Dow. We know what happens to the dog of the dow the next year. Last years worst performer was hewlett pack add. I was going to say. This year, the best performer. And best buy, if you could just if everyone could time the bottom. Well, of course. If you could buy at the low, you could sell at the high. Thats the secret. Well talk to mr. Kleinfeld about that. And good news for the tabloids, maybe bad news for the banks, because hes back. Eliot spitzer is seeking office once again. He could very well win for the office hell run for. Now, wall street and the banks that spitzer famously went after are on notice and some are already showing concern. Well tell you why coming up in a little bit. Great story. Yes, it is. And the investigation into the crash of that 777 in San Francisco continues. The focus seems to be on the pilot who did not have any experience landing that model plane at the San Francisco airport, and attempted to abort the landing seconds before the accident. So should there be more transparency on who is at the helm of the planes that are flying before takeoff . Well look into that and well have a live report. Thats a tough issue. Lets show you how we do right now. The dow is up 97. We were up 127 at the peak, at the open this morning, sort of been drifting since that time. But at the higher levels. Nasdaq was actually negative for a time. It is just now turning positive again, up about 3 points at 3,482. So clearly, technology is lagging so far today. Intel is being among those laggers. S p is up 9 points,. 5 at 1,640. So off the highs of the day, but markets are still on pace for a threeday win streak. Lets talk about it in our closing bell exchange. Joining us is rob and brian, bill and our own rick santelli. Gentlemen, thank you. Rob morgan, what do you make of this . I was joking, is the correction cancelled . We had a 5 pullback in stocks, and now suddenly, were flirting with alltime highs again. Russell 2000 is at an alltime high. What happened . Yeah, bill, i tell you, i think the broad market is just buying on the dips. It is interesting today, though, that the nasdaq is struggling. I think part of that is earnings expectations for tech companies, along with industrials and materials, have been ratcheted way back. But overall, obviously, a good tone to the markets today. Its interesting, as well, that the underperformance is happening in tech at a time when, you know, innovation and technology are the most important the most important things that are kind of driving companies more broadly. Why do you think it is, rob, that tech itself isnt benefitting more . Well, kelly, i mean part of the reason, i think, is because some of the stocks in the sector just got ahead of themselves pricewise. I agree with you that theres certainly a lot of innovation going on. But you got to figure out how much youre going to pay for that, as well. Right. Brian jacobson, it says july, were in the summer, used to be the doldrum. No longer. Its a busy week weve got coming up. An important speech on wednesday by fed chairman bernanke. What else are you looking for . Well, this week its probably all about the Federal Reserve and when we get to wednesday, its obviously the fmoc minutes and then also bernankes speech later that day. Earlier, kelly had mentioned about if we could only buy on the dips, and that would be very nice. But then those dips wouldnt be there. I think to an extent thats what were seeing is a lot of people are looking for the great opportunities. Nobody really wants to miss the next dip, and so thats why you can see a bullback of about 5 pullback of 5 but capped at that level. For the balance of the week, im interested in what will happen with the earnings coming out, what the fed chairman is going to say, but also whats the strength of the market. How broadbased is the strength that were actually seeing . And, bill, its happening because theres so much focus on whether people are going to start shifting funds out of bonds and importantly into the stock market. So far, weve only see the first half of that equation. Thats a very good observation. Its only bill nichols, this is your question. Sorry about that. No problem. Well, i just think with the 10year going up to 2. 70, its interesting to see what people are doing. I think in the last week or so, a lot of the participants in the equity markets were out, and now theyve come back a little bit. They see the markets have stabilized, starting to wind their way back into the stock market. Yeah. Rick santelli, got up this morning, and what did i see . 2. 72 on the 10. Is anybody talking about a 3 handle on the 10year yield yet . You know, they are talking about it, and i think its highly possible, because even though were 10 basis points off, we actually are at 2. 74 briefly right before midnight, we are still at lofty levels, secondhighest closing yield, even at 1. 64, going back almost 23 months. The issue is the deleveraging, involuntary selling. I dont think it was voluntary. I think we may have more bouts, but for now, the game changes a bit. We see certain etfs like the lqd, mub, they havent responded as well as stocks have on the rebound. But yet, theres many now talking about a new carry trade where you buy a 10year note and sell a 10year jgb ands there 180basis point spread there. Or the auctions coming up, where the rising yields may appeal to a new crowd. So i think all this is going to be an ongoing evaluation. But im certainly not surprised that rates have not come down as much as would have said this many weeks after the fed meeting. Rob, i wonder, as well, the talk rick raised the issue of etfs, and weve seen the pickup in the etf volume every time weve seen the market sell off this year, and talk about the role the instruments themselves are playing, and what theyre telling us about whether its a retail audience selling out, whether these are hedge funds covering i mean, is it short positions . What is happening here . Is there any reason to be concerned about the role etfs are playing . Well, kelly, i dont think theres necessarily a reason to be concerned about the role broadly etfs are playing. I do think in some in some small liquid markets, there could be a reason to be concerned there. But broadly, i dont necessarily think so. But certainly, the advent and the boom in etfs has added some volatility. Theres no doubt about it. Because does anyone just own alcoa out right anymore . Does anyone buy an index fund way way or another to basically get access to that . Rob . You know, i i think that people stocks people still own stocks, but those people tend to be the institutional investors. I think more and more Retail Investors are getting into the etf space. That conversation has certainly picked up through the recent past. Brian jacobsen, i know life is not that black and white. But what, in your view, is most important to the stock market right now . The fed Monetary Policy or the fundamentals . And especially the earnings were going to get this week. I think that the fed is actually part of the fundamentals of the market. If you think about it in terms of their provision of liquidity to the financial system, determination of shortterm Interest Rates. So we have to think stop thinking in terms of the dichotomy between the fundamentals versus the fed, and think of the fed as part of the fundamentals. But this week, i think that on the margins, we are going to see the minutes of the fmoc meeting being pivotal for this particular week, but over the longer term, over the next three weeks or so, i think its more the earnings picture that are really going to drive the individual names that we still buy and sell. Yeah, sure, the earnings picture, one that looks a little worrisome. Unless, of course, you say, all right, all of the bad news is factored in, stocks are at new high, even though weve had, bill, an extremely high ratio of negative preannouncements. Well, i think earnings will tell the story in the next couple of weeks. I think you mentioned that youve seen preannouncements, and most preannouncements than the past couple of years. But its the earnings, and the valuations arent that stretched. If you see a beating of the lowers expectations, i think the market will be here and trade higher. When they rally too fast, you sell them. If they sell them too much, weve seen the last week or two, its a good time to buy them. All right. Puts it that way, its easy. Guys, thank you very much for your time. There you go. Thanks, gentlemen. Adding 100 points, the dow is creeping close to the record close it set in may. Josh, how close are we . Reporter another day in the green here. We keep getting closer to new alltime highs. The dow right now only some 200 points, or about 1 , from a new record close for the blue chips. The s p, some 30 points, or about 2 , from making a new record for the benchmark gauge. Today, a host of big names making new alltime highs of their own, including amazon, which moved higher. Stock now up some 15 so far this year. United health also hitting a record high. Barons saying the stock of the insurer could surge 40 over the next two years. Starbucks edging into the green, touching a new alltime high in the process. That one up nearly 30 so far in 2013. And one final mover to mention, dell. Carl icahn and southeastern urging shareholders to vote against michael dells offer to take it private, this after Investment Advisory firm iss recommended shareholders vote in favor of dells offer. Kelly, back to you. All right. Thank you, josh. There are now just about 50 minutes to go before the closing bell. Did i get that right . Well done, yes. You got it. The dow is adding 94 points at the moment. The s p is up about a. 5 . And the nasdaq is the lagger in the market. Now, hedge funds or the government. If one is suing the other, who do you rout for . We have a hedge fund now suing uncle sam, and it goes back to the Fannie Freddie situation, with the taxpayers in the middle. This could be a huge one, this could go to the supreme court. And stocks inching closer to new high, but that was anything but the case 81 years ago today on wall street. Coming up, find out how history in a bad way was made back on july 8, 1932. Video taken by art by the way. Oh, no. Alcoa getting set to kick off earnings season after the bell. Chairman Klaus Kleinfeld will break down the numbers exclusively on closing bell for us and tell us how he plans to turn around what has been the worst performing dow component this year in 2013. Stay tuned. Yeah, im married. Does it matter . Youd do that for me . Really . Yeah, id like that. Who are you talking to . Uh, its jake from state farm. Sounds like a really good deal. Jake from state farm at three in the morning. Who is this . Its jake from state farm. What are you wearing, jake from state farm . [ jake ] uh. Khakis. She sounds hideous. Well shes a guy, so. [ male announcer ] another reason more people stay with state farm. Get to a better state. Get to a better state. When you do what i do, iyou think about risk. I dont like the ups and downs of the market, but i cant just sit on my cash. I want to be prepared for the long haul. Ishares minimum volatility etfs. Investments designed for a smoother ride. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus, which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. Wi drive a ford fusion. Who is healthier, you or your car . I would say my car. Probably the car. Cause as you get older you start breaking down. I love my car. I want to take care of it. I have a bad wheel i must say. My car is running quite well. Keep your car healthy with the works. 29. 95 or less after 10 mailin rebate at your participating ford dealer. So you gotta take care of yourself . Yes you do. You gotta take care of your baby . Oh yeah Treasury Department being sued by a Large Hedge Fund that invested in both fannie mae and freddie mac. Our kate kelly joins us now to explain whats behind the lawsuit. Kate . Reporter bill, the hedge fund Perry Capital is suing the treasury and federal Housing Finance agency over a 2012 measure that eliminated future gains in the investments in fannie and freddie. Perry, which manages about 9 billion, bought a substantial amount of preferred shares in 2010 with the expectation theyd pay off handsome dividends. As it turns out, they have, in the form of a 66 billion payment to the treasury just last month. The largest dividend on record. But they and other investors arent sharing the pot. As part of the government takeover of fannie and freddie in 2008, they were expecting an annual 10 dividend once the agencies returned to the black. But under a 2012 amendment to that act, known as the sweep amendment, that Profit Sharing was eliminated with only the treasury benefitting. Perry now argues that the sweep amendment undertaken by the treasury and the fha was arbitrary and wrong and it amounts to selfdealing by the government that destroys billions in value. The treasury and fhfa have declined so far to comment. Skeptics point out that the 66 billion dividend helped stave off an ugly debt ceiling debate for another quarter or two, kelly and bill, but a court will have to determine whos right. Kate, you also just broke a story about the banks and Capital Requirements. Can you bring people up to speed on whats going on there . Reporter absolutely. So the fdic is expected to announce new Bank Capital Requirements tomorrow morning at 9 00. And we are hearing that the standards will be tougher than originally thought. Under basel 3, as a reminder, they have to hold 3 of the common equity against total asset the, meaning they will be able to borrow a little less in the future as a way to stave off future systemic risks. But under tomorrows proposed guidelines, that 3 figure goes to 5 . This requirement known as the simple leverage ratio could be a big negative for goldman, jpmorgan, and other banks since offbalance assets are likely to be included in the asset allocation, but they may have sympathy from the fed, which was said to be open to higher borrowing levels as recent as their meeting last week, and maybe with the fed, Public Commentary, they may be able to sway regulators during the Public Comment period that that follows that the number should be closer to 3 than 5, which would enable them to borrow a bit more. Better than 6 . I know the banks sold off after the news. Well keep a close eye on them, especially into the closing bell. Kate kelly with us. Thomson reuters, another story were following, suspending its practice of allowing some clients pay for early market data. Ayman broke the story. He joins us with more details. Hey, aayman. Reporter the investigation extends beyond just thompsson reuters and that investigators are prepared to follow any logical leads they develop as they investigate here well beyond Thomson Reuters into other unfair market advantage based on timing disparities in the market. Now, as you say, Thompson Reuters announced late last night it would suspend its Early Release of the university of Michigan Consumer sentiment data. Heres the statement, though, from Thomson Reuters. They said theyve done this at the request of the new York Attorney general, but they also say that Thomson Reuters strongly believes that news and Information Companies can legally distribute nongovernmental data and exclusive news through Services Provided to feepaying subscribers. So Thomson Reuters there defending the overall practice here in general. Eric schneiderman, however, disagreeing with that in his statement today. Heres what the new York Attorney general has said. He said the Securities Markets should be a level Playing Field for all investors and the Early Release of data undermines fair play in the markets. Now, bill, i should say that this broader investigation beyond just Thompson Reuters could have implications for other news and Data Services that send information on a highspeed basis to market participants. A lot of those folks will have to be looking very carefully at their arrangements and figuring out whether or not they violate the spirit here of the rules that the new York Attorney general is citing in this agreement. Thompson reuters has said all along this was disclosed publicly, it was in their fine print. I guess we found Something Else that didnt read the fine print, ag schneiderman. And they said this time around it has continued to disclose this publicly and it will continue to disclose this publicly. They defend the practice. They say theyve done this now voluntarily, the suspension of the twosecond Early Release, but they did it at the request of the attorney general. All right. Eamon, good stuff. Thank you. Again, the dow up 89 points. It was up 127. See if we can get back to the high of the day before the session is over. Friday, we saw things going high into the close, and it will tell us about the sentiment. Priceline took a hit after killing off William Shatner as the pitchman. Since resurrecting the character, the stock is red hot, up 40 this year. Could this be the first 1,000 stock . Guess not the first. The first were watching this year. Someone out there says the stock is still a deal and could be headed for 900 next. Well look at the charts on that one. Former new york governor Eliot Spitzer trying to resurrect his own career. See congressman wiener for that one, right . Hes running for new york citys comptroller office, but are his longerterm plans even bigger, and are the banks and wall street in his crosshairs once again, an intriguing story well explore later on the closing bell. With fidelitys options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens, and i helped create fidelitys options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Before their gift helped preserve the point. Before a credit solution was used to expand their business. Before trusts were created for their grandkids educations. They chose a partner to help manage their wealth. One whose insights, solutions, and approach have been relied on for over 200 years. Thats the value of trusted connections. Thats u. S. Trust. Vietnam in 1972. [ all ] fort benning, georgia in 1999. [ male announcer ] usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection and because usaas commitment to serve military members, veterans, and their families is without equal. Begin your legacy, get an Auto Insurance quote. Usaa. We know what it means to serve. Welcome back. With over a half hour to go in todays trading session, kicking off the week on a positive note. We finished higher friday after the strong jobs report that usually sets the tone for a good month of trading. Closing higher despite higher yields on the 10year. And perhaps bolstered in part by positive comments from across the atlantic, but plenty of optimism so far in the program about u. S. Stocks on their own. Getting ready for the earnings coming out. In the meantime, priceline shares up almost 4 after Morgan Stanley upgraded the travel giant to overweight rating. That stock is up more than 40 just this year so far. Are shares of priceline getting a little pricey, or is there more room to run . Lets talk about it in talking numbers. On the technical side with jonathan, and on the fundamentals side, its mark, associate investment director at the oxford club. Gentlemen, good to see you both. Thank you for joining us. Thank you. Hi, bill. Jonathan, whats the chart look like . Would you bid on priceline here . Well, bill, i think we would. Priceline is your classic momentum stock, and generally with momentum stocks, you want to ride the trend as long as its in your favor. If we look at the threeyear chart, we can see its decertaiy been doing that. For 2012, it was range bound in a wide but well defined range between 550 on the downside and 775 on the upside. In may of this year, it broke up 775 and hasnt looked back. So from a measured move perspective, that projects an upside to 1,000 a share. Now, 1,000 sounds like a nice, flashy price target, but it does have other meaning, and if we look back at the 13year chart going all the way back to pricelines ipo from the tech level, we can see the alltime high was right around the 1,000. So it kind of seems like it has a magnet there to us, and while its extended in the short term, we think it ultimately does see the fourdigit number. Wow. Mark, do the fundamentals support that kind of a chart . Well, you know, this is one of those cases where i like the company, but not necessarily the stock. I mean, from a Financial Performance standpoint, priceline is good. Good Earnings Growth, cash flow growth, Revenue Growth. Great marketing. A great brand awareness. They got the guy from tj hooker, good move. Its expensive. It trades 30 times earnings, 20 times cash flow, 10 times book. Im a little concerned that so many analysts love it. The bandwagon is very full. I would i would agree there, but also say its a lot cheaper on a p e basis now as opposed to 1999, and momentum stocks are always at a high multiple. Fighting it is a tough game to play here. Thats true. Let me ask you, jonathan, about your price target, because what i wanted to say is, you know, i see a lot of risk here in that theres so many analysts that like the stock and that if there is some kind of disappointment, i think theres considerable risk here, at least 10 easily on a downside move. So for me, i want to see three times the risk you know, three times the potential reward for the risk. For me, 1,000 price target doesnt cut it. Yeah, i would say i have to mention an overbought condition in the short term. I wouldnt necessarily buy today. Any type of pullback, you want to be a buyer here. All right. Good stuff, guys. Thank you both for joining us. Thank you. Thank you. That guy from tj hooker. I like that. Well, i think, look, weve been focusing so much on whether it would be apple hitting 1,000 or google, and priceline comes sneaking back in. Maybe theyll be the ones to hit it first. In any case, the dow is up about 92 points, so off the session highs. But still trying to close with a tripledigit gain for the secondtrading session in a row. There are just a little more than 30 minutes to go before the bell. Yes, its true, earnings season is about to kick off with alcoa. Thats coming up at the top of the hour. Will investors finally focus on wall street profits rather than trading on the tapering fears from the fed . Were going to talk about that balancing act coming up next here. Thats right. And speaking of alcoa, can its results turn around about what has been the worst dow performer this year . Well ask the chairman and ceo Klaus Kleinfeld when he joins us exclusively moments after the numbers are released. Stay with us. Tdd 18003452550 opportunities are waiting to be found in faraway places. Tdd 18003452550 markets on the rise. Tdd 18003452550 Companies Breaking through. Tdd 18003452550 endless possibilities. Tdd 18003452550 with schwab, i search the globe for the big movers. Tdd 18003452550 i can trade in 30 different markets tdd 18003452550 to help me seize opportunities, tdd 18003452550 potentially better returns and new ways to diversify. Tdd 18003452550 to get an edge, i use schwabs global research. Tdd 18003452550 they give me equity ratings on foreign stocks tdd 18003452550 based on things like fundamentals, tdd 18003452550 momentum and risk. Tdd 18003452550 i also have access to independent firms tdd 18003452550 like Ned Davis Research and Economist Intelligence unit. Tdd 18003452550 and with my schwab global account, tdd 18003452550 i can trade directly online in top markets tdd 18003452550 in their local currencies when the markets are open. Tdd 18003452550 plus, their global specialists are on call around the clock. Tdd 18003452550 theres a world of winners out there. Tdd 18003452550 and now i have a better shot at finding them. Tdd 18003452550 now get our best global offer tdd 18003452550 trade commissionfree online through september 2013 tdd 18003452550 when you open a schwab global account. Tdd 18003452550 call 18003088414. So if you havent heard yet, earnings season kicks off after the bell. Weve got alcoa reporting at that time. You might be a little young to remember, but way back when the stock market used to trade on things like earnings, you see, that mattered. Things like fundamental profitability of a company . Right. Yeah. And the fed was just sort of secondary. But now, the fed has become a fundamental for the market now. It is an important point. And we know its about more than just riskon, riskoff, but it dels you a lot about tells you a lot about psychology. Theres been a sense that if the fed backs away, the fundamentals are not there. But the question is whether earnings will trump the fed and taper talk when it comes to the stock market. So lets bring in nick from the earnings scout, our own ron, and greg from the economist. Guys, good afternoon. Welcome. Hey there. So, nick, lets start with you. Youre the earnings scout here. Earnings dont look all that great, so i guess, you know, do we really want to hand the baton over at this point . Over the last eight quarters theres been steady improvement. What weve been saying is theyve gone from awful to less awful. Thats been a positive delta in moving the market up higher. When it comes to the central bank action, certainly it matters. We look at that as analysts and strategi strategists. We would love to follow the earnings and cash flows instead of wondering what the bank of korea or the reserve bank did overnight. When you look at the central bank action, its not just all about the fed as weve been saying, but what theyre propping up. If you look at the s p 500 this year, its up. But of the industries with higher earnings expectations on june 30th than they did at the beginning of the year, 81 are outperforming the market. We still say its all about earnings. Ron, we talked earlier about how we had a 5 correction, pullback in this market, and then its off to the races again. Is that because theyre expecting a better earnings, or theyre comforted that the fed is putting the net under the market . I think the feds there. I also think our old friend steve, a very technical analyst, coined the phrase news response syndrome. And thats shifting, instead of good news being bad news, meaning the fed will taper off as the economy strengthens, good news is turning into good news. The economy is strengthens, and i think corporate profits will strengthen along with the economy. Were transitioning into the mode where good news is good news. The fed doesnt not matter. The fed matters a lot. If this is a selfsustaining and sustainable recovery, then wall street may enter the second face of what is a secular bull market. Greg, thats almost why it seems so important to focus on Revenue Growth this time around, which, by the way, last quarter wasnt there. I mean, that was a real disappointment. If this transition is happening, its okay to see Earnings Growth, to see Profit Growth moderating. If its at the same time that labor incomes picking up and the economy is showing signs that its generally in the sustainable period of growth. Well, this basically comes down to the question of whether the fed has its timing right. The feds been pretty clear that they would start to pull back on their accommodative policies when the economy did as it was supposed to do, and finally develop the selfsustaining momentum. Is the fed right . Well, well know soon. Fridays employment report was certainly encouraging. Lets face it, gdp growth is still around 2 . Its not enough to get us above this really kind of soft pace of Earnings Growth of 3, 4 . When you think about the stock market, its always two things. Earnings and price earnings ratios, and with earnings having been lousy for a couple of years now, all of the outperformance in the stock market has been p e ratios expanding, and thats been number one, easy money by the fed. And some of the tail risks, whether it was fiscal cliff or collapse of europe, getting smaller. Here on in, its got to be about Earnings Growth. Greg, youre our resident fed watcher on this panel. Do you think ben bernanke wants to matter more than earnings right now . No, absolutely not. I mean, theres nothing those guys would love more than to be out of the picture, to have the economy running on its own steam. I think there is an almost existential burning desire to get back to, quote, normal, unquote. Thats one of the reasons theres so much resolution on the part of everybody, on the fomc, to end quantitative easing. Thats one of the things ill be looking for on wednesday when we get the minutes to the meeting. How universal is among the fed that they need to bring qe to a halt. Nick, can you talk about earnings and where we are with this cycle relative to the past . How do things fundamentally look now . Are they different than in previous cycles . No, as we said no, we dont think theyre different at all. The earnings patterns weve seen off the financial crisis look very similar to the patterns that we observed after the s l crisis in the 90s, and the dotcom crisis. We think Earnings Growth will reaccelerate in the Second Quarter from the first quarter, and were basing that on the companies that have reported may quarter ends. Theyve shown reacceleration of growth. And the secondhalf estimates, guidance will be the important thing here. And what looks bad, as i said, a snapshot in time, three out of four companies that have reported earnings so far, Second Quarter with may quarter ends, have had to lower the Third Quarter numbers, but only by about 2 . Can i make a point there . So what i was going to say, well have reacceleration of growth in the second half, and that will deal with the feds ability to start its taper. Go ahead, greg. Nick made a good point about comparing it to, say, the early 90s, thats when gdp was nominal at 5 , 6 . That was a proxy for longterm growth. Now, its only growing 4 , 5 a year. By that proxy, i think we kind of have to lower our expectations. And, also, a proxy for longterm Interest Rates as well. We dont have that tapering is different than tightening. The fed is not tightening. It will be accommodative until 2015, 2016. So theyre not tightening up on credit conditions. The corporations well well, no, theyre not. Theyre really not. Let me put it this way, is 2. 7 the appropriate level for the 10year right now . Should it be higher or lower . Private sector economic growth, its closer to 3 than 2 . The 10year yield tracks nominal growth. Thats about where we are if you take away fiscal drag. The rates are high for where we are at the moment. I dont think this is the same as tightening. Its more like 94, 95 than it is, lets say, 91 i should say 89 or 2000, or a period like that. Ron, well have to save that for argument for the next goround. No, no, lets do it right now, kelly. Yeah, you just pushed her button, ron, i can tell. Well have ron, greg, nick back to continue the conversation. Thank you all this afternoon. Thanks, guys. Well get the first read into the corporate profits when alcoa kicks off the earnings season at the top of the hour. Just be fair warned. And chairman and ceo Klaus Kleinfeld breaks down the numbers before he even speaks to analysts. Youll hear what he has to say coming up on closing bell. Were about 23 minutes away from the closing bell. The dow up 89 points, off the highs of the day. Technologys been a drag. The nasdaq has been struggling to remain positive in todays trading so far. It did go briefly negative. Now up by only about a point. Up next, well put our historian, bob pisani, to the test. Find out if he knows what happened 81 years ago today. And kate kelly reporting that banks are going to be required to hold more cash. What will that mean to bank stocks and the Financial Services industry . The ceo of rbc will be with us, and will weigh in exclusively coming up on the closing bell. Stay tuned. Ways learning more to make their money do more. ann to help me plan my next move, i take scottrades free, inbranch seminars. Plus, their live webinars. I use daily market commentary to improve my strategy. And my local scottrade Office Guides my learning every step of the way. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Ranked highest in Customer Loyalty for brokerage and investment companies. What are you guys doing . Having some fiber with new phillips fiber good gummies. Theyre fruity delicious just two gummies have 4 grams of fiber to help support regularity i want some. [ woman ] hop on over [ marge ] fiber the fun way, from phillips. All your important legal matters in just minutes. Protect your family. And launch your dreams. At legalzoom. Com we put the law on your side. And launch your dreams. Your chance to rise and shine. With centurylink as your trusted technology partner, you can do just that. With our visionary cloud infrastructure, Global Broadband network and Custom Communications solutions, your business is more reliable secure agile. And with responsive, dedicated support, we help you shine every day of the week. All right. Were kicking off the week in the green today. Up almost 100 points on the dow, in fact. What happened to the apple crate that simon hobbs usually stands on . Im missing that. I dont know what youre talking about. Bob pisani, welcome back. Ooh, now youre just being tough over there. Oh, no, no. Good to be back. By the way, the dow is on a miniwinning streak. Yeah. How are we looking at the close . Looking good. Were heading into earnings season. The s p 500 is 1. 5 from historic high. Banks, which i care about, thank you, jpmorgan, wells fargo, holding up well. The important thing is, i want to hear what they have to say about the steepening of the yield curve on friday. Look at the numbers, up nicely. A new high for wells fargo. Us bancorp, regions pnc, new highs. No sign that everybody is running for the hills into the earnings season. One of the reasons rear weak is semiconductors are weak. Thats why the nasdaq has had trouble. Intel had trouble. A downgrade, some comments from citigroup. Some of the hardware stocks havent been doing much. Another weak group, no traction or turnaround in emerging markets, so the etfs for, thailand, the philippines, and naturally lly egypt is down. Emerging markets are weak today. I want to note the s p 500, 1,669 is the historic closing high, and we are just just below that, 1. 5, 1. 6 . And thats the bottom line. I know youve had a great discussion there on earnings where were going. But right now, as far as the markets concerned, theres no freakout. We have the signs of the mix of the russell, closing a thousand friday. Up 8 in two months. And yet the semis lagging. This is something almost more whats the word, structural than cyclical, right . You can look at norm holdings, a better position, weakness relative specific to intel, to qualcomm, not necessarily the same kind of cyclical gauge perhaps as in the past. I look to say structural versus cyclical. I like the way i like the view from this level. Its pretty good. I wish i were this tall. On this date, how long ago, july 8, 1932 zsh 81 years. What happened on this date 81 years ago . The dow hit the historic low. You want to know, were talking 13,000. The dow hit 41. 41. 22. 41. Not 4,100 or anything like that. 41. By the way, the old high, september 29th, i think it warks 1929, 381 i think it was. Wow. So we dropped 90 between 1929 and 1932, and you know how long it took to get back to that the old 1929 high . 30 years or something. 25 years. It was 1954 before the Dow Jones Industrials average went back to that old 300 our executive producer cant believe you knew this. Did somebody prompt you on this . Not i would question you necessarily. First of all, this is ron insana knows this stuff better than i do, backwards and forwards. He knows the decimal points. I learned it by being with him. I hang out with the right guy. Thats how that works, yes. Yes. Thank you, its history. Good to know this kind of stuff. After the market break in 2008, there were those who felt we would see a market continue lower like we did into 1932. In fact, we did when the dow hit that low in march of 09. That was sort of tantamount to that. Whats important is people bellyache endlessly to go seven years from the historic high in 2000 to 2007. This is 25 years, thats why we talk about this stuff, the old high in 1929 to the past the past three, four years to get back from the 09 lows. Thats what i mean by historic perspective on this. Thank you, bob. Very good stuff. Less than half an hour to go before the closing bell. The dow is up 92 points. The nasdaq, weve been watching, a bit of a lagger, s p ending about. 5 . After a breather in june, the s p is now up 2 in the month of july. Well find out why some are saying that stocks will keep heating up this month alone. Straight ahead on that. Blackberry holding its annual meeting tomorrow. Its expected to get ugly with some shareholders. Well hear from one who says this could end up be the beginning of the end for the beatendown stock. Hooking up the country helping business run trains they haul everything, safely and on time. Tracks they connect the factories built along the lines. And that means jobs, lots of people, making lots and lots of things. Lets get your business rolling now, everybody sing. Norfolk southern whats your function . Helping this big country move ahead as one Norfolk Southern hows that function . The most Free Research reports, customizable charts, powerful screening tools, and guaranteed 1second trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. I dare you to say what you just said. No, dont do that. Were watching nielsen today, and also watching sprint. Sprints coming out. We have a trading crowd gathering over here just next to us here as at the close today, sprint out of the s p 500 and nielsen, ac nielsen will be going in. I was congratulating nielsen meaning they could measure ratings on trading floors. Or words to that effect. Markets are close to a threeday winning streak. Joining us on the floor next to the crowd, aaron gibbs from s p capital iq, matt from bertram financial, as well. What do you make of this i mean, the rally continues. Here we go again. Did you get enough of a correction . You know from the 5 pullback . There was enough money put into place on the pullback. We broke through the 1,621, an important level in the s p technically. We had a vacuum effect. When theres not a lot of volume, a holiday week, so we get the vacuum effect. Maybe we get to 1,660, thats when well run into resistance. One thing im looking at is the semis today, a little weak. Thats something to keep an eye on. If theres followthrough with that tomorrow, ill be concerned. Intel has been a lagger today. Yes, what does that tell us going into earnings, how much emphasis on tech . Were coming off the payroll numbers on friday, just Getting Started on the earnings season. I. T. Is basically the lowest q2 earnings, the lowest Earnings Growth, largest negative Earnings Growth, and were going to see specifically with the hardware, computers, the semis, and well see as the numbers come in, getting negative guidance, and its going of 5to1, negative guidance to positive guidance, and mostly coming from tech. Well continue to see those being weak throughout the q2 earnings season until we, like, have more stability for the end of the year. Where are expectations highest . Who is expected to put up the best Earnings Growth numbers . Now, were looking at Consumer Discretionary and financials, and theyre both hovering a little above 12 growth for q2, and around in line with a 7 for the end of the year, for 2013. Thats really been priced in. They are both up 18 year to date. Right. So theyre going to need to meet the expectations, or we could see vulnerability there. Maybe not a lot of volatility. Its been paired off. Art handed me whats the closingend balances, sell side by 26 million. Thats nothing. No, nonevent, especially after the numbers weve seen over the last few weeks, end of june, end of the quarter, some rebalances, 26 million bucks is not bad. Matthew, how important are financials to this market now . If theyre going to be a new leader, theyre very important. Starting to see regulation going into some of the banks. Well see how that plays out as well. I think that theyve been a quiet sector during this whole thing. If they do have spectacular earnings, and the tech earnings are weak, maybe we have a new leader. And interesting in the financials, its not the big banks. Its the reits and yes, thats interesting. Especially with the rates. People are worried about what theyve done to the various sectors. The regionals hit a 52week high today, as a matter of fact. They are showing relative strength there. Alcoa is not the bellwether it used to be, is it . It kicks off the earnings parade, but its hardly the grand marshal. No. Not by far. And, look, we knew going in, the materials, its a tough quarter for them. Im impressed theyve been holding their own so far. Theyre trying to bring costs down. Every quarter we keep hearing this from Klaus Kleinfeld. It will be interesting to see how much costs he can ring out from his operations. Theyre missing on revenue estimates and theyre beating eps, and this is the Third Quarter of seeing that trend. And yet, look at the job Growth Numbers that were seeing. I mean, maybe its the opposite where theyre cutting costs by paring back on tech. Thats what i meant. Yes, a great point. Conflicting job numbers. Its a good point. Well, at the same time were going to be watching to see if theres anything that alcoa does tell us, jims out there, saying, look, dont count these guys out. Theyre still going to tell us about the fundamental demand theyre seeing in europe, in china, whether theyre able to address the capacity issues. Theres still signals for the broader markets. Its a microfixer. Its not just alcoa. Theyd maybe move a dime tomorrow. That would be a big move. It does say underlying whats going on in asia. Theres big topics that theyll discuss. For sure. Thank you both. Good to see you. Thanks. Coming up next, well be right back with the closing countdown. And were moments away from the earnings season beginning alcoa, number one out of the gate as we said. Klaus kleinfeld will join us as soon as the numbers are released. Mine was earned in djibouti, africa. 2004. Vietnam in 1972. [ all ] fort benning, georgia in 1999. [ male announcer ] usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection and because usaas commitment to serve military members, veterans, and their families is without equal. Begin your legacy, get an Auto Insurance quote. Usaa. We know what it means to serve. Trust your instincts to make the call. To treat my low testosterone, my doctor and i went with axiron, the only underarm low t treatment. Axiron can restore t levels to normal in about 2 weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women, especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. Serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. Ask your doctor about the only underarm low t treatment, axiron. [ cows moo ] [ sizzling ] more rain. [ thunder rumbles ] [ male announcer ] when the world moves. Futures move first. Learn futures from experienced pros with dedicated chats and daily live webinars. And trade with papermoney to testdrive the market. All on thinkorswim. From td ameritrade. About 4 1 2 minutes left here. El mcpherson, watching the market here with me, watching the market close. That would be exciting. Were losing some ground here. The dow was up 126 127 points at the peak. We lost that ground. Heres what the trading chart looked like. It was on the open, off to the races. Europe was strong despite weakness in asia. Meandered the rest of the day and hovering at these levels here with a gain of 80 points. One dow component, alcoa, were watching now, up about a percent, but thats only by a dime. Up 1. 3 given its price level right now. This is the company thatll be reporting earnings shortly. Theyre expecting 6 cents a share for the Second Quarter on revenue of 5. 8 billion. Peter costa, what do you make of the rally . When you couple it with the numbers we saw on friday, 140point gain on the dow, and now up another 70, 80 points now. Its a continuation. I think people are resigning themselves to the fact that the fed will taper off some point, september, october, whatever. The economys doing better. You know, the feds put a lot of money into the system, and it seems to be working. Why wouldnt you want to be in this market . I wonder if we arent digesting the china story and moving beyond it to some extent, and whether alcoa will be a test of that. Alcoa definitely would be. I think with alcoa, a lot of people puts stock into it, but im not one of those people. Theyre just the First Company that reports in the socalled earnings season. Whats the peter costa barometer . Jpmorgan, looking at the financials first. The retailers. And then, you know, after that, theres a mix of all technology stocks, but definitely starts with the financials. Alcoa is the kind of company, caterpillar and alcoa, two Worst Performing Companies this year, saying something about the nature of our economy, when the two biggest industrialbased companies in the dow are suffering so much right now. You have to remember something, caterpillar had a great move last year. And they theyre a lot of the sales are hinged on europe and whatever the potential is in china. So, you know, were moving into a new era now. Now its more u. S. Centric companies. You look at to me, alcoa is a much broader play. Im looking more as a u. S. Play, is what im looking at. So, i mean, with alcoa and k caterpillar, they have a larger exposure overseas. Is the weakness in the nasdaq today something you think that portends more broadly for overperformance of that index relative to others . It can. As far as im a im a new york person, so looking at the equity, nasdaq is much more techbased, a lot of smallercap companies, which arent participating in the rally as much. Im looking more at the big highcap stocks, and thats doing well. Theyre doing very well. Catch you guys in a second. Yes, see you in a few seconds, and well have the ceo of rbc to talk about the banks and the Capital Requirements that are coming. Yes. Chairman bernanke speaks on wednesday. We get the fed minutes on wednesday. Could be Market Movers as well, right in. Absolutely. But i dont think there will be any surprise. I would actually be very surprised if he even intimated there was some sort of end to the qe 3. I think the fed has been very reluctant to give any timelines, specific timelines. I dont think that will change this week. You dont think theyre troubled by the rise in yields in the treasury, especially on the long end, where the 10year was at 2. 74 overnight briefly. Yeah, you know, 2. 74, anything over 2. 70, its monumental. So i do think theyre keeping an eye on that. Do i think thats going to be a permanent situation . You know what . Im not that sure. I dont think its going to be. Theyre looking at the employment numbers. Theyre looking at what came out last friday. Theyll look at jobless numbers this were. Theyre looking at a much bigger picture. I think the treasuries is very significant, but to them, the main focus should be and continues to be on jobless the jobless situation. All right. Well, it will be an eventful week as we get ready for earnings. Thank you, peter. Well see you later. Well get the alcoa numbers, and well also talk with the ceo of rbc as we get ready for the second hour of the closing bell. Stay tuned. [ bell sounds ] 4 00 p. M. And the dow and the s p 500 starting the week with pretty solid gains. The nasdaq lagging behind, though. Im kelly evans in for maria bartiromo, and also joining me is bill back from the floor. Heres how were finishing the day on wall street. The dow adding 88 points, off the session highs but still a solid day considering we had a tripledigit gain on friday. The nasdaq is the weaker of the bunch. It added about 5 points. The s p 500, bill, up about 8. Okay. Alcoa kicking off the earnings season moments from now. Still waiting for the numbers to come our way here. Well have those results a