Transcripts For CNBC Closing Bell 20130813

Stock . Take a look at what its doing right now. Its up nearly 5 . Of course, it already has a big buyback and the thought of it being bigger is something the investors like. Arguably the most successful of all of the activist investors going after one of the Largest Companies in the world and pushing it up 4 . Even apple responded. They said that, quote, we appreciate the interest and investment of all of our shareholders. Tim had a very positive conversation with mr. Icahn today. I tweeted out a little while ago that the translation of that is, simply, gulp. And to think this was one time a target of shorts. You had David Einhorn in there last year. Exactly. Shorting the stock. And now to think carl icahn is calling it undervalued. Certainly one to watch today. Much more coming up over the next couple of hours, im sure. Also, its called the hindenburg, and it has the Trading Floor buzzing, because the omen is back in play right now. So even as stocks are rebounding today, you can find out why some are predicting a stock market disaster is looming. We will look carefully at that coming up a little bit here. And one merger is grounded. Look at the stocks of American Airlines and u. S. Air, both depending on a deal to go through. American airlines down 48 . U. S. Air down 11. 5 . The proposed merger, the department of justice says consumers would be hurt and is suing to block that deal. So far, only investors are getting crushed today. Well talk to a few lawyers who have opinions on that deal. Lets get you caught up on the markets, how weve been trading so far this tuesday. The dip in the morning happened again, and then it returned. The market up 47 1 2 points on the dow at 15,467. That has been the trading pattern of late. Nasdaq, higher. Apples helping right now, up 17 points or about. 5 at 3,687. And the s p 500 index is up 5. 8 points at 1,695. Bob pisani, apple story is a good one. Reporter apple will normally do about 10 million. Icahns definitely having an influence on the stock. Were probably at the highest level since january right now. Heres the tweets here. Had a nice conversation this is carl icahn with tim cook today. Discussed my opinion about a larger buyback should be done now. We plan to speak again shortly. We currently have a large position in apple. We believe the company to be extremely undervalued here and the first part of what i was saying, mr. Icahn tweeting it out. I know this is a love fest here going on between mr. Icahn and mr. Apple. But people down here were really amazed. Look at whats going on in this day and age. An activist investor talks to the ceo, the investor tweets hes pleased, he has a position in the stock, the company says nice talking to you, they issue a statement, the stock is going up. Everybody is treating it normal, but its rather remarkable to see what is going on in the modern world. People down here talking about how different the stock trading has become in this day and age. And looking at the dow jones industrials. Bill is right. Whats interesting is Dennis Lockhart, with the federal reserve, of course, in the middle of the day noted that the economy was uneven and the data does not show a clear economic picture. That put down on whether the tapering would occur. The bond market has no part of that. If youll notice, weve seen an elevation in bond yields all throughout the day. The bond market believes tapers is coming and i would put more in stock with what the bond market thinks. If you dont think its the case, look at Home Building stocks. Theyre concerned about tapering because cutting off purchases of mortgagebacked securities would raise mortgage rates. So weve seen homebuilders fall throughout the day. These are off of the lows. And Real Estate Investment trusts also very much dependent on interest rates, also among the weakest groups today. Got a lot going on down here today. Guys, back to you. Thats for sure. Lets talk about this what has turned out to be a newsy. Joining us is david from mainstay, tim from tamron, david from convergeent, and our own rick santelli. Anybody own shares of apple . Rick, youre out of this, i know. Anyone . No, we dont. No one holds apple here. We own some apple. Oh, well, you didnt raise your hand. So what do you think of carl icahn going after apple here . I think its very interesting for the stock. Certainly has a longterm history of Success Stories and even more recently taking the position opposite bill ackman on herbalife. So its positive news for apple. Weve seen the nice bounce for the stock. Certainly a holder of the stock. Would you like to see a greater, larger Share Buyback as carl icahn is suggesting . We would. We would. Yeah, and, bill, what i volunteer is it speaks to maybe the dynamic marketplace we all sort of operate in. If you dont execute, theres capital, and capital comes after you. And more often than not, its a good thing. It speaks to the competitiveness of the economy. You know, we talk about the dynamic marketplace. But it seems like a lot of the activist investors are going after bigger and bigger names. You have carl icahn and apple. You have bill ackman going after proctor gamble, Ralph Wentworth went after pepsi. These are names with giant market caps. Is the state of activist investing changing, tim, ill throw that question to you. I dont know if its changing. I think the economy is bigger, the market is bigger and the games gotten a bit bigger. Thats not what we do here. Were fundamentally driven and bottomup. I think it speaks to the nature of the economy. I think its a good thing. If you dont allocate capital well, if you dont produce returns that are outweigh the cost of capital, you know, there are people out there that do that and do it well. And i think on balance, its been a good thing for the economy and its been a good thing for u. S. Capital markets. David, what do you think of all of the but i think hang on one second. Would you own apple here . I mean or what do you make of what carl icahn is doing to apple shares . We tend not to focus on individual stocks. The things were tending to focus on now are things that are sort of unloved and undervalued. Well, thats what he says apple is. Sure, sure. Some of the things were focusing on are emerging markets. Theyre undervalued relative to the u. S. In fact, theyre kind of at a point where in the last five years this is the most undervalued theyve been relative to the u. S. What catalyst, then, do you expect to move the emerging markets . I mean, weve heard from some other contrarians out there that are looking to that very unloved group right now. So what do you expect to happen . I think its just the normal capital flows. So at some point, the market wakes up and it realizes where value is. And i think its the emerging markets. Equities have been left on the side of the road. Once people start paying attention to them and understand what the value is there because they have strong earnings, theyre on the same debt levels that the u. S. Has, theyll flow back into that space. Rick, the other piece of news is the comments from Dennis Lockhart in the middle of the day saying whether theres not enough data to taper in september, october could be on the table. This goes against what he said even just a week ago. What are you seeing in the market . Is it reacting to those comments at all, or is it just in one ear and out the other, at this point . Over than 2. 71 . I think that the market definitely was helping the equity markets, based on his comment. As a matter of fact, if you look around 10 15 to 10 30 eastern, the stock market was sold off. The fed did a practice round or technically a practice round of reverse repos, and it seemed as though that was it. The stocks went down. Mr. Lockharts comments, kind of the dog ate my homework, not enough time, the heart isnt in the taper anyway, that pulled the day out. Interest rates through all of this . Well have the secondhighest yield close in two years, 2. 74, is the only higher yield close from the day after the fourth of july. And ill tell you what, as i look at stocks and everything weve said about the Stock Movement today, you know, itll settled at 15,420, went down 80 points and made the low, went 80 points up and made the high, i would think the old trader in me would look for an unchanged close, 44 points on the table. Yeah, the bias is to the downside, art cashin tells us, although not by a whole lot. David, whats your best investment idea right now besides apple . Well, we like we like the regional banks in this environment. We continue to think that this what weve seen in interest rates, the most recent move, the steepening yield curve, that improves Net Interest Margin for the regional banks. Currently and going forward. Because we think that rates continue to go up. Okay. Tim holland . Yeah, to piggyback on what david said, bill, were pretty constructive on the smaller banks, as well. One we own in the small cap fund, the diversified fund, first merit, northeast ohio, did an acquisition that gets them into wisconsin. The yield curve is helping. If you go through the quarterly results, credit continues and loan growth is okay, and that speaks to a decent economic environment here at home. Very quickly, david. Anything domestically you like here . I tend to focus on the things that are the most uncomfortable to own right now, which are Natural Resource equities. Some of those are trading six to eight times earnings, to give you an idea of how oversold those are. The gold miners in the past three days are up 15 . So theyre starting to become comfortable. They are well, i dont know if theyre comfortable yet, but theyre starting to come in the news. You are the great contrarian, arent you . Thank you, gentlemen. Thank you for your thoughts. Thank you. Thank you. Heading toward the close. 50 minutes left in the trading session. The dow is up 43 points. Right now, the s p is up just about 5. 5 points, nasdaq up 16. Apple the big news of the day. Well have much more on that news, that carl icahn is taking a big stake. Up next, the Justice Department filing a lawsuit to ground the 11 billion merger of u. S. Airways and American Airlines. Both airlines are vowing to fight back. But their stocks are getting rocked today. Well find out whats behind the governments decision. Then, is it ever too hot for Fried Chicken . Yum brands is blaming poor sales on warm weather in china. Well take a closer look at that claim, and also ask if the stock has room to run, weather permitting, of course. That and much more coming up on the most porch hoimportant hour trading day. Stay tuned. Farmers presents fifteen seconds of smart. So you want to drive more safely . Stop eating. Take deep breaths. Avoid bad weather. [ whispers ] get eight hours. [ shouts over music ] turn it down and, of course, talk to farmers. Hi. Hi. We are farmers bum pa dum, bum bum bum bum another big story today. The Justice Department dropping a bombshell on the Airline Industry by blocking the merger of American Airlines and u. S. Airways. Phil has the details. A shocking story, here. Phil. Reporter yeah, nobody saw this coming, certainly within the Airline Industry, it was unexpected. It comes down to whether or not you believe the merger will hurt competition and result in higher fares and fees. Heres what happened today. The doj filing an antitrust lawsuit, saying it will hurt competition. The lawsuit will slow down amrs exit from bankruptcy. Remember on thursday, creditors were supposed to vote on a bankruptcy exit plan, which would be contingent on the merger. U. S. Airways Ceo Doug Parker says this merger will no longer happen in the third quarter. Theyre not giving up on it completely. In fact, they say they plan to fight the doj lawsuit. Both parker as well as tom horton, the ceo of american, are out with letters to employees today, defending the benefits of this merger. So for the time being, instead of these two airlines combining and becoming the largest in the country, they will remain where they are, with american being the thirdlargest airline in the u. S. After united and delta, and there you see southwest is number four, and u. S. Airways the fifthlargest. According to the doj, this is all about a merger that would ultimately result in higher fares, higher fees. In fact, today, during a Conference Call, the assistant attorney general said we believe there will be hundreds and hundreds of millions of dollars in consumer harm if this merger goes through. Well, ill tell you what was really harmed today. Shares of lcc, u. S. Airways shares, down 12 , or almost 12 right now. The biggest single drop since august 2012. Its lopped off more than 200 million from the market cap. Bill, were showing you this chart going back to february 13. Thats when these guys announced their merger. After that, the airline had a nice little run. Today, everybody is pulling back. European officials approved this last week when the two agreed the two airlines agreed to give up some slots at heathrow and in philadelphia. Werent they willing to do the same thing for u. S. Officials . Wasnt there some giveandtake there, as well, dont you think . Reporter the doj wont discuss what kind of discussions were had between the airlines and the doj. But its clear by going with this lawsuit, and on the Conference Call today, bill, the doj said repeatedly we believe the best option here is a complete block. That tells me that its unlikely there will be enough concessions offered up here to salvage this, at least near term. Obviously, everything is up for negotiations. Okay. Reporter that was very clear during the Conference Call, that this in their opinion has to be stopped. All right, phil, thank you very much. Very important story. Well get back to more on that in a moment. But were juggling top stories right now. Back to the icahn apple story. Scott wapner is on the phone. I gather youve talked to carl. Whatd you hear . Reporter i did, indeed, bill. In fact, i just got off the phone with carl icahn a short time ago who reiterated a little bit of what he put out on twitter, that he had a good talk with tim cook, the ceo of apple. He also said in his call, you know, he believed that the nobrainer for apple to use either its extra cash or to borrow money and do a large buyback, and he said if he did a large buyback, the stock value would be enhanced, in carls word, tremendously. He reiterated the fact that apple is very undervalued, in his words, a company that has great product. He said they had a very amiable conversation, that carl speaking with tim cook, and that they do plan to speak again shortly. He also, you know, his comments [ audio difficulties ] on the program last evening, what apple is like now versus what the company was under steve jobs. So i asked carl about larrys comment that apple seemed to be going down without steve jobs, and carl would say a lot of people thought netflix was going down, too. That was his response to that. Of course, we know that carl has a big position in netflix, and one thats been incredibly profitable for him. Hes made, i think at this point, at least 1 billion. So thats been a big position for him. This is the latest one. This is creating the biggest wave on wall street. Thats carl icahn taking a very large position in apple. Speaking with tim cook, planning to speak again, and urging the company to do a large buyback. Bill . Well, scott, ill take it from here, because i have a question for you, which is that apple has become something of a battleground stock for a lot of hedge funds. I misspoke earlier and said that David Einhorn was short. Of course, my memory misserved me. He was actually long. And as far as we know, he continues to be long. Well get some 13f filings tomorrow. And i think a lot of people will be watching to see if other hedge funds have added to their apple shares. I know you talk to a lot of the hedge fund managers. Do you feel carl has momentum behind this trade, too . I think carl feels that anytime he does anything, he has his own momentum. He creates his own momentum. Einhorn has been in it for a while. Its large position for him. He made some waves several months ago where he was calling on the company to better utilize its cash, to increase its dividend. Im not sure of the other, you know, Big Hedge Fund managers at this point who have positions. Right. Carl creates momentum all by himself these days by taking these big positions in some of the stocks. And hes done so incredibly well this year on many of the names, whether its chesapeake or herbalife or, you know, obviously now he hopes to do the same with apple. But netflix and so many other names hes been in have done well. We should also say he does have a position in newance, which im sure has been mentioned already right. Which is obviously the maker of siri. Scott, you probably didnt get into too many details, but you did mention that he feels like they should do more to increase the chances of a Share Buyback, whether they should borrow money to do it or whatever. But theyve already done that. They issued a huge bond that was large very successful in order to increase their Share Buyback. And we all know that so much of the cash is overseas, and there would be huge tax liabilities to repatriate that. So i wonder how much maneuverability tim cook really has to increase his Share Buyback to please carl icahn at this point . Maybe if they could borrow more. The repatriation issue did come up in our conversation, and obviously, thats a significant issue not for apple not only for apple, but for a large number of companies and a large number of technology companies. Whats going to be really clear from this point forward, bill, and really interesting, i should say, is to see how this relationship now goes between carl icahn, a guy who certainly is not afraid at all to shake things up no disrespect whatsoever to David Einhorn, who got in and made waves and went public and urged the company to do it and took them on in ways that many investors have simply been unwilling and didnt have the wherewithal to do. But its a little bit different, i think, now that you have somebody like carl icahn weighing in, and its going to be fascinating to watch how that relationship evolves over the next several weeks and months. As carl said, he does plan to speak in short order again with tim cook. He described their conversation, as i said, as amiable, and well just have to see what goes on from here, how much pressure thinks he can put on, or even needs to put on, how receptive tim cook is to the idea of doing a digital buyback. And for that, i honestly dont know, and carl didnt say and wouldnt say what tim cooks reaction was to his idea. All right. Thanks, scottie. Thank you, scott. Well have more on that. We want to hopscotch now back to the other big story of the day, which is, of course, airlines, and why the government would seek to stop a deal between American Airlines and u. S. Air thats been in the work for about a year allowing delta and continental. Northwest also merged, and Domestic Airlines have done mergers. And american u. S. , as we mentioned, was approved by e. U. Officials last week, august 5th. Joining with the thoughts, Bruce Schneider and john griggs, and our own david favor, been doing great reporting on this. What are you hearing on the latest on this, david . And where do we go from here, do you think . I think phil said it earlier, bill. This was something of a surprise. You would imagine it wouldnt be a complete surprise. Its always been a possibility that the antitrust division of the doj would seek to block this merger. But nonetheless, something of a surprise to both sides here. And i think whats important is, youve had a lot of investors trying to figure out, okay, whats the landscape going to look like here in terms of, has this got a chance of closing . Is there an easy fix, perhaps . Because the last deal that was challenged was the bhev rage the beer deal between constellation brands, involved anheuserbus anheuserbusch. There was a clear fix there, and they got it approved after it was challenged by the doj. Here, not what im hearing at all, bill. In fact, on the on the u. S. Air amr side, there is a clear belief there is not an easy fix, and that, therefore, they will have to fight this in the courts and see if they can succeed. That becomes a big if. There had been a handful, a very small number of victories by companying seeking to merge when theyve been blocked or tried to be blocked by the doj. But there havent been many that have been able to win that case. No plan b there. Yeah, bruce, you know, its interesting when you look at some of the data here. They cite a lot of Cost Increases on some of the tickets. They also look specifically at the press release, at reagan, national, d. C. , seeing theyd have a monopoly. Nearly 70 . Why couldnt they have a fix, selling off some of the gates that are problematic . Is there a fix, albeit maybe not an easy one, from what you can tell in the deal . This is different from some of the other challenges. This isnt about city pairings. Theyre alleging something much more nationwide. They see a comfortable arrangement among the carriers, and they see u. S. Air as being a price maverick that could have held that back on its own. And, john, if youre advising both of the airlines, what would you tell them . Is there a possible plan b to try to solve this, short of countersuing and trying to appeal this . No, i dont think theres a plan b here at all. I agree with bruce. The big surprise here is not the fact that theres a lawsuit so much as the fact that the lawsuit is much more pervasive and serious, i think, than people might have anticipated. The u. S. Air Advantage Program is a big deal nationwide. The just general use of the admissions of the two ceos. Really serious and very clever complaint. And they identify 1,000 city pairs where they say this is in violation of the guidelines. And the market seems to think its not going to happen, if you look at the share prices. So it does not look good. Theyre going to have to litigate it all the way to the death, and maybe experience the death of the deal that way. David, you know, there are a lot of arguments that surround american when they first declared bankruptcy, one of the arguments was they want to save their cash to make them more attractive to a u. S. Air for potential deal. In the antitrust proceedings, they said they needed the deal to survive, but now the doj is saying, american is likely to exit bankruptcy as a vigorous competitor. What do you think the fate of american is . Could they do another deal with another competitor . Do they stay in bankruptcy . What happens to them . It would be clear if this is successfully blocked that the paths towards consolidation are more or less completely blocked for an american. The question then becomes well, you have to emerge, this is the way that they are emerging from bankruptcy, the restructuring has been going on for years. This has been a very complex deal to have negotiated, of course, in agreements with the creditors, who include the companys unions and the like. U. S. Air is hurt here. It is fair to say that american is hurt more and one will question in terms of its ability to be fully capitalized as it needs to. Phil has talked often, kayla, they have a big plane contract out there. Theyre buying a lot of planes. Well, if they are alone again, can they afford to buy all of those new planes that they have to . Right. Those are some of the key questions. I have by the way, kind of a question here, bruce, and ill ask you, we got the okay on northwest delta, united continental, why not u. S. american . Is it a matter they came late to the party and the consolidation is already to the point it would be anticompetitive for anybody else to get together here . I think that everybody knew that this was going to be the last consolidation, if it occurred. The question was, was it going to be before or after this transaction. The doj did a retrospective on some of those mergers and has concluded that at least as to ancillary charges, prices have gone up and the quality and total number of flights has gone down. So i think that theyre not happy with their retrospective and not going to let this go forward, and to add another to that chain. Yeah, crazy. Thank you all for your thoughts. Very important story. David, let us know if you hear anything else. Sure thing. Heading toward the close. We have 30 minutes left in the trading session here with the dow up 48 points. And coming up, we have more on the carl eicahn apple story. He buys the stock, tweets about it, the stock goes up. Created about 20 billion in market cap just by speaking to tim cook and tweeting about it. Up 5. 3 right now. Pretty amazing. Well have more on that. Meanwhile, yum brands blaming hot weather in china for slumping sales, and in that nation, really . The stocks getting hit hard. Well hear from somebody who says its a very appetizing buying opportunity. And the humanity. Art cashin said the hindenberg is hovering above the market. Find out how worried you should be. Stay tuned. [ dad ] so i walked into that dealers office and you know what i walked out with . [ slurps ] [ dad ] a new passat. [ dad ] 0 apr. 60 months. Done and done. [ dad ] in that driveway, is a germanengineered piece of awesome. That i got for 0 apr. Good one, dad. Thank you, dalton. [ male announcer ] its the car you wont stop talking about. Ever. Hurry in to the volkswagen best. Thing. Ever. Event. And get 0 apr for 60 months, now until september 3rd. Thats the power of german engineering. 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. 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. Yum brands stock not looking so tasty today. The shares of the Parent Company of pizza hut and kfc are off after the fastfood giant saw sales in china fall by 13 , which they blamed on the heat there. And it is not so much the chicken in summer heat dont mix, more it had to do with chinese consumers looking for cold cold, fruity drinks yes, thank you and ice cream as part of their dining, it says here. With the stock near 52week highs, is this a buying opportunity . Lets talk numbers on yum brands. On the technical side, carter worth, oppenheimer. On the fundamental side is steve cortese, the founder offer have cruz tjm. The stock rallied on recovery hopes in china. Is it too risky to go with it right now . It is too risky. I say yuck. Blame it on the rain, a terrible song by milli vanilli, and also a terrible excuse, blaming weather for poor performance. Weve seen poor performance in china from yum month after month. This was a Great Company with powerful brands. Unfortunately, they put their chips on the china bet, and it is now one of the weakest markets in the entire world. Milli vanilli didnt really sing that song. Thats true, too. Carter, what do you think of yum . The yuck part is right when you speak of bird flu. Lets talk about the chart, and that part is delicious, quite frankly. The fiveyear trend, like every other stock, a low in 09. Very orderly. Draw the trend line and take your ruler and do it. Whats important is the sideways period for the last 18 months as it keeps probing the 73 level over and over and over. Thats when a conventional buy juncture is, how a stock gets to a live 8, backs away. Each time it backs away less and less and ultimately exceeds that level. This is what we would plan for, a breakout at 73, looking for 80 and change. And what its worth, anecdotally, the whole street hates it. Holds and sells, 17. People are not in the name. But you would take it here . Oh, yeah. Thats one of the reasons and whether its the weather or bird flu yeah. Ultimately, this is a good setup, equilibrium always ends youre going to sell your shares to him, steve . Yes, i am. I think if you want to be in the fastfood space, youre much better off in domestically focused name, wendys and chipotle. All right. Thank you, guys. Appreciate t good stuff on yum brands. A fun sector to do Due Diligence in. Chipot chipotle, yum brands, no worries. 0 minu 30 minutes before the closing bell. The nasdaq is at 19 on heavy volume today. But some great individual stories. We were telling you about carl icahn setting his sights on apple on what he called undervalued, telling scott wapner a big Share Buyback would boost the stock. Well discuss what icahns latest move could mean for the technology giant. And also another tech onetime giant, blackberry, had the first smartphone ever in 1999. Shares spiking again today on reports its largest shareholder may take it private. Well hear from somebody who says this company is doomed regardless of whether a deal happens. That story is coming up on the closing bell. If youre serious about taking your trading to a higher level, tdd 18003452550 then schwab is the place to trade. Tdd 18003452550 call 18882849410 or visit schwab. Com trading to tdd 18003452550 learn how you can earn up to 300 commissionfree online trades tdd 18003452550 for six months with qualifying net deposits. Tdd 18003452550 see how easy and intuitive it is to use tdd 18003452550 our most powerful platform, streetsmart edge. 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Jon fortt, whats the latest . Reporter a remarkable bunch of statements. Icahn tweeted he amassed a large stake in apple. Apple issues a statement saying they had a positive conversation. After icahns tweet, the volume in apple shares shoots up 300 over the hour before. Now, icahn says he wants a bigger stock buyback. He wants it now. What would be the impact of that . It would, obviously, boost earnings per share. Unclear how apple would pull off a larger buyback. Apples board has already authorized 60 billion for buybacks, spent 16 billion last quarter for that on the open market. And take a step back. Part of what this is shaping up to be is a showdown for tim cook. Commentators have wasted no time on twitter talking about what steve jobs would do in this situation. I can tell you this, jobs did not like the idea of apple being pushed around by shareholders. Apple doesnt want investor activism to deter, and carl icahn has moved the stock, and hes moved it more than the rumor mill can. Yes, thank you very much, jon. Can you imagine if steve jobs was still in the ceo wing . This wouldnt have happened. I dont think it would have ever happened. I could be wrong. I dont think so. I think the market cap was fairly high. Yes. And apple is down pretty well, from its low of 385, its up more than 100 per share, up 27 . Down 31 from its top. The market cap wouldnt have happened with steve jobs either. Thats true. There would have been no need. Devils advocate. Carl icahn roaring again. Apple hearing the noise. The latest case of activist investor, the mouth roars, icahn announcing on twitter he has this large position in apple. He believes the Technology Company to be undervalued, and this, of course, on the heels of his war over dell. Dan loeb targeting sony. The soap opera over jcpenney, and on and on and on. Its been the year of the activist. For carl icahn, hes been one of the best performers. In this one tweet he sent this afternoon, apple shares soared up about 5 . So if icahn bought 1 billion worth of apple, that was a 50 million tweet. Is that right or fair . Thats the big question that a lot of people are asking, certainly not apple shareholders, but something to debate. With us is activist investor greg taxen of the clinton group. Greg, youre an activist investor, but you dont agree with the very active, vocal, mediafriendly style of bill ackman and others. Should these investors be so vocal and pushing so hard in industries that some people could argue are not maybe their wheelhouses . Well, im not sure i would actually characterize my view that way. I think carl icahn has certainly been an effective activist. Been great for shareholders in almost all of the companies hes been involved with, as has a lot of other activists. I think people use different styles and approaches, and ones that best suit their their own personality and mentality and those of their investors. Carl icahnst eicahn is hard o disagree with apple. They could do a buyback. Hes one of the few people who has the credibility to probably go toetotoe with tim cook and with the apple board, and i suspect as in many places where he gets involved, hell do well by his fellow shareholders here. But, i mean, the question becomes do you need to be an expert in an industry to take a position in a particular company and to become an activist . A vocal critic of a ceo to advise them over their shoulder what they should be doing to increase shareholder value . I mean, does carl icahn know that much about technology that he can make an informed decision or does he just know that much about a Balance Sheet . Right, exactly. Well, you know, my view is certainly that investors are the people who own the company, after all, and so, bill ackman owns 18 of jcpenney. If hes going to make lots of mistakes there, hes going to eat his own cooking. Hes got every incentive to learn a lot, to surround himself with people who are very knowledgeable, you know, either consultants or former executives, or others, and try to get it right. Carl icahn has proven he can get it right a lot. Its certainly the case that management teams dont always have all of the answers, even though they are inside that industry for a long time. I think its very helpful to have outside investors whove got money on the line take a hard look at the business with lots of help from outside experts. And to provide their ideas and thoughts, especially to underperforming companies or companies that are subopt imized from a Balance Sheet perspective or otherwise. Greg, the other big activist situation thats been very public today, bill ackman resigning from the jcpenney board. I know some activists are split over whether its even helpful to take a board seat. This is a very public reason or example of the cases in which this doesnt really work. And you cant really effect change, you cant do what you want. And even if what you want, youre going for it, sometimes the board doesnt agree with you. Thats right. And, look, weve been very effective putting industry people onto boards. People who are executives, you know, former Board Members of other companies in the industry, they have a lot of credibility when it comes to changing strategy or making suggestions in board rooms. I think its harder sometimes for the activist himself or herself to go onto a board, especially alone, and to try to make changes in these complex organizations. Sometimes you need the credibility of an operator to be there alongside you, or to be there in your stead. Its worked for us at red robin. Wet seal. At radeon. All companies where we brought outside industry people who had a major impact on operations to the benefit of all shareholders. At jcpenney, ackman went on that board along, along with steve roth, didnt bring industry people with him, and that may have i dont know maybe the source of the difficulties on that board and in that board room. Greg taxin, thank you very much. Appreciate it very much. My pleasure. Ledding toward the close. Very small bias to the sell side. Were Holding Steady with the dow up about 37 points here. And stocks may be higher today. Theyre pretty rangebound, though. Coming up, art cashin explains why Something Like a hindenberg omen may come in to play soon. It sounds scary, and apparently it is scary, yeah. You think that wouldnt be good news for stocks, youd be right. Well have that story. I found out, an old, old friend of mine coined the term, hindenberg omen. Well get to that. Why is new York State Financial Services superintendent cracking down on the tiny bitcoin business . Hell join us to tell us, coming up later on closing bell. My mantra . Always go the extra mile. To treat my low testosterone, i did my research. 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. 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Icahn, he does create his own momentum by taking these positions. As our producer, john milloy points out, Icahn Associates has had few losers. Almost all are up. Some are up huge. Netflix has rocketed up 190 . Federal mogul, up 113 . Webmd, up some 130 . Herbalife, the subject of a billionaire brawl you watched right here on cnbc between icahn and bill ackman, its up almost 100 . Chesapeake, a relative laggard, up some 50 . Kelly, back to you. Well, josh, to have a laggard thats only up 50 , i mean, thats pretty much reporter not bad. Carl icahn has tweeted five times in his lifetime, and hes made 50 million roughly and he even said it at delivering alpha, i tried to sell netflix, but my son told me to keep it, because he watches netflix. You know, its up tripledigit percent. The activist son. Yes, 3 billion to manage of his own, we should note. 10 minutes before the closing bell. The dow up 35 points. Brian bellski has been one of the bigger bulls on wall street, but now he said its becoming harder to justify higher stock prices. And later, Rick Harrison takes us inside the state of the pawnshop industry, and what that says about the health of the american consumer. 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. About 8 minutes left in the trading session here, getting ready to close out the day. The dow is still in the green, barely. And as the market continues to make the way way higher, some are questioning whether valuations are justified at these levels here. The question everyone has been asking as we keep climbing higher, are stocks getting too expensive . For that, we asked joe from u. S. Trust and brian from bemo capital markets. Thank you for being with us. Brian, youve been quite the bull. Where are you finding value now, even as many are saying the market is overbought . You know, it really depends upon your timeframe, kayla. Remember, weve been bullish for a long time and we think were in the midst of the next great secular bull market. But from a nearterm basis, we just think that stocks are fairly valued at these levels, especially considering the point weve seen three to almost four p e points this year, number one, which is our big theme over the year. Its already played out. And number two is that we believe the next phase really has to be driven by Earnings Growth and sales growth, and that really has not been prevalent the last couple of quarters. Yeah. So its okay, folks, for the market to take a bit of a breather. What do you think . Yeah, bill, we had a great first half. Right. So a little breather here. We had a great year the first half. If it ended now, it would be great. To brians point, another catalyst would be global growth. Europe is looking better. China is settling down. The emerging markets are kicking. Another catalyst, well get it toward the year end. What do you think the catalyst will be . We have so many headwinds were looking at with the possible tapering this fall, the debt ceiling situation, the continuing resolution, spending with congress thats like groundhog day. We heard that before. Right, sure. It will come back again its hard to believe that now is the right time to get in some of the trades, like europe. A lot of people have been ringing the europe bell our clients look three, four, five years out. Theyre looking for opportunities to come in. Some have missed it. At the same time, i still believe in globalization, u. S. Corporations, information technology. Were going to grind higher. Youre taking money off the table . Is that what youre saying . We would lighten up, bill, a little bit, especially considering weve had such a big run. We never advise market timing. Were like joe, three, five years from now, the market is significantly higher. Things are not linear for long. Its okay to take a bit of a breather. I cant tell you, bill, how much poohpoohing that everyone is poo pooing tapering, the budget. It was taken care of before, it will happen again. What if it doesnt . That will be the big shock if those things are not taken care of the way everybody thinks theyre going to. Joe, stocks got a boost today from comments from Dennis Lockhart that fred taper maybe wouldnt be ready by september, maybe october, maybe beyond that. How do you play that . Kayla, tapering is a good thing in the sense the fed believes the economy is Strong Enough to stand on its own two feet. So im not fearing tapering. And were far from tightening. It will add an element to volatility to september and october that are volatile already, so get ready. As a pullback, its a buying opportunity. A couple of guys with the sweaty palms in the short term, but the long term, liking to the horizon. Good to see you. Up next, the closing countdown, so stay tuned. And apple have the best day of the year. Take action at it now, up 22 bucks to 489. 27 after carl icahn tweets hes in the stock in a big way. And sea world is moments away from its first earning report since going public. Its up more than 30 since the ipo. So stick around to find out whether the results can keep fuelling sea worlds rally. And we have an exclusive interview with shamu coming up, as well. You werent supposed to tell. Im sorry. The competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. 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Almost the best day of the year. If it were up 5. 14 as it were earlier, it would be the best day of the year. Terry, three bulls in the last two days tell me theyre starting to take money off the table, starting to raise cash. What are you doing . Well, you know what . I think the market were actually doing the opposite. Youre adding, okay. Were adding, looking for dips to take advantage of. I think the market the market in trend is in place, and well look for a followthrough rally. As long as money comes in, rates go higher, theyre looking for places to come in. Theyre having a hard time finding them. The 10year yield, secondhighest in two years and yet the stock market ignores it. Why . Basically, it knows it has to live with them. The dividend yields have been competing with it. And, also, its a flight to safety to some extent or another where the bond yields will continue higher. You have much more growth possibility out of the equity markets. Got it. Terry, thank you so much. Well talk to you later. [ bell sounding ] going out with a gain of about 30 points. Much more coming up on carl icahn and apple on the second hour of the closing bell. Its 4 00 on wall street. Welcome to the closing bell. Im kayla and bill will join me in a moment. You heard about apple. Something to bolster the market higher after carl icahn took a big stake in the tech giant. Heres how were finishing on wall street. The dow up about 32 points, and the nasdaq up about 15 points, and s p up 5, hewlett pack and ard boeing, the i. T. Sector leading. Yes, it is. The stocks coming