Transcripts For CNBC Squawk On The Street 20130606

and your money. the dow recovering from a more than 200-point drop yesterday. investors waiting for the jobs number tomorrow. cramer's been looking through all the charts. >> jpmorgan's chairman and ceo jamie dimon warning of a scary and volatile market. this pepsi soda buyout rum r rumor. blue chips closed below 15,000 for the first time in a month. like the nasdaq and s&p, finished the session at one-month lows. today futures are rising on a morning in which jobless claims fell by 11,000 as we brace for the jobs tomorrow. the b of e and ecb leaving rates unchanged. draghi says in a news conference the central bank's monetary policy will remain accommodative as long as necessary. a lot of people saying the market is positioned short going into the jobs number tomorrow and that there may be a little bit of a bounce over the next session or two. >> i think that we're in kind of a busy dar moment that we're very oversold. the most oversold we've been since november of 2011. why does that matter? because people are pressing their bet. that's a bet press ahead of the employment number which has not been a good way to do things. it it's a decent employment number, we get a little lift. i look at a lot of companies. vera bradley, francesca, all bad. these are apparel companies that are really in the middle. the middle -- it's just not doing that well in this country. they had a tough month in may. when i come back to the fundamentals rather than the charts -- charts aren't so good -- the fundamentals are kind of confirming a lot of weakness that i see. it just makes me worry. >> most people who are instructive on this market would argue earrings are going to be just fine and in fact let's stop getting so excited about a 2% 10-year. put it in context, please, everybody. this is an air pocket, not a down trend. >> okay. we are down almost 5% from the high. that matters. but we don't all -- we're not trading in unison. real estate investment trusts started to go down. i think they are trying to bottom. they've come down tremendously. the generals have just started getting shot. we just started shooting boeing. we just took down the biotechs earlier this week. you got to let everything roll over and some bounce before, but i don't like the take yet. >> streaks getting broken this week. tuesday streak. we may get three down days in a rhoda which would be the first of the year. the first time where the s&p gets at 5%. we're almost there. not quite yet. you want to see those things happen in a gentle fashion? >> yes, i do. because i think we'll be able to say, you know what? this interest rate back-up is now reflected in the stock market. we have almost everything's corrected and we're safe again. if interest rates come down a little bit instead of 60 basis-point change in rates, we cut back say and we'll only be up 30 basis points, then the dialogue changes. and we just need stocks to come down a little more. then i'd be more constructive. >> i keep hearing -- everybody keeps saying there is this magnetic pull to 1,600 or 1,597. >> lots of people are hitting me with that. >> if it breaks, is that concerning? what's your take on that story. >> then it is supposed to go to 14,400. you hear that kind of thing. i've been going over the dow component which i find is much more worthy. verizon could lose three. alcoa could be breaking down. ibm could about back to 190. 3m could go under. you could take the pieces -- and there are pieces that could easily take you down 400 points. i think one of the things people forget, we're really at a high level. this is not dow 9,000. >> 3m could go back to where it was before it reported that bad quarter. >> i know! >> remember how we were remarking at the time -- you were many times pointing out these stocks were trading above the levels after which they reported not great quarters. >> ibm went back to $210! it went down to $189. did it deserve to be at $189? no. did it deserve to be at $210? no. you get this mid range thing, technicians come in and start talking about the idea that there's a head and shoulders -- i think of procter & gamble, head and shoulders. can you go to rite aid, which had decent comp -- >> you're okay. nothing there. >> when you have nothing, you got nothing to lose. bob dylan. i want to be constructive. i just need some time. >> there is some interesting calls. sam strovall at s&p who predicted this pull-back pretty well takes his s&p to 1,680. takes your equity allocation to 50% from 45%. as he sees multiple expansion, people see the recover being more sustainable and getting more comfortable with a fed withdrawal. does that make sense to you? maybe not. >> geez, not really. i mean to me, when i read the "financial times" today and it says the quant funds aren't positioned for interest rate back-up, i say what were you positioned for, guys? i'm not as punctuality with earnings as i was other than technology because we've had a series of technology presentations the last few days which were very good. cons, which is a texas-based -- therefore, oil -- retailer of the best buy variety was good last night. against i've got a whole bunch who were bad. i keep thinking about dollar general not being too good. i don't have that level of confidence in earnings that you may have. >> credit has also started to widen. investment grade deals, junk deals, things are starting to widen a bit. that's been noted over the last week or so. i don't want to just focus on equities. as we point out many times, credit is such an important component of the financial landscape. >> meaning, again, that there are people who are beginning to look through and say maybe this company's not as good and we paid very little -- >> maybe i'd need a bigger spread to treasuries at this point and willingness to take on this risk at a higher risk. would you you anticipate it would be the case -- of course deals done a few weeks ago. we pointed out apple -- that's ugly, man. as a buyer. great for them, ugly for the buyer. >> the other thing, while i'm getting made up -- which takes a huge amount of time because they have to totally redo me each morning. i was mentioning to david, i got caught up in the february 14, 15, 16 period of this year. there had been a series of deals that were announced. that was the hype, it was an exciting time. that's when we really started taking off. there's been no deals. >> none of great note. certainly not a spate of deals where we saw heinz and dell and virgin, overseas but, yeah -- >> that's a good point. >> we need that fuel. >> listen, we're getting dribs and drabs, here and there. we'll continue to chase a number of different things. though when you talk to people out there -- by the way, this volatility doesn't help. if you're trying to -- if you have two companies that are fairly close and you're trying to negotiate a price, i was talking to one banker yesterday. something was not that far away an then the buyer stock declines 10%. not able to negotiate a price when your buy stock tanks 10%. >> i remember when i was a hedge fund manager, when there were lots of deals were you afraid to be short. you were afraid -- maybe you got hit. i was short two different companies that both got bids within a very short period of time. a company systemics, they were written off as a company that did lab rat experiments. then noxema, procter & gamble. it changes your psyche. you could lose a fortune. when you don't have a lot of deals, you're not that fearful. >> by the way, ahead of the jobs number tomorrow, there's still time to nail the number as we approach the big jobs report. tweet us your predictions for may, non-farm pay rolls. our handle is @squawkstreet #nailthenumber. >> that's a nice shirt. >> you'll have until one minute before the friday release of the number to make your guesses and we generally have someone, at least one, who is right on the money. there are the rules. #nailthenumber. jamie dimon saying investors should prepare for more market volatility. that's the message jpmorgan chase's ceo delivered while speaking at a "fortune" magazine conference today in china referring to the fed's efforts to keep interest rates low, dimon said it is a different world when central banks are managing interest rates. until it gets back to normal, this time, it is going to be scary and volatile. of course, he also said, hey, things aren't that bad, don't worry too much. in fact, he's still somewhat optimistic in terms of the prospects for the overall economy, it would seem. but it is a fair point and one i think we can anticipate. but it's been a long time since central banks didn't control interest rates. >> yes. world war ii he's talking about? june 6, 1944? normandy? you read this headline -- you never want to see the most calm man saying that something's scary. it's like fright night, walking dead. no, i don't need this. >> though he can be somewhat casual in his observations. for example, we have a financial crisis every seven years, we'll say jamie, oftentimes, before he often launches why the u.s. is still the best place to invest because we have a transparent military, rule of law, blah blah blah. >> wow, that was everything. >> he will reel that off -- we have a financial crisis every seven years in this country. so he can say those kinds of things. >> i've been trying to get context all morning on this story. i think when you see a headline says ceo of jpmorgan said markets will be scary. well, no, jamie, you don't know what the market is going to become. who am i to say that to jamie dimon? yes, he does say things. he might have said it is scary, but don't worry about it because we're going to come through fine. then you bury the lead. the lead is that the market's going to go down and we're going to be fine, you have to do some buying. i don't want to put too much in it but you never want to see the word "scary," because that says "get out now." >> interesting that he is in china. that continues to be a key question mark for overall global growth, what's going on in china. big meeting starting tomorrow. >> it's in california? i think it will be interesting because chinese are blocking european wines. this may be napa's chance. it is a solar retaliation. they're blocking -- >> i know there is great demand for chinese wines. >> no! we're going to send them -- >> guangzhou 2005? >> and everybody loves it. when we come back, the ceo of pepsi shooting down speculation surrounding these talks about sodastream. but should pepsi be looking to expand? also ahead on the show today -- nascar superstar jeff gordon's going to visit us at post 9. his main sponsor has a new name. one more look at futures as we try to get back some of what we lost yesterday. for the time being it looks a bit iffy. lot more "squawk on the street" at post nine of the nyse when we return. at honda, we know some people are never happy with the way things are. and are always dreaming of how they could be. smarter, simpler, how-on-earth-does-it-do-that... er. and they make it that way. because things can always be better. we like those people. they think like us. introducing the best civic sedan yet. made possible by honda. how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪ shares of sodastream up sharply. a published report out of israel says that pepsi co-'s in talks to acquire for $2 million. pepsico's ceo says "the story is totally and completely untrue." david, what do we make of a ceo on the record saying something like that? >> you get a ceo on the record typically saying something is completely untrue i think you have to believe that it is completely untrue. she would not say that were that not otherwise the case. this goes to reflect something i've said for quite some time, which is when it comes to m and a reporting, it is a different world. it is something i've been doing for a quarter century or more. you never know where the stories are coming from. calclist in israel. listen, bankers will always want to get something out there, get something moving. you never know if it is going to result in something. but this is the way it goes. people report things very early from places unknown and publications unknown -- and it moves our stocks. >> when it came out, i was like, wow. they're going to do that? maybe she wants to put her soda through in the little bottles, but -- it didn't make a lot of sense. >> licensing deal would make sense. something like that. starbucks is not going to buy keurig. they might want to supply the k-cups. that would be a similar deal where she supplies the cola. right now it is generic cola when you use your sodastream. i stopped using my because it blew up and stained my wall. i stopped using it. >> i don't blame you. >> figure out the secret to pepsi's recipe? >> or coke -- i remember when coca-cola, kind of like even -- they are afraid to put it even in their verizon telephone lines. >> that's a story we could spend a lot of time on, isn't it is this. >> i'm switching right now to at&t. >> do you really think that that order didn't go to at&t as well? they just want verizon? >> oh. you don't think it was just verizon? >> huge story. we've reached out today to verizon for comment. no comment is the comment but that's a major story, of course, broken by the guardian and still trying to get clarity from administration officials as to what is the deal. they seem to acknowledge the existence of something like that. >> i'm shocked. it just happens. >> well, they got pfizer, they got the approvals that were needed. but one wonders, especially domestic calls. again we are talking about the story in "the guardian," nsa following domestic calls. not knowing what was said but -- >> david, when the chinese first get all the verizon calls, did you feel that this is just -- these days we're trying to keep up with the chinese? >> we were just bugging the chinese an getting it right from them. >> i like your stroke of cynicism today! >> the phillies won again yesterday. went to a great pizza place last night. >> we're this close to a police state. don't worry about it. >> what the heck? hey, we got twitter! we can fight back with twitter in the police state. >> people don't mind privacy issues on twitter. >> the nsa loves it, too. >> they monitor twitter? >> they monitor everything. >> do they? >> yes. when we come back, cramer has more market words of wisdom for us. his mad dash is next as we get close to the opening bell. one more look at futures. little squirrelly today looking for some direction as we await the jobs number tomorrow. back in a minute. tdd# 1-800-345-2550 [ trader ] when i'm trading, i'm totally focused. tdd# 1-800-345-2550 and the streetsmart edge trading platform from charles schwab tdd# 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd# 1-800-345-2550 i can even access it from the cloud tdd# 1-800-345-2550 and trade on any computer. tdd# 1-800-345-2550 and with schwab mobile, i can focus tdd# 1-800-345-2550 on trading anyplace, anytime... tdd# 1-800-345-2550 until i choose to focus on something else. tdd# 1-800-345-2550 [ male announcer ] all this with no trade minimums. tdd# 1-800-345-2550 and only $8.95 a trade. tdd# 1-800-345-2550 open an account with a $50,000 deposit tdd# 1-800-345-2550 and get 6 months commission-free trades. tdd# 1-800-345-2550 call 1-866-294-5412. eight minutes before the opening bell. time for the mad dash ahead of that market open with jim cramer. let's start off with sienna. >> reporting a very good quarter on top of juniper saying some good things. one thing no one's counting on are these phone companies starting to spend more. sienna is a classic play on the spend built out of the at&t, verizon or the sprint. this is a nice turn of events. tech continues to be the standout here. we have a lot of good talk about semi-conductors yesterday. micron was good, too. sienna, keep track. >> you will continue to get it. question is how much more are you getting -- >> look. strong product sales guide, up. inven t inventory is expected. >> if softbank finally wins sprint, there's a lot more to come there. >> sprint's got to go nationwide. >> they've -- the network. >> right. this is a nice comeback. >> ciena to a cena. >> ascena is more recessed. some people call me maurice, like steve miller, speaking the papadus of love. i think when you add vera bradley which is handbag company, the opposite of michael kors, and you put in francesca's, you have all these mid-tier retailers. >> what's the message being sent here? sl peop >> people are cautious again. >> which people? >> the middle. this middle -- the other day we saw target go up because dollar general went down. oh, they're gravitating to target. no! the middle is being squeezed here. some of it could be may weather. but ascena has a huge number of stores. they bought this charming shop. it's not management screwing up. this is what i have a little trepidation about. >> may weather. and we're not talking floyd. >> no. all right. can the dow avoid its first three-day losing streak of the year? that's right. opening bell just minutes away. get ready, we got another big day of trading ahead and a lot more "squawk on the street." s intuitive and customizable, just like a tablet. so easy to use, it won a best of ces award from cnet. and it comes inside this beautifully crafted carrying case. introducing the all-new 2014 chevrolet impala with the available mylink system. ♪ [ beeps ] ingeniously connecting you to your life and the road. that's american ingenuity to find new roads. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade. ♪ ♪ some people call me maurice ♪ >> yeah. we got a joke of our own today in one jim cramer as we're having some fun. we got to have a little levity, after yesterday's drubbing. brent was horrible. 13-1. 8-1 depending on the index. no deow components were positiv. the s&p has been unable to string two winning days together since may 14-15. >> when i looked at the charts, i see this area february 14, 15, 16 where the rally really took off from. that's what i'm basing that idea that you can come back to some of those levels, which would be difficult for some stocks. i -- when the drug stocks started rolling offense, that had been such a favorite group and i find that disconcerting. that's just a great leadership group that's no longer leading. >> this week started off -- merck and bristol-myers had a very good monday. >> that was the final group they're taking out and shooting, unless you think thatthy c they shoot down the texas instruments. >> speaking of tech, ciena, the juniper comments yesterday -- >> yeah. tech is the one place. you know what's interesting? micron. we got a raising price target in micron today. i always like to attribute who these guys are. this nand, d flash, d rams, there's just not a lot of capacity being added. they just stopped building. the average selling price is not going down like it should be. if you're dell, you would be worried about. one of the things you want is have your innards go down in price. that may not be happening. >> probably not happening as they continue to face incredible price competition as cross a broad area. le lenovo is just going to keep hammering. they'll take 2%. >> 2%. >> yeah. >> as we await the opening bell. s&p is off about 78 points. that's about 4.6%. >> almost 5%. >> we're in the thick of a correction. >> there's the bell at the big board today. perrigo, health care products supplier, transferring from the nyse to the nasdaq. it is the third nas 100 company to change to the big board in the last year. also in the nasdaq, a biopharmaceutical company celebrating its recent ipo. some talk about the components, the last men standing. boeing, is that one to watch? >> yes. i think boeing, probably yesterday was the first day it just did not act well. honeywell didn't act well. united technology coming in. aerospace has been this incredible theme throughout this period and i think that if you saw boeing complete its rollover, meaning go down to say $94, $95, it would probably attract buyers. i am watching boeing intensely because that has been the leader of this market. >> wells today raising their target -- >> yes. $115. they're saying listen, we see this, we're going to go the other way. kind of like what stovall said. look, if boeing bottoms here? it would be very positive. i just think that when they shoot the generals, they shoot all the generals. >> you mentioned costco briefly earlier. same-store sales 5% for may. a bit short. looking for 5.5%. talk about limited and costco being two of the few retailers that have a cult following. >> right. costco, there's two costco numbers, the number -- people say why is the number up, not down? because you have to take out gasoline and forex. you know costco better than anybody. there was no diminution of club members. >> right, after they raised the price. makes you you wonder if they're going to do it again. >> they ought to. i don't know. i didn't change -- went up to executive at that point because i've got the regular. they are always saying, listen, why don't you be executive? >> what's the differential in price between the two? >> you get more after rebate. costco is an incredible place. it is a destination. got two that i really like. i just find -- remember, you cannot eat before you go to a costco. i like to fast. it is like a holiday. okay? then you go there and you just -- you can have unlimited nib nibbles. just important to point out everything i do right. how do you think i made money? costco samples. list the winners today, jim. feels like 2000. ciena, jdsu. >> jdsu. i remember when that stood for just don't sell us. as it broke down, it was just don't sue us. >> i remember when they bought sdli? $40 billion. yeah. >> $40 billion here, $40 billion there. >> it was all just paper. >> well group has been so down and out because these -- telephone companies actually did build out everything you needed. this would be a very interesting contra trend if you really saw juniper and ciena be able to maintain their gains. cisco breaking out here. my travel trust owns cisco. this stock has now been the strongest stock in the dow. >> i want to mention the media complex, one i'd pay close attention to. bad day yesterday, much more than the overall market. talking news corp., viacom, time warner, disney -- >> the leaders. >> right. all of them. they were leaders. they are all down. not a great deal, but interesting to note after a significant decline yesterday. we're talking 2%, 3% for many of them. >> again, this is the general's theory. time warner's been up and up and up. and viacom, just this week they announced that deal and it went up. when i saw this group, i'm like okay, now all the leaders are being taken down. that's usually the end of a correction, not the beginning of one. >> watch carlisle today. pricing is secondary of common. 11.1 million units to be sold at $27. this was sort of in the ether out there but that's going to be one to watch. >> $27, huh? so much for that. >> that's interesting. blackstone, kkr, carlisle, "apollo," all public. >> right. >> i don't think any of them should be. >> look black boxes? you don't really know what they are when you buy them? >> just companies that take -- they are public companies that take other companies private. we get it. i know. fortress started it. >> how did that -- how was that deal? i think that deal was probably one of the biggest losers in history. >> fortress is even off its -- >> it's bounced from that critical 3-4 level. >> we haven't mentioned smucker. a name two weeks ago would have been the star of the show. 1.29. that beats 1.16. >> they made some great acquisitions. this is a fabulous company. maybe they can reverse three, four days of very bad action in the food stocks. another group that had been really holding up. that was the bond market equivalent stocks. i've been watching general mills. that stock is still only a few points off its high. again, watch these really high-quality companies. they will bottom first. >> we got a little bottom. at least the s&p is up just a tad, but it is up. >> hey, look, we're due for a bounce. when you're down almost 5% from the high, there are people who come in -- i can't blame them, because if you don't own anything you probably have to do some -- you're buying ahead of a number. i hope, what you said at the top of the show, if you're a bull, you hope people are betting this is going to be a bad number. one of the problems i have -- what's bad number? is it too many or too little? i don't know! that worries me. >> the 10-year spikes, what's that mean? >> got to be just right. >> whatever that is. >> i saw some jokes that 200 is good, 300-plus would be very bad. that's where we are. >> really bad except really good for people. >> well, look. the mortgage rates go up. we had stewart miller on yesterday. it was a great interview because lennar is so important. you look at lennar's stock, it's been horrible. it's been awful. four, five months ago these housing stocks peaked. maybe what they were doing is they were signaling there is a peak in housing sales. stocks tend to leave. but now lumber spiked big yesterday so maybe we've already completed the big decline that "usa today" put on the -- >> front page, cracking the 4% barrier. this is kitchen table, mom and pop sort of discussion right here. >> right. but they also had like the jamie dimon "scary," they did say the market is right for a pullback, but they probably won't derail the national housing recovery. i think when you see this, and say, wow, if they come back down, maybe i'll buy. i don't want to see that again. i miss that bottom. if they come down a little bit, i'm going to go buy a house. frlts right now we'll buy a little josh lipton on the floor. watch what's moving. >> good morning, carl. let's take a quick trip around the world. start with japan. obviously the source of a lot of headline making confusion, volatility. nikkei did close below 13,000 today. that's the lowest in two months. remember, 12,754 would represent a 0% drop from that high on may 23rd. you swing over to europe, a lot of activity from the central bankers there. bank of england hold policy steady. ecb holds rates steady. draghi saying monetary policy will remain accommodative for as long as needed. talking about the economy saying risk to the economic outlook remain to the downside. state side, jobless claims in line at 346,000, four-week average at 352,000. i'm talking to traders down here today. the dow leaning into the green right now. though some down here see more selling today, in part because of that momentum of the selling yesterday was strong. if we did see our close today, the dow, that would be the first three-day losing streak this year. david, back to you. >> thank you very much, josh lipton. want to look at thermofisher scientific. they had one of the largest issues of stock this year, $2.2 billion worth. though less than had been anticipated. you may recall not very long ago, tmo, buying life technologies for $76 a share in cash. now 9.5 to 10 billion of that. they said from the beginning maybe $4 billion is what we'll be selling in equity. in fact, they come today with $2.2 billion worth of common stock in that offering. one wonders whether they're generating more cash at tmo, whether they're actually seeing synergies beyond what they might have anticipated. of course they haven't even closed it yet for that $76 deal, but this still, jim, will be one of the largest issues that we have seen this year. in one of the bigger deals that we've seen in a year that we know despite hopes at year beginning has not really seen a great deal of activity. >> we have this watch this. this is a great deal of business. they are a brilliant company. they are the arms dealer for so many of the companies that have a lot of money, biotech, life sciences. this was a fantastic merger. i had the company on the show. this would be one if you're a growth stock investor you might have been in on this. >> there are some people that are even arguing it deserved more than $76. though there was a very active auction there. i think it was maybe roche. now they're starting to pay for it. not the $4 billion ecpit issuance perhaps anticipated at the time, only $2.2 billion from tmo. >> i'm going to use that today. that's the kind of growth stock that's been rolling over in this market. let's see. let's shift to bonds and the dollar. rick santelli at the cme group in chicago. >> good morning, jim. we've had many sessions since the break-out around the 22nd of may of interest rates that traded under 2.10 but not quite into the 2.05,.06. that's the area of the original breakout and it constantly reminds traders that maybe you're only two or three down dow sessions away from getting in that gray zone, getting back under it and reversing some of the momentum of the sell-off which for many practical purposes has already been distributed rather well. look at a two-day chart. yes, there was some volatility around 8:30 eastern when we saw the drop of $11,000 -- 11000 in claims. there's been a lot written of late between, hey, the markets are now discerning risk so interest rates and credit risks have been separated a bit. is there evidence of that? darn right, there is. let's look at the following etfs. look at a one-year of hyg. a one-year of lqd. the first is non-investment grade or high-yield. the second is investment grade. and the last one is the muni index. we had to go two years on that to give you a sense of where the market is moving. if we look at currencies, nothing more important. if you look at the dollar-yen, we are hovering now below that rather significant 100 level. on the euro versus yen, we're starting to pull under the 130 level. carl? >> see you soon, rick santelli. kelly evans is here at post nine with what she is watching. you got a bunch of stuff. >> morning. it is all about the jobs report tomorrow i think. we just got the claims report which was okay, down 11,000. we've southeastern the four-week moving average drifting a little bit higher. people are just generally saying is the market weakness this week related to concerns about tomorrow's number. certainly a lot of people have walked back their expectations after adp disappointed. we've also had some people coming out, again notably bearish. albert edwards talking about how all this tapering talk is going to lead us right back on the path to recession. as we know, most of the other guys we've heard from this week, have been pretty sanguine about the market. ftm's financials jim vogel saying based on traders he's talking to in the bond market, anything in the mid 100s tomorrow probably keeps us in the sweet spot a lot of these guys have been talking about. >> there you go. now we know what number. we were debating what's too strong -- >> and 170 probably the dividing line. you get on top of that, it starts to be bad for bonds. people about talking about that being the bar for upside surprise. anything below 1.50 almost keeps us renewing concerns. you you probably want to be right in the range which is, frankly, where we've been. we know we heard the fed talking about wanting to see over the 200,000 mark but if we don't get there tomorrow -- i guess what i mean is, it is going to take either a really good or really bad number to shake us out of these ranges. we're not seeing much movement in gold or in the vix despite signs of concern. >> you didn't think vix broke out yesterday to the up side. >> yeah, but do you look at that yet as evidence that there's a lot of fear in this market? >> i don't know. that's one of the things i've been pondering all morning, exactly what 18, 19, 20, is that enough to make some people feel that there is a lot of people feel if that happens it would be another down leg. i myself am perplexed about whether -- >> are you worried? this sounds about a little bit of cramer concern. >> more than sanguine. >> don't be morose. >> this pullback has lasted longer than fiscal cliff, sequester, italian elections, cypress, remember all those things that took us down 2%, 3%. this has been a little more permanent. >> no one ever wants to hear you like that the market is down -- but again, you see some retailers rolling over today. you need to see these rollovers before we can -- >> i hope we get 300,000 on the jobs. it would be good for everything. channel kudlow -- good for america! >> kelly, see you at 10:00. hear what vanguard founder jack bogle has to say about how investors should navigate this volatile market environment. and what is it like to be an intern at google. "the internship" opens this week. what does it really take to get a job at the internet giant? we'll talk to google's chief recruiter for interns a little bit later on. ♪ bonjour ♪ je t'adore ♪ c'est aujourd'hui ♪ ♪ et toujours ♪ me amour ♪ how about me? [ male announcer ] here's to a life less routine. ♪ and it's un, deux, trois, quatre ♪ ♪ give me some more of that [ male announcer ] the more connected, athletic, seductive lexus rx. ♪ je t'adore, je t'adore, je t'adore ♪ ♪ ♪ s'il vous plait [ male announcer ] this is the pursuit of perfection. \ s 10 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. welcome back to "squawk on the street." i'm sharon epperson. we're seeing a rather dramatic move in gold prices in the last hour. stabilizing right now around $1,400 an ounce. we saw $16 drop in the gold price after those jobless claims numbers came out. better than expected and what that might foretell for the jobs number tomorrow. part of the reason we're perhaps seeing that drop initially in gold prices. now we're stabilizing a bit though as traders try to figure out what may happen on friday. we're watching also what's happening in the oil market as oil prices right now at the highest levels of the week. you saw that big drop in inventories for the week for crude oil, according to the energy department. that was the biggest weekly drop we've seen all year. that definitely continues to be supportive of oil prices. at 10:30 we'll get natural gas storage report. natural gas prices consolidating right under $4 right now. we are continuing to watch the weather. we are in hurricane season but nothing on the horizon to move nat gas at the moment. that could change at 10:30. >> we got tropical storm andrea. we'll see what the rest of the summer brings. if you've ever had a craving for an egg mcmuffin at midnight, this month select mcdonald's stores will start serving some breakfast items like egg mcmuffins and hotcakes between midnight and 4:00 a.m. we talked to the mcdonald's ceo don thompson about expanding breakfast back in april. would you ever consider -- this is a big one -- having mcdonald's seven breakfast all day long? >> we have looked at breakfast across the day part. we have it in some markets around the world and again, this innovation center has come up with some innovative ways of us expanding the breakfast hours and some those things will also be seeing in the near future. >> so about a week ago you saw this ad for the after midnight menu posted on twitter. mcdonald's has been testing late night breakfast in places like northern delaware, college station, texas, home of the aggies, in a statement to cnbc, mcdonald's said, "our customers want convenience around the clock and we're making it easier to eat at mcdonald's with more 24-hour restaurants open than ever before." jim, stock lagging, chipotle lagging, starbucks lagging. >> starbucks is doing so well and that started to come off. that's one of the leaders i'm looking at. mcdonald's, very tough. not like they pblew out the las quarter. not yet for me. though i know that i -- when i lived in the south, say i had a big night on the town, used to have to go to krystal burger. some people call it a sop-up. i was just hungry. >> out all night, you might want something to eat. interesting story. a lot more squawk on the streets coming up next. coming up -- investing in this market can be as scary as walking a tightrope. but don't fear, cramer's here, and he'll get you started out on the right foot with six stocks in 60 seconds when "squawk on the street" returns. at honda, we know some people are never satisfied with a good idea. and work day and night until they end up in a place that no one ever dreamed of. because they know that things can always be better. well, us, too. introducing the redesigned 44-mile-per-gallon-highway civic hybrid. the best civic hybrid yet. made possible by honda. time for six stocks in 60 seconds with jim. >> one of the regionals that's held up fairly well. they want to sell. i think that's a mistake. >> whole foods. >> whole foods fresh market, north strnordstrom's. drug stocks have been bad the last few days. >> veriphone guidance. >> if you own veriphone, phone home. >> ubs, altria. >> this stock shouldn't be down. when they raise prices, which is what ubs is saying, all stocks go higher. >> price go up effective june 10th. >> tobacco -- they got you hooked, they got you hook. >> what's coming up tonight? >> we have got a company that i've been waiting to hear from for years an years, krispy kreme. i've been liking the stock. jim morgan, kind of the howard schultz story, built the company, went away, has come back. it's been a remarkable performer. dan oh, this is biodiesel company. i don't like ethanol because it burns corn. these guys burn the waste and all sorts of things we can't eat, inedible oils. i think that's a good thing. they don't take subsidies. >> that's fascinating. >> he knows that i think we shouldn't burn the food chain. he said, listen, we don't, jim. >> "mad money." 6:00 and 11:00 eastern time. carl, we are 22 hours away from probably the most important payroll number in years. what is the smart thing to do with your money now? that's the subject of the next hour on cnbc. we'll also have the banker that did the heinz deal with warren buffett. and jeff gordon, nascar superstar, man who's made $130 million. what do you think he's done with his money? that's hour two of "squawk on the street." 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[ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪ the healthcare law gives us powerful tools to fight it... to investigate it... ...prosecute it... and stop criminals. our senior medicare patrol volunteers... are teaching seniors across the country... ...to stop, spot, and report fraud. you can help. guard your medicare card. don't give out your card number over the phone. call to report any suspected fraud. we're cracking down on medicare fraud. let's make medicare stronger for all of us. woman: everyone in the nicu -- all the nurses wanted to watch him when he was there 118 days. everything that you thought was important to you changes in light of having a child that needs you every moment. i wouldn't trade him for the world. who matters most to you says the most about you. at massmutual we're owned by our policyowners, and they matter most to us. if you're caring for a child with special needs, our innovative special care program offers strategies that can help. welcome back to "squawk on the street." our road map begins with the markets. dow trying to recover from yesterday's loss of more than 200 points. we're up about 27. one of blackrock's top money managers will tell us why he still thinks dividends are a good bet. and good morning. verizon customers, can you hear me now? the government certainly may be hearing everything that you're saying. we're live in washington with the details of that report. technology and tobacco combined. reynolds american getting into the e-cigarette business. we have the story plus an interview with the ceo. also ahead, nascar champion jeff gordon will be here at post nine to make a big announcement about one of his sponsors. we'll give you the first look at that new car. of course we'll start with the markets. one of the reasons stocks are having a tough time lately could be the fact that four important areas of the market which helped fuel the rally are now showing signs of pain. scott wapner's back at headquarters with a breakdown of that. >> thanks so much. call them the four pillars of the rally -- housing, financials, transports and dividend payers like utilities. they are the sectors have that helped push stocks to record highs. now the key areas of the equity market look to be breaking down. i-shares home construction etf which holds all of the major builders soars more than 19% from january 1st to may 22nd when the s&p 500 reached its all-time high. since then it is down more than 9%. how about the financials etf? the xlf? had a similar increase of almost 21%, but it is now down 3% over the same period. the select dividend etf, the dvy, also up duth digiouble dig since fallen almost 5% as yield plays have fallen out of favor as interest rates have risen. perhaps most troubling to chartists, the transports which rose 21% are now down more than 5%. add it all up, to some it means the rally is showing some serious cracks especially in the pillars that have supported one of the strongest bull markets in recent memory. it is just not a pretty picture. those words from jim cramer this morning sitting there with you guys. >> those words sound familiar. those aren't the only places we're he seeing this breakdown but it is important that people understand the extent to which this isn't just about one area of the market or another. >> no. there are key areas of the market as we've shown through those percentage gains from the first of the year to the point the s&p hits its all-time high, they largely led the rally. they are helping to bring the market back and it raises the question of what's the make-up of the rally if it is to resume going to look like? are you going to see investors flock to other areas of the market that can pick up the slack? for. some of these spaces that are seeing some pain lately. >> in the meantime, scott, we have this slight swing-back today. where those defenses are slightly higher after the sell-off. i wonder if perhaps people are changing their view of where we are on the economy and therefore the view of where we get -- what we get from the employment report tomorrow and perhaps things will be actually weaker and might undo a lot of the fed speak we had over the last two weeks. >> the of move we're seeing in the markets today. we're not doing all that much. right? it is not that much after snap back. this week if anybody thought that the economy was performing or getting stronger, it was a big slap in the face between the ism numbers, the adp numbers looking ahead to what tomorrow could bring. a lot of people are short now ahead of the jobs report tomorrow. so who knows what tomorrow's going to hold and what the reaction in the markets will be? is bad news going to be good news for stocks or are we just in for some continued days ahead of pain, is this the start of the correction or is this going to prove to be a buying opportunity. all those questions are likely going to be answered in the next 24 hours. >> it is going to be a big one. scott, thanks very much. let's pick that point up. many investors in a holding pattern ahead of tomorrow's jobs report. head of sales and training with cowan and company joins us. talk about the sweet spot here where potentially we see markets rallying because the number is good enough to quell concerns that the fed can't -- that if -- the fed won't have to do more but not so good that we get back in to this whole taper talk. what's that sweet spot? >> i mean that's the key, what is the sweet spot? i think the sweet spot right now from what i'm hearing from traders is anywhere between 1.40 and 1.85. obviously a number that's really bad is going to be all bets off and the market is going to go lower. anything below 140. above 190 you'll see the market rally initially but easing off just because of tapering concerns coming back into the marketplace. what's really interesting when you think about this rally -- put it in real perspective here. we're up roughly 13% right now in the s&p. we've pulled back, we've seen a pull-back. it is very understandable. there is fear around this number. fear around what's going on. i think a lot of hedge funds are really nervous right now and a lot of the hedge funds i talked to yesterday in particular with the market down 200, asking them are they putting money to work ahead of the numbers tomorrow, and the response is no. they're sort of like deer in headlight mode. this number, as it falls within that sweet spot and the market starts to take off you'll see that chase effect occur. exactly what we saw in the options market between april 18th and may 22nd. >> david, do you think the weak economic data this week caught people by surprise? >> i think it did. i think it definitely caught people by surprise and probably gave them a little bit of an excuse to sell. there's no question about that. or take a little profits. i do, however, believe that you still have a lot of people underinvested, you have a lot of money in the sidelines. you have a lot of hedge funds massi massively overperforming in the market. i think the next move up will force people to get in if that number is within that sweet spot. >> david, do you think the fed has made a mistake over the last two weeks or do you think that it deliberately sought to put a halt to the rally? it's two weeks since we had had ben bernanke on capitol hill refusing to rule out the possibility of tapering before labor day. now the world is transfixed by the idea that we no longer have unconditional qe from the fed -- and yet, as we saw from the beige book yesterday, the data isn't good enough to warrant that, and arguably the fed can't taper for fear of what will happen to the stock markets. so did they make a mistake or did they deliberately want to stop the rally? >> right. no. i think that's a very good point. i think, look, they saw the equity market heating up and they started to leak out sort of information about -- in anticipation of pulling back qe, or discussion about that. i can tell you right now they're just not going to get qe out. i think that's the biggest fear that's been a misconception in the market. they're not just going to walk in one day and pull the plug. >> it isn't a misconception. they told us that. why did they tell us that if they can't do that in practice? >> i think that is part of the process of being full disclosure and possibly putting a little dampened tone on to the equity market as we were starting to get to lofty, lofty levels. >> it is a fascinating point. what you're saying is this strategy of using speech -- the fed is very clear that it does, not just the fed, but the european central bank -- to almost try to tighten conditions over the last couple weeks and give themselves more room to dial it back if they have to. >> unquestionably. that's exactly right. >> fascinating. last point. is it a good sign that people are effectively in this market more on the fear of missing out, more because they kind of feel like they have to dance while the dance continues, as opposed to really liking the fundamental story here? >> let's back up and make sure we get that correct. it is not necessarily the individual investor in the retail investor's fear of missing out necessarily. i think right now it is more the hedge funds fear of missing out. the fact they're underperforming and the fact they may need to play catch-up is the real interesting point there. so look at yesterday. we were down 200 and change. on our desk alone we weren't seeing panic selling. we weren't seeing protection being bought in the options markets. it was a very orderly sort of sell-off to the downside, some profit taking but nothing destructive. i think that's a very, very crucial point to make. there wasn't moving out of positions in a way that was aggressive. there weren't mutual fund redemptions going on forcing people to get out of positions. it was a simple trade down and i think, look, there's fear ahead of this number. i think it's been anticipated. i think we'll see the number tomorrow. if it is within the sweet spot we probably end up to trend higher going forward. >> david cowen -- i should say david seaberg from cowen. there is still time to nail the number as we approach friday's big jobs report. tweet us for your predictions of the may non-farm payrolls. #nailthenumber. a shirt autographed by the "squawk on the street" gang. you'll have until 8:30 a.m. tomorrow. there are the important rules that have spent many, many hours with the lawyers. >> limit one entry per person per day. what if they want to update? >> do we take their last guess? >> i think you need to be in charge of rules. we'll turn to you for an eye ja adjudication at any point. >> perfect. attention verizon customers. we have latest details on this new report that the government is collecting your phone records. we're live in washington next. also ahead db four-time nascar cup series champion jeff gordon. his number 24 and long-time sponsor sporting some new looks as he aims for victory at pocono this weekend. we'll talk about that and get a look at the car. later on. [ male announcer ] what?! investors could lose tens of thousands of dollars in hidden fees on their 401(k)s?! go to e-trade and roll over your old 401(k)s to a new e-trade retirement account. none of them charge annual fees and all of them offer low cost investments. e-trade. less for us. more for you. verizon customers listen up, because this is important for you. according to the national -- according to reports, the national security agency is collecting phone records from millions of verizon customers in the u.s. under a top-secret court order. eamon javers is following that story from morning. >> reporter: this story broke overnight by the london guardian. we've got an response from a senior administration official who says the type of court comes from a secret intelligence court. therefore, the contents of the court order would be classified. the administration's not confirming that this order was in fact given, but they have an elaborate defense of this type of intelligence gathering. let me bring you some of the key bullet points here from the senior administration official who e-mailed cnbc this morning. they are saying that the guardian order, the order that was reprinted in the london guardian, does not allow the government to listen in on phone calls. they're also saying that the order does not include the content of communications or the names of the people involved in those communications. it relates exclusively to what they're calling meta data, that is the phone numbers, length of phone calls, that kind of thing, as opposed to details of the communications themselves. that is they are not listen to what you are saying on these phone calls but they are gathering your phone number, the length of time that you're talking. they are also saying that this type of order allows the government to know the length of the phone calls and they say that it's been a critical tool in protecting the nation from terrorism and it allows counterterrorism personnel to discover the contacts of people suspected of being involved in terroristic activities who they're talking to overseas, then who they're talking to here in the united states. they're tracing that web of phone calls throughout the united states. this particular court order that's revealed in "the guardian" today applies to verizon. we've called a couple of other telecommunications companies this morning to find out whether they are also under such court orders. we've spoken to folks over at at&t and they have declined to comment to us this morning on whether or not they received a similar court order. that's what we know as of right now. the administration not confirming this but mounting a rig rorous defense of this typef intelligence collecting in general. >> this order was given to the government for effectively an april to july, go ahead collect all the data during this period that you're after. then their use of saying, well, it's not the communications, it's meta data, "transactional" information, and that's why we don't need an individual warrant. that seems to be sort of just a play on words. what they're after is information and this is just a different kind. frankly, it is a kind that's becoming more and more important and more widely available as technology grows. >> it is a very broad interpretation of authorities under the u.s. patriot act. of course one of the questions here given that these fisa courts are secret and their contents are classified, if "the london guardian" got access to a classified court order and they've now reprinted on their website what they say is the court order itself, that would be classified information. in washington we've been dealing now with several leak investigations and the question will be whether theed a mp ed administration and intelligence apparatus wants to mount a leak investigation to find out who gave this court order to "the london guardian" if that's in fact what happened here and whether or not in today's climate "the guardian" can protect their source. this all comes after the ap phone records case, after the fox news case as well. there's been a lot of aggressiveness on the part of the u.s. government going after reporters who have been involved in leaks of information. >> some might say americans have the right to know -- or should be aware that that is how the data is being used. you don't really give much away. the more interesting question, eamon, is whether they think they have a suspect that just uses verizon's communications network, or whether in fact this was done for all the telecom networks and all the people watching the television now are having their calls monitored at a meta level in a similar way which might and perfectly logical conclusion from where we are. >> that's a very good question, is this a narrowly tailored situation where they thought they were in hot pursuit of certain people who were only using verizon or is this a very broad-based thing where they're going after effectively the telecommunications of every single american using every single carrier. that's why we've been reaching out to these carriers. the carriers we've talked to so far, at&t in particular, have not commented. it would be tricky of course to comment if they'd been given a secret intelligence court order to cooperate. that in fact would be classified, very difficult to comment on publicly. but that's one of the big questions that we're asking here, simon. it is a big question a lot of people want to know the answer to. >> certainly not the last we've heard of this story. eamon javers in washington. might be a topic for tonight. 2012 republican presidential nominee, former massachusetts governor mitt romney will be larry kudlow's guest in a first on cnbc interview tonight. 7:00 p.m. eastern time this evening. >> let's hope they get some travel and ledger questions in because he's back on the board of marriott. >> would you like to submit that for his consideration? >> yes. >> that's going to be one to watch for later on. coming up on the practice today, one of the legends of investing who's seen his share of rallies and sell-offs. vanguard founder jack bogle will join us. we'll be right back. 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company continues to see an uptick in demand from its telecom clients, specifically in the north american region. other networking gear players also moving to the upside. jdsuniphase among others in the green. breaking news on sac capital. kate kelly is at headquarters with that story. >> so amid these ongoing concerns about redemptions -- in other words, investors pulling money out because of an ongoing legal investigation, s.e.c. performance has continued to be somewhat lackluster through the end of may. numbers just out this week show the fund was up 70 basis points for the month of may, that leaves it up 6% year to date. of course they're comfortably in the black with 6% but they're way behind the s&p to far this year which is probably something of a fair comp for a fund that primarily deals in stocks on both the long and short side. you can see compared to their peers, they're closer to the average mix than they normally are. historical historically sac has been right there in the market. they also sustained losses in 2008 alongside the market. but it is an interesting issue because either they're not having the trading luck that they normally have or you can maybe guess that there are some distractions or some concerns going on internally as these legal situations continue to deepen in terms of complexity and possible threat to the firm. basically there are at least two high-profile investigations in which a current or former sac trader has been indicted. there are concerns steve cohen, founder of sac, may be indicted as early as july or perhaps august ahead of two legal deadlines that are looming and the firm is doing the best it can to keep people's spirits up and reassure them that they're going to remain in business and won't become a family office, a fund that manages steve cohen's money. the president of the firm articulated some of those thoughts earlier in an e-mail -- he said yes, redemptions for the second quarter. that deadline was monday -- were significant. without putting a number on it. but he did say that the capital base is stable and that they should move ahead and have confidence that not a lot is going to change. >> kate, still we are talking about a firm that's had years and years of extremely strong returns. and then suddenly that comes screeching to a halt this year. its past performance, it was part of what caught the government's eye in the first place. >> absolutely. sac is well known for having average compounded returns north of 30%. they're one of the most successful hedge funds in history. are you absolutely right. that and their style. the fact that they rapidly get in and out of stock positions and short positions. the fact that they deal with 2,000 to 3,000 names at a time and they've just had this unbelievable string of good luck over the years is probably what created a red flag in the first place. >> yeah. it just makes you think again about what's happening there now. kate, thanks for bringing that to us. it looks like electronic cigarettes may be posing now a real threat to the traditional tobacco industry. analysts say e-cigarette sales could double to $1 billion this year. big tobacco is taking notice and looking to get in on the action. jackie deangelis is in new york where the nation's second largest tobacco company is rolling out its very own e-cigarette strategy. so there is a strategy for e-grets. >> that's exactly right. r.j. reynolds vapor company is rolling out as we speak. that's a state wide launch in colorado but that's an important step for the company because that's going to be what propels them to go nationwide in the coming months. this is a big rapidly growing industry. that's why this event is particularly significant. ubs said that in 2012 it was worth $500 million. it is going to double, they project, in 2013 to about $1 billion. meantime, laurelard acquired blue for $130 million. altria is expected to come out with an e-cigarette in the next year. we'll hear more about that in the next few days as well. there are risks to this market that analysts are highlighting. the first is fda regulation but also intellectual property issues and product quality as well. with respect to the fda, a spokesperson recently made a statement saying that further research is needed on the potential health benefits and also risks of e-cigarettes. critics are worried about a couple of big issues here, like targeting of children, how they're going to market these products, they're sold mostly online. are age restrictions going to be put in place? recently bruno mars invested in an e-cigarette company. people are wondering if kids are think e-cigs are a cool product to that. the question, if e-cigs will really have momentum in this product category or, forgive my pun, are they going to go up in smoke. >> i think regular cigarettes will still and very big part of this industry, for at least as long as i'm a tobacco analyst which is hopefully a long time. reality is it is still 75% of the category. >> coming up in the next hour, a first on cnbc interview with reynolds american's ceo daan delen. we'll talk to him about the e-cig and also about the greater industry at large. >> in fairness to bruno mars, is he actually 27. he's not actually a child. >> he is not a child. but the question is if the younger population looks you up to him as an idol, simon, they're going to turn around and say i need an e-cig on my belt to fit in. >> the biggest dynamics in this country at the moment is legalizing marijuana. i would have thought an e-cigarette is safer than the marijuana which is apparently popular with other younger pop stars at the moment. >> excellent point. >> i just want to mention as well the fact -- so france is now among countries -- or leading the way with regard to countries cracking down on e-cigarettes. they're saying the french health minister saying at a press conference the other day he's decided the measures which apply to tobacco will also be extended to electronic cigarettes. have the health benefits or risks really been explored enough? >> they really haven't been. as that fda spokesperson said, a lot more research needs to be done. it appears that these products seem healthier than regular cigarettes because of the carcinogens in them, but at the same time, we don't know enough about this vapor. we don't know enough how it can affect consumers that are taking it into their bodies, and also a lot of states are worried and looking to impose laws about where you can smoke e-cigarettes as well because they're worried about the second-hand issues and how it can affect other people who aren't necessarily using the products. >> i know some smokers who are on e-cigarettes. they seem it like it a lot. it may be an issue of the devil you know is better than the devil you don't. >> you can make money on traditional cigarettes. i think a lot of the cigarette industry in france is still naturalized. they don't want this upstart in that area. jackie, thank you. let's head over to the nymex for breaking news. waiting for the data from the energy department about natural gas storage levels. right now watching natural gas that's coming off considerably as the number is about to come out. seeing natural gas down about 13 cents. we are seeing the first triple-digit injection of natural gas to storage levels that we've seen in several years up 111 billion cubic feet in the last week. that is a much bigger than expected addition to storage than what traders were looking for. analysts and traders were expecting the addition to storage to be somewhere between 93 and 97 billion cubic feet. it is 111 billion cubic feet. the result is that we're seeing a sell-off here in natural gas. prices down more than 14 cents right now. and a lot of traders are continuing to watch not only the storage levels but of course this is the season to watch the weather and we're looking at milder temperatures than some had expected, as well as a hurricane season that's under way with right now no major hurricane that looks to be affect being the atlantic coast or an area that would be really, really damaged by of course in terms of natural gas infrastructure. we're watching right now natural gas prices down almost 15 cents. as we get a much bigger than expected addition to storage here for the week. back to you. >> sharon, thank you, sharon epperson at the nymex. does it pay off to bet on dividend stocks amid fears the fed will soon scale back stimulus? we'll talk to a blackrock portfolio manager about the hunt for yield. get good grades. lose the bling. go paperless. combine policies. make automatic payments. and of course, talk to farmers. hi ♪ we are farmers bum - pa - dum, bum - bum - bum - bum♪ welcome back. the stock market is stabilized after losing almost 1.9% on the dow in just two sessions. a lot of investors are worried about where next they should go. what is the smart move now in advance of tomorrow's employment report? portfolio manager of the blackrock equity dividend fund is here, david, good morning. your bag is dividends. what are you telling customers. >> it is important to distinguish between dividend yield and dividend growth. i think dividend yield part of the market has gotten quite crowded. you see those multiples near all-time highs. people have been using those as a proxy for bond so if you think rates are going up, they're just as much at risk as bonds. we think different stocks offer investors three attractive things. competitive yields in the 2%, 3%, 4% yields. long-term growth appreciation. and also lower volatility. that's an important part of investing in dividend stocks, that people don't pay enough attention to. you go down less, you have to make less up on the way back up. we want investors to have a smoother ride along the way. >> just before you scoot in to the dividend growth area which is probably the bright spot on your landscape, focus on dividend payers which i think is probably the bigger slice of the market and where most people are. you mentioned the connection with bond. if you have the head of pimco suggesting the 30-year rally in bonds is over, if you have even richard fisher at the dallas fed president suggesting also that the 30-year rally in bonds is over, is it also true that the rally in those defensive paying dividend stocks that behave like bonds is over? >> we think that's really possible. >> so should you sell? >> i don't know about selling. ultimately dividend paying stocks outperform the market overall, whether dividend yielders or dividend payers. >> but to the point i'm making, you've had a 30-year rally in these sorts of instruments. that now over? >> i think the rally in the high-yield defensive stocks hasn't quite been 30 years. it hasn't been as long as it has been for the bond market. we still think equity markets overall are an attractive place to be. people are overinvested in equities, whethif you look at w happening to flows, $600 million out of equity funds, hard to argue any part of the equity market is crowded. if any part is, it is that really high-yielding space, maybe utilities or telecom space. there are still some individual names in those areas we find attractive but we really want to focus our fund on the part of the market with dividend growth. >> are you going to mention some names? >> i could. >> go for it! >> sure. home depot. 2% yield. dominant competitive situation. they have a geographic advantage over lowe's. an insulated competitive position versus amazon online in terms of what they sell in their store. make sure they are competitive against the online market. we have three or four years in front of us of strong home spending. home depot is a prime beneficiary of that. >> do you have to focus on each particular company and its business and competitors? there is no way to sort of screen for just these companies, if you want to take a short cut and look at who's most likely to raise their dividends in terms of cash flow or something like that? >> we look at every company, one by one, bottom-up. we're looking for companies that have re-investment opportunities. we don't want them paying us back all of their capital. we want companies that have the ability to keep some of that capital and invest in growth over a long period of time. we think home depot has the opportunity to do that. vf corp. it is a great portfolio of high-quality brands -- north face, timberland. they're doing well in the u.s. gaining share but growing in europe, even in the midst of a pretty severe recession in europe and tremendous growth in asia where they have a very long runway. >> some good ideas, david. thank you for coming down to post nine. now coming up next -- the banker that put forth the berkshire heinz deal. the head of investment banking for lazzard will join us live. you candidate an intern. >> we'll say no to love. >> we'll say no to love. >> is a one nightstand considering dating? >> we'll talk to the head of google's internship program of how you can be a member of their elite team. 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[ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪ it was one of the largest and high-profile deals of the year, the purchase of heinz by berkshire hathaway. the deal is expected to close tomorrow. it was part of an emerging trend. antonio weis is global head of investment banking. this was an interesting deal for a number of reasons, not the least of which is you had this had permanent capital in the form of 3g. it finds its home here. is that a trend we are going to see more of? >> i think this transaction really says everything about the market today. first, there is the absence of a corporate acquirer. second, there is the marriage of capital built up in one economy being redeployed in to another, in this case the united states. and third, there is the use of permanent capital which was really pioneered by berkshire hathaway. warren buffett is the father of permanent capital and yet it is proliferating around the world and we do believe that this is a trend which is going to continue. >> i want to come back to that. in the case of heinz, 3g will be running the company, they'll keep this thing for a long time. right? >> this is part of it. warren buffett has been very clear that he intends to own this forever. 3g has the same approach to investing. and really the power of this category of investor in today's market, it is not about cycles. it is not about next year's gdp figures. they identify a company, in this case heinz, and they say to themselves, if i can buy it now, i'm going to own it forever. they really step into the gap which is being left by corporate acquirers. >> why do they want to own it forever? they just want to try an generate a return? will they use it to consolidate more? what's the idea of owning something forever. >> this is what permanent capital is about. we're all accustomed to one figure, which is m and a prog m practitioners bemoan there's $1.8 trillion in cash offshore. we know there are a half trillion dollars of private equity capital that are not yet deployed. what's different about permanent capital, it's there forever. in other words, put it in perspective. chinese foreign reserves, $3.4 trillion. sovereign wealth funds under active management, $5.4 trillion. >> we're looking at it right there. it is a staggering sum. are you saying therefore -- by the way, to your point, it doesn't have to go back to its investors, a la private equity, in which you have the life of a fund, then it needs to be exited and returned. >> there are no limited partners in a sovereign wealth fund. a third category of permanent cat tal whi capital which is not measured, the capital built up by industrialists, by families all over the world and is probably of an equality amount and really heinz is what illustrates that, which is that this capital doesn't need to go anywhere, it doesn't come from an investor. it just needs to be deployed in the way which is going to generate the most value over a decade. >> so are you saying that in an environment which we are not seeing a great deal of corporate activity that this is the place to look, that the sovereign wealth funds which heretofore have not really participated that actively directly in deals, they invest in private equity, are going to be more act sniff. >> we hope they'll continue buying u.s. debt and corporate debt. right? so they're not going to exclusively participate in m and a. but no, sovereigns are very active players directly and indirectly in m and a. and families and alternative sources of capital, pension funds, are increasingly active in m and a. so yes, we see it increasing. >> finally, antonio, before we let you go, your quick take on the environment overall on mergers and acquisitions. we talked earlier, jim cramer and i, when heinz was announced and dell and virgin media by liberty global, we got all excited. it hasn't been a particularly good year for m and as. >> we're now six years in to a flat m and a market, since the financial crisis. $2 trillion to $2.5 trillion globally, $1 trillion domestically. really nobody is saying that this is going to turn around in 2013. but we would argue that if you look closely at the composition of what is happening, you can really already see the seeds of the next wave of activity. which is, disproportionately cross border, a prevalence of emerging markets which have now overtaken the u.s. in the cross border scene. and third, the redeployment not just of the cash on corporate books, but of these permanent capital sources, directly or indirectly, in transactions. so this will -- these will be the elements of the next wave, but we're not saying it is coming this year. >> nobody's saying that either. antonio, as always, appreciate your insights. antonio weiss from lazard. when we come back we're talking to nascar champion jeff gordon and getting a first look at his car racing it for the very first time this weekend. we'll unveil it in a few minutes and ge the inside scoop from the racing champion himself when we come back. [ male announcer ] at his current pace, bob will retire when he's 153, which would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a mortgage. luckily, he found someone who gave him a fresh perspective on his portfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age. it's not rocket science. it's just common sense. from td ameritrade. welcome back. the sec is announcing an emergency fourth quarter now, freezing thexdñ assets of a bank based trader who needed more ahead of last week's announcement that smithfield food agreed to an acquisition by a chinese based firm. now they're alleging that this trader, whose name i will have difficult pronouncing, but he purchased thousands of smithfield call options in single stock from may 21st to the 22nd. and among his possible sources, and this is interesting, is a facebook friend of his who is an associate director at an investment bank exploring an acquisition in smithfield. the traders sought to withdraw $3 million from his account on june 3rd. an interesting one here based on the acquisition that got so much attention last week. man, do we have a treat for you nascar fans. here is one of the most recognizable faces in the court. nascar driver. it is great to have you this morning. >> it's a treat for me. this is my first time on the floor. this is amazing. we've been showing your car back at headquarters covered. >> you haven't shown it yet. >> so we want to reveal this for the first time. we're going to pull it back. in their coating by. this is the new launch of their logo. we've shown the brands. but this is the first time we unveiled the logo. >> we know them very well. a century and a half in coding. >> it's true, and announced today they extended the relationship through 2016. do you have a say as to how it comes out? >> the black and flames i did have a say in that. luckily, a long-time driver pulled all those things together and came out with this great paint scheme. >> poconos has been good in recent years we got last year with the rain. so let's hope so. >> we have you on the the floor of the new york stock exchange. where do you invest your money? what do they tell you to do with it? >> i was vinested in new york real estate over the years which has made recent news. 15 central park west has beenec great investment for a lot of people. i do try to hire the right people who can manage i feel like i don't plan on making 30%, 40% every year. it's very small percentages. over the 10 or 15 years it's increased. i know where i take the biggest risks and that's on the racetrack. >> in the latter half of their career, facing young drivers, very vocal guys. how long will you drive? >> i've always said if i'm competitive and healthy and enjoying what i'm doing i'll keep doing it. and each year new challenges come along, but i'm still enjoying it. the competition is getting tougher, but we're till very competitive. i'm over 40 now. i'm starting to feel the effects of all these years of racing more and more today than ever have. but i'm still pretty healthy. >> the pepsi max, making the rounds here, was that staged? the reaction from the guy you're with seems too hilarious. >> one is you can't stage those reactions. they're very real. i'll leave the rest up to the imagination. it was a great viral video that planned to be a viral video. it turned out bigger than we thought it would. i think we may pull it out again at the end of this year. >> have you test drove a tesla? >> i have not. but i've driven a volt. i'm a gm guy. i'm a heavy guy. but it's gotten good momentum. >> and you have to be impressed by the turnaround. >> so impressed. i was at the design center a couple of weeks ago. the things that they do to make them more fuel efficient. looking at what modern technology is coming and how to stay ahead of it as well as to make it affordable is unbelievable the job that they do. i'm proud to be a part of chevrolet. >> we'll be thinking about you this weekend. >> thank you. great looking car. still to come on the program, we stabilize after a few days of heavy losses. we need to get an experienced view of bangkok. what you should do now with your money.ym yr ;?tñx:zñ÷x welcome back. i'm in washington with more information now on this story involving an alleged intelligence court secret order compelling verizon communications to reveal to the nas and the u.s. government information about american phone call pattern. we've now obtained a document sent to verizon employees this morning from verizon's chief council. let me read to you from this document being sent to verizon employees. they're saying we have no kmebt on the accuracy of the newspaper story, but a few items are important. the alleged court order -- this is verizon speaking -- contains language that compels verizon to respond and excludes the content of my communication or the name, address or any information information. the law authorizes the federal court to order a company in certain circumstances so they are not going to confirm whether or not they got such an order. if they got an order the law would require them to comply with it and turn the information over to the u.s. government. >> so essentially we're not saying we got one of these, but if we did, this is how we would react. >> absolutely. and telling their own employees a little bit about what's going on. a lot of the verizon employees have been reading the reports and seeing the criticism of the company. clearly they wanted to send a note to the employees there letting them know exactly what the company was saying about this as of now. >> but wait a second. it's the american public that needs to hear from verizon, not verizon employees. this is not an issue whereby there's a story about how they are treating employees. this is a company that is the biggest phone and mobile company in america. why are they choosing to communicate with employees instead of communicating generally or commenting generally about the story? >> well, look. companies have a lot of constituencies. they have to worry about their own internal employees and morale. a lot of questions will be coming from the top employees. did we do this? what gives with this story? this is verizon's explanation to its own employees they're not saying they did receive one. clearly they've not said anything to the public. that remains to be seen whether they're going to comment on that in a general way. >> interesting. >> it's a high wire story. thank you so much. want to get a check on the markets. little bit more tepid action as a opposed to yesterday. s&p is getting back 2.5. nasdaq up some five. we're also keeping an eye on thm turkish markets slowing down again. >> now let's get to the road map for this hour. pay no passenger to yesterday yesterday's selloff. investors do need to pay attention, however. and the zbern shipstarring vince vaughn and owen wilson coming to a theater near you. we'll talk to the hiring intern at google. and electronic cigarettes could be the next big thing for tobacco companiesful we'll talk to the ceo of the second largest tobacco company coming up. and warmer weather is helping buoy the same storm sales number. courtney reagan has details on that. >> monthly same-store sales took a shadow on nine drugstores reporting. but so far slightly higher than expectations coming in at.9%. costcofalling shortly shy of expectations. the strongest reasons were canada, mexico and japan. that's both very positive signals. now investors looking at the good within the report. chuck initiating on costcocoverage with a buy and $130 price target. we're at 1210 right now. l brand, formally known as limited, also slightly underperforming expectations. boosted by sales in victoria secret. really gain traction with the teens and the direct channel thanks to the beginning of the semiannual sale. the margins were pressured with the discounting. investors less impressed with "l" brand and their shares. so we're going to read some signs into what limited starts to report over the summer for how they are poised for bank to school. the pink brand is really resonating with the teens. >> markets are trying to recover one day after a selloff. they saw the dow drop more than 200 points. still, what can we expect ahead of tomorrow's big jobs report? let's ask the senior chair of the vanguard. you say not to worry about the selloff. >> i don't know what to say about a daily move in the market like that. i quoted shakespeare on this point, as you may know before. it's a tale told by an id yotd. the momentary move from the market. full of sound and fury signifying nothing. we can rely on -- to help us through all of that. i would also call on the the wisdom of another wonderful investor over time. as my letter to the editor and wall street journal said, he wasn't always right. in the short run the market is a voting machine. and i'm on the weighing side. the fundamental value is probably a little extensive. let other investors buy their stock now. >> right. some wisdom there to be sure. one thing investors are trying to wrap their heads around is why we look at what happened in the markets and wonder is the extend to which the u.s. economy is strong enough to disdain stock evaluations. ywe're at the high end potentially in terms of historically. are you calling stocks overvalued here? and what do you think is the fundamental case to get exposure? >> the best wisdom is don't get distracted by all the noise. they're going to want stocks and bonds and more bonds as the years roll on because you're going to be a little more defensive. you have to depend on human capital. and bond yields are very, very low. and i think that's -- you know, no certainties in this world. but it would be amazing to me if over the next ten years stocks didn't outperform bonds. bonds will get around a 2% return. stocks, if you look at fundamentals. earnings growth could be 4% or 5%. that will be a 5% or 6% investment return. so don't get distracted by this. realize you're investing for a lifetime. changing back and foort, getting out, trying to get back in at the right time is not a good idea. and to make matters worse, our instincts or behavior lead us in the wrong direction. when the markets are high we want in. when they are down we want out. it's totally counter productive. >> people who have heard you speak before are familiar with what you are saying. you must have a thought or two about sticking to your plan with the fed and what their plan should be from this point forward. we have jamie dimon saying the markets could be scary as they are controlling interest rates the way they are. are we in a tapering environment or not? >> well, there's certainly a tremendous amount of uncertainty out there. i'm trying to think of a time in the markets, and i've been watching them for a long time. i'm trying to think of a time when there wasn't a lot of certainty. to be fair to jamie, the uncertainty is higher because the fed is kind of in control, and they're trying to do something that in the lock run will simply not work. they're trying to do what they have to do tw the economy. you need monetary policy and fiscal policy. they can do the monetary side. but all the buying and twisting. operation twist. operation qe or qe2 can do so much. but at some point our representatives in congress, our elected representatives, our politicians have to step up to the plate. we haven't been voting for anything to raise the money. there has to be some kind of spending cuts and there's got to be some increase in taxes. it can't all be done on the spending cut side. >> that's for sure. jack, thanks so much for your time this morning. >> let's get to the cme and check in with rick santelli and the santelli exchange. hey, rick. >> hi. hey, carl, i'm not going to let you off the hook easy this morning. i'm going to ask you a question. not sure you know the answer. >> i love irt when you do that to me on national television. if i ask you if you had all of germany's imports and exports as a percentage, what country do you think they do the most business with, both adding imports and exports up. >> huh, i'll say china. >> no. and that was my guess. i thought france would be this there as well. now you can see where this is headed, folks. if you really want a real answer to anything, follow the money. okay? follow the money. in this case you're also following the know of freedom. all right. something happened in may of 2004. and what happened is that you had several countries grouped together to create a block. let's put up a bar chart. that block is pulling. czech republican, slovakia and hungary. and what we have here is poland is the largest of the group. arguably if 19th largest economy in the world. together they represent 1.25 trillion. and believe me, this is close as an aggregate. that would be seventh largest in europe. 15th largest in the world. so when we start thinking that we are infallible in the world marketplace, i say they're doing it right. and you know what their biggest problem is, trying to deal with the liquidity flows based on big central banks. >> so this things i could say there. if you need to turn off your smoking hasn'ts, stick around. you could light up an electric cigarette. it's also stirring up controversy. we'll talk to the ceo next. >> and what is it really look working at google? >> the movie "the internship" opens this weekment we'll talk to kyle who heads the internship program at google when we come back. ♪ et toujours ♪ me amour ♪ how about me? 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(announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies." bond markets are stage iing little bit of a rebound. and one stock in particular is weighing down the sector. sooe mo mody has the latest on that. >> the fourth quarter adjusted prospect beat expectations, thanks to a drop in the price of key commodities used in the products, including coffee and peanuts. however they did say the expenses could rise in 2014 and that could weigh on the earnings. you'll see the stock down better than 3.5%. carl? >> yeah, thank you so much. now to the growing market for electronic cigarettes. some big tobacco companies are get flg the game. jackie deangeles is with daan delen. the ceo of the second largest tobacco company in america. >> obviously you launched and rolled out the statewide laumplg of your digital vapor cigarette. no one can dispute this is a rapidly growing market. the expectation is for it to double in 2013. but the question that a lot of people have right now is why get into a market when it's still sufficient a small percentage of the greater picture for your company? >> yeah, i think it's a fantastic question. this is truly a growing category. but more so the volume it's generating today. so we have come up with a product that's superior than anything on the market today. we believe that gives us the opportunity to convert that trial into regular consumption much better than any product. we believe we can significantly expand the category and take a significant proportion of it. >> are these existing customers that are trying it? and do you worry in a sense that the existing customer will cannibalize the other products? >> sure. we are very much targing existing smokers. and there will be some cannibalization. but we have designed our product to be margin enhancing. so from that point of view of a fantastic business opportunity for us. and it truly exciting to be able to bring something that is such a game changer from the technology point of view. >> kelly evans at the new york stock exchange has a question for you, daan. >> thank you for joining us this morning. e-cigarettes are banned in uruguay and france. can you say there are no health concerns with the product. >> we are not making any health claims on the products. this is a product that is targeted to adult tobacco consumers the u.s. >> that said, bruno mars is one of theó> dan, one final question for you. right now these are cheaper than traditional cigarettes. as the fda looks into the issue, there could be regulation in place. taxes could be imposed. do you think if the price goes up that could deter consumption? >> from everything that we see we believe the trial is established because of the product characteristics and how it fits into consumer laifs day in and day out. we believe coming out with a similar technology that replicates the smoking experience, there's a great business opportunity out there for us right now. >> daan delen, thank you so much for your time this morning. back to you guys. >> want to give you statistics on google this morning. 620 million daily viewers. but you can forget all of those. just remember 4%. that's the acceptance rate to get an internship at google. what does it take to work there? one of google's recruiters will join us live coming up. you make a great team. it's been that way since the day you met. but your erectile dysfunction - it could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not 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the company that could definitely have them especially the talent side. these companies are running against each other. >> now fox's bet is far riskier. spending $58 million to make the film. that's a lot, considering comedies do not make a lot of money in the all important overseas market. the film is expected to bring in 15 million or $16 million to the u.s. box office this weekend. that would be half of the opening weekend of vaughn and wilson's movie "wedding crashers". kelly, over to you. >> and we'll have a google recruiter coming up to tell us what it takes to work at google. don't miss it. plus, bells are about to sound in europe. we'll have the close and details here when we come back. so as his financial advisor, i took a look at everything he has. the 401(k). insurance policies. even money he's invested elsewhere. we're building a retirement plan to help him launch a second career. dave's flight school. go dave. when people talk, great things can happen. so start a conversation with an advisor who's fully invested in you. wells fargo advisors. together we'll go far. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. marks are closing across europe. >> neither the bank of england nor the european central bank as made any changes on military policy today. drag hee, as he suggested that it will stabilize and return to koe rvr coy. we are now technically ready for that there are several unintended consequences. and at this point in time we see no reason to act. so he's saying there will be recovery. and they need to keep more ammunition so some of the utilities are higher. that can be quite anyway. they ma be because the weaker financials will hope they will bend the rules further to get liquidity that may be why italy is down that's another factor in there. let's bring in josh lip on the. hey, josh. >> kelly, you're looking at the blue chips down 18. if you talk to traders, they'll say you are really in wait]w8"ñ see mode today. and i do have employment indicators suggesting that's on the weak side. do they want to see a slightly weaker report? or would it reinforce the concerns that we have that the bond money is not healing at the labor markets. tomorrow could get interesting. one other indicator would be bullish sentiment among individual investors. that dropped to 30%. now that is a drop of 20 percentage points in just two weeks. that's the only sector positive for the week. carl carl, back to you. let's get to rick santelli with reaction over at the ecb. i always like to help him and i guess first of all i'm going to go backwards. there was really no change. the stimulus stays in place. >> the british economy is doing somewhat better and the expectation for britain are certainly better at this point for most of europe. >> now in my last piece i talked about poland. they have really come a long way. when i saw that number on the imports and exports, it really shows the world is changing with regard to the european economy and the mix. any thoughts there? and it does show the emerging nations are in europe are much better than the core. >> no, they do. i understand the points about hungary. now let's go to the main topic for today. what are your thoughts on the one caveat he seemed confidence sh that by the end of this year the recession will dissipate. what did you see and hear from draghi today? >> it's the way i expect him to behave, saying the economy is going to get better. the numbers for europe would indicate that the recession is going to end any time soon. so i'm not surprised he said it. when they play each other there's always a winner. maybe it's the only thing to get happy about i see similarities. i don't know that we can gather huge amounts of information when the central banks are somewhat marching to the same tune. is that fair? >> every morning between 4:00 and 6:00 in the morning the euro goes up. i was told they support the euro. so the cost of oil is cheaper. >> gotcha, mark, it's always a pleasure. see you soon, thanks a lot. when we come back the movie "the internship" is coming to a theater near you. >> welcome to google. >> we're looking at some sort of mental hunger games with genius kids. >> that's a sharpie by the way, genius. >> it's all about google. what's it really like to work there, though? we're going to talk to the head of google's internship program. >> and later, a walk down memory lane with jack kuroac? we'll tell you how much. we're back in two. 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[ male announcer ] savings worth talking about. state farm. i work for 47 different companies. well, technically i work for one. that company, the united states postal service® works for thousands of home businesses. because at usps.com® you can pay, print and have your packages picked up for free. i can even drop off free boxes. i wear a lot of hats. well, technically i wear one. the u.s. postal service®, no business too small. coming up next on the half, the biggest numbers of the week. and we'll tell you how to trade tomorrow's critical job reports today. we'll ask the man following their money closer than anybody else. and one of our traders explains why now is the time to sell. carl, we'll see you in 25 minutes or so. and while the idea may be a bit far fiched. only 1,500 made the cut. what does it take to get an internship at google? kyle oversees the internship program as well. kyle, it is great to have you. good morning to you. this movie is getting a lot of play. it makes people wonder what it's like to look there. we ran through the numbers and those accepted. what does it take to get in, though? what's the secret? >> well, there's probably not one secret necessarily. we are looking for people who are passion not about technology, who want to tackle big problems. smart, creative, motivated people. >> i know you've got some technical intern programs. people morem,[ focused on compu signs. nontechnical areas. what do they do, specifically, what kind of projects do they work on and how much do they get paid, if at all? >> we definitely pay our interns a pretty competitive salary. we consider them full-time employees. they're here for three months and they're doing real work. we put them on all the major products you can think of. chrome, search, marketing. we had an intern work on a hands-free music player for android. it allowed users with disabilities create play lists on the go. >> kyle, i was going to ask about the intern's success stories that you've had. what are some of the names or projects that originated from being an intern at google? >> yeah, we've had quite a bit of success. our internal program is a great source for full-time talent. a lot of folk hos start in college have been interns. one cool story is i'm feeling lucky button on youtube was thought of and created by an intern a couple of years ago, which is pretty cool. >> kyle, we've had friends who have applied for full-time jobs at google. they told us about the interview process, which can be long, multiple layered, asking for things like a high school transcript, not just college grades. how deep do you go into their background, and what is the process of sorting out the winners for the losers? >> well, we take it very seriously. so we look at everything. i don't know that we look at high school transcripts. what sets you apart? what interesting things have you worked on? we want them to meet with people that they work with all summer. go through the interview, the hiring committee, that's about it. i'm sure you guys to some extent like that l what they showed google. if you think back to the social network and then shifted to the next big players. do you wonder how you keep an edge? >> well, if i'm thinking about the movie specifically, they did a great job of portraying the passion that google has for the work that we're doing. but i think for the most part with 40,000 applications i think we're still attracting people who want to come for the summer and make a great impact. >> finally i got to imagine that intern pool is a great area to find people who are going to come work for you long-term, on a full-time basis. what percentage of interns return as employees? >> the good news is we don't v a quo that. the hope is that if everybody does a great job and wants to be there, we could find jobs for anyone this summer. maybe you have seen it. but these billboards that kan daz puz put up. how much of a hurdle is immigration in the u.s. policy with regard to that generally when it comes to hering. >> i don't know a whole lot about that. i know for this summer in particular we have folks all around the world. >> and can you explain the doughnut behind you and the large green ail yn, it appears? yeah, i'm in frobtd of the android building. so, yeah, the doughnut, and ginger bread man. >> you're going to get a lot of publicity as a result of this film. >> you're right. i think that 4% figure will be lower next year. by the way, we have a corona? >> you still have time to nail the number. tweet us your guess. i think we're giving away two, maybe a men's aim a women's. you have until 8:29 eastern time to send us your guess. zbr we'll tell you how to walk down memory lane with jack kerouac and virginia wolfe. groceries, or even gas bills. kick! kick... feel it! feel it! feel it! nice work! ♪ you got it! you got it! yes! aflac's gonna help take care of his expenses. and us...we're gonna get him back in fighting shape. ♪ [ male announcer ] see what's happening behind the scenes at ducktherapy.com. some of the biggest names in investing are all gathered together in one place for the global exchange and broker conference. so you know, bob pisani is there with them. hey, bob. >> hey. i've been doing this for many years. it's fun to meet with all the ceos. including bill o'brien. i sat down with him to talk about probably the number one issue here. and that's how to and night tr reduce trading glitches. >> we made a lot of investments on our side, information security, disaster recovery but at the same time working well together, since the flash crash. almost finished flash crash reforms, limit up, limit down, keep trading in a narrow range. completely rolled out by the end of the summer and prevent the most egregious case of stocks falling from $50 to a penny. that's not able to happen anymore. >> there was a lot of talk about an s.e.c. proposal for uniform technology standards that would reduce a lot of the technology problems. that might happen within a year. a lively panel on market structure. compared to 20, 30 years ago the average trader was getting a very good deal, commission costs are lower, spreads tighter, execution better. i was surprised to hear that. not a lot of talk about the casino we keep hearing. bill o'brien surprised everybody by saying the biggest there the average trader was not coming from high frequency trading. instead, coming from day trading, shady day trading shops operating in china and other parts of asia trying to access the u.s. market. >> i think it's easy to think that the bad guys are anyone with a computer and the fact that anyone with a computer is everyone. what our regulators are worried about are more really kind of old school schemes, individual day traders in foreign countries, you know, asia, russia, that are opening accounts for multiple brokers and placing orders on multiple exchanges and using that as a way to trick or dupe institutional or other investors into doing transactions they otherwise wouldn't. >> this is a fascinating story that i don't know much about and want to get more information on it. we'll see what we can find out. he's working with u.s. regulators to identify shady day trading operations and try to shut them down but they're proliferating rapidly. i'll be talking to the ceo of cd ameritrade. big topic, is the retail investor coming back? they released numbers that indicated trading up significantly in the month of may. >> volatility getting people back to their screens, that's for sure. thanks, bob. bob pisani. you want to write like jack ke ? [ kitt ] you know what's impressive? a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. welcome back to "squawk on the street." want to point your attention to one of the bright spots in the market. yum brands, shares trading higher on heavy sole um. positive for the year. technically speaking ten-day moving average above its 30-day moving average which is a bullish sign. you can see the stock higher by 3% in today's trade. >> not a bad move there. thanks very much. now, in today's "million dollar minute" a revealing look into the personal lives of two of the world's greatest 20th century novelists but it will cost you. robert frank explains. >> reporter: the beat generation writer jack kerouac hated the telephone and left a lifetime of letters, including more than 59 pieces coming on the market for more than $1.2 million. kerouac's letters offer a rare look into his personal life and hint at some of his most famous works. >> written it on the back of a manuscript leaf an early iteration of "on the road "s. >> reporter: fans of "virginia woolf," personal letters and manuscripts. >> known letters to her nephew, poignant i think, heart rendering collection of letters from her widow to her sister, only recorded female lover. >> reporter: the wolf collection $4 million. insight into the mind of literary icons, priceless. >> robert frank joins us now from headquarters with more. robert, who is buying this? >> you know, it's interesting. so many of today's wealthy are baby boomers and grew up reading "on the road" and some of the great writers. the whole beat generation and the mystique there. it's interesting, the owner of the indianapolis colts bought the original manuscript for "on the road" written on that upi scroll paper, he bought that manuscript for $2.4 million back in 2001. you know, it's interesting, we talk about the back being dead. but the market for collectabili collectabilicollectibles of famous authors post-war is huge now. >> people are expecting there might be some value as you say to those who love these authors. i imagine others are doing it though to be able to turn around and flip it. >> absolutely. these letters we don't know who the seller was. but these kerouac letters were to a good friend of his, ed white. and whoever is selling them for $1 million, there's a lot of people cashing in on the collectibles boom. next week sotheby's having a big book auction, william faulkner letters and memorabilia up to $1 million. we don't see the flipping in art market. clearly people cashing in on the collectibles craze even with the old books. >> i was going to say, robert, not to discredit kerouac in any way if you sell it after buying it you have to find someone who loves them just as much as you do and it may be hard to do. maybe it's not as audience as falknor's. >> the number of kerouac loving millionaires in america is probably a pretty small demographic. absolutely. >> i tell you i was at a kerouac exhibit in london, there was a global crowd there. so the guy's a global name. fascinating. thank you. >> thank you, guys. >> of course, tomorrow's a big day. jobs numbers going to be an important number. the most important number of the week. reminder to nail the number as best you can. tweet us. your guests for tomorrow's nonfarm payroll. chance to win the shirt signed by everybody on tshirt team. you have until 8:29 eastern time tomorrow morning to enter. consensus, 165? it's changing. >> it's fun to follow on twitter. use the guesses as a market move. >> adp, the employment index of the isms. >> exactly. started off on a weak note with a miss on manufacturing. >> claims today. networkers today. watching those. siena, jdsu. it's like going back to 2000, names were up all the time but jumping off of what juniper said yesterday how it's trending. >> less than 98. back to headquarters. wapner and the halftime. >> thanks. welcome to the halftime show. four hours to go until the close. at this hour, no three-day losing streaks yet this year for the dow. that's in jeopardy. dow jones industrial average done nearly 46. s&p, nasdaq negative as well. on the half, markets and your money. the state of the retail investor from a man who knows what you're thinking. and doing. home sweet home, home depot's up big but has the stock run out of steam? a big debate just ahead. first, top story, the teetering rally. stocks c

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