peter will ask bill dudley why. is that concern to investors quickly? [closing bell ringing] >> 2.5 on the 10-year right now. liz: bells ring on wall street. closing the books on a rough session for the bulls, a great day for the bears. stocks finishing up weakly on very thin volume. the volume became thinner and thinner throughout the session. hour by hour it got worse. one thing that turned around utilities. lows of the session, the russell getting hammered, down 1.75%. 1 1/2 actually. very close to correction territory. "after the bell" starts right now. david: thin volume but very exciting action today on a number of stocks. let's break it all down on the market moves. michael sorrentino. he is here to tell us why he is calling for an end to the year rally. jason rotman, lido i'll advisors, managing partner with his stock picking strategy and three names to add to your portfolio and larry shover in the pits of the cme. larry, i heard from you early this morning about how things were shaping up. coming up, peter barnes will talk to the new york fed c

being on hold for as long as the eye can see. >> as you know yesterday, the new york fed president, bill dudleysaid inflation would, in his words, drift upwards toward the 2% goal. thephilly fed said that reserves could trigger more inflation. are we on inflation watch, or is it still at bay? >> i think dudley was saying inflation gradually moving up 2%,ard two percent -- toward which is similar to the view of most of the ofm c and similar to our view. and similarthe fomc to our view. inflation is low, below 2%, but gradually moving up. we see that in a number of indicators. last week we saw producer prices , import prices, even consumer price index gradually move higher. it is a long way to say we have an inflation problem in the strong sense of the word. >> we also learned the fed officials discussed the need to improve guidance on the likely path of interest rates. what do investors want to know on that front? right now i think there is a lot of confusion as it relates to the dots that are released of the individual participants' forecast and how that relates to the fomc statement. not onlyi

there is nothing illogical about what bill dudley said.ll perfectly logical but i sit here looking at banks now and i see the fed is paying them 25 basis points on excess reserves. and yet they're holding 2.5 trillion. that doesn't make fundamental sense to me. david: right. >> why would they be holding so much at 2.5 trillion? that makes me wonder whether i can accurately, not wonder, it makes me really question whether i can accurately predict how much they would hold if that rate was a lot higher. david: by the way, the other thing he is optimistic about, and we're going to play the third sound bite we have on growth by the way for the producers, is the question of growth. and of course they were very optimistic at the beginning of the year. janet yellen said 3% or higher. right now he's still looking at a 3% target. let's play that sound and get your reaction. >> about a 3% growth path. that will be sufficient to gradually use up some excess slack in the labor market, put americans back to work. david: that's a pretty optimistic growth

peter will ask bill dudley why. is that concern to investors quickly? right now. liz: bells ring on wall street. closing the books on a rough session for the bulls, a great day for the bears. stocks finishing up weakly on very thin volume. the volume became thinner and thinner throughout the session. hour by hour it got worse. one thing that turned around utilities. lows of the session, the russell getting hammered, down 1.75%. 1 1/2 actually. very close to correction territory. "after the bell" starts right now. david: thin volume but very exciting action today on a number of stocks. let's break it all down on the market moves. michael sorrentino. he is here to tell us why he is calling for an end

overall they're looking at the slack labor market is what bill dudley said in his comments today, andlong as the slack labor -- there's slack in the labor market, they're not seeing any real wage inflation, then we don't have other inflation and the federals i think probably stay on the sidelines for a long period. stocks will have some more room to the up side. stocks are also one of the asset categories that tend to appreciate and act as a bit of an inflation hedge, so investors kind of once again have to ignore the noise in the fish market and pay attention to the price of fish. >> as the tapering continues here, michael, and the fed keeps pulling back on the number of bonds that it buys and the treasury market and the mortgage market here, do you think the economy is where they thought it was going to be? housing still not reviving as much as we all thought it should. retail, we just hear, they had a lousy first quarter this time around. interest rates and inflation are not picking up to any great degree right now. what's going on? what do you think the fed is thinking about right

that is not what investors like to hear right now, of course, but you had bill dudley saying something slightly different and art cashin takes issue with all of that. all kinds of reasons why we're selling off here. >> kenny polcari is already shaking his heads. we've got investing legend bill miller coming up, bullish last month when he was on this show, so has that changed? we will find out when we ask him next hour. >> gee whiz technology for you as well, a usb port for your iphone and ipad, not exactly, but the maker of this device we're going to show you says his invention will serve that same purpose essentially where you can take data from your pc or mac and transfer it into your iphone or ipad. how big of a game changer would that be and how can you invest in it? have the person behind the idea coming up later on "closing bell." >> here's where we stand in the markets, and we're focusing on stocks today. talked a lot about bonds and today it's the market selloff that's captured some attention, the dow shedding 150 points or almost 1%. not many components are in agreement and th

bill dudley said the increase will be relatively slow, low rates will keep dividend pairs more attractivegroup could boost defense after earnings are projected to rise 19%. >> what is your take? -- i think long rates will move up more slowly than people feel that they will still move faster than bill dudley thanks. rising rates are not a good environment for reits. they are being used as an income substitute. i would be cautious. >> cautious on fixed income as well. >> you have got to think about your overweight and underweight. >> julie, we had disappointing retail numbers recently. as much as david is telling us economy is getting better, what are we seeing from the consumer? >> consumer is still feeling pain. a lot of retail earnings reports. target reporting profits that fell a little bit more than estimated. costs not just from the breach but also from markdowns. these are companies that came out yesterday, year to date performance numbers. urban outfitters, staples are struggling in terms of sales growth. and then there is the big one, walmart came out with a forecast that disappoin

we do have new york fed president bill dudley. that's coming up at 10:00 eastern time. later this morning, janet yellen will deliver the ny kruu commencement address at yankee stadium. stanley fischer's nomination to be vice chairman of the fed has cleared a key procedural hurdle. fischer is widely expected to win confirmation. andrew. >>> news this morning about deals. a new study facing hostile m&a activity has reached a seven-year high. research firm dealogic saying year-to-year hostile activity now standing at more than $273 billion. that number was only about $71 billion. the very active m&a market is of course leading some to worry. worrying about whether a bubble could be forming. >>> also in m&a news, google is looking to go an a foreign shopping spree. the company detailing international expansion plans in response to recent questions from the nec. they are setting aside 20 billion today's $30 billion for acquisition of foreign companies. the company adds it could spend about $4 billion buying offices and data centers outside the country. the other question, jo

liz tomorrow exclusive interthrew with bill dudley. gerri: i'm gerri willis, right now on the wills report. how do you get a job at google or facebook or twitter? >>> you're shopping all wrong. why some of us missing out on great deals by not using this simple trick. >>> and meet the brainy bunch, the family with seven kids in college by age 12. they tell us how they did it. you can to. we're watching out for you on "the willis report." gerri: outrage escalating as more whistle-blowers in the veterans affairs scandal. reports of secret waiting lists, treatment delays and as many as 40 deaths spurring calls to action and calls for the president to take a stand. so where is president obama? well, today, he sent his presstek zare jay carney to speak on his before. >> you keep saying and denis mcdonough is saying he is mad as hell. where he is? >> ed, i'm sure you will hear something at some point on this issue soon. gerri: while the president stalls, our nation's heroes hang in the balance. we have the executive director for the american

david: i think dudley's rally from yesterday's interview with bill dudley. go to retailers, nicole.ier in the week. tj maxx and tiffany knocking it out of the park. >> all-time highs for tiffany. [closing bell ringing]. mice november on wall street, 156 points higher. liz: let's not ignore the financials -- [inaudible] we ring the bells. david: let's look at all the indices. i called it a dudley rally. that incredible interview peter barnes had with bill dud the head of the new york fed yesterday, saying essentially interest rates would be low as long as we're alive practically. one of the most accommodative interviews i've seen with a fed official. clearly the market liked that news. also big jump in the energy sector. that leading to all the energy sectors going higher. all of the oil companies based on what is happening with oil inventories which are much lows than expected. we have a very busy hour on a very busy market day. "after the bell" starts right now.

janet yellen and bill dudley pushed back on expectations and they are having a debate about an exit strategy america is in strong shape at the moment. saying to say neutral. they continue to. the market moves and will continue to be a painful trade. stay long in these markets at the moment unless the fed start coming more hawkish. you have central banks that are accommodating and continue to make equities the asset class of choice. are at the lowest levels in many years. that means picking up yield. >> yeah. indeed. that is what they are looking for. thank you so much for joining us this morning. headlines.ext, the we checked on the euro after the common currency has the biggest drop in months. this is first up and we are back in two minutes. >> let's start things off this morning with the euro. a drop to late last year and the euro starts below 200 day average. europe intoata from the weekend suggests that the ecb may need to follow through on the actions next month. new zealand released new numbers this morning and there is a slowdown. you see that there. they came in at less than forecast

i am perplexed by the way investors react to every twitch that bill dudley or that mr. plosser, or mr. bullard remarks, they make comments about interest rates. we know several things. we know the fed is taking the stimulus out of the system. we expect that process will be done by the end of this year. we know, don't we, that sometime, sometime in the future, probably 2015, maybe around now, maybe a little later, next year, that interest rates may start to rise. so why does everybody react so harshly and violently when we get one more comment that says fundamentally that? >> you know what's even more amazing, you see investors pull out at the wrong time. you're sigh negative outflows, first time in a year and a half. i mean fifth street, we invest primarily in floating rate corporate debt. the whole idea is interest rates will go up, i try to fix my liabilities, float my assets. i issued a $250 million bond, triple b-minus rated at 5%. that same bond is trading at 4%. the demand for fixed rate, i'm surprised. i was a happy seller at 5. >> i bet you were. >> how about fl

williams very much echoing comments from bill dudley yesterday, the new york fed president, saying that it's best to raise rates before ending the bond reinvestment program, this in an interview with the dow jones. he's worried that ending it will send a hawkish signal. i'm not sure that there's very much economic value in this. i think it's symbolic value. sometime before the fed was scheduled to raise rates this year, the fed was going to let bonds that matured run off and not reinvest the proceeds and that would send the symbolic tightening signal and the fed says we don't want to do that. we want rates to rise when we're ready to raise rates. we'll let them wind down. >> what's interesting about this is by doing what they are now talking about, it will -- it will require them to keep buying. >> right. >> each month. >> so the size of the values won't increase but there will be a flow situation happening. >> absolutely. when a five-year treasury matures, they will take the money they get back from the government and will buy another five-year, depends upon the duration that they want

liz tomorrow exclusive interthrew with bill dudley., right now on the wills report. how do you get a job at google or facebook or twitter? >>> you're shopping all wrong. why some of us missing out on great deals by not using this simple trick. >>> and meet the brainy bunch, the family with seven kids in college by age 12. they tell us how they did it. you can to. we're watching out for you on "the willis report." gerri: outrage escalating as more whistle-blowers in the veterans affairs scandal. reports of secret waiting lists, treatment delays and

participants said the fed should provide more information, and that's critical, folks, following what bill dudley said yesterday, in a largely unappreciated remark, where he said the fed may not begin reducing the balance sheet, suggesting it could happen along with rate hikes or sometime thereafter. what that meant is there would not be as much tightening, a modest amount of less tightening -- less soon than expected. >> first of all, we always have the interest and time for your minutes. >> you really want the -- look -- >> well, no, no, no. i said that to be nice. >> just one second on that. the fed has a dizzying array of tools, and the process of explaining this to the public and the markets is going to be peculiar. >> we need an owl with a graduation cap to understand these minutes, right? that's the only thing that could be smart enough to figure this out. i can't get it. what i'm hearing is we sort of like the idea of a rate hike, but not really. >> what they're saying is we're going to raise rates soon. we have never raised rates in an environment with a massive balance sheet. what do we

they're not the ones that will make -- that mean bill dudley at the end eventually and hopefully stanleyher, and of course janet yellen, they're in charge, so don't expect that. the fed has said there will be considerable time between the end of asset purchases and the first rate hike. the fed would be going back on its promise and upset marx. what does upsetting markets means? sdrukz to economic growth. that's part of the neutral thesis, is that the fed can't move quickly or by much in terms of the fed funds rate. so don't expect a rate hike in the first quarter. >> when do you expect that first rate hike? >> the timetable looks pretty much on, especially after inflation this week seems to suggest a bottoming. call it the midyear or beyond, even toward the latter part of next year, but it's not the timetable we're bringses into the thesis, it's the amount of rate hikes. we'll have three charts i think to bring up this thesis. the new neutral thesis says that the new normal continues. there are major forces continuing to suppress economic activity globally and in the united states, for e

i think the market might be waiting for it to hear what bill dudley, the new york fed president, says00. we'll have those comments, what he says about the economy. i think the market understands dudley closer to the center of policy of the board right now than plauser is, and who knows, maybe it will be plausosser at center of the board. >> so let's move to microsoft. unveiling a new product at an event in new york city today. jon fortt is there with the very latest. jon, you've seen the tablet. how does it look? >> well, i've got it here. you tell me. it's the surface pro 3, 12 inches diagonal. there it is. i'll show you the thinless. there. just a little bit thicker, actually, than the iphone 5, and 5s. the interesting thing here is what this device is and what it's not. microsoft is pushing it as a no compromise, kind of hybrid between a tablet and a pc. it does have a touch screen, and also a really powerful intel core processor, and it starts at $799. 129 for the keyboard that goes with it, as well. so a lot of people might get the wrong idea here, though. i was talking to an ado

. >> we have heard it from janet yellen, bill dudley, and the markets -- housing is the key to acceleration. if it does not happen now it might not happen this year. the evidence is mixed. last month, new sales dropped to an eight-month low. since then, housing starts were huge but they were all apartments. we find out whether those new holes in the ground are being sold. they should be. more families are being formed, they need homes. interest rates are low. winter is over. existing home sales were up not as much as forecast. the fed folks have told us -- housing is a key part of the economy. normally it leads us out of a recession. last year it finally began adding to growth and that changed the last couple quarters. if we are going to see the economy pick up it needs to change. >> what is the excuse of the numbers are not good today? >> back to the interest rates. average mortgage rates haven't fallen since the beginning of the taper. the jump during the temper tantrum hurt. ofa relative basis -- a lot first-time buyers never experienced high rates. so today's rates are disappointing. bu

with the bill dudley comments from 2 days ago, the fed, the slack economy that yellen speaks of, whatline that you see given this sluggishness? isthe fed believes that qe the answer to the balance sheet recession, and it is not. the answer to the balance sheet recession is in dealing with the problems that are still competing on the streets, like excesshousehold that -- household debt and inadequate saving. balanceumer recovery sheet repair would accelerate. what does he we -- what does qe do? it makes a few wealthy people a lot happier. >> victory for burial peruvian he -- victory for nouriel roub ubini- i can't do the ro accent. qe5.3, qe4, nouriel roubini. they're supposed to help the banks, for one, and the rest of us repair balance sheets. if that is not the savior, what is? >> debt forgiveness. this has been talked about for a politically unpopular, rise of the tea party. president obama, to his credit, did announce at the state of the union address a small incentive for low and middle-income families, but much more needs to be done. these are the types of initiatives that polit

however, i will remind you that new york fed president bill dudley has said that one reason for changing be if the economy stops growing or if it grows at a rate of 5% or more he was trying to create extreme examples of economic scenarios in which the fed might have to act. after the q1 gdp new, that scenario might not be so far fetched after all. >> patrick, do you see anything that might blow this off the expected course? >> no. i think the first quarter gdp number, we were all looking for the economy to take a nap. it in fact took a coma. i think the underlying momentum of the economy right now is forward. within we look at the sentiment gauges, the measure of the outlook of households and businesses, they are increasingly confident of the sustainability of the expansion. >> interesting, yesterday we had that lower than expected rise in construction spending. that might mean the gdp gets revised even lower. you're already saying we don't -- that's history and we don't care about it. >> yes. i think that when we look at what happened in the first quarter, we had the weather, we had unc