25 and the nasdaq up 45 for the year. a different story today as we see weak innocence utilities and industrials waiting on the broader markets. earlier today, passive news on the jobless front with first time unemployment claims falling to their lowest levels since july of 2008 that provided some support to the market early on and the dollar strengthened and revised data to chicago pmi released yesterday and stronger and revised downward today, and that basically undercut the markets. the dow dropped 30 points at that point and remained around those levels since then. let's take a look at conway, because we're also seeing weakness in the truckers today and it's bad news for most truckers because of good news for another. yrc worldwide will avoid bankruptcy and some of the truckers had been rallying on expectations if yrc goes under they'll benefit. the news that yrc isn't going under putting pressure on conway and some other truckers. as a result we're seeing a pullback in the dow transportation average which is down 47 points today, but up 17% for the year. another thing that's up this year of course is gold. we've been talking about it, of course, throughout the year. up 23, call it 24% for 2009. the ninth year in a row that we have seen gains in gold, and take a look at how it's played out in gold stocks, all of these up well in excess of the 23% for the year, led by freeport macmoran 243% on the year. the dow off 47 points, still up for the year. we go to the nasdaq with mark. >> the nasdaq can party like it's 199 because it's on track to have its best december since december of 1999. mary mentioned that the nasdaq is up 45% on the year, but perhaps more importantly, it's up 80% from the march bear market lows, so perhaps we can forgive it, if it's going to end the year on a bit of a wimper, down six points or .2% now. we have a small pocket of strength in the chip stocks today with the philadelphia semiconductor index up .3% right now but because trading is so mixed in a lot of the stocks in that sector right now, i don't think there's going to be enough juju to push the market up like we saw yesterday in the final minutes of the trading day. in addition you got big cap stocks like microsoft down half a percent but i put it up here because microsoft and the newly added cisco are among the top five performers in the dow this year. microsoft shares up 58%, cisco shares up 48%. because it has been the story of the week, i did want to close out the trading week and the year with another look at the airline stocks because they are staging a bit of a rebound today after being under pressure since that failed terrorist attack over the weekend. united airlines up 2%. jetblue unchanged, and then in the security-related space, icx technologies up more than 12%, a new high today. we did have a couple of guests on "squawk box" this morning making bullish comments about that company's hand-held wand screening device. a couple of small stocks making big moves. quixote getting taken out for an obviously huge premium, up 115%. this company makes the rubber bumpers on highways, not on cars but highways to lessen the impact of a crash. biodel up 7%, it filed for fda approval of a diabetic insulin that supposedly goes to work in the body faster and newscorps shares traded on the nasdaq down .5% as the fox division heads into the 11th hour in its battle with timewarner for carriage. farmersmarket.cnbc.com, rick santelli, happy new year in chicago. >> thank you so much. happy new year to you and yours. today yes, we know jobless claims, even with all the distortions over a holiday period, which will come out sooner or later, and extended benefits programs, still looks like good news that caused rates to rise but mary thompson hit the revisions, the annual revisions came early on chicago pmi. it dropped from 68.7 but the employment index really got whacked went from 51.2 to 47.6. we need to really watch next week's first of the year labor report to see what job creation did, some upgraded in a positive territory, we'll have to wait and see. there's also big benchmark revisions on the job scene coming in february. now to the charts and intraday chart, slightly elevated yields hovering at the highest yields since june, up 164 basis points on the year. the dollar index we have to look at that. it's been the month of the dollar but if you look at a year-to-date chart even with the 5% bounce that the dollar had since the end of november, it is still down a little over 4% on the year from 81.3 to just under 78. we need to keep everything in perspecti perspective, because foreign exchange especially the yen and the euro against the greenback are key to observe for 2010. michele, back to you and happy new year from chicago. >> happy new year to you as well. it's been a great year. let's get more action in the oil market. john we saw oil briefly touch $08 a barrel today. is it because of the economic data this morning? >> certainly, michelle. generalized enthusiasm and follow-through buying generated during the week for a variety of reasons, geopolitics and the like. it is official now, we have crude oil up 78% when you market from the end of last year to the beginning of this year, which is an incredible run and i have to say to follow on to rick's points, crude was up most of the year with the dollar being down but now in the last rally on the dollar, crude oil has gone along with it. so we're continuing to see if that paradigm shift holds. >> john -- >> it was a wimper at the end of the day when we sold off. >> the weekly unemployment claims much stronger than expected, led some people to say next friday when we get the big jobs report, that it could be positive for the first time in so long, what would that do to the price of oil? >> i would expect crude oil to rally significantly off that, michelle. gasoline, too. those numbers are corelative to gasoline demand and prices. at $4, $5 a gallon in 2008, unemployment was strong, people were able to go to their jobs and pay for gasoline. >> john kilduff, happy new year to you. simon? >> michelle, welcome back to the floor of the new york stock exchange. let's talk about the way in which we've traded today on this last day and obviously what we expect for next year. joining me on the floor, alec young, equity strategist at standard&poor's and benny lorenzo, thank you on the last day, still being here. >> absolutely. >> we have this very good jobless data and still the market is down. should investors at all pause and worry about that as things stand? >> i don't think so. i think the market has been going very fast, going up, we are at peak levels and i think the real questions is what's going to happen next week as we look at the job numbers. right now the expectation is that they're going to be flat. i think they might even see the first positive jobs. >> i was just saying, yes. is that automatically good for stocks or do we get in that la-laworld because of what the fed might do, they say, actually good news is bad news and the stock market might fall as it's arguably done today? >> i don't think so. i think the good news will be good news. i think we are good from a kaufman brothers perspective we're in good shape. we think the surprise will be in how strong the earnings are going to come out of the fourth quarter and that is going to boost the market. >> alec, remind us where you stand. >> i couldn't agree more. i think we're moving in on 400,000 on the weekly jobless numbers which is historically consistent with positive payroll growth. >> yep. >> so we've seen nice upward surprises to the numbers. next friday december payrolls, upward revisions is consistent with the trend. for the earnings season the comparisons are easy on a year-over year basis. it shouldn't take a lot of top line growth to drive earnings growth. we're not expecting a top line revival just yet but because of the cost-cutting and operating leverage that shouldn't stop companies from exceeding expectations. >> why are you heading for stocks that have specifically lots of cash on their balance sheets? that would sound defensive to many people? >> we're headed for the technology sector. a loft the technology stocks have a lot of cash in their balance sheets. >> name some names. >> intel, we have a buy rating on that, you have apple with a lot of cash, microsoft, the tech giants have a loft cash, generate a lot of cash. >> they've all come an awfully long way during the course of the year. >> they have. >> you're still recommending people buy technology next year? >> absolutely. >> even if the dollar goes higher? >> we're still recommending them to buy technology stocks. we think that the leverage is there. we're seeing, for example, on the shortage in the supply chain, in semiconductors, for example, the capacity utilization at the founder was 85% in the third quarter, probably 90% to 95% in the fourth quarter. there is not a lot of fabs being built and a lot of operating leverage as alec is pointing out, a lot of profits. >> you mentioned the big names there. you have computer sciences and yahoo!. >> yes. >> that's the rationale there? >> computer science is a turn-around story, gross margins expansion, defensive name, but it's still a good grower and good management team. yahoo! is basically another cheap internet company, and we went to china -- >> but a troubled internet company in the grand scheme. >> the grand scheme but there's something else in there. they own 40% of taobao, the amazon.com of china, they own that through ali baba. chinese ownership more than justifies rights. >> alec, some people might say you should be looking for rotation into the areas that underperformed during the course of the year which actually is the likes of utilities. >> right, we think it's too early for that. i think we're going to continue to see upside surprises to low expectations on economic data, upside surprises to earnings. you want to stay with the cyclical trade. if we get better than expected jobs, better than expected earnings season it's the cyclicals, the materials, the industrials, discretionary text. they'll do well. i don't see staples, utilities, telecom reviving. that trade may get more legs as we move through the year. earlier in the year we'd stay cyclical. >> good to see you. have a good time tonight. on the floor of the new york stock exchange we have 46 minutes still to trade and we're in negative territory on this, the last trading day of 2009, michelle. >> simon, oil did hit the $80 mark for the first time in a month today. are we going to see much higher energy prices in 2010? that story ahead. and after the bell breaking down mutual fund strategies for the rest of the year. the story today at 4:00 p.m. eastern. but first the most actively traded stocks on the new york stock exchange in this last hour of trading for 2009, led as usual by citigroup, 3.34 a share. you're watching cnbc. we are first in business worldwide. national car rental? that's my choice. because with national, i roll past the counter... and choose any car in the aisle. choosing your own car? now, that's a good call. go national. go like a pro. december to remember sales event. now through january 4th. ♪ special lease offers now available on the 2010 es 350. ♪ let's take a look at some of today's business headlines, number one, the number of jobless claims fell by more than expected last week, hitting the lowest level since july, 2000. according to the new report, new claims were down 22,000 to a seasonally adjusted 432,000. meanwhile add at&t to the growing list of companies ending their sponsorship deal with tiger woods. the communications giant made the announcement in a brief statement in which it wished the golfer well. a recent study by two economics professors says the scandal could have cost shareholders of companies endorsing the golfer between $5 billion and $12 billion. and freddie mac reporting the national average for rates on 2030--year fixed mortgages rose to 5.14% last week preponderates have been steadily climbing since hitting a record low earlier this month. michelle? >> simon, a lot has been made of this being the lost decade for stocks, the worst decade for stocks since the '30s. are we really that unique over this ten-year period? a special new year's eve historical perspective of technical trading with jordan, global technical strategist with barclay's capital. >> thank you very much. >> you'll put this in longer context. >> talking about the forest through the trees. >> the forest through the trees. >> the last couple of years we had a crash in the market. 2009 outstanding market. have we seen it in history before? what does that tell us about what to expect in the future? start with the s&p. as everybody is well aware the stock market has been going nowhere, for ten years. so right there that blows out the body in a whole but generally speaking you've had many bull markets and bear markets but at the end of the day this market has gone sideways. that's important. you had a massive bull market before that. >> we loved that, but coming back. >> when you have a bull market you have to have a bear market. you can correct down like japan in the nikkei. >> bad. >> or sideways. >> this is much better. >> so far we are correcting a major bull market with a massive sideways range trade. that's net bullish despite the fact this is clearly chopping everybody up. >> what does that tell us necessarily about the future? >> first of all this is s&p, that's 500 stocks, let's go wider and look at the broad market which is more important than the big nasdaq, dow and s&p. >> this is everything in the united states. >> 5,000. we don't want to obsess about the big trifecta, america tends to be obsessive about the s&p, dow and the nasdaq. the broad market and the key is it's the exact same pattern. what stands out when the market was bullish it was unable to take out the highs. when it crashed it was unable to take out the lows. that means the bulls and the bears are at a standoff. again, bull market, correction sideways. the risk is we're just going to be in this environment for another couple of years and not unprecedented. >> another couple years? >> looking for another two years. we've been in ten years. two more years is not a big deal. we've seen it before. >> for you maybe. okay, what is the next chart you want to show us that gives us historical perspective, how far back, back to where? >> we're going back to the '60s. if you're bullish or bearish we forget the market can go sideways for a really long time. it's happened before. in the 1960s we went sideways from '66 to '82, when the dow hit 1000 right here. the market was ultimately bullish. you had a massive bull market, went sideways for 10 to 15 years and the topside, that looks exactly like what we're doing now, we're probably somewhere in this area, so it means we could go like this before we head to the tops. that gives us perspective that we've sean this before and tells us what we want to expect. >> how long is that time period, where it was flat for so long? >> you've got to ask where you started. most people around 1966 we broke out in 1982 so there you have about 16 years of this sideways movement. >> you don't think 16 years this time around, do you? >> we've done ten. to do another one or two, the fundamentals. >> 12 is shoert shorter than 16. >> we can go back, go back one more time. >> 1900, holy moly. >> sideways markets are not unprecedentsed. we tend to forget how far back we can go. here again, pretty much in 1906 to 1916, what you had in this environment a bull market, sideways and went up in the roaring '20s before we crashed in the '30s. what we're saying to you here is that we've had bull markets. we had them on either side. you have to correct, going sideways is a lot better than starting to look like japan or the nikkei when it crashed and this is exactly we think what is going on right now. >> jordan kotick, hope you're right. you're coming back next hour. >> you got it. the dow jones industrial average is negative by 50 points, nasdaq in negative territory as well. we'll be right back. i keep track of my entire business on this spreadsheet... and all of these. paid invoices go right here. bang! - that hasn't been paid yet. - what? - huh-uh. - all my business information is just a phone call away-- to my wife... who's not answering. announcer: there's a better way to run your business. intuit quickbooks online organizes your business in one place. it easily creates invoices and helps you stay on top of your business anytime, anywhere. this is way better. get a 30-day free trial at intuit.com. i hired him to speak. a lot of fortune 500 companies use him. but-i'm your only employee. we're going to start using fedex to ship globally- that means billions of potential customers. we're gonna be huge. good morning! you know business is a lot like football. i just don't understand... i'm sorry dick butkus (announcer) we understand. your business could use a pep talk. visit fedex.com/peptalk here's a look at how some of the widely held financial stocks are trading today. citigroup, bank of america, jpmorgan, wells fargo, goldman sachs all in positive territory. some of the other members of the dow and how they're fairing in the last hour of the trading day and decade, widely helds negative, ge, exxon, pfizer, at&t, verizon communications. 2009 is drawing to a close. my next guest says investors need to look at the economy when deciding trading strategies for the new year. turning to our cnbc investor network we have a web cam connection straight from beautiful laguna beach, california. peter navarro, business professor at the university of california, good to see you. >> hey, michelle let's talk strict trading now. >> based on the economy, right? >> exactly. my perspective basically is that the stock market and bond market are leading indicators of the economy. i do my own forecasting using a framework i call the always a winner framework and what that framework is telling me right now, all 11 indicators are pointing to a continued expansion in 2010. the big uncertainties in the equation are the consumer, and a possible effect on exports from a strong dollar, if the dollar starts to rebound but other than that, things look like smooth sailing ahead. the problem now however is -- >> if you think the economy is stronger why wouldn't the dollar be getting stronger? >> because of the fed's humongous balance sheet and the federal government's huge budget deficits. those were contrary to the strong dollar. we'll see how that fights it out but in terms of the strategies, i thought the segment just before us, michelle, was a beautiful setup to one of the three strategies i'm going to use in 2010, which is basically a long/short strategy. as a matter of discipline now, i do not buy any stock unless i also have a corresponding short position in the similar sector, and the reason why i do that as you saw and you seemed a little surprised by that sideways pattern, both that we've been experiencing over the last ten years and then in earlier decades, but i see that's the problem and i think until the recovery becomes less fragile, i think a long/short strategy is a good trader strategy. the second thing i'd do, michelle, i'm big on the big macro trade and one that is fairless riskless for 2010 is to short the long bond. >> how do you do that? >> here's what we mean. we know that yields are going up on the long end of the curve, and i think they will continue to do so with an expanding economy and the inflationary pressures from the federal reserve. the way you do that, there's a pro-shares ultrashort exchange-traded fund called tbt. you buy tbt to short the long end of the curve, and i think the downside risk is fairly minimal, because in order for that long end to go down, you'd really have to have a collapse of the economy in 2010. so that's a pretty good trade. >> you'd use an etf to go short, you can go short a stock sometimes and your liability can be limitless, right? you can get in a whole lot of trouble when you're going short just using an etf, the etf in theory could do g to zero but you're not necessarily on the hook for piles and piles of money? >> i'm glad you said that, michelle. you can guess wrong four out of ten times, but if you manage your risk with trailing stop losses, which is my primary risk management tool, you really are going to do well in the market, or at least stay fairly neutral. >> okay. >> you won't lose a lot of money. i think investors and traders today, this is a new world we're living in, the buy and hold as your previous guest, i mean he exploded that myth with a couple of charts, and the way we've got to do this now, basically, is long/short strategy, manage the risk through trailing stops and look at the big macro picture in order to see where it goes. the last thing -- >> we got to run, peter but thank you so much. >> have a great new year. >> great to see you twice today. >> enjoy, bye-bye. >> simon? >> welcome back to the flar oor the new york stock exchange, joined by art curbing and gordon charlotte, director of rosenblatt securities and cnbc mart analyst. happy new year to you both. >> happy new year to you. >> 45 years you've been a member here. how will 2009 rank within that? >> very high up there in the memory class. it's pretty close, maybe as important as 1987, you know, we've gone through a period when not only where people worried the financial system would collapse, but we've learned after the fact that the government was concerned enough that there was talk about declaring marshall law. we've come a long way since then. it's a great sigh of relief, but having gone through that experience, the memory is seared in here. >> i think a lot of people have forgotten it, and it's become business as normal, really quite quickly. have i got that wrong? is that not the case? >> well, it depends what business you're in. in this business, i don't see it coming back. we've kept the patient alive with extraordinary means. we're in the hospital now, breathing, but not on our own, there's still government money coming in, and we'll learn greatly next year whether they can withdraw that money and the patient can get up and start walking about. >> are you as eloquent in your dekripgs scription? >> i could never be as eloquent as the professor. i can agree with him about a collective sigh of relief, just the fact we got through, there were doubts earlier in the year and just that we've been able to overcome all the adversity, special shout out to the guys who make it happen, scott, manny and vinny castaldi, everybody, you can feel good about what, the year finally ended up. >> let me take you back to the substantial point now, we're still on life support, the huge amount of liquidity. three months ago when i first arrived we chatted about what this thank meant in reality and slowly the bears became fully invested. there's a belief we could go higher still. you're a guy who always felt it wasn't justified the rally but you get out soon enough, fast enough. >> the thing here simon is the ex-tr extrication of the fed, if they can do it continuously and quickly, they willwell' continue to grow. there were t.a.r.p. sales and discussion about further methods to achieve that result. >> yes. do you think they'll be able to do it successfully, remove the punch bowl? >> they seem to have settled these markets down. i think people do have faith in the fed, in the fed chairman and their policies. i think, though, that people are still somewhat cautious, though, because as art said it's a tenuous situation. >> leave us with one thought for the new year. >> i would say there two are concerns. always a keiji key geopolitical event, terrorist related or not. if the global economy is slow the u.s. will buy fewer products from china, there will be fewer dollars going to china, at the just the time that the u.s. government needs china to start buying its debt. this could be a very, very tricky tight rope walk. >> have a good year. >> thank you very much. >> thank you very much, gordon. see you next year. that's it from the floor of the stock exchange. michelle, back to you. >> 30 minutes before the closing bell. this is the last day of the year and stocks right now are in negative territory. we'll be right back. 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(announcer) get an exceptional offer on the mercedes benz you've always wanted at the winter event going on now. but hurry - the offer ends january 4th. all right, this is a live picture from the lobby of the new york stock exchange, one of the lobbies where they have korbel set up for the end of trading, when simon goes down the stairs there, he can have a glass of bubbly, they're going to mix it with chambord. what is that called, a special drink. simon, have one on me. 30 minutes left until the closing bell. here's how the markets are shaping up thus far, not so bubbly. the dow jones industrial average lower 57 points. we were higher out of the gate in the morning and been flat trade since noon. 10,490. can't we make it 10,500 at least for the end of 2009? the nasdaq is in negative territory. had a good month and great year. lower by 8.5 points. 2282. the s&p 500 lower that i 4 points, 1121 is where it sits now. simon? >> okay, time for the "fast money final call." oil is up, and my next guest says it's the result of a santa claus rally. but is it an investable idea for the new year? joe terranova, chief alternative strategist at vertis investment partners. you're getting carried away on that move, aren't we? >> i don't know about that, simon. every year typically christmas eve you buy it one business day before christmas eve, you sell it out, january 6th, one business day before january 6th. it's worked eight out of the last nine years. that's why oil's going up right now. it's anticipating, simon, a lot of the passive index money that generally comes in at the beginning of the year. you'll see it again in 2010, and you'll see it a lot because of what the performance was in 2009. >> you're not thrown off at all for example, because this obviously is symmetrical to the stock market and a lot of assets if you follow your argument. you're not thrown off at all by today's decline that we've had on the major indices? >> no, absolutely not, no. today it's a low volume day, the end of the year, absolutely not. there's a lot of good things coming down the pipe here in the first quarter n particular, earnings. i think they're going to look good. no reason whatsoever to move away from these comfort assets that you've owned here in the better part of 2009. >> what are the patterns you would pick up for the start of the first quarter? >> i think, simon, i go back to again the comfort assets, the assets, the vip names that we have owned throughout 2009. it's the technology names, it's the energy names. it's the material names, and it's actually some of the consumer names, because consumer spending itself looks as though, simon, it's far more resilient than we anticipated. the contribution from the affluent consumer himself is providing the resiliency. >> do you think so? because the third quarter revenue growth wasn't great, was it? >> no. >> we might go the fourth quarter in a sense is being closed on that one. what do you think we'll see there? >> well, i think it's been enough to see the turn in consumer spending, which is what you want to see. we've seen the bottom there, and it's beginning to move higher, and going into 2010 i don't know that there's anything out there to suggest that it reverses itself again. >> what about the way in which people trade the markets? i know that options have had a good year. >> great year. >> we've got an explosion on etfs. >> yep. >> what are people talking about? >> people are talking about watching "fast money" every night because you need to, in 2010. 2010, simon, i think is going to be a far more tactical year. buy and hold worked in 2009. i don't know if it works in 2010. you're going to have to be far more nimble. you're going to have to use options so that you listen to the nagaran boys, timmy semoyle in the emerging world and in the market looking for opportunities with reduced risk at all times. >> what you're saying it's going to be a far more nervous market. >> yeah, that's a good terminology, i would say far more nervous, yes, because i think we're always collectively as an investment community looking for that other shoe to drop, looking for that large market correction that we really haven't seen so far. >> i listen to jim cramer and he tells me there's a bull market going on somewhere. >> absolutely. >> anywhere in the world at some point. is there not a clearer place that we can find to invest emerging markets overboard, is there nowhere that really -- >> and simon, i don't know that emerging markets are overboard. i disagree with that. i think 2000 to 2009 was the decade of the emerging market the nation. i think the next decade is about the emerging market consume per >> yes. my problem is what happened recently is that american investors and maybe i'm being too sweeping in this have woken up to emerging markets. in fact the emerging markets structural story has been going on for an awfully long time and the problem is you got a huge amount of money that sits on top of them and oftentimes can't get into these economies in the same way as you could say in an american or western economy, and therefore, it can get very topee, and when it goes, it can go very fast. >> but i think the introduction of all of the etfs, as you mentioned before, gives you the e exposu exposure. there are vehicles, tools to play the opportunities outside the borders of the u.s. >> yes, but when they come off, isn't it quite difficult to get out of these assets at least in an etf backed by ultimately real assets which also they will find it hard to get out of. >> you want to see the liquidity, absolutely. that's why before you make any particular investment, you have to check on the liquidity. you're 100% correct, liquidity is the most important thing with an etf. >> what about the commodities overall? you mentioned gold. you mentioned oil, forgive me. what are your thoughts, what are the guys and the girls' thoughts on gold and indeed the softs, which continue to run up even as we speak? >> the softs have been phenomenal over the past year, but i think again it's a lot of the exposure to the emerging markets. pete nagaran talks about coal on the desk, copper, i like both names. karen and i have been talking about crude oil all year. that performs well i think again in 2010 but there's another commodity to add to the mix this year. timmy seymour agrees with me on this, it's corn. it's the agricultural names which underperformed in 2009. i think 2010, corn plays catchup with the rest of the commodities base. >> must be exciting being down there at the nasdaq market site. have a great time. >> thanks, buddy. coming up a look into 2010 with top analysts from the street to give you the best plays in tech and financials and a breakdown of the biggest trading headwinds that you might face for next year. some of which apparently might come as a surprise, as ever live at 5:00. michelle? >> i hope they're wearing their tuxedos and black tie, times squares on new year's eve. >> less likely than yours. >> 20 minutes before the closing bell. dow and the nasdaq are in negative territory. up next we'll talk investment plays for 2010 with one leading market watcher, find out who it is, and why he's bullish, after the break. and after the bell we'll break down mutual funds strategies for the new year. what's going on? we ordered a gift online and we really need to do something with it... i'm just not sure what... what is it? oh just return it. returning gifts is easier than ever with priority mail flat rate boxes from the postal service. if it fits, it ships anywhere in the country for a low flat rate. plus i can pick it up for free. perfect because we have to get that outta this house. c'mon, it's not that... gahh, oh yeah that's gotta go... priority mail flat rate shipping starts at $4.95 only from the postal service. a simpler way to ship and return. the final market trades for 2009 just 15 minutes away but some of the economic themes of this year are going to weave their way into 2010. dairy darus, chief investment strategist with morgan stanley, smith barney, they keep adding that on, good to see you. thanks for joining us. >> thank you, michelle. >> you think risk assets are in a cyclical bull market, in your mind, what are risk assets and define a cycleable market. >> risk markets are small cap stocks, commodities. >> large cap stocks? >> those tend to be less risk oriented. also bonds, government bonds would be less risk oriented. >> high yield bonds a risks aet? >> high yield and high grade corporates. high yield high grade municipal bonds and assets and real estate investment trusts. what is a secular -- >> cyclical. >> a secular bear market we think we're in, 18 years of sideways or questionable. we don't know that it's necessarily downward but it's cyclical bull market, we think we're in a very powerful two to three years. no one can call it with exactitude, two to three-year upward move in assets driven by economic stimulus, interest rates are low, inflation is low, investor vuchl is not overexuberant now. >> right. >> so people have moved a lot of their money into bond funds, not into stock funds and finally, is the economic growth, michelle, outside the united states, 6.5% morgan stanley's economies say versus 2% in the developed markets that's the u.s., japan, that's europe. >> but when you define, so we're in a cyclical bull market for risk assets that can last two years. we've had one year. you're suggesting we can get one more year out of this, even if it's sideways trading for another couple years long-term? >> all of your viewers need to know that we're moving from a recovery into an advance, and so this next year we think we will be in a very -- the big thing is when is the fed going to raise interest rates and that tends to start to move people from offensively-oriented sectors such as semiconductors, technology, hardware, such as materials, such as energy, into defensive sectors which is your food, beverage and tobacco, which is your pharmaceutical, which is your consumer staples. >> the biggest growth around the world is happening in the emerging markets. >> yes. >> are you recommending emerging markets? >> yes we like brazil, russia, india, china. >> that's the same stuff everybody's been talking about for ten years, it's a very crowded trade. >> well-said. it's very crowded. listen, american individual investors moved $15 billion into stock bonds and $400 billion into bond funds this year. >> right. >> but the emerging markets bond funds -- stock funds as you know, they received $65 billion or $70 billion, you had net selling in your developed markets, u.s.s and your europes. we like them, and we also like canada and australia, i mentioned it briefly because they are connected to the growth in emerging markets, where we see 6.5% blended together. chi china, 10%, michelle, and 9% next year. 10% in 2010, 9% in 2011. >> i just get worried when everybody tells me the same trade. talk to me about bonds. a lot of folks think next year is going to be the year for bonds, high yield, corporate, not necessarily treasuries. we got to divide. >> yes, yes. well, we think they can continue. we have gone from being once in a lifetime cheap when the spreads in march were so wide versus -- >> crazy. >> it was absolutely crazy. they've come down to once it a lifetime cheap to once in a decade cheap. we think they can compress further and they're a very good risk asset play and many people would like to make sure that getting that coupon, many of your viewers are interested in income, from their portfolio. that's also dividends, good high dividend-paying stocks as well as this high yield and high grade corporates. >> are we done with all of the worries that come out of washington, or are we just beginning? >> well, one of your great guests on this show, warren edward buffett, said that the bull market of 1982 to 2000 was driven by lower interest rates, lower taxes, lower inflation, and lower government intrusion and involvement. >> guess what? on all four of those we're going the other way. >> michelle, you heard it right, it's likely we're going the other way and that's a long-term impediment. that's why we don't believe we've started a secular 18-year bull market. we're half way through this, the consolidation purging and cleansing. >> david darst thank you for coming in. >> michelle means likened to god in hebrew and you are. thank you very much. >> i've never received such a fine compliment. thank you so much. there's nine minutes to go before the closing bell. dow jones industrial average down 6 points, nasdaq lower by 16. as we leave you look at red square, as they get ready to kick off the new year in moscow. look how beautiful. we'll see you on the other side of this break. 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(santa): aflac. we've got you under our wing. rudolph's better... but now blitzen's sick! this is a honda pilot, and this is the chevy traverse. it has more cargo space than pilot, and traverse beats honda on highway gas mileage too. more fuel efficient and 30% more room. maybe traverse can carry that stuff too. now get 0% apr for 72 months, or during the chevy red tag event, use $1,000 holiday cash to get $4,500 total cash back on select 09 traverse ltz vehicles in stock all right, with the new year just around the corner, one government agency is gearing up for what could be a very busy 2010. cnbc's hampton pierhearson look the sec for the new year. >> for the s.e.c. agenda gaining credibility as the investor cop on the beat after missing the better than ye madoff ponzi scheme. mary shapiro launched major initiatives translating them into rules with teeth will be the test in 2010. here's the list. it includes requiring credit rating agencies to file more conflict of interest reports and new well-proposed rules to stop rate shopping. a ban on flash orders in all markets, strong opposition from the options markets. there are three short sale proposals but the commission seems to be focused on a plan that would make it easier to monitor bid sequencing based on a national best bid model. shedding light on dark pools, private trading systems where participants make trades without the public seeing the quotes. money market reform, setting a standard for what percentage of portfolios should be in liquid assets as well as monthly s.e.c. reports. work will also continue on international accounting standards with a focus on convergence to 2014. market experts will watch how the s.e.c. uses new authority to regulate the multi-trillion-dollar derivatives market, a centerpiece of financial reform now working its way through congress. >> now it appears that the s.e.c. is going to be given a fair amount of additional authority. the problem is how the s.e.c. is going to mete those responsibilities and unless it comes up with creative solutions, the old ways in which it approached many of these problems are not going to be successful. >> also, both the house and senate bill envision the s.e.c. sharing oversight of derivatives trading platforms with the cftc. happy new year, michelle. >> thank you. >> sorry about that, simon. >> hampton pearson in washington. happy new year. >> you too. >> the closing bell of 2009. stay with us on cnbc. 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[ bell ringing ]. >> 4:00 p.m. on wall street. you know where your money is? welcome to "closing bell" on this last trading day of the day. i'm michelle crew sew-cabrex caruso-cabrera. in moscow it's 2010 and they started to send off the fireworks, we are waiting. happy new year in russian, however you say that. meantime how we finished the day on wall street on this final trading day of 2009, a round of selling right at the close. we were down 40, 50 points most of the session and bang, down 123 points literally in the last five minutes. 10,424. the s&p 500 lower by more than 1% to 1114. the nasdaq down 22 points, 2269. let's get more on the final market action of the year, mary thompson has her eye on the floor. as soon as she finishes that she's going downstairs for a pierre royale. >> i could have brought one but i resisted. there was a late round of selling on wall street. the dollar strengthened a little bit and investors appeared to be abandoning some riskier trades coming into the close. the dow closing very close to its lows of the session as the dollar strengthened at the end. keep in mind low volume session, 609 million shares changing hands but basically the markets closing out what's been a very strong year, in fact its best since 2003, with a loss today. we did get good news on jobless claims, first time unemployment claims coming in at their best levels since july of 2008, continuing claims falling to their best levels since february of last year. it wasn't enough, though, to help the markets in large part because we had revised data on the chicago pmi that put pressure on the market we remained on the markets until we saw the late-day sell-o