Who couldnt who couldnt be less enthused about it. Shes betting boy. I am. Youre saying its going to be a girl . Im betting girl. That must mean something in terms of the markets. I dont note what. Gold is up, bill, as its had its day since june 2013. And well be watching netflix. About an hour from now. The stock is trading lower, but up nearly 200 for the year. It will be out with what many say is a crucial Earnings Report. Well have a team of top analysts to tell you. Julia is moderating the Conference Call tonight. Shell be here to preview the questions shell be asking the question coming up. Thats right. And more fallout after the s. E. C. Charles stevie cohen. If its such a minor charge, how come it could potentially put a huge figure like cohen out of business . The coauthor of the doddfrank Financial Regulation bill barney frank will comment on that. Thats right. And heres how we stand, though. We havent moved much in terms of volatility. The dow was up 37 excuse me, up 32, down 27 at the peak and valley. Were right in the middle of the range, up 7 1 2 points at 15,551. By the way, if were up five points today, an alltime high. Thats right. Up about six for the time being. Mcdonalds will be making the call today. Nasdaq trading higher. The dow is the lagger of the major averages. The dow is up 14 points now at 3,601. Technology a bright spot for the markets today. And the s p, any positive close for the s p will be another alltime high. Up almost 4 points right now. So with the dow and s p trying to hit alltime highs today, lets talk about this market in todays closing bell exchange, with danielle hughes, anthony chin, and steven wood from Russell Investments and bob pisani on the floor here of the New York Stock Exchange with us here today. How are we doing so far with earnings . Were doing pretty well. Thats 71 of the companies that have reported already have beat expectations. Which is great. Kind of what we were expecting at divine. We were thinking we would come in a little bit better. But whats helped this has been the massive inflow of funds from investors into the Global Equity markets. About almost 20 billion last week came into Global Equity funds, which is a huge, huge number. I think that that probably mitigated some of the notsogreat news we heard from microsoft, ge, google, and even today mcdonalds, as well. Anthony, the fund flows have picked up. Is there or isnt there a great rotation . It doesnt matter. I think the great rotation is coming, and, in fact, believe it or not, from a historically perspective, stocks are cheap. If i use 110 on s p earnings, that means my forward p e ratio is around 15. 4. So relative to history, these equity this equity market is still relatively inexpensive. Steven wood, i mean, im sure youre guffawing, the dow and s p at new highs, and the russell has been at highs it seems forever. This has been a huge small cap rally. And the russell 1000, largecap space, too. I mean, i would agree that the valuations arent stretched. Theyre not overly cheap. Could we be lower than 110 on s p, but its competitive in that area, and i think the great rotation has yet to happen. Weve got a negative print in fixed income for a lot of investors in q2. If they get another one in q3, negative print, that might create impetus from fixed into equities. So there might be, even with margins flattening out, revenues flattening out, earnings flattening out, that could be a lift underneath equities. Youre right, small cap space. But if you look defensive dynamic within the russell 1000 or 2000, its neckandneck right now. This market rally has been largely defensive and right. Bob, isnt it the case if you take out financials, its a different picture for earnings season, because theyve contributed a lot to this story. Right. Financials are the allstars this quarter and theyve been up every single day, and today again, all of the bigcap financials are on the upside. Tech has been the big disappointment, obviously google and microsoft. But other disappointments there. And industrials are doing okay. So weve got, for example, lennox today, ge was okay, dover was okay, interesting here what Ingersoll Rand has to say. So industrials look okay. I think the big point is, and i agree with danielle, money is coming in a big way. 4 billion almost in inflows in the stock. Mutual funds last week. The biggest inflow since the beginning of the year. And i think thats the important thing. I think thats whats driving things right now. I am a little worried about the valuations. Moore downgraded honeywell, which had a fabulous report last week, 17 times forward earnings, kind of stretched. Thats the thing to worry about. Stock prices are high. We have talked often, dani, about the lack of participation of the little guy. Does this signal the end of the rally . I do think we still have more to go. I believe that, truthfully, we havent even seen the beginning of the inflows well see from investors, because i you know, were coming out of a 30year change in whats happening in bonds. However, theres going to be a lot of bumps along the road. We have a big week this week. About a third of the s p 500 report this week. 50 of the materials of the s p 500, and 50 of the industrials in the s p 500 are reporting this week. And they have been a real drag in terms of what were expect g expecting. So were going to see some bumps in the road, i think, this week. Anthony, has there been a sea change, just to borrow a term. You look at the 10 year, below 2. 5 , no indication, at least the last couple of weeks, the big move we saw up about a percentage point from the lows this spring, will continue. If anything, it has more room at the top. I think that was a bit exaggerated, but i think Everybody Knows what the direction of longterm Interest Rates is, and that is higher. Over the next year, two years, three years, Interest Rates will gradually move higher. That rotation will take place. Those inflows that danielle is talking about will continue. Because we will see negative Interest Rates go up. The math is clear. Interest rates go up, the value of bonds go down. Especially when you have longduration bonds. Why are oil and gold going up . I dont think the short answer is, the lower dollar. But why is that happening right now, do you think . Theres a lot of reasons. The lower dollar is part of it. Another reason is that gold may have been largely oversold to the extent that you see some of the emerging markets that are big consumers of oil may be recovering at some point. Oil may be leading that charge already. But by and large, as Global Economic growth picks up, its only natural that oil prices will, in fact, move higher. And that, i think, is what the signal is telling you. If we have, though, steven, the 10year moving lately lower, it sounds like a quantitative easing trade. Abe mnomics, they may be discussing the tapering, but waur not looking at it anytime soon. Maybe the end of 2015. Its not an inflation scare. Interest rates are normalizing, which means that the fed gets close to 2 target, people are going to need to look at multiasset, globally diversified portfolios with risk assets in there. To back you up. You started off with japan. You say investors even here need to be paying attention to whats coming out of that country. Whats happening in japan is huge. The chinese slowdown, the japanese qe is big. Europe is going to have to deal with qe, an sterilized qe, starting to print money. U. S. Has been in it for well over five years. Brazil, india, inflation problems. I think were still in the beginning innings of a global qe at the end. Bob, more earnings as dani was pointing out. Netflix tonight. Yeah, and having julia moderate, a tremendous move. Thats somewhat historic. Looking forward to hearing that exchange of whats going on there. The industrials are really going to be big this week, because if we continue to get fairly good numbers, like we did from honeywell last week, that will offset the weakness in technology, and it will add fuel to the idea that financials are not the only thing out there. Remember, the barons cover talking about europe making a comeback. Im skeptical of that. Im certainly hopeful. China stabilized. Japan is looking better. Portugal has a stable government now. If you get stability through the summer, you may not get a summer selloff. We havent had it yet. Were still no indication that it is led in that direction. Dani, the lack of summer selloff, do you think, yes, theres a qe bid in this market, just coming from other countries other than the fed . Absolutely. And we havent seen any volume in this market. Weve talked about how weve seen resiliency, but it hasnt been a volumebacked resiliency. And until that happens, i think there are a lot of people on the sidelines. Before we go, boy or girl . Girl. Girl all the way. Ill go girl. Everyone goes girl. What is that about . Im happy with the contrarian player here. Bob . Girl, too. Oh, come on. I guess i want it to be a girl. You look youre so dapper today. You look like a butler at Buckingham Palace today. What is that about . Ill have the chalk board to make the announcement, too, when the girl comes out. Yes, on baby watch. Thank you all. See you later. Lets talk about the huge rally in oil prices, taking a little breather today. Gold has been perking up. Sharon epperson has that for us. Sharon . Reporter look how perky gold is now. Looking at gold prices above 1,300 an ounce. Gold prices have broken above the 50day moving average. And breaking up the key Technical Levels is part of the reason why more traders have piled into gold here. As you heard earlier, yes, many said it was oversold. And that Short Covering is also contributing to the rally. And were watching, as well, the weakness in the dollar. The fiscal demand in asia picking up, as well as institutional buyers piling in. Now, its a different story that were seeing in the oil market. We have seen a mixed market here in oil. But we did see both benchmarks, the wti and the brent contract reach parity, first time in nearly three years. And the key session now is whether or not oil is able to regain the momentum it had last week and reach toward the 110 barrel level, bill. Back to you. Boy or girl, sharon . Girl. Oh, all right. Yeah, sharon. All right. Me, sharon. Steve liesman. All right. Heading toward the gold, 50 minutes left in the trading session. Dow is up six points. Again, mcdonalds, wed be up about 25 minutes. Exactly. The company is the worst performing dow stock thanks to less than stellar earnings this morning. And now theyre predicting a challenging year ahead. Well find out why mcdonalds in particular may be seeing unhappy meals. And the street is anxiously awaiting netflixs Earnings Report. Remember, the best performing s p 500 stock so far this year, up about 185 . Well have the analysis and numbers you need right here on closing bell. Of course, were watching the events in london, as well, keeping an eye on the hospital where Prince William and Kate Middleton are expecting the birth of their first child anytime now. Well bring you the news when it happens. With fidelitys options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. 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The s p 500 and dow are struggling to close at another alltime high. Josh lipton breaks down todays big movers. Hey, josh. Reporter hey, kelly. Yeah, the first session of the week almost history. Lets review some of the big movers. First up, yahoo slipping in todays trade. Yahoo will now buy 40 million of its shares owned by dan loebs 3. 40 million bought at 13. 50, told at 29. 11. Total profit 624 million. A masterful trade. Thats our own krim kramer put it. Were watching gold today. The metal shining, settling above the 50day moving average for the First Time Since november 2012. Miners are all responding, all well in the green. On the other hand, homebuilders not working. They fall unexpectedly by 1. 2 month over month. Analysts say it is certainly not a sign that the housing recovery is in trouble, but Sales Activity could come under pressure in the months ahead. They say dhi, lennar, pulte all lower. Were also keeping a close eye on microsoft. Remember last friday, the stock got killed the day after the Company Posted disappointing results. The stock dropped 12 . Today, though, moving higher. And well end on mcdonalds, the golden arches disappoint, saying fullyear results will be challenged. Some analysts i spoke to this morning were especially disappointed with the u. S. , thought we would see traction here on product innovations. Now analysts saying it raises questions about how successful its efforts have been. Bill, back to you. Yeah, lets talk about that, josh. Whats going on with mcds . Its warning the rest of the year will be challenging . Thats right. With us now, andy from jeffries, sam from qsr magazine, and also joining from the cnbc news line. Guys, thank you very much for joining us. Look, andy, lets start with you. I guess the question comes down to this is this a story about mcdonalds misfiring, or is there trouble here for the restaurant sector more broadly . I think its a little bit of both, actually. Mcdonalds has gotten more innovative with some Premium Products in addition to their value message this year on dollar menu. And it is it is helping keep u. S. Comps basically flattish. But i think the competitive environment has gotten more challenging. Youve seen some better product news and operations from some regional and national competitors. And pricings becoming more difficult. So i think when you put all those factors together, mcdonalds is really struggling just to kind of keep its head above water here. Sam, whats your version of whats wrong with mcdonalds, and why now . What happened . Yeah, i agree with that. Right now, youre seeing the crop of competitors come up, the socalled fast casual like chipotle, panera, theyre stealing market share. I think mcdonalds is having trouble because some of the new menu options they put out, there were definitely premium, like the angus burgers, the chicken mcwrap, but now, the millennials are gravitating to the newer concepts because of the Overall Concept that the experience offers. You know, the company over the last quarter has had one beat. Theyve had one meet and three misses. Is there a communication problem here . Why is the market basically taking this long to catch up, otherwise, with the fact that perhaps mcdonalds, there hasnt been there as much as meets the eye . Sure, well, our numbers have been below the street. We have a hole rating on the stock with the target price of low 90s. The results have been very much in line with what weve expected. I think that with mcdonalds, given their success over the last decade, and i think you have to put that into context here, this business has been so successful with the turnaround starting in the early 2000s that volumes now are at amazingly high levels. So it gets incrementally harder to drive volumes. Youve had a few other things like margins and foreign currency pressures here recently that have probably taken the street a little bit by surprise, although, again, i think the company has been cautionary. They dont provide annual guidance. So that does leave a little bit of a wider range, you know, for which expectations can kind of roam. Yeah, sam, what about the overseas business . We mentioned josh highlighted the u. S. Was in a special disappointment, a lot of analysts were expecting more from the sales here. What about overseas . How are they doing . It seems theyre doing a lot better overseas, at least theyre not really starting to falter like they are here stateside. And part of that is because overseas theyre still is a demand for the american product. Remember, theyre not in every country. They still have some markets they can grow into. And with that demand of the other countries for american products, i think theyre going to succeed with that, whereas here in the united states, there might be some waning interests, maybe as consumers gravitate toward newer, more exciting brands, theyre forgetting about the old stalwarts. Sam, speaking of the quickserve space that you know so well, is this about wendys introducing the pretzel bacon cheeseburg cheeseburger . Is it about the customer mcdonalds needs to go after . Whats changing here . Whats changing is its becoming more possible for consumers to access tasty Premium Foods at a cheaper price point and theyre willing to go up to the 8, 9 price point that chipotle is offering and panera, the other brands. Now, Consumers Want bolder flavor, some healthier food, but also demanding customization. Chipotle is succeeding so much because what they give you this great product you can build yourself. And so, a lot of the newer brands, what youre seeing, theyre giving you the ability to pick your ingredients to make it as healthy or unhealthy as you want, and pick as bold or unbold the flavors you want. Okay, andy, finally to you, have you changed your price target or the view on the stock in light of the quarter . No, we havent, given where we are, our estimates did come down a little bit. But it basically is the same. We believe street numbers have to come down closer to where we are. We think the stock maybe with midsingledigit growth deserves a market multiple, maybe around 15 times, or, as i mentioned, low 90s. We continue to be neutral on mcdonalds. Okay. Panera, wendys, their shares are up. The restaurant market generally is mixed. Thank you both. Thank you. I dont know where i was, but im found of the snack wraps they have at mcdonalds. My sister is probably the biggest consumer. Wherever i was, maybe in connecticut, they had gotten rid of the beef snack wrap. They only had chicken. That was a disappointment . Huge disappointment. Bring them back. Message to the company. Up seven points, the dow. Were in record territory for both that and the s p right now as we head towards the close. About 40 minutes of trading left. While mcdonalds was weighing on indexes, toyota has been a redhot stock, up nearly 40 . Up next, well look at if it can get hit as a bellwether claim goes to court. And shares are nothing compared to netflixs, up 184 so far this year. The companys got a lot of at stake when it reports earnings after the bell tonight. We will have the instant analysis of whether the big bet on original content has paid off. Thats coming up. [ male announcer ] ok, heres the way the system works. Lets say you pay your guy around 2 to manage your money. Thats not much you think. Except its 2 every year. 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Keep your car healthy with the works. 29. 95 or less after 10 mailin rebate at your participating ford dealer. So you gotta take care of yourself . Yes you do. You gotta take care of your baby . Oh yeah welcome back. As with the rest of the world, were on baby watch, waiting for the birth of Prince William and Kate Middletons baby. 2 Million Pounds have been wagered in england. On this baby. You know, when you talk about the stimulus or lack thereof, the royal birth is going to provide this morning, i just had a fun client note, looking at this thing, look, there wont be much of an impact, but looking at betting houses, sales of alcohol, no public holidays, so the impact will be muted. The oddson favorite on the bets is for a girl. Thats making me nervous now. Everybody is picking girl except you. You may be right after all. Well see. Sharon and steve. Alexandra is the favorite name for girl. James the favorite name for boy. Now, apparently, it took them, what, six days for diana to announce the birth of Prince William. Yeah. They named harry right away. It didnt matter. Well just leave that there. Now remember, the claims that toyota cars were accelerating on their own . Well, most of them were settled, but many did not. The first toyota unintended acceleration lawsuit heads to court today. Knbcs jacob rascon is following this story and joins us with more. Jacob . Reporter thats right. Many lawsuits have been brought to toyota about these unintended acceleration incidents, but all have been settled. This will be the first one that will go before a jury. There are 80 cases now across the country in state courts filed. This one is l. A. Superior court will be the first one to go before a jury. The jury selection begins today on that one. In this incident in upland, california, where i am, this was back in 2009, in the summer, a woman named norico uno, 66 years old, was coming down and the accelerator, an attorney and the family says, was defective, stuck, went up to 100 miles per hour, crashed, passed away. A witness said she tried to stop, but couldnt do anything. Toyota said they inspected the car. They said there was no defect. The attorney for the family of the woman who died said this will be an issue of why they dont have a brake override system. According to the outcome of this case, many will be looking on with cases in other state courts across the country seeing how this one will turn out. As i said, the jury selection beginning today in l. A. Superior court. And the case is expected to last about two months. For now, reporting live in upland, jacob rascon, lets go back to you. All right, jacob, thank you very much. Appreciate it. Lets talk more about toyota, despite the potential legal trouble, shares of the company are flirting with alltime highs. So is the automaker a good by for your portfolio . Lets Start Talking numbers on toyota today. On the technical side, carter wirth, chief market technician at oppenheimer, and steve cortese. And, carter, we realize, its a thinly traded stock, low volume, so it will probably be volatile at the same time. Do you like the chart . unintelligible underlying in japan liquid. In this case, as you cited, its very close to alltime highs. Thats whats appealing here. The alltime high was back in february 2007 at 138 on the adr, symbol tm, and here we are at 130. Whats most important is a lot of momentum in the group. If you were to look at how this stock is tracking with ford and general motors, for instance, these are all north by northeast and up to the right. Some of the best moves in markets history shows when you have an individual stock in a group thats also acting well, and that is the case in point here, at least by our work, we like toyota on the long side. Okay. If you see a comparative chart, its quite well how well its done compared to the s p. Okay. Steve . Bill, you know, i think that really its important to look at what is toy great that really. Its not an auto stock right now. Its a stealth currency play. And so, we just saw carters chart. Id like to see his chart and raise him a chart. I have Toyota Motors versus dollaryen. If you look back for most of this year, what toyota was really about was dollaryen. In other words, as the yen was weakening, toyota was prospering, because it was easier for them to export cars around the world. The problem with that, the dollaryen has stopped rallying, its stalling in recent weeks. Having trouble against 100, 101. If the yen strengthens from here, as i believe it will, then toyota will have a very hard time exporting to the rest of the world. Thats what matters to them, because the japanese market is in dismal shape, that economy on the whole, so they must export, and its really a currency play, and i think a dangerous one. You know the rules on talking numbers. If the fundamental guy shows charts, the technical guy can Start Talking fundamentals. So the fundamental pushback is honda is also a japanese stock, which should presumtively be encountering the same currency issues, if you will, or tailwind. And this stock, toyota, is crushing honda motor. And so, obviously, there are currency issues by investing in the adrtm, its adjusting. But the outperformance relative to a shore competitor, honda, is whats impressive. Here, too, one can speak of valuation, if you want to talk about funnymentals, when it can plunge from 130, all in a fiveyear period. All right. Hold that thought, steve. There. He held it. Good job. See you guys later. Thank you very much. Were keeping a close eye on the markets. Doyle up 6 points, not enough. That will be enough to give it a fresh record high. 15,550, with about a half hour to go. When you think sears, you probably think appliances, hardware, lawnmowers, but now it wants you to think of the website as onestopshop for highend luxury items. Yes, you heard me right. Highend luxury and sears in the same sentence. When we come back, well discuss whether its a brilliant business move or biggest mismatch ever. Have you seen this incredible video from china . A 5yearold girl left home alone caught in a window 200 feet above the ground. Well show you the dramatic rescue coming up later on the closing bell. If youre serious about taking your trading to a higher level, tdd 18003452550 then schwab is the place to trade. Tdd 18003452550 call 18882849410 or visit schwab. 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Tdd 18003452550 and learn how you can earn up to 300 commissionfree tdd 18003452550 online trades for six months with qualifying net deposits. Tdd 18003452550 our trading specialists are waiting to help you get started. Tdd 18003452550 so call now. Tdd 18003452550 we have a royal baby. Sue herera, break it to you. Reporter well, its a boy. The duchess of cambridge gave birth to a boy. He weighs about 8 pounds and 6 ounces. We dont have a name, of course, because they are going to wait a number of days to announce what the name is. But i can tell you the oddson favorites for boys names were george and james. So well see whether or not they take that under consideration. They expect that the economic boost from the anticipation of the birth of the baby and what happens next with the baby is going to be about 400 Million Pounds in terms of an economic boost to the u. K. Now, there were an enormous amount of bets put down on whether it was going to be a boy or whether it was going to be a girl. About 100,000 individual bets have been placed since betting opened by lad burks, according to a spokesman there, and about 10,000 bets were made today alone, bill. So this was a huge event in the u. K. , and, as a matter of fact, around the world. Yeah. Reporter and we hope, certainly, the duchess is feeling well. It is a boy, and he came in at 8 pounds, 6 ounces, and he was kelly, maybe you can help me with this, born at 16 24 p. M. British time. Yes. I was just going to say 4 it was several hours ago. 11 24 our time. East coast time, at least. Reporter so we will see. There are crowds gathering outside of Buckingham Palace, because even though they varied what the routine would be for this announcement, they actually put out a press release they were going to post it on an easel at Buckingham Palace, first, but they decided to change it, because, i think, probably to get rid of the throngs of reporters outside of the hospital. You think . Reporter but in general, you know, they changed the routine a little bit, so we now know it is a boy. Yeah. Thanks, sue. You must be feeling pretty good about yourself. We should mention once again, the house wins. Right . The oddson favorite among the betters was girls. So the house wins. And i think i might have won our cnbc pool on this, given the actual time of the birth, and it was a boy. It might come down to me and steve liesman. Well have to figure this out. You said 1 18. We didnt put any money on it. It was not lost on the floor of the New York Stock Exchange. As soon as word was getting out, we heard them yelling boy. We should let you know we should let you know that the Buckingham Palace has released a statement, they say that the queen and the duke of edinboro are delighted by the news. Keep in mind that this baby, this son, is third in line of succession after his royal highnesses. Should we mention what art was telling us . We didnt get a chance to confirm that yet. Has that ever stopped us [ laughter ] we were speculating about what would happen if it were a female and theyve changed the law to say a female could assume the throne. Ascend to the throne. That was in england. Right. Apparently not throughout the whole commonwealth. So maybe not in australia or canada. If this was a girl, we went dough now they would have handled that. Exactly. It would have raised interesting questions. Now its a into the point. Reporter its a moot point. Its a boy, hes healthy, and the duchess resting co ining co according to the palace. Thank you, sue. Lets overthink it. Its interesting to see people setting around the front page in 1948, going back with the historically trends, how the press covered it in the past. The first royal child to be had in the twitter era. I wonder if they were registered at sears . You know, they now do luxury, bill. Thats what i hear. Do they . Is that right . Yeah, assuming the royal will go upscale for the gifts. Yes, Courtney Reagan explains what were talking about here. Reporter i have to be the one to pivot from royal baby to sears. Im so excited well get to sears right now. So sears may not be the first retailer you think of if youre in the market for rolex, but they hope you might find what youre looking for on its marketplace anyway. Sears. Com has a section called marketplace where outside vendors can sell merchandise similar to ebay. There is a mens rolex watch for sale by bobs watches for 32,995. Sears makes money by collecting 7 to 20 of sale plus 39. 99 monthly fee from the vendors. Sears confirms in three years, the marketplace has grown to include more than 85 million items, the vast majority of the retailers total sales, remember, come from the physical stores. Sears total sales have fallen every year since 2007, sears total sales for the fiscal year reported in february a quarter of what they were in 2007. No one expects marketplace to turn around the slumping sales but its got us talking and we have amazon and ebay as competitors. When we reached out for further commentary, they noted it includes millions of nonluxury items. It says it has the assets to establish a marketleading nextday and twoday shipping capability, so that would be luxury or nonluxury, trying to compete in the marketplace. Bill . All right. Well let you go jump up and down in the newsroom now. Reporter i will, thank you. Courtney reagan on the royal birth. Will this move by sears be a boost for the company . Sears stock has been underperforming the markets so far this year, as we know. Marina thinks this could work, while paul does not think the luxury angle fits with sears. Thank you both for joining us. Marino, ive been doing the tv thing a while. The mandate has always been, know your audience. Theres a reason we dont do ariel car chases on cnbc, because it doesnt fit our audience profile. Why would sears want to sell luxury items and why do you think it will work . Well, first, its not just luxury items. Its many items. Certainly, the effort that sears is pulling through, its interesting, theyre trying to create a marketplace which includes luxury items. The consumer is not just a something that doesnt exist, is abstract. The consumer changes, depending on the attitude. So one moment im a luxury consumer. One moment i could be a valet consumer. We have to see what will happen in reality. Is this going to change the overall dynamic within sears . I dont think so. We dont think so, because 95 of the sales are in the stores. But certainly, we can create a different awareness within the consumers about sears, just like target did. A few years ago. Yeah, paul, youre a little more skeptical here, arent you . Well, yeah, and i was warned to not to stick to the bear side here, but ive got to say, maybe some of the small vendors cant take an order in pounds and ship it to england, right . So thats a benefit i didnt research before the segment. Should have thought it through, right . So to be serious, luxury vendors in general really are very, very protective of their brands. So i think sears is doing, you know, a heroic effort to sign up a lot of small vendors that are maybe going to look for an alternative from ebay or amazon. But the question is, can it really move the needle, and then i do think there is a mismatch between, you know, the ultra highend, especially a rolex watch, and, you know, you and i might shop for lawnmowers or tools at sears, but not watches. Yeah, paul, how much of a risk is this for the company . Is this the kind of thing they can say, well, well give it a try. It doesnt really the investment isnt that much. Or, actually, is it a big deal . How important is it for them that this works . Well, i think sears is investing a lot in the idea, and theyre investing a lot in online in general, and theyre using a lot of whatever they have left over after theyve paid their bills, you know, to go down that avenue. So it is very important to the future of the company. Right now, though, their profits are so thin. I mean, youre talking about 18 million unique visitors a month, or a million paying customers. I mean, what are your profit assumptions per customer per month, and wheres that showing up on the bottom line in this is a company that only made 270 million ebitda just last year. Right. Marino, do you agree its very important, im short on time, you know, it has the feel of a hail mary pass by eddie lampert. Do youagree . They have tried different strategies that different work. The marketplace is certainly a good idea. The question is going to be execution, as always. The question is going to be the Management Team thats going to execute this. Its not just your regular project, as you need a lot of knowledge to do this and do it right. So depending on how the Management Team is going to go about it and who is going to be assigned to it, well see some results. Its very early to tell, but again, its a step in the right direction. If i could jump in real quick, jump in, i think the execution has been good. If you go to the site, it works great. They have a lot of vendors. I dont know theyre selling a lot of stuff. Its a good strategy, because they dont have anything you know, they have to fill up the warehouses and theyve got to move more stuff. You know, i think that its not really an alternative that can beat amazon. Right. So if theyre shopping on their pcs, then theyre windows shopping. Huh . Thank you. I dont know where it comes from sometimes. Television genius. Yes, thank you. Please. 15 minutes left in the trading session here. The dow is up about three points. We need a fivepoint gain for an alltime high. Any positive close will be an alltime high on the s p. Yeah, paring back. Up next, julia bore sten tells us the number the one number we should say in netflixs Earnings Report you need to keep an eye on to find out if the rally in the shares can hold. Shes moderating and asking questions on the netflix Conference Call. Shell tell us about that as well. Heres a shocker. 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Reporter well, kelly, investors have their eye on a couple of key indicators of netflixs growth and future potential. Perhaps most important is the number of paying u. S. Subscribers to netflixs streaming business. Analysts expect more than 29. 5 million. Then, theres revenue growth, which is expected to be 21 to 1. 072 billion, and then earnings growth, as well, expected earnings are expected to triple from 11 cents a year ago to 40 cents this quarter. There are also other numbers in the spotlight, like the number of international subscribers. The Company Projected as many as 7. 9 million total, and then the dvd business. The question is, how fast its declining. Last quarter, the Company Projected as many as 112 million in profit from the dvd business. Less than that would be a disappointment. The stock is down a little less than 1 today, ahead of its quarterly results, recovering a little bit from losses earlier. And ahead of its unprecedented approach to an earnings call. Dwoogle netflix is actually hosting a google hangout, which the company has asked me to cohost along with analyst rich greenfield from btig. Well be moderating questions that have been emailed and tweeted in to us. Ill be back at the top of the hour as soon as those netflix numbers are out. Well be digging in. Kelly and bill, back over to you. Okay, julia, thanks very much. Looking forward to that. And keeping an eye on markets here, because there are just about 10 minutes to go before the closing bell. And the dow has now turned negative. Again, mcdonalds is a big weigher on the index. If you want to know whats happening with the broader s p 500, were up about. 1 , so a couple of points there, bill. All right. Wed be. Snoof this is the pursuit of perfection. Baby watch at Buckingham Palace has turned into baby celebration. People are flocking to the palace after they got the word. Incredible. You know, because theres going to be a lot of people in london, you know, from spending time there, you know its not always the thing that londoners love to talk about. I bet that crowd is packed with tourists. You bet. It will be a huge story. Its a boy, by the way, in case you hadnt heard. Thats why were wearing blue. Could you have worn any higher heel, by the way, today . Yes, i will bring those next time. Im sure youre will. Were 10 minutes from the close. The dow and s p pushing for alltime highs. And joining us is steve, and you are disappointing by the earnings so far, yes . Yes. Right now, running 2to1 beats to misses. So thats running a little high. Were still weve only had about onefifth of the way through the s p, but thats not where we want to see it. Again, were also seeing the companies missing on the top line. Revenue number has been yeah. You know, were threequarters now into companies missing the revenues, having a slightly higher of ratio of beatstomisses, and were worried. Chad, people are calling it an outright revenue recession. Where do you see it . I completely agree. Last quarter, revenues for the s p 500 were flat, even modestly down. You need to see a pick up in aggregate demand on a global basis, to propel the top line higher. Youre not seeing that. Expectations for the market, the third and fourth quarter, are for a recovery, we dont think thats in the cards. Were thinking about gdp at 2 , third, fourth quarter, which there gets you at fair market at best. Right. It hasnt bothered the market. Weve been flirting with alltime highs again today. Yeah. I think a lot of it is just, again, where are you going to put your money . You can still get dividend yields, the volatility in the equity markets. I think its still somewhat of an Interest Rate story rather than truly fundamentals. Well see when that finally switches. But does that worry you . If people are putting money to work in this market, even though the fundamentals arent all that great . Look, the Federal Reserve, everyone on the floor knows the Federal Reserve has been ginning up the market, in all asset classes, equities as well as fixed income, so it is a bit of a concern. You need to see an earnings followthrough and an economic followthrough, and its critical we see that in this quarter, which i dont think well come to that. And for us, the valuations havent gotten astronomical. Were still trading 15 times, 14 1 2 times forward earnings, so its not like its incredibly inflated. And we do see the housing recovery coming through. As long as it comes through erin, chad, thank you. Well come back with the closing countdown. And the netflix earnings. Stay tuned. The millionth customer. Would you mind if i go ahead of you . Instead we had someone go ahead of him and win fifty thousand dollars. 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Peter costa, is there a speed bump down the road youre watching, or is it full steam ahead still for you . You know, it could be full steam ahead, but you have to always watch out for earnings. I think that even when the earnings come in bad, the market doesnt react. As if its life threatening. It affects the stock. Like mcdonalds got hit. It didnt kill the market. The breadth is on the positive side. So theres no individual stock that will stop it. You always have to worry about any kind of like, geopolitical thing that might change. Right. But right now, i dont see anything ahead of us that will stop us. All right. Thank you much. Thank you. We are going out with a gain of about two, three points. [ bell ringing ] we needed to be up five to hit an alltime high. The s p, another alltime high. What do you know . Stand by. The second hour of the closing bell and the netflix numbers right now. Its 4 00 p. M. On wall street. Welcome to the closing bell. Im kelly evans in today for maria bartiromo. And im bill griffeth. Another record day for the s p. It doesnt look like well get one for the dow. Heres how were finishing the day. The industrial average needed to be up five mounts. Were not doing that. Hello there. Mcdonalds, the drag there, taking about 19 points out of the dow today. Its one of the dow components after the earnings disappointed this morning. The s p looks like we will have another