Dineequity, the Parent Company of ihop, having a nice run over the last year, up 42 . Imagine how many pancakes are fueling that raly. Yes. Everybody leave a little bit of money there. I think thats a good cause. Yeah. The market is powering higher. The Dow Jones Industrial average continues to move up, maybe 14,000 coming again soon, and by the way, need to note, something bill gunderson said has a lot in common with mandy. Both apple under him and apparently your College Transcript show the rare fplus. Shhhh. Just between us. Thanks for watching street signs, everybody. Closing bell is next. Hi, everybody. We enter the final stretch. Welcome to the closing bell. Im Maria Bartiromo at the new york stock exchange. Stocks doing another aboutface, and we are at 14 hub. I just said on twittery little while ago. Yes, im tweeting again, oh, dear god. Monday is officially forgotten now with todays rally. Right, right. For those of you who thought a selloff was the start of a much talked about pullback, not so fast. Big gains out of the gate. The dow once again flirting with a close of 14,000. Were above it right now. Well see whats behind the volatility and if the next leg will be higher or lower. Also on todays program, is this historic rally being fueled by smart money or as some of saying the dumb money . Thats pushing the stocks higher. Well discuss and who in fact is buying the smart money. I like calling it smart money but got come up with something else, not dumb money. Crucial earnings after the bell. Those results could help tomorrows direction. We have that man right there, disney ceo bob iger joining us moments after the report is released. And the president is pushing congress to come up with new tax revenues and shortterm spending cuts to avoid the massive cuts that will otherwise kick in automatically on march 1. How ways and means chairman david camp is here to respond. Looking forward to his comments. Has a lot to say. Heres where we stand right now. The dow, a mirror image of yesterday. A selloff in the open yesterday in the morning and then it went sideways, and today weve done that the opposite. A rally on the open this morning, now up 123 points and just off the highs at 14,004. 08. This would be the third could be sective 100point move for the dow, and the were only three days into the month of february. The nasdaq is up 45 points wiping out yesterdays losses. Now at 3176. That is the high of the session right there, and the s p 500 index is showing a gain of about 17, now 18. 25 points, just off its high at 1315. In todays closing bell exchange, were joined by todd schoenberger, marky willman from Jmp Securities and linds freftn financial and our own rick santelli. Todd, youve got to be loving this real right now. Im loving it right now, bill, and i dont see this thing stopping any time soon. It seems to me equities are the only place to be. Yields are low. They are going to remain low, and its clear that the headline risk isnt there, a la the fiscal cliff mess. Right now equities are there, and its going to continue, at least at least through this earnings period, if not longer. So what turns it around, mark lehman . What do you think . Are there things that youre watching for the potential for a reversal and red flags there . I think the red flags would come from a sentiment that drastically shifted meaning that washington was not cooperating, that republicans and democrats were not getting along, and given what the president said today, given how investors shrugged off yesterday, i just dont see it. I met with a lot of investors over the last couple of weeks. Cash flows are coming in to equity mutual funds. Thats a change from the last few years. You talk about the unenlightened money. The unenlightened money is the one no in the market and people are playing catchup, and you see that today. Lindsey, you feel this market is being very picky, only focusing on the good Economic Data and they are ignoring the bad. Thats right. The market is very at odds with what were seeing in the economy, cherry picking the data to really support anything behind this, the recovery is here mentality. Case in point is the markets reaction to a better than expected headlines report in durable goods and shrugging off negative Fourth Quarter gdp. The market is anticipatining ma of the oneoff factors that retarded growth, hurricane sandy, impasse in washington, wont have an impact in the economy beyond the First Quarter, let alone the first half. So do fundamentals matter then, lindsey . I think right now were very much at woods what were seeing with the oneoff factors. Remember, recovery is never easy and never a Straight Line and all the data wont point in one direction so all the while the market is focusing on the underlining trend that we see in consumption which is very confusing and at odds with what were seeing in terms of income and job growth. Right now the consumer feeling wealthier because of declines in prices at the pump and a recovery in the Housing Market. Rick santelli, how much of todays rally in u. S. Equities is because of a rally in the euro, a strong european rally after strong data this morning . When i came in lately, if the nikkei is down, this means european bur european bourses are up. I see the improvement. Right around 135. 80 and many thought wed slip under 135. The euro correction, i cant tell whether its over, but many traders dont think well see 137. 5 in a while. Treasuries once again, slightly above 2 , been there, done that, but its still important because we havent seen a huge rally pushing yields down for 2013. Nothing big with big depth. And lumber, lumber today, as you see an intraday chart, was up, i think its 2. 4 which ends up being 10, maximum allowed. Heres whats fascinating. Open that chart up yeartodate, havent taken out some recent highs, but if you pull back to a chart going to 05, could you clearly see were getting to a zone we havent seen since april of 05, and its a testament that we have moved past the inflexion point. Were not robbing gdp in housing and slowly adding to it. The big question is how much. Lindsey, that is a fundamental right there. That points to strength in the Housing Market down the road if they are buying up lumber right now. Construction cant be far behind. Sure. Is that something you can ignore at this point . No, certainly not, and we are taking steps in the right direction to getting a more stable Housing Market. Remember, were coming off of a very low level, so its going to take years before were back to a more sustainable, more robust Housing Market, so while we are taking steps in the right direction, its not going to be a shortterm fix, and a lot of that construction is going along the east coast as we see rebuilding after hurricane sandy. Whats and that hasnt even shown in the real estate stocks either, guys. If you look at the dow jones real estate index. Its flat today and hasnt performed well at all so you would expect that housinging is just not there right now. Whats most vulnerable to you right here, todd . What looks like its not participating in the rally, and, in fact, wants to go down despite the broader momentum on the upside . Well, real estate is the wild card. So is gold right now. I mean, i dont see it. Look at the dow jones Precious Metals index. Its up what, maybe 25 basis points today. Been relatively flat so not participating in the rally. Look at the largecap stocks and smallcap stocks. Any asset class that you really want and you can also look at things like, we talk about consumer discretionary. Look at the travel and leizure index. Carnival cruise lines a big winner right now because people are taking vacationsing probably because its so cold as well. Mark lehman, watching to see if we can close above 14,000 on the dow here. You feel thats going to be a psychological barrier for the market, yes . Its been talked about Great Lengths in the media and having that tough day yesterday and how quickly we bounced back. You mentioned gold earlier. Its a fascinating trade because gold is the fear trade. You look at what california, my great state did, over the last year closing their budget deficit overnight really with tax big tax rise that Governor Brown got through. Gold is the fear trade and look how quickly that has abated here in california. That potentially is a mantra for the country, and if people think the fear trade is gone. Where are they going to go, equities and 14,000 may just be the beginning. Thats what i see. Thats right. The gold rush is over in california, again. Thanks, everybody. Well see you soon. Appreciate your time. We are watching dow 14,000 going into the close tonight. Josh lipton is right now looking at the stocks leading the comeback. Over to you, josh. Maria, big gains today following yesterdays selloff and lots of new highs starting with the dow transports, hitting a new alltime high yeartodate. The transports have outpaced the dow industrials by over 4 . All driving the rally, Information Technology stocks, computer sciences. The biggest gainer in the sector and on the s p 500 today, up around 10 , a turnaround story, the i. T. Company posting a Third Quarter profit on improving revenues and asset sales. Video gamemaker Electronic Arts also in the green today after launching the latest version of its popular game dead space. The video game franchise now has 1. 4 million fans on facebook. The stock today up nearly 6 . Estee lauder, the skin care company, posted better than expected earnings and reaffirmed its full year outlook for sales growth helped by strength in the u. S. And china. The ceo saying the affluent customer is spending freely. The stock today posting an alltime high, up about 6 . Also posting alltime high today, consumer stocks like procter gamble, Kimberly Clark and johnson johnson. Well end here with kelloggs. Reporting better than expected earnings and raising its fullyear forecast. The stock right now, up only about 1 but also an alltime high going back to 1968. Maria, back to you. All right, josh, thanks so much. Weve got the financials, the consumer stocks and energy stocks, pharma, food, a healthy rally but can it last going into the final hour in the dow right at 14,000, up 123 points. Well, last month Retail Investors put a record 39. 3 billion into mutual funds and etfs. Heres the bad news. The previous record inflows came at the height of the technology bubble. What does that mean in terms of heading for the exits . Is it different this time . Were going to check out the retail behavior. Also. Washington already has enough trouble getting things down these days. Now the s. E. C. Is literally being handcuffed, really, by what it can and cannot do because of conflicts of interest. Im picturing the entire s. E. C. , why thats undermining enforcement and maybe going to cost you some money next. Well look at that very important. And will dow component dissly fuel the legs of this rally . That news after the bell and ceo bob iger is here live and breaking down the numbers live in a first on cnbc interview. Thats today live at 4 20 p. M. Eastern. But we can still help you see your big picture. With the fidelity guided portfolio summary, you choose which accounts to track and use fidelitys analytics to spot trends, gain insights, and figure out what you want to do next. All in one place. Im Meredith Stoddard and i helped create the fidelity guided portfolio summary. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Conflicts of interest are already handcuffing s. E. C. Commissioners from ruling on many cases, and president obamas nominee to run that agency now, Mary Jo White, could make it even harder for things to get done if shes approved by the senate. Eamon javers is in washington to explain. Eamon . Reporter hi, bill, the wall street journal reported today that a raft of conflict of interests at the s. E. C. Could make it difficult for the wall street watchdog to weigh in on highprofile matters, issues that some the s. E. C. Have worked on for past employers. For example, the journal said president obamas s. E. C. Chair nominee Mary Jo White would not be able to vote on any case involving jpmorgan for two years after taking the job because jpmorgan was a client at a previous law firm. And Daniel Gallagher would have a conflict of interest on jpmorgan cases, too. He came from a law firm that helped jpmorgan investigate the london whale trading fiasco. Such vacancies could give the s. E. C. Bare number of minimum commissioners to field a quorum on certain cases which could potentially weaken the commission. S. E. C. Declined to comment to the newspaper on behalf of white who is not yet a commission official. Back to you. Thanks so much, eamon. Reaction now with attorney andrew consultman who says this is a major problem, while a former s. E. C. Official says the benefits of having the right people far outweigh the cost of some conflicts of interest. Both join us right now for a discussion. Good to have you on the program. Robert, i think you make a good point. You want people with the experience and sort of knowhow in some of these complicated cases to be working there, but how do you offset the potential for conflict of interest . Well, thats right. Here we have a clear case where there may be conflicts, but the s. E. C. Has strong rules in place that prohibit voting on conflicts where the person directly worked on a case, but i think whats getting lost in this debate is that the s. E. C. Is a Bigger Program than just enforcement. They regulate the securities markets. They regulate public companies, etfs, all sorts of market products, so to have some conflicts i think is going to be expected, but in order to have people that are familiar with the broader issues that the s. E. C. Addresses, we really need to have that sort of experienced voice at the s. E. C. While still dealing appropriately with conflicts. Andrew, you disagree . Why . I do, because i think when you have people with conflicts like Mary Jo White is going to have, i think what youve done is in effect guaranteed institutional paralysis and institutional gridlock. You know, you look at somebody like Mary Jo White and a crucial enforcement action may be taken against jpmorgan for the london whale debacle, and if you cant have the s. E. C. Chairman weighing in and deciding whether that should or shouldnt take place, i think thats a big, big problem. What about that, robert . Well, the s. E. C. Enforcement program is much bigger than just the chairwoman or any commissioner. Theres a staff of people at the s. E. C. That work on these cases and that develop them over months and months, so whether or not the chairwoman is conflicted in one particular case is really not going to be a determinative issue. Theres really been noest that any enforcement activity has been slowed down as a result of conflicts they may have had with past employers and the staff and senior people are really capable of moving the cases forward with or without the votes of any one commissioner. Bill, i just i think the problem with that is in effect we are approving an s. E. C. Chairman or in this case chairwoman because we want her to partially make decisions on what goes forward. I understand leaving decisions with the staff, but ultimately it comes down on the shoulders of the commissioners, and if they are too conflicted with too many cases, thats a big, big problem. You know, andrew, really cant have it both ways, right . One of the big issues that we saw when the financial collapse occurred was the fact that nobody knew anything about some of these complex derivative instruments because they didnt have the experience, they didnt have the knowhow so you cant have a commission their actually has the experience and then say, well, thats too much experience and its a conflict of interest. How do you fix the interest . Clearly you do need people with experience, but i think the big problem is what weve seen now is weve seen commissioners who are former s. E. C. Defense lawyers, and thats where the problem starts. You know, if you have someone like Mary Jo White or harvey pitt who used to defend Merrill Lynch and youre not expecting them to make decisions that impact their exclient, clearly they cant do that. You can strike a balance and have somebody with experience. For example, a they should be able to do it, shouldnt they . They are fighting for the law so they should be able to do it and should be able to recognize right from wrong. Just because they defended a firm on wall street doesnt mean that they are lying . No, maria, but very clearly if your exclient has paid you hundreds of thousands of dollars to defend it in the past, i think its going to be really problematic for that person to be objective on the decision. Thats a good point. Certainly we dont question the integrity of a Mary Jo White. No way. But you have to say that the optics are not great if you have a person who is chairing the agency who has those kinds of conflicts, especially as andrew points out if it comes to a very highprofile case that the s. E. C. Is trying to enforce on. Well, i think the problem with the analysis is really just focusing on one small aspect of Mary Jo White eats career. Remember, before she was a defense lawyer at a wall street law fir, she had a very distinguished career as a federal prosecutor right here in new york city where she took on some major cases against wall street interests. Thats right. So i think president obamas pick of Mary Jo White really was based on her proven track record as a senior federal prosecutor and her ability to get tough settlements from wall street and weighing that against her potential conflicts from representing certain wall street firms. I think its a small price to pay, and the s. E. C. Does have policies and procedures in place to deal with conflicts, but it shouldnt disqualify a person of Mary Jo Whites caliber from serving as a chairwoman. Thats a great point. Andrew . Ihinkou hit the nail on the head. It is sort of an optics issue, and the s. E. C. Is trying to get a new reputation, after missing Bernie Madoff and allen stanford, they are trying to create a new s. E. C. , and when you have the chairperson not being able to take part in crucial, crucial enforcement actions, as a minimum the optics are horrific. Well, we will see what happens. Thank you, gentleman, for your thoughts on this. Thank you, bill. Thanks so much, guys. 20 minutes before the closing bell sounds for the day. Market up in the triple digits, up 130 point in the Dow Jones Industrial average, sitting comfortably back above 14,000. Highlighted lumber and home prices soared according to a new report in december, but many of the big Home Builders have been downgraded today ironically. Why the disconnect . Well talk about that next. Something more than a governments lawsuit against Standard Poors for blowing it on the Mortgage Market . Its just political payback for s ps action to downgrade u. S. Debt. Do clients believe that this was somehow politically motivated . Youll have to stick around to hear the answer to that question when we come back in a moment. Great, everybody made it. We all work remotely so this is a big deal, our first full Team Gathering i wanted to call on a few people. Ashley, ashley marshall. Here. Since were often all on the move, ashley suggested we use fedex office to hold packages for us. Great job. [ applause ] thank you. And on a protocol note, id like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh im sorry guys. Ah sometimes the caps lock gets stuck on my keyboard. Hey do you wanna get a drink later . [ male announcer ] hold packages at any fedex office location. announcer scottrade knows our and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Voted best Investment Services company. Otherworldly things. But there are some things ive never seen before. This ge jet engine can understand 5,000 data samples per second. Which is good for business. Because planes use less fuel, spend less time on the ground and more time in the air. Suddenly, faraway places dont seem so. Far away. Welcome back. Breaking news right now. Lets get to the david fab we are that. Thanks, maria. Tracking a potential deal in the media sector, not in this country, but an important one in europe, and can i tell you now that the boards of both Liberty Global, of course, the European Cable Company controlled by john malone, and the board as well of virgin media, a broadband company, the second largest provider of those types of services in the uk, have agreed to a deal under which Liberty Global will acquire virgin media. Now, its a cashandstock deal, but at this point i cannot tell you precisely what the ratio is on the stock portion. Therefore, i cannot tell you precisely the stock price other than to say it is below 50 a share. Virgin media stock has been trading right around the 45 level much of today, up about 17 or 18 after we learned of the talks taking place between the two companies when we in fact confirmed. As i reported earlier, these talks have been on again and off again and have heated up reesantly and now we have a deal with both boards having approved that deal just moments ago, my sourced tell me. But, again, more details on price as we get them and when we get them. Maria, back to you. All right, david. Thanks so much. In the meantime, the s p home builder index is up about 40 in just the last year, and that runup has prompted at least one wall street firm to downgrade several of the Home Building stocks. Diana olick has details in todays reality check. Diana in. Thats right, bill. Barclays is calling the Home Builders, quote, stretched and downgrading several of them as we begin to see some profittaking. First, they are downgrading their own view from positive to neutral as they say housing suppliers and remodlers will do well, but stock valuations of the Home Builders went too far, too fast. After falling dramatically from a peak in 2005 the stocks of the Home Builders saw liftoff well before the Housing Market had really hit bottom, spiking in the second half of 2011. Were still around 35 below the peak right now though. The stock is up 240 from their trough in march of 2009. Some are calling it a momentum play, but a lot of growth is baked into the Home Builders for 2013 with Housing Starts and sales up 20 is the prediction. Now, barclays concerns are that the possibility of new home prices coming down as a gradual improvement in Credit Availability brings more entry level buyers into the market. They would be looking for lower prices. They say the current price gap between new homes and existing homes, is quote, unsustainable as it corrects new home prices which could start coming down, even as prices in the broader existing home market are surging. Back to you guys. Thanks so much. Does all of this mean the ride is over for the Home Builders . Take a look at that in talking numbers. On the technical side of the story ennis tanner and on the fundamentals jeff kilberg with Kkm Financial and a cnbc contributor. Jeff, lets kick it off with you. Lets do the fundamentals. Want to buy the Home Builders here on basic fundamentals . Maria, not right here, but i do like the fundamentals here, seeing a sensational move in the last year. No doubt its a little frothy. Three reasons i want to buy on a pullback here. First and foremost, seeing a lot of institutional money coming into the situation, jpmorgan, blackstone, coming in and buying inventory. Secondly, waiting to see the banks on the Net Interest Margin and once they get the nim in place, they will incentivize the loan. We want to be buyers 2002 in 2013 well see continued growth in the Home Building space. What do you say about the charts, how does the Home Building inteams, the eft, how does that look to you in terms of the technical aspect . Looks very extended and refreshing to see barclays come out and actually sell when the stock prices are high. If you look at the 18month chart from the october 2011 low, you can see the stocks have been the efts have been in a strong uptrend. More than doubled since then, been in a tight trend channel and i think youre going to see selling pressure ensue. The level i think is where support lies where id be more of a buyer here, but i think you pear back your gains. Sounds like both of you believe the fundamental story but think its extended. The valuations bother you. They are certainly very stretched. Go air head. If you look at the Home Builders specifically, Home Builders valuation relative to 2002 and 2006, let me put my fundamental cap on here for a second, much higher now than they were back then, even at a similar earnings price level. Against that i think you look at auto names like ford that rin directly exposed in the Housing Market but not nearly as expensive. I think one other thing, inventory, maria. Seeing that getting gobbled you. That will play into the hands of the new Home Builders. One now, one thing ive lived by life by is top to be the hammer, not the nail and if youre been short this stock, youve literally been crushed in the floor and its proper and prudent to wait for the pullback. Ennis says 26. I say 24. Well be watching. Thanks, guys. Interesting that you fundamentally and technically agree that this group is overbought and needs to come in. Would rather be the screw driver, its less of a pounding thing going on, you know what i mean . Home builders. He said hed want to be the hammer or nail. Work with me here. Holding above 14,000 on the dow. Here weve got 30 minutes left in the trading session. Apples latest ipad hitting store shelves and lock at the lines. Check out these shots. Yeah, exactly. Where are the line . As we widen out the shot. Last time apple had a new product and no one lined up. Why that has them very worried this stock may not recover so soon. Back in a minute. And president obama proposing to delay massive acro acrosstheboard spending cuts, but did he offer any specifics . Reaction come up later on the closing bell. Tdd 18003452550 when im trading, im totally focused. Tdd 18003452550 tdd 18003452550 and the streetsmart edge Trading Platform from charles schwab. Tdd 18003452550 gives me tools that help me find opportunities more easily. Tdd 18003452550 i can even access it from the cloud and trade on any computer. Tdd 18003452550 and with schwab mobile, tdd 18003452550 i can focus on trading anyplace, anytime. Tdd 18003452550 until i choose to focus on something else. Tdd 18003452550 all this with no trade minimums. Tdd 18003452550 and only 8. 95 a trade. Tdd 18003452550 open an account with a 50,000 deposit, tdd 18003452550 and get 6 months commissionfree trades. Tdd 18003452550 call 18662945412. Lets see. Tech stocks led the market lower yesterday, and they are leading the comeback today. Se seema mody is on the nasdaq roller coaster for us today. Seema . Reporter broadbased rally in tech for today, but lets put this all into perspective. Tech as a sector is still the worst performing sector this year, and whats even more interesting is that earnings this quarter have been relatively strong. 81 of the tech stocks that reported earnings have beat street estimates while the entire s p 500 has a 68 beat rate thus far. Its not earnings, what is it . Isa capital says theres a perception that tech is deflationary and has matured as an industry. Michael pento of portfolio strategies says its the negative sentiment driven by apple, apple and its sharp fall has been casting a dark shadow over tech making investors more hesitant to invest in this shape. Seeing shares slightly higher, thats apple but keep in mind shares of apple roughly down still 14 this year. Maria. Thanks so much, seema. Were sitting right at 14,000, threatening to go up below it. Were at 14,001 so it can go any way here. Sweaty palms. Sweaty palms. Its what i hear on friday. Right down to the wire on friday. Even at 4 00, it just was settling out. Yeah. Meanwhile, apple out with the latest version of the ipad today with all the same features as the last version, except at 128 gigabytes this one has double the storage capacity. However, unlike other ipads this, fourth generation is not getting much buzz. On the left side of the screen there, this is what the lines looks like in 2010 when the first ipad came out and on the right side, same apple store today. So is this a sign that the stock wont be coming back any time soon. The lines lesser. Nicholas carlson and Colleen Taylor says dont judge a stock by the lines outside the store. Thanks for joining us. Colleen, youre excited about the new ipad even though its pricey and getting its not getting as much buzz. Why so optimist snick. You know, maria, the real thing with this new ipad, the storage is the game changer because it makes it finally an enterprise device. You know when businesses order i. T. Equipment for their companies and for their sales people, they dont like up at the apple store, they order them. They order them from the company in the quantities of dozens of hundreds and potentially thousands. This is an enterprise device. What you can do with 128 gigabytes of memory and storage is you can do cad files and dr. Dow blueprints and xrays and do pilot flight plans. Can you do sales presentations with hd video thats going to look beautiful on this retina screen. Thats what apple is really banking on here with this device. They want to sell to businesses. I mean, nicholas, you say its a nice product, but its not going to make that much difference to apple. Why not, and where are the lines this time around . Are the introductions too close together today . Apple is a Healthy Company that employees like to work for and consumers like it and everything like this. A new ipad, a small upgrade really, over an existing product. This ipad isnt going to be the thing that restores margin growth and really gets profits accelerating again, not just growing but accelerating. Its going to take something else. Going to take a big new product, and, you know, if you look at apple, their Current Management Team hasnt been one thats been responsible for a big new Product Launch yet. Havent seen one out of the tim cook regime, and so its hard to say that this new, you know this magical upgrade is really going to fix things for apple. I certainly dont think its going to. Should we be having such frequent updates . You know, people just bought it, the last one, and now theres a new upgrade and the same with the phones. Is this too much, too many products . This is a major update. It doesnt look different from the outside, but as we know with apple its not just a hardware story, its a Software Story and Digital Media story. Under 28 gigabytes of media storage, that allows you to play hd veds and download a lot more apps and thats great for the app store and itunes. This is also a huge signal to developers here in silicon valley, start making Enterprise Apps for the ipad and that could be a big gamechanger for the income statement for apple in terms of the money that they make. Remember, Enterprise Apps colleen. Go ahead. Heres the big challenges for apple. The pentagon chael challenge for a s l that its a really great wonderful product thats changed the world but ipad, it growth is not enough to make up for the slowing saturation of the Smartphone Market that that is happening because the iphone is being adopted and the rich people already have these things. You know, the ipad is a great product, but its been so great, it hasnt been able to sort of do what the iphone has done. The iphone is a once in a Lifetime Product that was wonderful for apples Profit Margins and were just not going to see the likes of it again any time soon. Not to pile on, colleen. You have to admit buzz is not there for apple and when you look at the stock price, its down sharply from those highs last september when ironically they had just introduced the new iphone, so, you know its a nice ipad, but wheres the buzz for apple these days, colleen . Listen, i agree, apple need to do a lot more to get this stock back, but the buzz isnt there because this is an enterprise story. This is a business story. Businesses, enterprises, people buying big quantities for their sales forces, they dont need a lot of flashy buzz. They need a good product that think people can use and 128 gigabyte storage i think is going to go a long ways towards doing that. All right. Thank you both for your thoughts today. Appreciate it very much on apple. 40 minutes im sorry, 20 minutes before the closing bell sounds. Weve dropped below 14,000 at this point, 13,999. Going back and forth. A real close gain with a gain on the session of 120 point. The bulls have fourth and goal and see if they can make it over. They were killing it, the ravens and then the power outage. Dont get me started. We dont want a power outage here. The department of justice is suing Standard Poors, as you know, for allegedly defrauding investors over its rating of mortgages before the crisis. Will the go after other agencies or just the one that downgraded the united states. And dow component disney reporting earnings. Well speak with ceo bob iger minutes after the release. Dont miss that. Pack in a moment. Protect your family. And launch your dreams. At legalzoom. Com we put the law on your side. Welcome back. Shares of Standard Poors parent mcgraw hill down sharply today after the Justice Department formally accused the Ratings Agency of defrauding investors. The stock also pounded yesterday as word came down this would be happening, and today we did get the official news. David faber spoke to s p lawyer exclusively, but we start with scott cohn with the details of the suit. Over to you, scott. Reporter this is a civil lawsuit, no one going to jail even though attorney general eric holder says it involves fraud at the very heart of the financial crisis. The feds want 5 billion from Standard Poors and its parent mcgraw hill because Authorities Say s p issued materially false ratings on the mortgagebacked securities that wall street sold around the world during the housing bubble. The complaint says the agency violated its own standards rating the Securities Investment grade so it could gain market share. The government says that is fraud under federal law that was passed over the savings and loan scandal in the 80s. S p analysts, like the wall street analysts of a decade ago, privately trashing deals that they were publicly claiming were solid. Two analysts instant messaging, by the way, that deal is ridiculous. I know. Model definitely does not capture half the risk. We shouldnt be rating. We rate every deal. That Exchange First made public in a congressional hearing back in 2008 and now it could be evidence in court. What does s p have to say about this and motivation behind this lawsuit . David faber has been talking about the s p attorney, a First Amendment laurene though that will not be s ps defense . No, scott, interestingly. Something weve talk about off camera. Floyd abrams known as a First Amendment attorney but hes been in fact representing s p for over five years. Lets not forget that the company has fended off any number of lawsuits in the past, in part using the First Amendment defense and he went on to say during our own interview they wont put that up as a defense and say can the government really prove that we knowingly, the analysts at s p, knew one thing and said another . Well, he believes thats obviously going to be very, very hard, in fact, to do that, if and when we ever get to a trial which would be years down the road. I did ask abrams as well whether he thinks this is at all in part motivated by the government seeking revenge for the s ps downgrade for u. S. Debt in the summer of 2011. Is it true that after the downgrade the intensity of this investigation significantly increased . Yeah, im sure the government would say it had nothing to do with it. We dont know why. But it did increase after the downgrade . As he was correctly assuming, eric holder, the attorney general, says it has nothing to do with that. Still, it does beg the larger question, if youre going after s p, why wouldnt you gone after moodys as well, the other large Ratings Agency that engaged in so many of these practices that were well aware of given all the emails unearthed and that which scott referred to. Heres what holder had to say on the overall question of whether this was political payback. They did what they did assessing what the credit worthiness was of this nation. We looked at the facts, the law and the investigation that these great prosecutors and civil lawyers put together and made a determination that the filing of these lawsuits is appropriated, but they are not in any way connected. The settlement talks as weve previously reported, the government saying we want at least ten plus, at least 1 billion. Mcgraw hill, the parent of s p, had come back perhaps with 100 million offer. They also want an admission of guilt. Hence, they have brought those charges, but its going to be quite some time until we see them, if we ever do in a court of law. David, whats the answer as to why moodys is not being investigated as well. I dont understand. Whats the answer to that . I dont have an answer for you. Holder and his associates were asked that question a number of times during the q a at the press conference. They said this is about s p any number of times, but knowing what i do from my own reporting, having also read so many of the investigations that have taken place, it is a fair question to ask, but i can tell you, according to my sources, there is not at this point an expectation on the part of moodys that its the subject of any potential lawsuit down the road even. Wow. Well see if that changes. Yeah. But certainly an interesting question. It is, especially since s p downgraded the u. S. Rating. Right. I understand even putting the two together because theres not any other investigations. The market has voted. Sent moodyown like they did s p anyways. They have indeed. Still an expectation that they could suffer or maybe the businesses of both companies will simply suffer as a result of this. Thanks, david. See you later, david. Thank you very much. Headed towards the close and still flirting with that dow 14,000 level, down to 13,994 right now. Up 114 points. A collective holding. Breath down on wall street here. Still this market getting closer and closer to record highs. Barclays larry canter says stocks are cheap even with the records. And a Retail Investor jumping back into the market and our jeff cox says thats exactly why smart investors should run for the exits. Back in a moment. How do traders using Technical Analysis streamline their process . At fidelity, we do it by merging two tools into one. Combining your customized charts with leadingedge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. We like this idea so much that weve applied for a patent. Im colin beck of fidelity investments. Our integrated Technical Analysis is one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. All right. Lets send it over to josh lipton for a quick market flash on a story david faber told us about earlier. Were watching virgin media rocketing higher, up some 18 . David faber report that had Liberty Global acquiring virgin media in a cash and stock deal. David reporting that the boards have approved that deal. Were still waiting for the pricing, and well get you that as soon as it crosses. Bill, back to you. Thanks, josh, very much. Dow jones industrial average now closing in on that 14,000 level once again at 13,990. Yeah. With three straight market days now of seesaw tripledigit moves by the dow, is roll tilt back . Will it continue . Joining us with their thoughts, sam stoval and larry canter from barclays. What about the volatility . One tripledigit move in the dow in january and three so far in february. I think were just getting back to normalnormal. In 2012 we had three days that the s p fell by more than 100 point and the average since 2,000 was 15 so we had onefifth the volatility last year as weve normally had. What do you think, larry . Obviously theres a lot of momentum in this market, even despite the decline we saw yesterday. Does this continue . Well, i do . I wouldnt be surprised to see a correction given how strong january was, but i think one of the things thats happening here is the kind of rerating of stocks versus bonds. Had two big negative tail risks hanging over the stocks. Dissolution of the euro. I think it was a bit of a risk premium in treasuries thats going away and people are starting to gravitate towards stocks which look a hell of a lot cheaper and more attractive than bonds do. We keep hearing that, and had todd shoenberger on a little whooil while ago and i respect his opinion and hes among those saying what else are you going to invest in . Is that a reason to buy stocks because theres nothing else to invest in . One, stocks by themselves arent a screaming buy but relative to yields you get on fixed income they look very cheap and remember growth has picked up and even in europe its looking better and i think thats helping, and the second thing is monetary support which is stepping up, the feds starting at the question 3 and we just saw what happened at the bank of japan where they will get a new governor in there who will step on the gas further. The low rate environment is a major driver. Absolutely. How do fundamentals look . Earnings much better than expected. 2. 5 Percentage Points before where the expectation was at the beginning of the period. Now s p capital ik consensus are at 6 . The only problem is it basically seems to have been borrowing from the First Quarter of 2003. Now were only looking at 1. 4 growth but had been expecting close to 4 growth. How about revenue. Pretty much steady at 3. 5 growth so better than the onehalf of 1 we got last quarter but still not seeing the driving ref now that i would like to see. I know were splitting hairs and i cant afford to do that anyway, but the dow is up 100 points so were at risk of not having the tripledigit move in the market. Psychologically would that matter at all, at least for the short term . I think revels are like rusty doors, takes a couple of attempts before they finally swing open, and this is just one of those attempts. Well said. Larry. Youre thinking five, ten years down the road. Youre thinking a psychological boost for an hour or so. Round numbers. See what happens. Well see you on the countdown coming up here. When we get to that countdown well wrap up the day. Minutes away from reporting their earnings, ceo bob iger standing by for an interview youll see only here on cnbc. Earnings estimates from chipotle and zynga. Still much more to come on cnbc. We are first in business worldwide. 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Fiveyear chart of the dow, were near those fiveyear highs, as we know, of the Dow Jones Industrial average and there it is, and at the same time the volatility indicators the fear index, is at that fiveyear low. Is that complacency . Well ask terry dolan about that in a movement meantime, have you some earnings coming up. Disney is coming up in a few minutes. As soon as disney reports earnings, well talk about the quarter. 76 cents a share is what people are expecting and 11 billion in revenue. Bob iger will join us at the top of the hour. Im just wondering, bill, if in fact 14,000 has become a bit of a barrier for this market at this point. Seems like every time we inch closer toward it were seeing a bit of a pullback. What do you think, larry . With technical levels, it takes a while and once you go through you go up a little more. As i was saying before, this has been a spectacular rise in january, and im waiting for at least some correction. Yesterday thought it was the start of it. Look the way we bounced back. I kind of agree with larry. Thought yesterday would be the start of a decent correction. If you take a look from 12,8 to 14,000, looking at a 1,200 point