a more value oriented mindset, and that's something that will probably continue in the months to come. this may not be the last month that mcdonalds puts up a slightly negative same store sales results for the u.s., and >> susie: mcdonalds was one of the big losers here on the big board today, and that pressured stocks. but the dow, still eked out a 4th day of gains. the blue chips rose seven points, the nasdaq slipped four- and-a-half, and the s&p added nearly a point. >> susie: get ready for a pull back in stocks, that's what our market guest is telling his clients. he's scott wren, senior equity strategist at wells fargo advisors. so scott, let's talk about that pull back. when, how long, and why are you >> well, susie, i think over the next couple of months, we are very susceptible to headlines out of europe. i think the ecb will certainly be in at some point buying spanish and italian debt. but i don't think it's going

to be as soon as the market wants. much of this rally was baseed on what the fed might do, and what the ecb might do. so i think it's very possible the fed does do some easing. it's very possible and likely that the ecb does go in and buy some bonds, i just don't think it's going to be soon, and i think the market is ahead of itself. i think you could see a 5% pullback and upwards of a 10% pullback, but really on a pullback like that, we're looking at that as an opportunity. we want our clients in there taking advantage of a pullback like that and adding to positions. >> susie: let me pick up on the points you made. first of all, about policy action. investors do seem to be banking olt federal reserve and the european central bank doing something. let's say they do. is that a long term or a temporary boost to the market? >> i think that -- let's look

at the federal reserve. if they do a qe 3, i doubt theesqueivenes effectiveness as. it's pushing on a string. there's no velocity, the confidence is down, and people don't want to borrow and spend. the ecb is in a much more dire situation. spain and italy both have a lot of debt this year that they need to roll over, and there's not many investors stepping up to buy that, so the ecb is more dire and likely to act sooner. let's be certain f. we is sx*bl two percent gdp, it is fed is not going to sit on his hands and do nothing. >> susie: let me ask you -- there's a lot of market guests on the program and they point to housing numbers, for example. housing is making a recovery, we just talk body that at the top of the show.

and corporate profits coming in better than expected. they talk about fed action. now none of that resonates with you. you're still scaped toing on a pullback. >> our year end target for s&p 500 is 1400 to 1450, and we're at the bottom range of that target. and i'm confident in that year end target. i just think we came to this level too fast because of anticipated action by central bank that's probably further out than what the market thinks. >> susie: 20 seconds left. talk to us about investor confidence. we're running a whole series this week about this subject. what are your clients telling but their confidence level? >> retail confidence level is low. they're fearful. they're afraid to get back into the market no matter what the valuations are. so our clients have a lot of cash on the sidelines, and one of my main jobs is to point out to people that you're going to be living longer. you're going to need to grow your mony and you're going to

need to participate in the global and u.s. growth sx.d one of the best ways to do that is going to continue to be stocks. you need to be invested in the stock market. >> susie: lots of good information. scott wren at wells fargo adviser. >> thanks, susie. >> reporter: i'm diane eastabrook. still ahead, i'll tell you why the futures market isn't what it used to be. >> tom: starbucks customers, in the future, you'll be able to buy coffee at many locations simply by giving your name. the only catch is you'll have to have a special "pay with square" ap on your smartphone. it's part of a new partnership between starbucks and "square." that's the mobile payments start-up run by jack dorsey, the co-founder of twitter. the deal calls for starbucks to invest $25 million in square. "square" will also process all of starbucks' credit card payments, at significant savings. earlier today, erika miller spoke with starbucks c.e.o. howard schultz and square c.e.o. jack dorsey.

>> i would imagine that every big tech company has been beatingalt your door begging for a mobile payment deal. what do you think this is the right partnership for starbucks. >> it's true that we have spoken to most of the high profile blue chip tech companies, all of whom are trying to crack the code on how to monetize mobile payments. when we met square and jack. there were two things. like minded values of both companies, and i think square's singular focus on payment and their level of innovation and entrepreneurialship and understanding of the starbuck experience separated them from the pack and it was an easy choice. >> and jack, talk about what this means for square. is it more than a positive development. is it a game changer? >> absolutely. the technology helps the individual and the small business all the way toup the

largest organizations in the world. >> and up to this point square has been focused on small or micro businesses. does this focus a signal toward global companies. >> it's a technology that should be treated as a utility, an individual can come to or a large organization can come to it and use it in a similar way. >> susie: howard, it's one thing to encourage local payments in starbucks. it's another thing to make a $25 million investment in a company that's not yet profitable. why did you go that route? >> i think we've all seen as consumers that the smart phone has really become the primary device in our life. the investment we're making of $give millio25 million, we thin create shareholder value for our shareholders. >> susie: this comes at a time when you face stiff competition from the likes of google. it's a big competitor. is there a big rush to sign up

big corporate partners. >> we do something specific which is not just focus on the mechanics of the payments, but the experience around it. everything from the point of sale all the way to the what's in the consumer's pocket. and that bridge between the two is what is powerful and meaningful. >> howard, i'd like to get your assessment of the global economy. what do you see in terms of trenlds? are consumers becoming more willing to spend? is your ticket price going up? can you tell me about europe? >> i think with 18,000 stores in 60 countries, every single day we have a window into consumer confidence and consumer behavior. it's not surprise that over the last few months there's been a significant level of pressure on consumer behavior and consumer spending in europe. i don't think that any of us see that changing any >> this deal is obviously a big vote of confidence for mobile payments. do you think (inaudible)

>> i think it is disappearing. i can't imagine my grandmother leaving it at home. but i think what's always true is that the merchant needs to accept whatever comes over the counter. they always want to make the sale. so it's important to stick to that, and at the same time recognize the technologies that are coming to make it easier to make it faster and improve the experience. >> thank you both for joining us. >> thank you. >> thank you. thank you very much. >> susie: if you live in a political swing state, chances

are you've seen a political ad, or two, or twenty in the past few months. this years' presidential campaign season already is on pace to be the most expensive on record. and with the so-called "super pacs" able to raise unlimited amounts of money for political advertisements, the spending is expected to rise. sylvia hall takes a look at the heated ad war already underway. >> reporter: summer may be ending, but the fight for the presidency is heating up. you just need a remote control to see it play out. >> these are the results of president obama's failed stimulus policies. >> if romney wins, the middle class loses. >> last time had 90% of the spending. television campaign spending. is on pace to break records. and this year, super pacs are set to spend huge sums of money on advertising, for or against the candidates.

>> romney and his collaborators will probably spend a billion. obama will be less than that, maybe 800 million dollars. >> reporter: but most of the country won't see the ads that spring from all that cash. so far this year, spending is concentrated in nine swing states. >> the tide does not rise >> reporter: by law, campaigns pay fairly low rates for television ad space. but for super pacs, it's a different game. some super pacs pay as much as twice what a campaign pays for airtime. >> the irony is there are a very few number of undecided voters this year, so we're going to spend $3 billion essentially trying to persuade 5% to 10% of the electorate in nine states. >> reporter: if you're in one of those states, you'll have a front row seat for a presidential campaign that's shaping up to be one of the most intense, and negative, on record. just listen to some of the most recent attack ads to hit the airwaves. >> under obama's plan, you wouldn't have to work, you wouldn't have to train for a job, they just send you a welfare check.

>> i do not think mitt romney realizes what he's done to anyone. and furthermore i do not think mitt romney is concerned. >> it's way, way negative, somewhere north of 70% negative to 30% positive. we think that's going to continue and perhaps get worse. and one of the reasons is the pacs, the super pacs. they're providing the bulk of the republican spending right now, and a significant portion of the democratic as well. >> reporter: nobody knows yet how all this political spending could affect the businesses who usually advertise on tv year- round. the super pac money could raise ad rates for everybody. sylvia hall, "n.b.r.," washington.

>> tom: toyota says its only a matter of time before it starts building more cars in north america, and you can thank it's native currency. a strong japanese yen is clobbering the company's bottom line on u.s. exports. toyota's u.s. sales chief jim lentz today said the automaker's looking at moving production of lexus es sedans from japan to the u.s. but he says before making such a costly move, the company will keep monitoring the yen. lentz also re-affirmed toyota's u-s sales forecast at 14.3 million vehicles this year, predicting a pick up in sales after the presidential election. >> susie: the government controlled mortgage giant earned $5 billion or $0.37 a share. the gains came on the back of rising home prices, and mark fannie mae's best quarter in

nearly a decade. since the financial crisis, fannie mae has relyed on the american taxpayers along the lines of $116 billion. >> a good development there. positive news in housing tonight. and that's got a little bit of the market going, susie. in market focus. >> tom: the major stock indices meandered around today before closing essentially flat. the s&p 500 had a choppy session, trading in a very narrow range. the index saw its worst and best levels of the day this morning, creating only an eight point trading range. it ended higher by a fraction, but enough for a new three month high. trading volume was 636 million shares on the big board. just under 1.9 billion on the nasdaq. the consumer was in focus for the markets. the consumer staples sector had the best gains, up 0.6%. while the consumer discretionary sector was the biggest drag, down 0.4%.

consumer staples are those things we tend to buy because we need them. and dean foods stock saw a big pop as the company plans to spin off its horizon organic and silk soy milk business. the stock shot up 40.6%. volume jumped more than seven fold with the stock up to its highest price in two and a half years. the firm has hinted for some time about a possible spin-off, wanting to separate its faster growing business from its aditional dairy operations. that news came after the company reported. a stronger than expected second quarter helped by lower costs. earnings were a nickel better than estimates. the company raised its guidance for the year. and despite the u.s. drought's impact on grain prices for dairy producers, dean foods does not think the impact on dairy prices will be as bad as some predict. meantime, consumer discretionary companies, firms selling things we want but may not need, were under pressure thanks to travel websites. priceline.com topped the losers,

down 17.3%. this is its lowest price since february after the company's financial forecast came in short of expectations. fellow online travel site orbitz worldwide lost more than a quarter of its value, closing below $3.50 for the first time since late june. trip-advisor lost 4.9%. meantime, homebuilding stocks saw higher prices thanks to the two reports we mentioned at the beginning of the program showing home prices climbing. this exchange traded fund in made up for homebuilding stocks. with today's 0.8% gain, it's at its highest price since may, and less than $0.50 away from a four year high. hewlett-packard has been struggling for a couple of years, hit by c.e.o. turnover and its traditional computer business under pressure by tablets and smartphones. the company warned it will take an $8 billion write down due to the drop in its stock and business in its services unit. but it excluding that massive charge, it raised its adjusted

earnings forecast for the third quarter. shares responded positively, rising 2.4% on heavy volume. shares hit an eight year low earlier this month. after closing just below a five year high, media giant news corp may be one to watch tomorrow. after the closing bell, shares sank 2.5% from this closing price. the company reported disappointing revenues. the company is preparing to spin off its newspaper publishing business from its television and film operations. a mixed day for the five most actively traded e.t.f.'s. only the s&p 500 and emerging markets exchange traded funds eked out small gains. and that's tonight's "market focus."

>> tom: this week we're talking about investor confidence in the markets. in the futures market, that confidence has been hit by the bankruptcy of m.f. global, and the admitted fraud at p.f.g. best. farmers started trading futures in chicago in the middle of the 19th century. today, pension funds, hedge funds and individual investors have millions of dollars on the line in corn, soybeans and other products. as diane eastabrook reports some old-style market participants say these newer players are making it tougher for them to trade. >> reporter: for 164 years farmers, grain elevators, and food companies have used futures contracts traded in chicago's commodity pits to hedge risk. alpha baking company uses them to lock in prices for the wheat and natural gas used to make its breads and rolls.

president larry marcucci's been trading futures for 30 years. about eight years ago he noticed it changed. >> it used to be if the market went up a couple of cents or went down a couple of cents a day that was a big deal. then it started bouncing around 10, 20 cents a day. >> reporter: marcucci thinks "so called" financial participants are the reason. they include pension funds, commodity pool advisors and swap dealers who are trading futures as a way to make money. together they can comprise anywhere from a quarter to nearly half of the market. >> they add liquidity, but they can drive the market up and certainty drive the market down. >> reporter: speculators have always been crucial to the futures market, buying a grain contract, a hedger is trying to sell. david lehman is the managing director of commodity research and development at the c.m.e. group. he says these new financial participants are improving the market for hedgers like marcucci.

>> bringing a much broader array of participants into the market globally, as well as, bringing more liquidity into the markets from investors has actually dampened volatility. as you look at it statistically. >> reporter: lehman says what makes markets volatile is uncertainty: the current drought is a good example. and today hedgers and speculators have instant access to information and can trade electronically 24-7. university of illinois agriculture economist scott irwin says that can make for faster moving markets. >> but overall you'd have to say on net it likely means just simply, more efficient quicker reacting markets to even more relevant information. >> reporter: for marcucci it now means spending a little less time on the plant floor and a bit more time monitoring commodity prices. >> i've gone from watching it maybe monthly, to weekly, to daily, to hourly.

>> marcucci has assurance for his company, and is being a little more cautious how he uses them in the future. tom? >> tom: diane a lot of people are looking at the futures cautiously because of what we mentioned last fall, sxtd summertime bet. how has that impacted the trusts of the futures industry? >> well, i think from a customer standpoint, where people like marcucci, he trusts the markets. he thinks the markets are functioning as they should be. but i think there is concern that there needs to be more oversight, particularly of these futures commission merchants like peregrine and mf global, and regulators are doing more. doing more electronic audits and making extra sure the companys are not commingling their money with customer money. >> tom: that's a key point,

the mf global collapse was a made that went wrong, and admit fraud. and mf global failure, you sat in the same loom with russell who is now at the center of the alleged fraud, and he said that it was sacred to keep customer money -- not to commingle, and now he's learned he was ripping off customers. >> yeah. that's what took a lot of people -- it really stunned a lot of people, particularly me. i interviewed him many times and he was a trusted member of the futures industry. i k it goes back to what we were talking about earlier. there needs to be more oversight, and hopefully that's what we'll be seeing. >> tom: looking at investor trust in the futures market tonight. it's diane eastabrook reporting for the cme group in chicago. thanks, diane. >> susie: when it comes to confidence in the markets, tonight's commentator says

market makers, like knight capital have a great responsibility. here's joseph cotterill, editor at the financial times. >> is it so terrifying that you should gut your 401(k) of stocks? you could say that the market itself absorbed knights problem trades pretty well last week. those weird prices died down after that wild half-hour. trades in only six names had to be cancelled. even if you trade stocks day to day, that seems like better resilience than the big flash crash of two years ago. if you hold stocks for months or years, you could be feeling pretty insulated. instead, the only downer on your confidence would be the merely atrocious economy. but that can't be the whole story. better resilience hasn't brought investors rushing back: retail flows out of equity funds haven't noticeably reversed since the flash crash. investors, retail or institutional, would be justified to have second thoughts over the bewildering pace of change in technology. these algorithms aren't space invaders. or black swans. they're put in place by market- makers locked in an arms race to be the fastest.

they go fast to get you a tight stock quote. but weigh that against the unease when it goes wrong, or, as with knight, there is no kill switch. there needs to be a precautionary principle on this stuff. market-makers need to show they can deal with the risk before it goes live. otherwise the market, even for long-term investors, will remain pretty dead. i'm joseph cotterill. >> tom: tomorrow on "n.b.r." from the every-day consumer to the high end, more big retailers report results. we'll see 2nd quarter earnings from kohl's and nordstrom. >> susie: and finally james bond has always been a box office hit, and now british pay tv service is banking on it. it announced the launch of a new 24 hour channel dedicated solely to what else? films featuring the one and only james bond. it will launch in october to mark the 50th anniversary of the franchise and put 007 films on the screen.

these guys bought the rights to the britain franchise from mgm studios. >> tom: see if i can get that channel in the office. i'm a sucker any time those films are on. >> susie: and even if you watch them in the middle of the movie. >> susie: that's nightly business report for wednesday august 8, have a great evening everyone, and you too tom! >> tom: goodnight susie, we'll see you online at: www.nbr.com and back here tomorrow night.

tonight on "quest." they're graceful. they're beautiful. but do you know how they really work? come along as we explore the scientific secrets behind the elegance of sail boats. and looking for a candidate for your next nightmare? try this on for size, new evidence suggests the hayward fault, which runs through oakland and berkeley, may be the most dangerous in america. but protecting your house is possible, if you know how. >> announcer: major funding for "qst" is provided by the

national science foundation. the gordon and betty moore foundation. investing in partnerships for environmental conservation, science and the san francisco bay area. the richard and rhoda goldman foundation, celebrating more than 50 years of innovative grantmaking. and the amgen foundation. additional support provided by the william k. bowes jr. foundation. anne s. bowers, the robert noyce trust. the dirk and charlene kabcenell foundation and the vadasz family foundation. support is also provided by -- >> before there were airplanes, before there were trains, there were sailboats. without them the world as we know it would not exist.