troubles in the commercial real estate sector... are back in the spotlight.... plus, a market pro tells us where he's putting his money to work for the rest of the year. and...the advanced technology behind your cell phone calls...we get a behind-the- scenes look...it's all ahead on this edition of first business. welcome to the show everybody the stock market's trying to build on 2009 highs and matt shapiro of m w s capital joins us from the cb 0 e and what are you thinking in the pits do you believe this rally? if you have to. onward and upward if and last night we get apple's report which is pretty good in the stock has been up so the next step of earnings has been pretty good. this morning we get will forgo any u.s. bank and that's one of the key indicator to see we're recording head and

we can take all 9000 easily in the next few days. it depends on what kind of forecast these companies are going to put forward if. do you think the market has been in power here? i do travel talk about in chart talk is the dividends are very good compared to what you are getting it fixed income. thank you so much matt shapiro will see later in chart talk. the commercialeal estate market is back in focus now as several regional banks that have big exposure to that sector - begin reporting 2nd quarter earnings... and in his twice yearly testimony to congress this week - federal reserve chairman ben bernanke says he's also keeping a close watch on commercial real estate... since it faces the same foreclosure risk as the residental mortgage market. a stalemate at some point something will tip the scale.. and see lot more transaction activity

another big concern out there.. is whether owners of large properties will be able to refinance when their loans come due - a wave of refis in commercial real estate will take place starting this year... and lasting into 2012. and some experts say as long as property owners continue to make their interest payments... banks are not likely to pull the plug very quickly... the brokers are saying if building owner is servicing debt.. making payments.. they will keep pushing out the terms.. banks don't want to take property back.. but if buildings can't service debt.. it's a different process while the commercial real estate sector is imploding at a very slow pace... it could still have a huge immediate impact on hundreds of regional banks... that hold a lot of those loans... many are questioning whether regional banks have accurately reflected potential losses from commercial real estate holdings.

regional banks.. have big porftolio of commercial loans that have not been marked down.. that to me feels like next wave of bad news in industry .. or for brokers.. first source distressed selling.. critical mass.. have to unload these properties one estimate points to 30 billion in losses from bad commercial real estate loans... that small banks will have to write off this year. so far 57 regional banks have failed in 2009 - and the list of troubled banks is growing... it's up to more than 300 today. another sign that troubles are getting worse - this week - shares of comerica and regions financial - were down more than 10% after they reported 2nd quarter earnings. dow jones industrial average this year some historic companies get kicked out of the doubt in the dow has seen its worst performance in decades. joining us is john he is the executive director of the dow

jones indexes. he is also the man pulled up beside what is in the dow. welcome. my pleasure to be here. the talk about the newcomers cisco replacing a ig city group in gm why do you feel these companies along with the rest of the doubt components are the best mix of companies to reflect the future economy? because they represent the various industries that make up the economy. cisco is very prominent in the technology area kraft foods is a consumer goods company like general motors obviously a different kind of consumer goods but nonetheless represents consumer buying beans that they need and want. travelers is a financial company finances has become a big part of the american economy is has some trouble lately having some still but

nonetheless insurance and financial-services are very big parts of we are today. as we progress through the information age what about a big internet companies like global having a place in the doubt be see that? it's possible right now are technology representation is really quite strong i think. the hold industry segment sector what everyone a call is very adequately represented. a dozen means that if technology becomes a larger part called the american economy which is very well could we won't need more candidates. and technologies particularly were blessed with far more blue chips than we have iv. an ax to about bank of america this company has received $45 billion in government aid more than a hundred billion in loan guarantees the think bank of america still deserves to be in

the dow is the third worst performer in the dow. is obviously a company that has its challenges there's no doubt about that. the only reason we took out eight i g and city group was because the government to influence on the operations of the company in question was really quite substantial. aig the government own the majority of the common shares. in the case of city group the majority ownership wasn't there but the influence when the board of directors and on the strategy for disassembling and spinning off some of the parts of city group were very much bear. and the case of bank of america we are starting to besieged see some indications of government influence on management's in on the board of directors if that continues them will take a

second look at it. i also want to add to about comparing all of the index's here the dow has been flat to up only about 1% the s and p 500 up about 5% the nasdaq composite up 21% we know that industrial companies have been hit the hardest by this recession which explains the dow week performance with the youth feel the doubt will ever take place as a leader in overall market and under what circumstances? i absolutely do and the reason that i do is because it has in the past. ford's previous proceedings last year including less during the dow was the leader. it beat the s&p and the next that by considerable margins if it happened and it can happen again and what are the circumstances the circumstances are when the large metal capital companies leave the market. if they just don't happen to be

right now. thank you so much for your insight. executive director of the dow jones indexes. still to come a behind-the-scenes look at the technology behind a cell phone calls.. but first, john person of national futures joins us from the cme group...john.

john person of national futures is does he joins us from the cme group were talking manciple bond investing in the know california just came up with a proposed budget deal but dozens of states have been grappling with their deficits and we know

the state government are likely to be back in the same boat next year if especially the lawmakers not willing to make the reforms needed to bring the budget back into realities of our question is it's been a muni bond investor worth the risk? that's what is all about. risks of version #one i don't think investors are looking for return as much as they still are looking for rates if a person that many bond i think is so much competition of other products out there that investors are fleeing to like corporate bonds right now even treasurys and i think there's going to be an over burdensome supply on the market in the bonds right now is not something that i would personally invest in nor am i right now. in some cases if the pause until sauna the yields are about% and it's not worth it to you. i know. considering the risk that the states could default but is always a possibility. let's move on talking about where is the volume this is an issue in

popular topic that has been on the show for several weeks the stock market doubt s&p in nasdaq its yearly highs for 2009 and the markets have been going up on lower and lower volume so what do you make of it maybe you can explain it but certainly traders and money managers have been calling for a big correction and it has not happened yet. very good first off i know for the last few weeks people have been talking about the mysterious hidden shoulders pattern that existed in the dow and s. and peace. if you look at other indices you never saw that correlation or corporation pattern for example if you look at the russell in " more importantly the nasdaq with to get c and of trading channel and it's interesting to note that in the business cycle when we're coming out of a recession there are three sectors that you want to pay attention to that should lead the economy forward a technology

and if you look at the nasdaq 100 that is what we have been seeing a rise in tech stocks number to you want to look at transportation of gas of the stocks like ups cbs also cause fed ex and you see some of these stocks have been gaining and holding value, so when you look at the overall stock market i think there isn't something that everyone sees the dow and says we are going continue higher i don't see that. but i see is that fundamentally superior sectors and stocks will perform well maybe hold value here i will look for much appreciation from the skies. if the s and p's get around 980 doubt creeps right around 9000 i think we're looking for another 68 percent correction to the downside in other words a trading range until we get to october. the small one what is your best trade for the second half of this year? are you looking at oil gold stocks bonds or greens " the mark would be want to

money? if the best record down to the rest of this quarter for right now i think that the grain at complex bourbonnais see some really good crops look at the december new crop press lord and $3 i'm looking for soybeans november's under a 50 to 825 marks. i'm looking to buy gold but and not looking to buy gold and gold were no interest is seasonally strong period for the year and as we came into may and june it should have been a week in fact gold hasn't been able to press on a 900 so imagine what might really be the catalyst and were going to be a bullish time of the year from a supply demand cycle " probably press new highs by year end. one last one i won't be long stocks by the end of this year on any 6 to 8 percent correction from this level right now. real quick about government bonds? government bonds t-bonds x i meant to be a seller of the 30-

year bond when any rally if we get a yield i don't think there were once seen much higher than this 12121 level and the 30- year bonds are one be a seller of bond going forward. thank you for your insight john person of national futures thank you so much. still ahead we head to a switching cell phone center to see exactly how cell phone calls go through...that's coming up after the break.

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for most, not much thought is given to exactly how a cellphone call goes through, so long as that call actually does go through. but regardless of who your carrier is, there's a lot of technology from a number of different companies that comes together to make that mobile call work. we got a behind the scenes look at a cellphone switching center for a better understanding of what goes into a cellphone call at an undisclosed location in suburban chicago, "this is the heart and soul of our operations. so we don't want to broadcast to everyone where this is."

lies a verizon wireless switching center that has a place in the cellphone history books "the home of the first call that was switched out of this location." switch tech richard holsley worked that day "yes i was here for the first commercial phone call. that was a big to-do." and has had a front row seat for the growth in cellphone use ever since. "we used to have a presentation here and they suggested our switch would handle about 186 thousand customers, and there would only be 2 million nationwide." those projections of only 2 million cell users across the country have proved far off the mark. verizon alone has more than 86 million customers, and overall, more than 3-quarters of all americans own a cellphone. to keep up with that demand, verizon operates more than 130 switching centers across the country, which take in calls from cell towers and route them across the country

and across the world. "the switch is what it is, it switches your call to where it needs to go. that's why its so important to have these up. mark wouhld is the operations manager of this switch and he took us on a tour of the facility. "the first part we're going to show you is battery backup." and the switch requires a lot of power. according to verizon, the electric bill for the site runs into the millions of dollars. so if the power goes out, they need to switch to battery backup. "and as you can see, a lot of battery backup." 4 times this year a storm has knocked out power, but a diesel generator can keep the juice going in case of a blackout for 7 days using 10-thousand gallons of diesel fuel. "just like the airlines, we budget and plan for gas prices." this switching center alone handles over 30 million voice calls and 41 million data transmissions each month coming in from over 500 cell towers across chicagoland. "this is where voice and data calls are processed."

and it requires a maze of parts from suppliers like engine and generator maker cummins, to software service company comverse. "you'll see an endless supply of routers and backup routers that work in redundant pairs." backup is the name of the game at the switch, and one room in the facility is dedicated to having a replacement parts. "all of our equipment we have an active and a standby. even when it comes down to a router. " there's even a open room ready to accomodate growth. "in two years, this will be full of adjunct equipment. we're not waiting for new capacity. its already here." but for all the equipment and power needed to operate the facility, it requires just 12 technicians working three shifts round the clock to run the site. "well that's technolgy right?" according to verizon, a new switch is a 30 million dollar investment just to get a site up and running. regional director t.j. fox estimated that the company has put in roughly

twice that much to keep calls connected since the switch handled the first commercial cellphone call back in the early 80's. coming up in chart talk matt shapiro is back with us to talk about dupont. that's after this in the know message.

and at shapiro of m w s capital back with the fourth chart talk i know you like the blue chip companies in this time focusing on dupont's. if dupont's is a stock i'd like they came out with earnings yesterday a kind of lukewarm baby lote lower expectations sales were down 20% because the economic crisis but one of the big reasons i like is because the big dividend almost 6%.%.%.%.%.%.%.%.%.%.%.%r dupont's. since cambridge the stock is up almost 12% in as much better compared to the overall performance of the doubt which is up 1%. right. classic american company think the dow is going to advance

ticket dupont's because very leveraged to the economic cycle the crisis is going to abate and you're gonna be happy you get into the spotlight dupont's. this is a chemical maker for lots of different types of products so was certainly very dependent on a strong u.s. economic recovery. think so much matt shapiro of m w s capital as always we appreciate your insight and think you will see you next time. see you next time.