we'll have full coverage as soon as they cross the wire. in the meantime, let's break down all of today's market action. with us today, nathan bacharach, and jim holson from wells capital management. jim, you've been loving this rally. does it continue from here? >> i think so. i've been on record since year end saying the s&p would hit 1700 this year. i think that's probably likely. although i do think that maybe in the second half, the market starts to tread water a little bit. i think confidence has been the main driver here. the multiple has gone from 14.5 at year end over 16 times, about a 10% multiple gain. that's a lot of the advance this year. and that's about rising confidence that this recovery is sustainable and we're becoming less susceptible to external events and armageddon stories. and i think you're seeing that go to the markets. the problem is, in the second half, that's going to go right through bond yields as well. and i think bond yields are going to climb, giving the stock market more of a sideways trend in the second half. >> nathan bacharach, you call this the may west market. without having to explain to our younger audience who may west is, why do you do that? >> well, when i'm good, i'm very good, and when i'm bad, hey, i'm even better. good news is good news. it means the private sector is coming along. and bad news is even better news, because the fed is going to still keep pumping money into the economy. you're winning either way. now, having said that, i'm going to watch the next two jobless claims, because if they go up higher than 350, bill and kelly, and i think they will, that could set the tone for the summer. but right now, nothing has changed. fundamentals in terms of how we look at corporate earnings and how we look at the fed's role, when you strip it all way, the fed is still all in. they're not about to let anything happen to ruin five years' worth of what they consider to be hard work. >> don, what about you? >> i like where the market is. obviously it's rising. my big problem with the markets is that revenue for the first time is really disappointing this quarter. so revenue is a fuel for future earnings growth. and if we don't have earnings growth, as the market moves higher, it gets more and more overvalued and the correction on the other side is likely to be much bigger. >> so you're saying it's not fundamental then. i guess that's not even been the question, has it? guest after guest after guest has said, it's all about the fed. it's about company buybacks. are those pillars going to stay in place? >> i think they do for a while. i think what we need is we need the administration, essentially tax policy and sequester policy to be amended so the fed can actually back off. that would be really healthy. the economy's growing pretty strong. and i expect the markets to move higher, through the end of the year, but i think we could get into some trouble if we don't see revenues perk up. >> doug, if i read this note about you correctly, it says you like all stocks in all markets and all classifications. are you throwing a dart at a dartboard? is that what you're doing? >> well, essentially, the market as a whole is reasonably priced. so i know you may think it's gone up too far, too fast, but we're looking at s&p, 14 1/2 times next year's numbers. we're looking at companies that are probably in the best shape, profitability wise, that they've been the decades, great balance sheets. the bottom line, in my opinion, is that investors are sitting on the sidelines with money in the mattress. and most of them can't meet their goals in a normal interest rate environment, much less a negative real interest rate environment. ultimately, that money has to find its way into equities, and today, or two years ago, equities were really cheap. today they're slightly cheap. and tomorrow they're going to be more expensive. and i think it's just a matter of people recognizing that and that there's a penalty to being on the sidelines. >> i think, i've got to tell you, there's only one place where they seem to be cheap, and that's over large cap growth. when you look at historic pe ratios, and what stocks are selling for, the one screaming bargain is large cap growth. i like ibw for just that reason. when you look over there, shares over in large cap growth are selling at 75% or a 25% discount to what they have historically. they're the unloved group, and i think they deserve a lot more attention. they're the rodney dangerfield, if you will, of the market. >> are there really any unloved groups here, don? if you listen to the rhetoric, everyone's bullish. all these stocks now seem to be participating. it's not even as we've heard, defensives are participating. in fact, they're still doing quite well, even when people -- do these classifications even matter? do they mean anything? >> they do. we just had a rotation back to industrials, back to materials and back to commodities. they're very claep on a relative basis. i like cheap, buy low, sell high with dividends a lot better than i do chasing a 17.7 average price to earnings multiple on the s&p, where we are right now, for trailing earnings. and so as that moves higher, i think you've got to ask yourself about that. >> i agree with that. >> hang on, guys. i've got the earnings from cisco right now. and they were expecting revenue of $12.18 billion. they got $12.2 billion so a little on the high side. they were expecting 49 cents. i had seen a whisper number from 50 cents and it's above that at 51 cents. jon fortt, is he ready there? we'll get to jon fortt in a moment as he goes over these numbers. but we'll see what the stock is doing. it's up 2% and moving a little bit higher right now. joining us with their thoughts, we have mark sue of rbc capital markets and eric soupinger of jj jmp securities. eric, you have a hold on this stock, but the revenue seem to be topping estimates. what do you think? >> i'm a little surprised. this was a really tough quarter for networking and clearly cisco was able to come through. there were some vertical markets like service provider and federal that were really tough and cisco had some exposure there that apparently they were able to overcome. so that's pretty encouraging. >> mark, what metrics are important to you? what are you going to watch for beneath the top of the bottom line? >> sure, i think that our three key important points, the guidance for the upcoming quarter, and that's what the street has bracketed, about 67% topline growth. so for them to see some upside, that's a good early indicator. gross margins are another important sign, because the gross margins have stabilized. it's one of the reasons why we upgraded the stock ina january and it's also why this stock is growing. we think they can grow their dividends over time. >> jon fortt has the numbers. jon, the stock is now up about 3.5%. >> -- good news in here, kelly. among the things that i'm seeing, product revenue, $9.56 billion, that's up from last quarter's number, which was $9.43. the service revenue last quarter was 2.66. this quarter, it's also 2.66. we have seen service helping out a lot more, as product revenue was hard to come by. it seems like product revenue coming back a bit for cisco, while service continues to be strong. also, that gross margin percentage in there at around 61%, as the analysts said earlier. it does seem to be holding steady. cisco doesn't give guidance until the call. that's going to be important, as a lot of companies in the space, not just cisco, have been talking about the back half of the year, being where they expect to see the growth coming. cisco has continued to be a good bellwether as far as their sense of the channel, of demand from end customers and the enterprise. so if their guidance is a little bit more bullish, that's good for everybody. if it's not, that could signal some trouble. not just for cisco, but for all these other companies, your ibms included, who have said the back half of the year is where they expect to see more significant growth to meet their annual targets. >> all right, jon fortt, cisco shares again, tested 4%. they're now about 3.7% here for this company. also note too as bellwether. >> mark sue, did you hear the margin numbers you were after? >> i think directionally, the margins are moving in the right way. if last year was one of the big years for us, there was no real floor to the margin, and we were very concerned about cisco stock with and we asked investors to stay away. gross margins will stabilize and improve. and also that cash flow is going to improve. so i think top line beat the better margins and also the outlook for cash, which you will get on the call, bode well for the future, for the back half of the year. we do think the stock can move higher. we would commit nor capital to is this stock at a price target of 24. >> nathan, if we can bring our market guests if here as well. we want to look through these numbers and question what this means for the performance of tech and maybe for the nasdaq tomorrow. nathan? >> i think what it means for technology in general, as we get toward the back half of the year, that's where we'll know if the economy is really seeing progress. people are keeping their businesses longer and only making their technology purchases when they have to. so when everybody talks about the back end of the year, if, in fact, the economy is able to start showing some of its own growth, i think that will be very good for the nasdaq, and i think it's going to portend well for large-cap growth at the same time. >> erik suppinger, you have this hold on cisco, what do you need to do in the call tonight to change that rating? >> certainly we'll be looking for commentary on the carrier front and the federal front, as i had mentioned. those are going to be areas where cisco's exposure could continue to be a challenge. but i do think the company is working to improve the margins, as mark had alluded to. certainly the gross margin is going to be a telling sign of what kind of pricing they're seeing in the market. it's a surprise to me to hear that they hit the top line as effectively as they did. so the guidance is going to be a telling tale on how the outlook is. >> and what about the prospect of returning more of their cash to shareholders, about buybacks, dividends here, increasing that yield, perhaps? >> i would imagine that dividend is going to be getting a great deal of interest. they've been pretty aggressive on the buyback already. so i'm not expecting too much of an increase from where we are right now, but they've done a good job so far. >> don shriver, is this a cheap stock? >> we think it is. we just had it in on monday. 3.2% dividend yield. we expected a little bit better quarter than what people were expecting. i think the second half of the year, this was a tough quarter. it's going to look better, even the federal vertical that they have is going to look a little bit better as this sequester thing starts to get less muddy. and businesses are unlocking their war chest and they have to spend. they've waited a long time. and so that affects cisco and the rest of the tech sector positively. >> all right. thank you, all. thank you, john, for the numbers there and watch that stock move higher here and we'll see how it does in the after-market tonight as they get ready for that very important conference call. and don't miss an exclusive interview with cisco chairman and ceo, john chambers. that will be tomorrow morning on "squawk box." look forward to that. >> that's right. and it's been almost a year since facebook's ipo. the shares are down about 30% from that $38 offering price. some now saying mark zuckerberg should turn over the ceo reins just like they did with eric smith. and just as investors begin to doubt the gaming industry, we wonder whether mobile is changing the game. we find out from ceo of take two interactive, coming up. his stock is up almost 50% so far this year. and then, yes, we are whale watching. we've got all the surprising hedge fund revelations. you won't believe which stocks are getting dumped. it's not just apple and it's coming up on "closing bell." stick around. [ male announcer ] with wells fargo advisors envision planning process, it's easy to follow the progress you're making toward all your financial goals. a quick glance, and you can see if you're on track. when the conversation turns to knowing where you stand, turn to us. wells fargo advisors. another day, another set of new highs for the dow and s&p. but this morning on "squawk box," hope you saw this interview with michael no novogratz. >> the moment the tfed starts moving, the stock market is going to go end. >> how much? >> i don't know, a decent bit. the rally will end. >> and a correction or a bear market? >> you'll get a correction. >> is he right? joining us now, let's hear from ron insana and harry dent. gentleman gentleman, good afternoon to you both. >> and ron, i regard him quite highly. we can have a correction. if the fed takes its foot off the gas and starts to normalize interest rates, there's no reason why the stock market wouldn't react to that, but it doesn't mean the secular bull market would be over. it just represents that the economy is strong enough to stand on its own, budget deficits getting smaller, and the things that are going right in the economy continue to go right. >> you would buy if there was a correction? >> absolutely. >> harry, you would not buy if there was a correction? >> there will be a correction if they announce. this market is totally being driven by stimulus. $1 trillion a year in fiscal deficits. $1 trillion a year in monetary deficits and a $15 plus trillion economy. you don't think we would be in negative growth? yes, the markets on crack want more crack and if they hear the fed will taper off or stop, i think the market will be down at least 20%. and i think it could be the beginning of a bear market, not just a correction. >> with that in mind, you know federal reserve are going to weigh the rhetoric, weigh any exit given those concerns. and if you look at a day like today, where people are starting to chatter a little bit about how much longer the fed stays in the market, yet we're up 60 more points on the dow. >> there's so much money coming in, not only from the fed injections, but japan has just given the most aggressive stimulus program in history, 2.5 times what the u.s. is going, and a lot of that money will flow into u.s. bonds and stocks. the market is not topping. i agree with ron. it's going to go higher later this year, probably into the summer. i think over 1,700 on the s&p and 16,000 on the dow is where the next resistance after we broke 1,600 on the s&p. but i think that -- i'm looking for that to be a top. i'm looking for demographic trends and world trends to work against us in the next year. >> are you still saying, then, that the s&p will be cut in half in two years, as you said before? >> i think in the next several years, yes. i think we'll see new lows in the stock market, somewhere between late 2014 and '19, but it will depend on how the fed reacts. like kelly said, if they start to taper off and see the economy slowing, which i think will happen, and they start to get aggressive again, we may have a 20, 30% correction, rally again, and then go down. but i am convinced we are going to see a major crash in lower lows in stocks in the next two to six years. >> i'm putting all my chips on that right now. listen, we had, from 1999 to 2009, the worst, and i heard this statistic yesterday, the worst rolling ten-year period for stocks in the last 140 years. we had a secular bear market in the average stock for quite some time. this economy, what i called fortress america has a lot going for it. the deficits are falling. they're not $1 trillion, the cbo just revised it down, it's going to go under 3% of gdp by 2015. energy, manufacturing, auto manufacturing, real estate, all of these things are coming back. and the fiscal balance in the u.s. are improving. and we're not having crisis overseas. >> ron, the point being, if harry looks at this rally and sees it as an increasing reason to be worried because it's not built on fundamentals, your reaction is that, yes, it is. >> i think there are too many harries o out there. a whole host of others who keep looking for armageddon just adds more fuel to the bullish case, that there are very few people invested in this rally. this is one of the most hated rallies in my professional lifetime, if not in market history, where it's all been driven by professionals. pensions are underinvested, individuals are underinvested. this thing could go for quite some time. and i think the economic outlook is far rosier than harry would suggest. >> the fundamentals are getting a little better. and just yesterday, the deficit for this year would be $642 billion, not the $1 trillion that might have been expected. >> yeah, we've been $1.3 trillion. so things always get better as the rally goes on and economic expansion. but we've had a boom since late 1982. no booms in history have lasted this long. this is not armageddon. generations spend and then they slow down, debt gets excessive and then it has to deleverage. this happens every 40 years, like a clock, and the fed is just trying to prevent a downturn and a deleveraging of debt, which is necessary for long-term health. this is terrible to just say we will not have a slowdown, we will not deleverage debt. >> we already have. >> look,ing this argument is old, though. everything that harry's protected in the last four years hasn't happened. everything that peter shift predicted in the last four years hasn't happened. what the fed is doing, this is not crack. this is enlightened policy. this is what you do -- >> this is crack. >> no, that's a silly analogy. >> it's not a silly analogy. >> harry, you just said we would be in a deflationary depression if not for the fed. >> no, they're preventing the market system from rebalancing itself -- >> that's what they said in the 1930s, and we didn't come out until after world war ii. >> they're tinkering with mother nature and it's going to be a mistake long-term. >> no, it won't. >> mark my words. the next six years. >> not in a million years. >> that's good, ron, not in a million years, we won't have a bear market. >> that's good, we won't have -- >> let's establish that, we studied history. harry, if you're talking about the potential for a correction here in 2019, i hear this a lot from people as well, they hate this rally, trying to draw a point as to what bill was saying, but i'm hearing a lot of the chuck prince line again, while this is happening, if this is the dance, you have to get up and dance. you can hate it, but can you short it? >> i think the market is going higher here. i agree with ron, there's no signs of topping here. but there are limits to everything. and it's not just the u.s. europe keeps slipping into recession. china's got greater bubbles and is being forced to slow down. and you've got japan in such desperation -- i mean, the level they're stimulating at says, to me, we're in trouble. they've been in a coma economy for two decades and they can't get out of it. >> so why wouldn't -- if the bank of japan is not only buying bonds, but buying stocks, they're buying japanese etfs, why on earth would you not play with the bank of japan here? the nikkei can go all the way back to 40,000, which was its old all-time high in the next 18 to 24 months before there's another election. fighting central banks in this environment has proved to be entirely wrong. we're in a secular bull market. the u.s. economy is improving. and when you have 140 million gen-xers, the demographics don't play out -- >> time's up. got to go, buys. >> you don't understand demographics. >> i'm sure i don't. >> i think i just heard nikkei 40,000 from ron. >> i didn't want say that. >> yes, he did. >> i think it's going to 20,000 before it breaks. >> i agree with that. >> coming up, move over, zuk, in the wake of the facebook phone flop and lagging stock price, is it time to let someone else run the social giant he cofounded? later, watching the billionaire investors. today is the deadline for them to disclose which stocks they bought and sold in the first quarter. we'll round up some of the biggest moves for you coming up. [ laughter ] ♪ [ female announcer ] each one of us is our own boss. ♪ and no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. ♪ ♪ ♪ ♪ ♪ ♪ the new blackberry z10. with time shift and blackberry balance. built to keep you moving. see it in action at blackberry.com/z10 welcome back. let's get straight out to courtney reagan for a market flash. >> cisco after-hours, earnings beating on both the top and bottom lain, 51 cents a share on $12.2 billion in revenue. shares are up, as you can see here, almost 6% after hours. some comments too out of the ceo, basically talking about the economic environment, still not great. but cisco performing well, saying they're starting to see good signs in the u.s. and in other parts of the world. and quote, noting their ninth consecutive record revenue quarter. bill, back to you. >> all right. we'll see what that does for tomorrow's trade as well. could bode well. thank you, courtney. well, it's been nearly one year now since the facebook ipo. and in that time, the company stock is down nearly 30%. part of that due to its struggles in mobile, where reports today have that at&t is now dropping that htc facebook phone due to poor sales. it's gone. also, the facebook home app for other android phones has garnered poor consumer reviews. >> all of this as chris desi wondering if facebook would be better with someone else at the help, but bill parr thinking that zuckerberg is still the best man for the job. on that note, ben, first of all, defend zuck. what's he done right here? >> in the last six months, facebook stock is up 15%. he is steadying the ship after the ipo, which it was tough to predict. and what he's doing right now is he's launching and trying out new products that are going to expand facebook's appeal. not all of them are going to succeed. but we're not calling for people's head when google buzz or mobile me failed for other companies. in this case, you have to give him the time. and right now stock is going up, and that's the most important thing. >> that said, the company is still down from its ipo. chris, you're arguing that this is actually a structural problem. it goes beyond the fact that they haven't recovered to that level. that actually there should be a turnover at the top here. >> i believe that zuckerberg is going contrary to what his roots are all about. he's really an entrepreneur at heart. he's not following the things he's best at, and that's strategy and vision. now that they're a publicly traded company, it's just that. they need a ceo that can sit with investors and as well as sit with analysts and i'm not seeing that from zuckerberg. >> you can say the same thing about larry paige. and larry paige has taken back the helm at google and has done a fantastic job. and there are others who do a great job leading public companies. >> i'm not saying he's a steve jobs, but steve jobs did leave the company that he founded. although he did have a sabbatical away from the company at time. >> mark zuckerberg is a genius. i'm not arguing that. he did change the manner in which we all aggregate and disseminate information. but he is no steve jobs. when he's presenting something in terms of journalists, i get nervous. i think we all want to say that he's changed everything and that's fantastic, but the world isn't made of unicorns and rainbows. we need to take a fiduciary responsibility here and answer to individuals that are stock owners. and what we're seeing with the facebook stock that it's really, traditionally, it's beating individual investors and retail investors. it's not the corporate investors that some of these other companies have. it's the stock for the masses. so they need to be speaking to the masses and he's not doing that, i believe. >> chris, at the same time, what he also needs is vision and strategy, and in this case, do you want him to push zuckerberg out and push in someone out there, who may be more of a manager and not necessarily have the same focus or the same innovative track record? >> i think he's got the adviser right there. i think he's got sheryl sandberg who's sitting off to his right and i think it would be a smart move for him. it's a gesture to the public. we know that zuckerberg and facebook have had some public facinging issues, some pr issues, and they're not dealing with it. they continue to have these bumps in the road regard to privacy and et cetera. and i don't really feel that the everyday investor is feeling that from him, that he's paying attention to those things. >> last word to you, ben. >> they have had those privacy issues over time, and you have to look at the overall body work and tread of other companies. when you put a manager in, apple tanked. without zuckerberg, facebook is not facebook. without zuckerberg, the team loses the moral and will not work as hard and will be a bad stock in zuckerberg leaves. >> few companies are as polarizing these day as facebook, but that's certainly an example of it right here. >> if you've ever played the video game "grand theft auto," being left for dead isn't uncommon. >> happens to her all the time. >> that's what some do to the video game business. but publisher like take two are back with a vengeance. and since our nation's capital has become enveloped in three major scandals this week, can we possibly expect any work to get done on the budget and the country's financial health? today we got a taste of just how ugly it's getting in washington. cattle feed and beef. , bny mellon turns insights like these into powerful investment strategies. for a university endowment. it funds a marine biologist... who studies the peruvian anchovy. invested in the world. bny mellon. ...amelia... neil and buzz: for teaching us that you can't create the future... by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions... in everything from the best experiences below... to the finest comforts above. we're not simply saluting history... we're making it. but we can still help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. 150 years. from the civil war era, right up to today. and through it all, the california teachers association has stood strong. for the legislation that established california's free public schools... ensuring funding for all students... the first law to reduce class sizes... and establishing community colleges. our schools may have changed, but our commitment to california's children never will... because we know quality public schools make a better california for all of us. we had breaking news on tesla motors. phil lebeau has details for us. phil? >> bill, when you have a hot stock, you need to take advantage of it. that's what tesla is doing. the company announcing they'll be offering another 2.7 million shares as it generates $838 million. what's it going to use that money for? some of it will go to repay the federal government and the dao loan that tesla has outstanding. the rest will be used for general purposes. a couple other notes. elon musk, the ceo, he's putting $100 million into tesla, buying $45 million worth of common theirs, $55 million directly from tesla. and there is also, we should point out, a convertible notes option that's going to be offered here. $450 million is what they're going to generate from that. goldman is running the stock offering and goldman, jpmorgan, and morgan stanley are handling the notes offering. so tesla generating $830 million, or at least that's what it expects to generate we selling an additional 2.7 million shares and elon musk putting $100 million of his own money back into the company, buying new shares. guys, back to you. >> i love that. 3.5%, although coming off a little bit now. phil, thanks very much for that, a little bit of an outperformer, as well as a take two shares. a video game research organization may be forecasting a drop in video game sales, but with some big titles still to come, including bill's favorite, the latest "grand theft auto," predictions of gaming's demise may be premature. take two is already taking preorders for the fifth edition of "grand theft." >> that stock is up nearly 50% this year alone, as the company is riding the success of another title, "bioshock infinite," and can expansion into mobile gaming as well. oh, by the way, joining us in an cnbc exclusive is strauss zelnick. welcome back. >> nice to be here. >> we buried the lead. that move into mobile, that's the trend that a lot of companies are taking advantage of and benefiting from. >> it's early to say, but we brought a lot of our legacy tablets to smartphones and they've done well. >> strauss, just to pick up on this as well, look, the pc industry, as we know, is in secular decline. whether it's pc, traditional gaming consoles, the world is clearly move in the direction of more mobile. how do you see take two participating that in the next, say two to five years? >> we're platform agnostic. we want to bring our titles to consumers wherever they are, however they want to consume the titles, whatever time of day, and we're flexible about the business models too. so we brought our big console titles, most recently, grand theft auto 3, our tenth year anniversary addition, to a tablet, to a mobile platform. and i think if the consumers want to be mobile, our games will be mobile. >> but what are the challenges? i would imagine that mobile, still, as a platform, is less sophisticated than some of the technology that you can get on pcs and other consoles. >> 3-d, hd. >> how do you translate all of that and keep the integrity of the game there. and does that require investment on your part? is it the partnership with the actual device makers? >> i think we've all seen, tablets are very nearly as strong as pcs. and in about two years, i think they will be. in the meantime, our business is by no means in decline. our core console titles are doing great. "bioshock infinite" has been a massive hit for us, before that "borderlands 2." our goal when the platform allows it is to make those titles available wherever the consumer wants them. and we've been able to do it with console titles, but not quite the update ones that we'd like. that's probably just around the corner. >> do you compete with like a farmville or an angry birds? and i don't know if that's insulting to ask about games like that, but there's a difference between those focused individuals who play your games and sit there and, you know, whether they're online against another component, and those people who kind of sit idly and play those little games -- >> on the subway or something. >> we're all going to the same consumer. >> are we talking about the same people? >> we're talking about a different consumer. typically, consumers who like social games are female and skew a little older. our median consumer age is about 37. and we make social games as well. so we have games like grid block and most recently we put out a mobile title called ace patrol. we aim to serve consumers wherever they are. >> and "grand theft auto" is still the jauuggernaut. what are your expectations at this point for sales? >> my expectations are very, very high. but the question is always, how high is up. >> how high is up, then? what do you expect to see? how would you like to see? how important is this release for your company? >> it's a very important release? we love all our children equally, but to put it in context, the last release, "grand theft auto 4" has sold in 25 million units and the franchise has sold in 125 million units. this is among, if not the most important entertainment property on earth. >> stock up 54% this year, that will make the man smile, as it is right there. thanks, strauss. >> if you want to know what companies warren buffett and george soros are investing in, today is the deadline for big investors to disclose their holdings to insurance regulators. we'll run through who's buying and selling and what next. also ahead, it's exactly what the nation doesn't need right now. more gridlock in washington. we're going to keep you up to speed on new developments from scandal town next. and just how bad is it right now between the two political parties? watch this. >> characterize something as something -- >> mr. chairman, would you inform the witness as to the rules of the committee? >> -- and is too consistent with the way with which you conduct yourself as a member of congress. it's unacceptable and it's shameful. >> more on the that testy exchange later on "closing bell." >> don't go anywhere. 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>> thus the reason to buy. >> we'll see if it works out. as the work in our nation's capital piles up, such as tax and immigration reform, the white house is now battling scandals on multiple fronts. eamon javers has the latest developments from scandaltown, where things got a bit hostile today. eamon? >> we thought that eric holder, the attorney general's testimony here before the house judiciary committee might get a little bit heated over this irs investigation issue or even the ap issue about obtaining phone records of journalists. instead, we got a near meltdown over an entirely different issue, a whistle-blower lawsuit case, a long-simmering controversy. take a look at this exchange. this is congressman darrell issa, who is grilling holder about some decisions that the department of justice made in that whistle-blower saga. take a listen. >> when i look at the request and try to be as responsive as we can. i'm sure there must have been a good reason why only the to and from parts were -- >> yes, you didn't want us to see the details. mr. attorney general -- >> no, no -- that's what you typically do -- >> knowing the to and from -- >> i'm not going to stop talking now. >> mr. chairman, would you inform the witness as to the rules of the committee. >> -- and is too consistent with the way in which you conduct yourself as a member of congress. it's unacceptable and it's shameful. >> guys, i've got to tell you, you don't often hear a cabinet secretary, tell a member of congress, particularly a senior one like darrell issa, that his behavior is unacceptable and shameful. that's going to have some diplomatic repercussions. to other situation. a senior irs official has told congressional investigators that two irs employees have been disciplined in relation to that case and also, the irs is now saying that its general council, william wilkins, did not learn about political targeting here until early this year. so a couple more developments on that irs story to watch, a rapidly unfolding story there too, guys. >> eamon, thanks very much. well, even with scandals engulfing the white house, it might not stop republicans from making a budget deal with the president. that's what our own john harwood wrote in his "new york times" op-ed piece today. he said the republicans have powerful incentives to strike a budget deal right now. >> what are those incentives? let's ask the man himself, john harwood joining us now, along with our very own rick santelli. john, why is it the gop might actually want obama to reach some type of entitlement reform here? >> there are two reasons. one, kelly, is that the republicans still need to raise the debt limit later this year, and leaders have told their members that they're going to have the chance to vote for spending reductions, equivalent to the amount that they're going to raise the debt limit. where do you get the spending reductions? they show no inclination to go back at domestic spending. we're dealing with a sequester right now, so the place to get the money is entitlements. but the only way entitlement reform is going to happen is with a deal with president obama. the second thing is that, remember, republicans have talked for a very long time about reining in these programs. they're very costly, they drive our long-term fiscal challenge in this country. but if republicans wait until they have a republican president to control both houses of congress, all of the political responsibility and blame would go on them. so i talked to glen hubbard, who was mitt romney's economic adviser in 2012, who worked for the george w. bush white house, he said, much better for republicans to cut a deal on entitlements on barack obama's watch, not for a republican president. >> what do you think, rick? >> i think it would behoove the democrats to cut a deal with the republicans for the future of their party. >> explain. it would behoove the democrats for the future of their party, but what's the message that then they get to sort of campaign on? how do they politically win from that? >> see, i don't look at this through the guise of kabuki politics. and to me, if things like reforming health care or the tax code become little chess pawns in a game, then i think that there's very little hope in the near future. and i think the scandals will totally preoccupy washington, because the issue of every scandal in a simple, common denominator is trust, and trust is integral to any type of grand bargain, and i think not only didn't trust exist before the scandals, but now i think that there is an aroma that is associated with many of the incumbents and many of the leadership. that last exchange with erik holder, head of the justice department, has he ever been to court? has he ever been to traffic court? has he ever been a witness in a real court? i can't believe he said that to a congressional panel. he should go and see how his group treats -- i've been in court. you can't say a word. there's a certain type of order. it's the demeanor and the lack of trust and i think that we have very little chance between now and 2014 to accomplish anything on the fiscal side. >> john, does this threaten to crowd out all of the work that's trying to be done on the budget and the finance situation right now? >> it's a problem, but it might also be an opening. remember, the more the parties fight on various things, whether it's the irs, whether it's the ap phone records, benghazi, other things, the more they also have the incentive to come up and show the voters that they're doing something, they're cooperating in some fashion. i agree with rick, democrats also have good reasons for striking a deal with republicans on entitlement reform. now, one challenge you potentially could have is that the deficit itself is already coming down. cbo estimated yesterday that the deficit is going to be $200 billion less this year than they projected in february. it's going to be down to 2% of gdp by 2015. on one hand, that takes pressure off for a deal. on the other hand, it the numbe cuts and tax increases, the more achievable the deal becomes. >> thank you, both, for your thoughts. see you later. have a good evening. so where is the beef? wait until you hear what one of the nation's biggest burger chains is putting on its menu to tickle the ribs of one of its rivals. >> we'll have the latest savo in the fast food war, back in a moment. [ male announcer ] when gloria and her financial advisor made a retirement plan, they considered all her assets, even those held elsewhere, giving her the confidence to pursue all her goals. when you want a financial advisor who sees the whole picture, turn to us. wells fargo advisors. well, the mcrivalry ratchets up tomorrow when burger king, stock up 15% this year, unveils its summer menu and takes aim at mcdonald's improbable but popular offering. let's take a peek, jane. >> i my first mcdonald's mcrib in 1981, also my last. but there is a cult around the boneless pork sandwich it hypes with limited time releases and even a facebook page, tracking when and where they can be found in the u.s., so burger king has solved this problem. debuting its own bk rib sandwich for every day this summer, starting next week. reportedly tested well. there it is we asked fast foodies, some who were confused about what went into a rib sandwich, if they would try it out. >> i would try it out. >> i don't like chicken that much. >> i don't eat red meat actually. >> it's pork. >> i want to see a bone going through it. bite into it, and bone, you know, i don't want something that looks like it's spam with barbecue sauce. >> i l.a., and and one of the most popular limited time offers for three decades. we think the pork category, white meat, red meat, chicken? what is pork. we don't expect a significant amount of pressure on mcdonald's mcrib. you may recall last summer, kids, we reported on their different pork experiment, the bacon sundae. still in stores. back to you. >> yes, jane wells, making her own bacon these days. thank you so much. >> yes. >> and a yahoo! forum on whether spa pork is a red or white meat. the next question for those in los angeles. >> the fast food night, good night, jane, and the fast food fight beyond the bun when we speak to taco bell ceo greg creed. >> with more than a third of s & p companies hitting new 52-week highs what will move your money tomorrow? >> we'll give you a leg up on thursday's market action when we come back. 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. 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. tdd#: 1-800-345-2550 hours can go by before i realize tdd#: 1-800-345-2550 that i haven't even looked away from my screen. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 that kind of focus... tdd#: 1-800-345-2550 that's what i have when i trade. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 ...helps me keep an eye on what's really important to me. tdd#: 1-800-345-2550 it's packed with tools that help me work my strategies, tdd#: 1-800-345-2550 spot patterns and find opportunities more easily. tdd#: 1-800-345-2550 then, when i'm ready... act decisively. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 with the exact same tools, the exact same way. tdd#: 1-800-345-2550 and the reality is, with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime... tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 ...until i choose to focus on something else. tdd#: 1-800-345-2550 all this with no trade minimums. and only $8.95 a trade. tdd#: 1-800-345-2550 open an account with a $50,000 deposit, and get 6 months commission-free trades. tdd#: 1-800-345-2550 call 1-877-656-8748 tdd#: 1-800-345-2550 and a trading specialist tdd#: 1-800-345-2550 will help you get started today. with centurylink visionary cloud it'sinfrastructure,art. and custom communications solutions, your business is more reliable, secure, and agile. there is apparently no stopping this rally. will we see more gains tomorrow? pan ill will tell you what more you need to watch for? kirsten, 30 seconds on the clock. what are you keeping an eye on? >> thanks. we're looking at april residential housing starts. we're expecting a sequential uptick in single family starts this month and the next several months. our most exciting play is headwaters, and we also will be watching april krfrp pi, important for the waste sector as a lot of contracts are pegged to cpi. we took up price targets on waste management and waste connections and volume in overall space and prices have been pretty stable. we'll be watching for changes there. >> and over to you. >> i'm looking for a mixed housing report tomorrow, maria. and housing starts slow down relative to the month of april, but expecting personal nens to pick up in anticipation of additional activities and go to the summer months, i think the takeaway is to be careful as an investor and don't chase this central bank induced stock market rally. diversification is key in rebalancing and is key, and keep in mind, you need to sell off some of the excess performers, and stocks in general and rebalance proceeds into bonds. >> chase has paid off. that does it for us on "the closing bell." >> kelly here tomorrow, i'm not. long story. 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