Transcripts For CNBC Closing Bell 20130730

He will talk about his earnings and the outlook for the company. In a few minutes, the ceo of aetna will be back with us, mark bertolini, aetna is on the front lines dealing with healthcare, and they are in highprofile fashion pulled out of the state of california. Well talk about that. Talk about that and the impact that the Affordable Care act mandate is pushed out. Also, investing icon is with us. He has two stocks he will name. He says theres money to be made with both of the companies. Hell be along telling us about that. Plus the market may have speed bumps ahead. Hell tell us what to watch for. Hes apparently already started talking. By the way, have you seen facebook today . Oh, my god, back to the ipo front. Almost. Were almost there. 38 is when what it came out at and never saw that price again. Its very close right now. It is knocking on that door. Another big move today after last weeks huge move. Since they reported earnings last week, Facebook Stock is up 40 . And much of that, in that one day. Exactly. How much of that is short covering, you wonder. Yeah. Well look at that. Lets look where we stand as we apreach the final hour. The dow down about 10 1 2 almost 11 points, a fractional loss, at 15,511. Nasdaq positive, thats where the strength in the market is today. Technology all the way. 14 points even on the nasdaq. 3,613. Last trade there, looking realtime, obviously. S p 500 also, as you can see, really flat on the session at 1,685. All right. Lets talk about the market today giving up some early session gains. Joining us in the closing bell exchange, ron weiner, from the i dont mean that politically steve grasso from stewart frankels, wandering the floor here, and Rick Santelli is here. Ron, i guess this market right now just waiting for the fed, per usual, right . Yeah, i guess so. I dont think that matters a whole lot. Theres just so much cash on the line. The markets go down, theyre going to bid it back up. So i think its fed or no fed, it will have some effect. At the end of the day, where you going to put your money . You dont think people will be repositioning if theres more of a signal tomorrow that theyre going to start tapering sooner rather than later . I think it will come more on the pick side and the equity side. Thats a good point. It is about the fed, but in this week in particular, its about a lot of earnings as well as a lot of economic data. Yeah, its fine. The jobs numbers, gdp, so, steve, let me hit you up with that. What are you seeing in terms of conviction ahead of all of the economic reports coming out this week that will likely give us another indication that were in an anemic grower . I think to rons point, when the market sells off, theres always hands to catch the market. Because theres such a lack of new ideas coming out in the marketplace. Because everything has rallied so hard and so fast here that people, if you own a stock, you cant you cant find value in buying it at these levels right now. So you actually want to see a selloff. But as soon as that happens, they get excited and the market is bought right back. So i wouldnt read too much into it. I dont think the market sells off that much. Yeah, andre, maria and i have made the comment often, this is a market that wants to go higher. It just feels like it wants to go higher. At times i feel like a broken record saying there are no other options, but thats the case still. Right . Outside of equities, you have cash basically yielding nothing. You have bonds with 2. 5 , inflation at 2 , not a lot of upside there. And earnings have been okay. Right . Earnings 3 , 4 yearoveryear growth. Its important to remind investors its not about the growth race but the visibility. You think about the last four years, this is the best visibility on earnings, and for that reason, it makes sense why multiples would rise, because theres more clarity Going Forward. Whats your take on the emerging markets at this point . Clearly, this has been an area that everyone has been fleeing. Do you see a bottom there . I mean, relatively speaking on valuations, is that as good an opportunity as the u. S. Right now, or no . I think in the short term, theres probably going to be more pain there, especially because china is implementing shortterm pain on their own economy to try to cool it off. Longer term, youre thinking three to five years, i think these are good spots to start accumulating some assets in the emerging markets. Yeah, you know, just to jump in sorry to step in, but just to step in on what the other guest said, is it time to step in with steel, coal, the metal stocks, because everyone is trying to bottom fish. And every time they bottom fish, they get their heads ripped off. If theyre looking for some type of return to beat the averages because all these funds are trailing is now the time to start buying steel, or coal or things like that . Things that have been lagging here. Right. Exactly. Rick santelli, what are you guys talking about in chicago . I handicapped that fed meeting for you. You expecting any news out of that meeting, or will it be the same ole weve had for the last few months . I think the latter would probably be the camp down here. Of course, whether you agree or disagree with anything the feds doing or may continue to do, traders will be glued to the activity. But they dont really suspect much will change. If you look at Interest Rates, i find it fascinating you know, our guests said, you know, i hate to keep saying this, but there is no substitution, there are no alternatives, in cash you earn nothing. Earning nothing may be a really great return at some point over the next two to three years. And i think thats why so much money, trillions of dollars, are still trapped, what, 2. 6 trillion in money markets. So were hovering at a 2. 60 yield. The dollars getting a breath of fresh air here. Its finally getting a little bit of bounce. Its on 1 1 2month lows, and i think a lot of that is the china storys affecting the psyche of german output and, of course, while were looking at our gdp number tomorrow, which will be so hard to handicap, theyre going to be looking at their employment data, and thats going to be a biggie. Theyre looking to continue at this record level of 12. 2 , and thats the aggregate number for the euro zone. What about his point, maybe it is smart money sitting on the sidelines earning nothing, but at least it wont lose anything. The worst asset class the last ten years has been . Cash. 1. 7 annualized return. So in the short term, cash seems like the easy solution. For a lot of our client, theyre trying to retire one day. The biggest fear should be theyre going to outlive their money, not necessarily theyre going to miss out or theyre going to, you know, save some money by being on cash. And most people are not prepared at all for retirement, and when you need that money. Brian, what do you want to be exposed to here . How do you allocate capital . First of all, you want to be vested for us, we like smoother ride. So were mostly u. S. In fact, in our history this is the most weve been all u. S. , only because we can see it better. I cant see the emerging markets. I got gurus that are taking one side and as vehemently others take the other side. Unclear. S p is 40 foreign. So youre playing the market by buying pepsico. You play the market by buying all of the technologies. So we like technology. We like the financials. And we like the mlp space a lot, especially for our clients. Master limited partnership. Oil and gas pipeline. For income purposes both. Both. I mean, theyve tripled the s p in the past 15 years. But the point is that theyre you can understand it. You can understand the business. Its not going out of business. And theyve raised their dividend higher than the cost of living every single year. Whats the story with the financials right now, because, you know, when you look at the Earnings Growth lets say were at 5 or 4. 5 on s p 500 earnings so far its largely financials. Is it because they have such profit moves because theyre coming from such a low base . Yeah, thats certainly part of it. Thats part of it . But things are smoother. Theyre lending for the first time. Interest rates are going up. Thats actually good for them. So i think i think the financials are more solid and more you can see them down the road as a clear winner as long as there isnt a bump in the road. And if theres a bump in the road, which is happening in europe on their banks we read about that the past couple of days that will also benefit the u. S. Banks. So theyre in good shape right now. All right. Gentlemen, thank you all. Thanks so much. Sure. Investors are remaining cautious as they wait on any word for the Federal Reserve. Reporter take a look at the Dow Jones Industrials today. We went positive once again a few minutes ago. We got some of the verizon, at t, tollycom a little on the weak side. Look at the sectors. Bright spots. Good earnings reports from the industrials today. Tech is up. Materials and energy, theyre just getting killed on china, base metals like copper, nickel are down again today. Day after day, just poor performance out of the particular sector. Look at the industrials. Oldschool names. Pitny bows, rockwell, cummins, you know the companies, all oldschool technologies, reporting good numbers today. Look at the percentage moves to the upsides. Thats whats lifting the industrials. Semiconductors, theyre okay. Not a lot of news. They had a lousy week last week. But look at some of the names today. Theyre helping to lift the semiconductor index, and thats been making a comeback. Finally, i want to note boyd came out, i watched some of the gaming stock, 18 move. I read the report, i dont understand that. In line with expectations. Maria, i would note they did have fairly good results with the borgato in atlantic city, and that might be because the rub rebel, declared bankruptcy. Thats an impressive move there, 18 on the upside. Back to you. Thanks, bob. Heading towards the close, 50 minutes left. Were about the middle point of the range today. Up 71 on the dow at one time, down 42. As you can see, were up 12 points as we head toward the close now. The earnings continue flowing. Aetna reporting better than expected earnings. The stock up almost 40 . How will the rollout of obamacare affect the company . Well talk with the ceo after the break. And a man who manages almost 40 million. Hell be here in a cnbc exclusive to tell you where hes putting his money to work right now. Plus, making some similar investments to another big wall street name that we all know. Well tell you who that is and why, coming up. And then, keeping an eye on facebook today. The stock is almost back to the 38 a share ipo price after an amazing run since earnings came out late last week. Youre watching the closing bell. Well be right back. 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. Welcome back. Stocks are struggling overall to hold on to early session gains, but how about that facebook, josh lipton . Reporter yeah, absolutely, bill. A few stocks on our radar. Lets start with facebook here, getting closer to that offering price of 38. Remember, the intraday low here was 17. 55. That was back september 2012. Since reporting last wednesday, facebook now up some 40 . And how about potash, global prices for the fertilizer ingredient expected to drop hard, after mosaic being dismantled, all down hard in todays trade. On the other hand, Western Union marching higher. Reports and beats expectations, also affirmed its fullyear financial outlook. Also in the green, goodyear, the tiremaker, reporting a higher quarterly profit, getting a boost from lower raw material prices. Also seeing signs of volumes stabilizing over in europe. And well end on aetna, the health insurer, reporting higher Second Quarter earnings and revenue. That stock up some 36 so far this year. Guys, back to you. All right, thank you so much, josh lipton. All right. More now on aetnas latest results, but how are changes in healthcare laws going to affect the nations thirdlargest health insurer, something we want to talk about here . Joining us now in a first cnbc interview is mark bertolini. Good to have you back on the program. Welcome back. Hi. Thanks for joining us. Talk us through the quarter, the coventry healthcare acquisition seems to be a big positive impact. What can you tell us about your Quarterly Report . Sure. We had record membership at 22 million members, record revenue at 11. 6 billion in the quarter, and revenue earnings at 583 million. Driven largely by the coventry acquisition, but also lower commercial utilization still across the sector, driven by the weak economy. And when you consider the acquisition within the context of what we borrowed the money for at 2 to do the acquisition, weve got a lot of return on investment associated with the coventry acquisition. Mark, your stock has been on a tear over the last few years. In fact, a lot of the Healthcare Companies are at alltime highs right now. Youre just off your alltime high. Why is that . Is the market trying to tell us that there that the obamacare, for example, will be a positive for your industry, some of the changes in healthcare laws coming up . I think its that i think what its telling everybody is that were still relevant, that theres still a lot of market out there, that the Affordable Care act will drive some business, but theres still a lot left to do to get healthcare costs under control and to get americans insured. So i think, you know, were still relevant, still part of the economic mix, were not going away anytime soon. That was a concern a couple of years ago. You announced would you stop selling individual Health Insurance policies in california. 50,000 existing policyholders will have to find new coverage by january. Talk to us about this. Whats behind this . I mean, the california insurance commissioner said its not a good news not a good move and its not good news for california consumers. Whats behind the decision . Well, given that we only had 50,000 members in the commercial in the individual marketplace, it was difficult for us to be competitive at the rates that the California Exchange wanted us to be at. And so, therefore, we thought it would be better for us and for those consumers, where theyll get a more affordable policy on the exchange from carriers who believe they can be competitive in that market. The cost of acquisition the cost of acquisition of patients was going to be that high, is that what you think . Just the underlying cost of healthcare to be supported by the premiums that the exchange could afford. And so, as we look across the country, were making this decision virtually every market. As we look at the changing fundamentals of both the small group and individual marketplace, its not the last place we will no longer provide individual insurance. So walk us through that thought process, and, i mean, youre saying that if look, what, a handful of companies in california that had, like, 85 of the market. You were a Small Company in that regard there. So youre going to just write that one off and go where you feel you can make have a better profit margin in writing policies out there. You know, the whole idea behind obamacare is to spur competition and lower rates, but if youre not going to go after the competition in some states where you dont feel you can compete, is that saying something about the competition that we will not see . Will we see lower rates in the long run for this for healthcare . Well, its not just about the rates, bill. Its actually about the underlying cost of healthcare. Healthcare Insurance Premium has risen on average 7 to 8 over the last decade. Underlying healthcare costs have driven by 7 , 8 each year over the last decade. So if you look at that condition, you need to have a good cost structure with better provider rates in order to offer a competitive Insurance Premium in that market. And fortunately or unfortunately, were not competitive in every market in the united states, and in marketing where we are, well be very active on the exchanges. Well offer an affordable product. But in the end analysis, if we cant be competitive, we shouldnt be there. Its not worth our time and energy or investment to be in that market. So was it a good move, then, that part of the mandate is pushed out . You know, talk to us about that, the impact, and then the impact on rates once the law takes effect, when the Virginia State Corporation Commission asked about how rates would change, aetna said the most popular policy for a 29yearold man, once the law kicks in, the rate will nearly double from 118 to 225. Is that right . Yes. And, actually, what weve been seeing all along is there will be a significant increase in rates across the marketplace based on what people used to buy. A big piece of it is that their benefits will have to go up. Theres a minimum benefit required by the Affordable Care act, and where most americans in the individual Insurance Market are below a 50 actuarial value, theyre paying half of the cost out of pocket, the Affordable Care act requires at least a 60 actuarial equivalent. That in and of itself is a 20 increase in rates. So go ahead. Let me ask my question, and the same question maria is asking, the whole idea behind obamacare was to make insurance a buyers market. What you seem to be suggesting is it will still be a sellers market, and that seems to be what the market is saying right now by pushing all of your stocks to record highs right now. I think it still will be a buyers market. It just will be more expensive. I think there will be a number of plans competing in most markets and people will have a choice. However, if the underlying rates that we pay to hospitals and doctors dont change, we cant impact insurance rates. And thats where we have to leverage our local market share in order to provide an affordable local product. All right. Well leave it there. Mark, good to have you on the program. Thank you very much. Good to see you both. Well see you soon. About 40 minutes left in the trading session. Right where we were 10 minutes ago, up 12 1 2 points on the Dow Jones Industrials average. Have you seen coach today . The stock getting crushed. Very disappointing earnings report. Word two more executives are headed out the door. Should you be following their lead, getting out of the stock, down better than 8 today, or is this an opportunity to buy the stock at this big selloff price . Maybe coach needs a fix from this guy. Look, i dont know if you thought this was my first rodeo, but my job here is to make money for myself and for you. That would be marcus. He puts his own cash on the line to help fix struggling businesses. Its the latest show from cnbc prime called the profit. Coming up, hell be here, and well hell tell us why this gruff style of his may not make him popular, but it does make him a lot of money. Thats still to come on the closing bell. In todays markets, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Welcome back. The markets up 22 points on the dow. Lets get over to josh lipton. Were watching Madison Square garden here, msg. The headlines just crossing. Member, msg acquired the forum in englewood, california, that was in june of 2012. Now, msg saying that it plans to invest 100 million into that venue, thats ahead of its anticipated opening in january 2014. The opening will be with a performance by the legendary eagles. So listen, investors and fans, i guess, of the eagles, bill, have cause to celebrate this afternoon. Back to you. The original home of the l. A. Lakers, once called the fabulous forum, and its coming back. I know people in l. A. Are probably very excited about that. Thank you, josh. Meantime, shares of coach sinking today after the Company Reported disappointing earnings. The big concern, sales were short of estimates. Thats pretty concerning. Outgoing ceo lou frankfurt, as you know, usually comes on this program on the day his Company Reports earnings. But this time, coach told us that mr. Frankfurt was unavailable, because he was on vacation. So is this dip a buying opportunity . Or is it a signal that something bigger is wrong at coach . Lets talk numbers on coh today, on the technical side, rich, and on the fundamentals side, mark of the oxford club. Good to see you both. Thank you for joining us. Mark, start with the fundamentals. I mean, even ladies handbags, their bread and butter, saw a dip in sales. Yeah, its not been a good quarter for coach. Usually coach sells stylish merchandise. But the stock reminds me of a pair of sensible shoes. Not a lot to excited about here. You had samestore sales growth negative in the quarter. Flat for the year. And they expect it to be flat Going Forward for the next year. They lowered guidance significantly for the fiscal year. You have a Management Team in turmoil with two executives quitting. So other than a cheap p e ratio and cheap for a reason, so other than that, theres not a lot to be excited about here. You sell it. Let somebody else take on the risk for waiting for this thing to turn around. Rich, i was looking at the price chart for the past year. And there it is. This things been all over the map in the past year here. What do you make of it . Bill, you know as well as anyone, trading is like fashion. One day youre in and the next youre out. For the past year, this chart has been a hot sideways mess. When you pull it up, you can see this very welldefined trading range. For the past three months, the stocks been under distribution. Its being sold into the key resistance at 60. Today, we get the big breakdown through the 200day moving average. Now, we are testing critical support here around 52. 50. That takes us back to the neckline of the headandshoulders bottom. I want to bring up the weekly real quick to give you context here. For the past three years, you see a multiyear complex headandshoulders top, which the stock has been wearing. You rarely get the breakdown below the plunging neckline around 46. If you own it, hold it. If youre flat, look to get in a little bit lower. But im slightly more optimistic here than mark. Mark, is there a price if it gets down to it that you would buy coach . Not really. I mean, i want to see some turnaround in the fundamentals. You know, when i look at the chart, as rich mentioned, theres a lot of resistance at 60. So to me, theres not enough reward there to take on this kind of risk. So theres nothing really at this point in time that would make me get interested in the stock. You like anybody else thats competing, michael kohrs, kate spade, any of those companies . I like i would rather michael has been hang on, rich first, very quickly. No, sorry, i would rather own anyone in the retail space. Keep if mind, this is one of the hottest sectors in the market. I like retail. Just coach, like mark, not so much. Okay. Mark . Yeah, and i agree with richard. You know, michael kors has been doing well from a fundamental and technical perspective. Its expensive, but pretty much anybody but coach at this point. All right. Thank you both. Lou frankfurt, if youre watching, enjoy your vacation. Yeah, im surprised he cancelled on us. Then again, you see whats happening at the company. I guess its understandable. Were disappointed that youre not here with us to talk about it, lou. In the final stretch here for the day of trading, 30 minutes before the closing bell sounds. We have a market thats up 18 points higher on the dow. Up next, an investment idea close to my own heart and legendary legendary investor we call him, Mario Gabelli thinks bourbon stocks are attractive. Hell tell us why. And why is oracle partnering with two of its biggest competitors . Mark herd answers investors questions later on on closing bell. Ive been doing a few things for a while that i really love tdd 18003452550 playing this and trading. 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And five years from now, four years from now, maria, theyll earn about 6 and hell find a way to harvest that. You didnt buy it because he did. No. Weve been in it for a while. Yeah. In it about 19 you know, a long time. And another one is federal mogul where he owns 81 , and the stock is 14. Next year, fdml, theyll earn 2. 40. So the stocks going straight up over time. And they will split up the company, have aftermarket oe, so carl is very good. Were back in the period of activist investor and carl is a prime example. Bill ackman, everybody, is that a good thing . Are they stirring up the right kind of dust . Well, you go back to the 60s when i first came down to this place, what you had was bootstrap financing, someone who would look at the sum of the parts, figure out how to break it out, and in quotes the corporate raiders. Charlie bluedawn, gulf western, jimmy lings of the world. So this dynamic of the free market changes overtime. And when you give money to individuals or organizations, 1 in 20, theyre absolute return oriented. They dont want to beat the market. Theyll be active. Youre talking about what navistar will be able to earn, really looking at earnings. Give us the most important screens you look at when youre picking stocks. Well, we like to look at how much well lose first. The downside risk. They only had one engine and certain way to meet epa requirements, didnt have the backup we thought they did, and we blew that one. On the other side of the coin, how much can they earn on the upside of the cycle and what money can they is there a risk, maria, having a financial challenge on the downside, and what carl icahn did with federal mogul is brilliant. He had a Rights Offering and basically raised 500 million, so eliminated the downside. After that was done, its moved from 9. 50 to 14. 50. So thats all in about a month. Right. So thats one screen. What are your other screens that are most important when you pick stocks . We dont believe in prince like bill, kiss a frog and its a prince. We like a good manager. In the case of john malone with tom rut leledge, he backed him well as the industry of which hes a part. So the moon, the sun, the stars said when you have a good industry, good company, good management, and americas very blessed with good ceos youve long been an investor in media. You talk about john malone, viacom, you pound the table on that still, right . I look at companies with cash flow that are buying back stock, bill. When they split up and spun off cbs, they had 722 million shares outstanding, down to 470, and in three, four years, down to 350. So some of the redstone will be the last person standing, and well be the second person behind him. Viacom is selling at 72. Probably worth in a marktomarket model basis, three years out, over 100. Are you but therell be air pocket. Are you surprised we havent seen more m a, in an environment where you have rockbottom levels . You also look at marriages and love like you call it in business. Youre going to make me blush. Notwithstanding that, its financial engineering, spinoffs. Spinoffs are an important part. Maria, for example, roll corp. It was taken over by conagra. Post is a Cereal Company thats run by a gifted ceo by the name of bill, and he will make us a lot of money and already has. In addition to that, the oldfashioned company a buys company b to grow, and that well see a lot more of in the next 12 months. Rates are at such rockbottom levels. Are you surprised we havent seen more . I think the ingredients are there except one. Confidence. The ability of the ceo to walk into his board and say, ive got visibility over the next three years, and that requires changes in the way government is approaching this antagonism towards business. I love watching you work. You havent looked at a note yet. You have all of the numbers off the top of your head. Years ago, i remember we were sitting down with jim rogers and during a commercial, you leaned in to him, and you uttered one word. You said, coffee . Yeah, he should have bought it. Singleserve. You werent asking for a cup of coffee at that point. You saw that coming. Now the word youre saying is bourbon . Well, american bourbon, spirits, alcohol, about a 600 billion business on a global. Bourbon is only 8 billion. So to the degree you buy jim beam, brown foreman, and wild turkey, you have a strong tailwind of those companies and those consumers around the world that want to buy this product. Consumer tastes are fickle. That can change on a dime. Slowly. Okay. You walk into a bar tonight with me and we can have a jack and coke and see what everybody else is drinking, and im not knocking anybody elses product. I mean, you know wild turkey is your preference. Notwithstanding that, there are a lot of other stocks that we like, like malone. Why did he buy into cable, what does that mean for cablevision . Chuck dolan has an opportunity, maria, to take cablevision at 18. 50 a share and put that into time warner cable, cluster up new york, and then have malone with rutledge do something. Its a lot of interesting dynamics interesting characters. Look, i know youre a stock picker. Mario, what do you think about the market . Were still waiting on this great rotation, all of the money that came out of bonds its happening, maria. We see it now. We see it now with individuals through their intermediaries, the investor advisor is saying, listen, the bond is 2. 60, going to 3, 3. 25, and at some point, the tbill the 30day goes up, so weve got to move you into equities, start off with a baby step like training wheels and utilities, and thats how to run. But theyll do other things over time. And not only that, why did Warren Buffett buy heinz . He bought it in part because he wants a cashgenerating business that will be inflation indexed and he can maintain the multiple on his exit strategy down the road. Theres a lot of reasons to preserve capital by owning equities. At the same time, i cant knock anything else anyone else does. Yeah. Let me hit you with one more. Fracking. Are you making a bet are we going to see a revolution in this country where we become much more Energy Independent . Well, our bill our balance bill, our bill our balance of payments is about 300 billion. Right. So as we try to not give as much of our wealth to the nonamericans, countries that may not be friendly to us, like cline that and other parts of the world over time, fracking is a technology thats been around. So can we become Energy Efficient . No. We have to hug the planet, be environmentally sensitive, but we a the bridge that god shave us to find the shale and deliver it to the right price. So natural gas. The other day, maria, the other day as part of financial engineering, one oak, a utility company, took the local distribution business, ldc, selling gas utility, and spun it off to the shale. Other companies have taken their midstream business and monetized it. National fuel and gas sells at 62. The day they announced that, its 82. Mean while, its a loaded laggard. Rich in natural gas in this country, so you would expect theres investment ideas around that. There are. Plus equipment. Theres a company reporting this afternoon called weatherford. I was not down recently visiting with the management, you know, some time ago. Theres a company that jeff bought called luf kin. They lift the liquid and or gas out of the ground through artificial lift, after the shale works on it. The stock is 13 1 2. Wft is the symbol. 800 million shares, a Good Business and a bad business. We would like to see them sell the bad business. Monetize some aspects of the Good Business. You have a stock that could be doubled. They have some issues, a lot of warts they bring to the table. But its worthwhile looking at, and today well know the stock has come back here ahead of the earnings as you saw there. Well, what were looking for is a cleanup in the foreign corrupt practices act. They made blunders offshore. Theyve had accounting issue, some tax issue, but though have some fairly wonderful businesses. And just get an activist not me, but an activist to focus on it and you can get a fairly significant lift in the stock, not artificial either. Got it. The mind is always working, isnt it . Thank you, mario. Great to have you on you guys are inspirational. Get him started, hes going to make by the way, how come you dont have a check mark on your twitter page either . What do we have to do to get a check mark chase a checkmark . You should know what that is. I had somebody set it up and hit a button. Thanks, mario. Delighted to be here. 20 minutes left in the trading session. Still up 14 points. Kind of a waitandsee market ahead of tomorrows fed announcement meeting. President obama meanwhile proposing a grand bargain to reform the Corporate Tax code, but use the money for more spending. Will republicans really agree to another Stimulus Program . One of canadas top officials says president obama is severely underestimating the number of jobs the Keystone Pipeline with create. He takes on the president s math later on the closing bell. S in hidden fees on their 401 k s . go to etrade and roll over your old 401 k s to a new etrade retirement account. None of them charge annual fees and all of them offer low cost investments. Etrade. Less for us. More for you. And all of them offer low cost investments. First day of my life by bright eyes youre not just looking for a house. Youre looking for a place for your life to happen. A quarter million tweeters musicare tweeting. Eamed. And 900 Million Dollars are changing hands online. Thats why the internet needs a new kind of server. One thats 80 smaller. Uses 89 less energy. And costs 77 less. Its called hp moonshot. And its giving the internet the room it needs to grow. This. Is going to be big. Its time to build a better enterprise. Together. [ male announcer ] ive seen incredible things. Otherworldly things. But there are some things ive never seen before. This ge jet engine can understand 5,000 data samples per second. Which is good for business. Because planes use less fuel, spend less time on the ground and more time in the air. Suddenly, faraway places dont seem so. Far away. Welcome back. President obama offering to cut the Corporate Tax rate today, but there is something in the proposal he wants in return. Eamon has the details. Reporter he toured a center in tennessee and used the opportunity to tout what he and the white house are calling a grand bargain on taxes and spending, what the president would like to do is lower overall tax rates, broaden the base, and use some of the additional revenue to beef up Infrastructure Spending in this country. Heres how the president put it in chattanooga earlier today. Heres the bottom line. Im willing to work with the republicans on reforming our Corporate Tax code as long as we use the money from transitioning to a simpler tax system for a significant investment in creating middleclass jobs. Thats the deal. Reporter but, maria, republicans up on capitol hill said that they didnt think this was so grand, and they didnt think it was much of a bargain either. Republicans pretty much shooting down the president s idea right out of the gate here. So why is the president making this proposal . Well, a lot of politics here. President s generally like to be perceived as the person whos offering up new solutions and then they can let the bad guys on capitol hill be the ones knocking it down. Thats the politics of it. Thats why it may be a win for the president , although you wont see any policy emerge out of this thing. All right. Thank you very much. Im taking it because were watching facebook very carefully. Can it close above that 38 ipo price, josh lipton . Reporter yeah, bill, obviously watching facebook very closely here. What do we get back to the 38 offering price . Right now, youre around 37. 94. Remember, you hit that intraday low of 17. 55. That was in september 2012. You finish 2012 around 26. But right now, right near session highs, up about 7 at 37. 92. Maria, back to you. All right, josh, thank you so much. Were in the final stretch of trading for the day. About 12 minutes left before the closing bell sounds. We have a market thats fractionally better on the day. Up 16 points on the dow. The stocks may be struggling to hold onto gains, but when we come back, joe quinlan explains why the rally could head higher. And could Facebook Stock get back to the 38 ipo price . It looks like its headed there. Up 7 . Back in a moment. 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. Well, welcome back. Were up against the close here. About 10 minutes before the closing bell sounds. We heard info from art cashin, a lot of stock for sale going into the close. All high caps, looks like more than 1 billion of stock for sale. Although, he was pretty confident they would get pared off. Thats a lot though. Yeah. Anything is possible. Were talking bigliquid caps. Well see what happens. As we head to the close, joe and jeff from cnbc. You still like this market. Were still in the throes, without a correction, without any i would like to see a correction, because its set up again for another move up. I think, bill, were still going to grind higher. Not much higher. Were close to the target ends. Theres some value in the cyclicals when it comes to the globals, industrials, energy. Theres places to put money to work. At this point, whats driving your thesis here . Is it earnings . Is it the fed . Is it the fact there just are very few alternatives . All of the above . All of the above, maria, but i would add global growth. Im probably the only one, i think the old world europe is coming back. It will come in 2017, well price it in early. You still a skeptic . Always a skeptic. Weve seen seven months in this market of the good, the bad, the ugly. The market seems to have weathered everything. Except we seem to have come over the past couple weeks a little bit of slowness, coming up against the wall here. Still a slight upward bias. One of the things thats intrigued me a lot about earnings so far is the companies that have missed have been penalized a whole lot more, twice as much, in fact, as the companies that have beaten. So you sort of start to get the feeling that investors are wanting more, and as we go forward now, with gdp, probably not going to be very good tomorrow. Tapering. Sequestration. A lot of obstacles out there that the market will have to overcome. But very good at doing so so far. Well see. You smelling the cheshshire cat as hes talking . Weve listed the obstacles in the past, and weve surpassed them. If we get talk of taper, well grind higher. It will be a grind, not a straight shot. How do you want to be exposed . The emerging markets, everyone hates them. Right. My inclination is, lets look at a mexico, south korea, maybe even poland. Dont jump head first, but start nibbling. Outflows have been enormous. Right, but longer term, threeyear horizon, this is a good buying opportunity for emerging markets. And . I think its a stock pickers market Going Forward. Just the easy money has been made already. Youre really going to have to find the companies that have really good growth stories, and i dont think it will be sector by sector. It will be real company by company type story. And do rates go much higher . Is the bond market, you know, this great rotation we keep talking about, is that going to evidence itself that much more as we see the tapering begin . It may, bill. I think theres its not great rotation. You know, were seeing more money come out of cash, fixed income into equities. Its a trickle, which is what i like, not a flood. Yeah. So a minor rotation . Call it that. Came out of bond funds in the last month and a half or so. Do you want to avoid bonds . Shorter duration, high quality. Everyone has to have fixed income in their portfolio, but right now, be very careful. All right. I think this notion of the great rotation, the market should be careful what it wishes for. If this outflow continues and rates start to go higher, i think that puts a whole paints the market in a different light. I really think earnings have driven the market, but lower Interest Rates have driven earnings, and if we lose that, look out. All right. Thanks, guys. The rate of the 10year, is that the rate youre looking at for the most part . We look at that, maria. Well see how it moves in the next couple of days. We dont see much more up from here in terms of the yield. See what the fed does tomorrow. Thats right. Thanks, guys. Appreciate your time. Well come back with the closing countdown. Were heading toward the close and not seeing a sign yet of a drag on the market here with all of the money the stock for sale right now. We are up 10 points on the dow. Meanwhile, oracle president mark hurd about to ring the closing bell and he will join me on how hes planning to get the Software Giants sales back on track. And well also talk about the move from nasdaq to new york. Youre watching the closing bell on cnbc, first in business worldwide. 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. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. About 2 1 2 minutes left here. Lets show you the dow before we head to the close. We did talk about how there was a billion dollars for sale of bigcap stocks on the close here, but they have been matched, apparently, right, terry dolan, it would appear thats the case . The dow is still up about 17 points. Nothing to write home about, but its not a selloff here either. No, most often when you see the imbalance in the earlier stages, it gets offset, either closer to the bell or right on the bell. They dont want to show both hands. So before we get too close to the end, let me see what facebook is doing. Weve been watching whether it can get back to its ipo price of 38. Its been the last i saw, the high was 37. 93. If we can show facebook, then well move on here. But while youre doing that, what do you expect the fed to do tomorrow . Are you expecting anything marketmoving . I think weve seen a little bit of what the fed is saying, tempered rates downwards, giving us an indication that they may be reevaluating their jargon, if you will, on tapering. You know, there was a comment from bernanke not too long ago that said we may be looking at 6 employment rate instead of 6. 7 . He also used great verbiage in saying the 6. 5 was not meant as a trigger when things would start moving right away, but rather as an indication of a range of where were interested in taking a second look. So those types of things are tempering the market, realizing the fed is still on our side. With or without the fed, the market seems to be the place to play, as money moves back into the market one way or another. Are you putting more money back in this market . At this point, we are, because we saw a little downdrift in june, and we didnt get much out of it. Yeah. 5 is what you got. Yeah. Thats right. You came back. Youre inclined to be more bullish than shorter term here . Right now right now, theres no reason not to be, because the markets not allowing us to have any type of a selloff, because the moneys on the sidelines looking for opportunities, especially money that missed in march. Its now looking to say, okay, where will i see my next opportunity . Couple that with the fact that the Interest Rates are moving slowly higher, more money coming onto the sidelines. And then, of course, the technical factors are pretty impressive, to me, the moving averages are still positive. I like the way the dow is moving along its tops here. It is moving higher. Thank you, terry, very much. My pleasure. Well see you later. Wed head toward the close with mark hurd, the president of oracle ringing the closing bell of the New York Stock Exchange, getting a big fish for the nasdaq today. They lift at the New York Stock Exchange for the first time, and mark hurd will be marias special guest coming up on the second hour of the closing bell. Ill see you tomorrow. [ bell ringing ] and it is 4 00 on wall street. Do you know where your money is . Hi, everybody. Welcome back to the closing bell. Im Maria Bartiromo on the floor of the New York Stock Exchange. Stocks closing modestly higher. Investors remaining cautious ahead of word from the Federal Reserve tomorrow. That will likely set the tone. Lets look at how were settling out ahead of the fled. We did have selling at the end of the day, which took some wind out of the sails. Up about 15 points. Nasdaq was the winner. Technology getting a bid today, up 17. 30, finishing at