Transcripts For CNBC Closing Bell 20130226

[ coyote howls ] how about no more surprises . Now you can get all the online Trading Tools you need without any surprise fees. Its not rocket science. Its just common sense. From td ameritrade. Very quick correction for you. Before the break i said that pandora was up 36 since its ipo in 2011. In actual fact it was down or is down 36 since the 2011 ipo. Meantime, sure. Their economies might be struggling, but there is one thing italians and the great shaw know how to do and thats eat. The mediterranean diet can help prevent Heart Disease, high in fish, veggies, fruits and oil. People who followed the diet were 30 likely to develop Heart Disease than those who consumed a traditional lowfat diet. Good news is what i say. Thanks for watching street signs. Closing bell is next. Ready . Welcome to the closing bell. Im sue herera in for Maria Bartiromo here at the knowledge. Were higher, but dont forget it was in the final hour yesterday where we had that really big violent move down to the downside. So great to work with you, scotty. Likewise, sue. Never know whats going to happen over the next hour. Im scott wapner in today for bill griffith. A rebound for the market, at least for now after yesterdays 200point loss. Investors like what they are hearing from ben bernanke today, that the easy money will keep coming from the fed. Indeed, but reaction to that and more is coming up from our special guest ray duffy. Hes executive chairman of the chicago mercantile exchange. Hes here exclusively. Hes going to be with us here for the whole 4 00 hour and has a lot to say about the stock market, the economy and a lot more. Well ask him about the reports hes in talks with germanys bourse. A warning about the sequester cuts kicking in and a warning that the banks could be hardest hit if congress doesnt make a deal. The author of that very report is here exclusively. Look forward to that. Lets get you up to date on the markets. With the Dow Jones Industrial average up 117 points on the trading session, the high of the day was a plus move of 127. Right now the nasdaq, the last trade on the techheavy index has been to the plus side as well on the nasdaq and the s p is in positive territory, as well. Theres the nasdaq up half 5 and the s p 500 is up half a percent as well, but it was about this time yesterday that it all went sideways and then down for stocks. Could we melt up in the same way we melted down yesterday . Yeah. We have the markets covered from all angles at this hour. Today closing bell exchange, carol roth, Anthony Valeri from Lpl Financial and steve grasso from Stuart Frankel and our very own Rick Santelli. Rick, ill go to you first. What a difference 24 hours makes, right . In the last hour yesterday that things went haywire and flipped around. What do you make of it all now . Well, one thing i dont make, i really dont understand how all the Market Participants can think that ben bernanke is reason for stocks being up today. If you show a Dow Jones Industrial average intraday chart, at the time he spoke is when the high of the day was set. The market proceeded to move lower. It wasnt until 2 30 eastern that it took out that high that was made at 10 00 eastern, 9 00 central, and as far as italy, you know. Another conventional wisdom i dont agree with. The conventional wisdom is even though there isnt a coalition government, nobody had big enough numbers, that nobody wants to drop out of euro. Berlusconis party indeed has issues there, so i think europe is a big deal and not only for the politics. The eurozone is slowing, and this certainly isnt going to help it. Carol, let me turn to you, if i could. Welcome, by the way, to the cnbc family. Thrilled that youre with us. Lets talk about the last hour of trading. I think rick said it best a few minutes ago. You dont really know whats moving the market in the last hour. I think you liken it to a basketball game these days. I do, sue, and thank you for the warm welcome. Im very excited to be part of the cnbc team and i feel like this is down to nba basketball. We might as well start the last hour of trading, and thats all we need. You look at a basketball game, 100 points. Thats what decides whats happening here. I think the Institutional Investors are coming in at the end of the day. They are setting the pace for whats going to go on and nobody wants to keep positions open overnight. I think though the one thing i will say with what Rick Santelli before. Forget about conventional wisdom, rick. There is no wisdom. Exactly. The markets and the economy are no longer related. Everyone is waiting for what ben says. Eventually these two have to come together, and thats the point im worried about. Steve, do you think if the market was looking for a soothing voice today from ben bernanke, didnt it get . It . I dont know if its looking for a soothing voice. What they are look for is any surprises, so to ricks point, as soon as hes done speaking, the market is allowed to rally. The market sells off in anticipation for what hes going to say, so its not you know, its about him dropping another word bomb on us, but we sort of know everything. Lets put it this way. He showed up with his butlers outfit on today and refilled the punch bowl. Certainly told us hes not going to take it away. To a certain extent, yes, and guys are still looking for return. The only place youre getting it is in the s p. Until you dont. There could be a day when you say that day 30, 40, 50 handles down, be a then then guys are going to continue to buy the dip until the momentum switches. Anthony, weigh n. Whats the point of the market and the volatility you see at the end of the day given the fact that scott so aptly pointed through the mr. Bernanke has basically signalled that hes going to be there. The training wheels are still on. What do you do in a market like this . I think in a market like this its very much a trading range. I think yesterday had a lot to do with sort of the late change in the italian Election Results so i think that was a unique situation. Youve got to be active in these markets. You have to buyons dips and take advantage of weakness and at the same time trim at the tops. We think were very much in a trading range. Theres a reason why the top is limited, sequestration, possibility of a Government Shutdown at the end of march, and as we found out yesterday europe is very much a risk. Were in the trading range. You need to be active in that environment. On the bernanke front, i did think it was interesting that he talked about remittances to the treasuries, in other words, paying back the proceeds from the bond holdings. He expected a lower amount. I read hed be willing to take some losses in order to keep his foot on the gas pedal. A very dovish remark. Look, if nothing else, it shows the fragility of the move that weve seen. Easily blown over, you know, by confusion out of italy or a misread perhaps on what the fed is trying to say or actually does say. Is there any truth to that . Well, i think we do have a fragile market. Italian tenyear yield up 50 basis points in a matter of two days so the uncertainty is going to be a factor of keeping the bond market well supported here over the near term and markets volatile in the equity market. Carol, if im the individual investor that has, you know, anthonys point about a Trading Market and a trading range, i absolutely get, but if im signature at home and have a longerterm time horizon, how do you adjust to a market that has volatility like this in the hour of tradeing . What would you recommend . I think it depends on where the portfolio is right now. If youre not invested, i would stay on the sidelines until we have a bit of a pullback. If you are invested dont panic because youre a longterm investor anyway. The one thing im looking at for my portfolio is considering alternative investments as well, and that depends on how many liquidity needs you have so if you do maybe need not as much liquidity in your portfolio, im looking at alternatives to throw into the mix that have a longer time horizon because im concerned long term, how much im going to get out of equity side of my portfolio. Rick, are we going to get back to the point where were watching euro dollar every day again . Well, i think we are. I think for the next couple of months especially, the Euro Currency going to be very volatile, and in the end when they pick their bank governor, maybe well get back to the trade where everything is trading on the yen, but for now the yen have have a couple of nice up days against most major currencies. Rick, and everyone else, thanks so much fork on the panel. Carol, again, welcome to you. Good to have you as a cnbc contributor. Thank you. All right. Is this a buy on the dip market playing itself out . They said in unison. Bob pisani is here to break it down. Box take it away, please. Take a look at the s p 500. I agree with rick, by the way. Mr. Bernie said pretty much what traders were expecting them to say and i dont think they were a factor. We declined going into the european close, and to that extent settling out of europe was certainly a factor, and we rallied once the european markets closed. Risk on is what i would call it and you can see it in sectors, see it in the industrials and the materials and take a look at the technology stocks, Consumer Discretionary and a look at some of the sectors that are on today, and can you see all the ones in a are off. Notice the industrials just positive now at 0. 56 . Take a look at dow movers. The dow has been outperforming other major indices. Home depot had a threepoint movement thats about 25 point in the dow to the upside. Finally, all of the Home Builders and the Building Material companies today on the terrific housing start numbers, new home sale numbers as well as the case shiller Housing Price indexes. Look at whirlpool, up 2. 5 . Usg and mascor, all up 4 . Back to you. Apple shares spike ahead of tomorrows Share Holding meeting. Josh lipton with the details back at hq. Josh . Reporter apple reversing earlier losses, now in the green. An impressive intraday spike ahead of its Shareholder Meeting tomorrow. A lot of speculation about how or if apple will return some of its 137 billion cash hoard to investors. Still worth noting, today marks the 9 5th consecutive trading sessi session. Gold has had a stellar day, best day of the year so far. Sharon epperson is at the nymex for us. Gold jumped 28 today to close above 1,650 an ounce and gold prices and gold traders certainly reacted to fed chairman Ben Bernankes testimony. The fact that hes looking at the positive outcome of accommodative policy far outweighing the risk and thats part of the reason why traders say were looking at this rally in gold. Also keep in mind theres a lot of shorts in the gold market so were seeing short kofrlg. Noencht is cold on the fact that gold is set to continue to climb. Goldman sachs cut 2013 price forecast for gold from 1,800 an ounce to 1,600 an ounce saying were going to start to see a climb in real Interest Rates, and lock at the big drop gold has already had in the last month. Back to you. Okay, sharon. Thanks so much. 50 minutes to go before the closing bell rings on wall street. The dow is holding on to a tripledigit cane. 105 points. S p and nasdaq well into positive territory. Well talk more about the fed chairman ben bernanke who took some shots on capitol hill today. Weve now understood this problem for nearly five years, so when are we going to get rid of too big to fail . He held his own. Highlights of this explosive testimony and what it could mean moving forward for your bottom line coming up next. Heard about massive Government Spending cuts and the devastation to the defense industry. Now a wall street analyst tells us about another big victim of the sequester, banks. And are there merger talks with Deutsche Boerse . Find out when we speak with terry duffy who joins us later on the closing bell. Back in a minute. [ male announcer ] this is not my home. There. I said it. They dont have pictures of my kids. They dont have my yoga mat. And still, i feel at home. Could it be the flat screen tv . The not so mini fridge . The different free dinner almost every weeknight . Or maybe, its all of the above. And all the rest. Am i home . Nope. But it almost feels that way. Homewood suites by hilton. Be at home. Homewood suites by hilton. music throughout why turbo . Trust us. Its just better to be in front. The sonata turbo. From hyundai. Fed chairman ben bernanke strongly defensing the federal banks stimulus measures during testimony today on capitol hill. Steve liesman has all of the details. Steve . Scott, thank you. For several days the market puzzled over the outlook of quantitative easing as others raised doubt about the outlook. Today fed chairman ben bernanke had a chance to set the record straight and seemed to persuade some in the market that the fed is still committed to the qe game. His comments seemed aimed at least as much at his colleagues on the fomc as the senator on the hill. As a long period of low rates could encourage excessive risktaking an continue close attention to developments is certainly warranted. To this point we do not see potential cost to the increased risktaking in some Financial Markets is outweighing the benefits of promoting a Stronger Economic recovery and more rapid job creation. Economists at ihs said it stopped short of being a vociferous defense declared after the testimony. In the end it was enough for us to stick to the understanding that asset purchase will continue into 2014. The proposed review of asset purchase scheduled for the march meeting will likely be a nonevent. Bernanke on the hill defensed qe. As we said, he urged no sequestration and said that they should really push that into the future, and he responded to senator corker who made comments about whether or not the fed was overly helping banks saying quote, none of what you said is true and saying to him were not engaged in a currency war and rejected senator warrens recommendation on a attacks on banks that are deemed too big to field and envisioned a fed Monetary Policy where the fed doesnt sell any assets at all and lets the Balance Sheet wind down. Stay with us right now and well bring in Rick Santelli, right, scott . Obviously the market liked what it heard today. I mean, you can debate as to how much bernanke has to do with the rally today, but certainly if there were those who worried that the fed was going to leave sooner than we wanted, he definitely was more in bulla camp, in the dove camp of saying were not going anywhere and theres substantial improvement in the labor market and we all have to believe that thats not going to happen for any time in the very into future. I agree with your last statement. The labor market probably isnt going to improve dramatically which really i think is a snafu in bens argument. Take it a step farther. The market wasnt looking to hear anything different. The minutes, as many on this floor have said, ignore the minutes, that theres a handful of people that control the power, and nobody sees the fed. What percentage is in it from bens Vantage Point to stop any of the programs . Anything that goes wrong, he gets blamed. Continue down the road he doesnt. He didnt help stocks, he just didnt hurt stocks. Apple, what they are going to do tomorrow is helping stocks. The market is not ignoring the minutes, thats the point, right . That the markets gets spooked when it thinks that theres enough talk within the fed to perhaps end the stimulus earlier than most people would think is necessary given the state of the economy right now. He certainly didnt say anything to that today which leads you to believe that his way of thinking, the bullard or dovish way of thinking, is going to prevail at the end of the day and the market is holding on to tripledigit gains. Of course it is, and when you build an equity market on these programs were discussing, how could it surprise you that when the punch bowl starts to wiggle a little bit the stock market is going to wiggle a little bit. Makes perfect sense. Right. Steve, let me turn you to the issue of sequestration. Hold on. Im trying to get that image in my head of a stock market wiggling on a wiggling punch bowl. I like it, rick, i like it. On the issue of sequestration. Mr. Bernanke, first of all, held his own on capitol hill as he always does, but some of those barbs from mr. Coaching and others. On the issue of sequestration when he basically urged no sequestration take place, how much sway does he hold right now on the hill on that particular issue . Its a really good question, sue, and its hard for me to answer that question. What i thought was interesting about what he said is while washington is having one debate over how the sequestration happens, you know, bernanke as well as a lot of other economists are saying it doesnt matter to us if you do it this way or that way, thats not our overall concern when it comes to growth. We care about you reducing spending right now. He agrees with the concept that the budget needs to be cut over time and is disagreeing with the spending and points out that Monetary Policy and fiscal policy is going crosspurposes. His comments, sue, is washington is having the wrong argument. Not about what should be cut about when it should be cut. Steve we werent always talking about quantitative easing during the discussion today and the q a session. I think that the new senator from massachusetts, Elizabeth Warren, certainly gave you a good idea on what shes going to be focused on during her time. Going to be focusing on taxing, taxing large institutions. I dont disagree with her that the institutions arent too big. Lets listen to the sound bite, rick, and then lets react afterwards. Ive listened to it. I would make another prediction and predictions is always dangerous, that the benefits of being large are going to be are going to decline over time which means some banks are going to voluntarily begin to reduce their size because they are not getting the benefit that they used to get. I read your predictions on this in your earlier testimony, but so far it looks like they are getting 83 billion for getting big. Thats one study, senator. You dont know whether thats an accurate senator. Rick, you were saying. I agree with her. They are getting bigger and i actually agree with that study. I think its a pretty good study. I think the issue is that Elizabeth Warren is somehow involved in the process from the consumer side. You know, dodd frank is taking forever. That was brought up in the hearing, taking forever. The banks are a real issue here. They do get a lot of benes. I dont see that any soon that quantitative easing is going to end voluntarily. Thanks so much. We have about 40 minutes until the closing bell. The Dow Jones Industrial average is up 105 points on the trading session, and the s p is holding up pretty nicely as we go into the close. The battle over macys and j. C. Penney over Martha Stewart Branded Products is getting nastier by the day. Now its in a courtroom. Well have an update and tell you which stock you should be fighting for next. And billionaire Richard Branson blasting yahoo shower marisa meyer saying they shouldnt telecommute. Well get some inside information, information that you wont hear anywhere else. Thats coming up later on the closing bell. [ male announcer ] how do you engineer a true automotive breakthrough . You give it bold new styling, unsurpassed luxury and nearly 1,000 improvements. Introducing the redesigned 2013 glk. See your authorized mercedesbenz dealer for exceptional offers through mercedesbenz financial services. As you probably know, macys is locked in a Bitter Court Battle over whether rival j. C. Penney can sell Martha Stewart Branded Products in its stores, a privilege macys says it owns exclusively. Its a nasty fight. Reporter it sure is, sue, and the lovesick triangle does continue to play out in a manhattan courtroom pitting Martha Stewart between Department Stores macys and j. C. Penney. Today a new York Supreme Court and the courts saw a videotaped deposition of former j. C. Penney Michael Francis on its exclusive right to sell categories of Martha Stewart branded goods. Martha stewart will testify at some point this week or next and jv penny ceo ron johnson will testify and lundgren said a longterm contract with a renewal option with certain categories of Martha Stewarts company and he also said he considered stewart a friend. They argued that the Martha Stewart stop in jc pens store is actually allowable. Well see what happens. Scott . That will be exciting. Courtney, thank. Big hitters coming up later in the week. Is either stock of these companies a buy right now . Lets Start Talking numbers. Macys versus j. C. Penney and abigail, well begin with you. Macys had good earings, and the stock was representative of that. Something tells me that your fundamental case on j. C. Penney will be a little more difficult. That is absolutely true, scott. J. C. Penney is really a story in turmoil, company in turmoil, due to a transition isnt working out. The reason that we know that a transition to the new jcp isnt working, look at numbers. Samestore sales are plunging and Free Cash Flow is in a free fall and revenues, earnings, margins, all going in a right direction so until j. C. Penney can prove that they are no longer burning through cash like crazy, this stock, in my view, is just very bearish, could really go no the low teens, single digits, and the way that we would see that sort of a transition would be any kind of improvement, sustained improvement. Macys, on the other hand, retail done right, really executed on great strategies relative to local merchandising, aligning the stores with the internet mobile and the quarter was great out of 1 billion to the top line and doubledigit Earnings Growth for 2012 for the fourth year in a row. Strong store cales, comps, operating cash flow is strong and they were actually able to double the dividend with that extra cash and repurchase shares. Macys is likely to be a 50 stock in my view in 2012, within 12 months. 39. 75 is the print right here. The stock is up 3 . The charts to me say all of those fundamentals are in the stock price. If we look at j. C. Penney, you can see over the last three years the stock has gotten crushed, especially in a strong bull market run like the broader markets had. The 19 level is crucial support and the stock broke down from there in the fall, and it recovered and thats a breakout on volume and i think 19 is going and i think the risk reward as a result is to own the stock here. On the other side of this macys has actually been a very strong stock but over the last year the stock is actually stalled so its a strong bull market run for years and hasnt been able to get over the 42 resistance level and i think were only 5 away from there so id be a seller up here. Its funny because i really agree with your points also. Theres a chance we could actually see j. C. Penney pop up and in the long term it will break through the 19 support. The company will not get ahold of the Free Cash Flow and the seam store sales will teeter along here and looking at maces i agree with the resistance and macys started to reorganize in 2009 and implemented a lot of strategies at that time that they continue to think that theres going to be upside opportunity, so i think that the upside opportunity going into their their calendar remember 2013, i think that it could really provide the reason for buyers to take out sellers at that 42 level. I think that it will take the 12 months or so, but i think theres fundamental reasons to think that that sort of breakout could in fact happen. Abigail, thanks so much. See you next time. As we get closer to the closing bell, the Dow Jones Industrial average is holding on to its advance, and the s p is doing the same, and were now just half an hour before the closing bell. Forget the defense industry. 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Well, its just three days to go until the automatic spending cuts kick in and another day where both sides were talking to everybody but each other. John harwood joins us from the Nations Capital with the late on the gridlock. Hi, john. Reporter hey, sue. This is getting to be a familiar story. Everybody is trying to put pressure on one another. President obama went to new port news, virginia, and tried to make the case that the sequester was going to hurt jobs in the state of virginia. Scores of thousands of defense jobs are going to be subject to a sequester and then back in washington you had House Speaker john boehner accusing democrats in the senate of not doing their work and putting forth an alternative. Heres john boehner. We have moved a bill in the house twice. We should not have to move a third bill before the senate gets off their ass and begins to do something. Reporter now, we had harry reid respond afterwards and said its the house of representatives that is sitting on their postiors because the house passed their bills last year. They havent acted. We are going to get votes in the senate over the next couple of days on a democratic and republican alternative to replace sequester but, of course, everyone knows, sue, that neither one of those bills is going to pass so the president is going to keep pounding. Republicans are going to try to hold line on taxes, and weve got an unresolved standoff that will go on for a few more weeks until the sequester begins to bite. Its like groundhog day. Weve seen this movie before. Its just ridiculous. You know, health care, defense, public safety, education, those are some of the areas that the president said will be hurt by those possible sequester cuts. But hasnt said anything about the banks, and my next guest says he should. Fred cannon is an author behind a report, and hes certainly sounding the alarm on the sequesters impact on the financials. Fred, why . I dont think most anybody is focused on this sector. Why are you, assayed from the fact that you cover it . Its just a spillover, right, when an economy gets hit, loans goes down and spending goes down and pages will take their hits, especially after weve seen a big rally in the banks last year and coming into this year. Even if the cuts go into effect, they will be rolled in gradually. We wont see the hit immediately, at least thats what were told. Would that lessen the impact on the sector . Sure, the shorter of better, but what were already seeing for the sector is the long bond is coming down, the yield is coming down, and just when a lot of bankers were thinking were out of woods on the Interest Rates here we go again and we get the flattening yield curve. Are we talking about the biggest financial institutions, the one the ones that typically get the bulk of the conversation when you look at actual stocks that are moving, or are we talking poverty smaller regional banks that perhaps could be more impacted . Well, really whats going to get the most from a business standpoint is the Community Banks that the politicians like to talk about how important they are to the economy. When you look at what happens with the sequester, going to be very regionally isolated so, for example, the d. C. Area is going to be very hard hit and theres small banks in that area that have benefited from the growth that are going to take some hits. Why hasnt the market figured this out . Usual lit market knows whats going to happen before, you know, the bottom line impact hits, and we havent seen it reflected in stock prices yet, why . Thats right, sue. All weve really seen so far is the financials continuing until the last couple of days. I think whats going on is theres momentum behind the rally and this is a secondary effect. Its a little bit hard to put back, not like a cut to a bank job, but its going to be a cut to a banks business meaning its going to be tough on the rally so far. Lets quantify. Fred, with respect, this seems a little bit of a leap to make, that to say that the sequester kicks in that the banks are going to be severely impacted. Thats right, scott. As i said, its a secondary impact. Lets face it, if the economy slows like were talking about, the sequester takes out 0. 5 of the growth, so youre starting to talk sub 1 . Suddenly a sector with a lot of momentum behind it suddenly runs into a wall. Is it region specific . In other words, are there parts of the country that you think are perhaps more vulnerable if this indeed does happen than other parts of the country . Absolutely. You know, theres certain parts of the country where the federal government is not wanted and is not really there. If you look at the d. C. Area and look at hawaii, alaska and interestingly up in connecticut when we look at the data where the Government Spending is the biggest in those defense areas, some of the Smaller Banks are going to run into some challenges. Good to talk to you. Interesting report. See what happens. Fred cannon. Great to be on. Thank you. All right. Were approaching that closing bell and less than 20 minutes before the closing bell. Right now the Dow Jones Industrial average adding on to its advance. Its up 113 points. Not very much off the high of the trading session, and the s p is close to its high of the day as well. Hanging in there, up 115. Ceo of bond giant Cantor Fitzgerald joining us exclusively later on. Find out what he sees in the bond market and his take on fed hawk worries about a bond bubble. And the cme executive chairman terry duffy is our exclusive guest for the entire next hour. Well talk about a whole host of thing, including where the markets are heading and reports that his exchange may be in merger talks with germany Deutsche Boerse. Thats all coming up a little later on the closing bell. You know how to mix business. With business. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above. And still pay the midsize price. I could get used to this. [ male announcer ] yes, you could business pro. Yes, you could. Go national. Go like a pro. Transit fares as in the 37 billion transit fares we help collect each year. No . Oh, right. Youre thinking of the 1. 6 million daily Customer Care interactions xerox handles. Or the 900 Million Health insurance claims we process. So, its no surprise to you that companies depend on todays xerox for services that simplify how work gets done. Which is. Pretty much what weve always stood for. With xerox, youre ready feal business. Which is. Pretty much what weve always stood for. How do you keep an older car running like new . You ask a ford customer. When they tell you that you need your oil changed you got to bring it in. If your tires need to be rotated, you have to get that done as well. Jackie, tell me why somebody should bring theyre car here to the ford dealership for service instead of any one of those other places out there. They are going to take care of my car because this is where it came from. Price is right no problem, they make you feel like youre a family. Get a Synthetic Blend Oil change, tire rotation and much more, 29. 95 after 10. 00 rebate. If you take care of your car your car will take care of you. Jpmorgan chairman and Ceo Jamie Dimon wrapping up the companys investor day meeting and kayla tauschy is there with the highlights. Hi, kayla. Hi, scott. Yeah, dimon just finishing moments ago to cap off the end of jpmorgans annual investor day. Of course, one of the questions that inevitably he fielded this afternoon was about the possibility of splitting the chairman of role and ceo, a call that came from some pensions that are shareholders in jpmorgan. He cited various reasons why that was not the answer for the company saying the board has full flexibility and six out of his 11 bom Board Members can fire him at any time and cited a study that said companies that do have the role split will do worse and a ceo at the end. Day nodes to be able to set broad strategy goals for a conditions and can you only do that as chairman and ceo as well. Now, he also made some comments about fiscal policy on the back of Ben Bernankes testimony today and said rates will go higher but hopes that it happens sooner rather than later because the later that it happens likelier it is that rates will be rising going into a recession and that, he says, is the worst thing that can happen, though jpmorgan he says remains hedged there. I want to finish talking about some shareholder returns. The stock was down and did bounce back off of its lows and started to talk about these issues. Company will continue to buy back stock even at its recent levels after a big rise last fall. They will buy about 45 bucks and if they get to 80 they will do a special dividend and hopes the dividend will keep rising every year and that he will continue to return capital to shareholders. Well send it back to you. Kayla tausche, thanks so much, and we are just minutes before the clothing bell. In fact, 15 minutes. Dow holding on to that tripledigit gain. Highs of the day, 131point gain. Guess were with a little bit of good luck. Havent chased the buyers away. Yesterday at this time italys inclusive election sparked a big selloff and next were live from rome and why the italian job may not be done with our market. Yesterdays plunge showed just how fragile these markets are right now. Coming up, how you can protect your portfolio amid so much uncertainty. [ male announcer ] whats the point of an epa estimated 42 miles per gallon if the miles arent interesting . The lexus ct hybrid. This is the pursuit of perfection. The lexus ct hybrid. announcer at scottrade, our cexactly how they want. T with scottrades online banking, i get one view of my bank and brokerage accounts with one login. To easily move my money when i need to. Plus, when i call my local scottrade office, i can talk to someone who knows how i trade. Because i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Awarded fivestars from smartmoney magazine. Italys deadlocked election battered the markets and the euro firing up concerns of the overall crisis once again. The story is very much from over and thats why carusocabrera is in rome with the very latest developments for us. Good evening, michelle. Sue, the situation is so concerning to Global Investors that even ben bernanke was asked about the situation in italy when he testified in front of congress today, and his response made clear he had spent some time trying to figure out complicated political situation he here. Im not an expert in italian politics, but i dont think any of the candidates have outright rejected either saying in the euro or maintaining the policies that are being required of italy in order to continue receiving, you know, in order to be in the eurozone. The reason that bernanke or anybody would care about italian elections is because the country rowes owes the world so much money. Its the third most indebted country in the world. They owe investors more than 3 trillion and right now their economy isnt growing fast enough to pay back that money. Can it ever grow fast enough . They need new leadership here in italy to make changes to the economy so that it can grow again and every single day that you can go without leadership that day gets further and further away. Sue, back to you. Michelle, thank you very much. We question now whether italy is where the market should be looking for its direction. Lets get the thoughts right now have Mike Thompson from s p capital iq and Mark Freedman from Westwood Holdings group. Im going to start with you, if i could, mark. Is the market looking in the right direction . Is italy as big a factor as the market seems to think it is right now, in your opinion . I think thats a good point, but i think hopefully what the market has to realize instead of looking at it from a magnitude stand point, think about this. Its going to be a constant source of volatility for the market so well ultimately see what the impact is. Europe and italy is certainly a mess. It will continue to be a mess. For a while. And well still be dealing with this going forward. Unexpected volatility, right, mike . I dont think people expected that the Election Results would come out way that they have with no clear mandate to do anything, and now we find ourselves perhaps having to have another election and then the market is roiled because of that. Going in the polls were suggesting that montes coalition would do better than they did. When people saw the dust settle, have you divided government. No one thinks at the end of the day italy is going to leave the eurozone. The unemployment is not 26 like spain. The issue doesnt seem to be so extreme that italy would leave the eurozone, its that it would follow through on the reforms that people who think that the markets are going to go up didnt have to worry about that before yesterday. Now they do. Yeah. So cds backed up 40 bips, 40 basis points, the only gains they made since the beginning of the year but divided government at best impedes or waters down. Doesnt mean that austerity is going away. Thats the collective sense of the market. Thats the crux of the issue, isnt it, this is more of an antiausterity vote than a vote for or against a particular candidate which i think is calling into question whether or not those Economic Reforms are going to be completely derailed, as scott suggested. Whats interesting to see is whether or not what comes out of this, who gets some progrowth policies. Thats kind of the other side of the coin, if you will, from the austerity. We havent heard that. What are you going to do fours on the growth side, and its very similar to what were seeing here. We can cut and you also need to grow and thats what i think ultimately thats whats coming out of this whole election, if you will. Are you of the thought that any of these dips specifically related to italy should be bought and then your concerns as they relate to the fed because thats a bigger issue all together potentially . Ill take the latter part of that first. Makes the feds job easier because the u. S. Starts looking like a sea of calm. We were talking about this. If you were a european and would you look at the situation as if illinois was really starting to go and bang bang up and the federal government had to bail them out. Thats sort of what the european investors look like, but i think it reaffirms risk on and risk off and does make the jeds job easier and safe haven, buy u. S. Treasuries and dont even have to buy as much. Go ahead. Would you have been a buyer given what happened yesterday late in the day. Yeah, yeah, probably would. You have knee jerk reactions on the news and the market got caught off action and thats the way the media portrayed the initial, you know, sentiment and what really came. There was a big disconnect there. What do you do in the market, if italy is with us for a long time. The fed chief did say if europe doesnt get itself in order that it will impact our economy overall. Do you put that to the side and focus more on the fundamentals of the u. S. Economy or not . Thats a great point. Because we can talk about europe all day, and i think from the hierarchy of relevant factor, i actually think its actually a little bit lower on the list. I mean, first and foremost, and secondly is the gentleman who was speaking earlier today, and thats chairman bernanke. Hes saying were going to stay the course, then investors need to pay heed to that. Green light. Exactly. Appreciate it very much. Back with the closing countdown right after this. And is the cme the latest exchange who might be getting the urge to merge . Find out if the company is Holding Merger talks with the Deutsche Boerse when we speak exclusively to executive chairman terry duffy, and well get his take on where this market heads if the congress cant fix the sequester. That and much, much more. 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Welcome back to the floor of the new york stock exchange. Were just a few minutes before the closing bell and what a difference 24 hours makes. In the final hours of trade where the market rolled over and sold off really hard into the close. Totally different story today. Take a look at the tripledigit gain for the dow today. The nasdaq is well into positive territory and the s p is as well. Perhaps you can hang it on ben bernanke, the fed chairman, testifying today before the Senate Banking committee and giving some perhaps soothing thoughts to market bulls and certainly they are running with it today as they do look at a tripledigit advance as we head towards the close. Take a look at morgan stanley. Interesting to look at the banks today. They have certainly been volatile and a volatile day it has been off the open. Probably has a little to do with whats going on over in europe and bernanke making some decent comments or perhaps some comments about the banks that hes not so worried about the contagion from europe and then you have a nice recovery and the Shareholder Meeting tomorrow. Thats going to be closely watched. Theres nice move and goes sideways and that stock is going to end up 1. 5 and well be following the Shareholder Meeting tomorrow. Lets bring in terry dolan, brokerage and ceo, whats your read here . Yesterday were standing here and the market is down 200 points and here we are up more than 100. Whats the person watching supposed to make of all of this . What weve seen is both the fear and the greed in one sense. I think today confirms the underlying strength in the market that weve seen for about a month