here, folks. if you look at the gains that we're trying to get to, some of the sectors have turned positive here today. not the banks, though. they still continue to be the worst performer. in fact, that 2% give back is the biggest one-day drop for the banking industry group that we've seen since february 23rd. it is the worst of the 24 industry groups here today. if you take a look at some of the big withdrawal victims here today. still hurting from that ubs downgrade to sell. huntington bank, key bank and renalens. those stocks still up 60% to 40% year to date. don't lose too many tears here. oil is also down sharply here today, below 83 and energy the worst sector now 1%, but you're seeing denbury, baker hughes and sunoco and this after jim cramer said it looks like a takeout target. and discretionary continues to be the darling, as you can see, up 12% in that period of time. doing well today. guys? >> matt nesto, thank you so much. that will do it for us on "the call." >> see you tonight on "the kudlow report" 7:00 p.m. eastern. "power lunch" is up next. welcome, everybody, to "power lunch." i'm tyler mathisen. the run up to dow 11,000 came back on the poultry volume and so as a wendy's commercial once asked, this was a long time ago, where's the beef? >> i'm sue herera. ford motors bill ford joins us on the importance of america's manufacturing sector and the need to go big when going green. i'm dennis one year after ranking best in first quarter of '09. twitter unveiled its business plan today, but is it anything to tweet home about? that's what's on julia borteen's menu. >> everybody is talking about twitter's long-awaited business plan. the retweets and now what is a retweet worth and will it work? >> julia, thank you very much. let's get straight away to the market action. bob pisani kicking it off for us that new york stock exchange. bob? >> we can't quite seem to hold that 11,000 level and keep slipping in and around it. the dollar right at the top and a bit of a dollar rally right in the middle of the day. vague rumors floating around that mr. bernanke might use that joint economic testimony tomorrow to remove that extended testimony language. it did move the dollar up and didn't dramatically hurt the stock market except some things like the commodities. precious metal stocks and they had a nice run up so all the gold stocks, for example, and the silver stocks are all on the down side as you can see here. also, we saw oil, which has been moving down the last several days, it has been hurting the energy stocks here and all the big oil service names have been to the downside, as well here. regional banks cut the sale at circumstance bk and they had big, big run ups here and no runps with commercial real estate and loan growth would still be showing up. that's a big if right now. numbers start coming in on wednesday. tradertalk .cnbc.com. bertha, how are we looking at the nasdaq? >> analysts are not expecting intel to disappoint in the same way that alcoa did but the last couple quarters back in october we saw a dip back in january and we saw a dip, could this be a sell signal for the market regardless of what intel reports this afternoon. meantime chips this afternoon are looking fairly strong, kind of mixed and we've got inviddia and google, meanwhile, continues to be the king when it comes to video that youtube investment paying off and you are seeing part of the parent company seeing bigger growth. regional banks, as bob was telling you, cut to a sell over at ubs and they do start other puerto rican banks at an outperform. let's head on down to sharon. >> oil prices here are lower for the fifth straight session and we're looking at the dollar recovery as bob was mentioning, having an impact here on the oil market. we did see oil markets start to fall below $84 a barrel as that happened and we recovered a little bit from that level but not a lot of support between $83 and $84 a barrel. meanwhile, also keeping close attention on what is happening in inventories because that inventory level that traders now seem to be focussed on and inventories build for the 11th straight week and tomorrow when we get that report from the department of energy. bob mentioned look at the precious metals. etf, we have see outflow from the silver metals. rick santelli in chicago. >> whisperring about foreign exchange and we also know that the chinese president basically said they'll take a look fit for the best economy and the forward market, the market that does allow that currency to trade moved lower and we see the dollar index whether a one-month chart and trading at the lowest level since march 18th. we want to pay attention. if you look at a ten-year, ten-year moved off 4%. that's the news of the day. if you want a big yield, look at cablevision yesterday. an 8% yield on a cablevision ten-year and a 4.5% yield on a six-month bill sounds pretty good because the currency beneath it isn't some currency. that's why it's so susceptible to the greek decision. sue, back to you. the dow ventured past the 11,000 mark yesterday and having a little bit of trouble holding it right now and we're just below that. low volume, though. so, should we be weary of this market rally? let's gather our insiders to talk more about that. mike holland and from chicago we have net, the vice president of financial research at mf global. welcome, gentlemen. >> thanks. >> mike, i'll start with you. not just the low volume that has some people worried but also the lack of volatility, it makes it hard for some particular traders. what do you make what's going on right now? >> all kind of reasons to be worried about the market since a year ago march. the thing keeps moving almost painstakingly slowly for some people. i was just on the phone a little bit ago with someone from the larger hedge fund. the hedge fund is not positioned for this market the way it is right now, which is moving up slowly and we're getting slow capitulation moving in. listening to bertha coombs a second ago talk about intel, when they report, if they don't get a selloff in the market right now with whoever intel does that's one more piece of the puzzle of the people who were bearish, i'm sorry, we're not going down right now. >> nick, do you agree with that? we talked about the fact that the individual investor is not what is moving this market. they've been sitting on the sidelines. >> i wouldn't read a whole lot into the volume. if you go back into the 2006 area, volume is low. in addition, i think we're used to the volume over the last year which was coming off a huge selling climax. we're not going to match that type of volume and thirdly on volatility, you need to keep in mind the fact that interest rates, the funds rate is very low and that tends to compress volatility, earnings are actually improving and credit has yield significantly and that tends to compress volatility. i think the volatility environment from a macro standpoint is going to be lower than what we've seen in recent years. it doesn't bother me. >> mike holland, despite all those nice, positive signs so much fierce out there in the call ran a poll, 72% of the people responded say they still fear the markets. >> that's exactly right. the trauma that occurred a year, year and a half ago is still very fresh in people's minds. that's why we have a huge amount of cash on the sidelines and also institutional investors and hedge funds and some of that, maybe a big chunk of that as many years ago will not ever come into the stock market but some will. that's one of the problem for people who position defensively as it continues to have, you know, trickle into the market, the market is moving up. the market, by all accounts should have some kind of selloff. we keep hearing it's not happening. that's a problem for the bears. >> mike, what should i buy here? i know you like big cap tech. make the argument for that and speak more specifically about intel and what you said a moment ago. if the market doesn't sell-off after intel, it's basically at the door. >> just one more piece, tyler. bertha coombs was reporting every time they report good news or bad news you normally get a selloff because their margins are down 1% or 2%. right now around the world beginning with asia, we have the numbers coming out of the industry that technology generally, taiwan semiconductor or anyone else and really, really good numbers and in the u.s. and in europe one of the few places where people are spending in business is in productivity areas and they're letting people go and they're buying some technology. so, technology numbers continue to be wonderful throughout the world and the stocks have actually lagged the market for the last few quarters. so, the valutions, for example, in the case of intel, we're talking about less than a 14 multiple, at a 7% earnings yield, plus a 2.5% cash yield. we're talking 10% overall yield that's in a 1% world. >> thank you, gentlemen, good to see you. mike, nick. consumer reports issuing an emergency don't buy recommendation on lexus. find out why, coming up next. that, plus -- >> it's that time again. earning season. we head over to earning central and get a taste of what to expect over the next few weeks. then adventures in articulation. the ceo of rosetta stone joins us one year after the cio. carrying on about carried interest. to tax or not to tax, that is today's powergrid throw down. all that and the fast money halftime report. this is earnings central, dude. this is a very cool place. >> this is the new earning central and we have more toys for more boys and girls than you can imagine. it started yesterday with alcoa, a vague disappointment as it is being interpreted by the market. but what we're going to focus on this earning season increasingly is not profits and not cheat you on that, but revenues. >> revenue, revenue, revenue. what we finally want to see is the elimination of profits due to cost cutting and profits driven by people actually buying stuff and pushing the top line higher for companies. >> real organic sales growth. here we look at what some of the forecasts are led year over year and a lot of people had appointed this and energy, materials and technologies. one other point on revenue is anybody who spent sort of taken fresh from accounting would know this. it is easy to fudge profits. it is much harder to fudge revenue, actual sales. now, al pretty good at that. >> chain saw al. >> he was pretty good at fudging the revenues. some guys go to jail for doing just that. however, it is usually a little bit harder to do. >> the overall s&p 500 we're hoping for 10% gain in revenues and energy at the very top, as you pointed out, 33%. what i found so interesting is that there isn't anybody in the top ten this time around who is expected to have a revenue decline. >> a revenue decline. let's look at earnings growth here over the past few quarters and as you look there. you can see it was down through the fourth quarter of '08 through most of '09 bouncing back and looking now for a 10% revenue gain. another thing we looked at. i asked our crack team to look at what is the aggregate revenues of the s&p 500. >> so, yes. >> if you look at that, look at how they got it, they got it together. the estimate there for the q1 puts us somewhere about, let's see, $2.13 trillion. it is actually down, if it comes through, from what the total revenues were in the fourth quarter of last year and if we get the estimated revenue, we're really only going to be back roughly to where we were here in the third quarter of '08. so, recovering but not yet fully healthy american business. >> can we go back one graphic and just so that, again, we are expecting higher growth in revenue. >> greater growth rate. >> year over year because of easy comparisons. the actual revenue level is going to be lower still. >> a little bit lower than they were, roughly on par with where they were in the fourth quarter of '08, down from the third quarter of '08. all about the revenue, folks. >> yes, it is. we'll drill down into revenue on everything single sector as we get through earnings. >> more toys coming out ohehere. i might even tweet on this. >> it comes out over there. that's amazing, right? >> we'll be serving cosmos and martinis in this beautiful room later on. >> to match the red. >> i wish i was doing that segment. thanks, guys. consumer reports warning that lexus gx 460 is a safety risk. it believes the electronic stability control on the vehicle is noted aquent to prevent a potential rollover accident. consumer reports is warning consumers not to buy that suv until the vehicle is fixed. toyota is concerned with the report and its engineers conduct similar tests. it promises to duplicate the consumer reports test to determine if appropriate steps need to be taken. couldn't come at a worst time for toyota. >> not from the company making the announcement itself but kind of the worst thing that could happen to them. surprised they didn't preempt the announcement come out with something ahead of time. >> one of the issues is the chassis, in fac, most of the automobile this year changed and that may be one of the problems for toyota. the lexus this one is quite different than previous lexus models and, as a result of that, that could be a big problem. supposedly need fixed. >> we will run our own tests and want to see this. >> they think it is an easy fix. you see all those commercials they run 24/7 on cnbc. you remember the hot ipo a year ago. >> so has the success of that ipo translate under to long-term profts for rosetta stone? we'll talk to the ceo on the other side of the break. how do you say business in swahili. rosetta stone will be able to help you. rst gone public last april becoming one of the better ipos early last year raising $130 million almost. we have an exclusive today with the ceo. tom adams. thank you very much for joining us. i've looked at your stock chart. your stock went public last april and went 20% and down 30% in three months and back up and back down and now it's around 25. you must be exhausted. >> no, i think, you know, when we went public we knew that this kind of stuff would happen at different points. >> the bottom of '09 and then march. >> i guess we've always been really focused on the business and on trying to build fantastic solutions for learners. and, so, even though the stock has its gyrations, we're really focused on changing how people learn languages. >> what is your best selling language? >> our best selling language is spanish and close second to that is french. chinese is an up and coming language for us and many people are using it. >> can your programs teach you to speak english like you speak english? >> i'm actually an esl product myself. i'm swedish and i learned englishes as a second language when i was 10 years old and a solution like rosetta stone helps people learn anglish and we use in k through 12 schools to teach kids of an immigrant background the english language. >> where is the core demand coming from is it from businesses or from the individual that wants to learn the second language? it's an optional thing right now in this economy to pick up a second language. where is the better part of the business coming from? >> people are very careful how they spend their money now. whether corporations or individuals. disruptive technology solution like rosetta stone is even more appealing in that sort of environment because what people want are results for less. so, rosetta stone for individuals has continued to be a very compelling story, even throughout this recession. we're something like 83% bigger than we were in '07 in our consumer segments. >> but, still, that's growth. but where is the primary driver of revenue? is it corporations or individuals or the government, where is it? >> it's a host of different areas. right now the fastest growth is probably coming out of institutions, corporations and also schools that are sort of spending stimulus money to try to get more resources for kids. >> you get the vast majority of revenue teaching americans. very few of us speak enough foreign languages versuses teaching english to overseas folks. >> yes. int international was only 5% of our business a year ago in q4 it was 11% and growing at 160% a year. that part of the business. so, global's our future, but right now we're an american company. >> did i hear you correctly? you think you're benefiting from the stimulus bill directly? >> stimulus money going to schools and they're using that money to buy materials. >> so, the taxpayer has helped your bottom line? >> yeah, i guess so. but we pay taxes since we're very profitable. >> we just talked about are evnoo as a moment ago, michelle and i. what is the growth rate? >> two years ago we were $137 million, last year we were $252 million. so, we've really grown the business tremendously over the past two years. so, as people have sort of had to figure out how to do more with less -- >> at some point do your revenues slow because you hit all the easiest targets because of people who want to learn a foreign language and there's no one left? >> we sized it with nielson and about $83 billion a year by consumers post-college. so, it's massive and in other countries it's a much bigger deal than it is here in the u.s. in the u.s. about 40 million people do. >> one of the things we have been hearing anecdotally from people is that they have to retrain. they lost whatever position they have and they have to retrain and one thing that helps them in getting that new position is the second language. has the slow down in the job market actually helped your bottom line? >> i think there are countercyclical dynamics behind some of the things we have seen. the world is learning more languages as the world is going global. >> we have to wrap it up, that google lawsuit. you had the courage to sue google a company 50 times your size. is that thing over with or is it going on? trademark infringement. >> i'm limited in what i can say about it -- >> it's still going on. >> good job. coming up next, we go off the charts with the stock that is up more than 100% in the past year. coming up at 12:45 eastern, get ready for the fast money halftime report. melissa, what are you watching? >> hey, guys, we'll take our position on intel. of course, after the bell today, our traders say the best playoff intel may not be intel. we will name names and jpmorgan getting bullish but are they late to the game? the negotiators will phone in and tell us what he thinks. first, more "power lunch" right after this. welcome back. we are almost halfway through the trading day. in the headlines at this hour, the u.s. trade deficit increasing in february to 39.7 billion. beauty product seller a von putting more executives on administrative leave. and american airlines flight making emergency landing in iceland after five crew members became ill following reports of chemical fumes in the cabin. sue? thank you very much, dennis. from beyond the big caps to a name that is off our radar but moving higher in this market, shares of salesforce.com. the ticker symbol crm reached an all-time high yesterday and up over 350% since its ipo in 2004. still time to buy or not. here to break it down for us robert breeza. good to see you. >> hi. >> that is the key question. with a move like that in the stock, is it time to still get in the stock or has it peaked? >> i think there is time to get into the stock. a $95 price target here and earnings upside potential and more importantly a very resilient business model and the stock in a tough market last year still grew 20%, we think it will grow roughly cash flow from operations 30% this year and we think a long-term growth rate is somewhere between 30% and 40%. we still think sales force has room for upside. >> what is it about the business model that you find so compelling that would add that kind of percentage move? >> really a subscription model. first and foremost, it is very resilie resilient. even in the downturn, people pay their subscriptions. the company is still in the very early stages and everybody can buy this product. it's not just the large companies like cisco who are the current customer. it even relays to the small and medi medium-size business owner. >> what could go wrong? what has you a bit worried or what would make you change your opinion of the stock? >> well, the company continues to add a lot of people. and, so, some investors want to see better margin expansion quicker, but the reality is the company addressed a very big green field market opportunity. so, being first to market is important and we think the primary growth driver here. so, we'd like the strategy at sales force. >> you're worried. it sounds like you're worried about the cost structure a little bit, perhaps. >> they do add people and it's important to address that small to medium-size business segment. we do see leverage continuing to improve. even last year they were able to grow over 150 basis points, so, still room for marginal improvement. >> all right, thank you very much. we appreciate it. >> thank you. >> first year that company met i met with the ceo and delusions of turning into a powerhouse and put up a little sign and he's done it. he turned it into a billion dollar blockbuster. >> a hero of capitalism. >> you took the words out of my mouth. >> the environment also really helped him out. >> renting software instead of having to commit to a huge system. watch for oracle to try to buy him. coming up next, taxing america. the dems may back off on hiking taxes on private equity and hedge funds. everyone thought that was a political slam dunk. >> what the heck happened? should congress push to raise taxes on what they call carry interest? sparks are sure to fly in our powergrid debit. the push to raise taxes on hedge funds and private equity managers stalling on capitol hill. did this have anything to do with campaign money? the nation's ten richest hedge fund managers dumped nearly a million dollars into campaigns over the past few years. senator schumer of new york alone receiving $150,000. should we tax what is called carried interest? guys, good to see you for the novice viewer out there, i'm going to define carried interest really simply. a fancytiamancy way to say the funds a private equity gets to keep and gets taxed at a lower capital gains rate even though they didn't put in any capital. dan mitchell, should they pay higher taxes on that money? >> no, there should be a zero tax on capital gains. that's what carried interest is. when you have a profit on the underlying investor's money. the investor agrees with the manager and i'll give you a cut of the capital gains as a result of you managing my money well and if you don't want taxation and you don't want to make your economy we shouldn't tax capital gains at all and the last thing i want to see is for the politicians in washington i don't want them getting more money because they have to take the keys to the liquor cabinet away from the alcoholics. >> darryl jones, what is your response? dan seems to think this aligns investors with the managers of that money. >> well, certainly, it does. but it's just like profit sharing and any other circumstance. we don't tax people who get, who are employees, essentially. we don't tax them at capital gains right. what the fallacy in dan's rate is, they put no capital in. if they do put capital in, the bill before congress will allow them capital gains rates. but what we're talking about are yields to the fund manager's labor, not their capital. no double taxation at all. the fund managers have not put any previously taxed capital in the fund. >> okay, dan mitchell, i see you nodding your head back and forth. >> let's say by some miracle i'm not a poor think tank worker and i'm a rich guy and i get capital guys if i want to get capital gains, it's still capital gains just because i'm giving it to him it doesn't transform to income. a couple key principals. government is too big and getting bigger and we don't want to encourage bigger government with more revenue for the politicians and then, number two -- >> that's a tangent point. >> that's important because this isn't the context of politicians being hungry for more revenue so they can spend more money and buy more votes. but then we want a competitive economy -- >> but can you speak to the spirit of his argument which is that it's a management fee. it's not a capital -- >> the investor who has put capital at risk has paid at the capital gains rate on the profit and then after that, that individual is paying a 20% or whatever the percentage cut is as a fee for the management to the hedge fund guy. and, therefore, that ought to be taxed as income. >> the hedge fund guy is performing services. he's performing services. he's not investing capital. if somebody pays me my salary from their capital gain, i don't get capital gains rates because i'm getting a salary. doesn't matter what they pay me. >> it's not a salary. they only get the money if there actually is a capital gain. it is something that aligns the fund managers with the investors. they agree, if we do a good job investing and there's this much capital gain, we'll give you this much of it as a reward. >> i want to move forward, guys. are either one of you surprised that, shocking, this doesn't seem to be going anywhere in congress and maybe it's related to contributions? are either one of you surprised on that? >> that's exactly why. in the years past, that's the way this reform legislation has been stalled. in every case, it's been because the chucks of congress, chuck grasly and chuck schumer have been the recipients of campaign contributions from wealthy donors. >> don't forget christopher dodd. >> dan mitchell, final word. >> there's no question that there's a lot of corruption on capitol hill and the only reason politicians arant doing this bad thing is because they're getting contributions. but i'm glad they're doing the right thing, even if they're doing it for the wrong reason. >> it's the wrong thing. >> all right, guys, good discussion. thank you very much. >> how much money are we talking about here? i've forgotten, not a huge -- >> no, it's not. it's billions. >> in terms of race -- >> that's effective. i worry about it on the investment. >> you have sources in silicon valley that are very, very worried about this. >> raise hundreds of millions of dollars for companies that will hire people and they say this rate, if the all changes, we're in california and our rate could go to 60% and we're not going to raise the second fund at all and that hurts because that investor money will go into things like treasury bonds. >> isn't it fairly rare that the actual person who's running the private equity firm doesn't actually have most of their capital in there. >> most of them do. >> sure they do. >> i talked to some silken valley guys who said it's good to take the hedge funds trading every day and tax that as regular income. we're putting money into companies for three, four years before we get it out. >> these are vcs. >> venture capitals. still ahead, $275 billion in retirement assets under management and the nest eggs of 6.5 million americans. the ceo of ing retirement services is going to tell you what these folks think about the n new retirement. bill ford, executive chairman of the company that bears his fam eel's name. dpreen technolo green technology and a whole lot more. welcome to the fast money halftime report. the markets come off its lows for the sessions, but some key results out in the next 24 hours. could breathe life back into this market. let's get straight to the word on the street. fast money crew today patty edwards and steve cortez and zach. pete, you got those alcoa results. they're a little hohum. dennis almost fell asleep on that conference call yesterday. >> i think he did. >> but in terms of the tells out of earning season this week, will it be intel or gpm? what are we waiting for here? >> if i were to look out right now i would go with jpmorgan. intel is tonight, we have to focus on that. . s as you look forward throughout the rest of the week, it will be jpmorgan that is what turns the tide in the last cycle in january and turn the tide more positive or even give us a pull back and maybe some kind of correction if they disappoint. right now all eyes are on intel and everyone is focused on the semiconductors as well as the pc demand. if you look at the volatility, no one seems to care about anything right now. >> let's hit that chart of the day, you think we would be in a holding pattern and we saw it spiking as much as 7% right now. right now up by 4% and i would go to pete normally on this, but, patty edwards, what do you see in this chart? >> this number is so incredibly low. if you go back, you almost have to go back to 2007 to get into levels like this. to me, this is telling me that people are either being really, really, really stupid, which i don't think is the case, or maybe that this market is climbing the wall of worry, but we are through the worst of it and perhaps with this earning season we're going to have something to go with and to go further. >> and protection, protection, protection, pete. the volatility index is historically low still by almost any measure here and the way you interpreted it, people are saying maybe it's time to get in. >> the people who are getting in are trying to reach a little bit for that protection because it's still cheap. anything underneath 17, very, very low levels and down towards 15 yesterday and, obviously, when you look at the volatility right now we're getting tighter ranges and that is absolutely a fact. the violent moves, we haven't seen the violent moves in quite some time. that's the reason you're seeing the volatility at this level. if you want to participate, you have to buy protection along the way and this is the right time to do that. >> when pete says for crying out loud, he really means it. zack? >> i was going to say, the vic is tired, it's cuput. and i think this market is going to be really good for fundamentals because it's not a great trading market. i don't mean you can't trade quickly, this is a market to trade on fundamentals and driving the stock price and not volatility. >> let's move on to intel. we have to talk about that. earnings after the bell today and what will be the results from the world's biggest chipmaker mean for the rest of the industry. cortez, is intel the real winner for tech overall? >> i don't have a particular view on intel, but it has been lagging its own sector. if you do like semiconductors i would veer towards txn and not intel. no matter what today's results are. >> i mean, they do the -- >> chip equipment. >> i agree, an interesting name and interesting because they do a lot of solar equipment in china, which is a huge, huge market for them that they invested in years ago. >> pete, i'll put the question to you here. intel, we're, of course, going to lissen for any sort of guidance they have on their mobile unit in terms of feeding chips into mobiles and 20 tablets hitting the market with the next few months and guys like intel are going to be scrambling to get their chips into the other tablet pcs. >> i would agree with you, if you look at a stock like nokia and they have their ipad-type version coming out some time in the fall, as well. when you look at that and look at intel, they are the bellwether. not necessarily the place where people should put their money because it is a very, very dull plotting stock. i think you have more upside than other names some of those other names probably have more of a violent-type move in front of them. this is the big dog. this is 60% of their revenue in enterprise spending and 70% of it comes outside the united states. that tells me that they are the global leader and this global leader right now is talking about lean inventories and pc demand. >> i want to go back to killer just a second, steve, you like those on a pull back. let's say we have a pull back on the chip sector on intel's results, would you be a buyer of those names? >> yes, i would. >> got to move on, talking about jpmorgan ahead of the bell. stocks relatively flat, but a nice 7% run up in the past month. patty edwards this is a name you are in or related names you are in? >> we're in jpmorgan and goldman sachs and a lot more mergers and accusation . >> melissa, i agree with patty about want to be in goldman sac and morgan stanley. one of the things that worries me about jpmorgan and other traditional banks, the lingering issue of home equity loan exposure. >> you wouldn't be a fan of bank of america which is also reporting this week. >> that's correct. i much prefer the brokers. >> when you look at the brokers, the one issue you face there though is the regulators. i think they're much more harsh potential at least with goldman sachs and morgan stanley right now than opposed to a jpmorgan where you have much more diversification. same thing i think will be said about bank of america. that's why i think there is more up side to those two names, at least presently. right now i think those other names have a little bit of a ceiling on them. >> if you don't like the consumers, don't like the bank of america or jpmorgan, you don't like the fact regulators might come in and regulate things like prop trading so you might not like goldman sachs, does that leave morgan stanley by default? >> i would say morgan stanley stands up for sure there. but you really want to get some of the torque. when you listen to some of these calls over the last couple of quarters, jpmorgan has put in an enormous amount of money. they are in a position right now where if there is any signs of improvement, the money they've put away for that now can be used other places. that's where i think jpmorgan could have much more up side potential. >> i'm not sure any of these names are going to be where the money's going to be made in the market. a lot of the ways financials are last year's story. doesn't mean these stocks couldn't do well as stocks or that these companies won't be hugely profitable, but it is not really where i think focus ought to be in terms of the up side. what we talk about before in terms of derivatives of wireless, derivatives of ipad, and there are multiple other things. innovative things we could probably talk about in health care. we haven't talked about biotech in years. i think you'll look for money in those areas more than we are this kind of financial set that we focus on a lot. >> very good point there. let's also hit the rails. csx out after close today. steve, you've been bullish on the rails. what do you do here? >> i think this is one of those names when you look at all the rails, this one definitely has been one of the lad earfof the now. they do expire on friday as well so the volatility there is moving to the up side. i think this does set you up where you can do one of these trades we talked about in the past where you can go out to may, buy some calls, then sell some of the april calls in front of the earnings. right now they are not pricing in a major move but the volatility is up enough where you can take advantage of some of the volatility. >> from the rails to the strip, casino names. jpmorgan raising estimates for mgm and las vegas sands. mgm, new 52-week high today. they're pinning it on better-than-expected occupancy rates on specifically the vegas trip. guy adami is on the fast line. hi, how you doing. guy, we've got gamie ining winda last week that showed the amount generated from gambling was up sharply in the month of ge february. that was last week. today jpmorgan comes out with this call. >> the analysts at jpmorgan is playing the role of mongo. he said i'm overweight, i'm pushing my chips all in. i think frankly he's playing at the $100 table right now. he has a pretty aggressive price target. valuations, it is hard to make sense of the valuations right now at las vegas sands but the tape doesn't lie. stocks have been unbelievable basically since august 3rd since we were out having a really good time in las vegas. good for him for having the tenacity and mongo-like nerve to make this call. but it is very hard to get into a new long trade in the las vegas sands. i think pedro is seeing some long action there. >> march 22nd and even before that you started seeing an acceleration of options activity but it was all focused on april. so this goes away, again, expiring on friday. that's where the focus has been. people were looking for this kind of a move. stock was under $20, now it is pushing $25. i think a lot of people are taking chips off the table. >> all right, do not go anywhere. we'll show you why some traders are being bullish on procter & gamble. stay tuned. earnings season day two. fast money goes inside intel and behind the numbers to bring you all the late break news in the tech titans' earnings call. plus one man, 30 seconds. how will pete fare on the sales front? he's making his pitch. "fast" at 5:00 p.m. eastern only on cnbc. let's get straight to the halftime report. unusual call activity. >> this stock hasn't been above $65 in a couple of years. then you look and all of a sudden the calls get very active. april 29, people may expect to see the stock finally get back over $65. lot of buyers. everybody's focused on intel. patty, you're looking at invidia. why? >> it is all about the 3-d, new games, they have chips that allow 2-d games to become 3-d. you have 3-d tvs, the new ipads. i think this is the way to go. >> hard to argue with where this market's going. it's been going up. >> taylor cortez. >> i'm bearish. europe is still a problem. >> i'm buying individuals, not so big on the overall. >> expect more of the same. think we finish flat but intel tonight will be the tell. >> see you tonight, steve. that's it for us. on tonight's fast money, all the action on intel and setting up for yum earnings tomorrow. ford motor executive chairman bill ford on the need for america to value manufacturing and the industrial sector. and the need for the globe to embrace green automotive technology. that's ahead. and a whole lot more. retirement rebound. as markets start to recover, are you doing everything right right now to enjoy your golding years? we'll talk to ing ceo of retirement services. plus the intel on intel. earnings preview of the tech titan. why our two analysts say now is the time to buy. and promoted profit? twitter announcing its new business plan today promoting tweets. will it drive up revenue or drive people away from a newly ad-cluttered twitter verse? tweet this -- the second hour of power lunch starts right now. welcome to the second hour of power lunch. crude recovering from its session lows. still though down below $84 a barrel. that is, i'm told, a key technical level. couple of unusual volume movers today. avon, a 55% turn up in volume. >> fed governor daniel carulo, the central government's central bank on bank reform says the stress test ought to be routine. and when it comes to planning for your retirement, a new survey from ing finds many folks relying more heavily on workplace plans rather than go it alone. once they do sign up, they're more actively involved in managing those plans than they ever were before. we're pleased to welcome the ceo, katherine smith, with more details. pleasure to see you again. >> thank you for having me. >> the survey you did involved about 1,000 investors. i was interested in the fact that they feel confident about their retirement, they just want more choices so that they can be better investors in their retirement. is that a correct read? >> that's absolutely right. i think they're not 100% confident they've done everything they could do but they absolutely feel much more confident than the people that do not invest in a 401(k) or 403b plan. i think it is good news that people are beginning to understand it is important to take advantage of your employer-based retirement plan. >> how much do you think came from the economic meltdown we had and are you at all impressed by the fact there's less hangover from that now than many people thought there would be? >> we are beginning to see the people increasing their contributions to their plans. i think while for the most part people stuck with their savings during the course of the economic crisis, we're still now beginning to see a little bit of pick-up, less people taking loans, more people adding to their retirement plan. i think it is all good news and reflective of a bit more optimism about the market as a whole. >> do you have any details on asset allocation? it seemed at the height of the crisis a lot of people were moving into fixed income, maybe keeping the investments intact in the 401(k) but making different choices. is that changing? >> you know, we actually didn't see as much change there as you might expect. we manage over $270 billion of assets under either management or administration, and literally 1% or 2% moved at the worst time in the crisis. so clearly the shift was changed because the equity markets came down so much. but we're not seeing now a dramatic change in people's allocations either. again, a little bit of an uptick slowly but surely in allegations to equity-based mutual funds. >> that's surprising to me, a 1% or 2% move. does that worry you that people weren't that active before or is it good that they weren't that act sniff. >> i'd like to think that people understand that this is a long-term investment, that their retirement money is not something that's short term that needs to be moved around, that in fact over the long haul, the equity markets and some combination of the equity markets and a fixed rate are really what will serve them best. i'd like to think that people stuck with their financial plan. but i would admit probably some of it was fear and inertia as well. what would i do if i were to move my money. >> frozen with fear. did you sell anything yourself at the bottom? >> i'm a long-term investor as well so i stuck with it. i don't have any regrets. the equity markets came right back. >> your survey is rather positive but yet i feel like there is still a lot of fear out there. >> i think that the fact for instance, this year the social security system looks a little bit out of balance, think that's another message to investors and to our consumers in this country that they need to step up and really get more active on their savings, both within their retirement plan but of course in other vehicles that are available. >> that was the key of the survey, was it not? they don't run government to run the retirement plan, but they want more employers per se to offer a plan. >> i think that's right. if you work in a small company now you may not have access to a 401(k) plan and they're saying, please, give us access. they're saying, please, the plan sponsor, give us more education, help us make better investment choices amongst the options in the retirement plan, and they're saying, outside of my 401(k) plan, let's see what else i can do to be saving more appropriately. i think they're hungry for more information. >> catherine, a lot of pension funds are now way below funded. in other words, they've lost so much. and individual 401(k)s and retirement is basically the same phenomenon has affected them. are people back to where they were three years ago or do they still feel like their playing catch-up? >> i think while most consumers are down some, they are not down as much as the markets might indicate they would be. because again, in most retirement plans, there's a mix of fixed income and equity-based mutual funds. so the mutual funds clearly came down rather rapidly and they've ined most of that. on the fixed income side, they have fared very well. a lot of the fixed income products that are offered, for instance at ing, offer guaranteed rate of interest and in the 3%, 4%, 5% range so those look pretty attractive so they held that value throughout. so while they are down, i don't feel like many of them feel like they are completely out of business and they can now turn back to their retirement plan and say, wow, this is going to work for me. one of the things we were very pleased with in the survey is people really believe this is the cornerstone of their retirement planning. >> catherine, thank you. nice to see you again. a suz senate panel is pointing the finger at the collapsed bank washington mutual. committee says the bank fraudulently sold high-risk mortgages to investors. meanwhile, top executives like former ceo kerry killinger raked into his pay packages. mary thompson says they were grilled today. >> they are still being grilled. it is a long day. killinger is up later in the afternoon. two former risk officers say they repeatedly warned senior management of the problems in the failed mortgage operation but management appeared reluctant to rock a profitable boat, making money selling defective loans to wall street firms. >> i cautioned about subprime loans consistently. if we were in conflict, we had no way to resolve that because the chairman would not engage in conflict resolution. he was very conflict-averse. >> the chairman was kerry killinger. he's testifying later this afternoon. in his prepared remarks, killinger defends his 18-year tenure as ceo and said he warned about the housing bubble as early as 2005. he also claims wamu dialed back on its mortgage business heading into 2008, but the second -- creating files for new clients or an office where 82% of the mortgage originators were defective or lacked proper documentation. >> washington mutual was unusual in the fact that it was -- allowed these gaps to continue for as long as it did. >> whether killinger pops to being responsible for this remains to be seen. he claims wamu is a stalwart main street bank. a 30-year veteran at firm, he earned wall street-like pay in his last five years at pamu, $103 million. he was fired in september 2008 right before the fdic took over the bank in the biggest bank failure ever. >> was there some discussion at the executive level about how they'd give out compensation, whether they'd include subprime loans as a measure? >> that happened in 2008. the board decided they were going to exclude subprime losses in considering killinger and osenior management teams' compensation. >> why? >> i would assume that maybe the executives encouraged them to do so. i don't know any responsible board that would say we're going to exclude a certain part of the business. especially one that has caused a bad problem. we're going to exclude this from their compensation. >> their product was -- >> the option arm. >> they designed this or i believe it was some subsidiary of theirs -- >> actually long beach was their subprime lender. it was something separate. then their own prime lending operation generated these option arms which in many ways were considered prime loans. but a lot of them, you had an option, you could -- a teaser rate, could you choose a 30-year fixed, 15-year fixed, interest only, or you can choose to pay less than the interest which was tacked on to your principle -- >> the lenders lost their mind. >> it is like a bunch of romans gorging on a table. no one has any control. >> i heard the "f" word bandied about a lot -- fraud. but a lot seems like stupidity or gluttony. where was the fraud involved? >> i think if you have employees who were taking bank statements from clients -- listen. take those bank statements, photocopy them, cut them out and put them in documents to create a file for a borrower who has yet to be approved, one might consider that a fraud. >> senior executives at a higher level -- >> if they knew of it. >> i still can't get over the board saying we'll just ignore the subprime losses. that is disgusting! >> i think what you have to recall is when that all came out, shortly after that there was a very contentious shareholders meeting in april of that year when killinger was actually stripped of the chairman's title. shareholders were very angry about the losses at wamu, angry about this compensation package. killinger basically refused to step down as chairman even after being voted out. it was only i think in june of that year that he actually decided to step down and then he was fired as ceo in september of that year. remember in all of this, too, there was a huge investment by tpg, the private equity firm. they lost that money. they did get wiped out. $7 billion. >> and the fallout continues. >> an interesting afternoon on capitol hill. thanks, mary. up next, it is one of the tech titans -- intel reports earnings after the bell. no wonder they call it a bellwether. what should investors expect, what to trade here. and check out the shares of intel. 80% higher since the bottom of the market last year around this time. we'll be back in a couple minutes. welcome back. bob pisani down on the floor of the new york stock exchange. volume's pretty good today. what's going on? lot of people buying stuff and mostly you'll find there are three or four stocks getting extraordinary volume here today. they tend to be what we call the lower-quality names. let's be kind. fannie mae and freddie mac. ambac has turned into citigroup. it's been up like that for a couple of days now. fannie mae and freddie mac, every few months they start tracking volumes from the momentum guys. that's where most of your incremental volume is. waiting for csx after the bell. very encouraging commentary from some of the regional freight carriers in the last couple of days. genesee runs steel lines for shippers in pennsylvania and ohio. railamerica said the same thing, march shipments are picking up. this gets widely noted in the transportation community and that's one of the reason we've seen some of these transportation stocks, these small companies, moving up in the last several days we've highlighted, because they're expecting to hear good things concerning march shipments. tradertalk.cnbc.com. fairly good news in the industrial area. today we've got a bullish call out of credit suisse on higher education, pay colleges. the whole group, take a look. career, education, "apollo," all trading higher at this hour on that news. couple hitting new highs. the biggest loser on the day is orex, the stock is down about 10% as the company today saying that it's had to resize some of its obesity drug data saying that some of the weight loss wasn't as big as they said. three big drugmakers vying for an obesity drug approval likely in july. >> thank you very much, bertha. whenever you talk about obesity drugs i begin to perspire. i get a little sensitive about it. >> welcome back to our temple to plexiglass here called earning central. one of the big earnings reports coming out after the bell is from the tech bellwether, you can't say the word intel without using the phrase tech bellwether. the stock surging more than 2.5% in the last two months. doug friedman, senior analyst at broadpoint. bobby, start with you. pam am i going to be sad or mad or glad today? >> i think you'll be happy. we're hearing good things about intel's notebook business in particular. we think the first quarter saw some up side in a new product line they just launched. we think that could lead to additional demand in q2 probably better than what expect for both revenue and earnings. >> doug, the street closing in on the $10 billion range. how did they do such a huge upsurge when the economy's supposed to be so lackluster? >> if we look, last year we had pc units down only 1% in a very bad economy. so people continue to want to buy higher powered processors. >> bobby, what do you think about the possibility if the market likes intel's earnings at the close of the market, that it fuels a new rally for the broader bull? >> that's a good question. we do think that given the run that intel and some other semiconductor stocks at least have had, we think there are pretty high expectations. there could even be some selling into good news. but we think ultimately once people digest the entire earnings season we'll realize that with the corporate refresh coming in the second half, there is a lot of up side still. >> doug, as we look at this chart here, it exaggerates a move over two months. now there you're looking back at today's numbers. what's your price target on this stock, and why do i feel as though intel is basically a range-bound stock and has been for a long, long time? >> yeah. i mean you raise a great point. if we look back on a long-term chart, intel has had a problem breaking out in the 20s. our price target's $29. what we really experienced over the long term here is massive multiple compression. we've had the pc sector not as a growth industry but what we're going to talk about, and we think intel will talk about at their analyst day, a change in their business model where they get more stability to margins and really become a clash flow money. on a lower multiple we think we can get to $29 again. >> bobby, intel surfed on the pc wave, did great laptops, internet, servers. now we go to mobile internet. is intel poised to be as strong in smart phone chips as it is in laptops and service? >> that remains to be seen. they're making so the efforts in that direction with low-power platform, processor called atom. i think they're doing the right things. it just remains to be seen what kind of traction they can get. >> gentlemen, nice job. thank you very much. coming up next, one of the most famous names in business history. bill ford. he's executive chairman of the company that his great grandfather founded. he's going to talk about the future of the auto industry, green technology and a whole lot more. i'm sure he'd love to talk about the shares of stock because ford is up over 600% since the bottom. right now it is at $12.77. flat on the day. back in two minutes' time. (announcer) we're in the energy business. but we're also in the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won't- hurt-a-bit business. because we don't just work here. we live here. these are our families. and our neighbors. and by changing lives we're in more than the energy business we're in the human energy business. chevron. of the most storied family dynasties in a family business. bill ford, executive chairman of the company his great grandfather henry ford founded in 1903. mr. ford says he wants the tea carmaker to take the lead on green technology fuel-saving products. pleased to welcome bill ford to power lunch. >> thank you very much. good to be here. >> we want to get to green technology very soon. but first, after the results of the first quarter sales numbers for the auto industry, a lot of folks think that finally there is a turn when it comes to auto sales. maybe we aren't off to the races, but things are definitely getting better. is that your assessment? >> yeah. think they are. the first quarter was a pretty good quarter for the industry. ford had a terrific quarter. we -- market share was up over 2.5%. percentage points. but i think it's too early to declare victory in the auto industry. sales if you look at a historical level are still pretty low. >> as to the question of building a greener company or a greener america, what in the auto business is the single-most critical component of that? is it a reliance on hybrids? is it -- what is it? >> well, taylor, there's really no silver bullet. we have to push hard on a lot of fronts. electric. hybrids. biofuels. still investing in fuel cells. that's just for the car itself. then you've got our plants, we've got a huge water savings effort going under way if our plants. we've got paint fumes in one of our plants to power the plant. we're working on all the fronts because it is not just the vehicle propulsion system. that's a look people focus on, however. >> it is what most people focus on. are you worried by focusing on that, if you don't get gasoline prices to help you out and push the consumer into more fuel-efficient cars, that's going to be a lot of wasted investment? >> i don't think it will be wasted but there is no question that we've got to align customers' pocketbooks with society's goals. i've always felt that way. in fact, five years ago i was calling for a gas tax. i think people thought i was a heretic in detroit. >> the health of your company is gaining in market share and in profits which is certainly gratifying to you. will ford add employees this year, fanned not, what will it take for you to begin hiring? >> well, we've always -- to get us through this period, and really this is going to be our mantra going forward, is to be very conservative in our production schedule and be able to ramp up when demand comes up. so the answer to that is, not sure yet. we're going to closely monitor where we are in terms of demand, and sure, we'll add people if we need to. but we'd rather at this point play it conservatively and then demand pull us up. we've seen the equation where all the auto producers overproduced, then had huge incentives to try to shove them into the marketplace. that's a game we don't want to play anymore. >> when you think cautiously, what's the new normal for the annual level of sales of cars in the united states? we got to nearly 17 million, we went down to 9 million at the worst of the crisis. around 11 million right now. what do you think it is a year from now? >> you know, i could make up any number and say with great confidence and i'd be wrong. one of the things that i always used to laugh at is january 1st every year they used to ask the head of the auto companies what the yearly sales were going to be. the first person to answer everybody else jumped in and was like within a tenth of that person because they all knew they were going to be wrong. they decided they'd be wrong together. i don't know the answer to that, but i will say this. i feel very good about where we are whand we're doing. our plan is working. and we're just going to continue on the way we are. way too early to declare victory and our people are working hard. >> if anybody could sympathize with mr. toyoda right now, it would be you, mr. ford, in the family auto business. talk about the travails toyota is going right through right now and what advice, if any, you would give right now. >> akio certainly doesn't need my advice. whether your name is toyoda or whether your name is ford, it is personal. there's no such thing as going home at night and forgetting it all. so i can imagine that he is taking this extremely hard and personally. as do i whenever we have -- >> have they done enough? have are they done it quick enough? >> oh, that's not for me to decide. it's really -- i don't know all the facts. i don't know really what they've been looking at. it's hard for me to comment. but i do know this. i know akio is a good man, i've known him for years. and it's got to be really tough right now for him. >> how glad are you you didn't take government money? >> very glad. one thing that was always really critical to us is that we had the freedom to run our business as we saw fit. we thought we had the right plan. we did a massive borrowing in anticipation of putting that plan into place, and it worked. and so here we are, we still have a debt to repay and we're working very hard to do that, but i love our position and i wouldn't trade with anybody. >> you want to give allan mullally a raise. >> jim cramer says he's underpaid. >> allan is doing a great job. not only is he doing a terrific job, he's a high-quality human being and i really enjoy being with him and we see the future in very similar ways. so it is a great partnership with allan and he's doing a wonderful job. >> mr. ford, good to see you. thank you for taking the time to join us. >> thank you, guys, so much. up next -- they are turning some of the lights out in colorado springs literally. we will talk to that city's mayor about the incredible financial crunch that his town is facing. plus, millions of americans invest in mutual funds. how do you pick the ride ones? help is on the way. the 5 best no-load funds. we'll tell you which ones made that cut on the other side of the break. china's president rebuffing u.s. calls for revalue the country's currency saying any tinkering with the yuan will be done according with domestic interest. toyota responding to "consumer reports" do not buy the lexus gs-460. twitter announcing an advertising-based business plan. julia boorstin will have more in a bit. colorado springs is facing one of the worst budget crunches in that state's history but government officials and residents are hard at work trying to save some money. they are selling off police helicopters, shutting off street lights an even volunteers are now offering to collect garbage at local parks and municipalities. you can adopt a street light if you would like as well. colorado springs mayor lionel rivera. welcome to "power lunch." it is a pleasure to have you here. >> pleasure to be on the air. >> your city has a history of wanting less government and they are now obviously willing to take up some of the shoulder of government. but i wonder how it is going to work because as your city has grown, there's a disparity in terms of income levels and some parts of the city may be able to afford to do these programs and other parts of the city may not. how is that all going to work? >> well, you're right about that, sue. some parts of town are more affluent, they're going to be able to adopt parks and do a lot more of the maintenance than maybe the southeast part of town. but one of the things we did do, we are dipping into the reserves to keep our community centers open. they those the service economic disadvantaged parts of town so we understand there are some parts of town that won't be able to pitch in as well. but by and large, our community's been very positive in adopting parks, adopting street lights and really showing a spirit of volunteerism. >> you've also cut back on the police force and other functions like that. how are you making up for those cuts? are citizens filling in this that particular role, and if so, how? >> well, no, we would never ask our citizens to fill in where police officers and firefighters do their jobs. but we've changed the way we respond to priority one calls. our priority one calls policy has stayed the same. we aren't responding as much to cold cases, to make break-ins in automobiles but we are maintaining service at a very high level. we're one of the safest cities for a city our size in the state of colorado and in the nation. i don't want anyone to think even though we've cut back in some areas we aren't a safe city. from there were reports that taxi cab drivers were doing some surveillance and things like that. is that correct or incorrect? >> no, that's correct but they've always been doing that. they've always kept their eyes on the road and reported anything that they saw to our police department that might help us. we formalized the program and let the community know that we do have more eyes out on the street. but that's something they have been doing all along. i think it is just great to make a formal partnership. >> mr. mayor, what kind of issues do you have if at all with pensions? that seems to be the biggest issue across the country. is that one of the reasons you have to divert money away from other things? >> michelle, that's right on. we had to make an additional $10 million contribution to some of our pension plans. we have four different ones in order to keep them ache wetuari sound. we're working diligently -- i am working with both the police department and fire department professional associations so this year we won't be looking at that crunch for 2011 that we can adjust those pensions to make them more affordable. >> is there any political will to move them from a defined benefit to a defined contribution like the rest of the private america has done? >> well, unfortunately, for us, back in the 1970s the contract was struck with the firefighters and police officers for these pension plans. and unless 65% of the workforce votes out of the pension plan, it's not going to happen. but we can roll our police and fire to a state wide plan that requires a much lower contribution from the city than the one we currently have which is more of a local plan. that's what i'm shooting for. >> mr. mayor, thank you very much. good luck. we'll be watching closely, see if more cities adopt that same type of program. how much does it cost to adopt a street light, by the way? >> it costs $75 a year. it is very low price especially if you want to rally your neighbors to do that. >> if you don't like the street light, can you return it to russia? >> you can, as a matter of fact. residents are asking if they can turn off their street lights because they like to see the night lights in colorado. all of you should come out and visit our city. >> it's gorgeous, i've been there a number of times. thank you, mr. mayor. good luck. kiplinger's may issue hitting the stands today. joining us to highlight a few things, the executive editor with "kiplinger's personal finance finance." manny and i used to play softball together. when we were young. >> when we were young. >> let's talk about some of these funds. a lot of these on your list again are familiar names but there are some new ones in the large cap category, including vanguard difficult dent growth. this is consistent with the idea that dividends are a much more important place to concentrate. right? >> yes, indeed. in fact, we've actually added a few funds designed to give people more choice among more conservative investments. and vanguard dividend growth is what we would think of as a conservative stock fund. the name says it all, the manager looks for companies that have been raising their dividends for many years and are expecting to continue to do so. he seeks to increase the fund's income by three percentage points in excess of inflation every year. he expects the holdings in the portfolio to deliver dividend growth of 11% a year over the next five years, and it's not a fund that's going to shoot the lights out in a rich nordic bull market but we think it is capable of delivering good, steadily returns over a long period of time. >> these are all no-load funsdz. correct? >> that's correct. no-load funds. good managers with good records, sound strategies and low to moderate expenses. >> a lot of these are the usual suspects -- t rowe price, and other companies known for no-load. harbor international, if i recall correctly, this has swung hot and cold in the past. >> no, actually not. between 2000 and 2009, harbor international beat the index 9 years out of 10. in addition, 9 years out of 10 it was in the top half of its investment category which morningstar calls large international blend. the fund is run by a team of five managers, one who launched the fund in 1987 so you have a very experienced team, invest in large cap foreign stocks, companies with franchise -- companies that are capable of raising profit fmargin through higher sales. it is a solid core international fund. >> thank you for correct ing me on that. how did the fund perform last year? >> off the charts. our typical domestic stock fund was up 66%. our international funds were up 80%. we say this often -- don't confuse a bull market with genius. we funds all suffered during the downturn. i want to mention one of the new additions in particular, that's arbitrage fund. it is a fund that invests in merger arbitrage plays. that is, companies that are the tasht targets of takeovers. it invests in those stocks after the deal is announced and hopes to capture the final few pennies or dollars of appreciation both the post-announcement price an conservation price. the reason i mention this is two fold. one, this fund has virtually no correlation to the u.s. stock market. it has very little correlation to the bond market and there is one magic number -- 1.6%. that's what this fund earned -- earned -- positive return -- during the 2007-2009 bear market during which the s&p 500 lost 55%. this is one of the two alternative funds that we have in the kiplinger 25. >> that chart just showed, it was only up about 9% in this most recent year which proves the point, which is that it is not correlated to the s&p 500. >> exactly. this fund will make you squirm in a full-bore bull market. but that's not the point. >> i think they're squirming in the control room. >> thanks very much. who's smarter? the harvard kids i spoke to yesterday or the big brains who run twitter? julia boorstin's at the big twitter event in new york where their money making plans are being unveiled. julia. >> michelle, twitter's long-awaited much-debated plan is finally here. how will it work and what does it mean for companies and consumers? i'll have the details coming up after the break. twitter is finally rolling out its business model and has our experts on power lunch predicted yesterday, it centers on advertising. cnbc's julia boorstin joins us from the ad age digital conference with more details. julia. >> michelle, starting today, twitter users searching the site will find paid search results paid promoted tweets on top of all of the other search results on that page. is twitter's first ad model and it is designed to build on what companies already use the site for tweeting about their products and the brands. now marketers will be able to pay to give their 140-character messages top placement on twitter search pages no matter when their tweets are sent. advertisers already on-board for promoted tweets include best buy, starbucks and virgin america, all of which already tweet. twitter aims to charge base on promoted tweets or how much these tweets are retreated, shared. even established players like google say the power of a referral through retweeted ad could be very significant. >> this is a new media and the most important thing to do now is experiment with different models. twitter's doing that. >> is referral important to google's ad strategy? >> we're certainly looking into that. >> twitter's chief operating officer dick skos tell lcostell started his speech in this room behind me. he's joined on stage by bravo and virgin america executives. they'll talk about how they expect to use these promoted tweets and what they think the value of this model will be for them and other companies. costolo will talk to us during the 3:00 p.m. hour. >> let's see what our next guest thinks of twitter's strategy. caroline mccarthy at cnet.com joins us. boy, are they just obliterating the chinese wall that's supposed to separate editorial content from ads? >> twitter is not an editorial company in its own right so i don't think there is really a question about conflict of interest there. but what you have to think about, twitter is saying to marketers basically, hey, it's free to maintain a brand presence on twitter but if you pay, you can make that message permeate through the network of connections more. if that sounds familiar, it is because very similar to facebook strategy where it's free for a brand or advertiser to maintain a fan page but this f they want to promote that fan page, they have to buy ads that link directly to it. very much a similar strategy. >> if i understood julia correctly, they're going to pay more if their ad gets retweeted, is the incentive then for them to come up with cool tweets? because to be retweeted you have to say something that people want to bother to pass on. right? >> right. exactly. >> just like a search ad. as if someone was clicking through and for this, it's similar. the value is if your tweet gets seen a lot, shared by a lot of people it has more resonance and more value. we'll learn more about the details. but one thing to point out, when you are searching you are looking for something. that's why it makes sense to put ads for people who are looking. what's going to be interesting is what happens with twitter when they try to expand this? i chatted with dick costolo earlier and he said down the line they are thinking of putting those tweets into your news feed. right now when i look for my news feed i just want to see what the people i follow are saying. not what's new with jetblue. that's where it becomes a little bit more challenging. >> here's the other thing about that, you think about the brands that are on this from the start. virgin america, starbucks, bravo. these are all brands that generally have a relatively high end, relatively positive reputation. so even i really don't think people will mind seeing starbucks promotions in their twitter streams without any search in the process. however, when you think about they're going to have to get this promotion to be -- in order to be profitable, they have to reach out to other brands, including brands that don't necessarily -- >> caroline, please, stop. okay? i got to tell you, no one's going to retweet ads. i'm not retweeting some starbucks ad. >> caroline, i'm talking! wait. >> dennis within think you're totally wrong. >> inside the office of google today, google's now saying twitter, you're doing that search-based ad service? now we must kill you. what do you got to say to that, caroline? >> yeah, absolutely. i think twitter was under a lot of pressure to come out with a business model. the thing is that i think that people have been incredibly responsive to brands on twitter, much more so than i thought they would be. will people retweet this if an ad says retweet this and use this code as a coo upon. >> dennis, i have to disagree with what you said before. right now people retweet things that whole foods or jetblue, what they have said -- >> she's right. >> they have retweeted and encourage brands to become more creative and offer better deals. >> google, wake up. twitter, waiting for you. okay. thanks very much. over to you, sue. coming up next, the etf business gets bigger seemingly every single day. millions of investors, billions of dollars in ad sets and a lot of those etfs can give you a big tax advantage over traditional mutual funds. >> how do you get that tax edge and what happened kinds of etfs give you the biggest break? answer in two minutes. investments at etfs are rising dramatically every year. turns out also if you pick the right ones, they can give you a tax advantage. joining us with where to look, peter crawford, senior investment schwab investment management services. are all etfs helpful or tax-advantageous or only certain kinds? >> you definitely want to do your homework on which ones are more tax advantageous. when we say that, we mean etfs, when you sell them you certainly have to pay capital gains on those sales. and they pass through dividends and interest. many etfs tend to pass through a lot less in the way of capital gains distributions than for example your actively managed mutual funds. capital gains distributions occur when a mutual fund or etf sells securities in the portfolio. just like you or i when we sell security we have to pay tax, the etf or mutual fund has to pass through that tax burden on to the shareholders. the etfs tend to way less in the way of capital gains contributions are ones with relatively little turnover. there is not necessarily a lot of buying and selling. also ones that are very liquid indices such as a large cap or small cap etf. >> commodity etfs. if you want to avoid worrying about taxes -- i don't understand. we're showing a graphic i don't understand. no tax advantage to commodity etfs like gold? >> i wouldn't say no tax advantage to a commodity etf but the problem with a commodity etf are a couple things. one is the way that the etfs mid gate the capital gains distribution is a relatively complicated process but essentially what they are allowed to do is when they redeem shares, rather than selling securities and delivering cash to a shareholder as a mutual fund does, they can actually deliver securities. a commodity etf, if it is dealing with bullion, they can't deliver securities to the street. they have a real advantage there in terms of avoiding that sale. the other issue with commodity etfs, a number of them you don't get a 1099 at the end of the year. you may get a k-1 or a grantor trust letter. just adds a little bit of complexity to your tax situation. >> inverse etfs as well aren't as likely to be tax advantageous. like if you want to invest in a bear market fund, if the stock market goes down you actually make money. >> that's absolutely right. we certainly don't at schwab recommend levered oirn verse etfs. the tax situation on those is also more complicated because they tend to have higher turnover and often have a lot of derivatives in the fund itself. so again, they can't do what's called that in-kind transaction so you don't get the benefit necessarily of that payroll or capital gains treatment. thanks for the insight, peter. we have some exciting news here at cnbc! tune in for this. our special report, "tax is america" on thursday. because look who's coming back! bill griffeth hosting a one-our special on taxing america. it is a summit focused on taxes, tax solutions, et cetera. he's only coming back for this one-day thing. but when he's back i might kick him in the butt a couple times and say, come back permanently. coming up, pamela anderson is a big star with major assets. let's face it. and the state of california? it says she's not paying enough taxes on them. sounds like food for thought. right? we'll be back in two minutes. (announcer) we're in the energy business. but we're also in the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won't- hurt-a-bit business. because we don't just work here.