, nothing to do

with a nod. tracy: but before we head out let's look at how the dollars fairing today, foreign currency, the dow down 22 points. we will be right back. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all onhinkorswim from td ameritrade. ♪ from td ameritrade. nascar is about excitement. but tracking all the action and hearing everything from our marketing partners, the media and millions

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>> 23 minutes past the hour, your fox news minute. rain and cooler temperatures helping firefighters in california's yosemite park, the u.s. forest service says now that the rim fire is 75% contained. starting aug. 17, burned for 235,000 acres, and cost $39 million to fight. after years of delays and cost overruns, the $6.4 billion eastern span of the oakland bay bridge is open to traffic, and in time for the morning commute. and it was damaged in the 1989 earthquake. the fifth time was the charm. diane becoming the first person to swim from havana, cuba to key west, florida without a shark cage. peer arrived in key west labor day after covering 110 miles in the water in 53 hours. rest attempt was in 1978 at the age of 28 and those are your

news headlines on the fox business network. adam: breaking news, un secretary general says at a press conference moments ago that if chemical weapons were used in syria, the u.n. security council must unite and take action. and he went on to say that the use of force is only legal when in self-defense or with u.n. security council authorization. tracy: i wouldn't worry about gas prices this holiday weekend, they were $0.24 less than they were last year. my next guest says they will remain surprisingly temperate. he warns of a stealth the spike in other fuels. joining us by phone, gas buddy's chief oil analyst, tom, glad you are with us. let's talk gas before the stealth spike. market pricing in. nothing happening in syria. why isn't it rocketing? >> the market is pricing in the notion that people drive a lot

less after labor day and the u.s. is the last big gasoline economy out there so we will see demand dropped probably close to twenty million gallons a day and that means refiners for the remainder of the year probably won't make much money on gasoline, they will make money on products coming into a season like diesel and heating oil and jet fuel. tracy: that is what you call bust of spike. why is that going up instead? >> it is coming into season and much more spectacular, popular product globally. you look at it and the growth is in diesel economies like china. that is a product that is moving higher, we looking at $4 on the street here and $4 for heating oil prices and looking at high jet fuel prices though the executives at the airlines are figuring out how to contort tinier spaces for the next few months. tracy: we are going to spend a lot of money heating our homes and if you plan on taking the

trip this holiday season jet fuel will be higher so those are your ticket prices. >> i think there's a lot of excuses to raise ticket prices capacity being one of them. but i think that is where oil is going to grab us and beat us all little bit. not much with gasoline. i think we are going to bubble all little higher with crude because of the worry factor but once there is more certainty, if the missiles fly and there is the response people will look at it and say there's a $10 or $15 a barrel investment p.m. in crude and 5 or $15 war premium so if we can get rid of those premiums we will go back to numbers that are very palatable. tracy: you don't think we're seeing $4 gas any time soon? >> i do not. you see $4 diesel and you will see $4 home heating oil but not $4 gas. tracy: for a community like myself that is great news but what if syria does that?

what is not simple and straightforward and turned into something bigger? >> you could come up with scenarios where you could see crude oil prices go to 124125. we do have seven hundred million barrels sitting in storage in we see an and texas salt domes. that could be used to supplement light sweet crude. we are in really good shape in north america. we could get crude from the canadians for $82 or $83. it is the rest of the world, the other continents that have the problem. tracy: the blonde we're switching to an september 15th is actually easier to make that makes it be cheaper. >> like when you watch that show, you make the gluten free cake, it is more expensive and more difficult. after september 15th you throw all sorts of cheap flower into it and will do that and we will see more plentiful gasoline. tracy: tastes better at the end of the day. thank you. adam: the dow finished august down 4.5%. will september add to those

losses? the biggest threat to september trading coming up. tracy: let's look at who is up and who is down right now on the dollar. the dow is down 15 points. that is more red and green on the screen. we will be right back. with the spark miles card from capital one,

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bounce keeps my clothes fresh for weeks, even when they've been sitting in the drawer a long time. like those jeans you can't fit into anymore. uh...by that, i mean... [ male announcer ] how do you get your bounce? long-lasting freshness. adam: time to check stocks one more time on the floor of the new york stock exchange. our own nicole petallides is looking at a company reporting earnings today. nicole, who is it? >> we're looking attacks preparers. looking at h&r block going into the close back half of this day. the stock is at 27.96. the world's largest consumer tax services provider has had a great year thus far. is up over 50% so far this year.

we'll find out more about h&r block, about the latest quarter and maybe guidance going forward from h&r block, "after the bell", the 4:00 p.m. show. watch that one because it could be very busy in tomorrow's trading as well. back to you. tracy: nicole, see you in a bit. september historically the worst trading month of the year. we have a growing chorus on wall street pointing a huge threat for september. it is not syria nor the debt ceiling fight. our own liz macdonald knows what it is about. >> mortgage rates? tracy: what? >> big chunk of gross domestic product, anywhere from a third to 40%. what we saw in may and june was a rush for the exits out of the mortgage bond market. one of the worst periods, two-month periods we've seen since 1981. that is when we saw mortgage rates spike higher, it went up

1.11%. 4.5%. we saw 30-year mortgages at 3.25 in may. just may of this year. for that rapid spike higher, wow, that has got wall street talking. what wall street is talking about, and goldman sachs chief economist is saying what we've been saying over a month ago what will the fed do next couple weeks in terms of taper? the word on the street, possibly the fed will scale back buying treasurys, but, continue to buy mortgage-backed securities to keep the mortgage rate low. that's right. whether they do that or not remains to be seen of course but i'll tell you something. the fact that goldman sachs is now saying that the fed could put a twist how they do their tapering is a big deal and the fact that we've been watching this action in the mortgage rate hitting new home sales, hitting refinancings really hard. that housing recovery is so key to economic recovery and jobs picture. tracy: then what happens? do they not taper to keep rates down? >> they taper back on treasurys. tracy: right which they're going

to do. >> but continue to buy mortgage-backed securities and continue to be supportive of 10-year yield and 30-year fixed-rate mortgage note. adam: when they set up the notes and hinting at taper, whether they said what goldman sachs is talking about would they shift into that? >> that is such a great ques debating that? tracy: right. >> we haven't seen an outright debate about that the other thing we have to keep in mind too, the action in the mortgage bond market has been the choppiest we've seen in a long time. wall street really ran for the exits when they heard that the fed was going to start cutting back. so, you know, same thing too to remember on the 10-year yield, of course if there is syria action safe haven you will see the 10-year probably stick low. it is really mortgage bond market we're seeing really ugly action going on. we will keep an eye on for. >> lizzie mack, that is good story. >> sure. tracy: new york city budget blowup? charlie gasparino sits down with

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>> i'm cheryl casone with your fox business brief. stocks initially rallied after congressional leaders voiced support for military intervention in syria but now mixed. this is the first day of trading since president obama said he would seek lawmakers approval for a strike in that country. checking the dow we're down eight points, almost nine points as you can see. 14,801. u.s. manufacturing activity grew at passest pace more than two years in august on a jump in order. the institute for supply management index rose unexpectedly to 55.7 last month. estimate was for 54. any reading over 50 indicates a expanding manufacturing sector. ceo of a pc-maker lenovo is sharing the wealth with his staff. a company spokesman says he will share his $3.25 million bonus with about 10,000 workers in china and other countries. that is latest from fox business, giving you the power to prosper.

tracy: here is some breaking news for you. eastman kodak announcing its emergence from chapter 11 bankruptcy today. ceo antonio perez saying we emerged as a technology company serving imaging for bismarck markets. and that company has, after that has been revitalized. adam: selloff in municipal bonds continue how will one of the largest issuers of municipal debt fare after upcoming mayoral election? charlie gasparino is here to discuss that with us. >> that large city is new york city and that expert would be particular kin. thanks for joining us. made it in the studio this time. last time you were lost in little havana having coffee at versailles. >> charlie, i had a better deal. going to joy's crab shack. >> you're one of the wall street fat cats. we have to give you that. new york city is in a really difficult situation. we had 12 years of a decent

mayor. very strict fiscal discipline. we now have a bunch of potential mayors who want to increase the size of the budget. want to spend on stuff. one is frontrunner, bill de blasio. some people called him a socialist. why would i buy new york city bonds now? this is national story, new york city as you know, dick, you covered new york city whether you were at s&p, it is one of the biggest, it is the biggest municipal bond issuer out there. >> by far and probably one of more liberal cities in the country if not one of the most liberal. it has a history of liberal support. any mayor that gets elected republican or democrat will have some democrat values. even the leading republican has some democrat-leaning positions. why am i not worried about new york city? new york city is like the queen mary. it takes an awful lot to sink it if 9/11 didn't sink the city i doubt a liberal mayor will. >> there are controls, explain some of the controls on the city debt. there are a lot more checks and

balances than most places coming out of the fiscal crisis in the 1970s. it is very difficult to default on new york city debt unlike detroit we'll talk about in a minute. >> most important thing the city has going for them, they have a four year financial plan. they have to forecast four years out what they're going to do. if they do something this year they have time project what the impact will be the next four years. that is probably the biggest single control. it was under a city control board for 30 years. it expired in 2008. i thought that was a shame but it brought the city back. the control board expired but they kept the fiscal discipline that. >> is mandated by state law all the management reports they have to put out. use a al gore term. there is a lockbox, correct, in terms of new york city debt? where the first lien, first payment on tax revenues go right to city bondholders isn't that accurate? >> that is all nice to talk about but i'm a financial

analyst. i learn adlong time ago legal promise to pay is only as good as your economic ability to honor it. while they may have a lockbox i'm more concerned that the city will have fiscal ability to pay. they have come a long way. they are in real strong shape. one of the strongest financially managed cities. >> they could survive bill deblasio? bondholders could survive bill deglaus woe. >> i'm not a political person. i red his campaign and website and reading papers t would take awful lot to sink new york city. if a liberal comes in and opens up the spigot you will see it right away in the financial plans. you will see it coming. it will not happen overnight and certainly no one will panic. >> one city that recently sunk is detroit. you've been very vocal. even with all its problems detroit did not have to file for bankruptcy. i find that somewhat hard to believe. how do you get people to stay in the city when they're leaving in droves? how do you get tax revenues back there when taxes are high?

isn't at some point, wasn't the default inevitability given the state of that place. >> no, no. the detroit always had problems. when there is economic turndown, detroit always had problems. when everybody had a cold they had the flu. usually the state came in, din bail them out but gave them some form of support. ability to issue debt. that got them over the hump. still didn't happen this time. it still doesn't have a to happen. i wrote a report. happy to send it to anyone. >> thank you. >> 10 reasons why they didn't have to default. emergency plan crafted, a lot of mistakes. they need to eliminate the blight. their budgeting $500 million to eliminate the blight. >> easier said than done. easier said than done. >> i know. you know what? they will use annual tax revenue to do it there is a better way to do it. they need to reduce the blight and do it sooner rather than later. >> ask you one question. you used to work at standard & poor's. standard & poor's has been sued

by the u.s. government for allegedly faulty bond ratings during the financial crisis. s&p responded to the suit today the reason it is being singled out because it had the guts to downgrade u.s. credit rating, get rid of its aaa a couple years ago. do you think there is any validity to what they're saying? >> no. i have a lot of friends at s&p but that is not why i'm biased. that was probably a pretty tough decision. >> right. >> certainly got them headlines. always good to have headlines for ratings agency, gives you bet more credibility but that wasn't the reaction. >> got to end it there. back to you guys. adam: charlie gasparino, thank you. tracy: every 15 minutes we get checque of markets. teddy weisberg from seaport securities on floor of new york stock exchange today. teddy what are you watching? the market doesn't seem to care a whole lot about syria, does isn't. >> oh, no, i think the opposite, tracy. we got off to a pretty good start this morning. yesterday we were not trading. markets around the world were

pretty strong on mostly economic news out of china. i think that followed through this morning. we were doing just fine until mr. boehner opened his mouth and said he supports the president in his efforts to have some sort of a military action in syria and, that just pulled the plug on the market. tracy: but it is interesting because the other day when we were talking about it as well, felt like the markets didn't truly like blow up based on the news that we could be going to some sort after military action again. do you think if we go, teddy, that the markets will take a big nosedive? >> you know, tracy, i mean this is really a tough call because i think like everything else that comes out of washington it is just, absolutely wrapped in politics. and, i think that general sense, i mean you can't speak for everybody, but i don't get a sense from at love folks that i talk to that they're anxious to pull the trigger here. i think most people are sort of tired of this whole, middle east conflict stuff. and, i think it is very

confusing for investors. i think if we do something there, i think it is going to be a negative. i don't think it is like, what was it, '93 when the bush, senior, went into iraq? i don't think it is anything like that. this has some other air to it. i can't quite put my finger on it but, i guess we'll find out soon enough. but i think we're sort of hostage to this event at the moment. tracy: i think you're right. i think there is a lot of negativity about it. teddy weisberg. thank you as always, sir. adam: we're going to switch gears because smoke them if you got them the fed throwing in the towel in the fight against marijuana. why the department of justice is now easing its stance on pot. that's next. >> hmmm. residents of dubai take a worth your weight in gold literally. how dropping pounds is making them, well, sort of heavier. we'll look first at some of today's winners on the nasdaq as we head out to break. activation blizzard is up about

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adam: so the obama administration has flip-flopping again on enforcing federal marijuana regulations n a 2009 memo the department of justice promised no federal interference with state medical marijuana laws. but in 2011 doj issued a new policy promising to prosecute people even if they're complying with state laws legalizing marijuana. in fact they are doing that in california. but now, attorney general eric holder says doj will leave it all up to the states without federal interference. joining us now to discuss all of this is dan rifle. he joins us from the marijuana

policy project. he is director of federal policies. is there a distinction in the new doj policy as to recreational marijuana as they will allow in colorado an washington state and medical marijuana which i believe is now allowed in 16 different states? >> no. there's no distinction between medical marijuana and recreational marijuana in the department's memo. the memo simply says that what they will do, take a hands off approach in those states like colorado and washington which take a clear, safe, regulatory approach to marijuana, that put safeguard in place to prevent marijuana from falling into the hands of kids, to keep criminals and cartels out. marijuana market. in those states the department of justice will take hands-off approach and leave it up to the states. adam: does that mean, we witnessed the crackdown in california. they have gone after distributors and people growing marijuana for medical marijuana distribution doing it really under state law but violating federal law. are they back off those prosecutions now? >> part of the problem with

california their state law is so vague it is hard to determine what is in compliance with the state law. now that we have a memo from the department we'll only take hands on approach for states that regulate industry, that puts onus on the california legislature to regulate marijuana industry. adam: places like california, or colorado and washington state which passed laws legalizing the recreational use ever marijuana where will they get the marijuana? does the state law actually govern all aspects of the industry to growing and processing and deliver of it? >> i does. it is really one of the most revolutionary changes in public policy as it relates to drugs in many years. even in amsterdam where people think marijuana is quote, unquote legal, it is only legal to buy it and use it in coffee shops there the coffee shops themselves obtain it from the black market. the difference in colorado and washington the state will actually license individual farmers to grow marijuana, wholesalers and transporters to distribute marijuana and retail stores to sell marijuana to adults 21 and over who choose to

use marijuana. adam: where do we stand nationally with regards to marijuana? is the day coming where people walk into starbucks to get a coffee you might walk into a store in any one of the 50 states to bet a buzz off of a joint? >> anyone here in washington, d.c. knows that marijuana prohibition days are numbered. the it was a clear white flag in the federal government's 40-year war on marijuana. they had a opportunity to block implementation of these laws and chose not to. because they know the majority of the american public no longer supports crimizing adults using a substance less harmful than alcohol. it send a clear signal to washington and colorado, to other 48 states they're free to chart their own course on marijuana. if they don't want to enact rational and sane policies, taxing and regulating marijuana, taking revenue out of cartel's hand and out of the criminal's hands and putting revenue into the tax paying, law-abiding

businesses they're fair to do so. adam: dan, thanks for joining us on "markets now." >> thanks for having me. tracy: this is a pretty fun story. dubai residents hope to cash in on their beach bodies today. the city-states your weight in gold program comes to an end. 30-day antiobesity campaign offered participants who dropped more than 2 will cograms, 4.4-pound a gram of gold for every kilogram lost. currently 30% of the males and 3% of women are obese out there. this is according to the world health organization. gold is cuurently trading around 1415 a troy ounce. i didn't realize there was such an obesity issue out there, apparently not only in the united states but other countries. tracy: everyone says americans are fat. not so much. well it is a critical newmont for stocks as the fed meeting, syria, and more.

strategist scott wren will tell us how he is playing it next. ashley webster and i will take you through the next hour of fox business. don't go anywhere. thank you orville and wilbur... ...amelia... neil and buzz: for tehing us that you can't create the future... by clinging to the past. and with that: you're history.

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tracy: welcome back. i'm tracy byrnes. ashley: i'm ashley webster. market jitters over syria. the dow raising erasing more than a 120 point gain as more lawmakers come out in favor of military action. the dow was off 25 points despite two of the biggest corporate deals in history. tracy: congress holding its first public hearing on possible military action in syria this hour. defense secretary and the secretary of state will lay out president obama's case. we'll of course ha have the latest on that ahead. ashley: housing heats up again. corelogic said prices jumped for

the 17th straight month. he says it is due for a cool-down and i says that is not such a bad thing. which had a nice 120 point gain to kick off the session. it has gone downhill from there. let's go to nicole petallides on floor of the new york stock exchange. stocks turning around and not in the best way. >> as ashley mentioned at the top of the show erasing a 120 point gain at the top of our day for the dow jones industrials we were 14,933. you can see we had a big swing top to bottom. right now down 22 points. that really is, we'll get to it in a moment. we talk about microsoft and verizon, two names under pressure and weighing on the dow. the nasdaq is up a quarter of a% -- percent. the dow has been down 5% over the last four weeks. left's get to some off the topics we've been following deals, deals. device deal, microsoft

announcing it is buying nokia's cell phone business. that over a $7 billion deal. nokia is jumping on the news up over 30%. we're talking about verizon and vodafone this has been months of negotiations. it has been a 14-year marriage. it is over. verizon down 2.3%. this obviously gets vodafone out and it's a big deal. verizon paid more than they originally thought they were going to. 130 billion-dollar deal and weighing on the dow. ashley: certainly is. nicole, thanks very much. by the way elizabeth mcdonald will have more on the microsoft deal in a minute or two. tracy: congressional leaders on both sides of the aisle throwing support behind the call for president obama's to have action in syria. as the senate foreign relations committee hold as first of series of hearings into this military intervention. rich edson at the white house with the latest. where are we, rich?

>> reporter: hearings begins. first of a series of hearings starts in half an hour. we'll get the senate foreign relations committee. senate committee tomorrow and house hearing tomorrow. by next week the house and senate could be voting next week on this resolution. there was a briefing earlier today at the white house. president obama, white president joe biden talking with 16 lawmakers. in the end it is clear house leaders are in support. >> the use of these weapons has to be responded to and only the united states has the capability and the capacity to stop assad and to warn others around the world that this type of behavior is not going to be tolerated. >> president obama did not draw the red line. humanity drew it decades ago, 170 some countries, supporting the convention on, not using

chemicals, chemical warfare. so it is really something that, from the humanitarian standpoint can not be ignored or else we can not say never again. >> in the house the top republican and the top democrat are on board with intervention in syria. the top democrat is. however senate minority leader mitch mcconnell putting out a statement and still very non-committal saying congress and our constituents would benefit from knowing more what the president thinks needs to be done and con be accomplished in syria and in the region. mcconnell wants more information. meanwhile other three congressional leaders for the most part on board with this. back to you. tracy: rich edson. they will be back from vacation on the 9th. thank you, sir. coming up fox senior judicial analyst judge andrew napolitano tells us if the president has any other options if congress just says flat-out know to military action. ashley: interesting to see what the judge has to say. more on microsoft's

7 billion-dollar mobile phone play and whether buying nokia is enough to take on other big guys, apple and samsung. liz macdonald is with us. he made an important forecast about this merger. what is he saying, tracy? >> he is saying for the purchase and for the nokia unit to break even given the purchase price they have to hit 50 million smartphones this coming year. but get this, apple sells about that much in a quarter. samsung sells about 70 million smartphones in one quarter. so they have also got a real balancing act to deal with at microsoft with this nokia purchase because they have got to keep happy also htc which has partnerships with microsoft and also samsung as well. so we have an email though from steve ballmer that went out to workers about this acquisition. here's what steve ballmer is telling his workers about the acquisition of the nokia unit. he is saying quote, this is a bold step into the future. it is the next big phase of the

transformation we announced on july 11th. nokia's windows phones are the fastest growing phones in the smartphone market, basically displacing the blackberry. we have a huge fall and holiday season ahead of us. we have to execute flawlessly. what is really key here is what is happening with its competitors. meaning the android phones are big in play in china. apple moving heavily to work fast with getting a deal with china mobile. and also applications, whether or not the microsoft unit, now the nokia, now the microsoft unit, whether they can get apps everybody wants on windows phones. there are headwinds against this deal. but it was a smart use of microsoft's cash pile to basically get this nokia unit in the door. it is looked at as a google acquisition of motorola. nokia seems to have a bigger play and bigger presence than the motorola unit that google had acquired. i will send it back to you guys. ashley: liz, quickly, what about the replacement for steve

ballmer? we know he is going to retire. how does this merger play into that? >> that is an important question because we're talking about the man who basically runs the nokia unit, rather top executive there. he used to be at microsoft. he helped run juniper networks. he helped run macro media. he has a long pedigree in tech. we're also watching whether or not he will be in a runoff with the gentleman who ran scrape which microsoft, that was its other big acquisition. so those two executives could go head-to-head right now with the steve alop in the running to replace steve ballmer who announced his retirement just recently. back to you guys. ashley: great stuff. liz macdonald, thank you very much. tracy: quite the little saga. ashley: it is. tracy: all right, september may be just getting started but our first guest is planning for the new year, the target for the s&p, another 16% in 2014. scott wren senior equity strategist at wells fargo joins us right now. scott, we like to hear good news but is any of the stuff going on

right now bothering you or going to deter your little goal? >> it is bothering me a little bit, tracy but the way i'm looking at this, are these selloffs or this volatility is an opportunity and we have a lot going on in sent that you guys have been talking about between debt ceiling debate, syria, german elections, fed meeting. you know all of those things are likely to continue to cause some uncertainty in the markets, some, you know, probably we'll have a lot of days like today where we open up one way or the other, pretty good amount and then drop off and go the opposite way. so i'm looking at this as an opportunity but certainly, you know, syria, that's an issue there that's been at the top of my mind as the most potential to really disrupt things and the way it can, if this gets into more of a regional conflict, we see oil go to 120, 130, $140 a barrel, gas go to 6 plus dollars

here, that will be a problem. that will not help our slow growth economy and certainly not help the global recovery either. tracy: but to your point then in your notes, you said earnings will not be much of a driver this coming quarter. are companies i guess again are on hold based on all these macro issues? >> yeah, i think earnings over the next couple of quarters are really going to be a reals. >> er and not much to drive the market. this year up 5.6%. we're on next side of cycle. we have on our side valuations. and fed will help us even if they taper a little bit. valuations are a big thing to think about. right now our target for this year is really, 15 1/2 times approximately. that is below the long-term average. if valuations were stretched right now i think i woulddhave a pretty different view. that is one thing we have on our side. just the thought we're in this modest growth, modest inflation

environment, we have been for a few years, will probably continue to be really here at least for a couple of years. tracy: let's talk about the consumer because you said stretched and the consumer is pretty stretched. your point on higher taxes, no one is talking about this anymore, feeling the pain of entitlements and taxes are higher. less money is being taken home. how does that play into all of this? >> well, i think that the unemployment situation is going to continue to get a little bit better. as we know, i mean the labor participation rate is very low. you guys talk about that all the time. that's been a big factor bringing unemployment down but the fact of the matter is, companies are adding jobs. now wages are going up very slowly but i think as confidence continues here on a consumer and business basis, you will see a little bit of pressure up on wages that gives people more money to spend. i think right now, people are more than willing to spend money, if they have the income coming in and if jobs are more

easily found and i think that is going to be case as we move into 2014. tracy: that's a big he if, right? >> that is. tracy: you don't like defensive sectors at all, but back to your big if, you do like consumer discretionaries and that is really relying on the consumer having extra cash. >> it has been funny, tracy. if you look over the last five years, the consumer discretionary has been really the top or the second best sector performance in this whole rally that we've had. and, some groups, like homebuilders may not look very good in our work but home improvement retail does. so there's enough groups in the consumer discretionary sector that i think it is going to still be an outperformer at least through the end of this year and probably into the middle of next year. tracy: scott, to your point, really have to be a stock picker in this market. scott wren, thank you as always for taking the time, sir. >> all right, thanks, tracy.

ashley: well-fed meeting starts two weeks from today. leading economist drew mattis from ubs says chairman bernanke should not be in a hurry to leave and he will explain why coming up. tracy: hmmm. presidential power and syria, judge andrew napolitano tells us what could happen if congress rejects president obama's request to take military action. the market is coming back a little bit we're only down five points on the dow right now. oil up a dollar a barrel. we'll be right back. $108.55 a barrel. [ male announcer ] how do you get your boce?

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as, sina is mostly, ethernet but also cloud also. everything else, and you know when we had this thing with nasdaq, just a couple weeks ago, the bottom line is, the pipes have to get bigger. we have a series bandwidth problem and in the world, not just this country. i got to tell you, that is where these guys. ashley: big play that that field. >> great play in that field. i want to get back to it on a dip. i haven't pulled trigger. maybe people put this on the screen. under 20, holding 19. value is there. next leg up should take it north of 25. this is a name that is a survivor. ashley: a little volatile. >> a little volatile but it was a great play. went from 15 to 22. so it had a good move. margins are improving. maybe one more quarter i want to see margins improve but sequentially that would probably be a buy signal for me. tracy: you're getting in where, getting out where? >> i'm not sure yet. i like it. i want people to put it up on the screen.

i may wait for one quarter. margins look fantastic year-over-year. i want to see sequential improvement there. ashley: very good, charles. tracy: radar screen stocks. >> market sideways. tracy: actually there is volatility. could be. ashley: charles, thank you. just a little after quarter past the hour. time to get a check on these markets that have turned south, haven't they? nicole petallides on floor of the new york stock exchange. stocks well off the highs of the day. >> there is certainly a feeling that syria of course is one thing that is very serious topic, driving these markets. at first it was thought that we wouldn't be heading into syria so fast. then we saw support for the president that that may be a possibility and that is when you saw the markets coming off the highs of the day. there is an intraday. the dow is up 123 points that was a gain of over .8%. s&p 500 was up over a full percentage point. now the s&p is up 1/4 of 1%. much like the nasdaq. nasdaq was up 1.3%.

now is up just .3%. you're seeing major averages have pulled back from the intraday gains which was largest intraday gains for the all three indices in a month t was a big day. big day for apple too as we follow stories on apple. the first they have invitation that went out for september 10th. not sure what you're doing, folks, but this is the big day we find out more about the iphone 5. so unveiling new iphones. that will be a big thing. we heard wal-mart has begun discounting other iphones. we'll follow the apple story. back to you. ashley: good stuff, nicole. we'll be back with you at the bought hour. tracy: are you getting the new phone? ashley: no. in a word, no. i like the one i got. i don't have to keep upgrading it all the time. tracy: i'm so behind the eight ball on technology. on deck, home prices are jumping more than 12% in july from last year. corelogic put out this report and chief economist mark fleming

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>> at 21 minutes past the hour i'm patti ann browne with your fox news minute. president obama getting bipartisan support for action in syria after he made his case to congressional leaders today. house minority leader pelosi, house majority leader cantor and house speaker boehner all agreed to back the president's call for action against the assad regime. the u.s. forcest service says the rim fire is now 75% contained. that fire was started on august 11th has burned through more than 235,000-acres and has cost more than $39 million to fight. a london skyscraper is being blamed for melting cars and setting fire to if you were nichings in a nearby shop. so-called walkie-talkie building's curved shape is focusing sun rays and creating temperatures as high as

158 degrees on the streets below. so hot one journalist was able to fly an egg on the sidewalk. those are the news headlines on the fox business network. ashley, back to you. ashley: what a bizarre story. the good news the sun rarely comes out in london. they don't have to worry about it too much. >> thank you. ashley: home prices surging by 12.4% since july a year ago. marking the 17th consecutive month of he of price gains. joining me to breek down the latest numbers is chief economist mark fleming. mark, thanks for joining us. can we keep up this pace or is the market due for a little bit of a cool-down and is that a good thing? >> we don't want it to keep up this pace indefinitely. that certainly would not be good, that would be conversations about bubbles again. we think the pace will slow down largely because of the gains we had locking pent up supply and easing pressure as well as we mentioned earlier a little bit about mortgage rates rising and

cooling demand ever so modestly. ashley: what are the impact of those rates? historically they're still pretty darn good right now. but houses are getting more expensive and so are the mortgages. >> that's right. so we went from a 3.5 to 3.75 rate environment to mid to high 4s at this point. you know, that was a big jump, that maybe pull ad couple of people off the sidelines that no longer will buy because they can't afford to. but generally speaking, four 1/2 is still a great rate and things are still very affordable. it shouldn't have too much impact going forward. ashley: the biggest problem i've heard from real estate agents is the lack of inventory. is that still an issue? >> that's the big one. that is really pushes prices higher. that is that lack of inventory. think about all the depths of negative equity people were in or insufficient equity they have because house prices declined, they're neither a seller nor will they be a buyer. when you don't have that many homes for sale even with what little demand there is out there

there will be big price gains. but the price gains will unlock it. virtuous circle. ashley: that is a question, at what level do the recovering prices spur a whole another level if you like of homeowners if you say, okay, i'm not going to take a bath if i try to sell my home, now is the time to jump in? have we reached that point? >> we've had one wave of it i think this year even though inventories are still tight. they're not as tight as they were last year. so people who experienced the price gains last year came to market this year. we'll probably see that again next year in 2014 in the spring and summer buying season. we forecast house prices to only grow by 6 to 7% year-over-year this time next year. so the slowdown, slowdown relatively speaking could happen relatively quickly. ashley: of course i mean it depend what you're talking about. you know, house prices in phoenix are a whole lot different than house prices in detroit, right? >> that's right. you have big gains in some markets. no, sir as big gains in others. to put it more context

nationally the peak to trough is 35%. we lost 35% of the housing value through the crisis. we're back up to only down 18%. that is pretty good for 18 months. there are markets like nevada, florida, and arizona that are down by 30, 40, 45% still from peak even with the price appreciation they had. ashley: will we ever get back to the point before the crash? >> one day eventually but it has to be driven by fundamental income growth and healthy economy more than anything else. ashley: all about confidence in the economy. what about psyche for the consumer and therefore the homeowner right now? are they feeling little more confident? >> they are feeling modestly more confident. i think the consumer sentiment surveys that ask questions about homeownership and home buying, those aspects of the survey took a little bit of a hit. wait a second, with rising rates maybe i won't be quite so aggressive but in the grander scheme of things, still in pretty good shape. ashley: all very positive. mark fleming, corelogic, thanks

for joining us. >> thanks for having me. tracy: so subprime loans are coming back, at least for cars. in the second quarter, banks made 36 percent of their auto loans to subprime borrowers. that is up from 34% a year ago, according to data from experion. the move down from the credit spectrum comes as banks face greater competition from finance arms of automakers from credit worthy borrowers. the rate of car loans delinquent of 30 days fell to 2.8%. that is the lowest in any second quarter since 2006, again according to experion. people are paying their bills and getting better december. ashley: they are. get the 84-month loans. don't want one forever, if you want a new car you can probably get in. on deck a murky future at the fed. ubs economist drew matus says the fed has bigger problems than the taper than bernanke's

departure. he explains next. tracy: as we head out to break, look at some winners and losers on the s&p 500. cbs up, they settled with time warner up 2.9%. the dow is back down about 18 points. we'll be right back. you know throughout history,

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ashley: just about 89 minutes now until the close. the cold petallides is at the new york stock exchange. nicole: waiting to hear any news pertain to syria. that has been one of the main topics here today.

the dow has now moved into negative territory. the nasdaq and s&p have managed to hold onto some games. let's bring you right over to citigroup. up 2% today. the bank sold more than $6 billion. this comes as the bank aims to comply with the volker rule. they have been doing this in order to apply. ashley: thank you, nicole.

tracy: cbs deputy chief economist joins us now. we want this transition to be simple and seamless. you think bernanke should say a little bit longer. >> i think it would be a smart thing to do. i do not think bernanke wants to stay on for another four years. i do think if you are thinking about all the different things that could go wrong, all the different tune over that can happen that the fed, if janet yellen does not get the chairmanship job, why would she stay, and, of course, you have bernanke leaving.

you will really be left with a completely different federal reserve board. >> it seems like the market is somewhat not paying attention to this. unfortunately, the problem is, the chairman change the person. i really do think that people think janet yellen would be a dud. i think people assume that larry summers will be a hawk, they do not understand him that well. our point is it would be better if the fed did not tell us everything.

sometimes it is better to leave a little mystery in life. people come up based on how much you think they would cut, the next month they could end up buying more treasuries or more mortgages. they were buying the month prior. if markets have to take both sides of a story in fight it out, that means there is probably less price volatility around that decision. yes, it matters. only if it alters the trend.

tracy: have you heard any subtle about bernanke staying at all? >> no. it sounds like a great idea to be. to chairman bernanke, maybe not. it probably does not sound like a great idea to larry summers or janet yellen either. it could set up markets. i do think, if you want to minimize volatility, if you want to minimize market security, it is probably a safe bet. tracy: thank you. ashley: .and our log. breaking news, oil closing up. the first congressional hearing all possible strikes on syria now just getting underway.

plus, judge napolitano will be telling us what power the president has if congress says no. tracy: the tenure is up. your 30 year is moving is well. we will be right back. ♪ ich 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 sen. from td ameritrade.

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>> i am also francis with your fox business brief. stocks are trading at a narrow range. turning the down right now, you can see we are trading down about four points. u.s. construction spending doubled what analysts were expecting. toons activity was revised higher to unchanged from a the client of about 6%. ford is recalling cars. ford says no accidents have been reported. that is the latest from the fox business network. giving you the power to prosper.

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tracy: secretary of state john kerry facing tough questions. this is the senate foreign relations hearing. rich@ten joins us with the latest. rich: this is it. it is now in congress' hands. so far we have had the president pushing lawmakers himself. now you will see that on capitol hill. >> i will be working with congress. we will be asking for hearings and a prompt vote. i am very appreciative that

everyone here has already begun to schedule hearings and intends to take a vote as soon as all congress comes back early next week. rich: john boehner, nancy pelosi and harry reid all said they somewhat generally back some type of intervention here without getting too deep into specifics. there are still a number of skeptics, both house democrats, senate democrats, house republicans on both sides. the administration begins making its case on capitol hill. the committees are in action. the full house and senate did in next week.

that is would we expect them to vote on a full resolution on syria. tracy: thank you. ashley: for more on syria and what the president's options are , we are joined by judge andrew napolitano. there are many aspects to this. >> it is a bit of a head scratch or that the president is asking the congress for expect authorization. he knows that he already has the ability to engage in that without asking congress. congress says no and the president does it anyway, that will be consistent with federal law. there will be lots of ramifications, but it will be consistent with a nixon era statute. the planet can use the u.s. military anyway he wants for any reason he wants just up for 90

days. he just has to tell congress about it. tracy: we had a guest on earlier talking about this. he knows he has the right to do it. if congress says no, he says i wanted to and they did not. >> i think the president recognized initially that the syrian civil war, the ultimate outcome of it, whether assad stays in power or the robles, whichever groups come, it is likely to affect the united states. let's go back 13 months from now. the president said, i will put down a red line. if assad uses chemical weapons, we will revisit the issue of

neutrality. the thin-skinned president obama says i have to do something about this. if more innocents are killed and congress says no, blame the congress. that is where we are right now. ashley: it is interesting. jason cameron basically did the same thing and they said no. >> can the united states bomb syria? the answer to that is a crystal clear and loud no. we can invade a country that we

think is about to invade us. clearly lawful. we can invade a country that has invaded us. clearly lawful. we can invade to enforce a un regulation when the u.s. authorizes. the president will probably do it anyway. there will be international outcry. some crazy judge could invite him. it is crazy that that indictment would hold water.

are we going to be the world's policeman? are we going to invade north korea because he starts people to death? hussein used chemical weapons. years later we gave him more weapons. where does this and? ashley: that is a very good question. >> president barack obama is beginning to sound even more belligerent. ashley: interesting. judge napolitano, as always, thank you. tracy: it is a quarter till. time for stocks now.

we were talking about how john boehner pulled this market down when he said he would back the president. >> i think it is the sameg here? dynamic. this week is a short week. there just is not a lot going on. i picked by wise, they are always the slowest two weeks of the year. will we or will we not do something in syria. you know, we have seen this show before. the dynamics are a little different this time. for some reason, it just seems to be wrapped more in politics didn't do it right thing. i am not sure folks willing to support this effort.

that remains to be seen. tracy: thank you, sir. >> my pleasure. ashley: one of the ugliest battles in media is finally over. dennis kneale tells us who came out on top next. tracy: first, you have to take a look at some of today's knitters and losers on the nasdaq. the dow is down about ten points. we will be right back. ♪ but tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. that's why we partnered with hp to build the new nascar fan and media engagement center. hp's technology helps us turn millions of tweets, posts and stories into real-time business insights that help nascar win with our fans.

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>> that is back open for business. more than 3 million cable homes.

dennis kneale has his take on it. dennis: it is that cable tv version of vietnam. cbs looks like the clear winner in this bitter battle. it will revise to two dollars per home per month. time warner says it has gotten more than it would have without enduring this blackout. the time warner cable argued that cbs shows are free over the air so why should they have to pay anything more.

cbs is watched by five times as many viewers then espn and espn breaks in five dollars a month. other station groups will start pushing their local operators for higher fees. there could be regulatory fallout. time warner cable says it will push congress for tighter rules. that could have far-reaching and damaging effects. wait a minute.

ashley: we create our programming. why should government get involved in deciding? tracy: i think this notion that we could just pull the plug on people, i mean -- dennis: let these two companies pay the price with their customers then. ashley: construction delays. the new $6.5 billion eastern span of the brooklyn bridge is finally open to the public. drivers began lining up at 10:15 p.m. they were so excited. tracy: what? ashley: they led the first group of vehicles over the span.

the new span were places a structure that was destroyed. expected to withstand the strongest earthquake, by the way. ashley: whatever they did over there, new york, new jersey bridges. all right. u.s. oil prices for shock wave speed liz claman talks with the chairman and ceo of kodiak gas and oil in a fox business exclusive. ♪ no two people have the same financial goals. pnc investments works with you to understand yours

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♪ liz: good afternoon, everybody. i am liz claman.

this is traditionally the worst month of the year. it could not power games all the way through the day from syria. we were down about 33 pointspreads as president obama works, we are going to take you live to the white house in just a moment for the very latest. as the dow falls into the red,