Transcripts For FBC Markets Now 20130228

Good afternoon, everybody, im ashley webster. Lori great to have you here. Will today be the day, the dow within striking range of an new alltime high. Ashley what about spending cuts due tomorrow . No sign of progress in washington. Whats new . Retired four star general Wesley Clarks take in mibs. Lori lou dobbs cuts through the washington hype as parties dig in ahead of budget talks at the white house. Ashley behind the business, me liz is francis live in austin, texas with a look at jpmorgan. Melissa . Thats right. Jamie dimon out on the road on a famous bus tour, my third with him, and out to rally the troops. It could be harder this time around begin the layoffs announced this week. 4,000 coming for branches like this. Coming up, talking with Pablo Sanchez, manager of consumer banking, drilling down on data used internally at the bank where they make decisions to decide what to do based on what their customers are doing. They have access to 50 million customers, one nugget, for example, they saw spending up 15 in january, year over year, a big jump. They will talk about integrating the layoffs and plans in the future. Back to you. Lots to discuss. Thank you so much. Time for stocks as we do every 15 minutes, to the floor of the new york stock exchange. Nicole, stocks, well, clinging to gains. What are the traders saying . Clinging to gapes, and the vix changed direction, slightly higher today, pulling back now. The dollar remains strong. We got Economic News mixed. The weekly jobless claims, better than expected, but the Gross Domestic Product was weaker than expected. Also, retail drugs, banks, all doing well today. I wanted to talk about what were seeing for the week; right . Looks like a winning week on wall street. Not far off from the alltime highs, as you noted, right there at the top of the show, showing that great graphic; right . Less than 70, about 70 points from the alltime closing highs. We should note the difference. Thats something, obviously, well continue to watch. One thing we have to say that the s p500 is on track to rebound from its first weekly loss seen last week after eight straight weeks of gains so the trend has been to the upside. Italy and europe have been behaving well, at least for today and yesterday, and so, also, ben bernanke helping things along as well. Back to yo but on the phone ashley all right, thank you very much. Well, tomorrow is the deadline. The automatic spending cuts set to hit as soon as president obama signs the order. What can we expect and when . Peter barnes has answers and doing Fact Checking on the sequester. Peter . Hey, ashley. Large chunks of the budget, trillions, in fact, exempt from any sequester cuts such as social security, medicaid, and the va. Now, for other potential cuts, the white house carefully words some of its dire warnings saying the food and Drug Administration could conduct 2100 fewer food inspections, may have to furlough all food inspectors for two weeks. That one has got one republican member of the House Agriculture Committee angry. The implication was it was going to suddenly stop. I dont think thats the case. If youre a responsible manager, and i hope vilsack is, hell roll furloughs through the system between now, mash of 1st, and september 30th. No reason one shop should be shut down. A house republican, sam graves, asked faa add minute administrator yesterday what year of spending levels that the sequester cuts force the faa back to. She said 2008. Graves said he was baffle that the administrations warning that air Traffic Controllers will be furloughed at those levels since they were not back then. Graves added, quote, the sky is not falling. As for all the sequester cuts in total, one Research Shop saying today, quote, many ordinary americans will not notice a difference at all, and many wont notice a difference for months. Ashley . Ashley were going to survive. Peter barnes in dc, thank you, peter. Lori sequester slashes 2 of the federal governments total budget, a large part of the cuts from defense. No one knows the impact the cuts could have better than retired four star general and former president ial candidate wesley clark, general, thank you for joining us. It could take a hit this year with Congressional Research service estimating a loss of defense dependent jobs by 907,000. Will it be that bad . You know, it could be very damaging. 2013, already five months into the fiscal year, had a continuing resolution authority. We dont have a budget, and when you try to take the money out, it comes out, principally from salaries, from repairs, from spare parts, and from fuel purchases. One estimate i heard says that the United States army may take a over 30 cut in its operations and maintenance account so lots of training wont occur. People stay in the motor pools for the quick, they wont be going out to the national training, and aircraft wont be flying. The truth is no one has a 100 grip on this. Whats going on in the pentagon is being mirrored down the line as people are figuring out how to take the cut. Theyll do the cuts in the most responsible fashion. Thats the problem. Lori i understand. Treasury had figures on defense spending in ten years. Its risen 54 in the last decade, a real increase. Inflation adjusted, and obviously, two wars. That increase actually includes money spent under president obama too. A 2 overall federal budget cut, small potatoes, and considering it increased by that much in that period of time, theres a lot of fat in the military. Well, im not sure if its fat, but it is these are requirements that people saw that were funded by congress. Everything was approved. Every requirement was justified. Every dollar in that Defense Program multiple layers. The administrators and bureaucrats said we need this. The sequesteration in development was designed to be so ridiculous cuts would never happen. Are there better cuts for defense . Do you have recommendations that make more sense than the punitive cuts tomorrow . Well, sure. Normally, when you do cuts, you dont put an artificial con straint on it saying every program is equally cut. You look for the things that i say if you kill a big weapons system, you can get billions out of that. Maybe you dont need it. In the past, they have killed big weapon systems when they had to save money. The department of defense is probably the most experienced group of all in how to deal with perspective cuts. It starts at the top, all the way to the bottom, comes back up. Its going on right now in the pentagon. Im sure theres a lot of people who ate pizza last night. Lori where should the cuts happen, general . At various levels. When money goes down, it has to get sliced up and smaller and smaller bits, so lori right now, its the president deciding where the cuts happen. Thats the problem. Sure, at the top. Hes not the one saying in fort carson, colorado, 15 houses that were to be repaired will not be repaired this year. That happens somewhere else. It trickles down all the way down. There may be a big cut, okay, protect military manpower, but not protecting fuel savings. Somehow that cut to fuel purchases goes all the way down to where some Company Commanders in fort carson or fort hood says we cant move the tanks for the next 30 days because we dont have the fuel. Lori interesting. Theres proposal vie various Congress People to eliminate the draft. Thats a small portion, about 2025 million i believe, but we have thousands of troops stationed in europe since the cold war. Those are ideas that have been bantied about this week. What do you think of those . Well, i think they are reaching. Look, as a Defense Budget has grown, the Defense Department can responsibly cut back. Coming out of afghanistan, there are savings that are going to be made, but i think we have to put the Defense Program in the context of what is the national strategy, so i id be opposed to further cuts in europe. Weve done a lot of cutting in europe. We need forces there to reassure allies. They maintain stability, and they use europe as a launching pad for educational where. Lori i have no time, but im curious, if the sequester cuts happen, our National Security is in more serious jeopardy . Are we at risk . I think well get through it. I think the United States will survive. Well make it. Theres individual hardship. Thats the issue. Lori okay. We sure thank you for your time and insights. General, a real pleasure. Thank you. Thank you. Ashley interesting stuff. Is your cell phone the new bank teller . Online banking changes the way banks are run, of course, and we go behind the banks with melissa fran sis and Pablo Sanchez is next. Lori a look at metals at the chairman wrapped up his testimony before congress. Gold is down. Were back after this. Clients are always learning more to make their money do more. ann to help me plan my next move, i take scottrades free, inbranch seminars. Plus, their live webinars. I use daily market commentary to improve my strategy. And my local scottrade Office Guides my learning every step of the way. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Ranked highest in Customer Loyalty for brokerage and invement companies. Lori jpmori gain getting lean, and the banks giant cutting 4,000 jobs, but expanding the number of branches by 100 locations each year. Melissa francis is in austin texas with the man in charge of all of jpmorgan retail bank branches. Hi, melissa. Thats right. Hey, lor. Joined by Pablo Sanchez, thanks so much for coming on the show. Thank you for having me. On the bus tour talking to the troops here, rallying them, and it has to be tougher in the news that you were going to lay folks off, 19,000 across the board, 4,000 in branches. How is everyone taking that news . Is it how do you reconcile those things . Weve been on the tour and its great. Great feedback from the employees, and for us, yeah, a number out there of 17 ,000 folks who were going to reduce head count with and 4,000 in the consumer bank. Those are all through attrition. The others in the mortgage banking side where defaults are down, obviously, good news for us and the economy, and we do a great job of redeploying the folks. The overall picture, i know you are opening 100 branches a year across the country. At the same time that you try to reduce the head count. Whats that neon for inside the branch . Well, inside the branch, we have great people. We continue to think that our branches are competitive advantage for us. As you know, for many, many years, transactions have been down, 16 over the last two years, and so as we think about it as Good Business owners, we want to make sure we staff our branches appropriately and first timely, and its really been the same trend for many years now. With so many people turning to mobile banking where you are a leader across the industry, does it make sense to keep opening branches . Do you need physical locations when so many people are going online, and so many people use mobile banking . Thats a question we get a lot. We have done research about it. Whether folks are young or old, they want to talk to somebody in a branch when they open a new account. For us, we feel its important that our distribution is there. Quite frankly, as they get further in their life cycle and have further financial needs, we want to be able to talk about mortgage banking, Business Banking investments, and so thats the place for us to be able to do that, and customers like it. One thing that analysts are worried about when it comes to this is the idea that revenue disappeared from Overdraft Fees and debit fees. How do you replace that . For us, deepening relationships with the customers. We understand that our customers voted with their feet to do banking with us, and so being able to offer them the other products i mentioned, mortgage banking, investments, those things, if we can deepen the relationship by creating a Great Customer experience, thats something we want to do, and if customers like us, they want to do more business with us. Getting all the business is part of the push behind opening the branches. Absolutely. So a lot of the focus in terms of expandingfuls expanding was through california and florida. Now it seems like theres other directions. Whats the target right now in terms of reach in markets that you want to penetrate . As you mentioned, california and florida are great Growth Markets for us. Sthail continue to theyll continue to be that for us. Well look at the other states we have. Were in 21 states across the country. Well infill in those places where we think we can really grow the business and other customers. Whats the mood like when you are here . Whether its customers or your tellers . I mean, how to people feel about the economy and whats going on right now . Well, as you know, weve been on the bus sture r tour, stopped at employee centers, employees have been on the bus, and asking them to give us feedback, and, quite frankly, its been amazing. In texas, we got 675 branches. We got 31,000 employees for the firm here in this state, and the economy they are not worried about the sequester and all things that everybodys worried about . People are really worried about whats happening to them in their daytoday life, and we have Great Solutions for them. Were okay. Okay. Pablo sanchez thank you so much. At 5 p. M. On money, the man, himself, jamie dimon has an exclusive interview. Thats later. Back to you. Brave man, jamie dimon sitting with you, melissa. Work forward that. Thank you. As we do every 15 minutes, checking the markets. Nicole another the nysc. Youre watching the retailers. Ashley, yes. Look at a couple retailers, starting with jcpenney, up off the earlier lows of the day; however, you can still see that a disastrous quarter causes an atrocious stock move for shareholders today, who im sure are not pleased that are 14 drop for jcpenney, which already has been struggling over the last 52 weeks, down nearly 50 . They orvel have been working obviously worked hard on changing their plans and presenting the store to the promotions they have taken away and reinstated with ron johnson. Thats something they continue to watch. Gap on the move. The Company Reports after the bell today. Gap, old navy, banana republic, up 2 . Unlike jcpenney, its actually a winner over the last 52 weeks, up 40 . Analysts looking for them to post revenuings of 4. 6 billion. Back to you. Ashley impressive. Thank you very much. Speaking of which, catch full coverage of gaps earnings on after the bell here on the Fox Business Network starting at 4 p. M. Eastern. Lori i wear colored denim while i watch. Ashley very good. Lori you think so . Sequester happens, and then what happens . Lou dobb weighs in ahead. Ashley california bad for business . Thats what rick perry said on a recruiting trip to the golden state. Californias governor, jerry brown, is firing back. Thats next. Shes always been able to brighten your day. Itjust her way. Butthat could be a questionon of blood flow. Cialisadalafil for daily use helps you be Ready Anytime the moments 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 drink alcohol in excess with cialis. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, seek immediate medical help for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a 30tablet free trial. train horn vo wherever our trains go, the economy comes to life. Norfolk southern. One line, infinite possibilities. This is your fox news minute. In a fair well speech to cardinals today, Pope Benedict is promising reverence and obedience to the successor. Monday, they get together to set the date for the conclave to choose the next pope. The former Prime Minister being investigated for allegedly bribing a senator with almost 4 million to switch parties and support him back in 2006. The attorney calling the acquisition groundless, and he and his party came in a close second in this weeks lexes that failed to form a new government. Bradley manning, the army private charged in the biggest leak of classified material in u. S. History, offers guilty pleas for ten of the 22 charges against him. He would be pleading guilty to sending hundreds of thousands of classified documents to the wikileaks welcomes, and if the judge accepts it, he faces 20 years in prison. Those are the latest headlines, back to ashley. Ashley thank you so much. We appreciate that. All right, stock alert. Dow hitting session highs adding to gains after the big jumps seen over the past two sessions. 50 points shy of the alltime high. Were on track for all three averages, and that makeses it, by the way, four straight. Look at the leaders on the dow right now including cocacola, verizon, and the big winner, hp. The market continues its climb north. Lori california bad for business . Thats what Texas Governor rick perry said on a recruiting trip pointing a finger at the states high tax burden. We are live in california with more on the tax plight from california. Adam . Well, the people here in california feel the finger that governor perry pointed at them was not number one. It was bad for business here in california, so governor jerry brown responded. Heres what he told fox business. Do you think if a few tricks from a politician makes a difference . People invest money where they think theres a return. The ideas, the infrastructure, the climate, the opportunity is right here on the pacific rim. It may be here, but theres no escaping the fact that a lot of businesses feel that this is a state thats very difficult to do business in. For instance, lets take a look at one of the tax structures they have to deal with in california. The state Capital Gains rate combined with the federal Capital Gains rate compared to some other countries. For instance, denmark, that combines tax rate with 42 , california, its 33 . France, 32. 5 . And new york, 31. 4 . Talk about the Business Climate in california, 9,000 jobs a year depending on which Research Firm you go to, 9,000 lost because firms close or move out. Heres how Governor Brown responded to that. California attracts Foreign Investment since the gold rush. Sometimes it slips back, sometimes it takes a wrong turn, but over the years and decades, its been upward and on ward. When i was governor the first time, the income of california was 150 billion. Now its close to 2 trillion. This is where the new industries are, the creativity, the movies the internet, google, apple, and all the rest of that. Facebook. When you talk about on ward and upward, california and texas lead the nation in job creation, but a recent survey by the business round table in california of Business Leaders, 62 of Business Leaders say its harder to do business in california than other states. Its one of the reasons that arizona and fairfax county, virginia opened offices here to not only recruit, but help businesses relocate and open offices in their communities. Were going to be talking with the governor of arizona coming up on fox business, and then were going to be speaking with garch on how to get the state a more friendly business environment. All right, thank you. Student loan debt on the rise. According to a new report from the Federal Reserve bank of new york, 35 of people under the age of 30 are at least 90 days late on their student loan payments, a 9 increase from 2008 and a 14 increase from 2004. Thats not all thats rising. More students taking out loans to pay for college. 43 of 25yearolds had education debt in 2012. That is a 10 jump from four years ago. Now, the higher number of late loans points to adults unable to find jobs and debates the real value of a college education. Lori a vicious circle of the low cost borrowing, helps the university and academic institutions, raise tuition saying Student Loan Debt is the next bubble to burst. Ashley horrible to graduate without a job scene have hundreds of thousands of debt. Lori you said it. When the sequester hits, will you notice . Ashley the sky is falling hype, straight ahead, lou dobbs is here. Lori speaking of flying high, new highs, who is up and down . Most of the components on the dow surfing the wave today. Cisco just kicked lower, but, really five stocks down, 25 up. Thanks for helping me with that. That was tough. Back after this. Announcer you never know when, but thieves can steal your identity and turn your life upside down. Hi. Hi. You know, i can save you 15 today if you open up a charge card account with us. You just read my mind announcer just one little piece of information and they can open bogusccounts, stealing your credit, your money and ruining your reputation. 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You have so much to protect and nothing to lose when you call lifelock now to get two full months of Identity Theft protection risk free. Thats right, 60 days riskfree. Use promo code gethelp. If youre not completely satisfied, notify lifelock and you wont pay a cent. Order now and also get this shredder to keep your documents out of the wrong hands a 29 dollar value, free. Get protected now. Call the number on your screen or go to lifelock. Com to try lifelock protection risk free for a full 60 days. Use promo code gethelp. Plus get this document shredde free but only if you act right now. Call the number on your screen now lori time for another edition of stocks now with nicole covering the floor of the new york stock exchange. Were less than 50 points here on the dow from an alltime high. It sure is pretty exciting, lori. It is getting hot in here, right . Were getting closer and closer to the alltime closing high on the Dow Jones Industrial average. We have this great graphic well show you. The record closing high back on october 9th, it was 14,164 and change. I is just moments before we launched the Fox Business Network. But were not too far off those levels now at 14,121. When you look at the Dow Jones Industrial average, most of the names on the dow actually have up arrows. The vix, the fear index, has pulled back. Names as home depot, at t, verizon leading the way on the Dow Jones Industrial average. The best performer today sup 2 and that is hewlettpackard. Just a handful of names with red arrows. For the most part it is all green right now and were up 43 points on wall street getting close to the alltime highs. Back to you. Lori thank you, nicole. Ashley are we less than two days away from absolute economic armageddon . Lori according to the president , yes. Ashley listen to recent warnings from president obamas cabinet members. Kids are going to get hurt. Kids will get hurt that is just reality. There are things well not be able to do as well, like secure between the ports of entry on the land borders. There will be pain and the American People will be less safe. Cuts to budget mean preventative maintenance and quick repair of runway equipment might not be possible. Lori . Ashley pain, hurt, safety. But if you listen to the American People, sound a little bit different. According to a gallup poll, 37 said they would tell the members of congress to let the spending cuts go as scheduled you would. 45 said they would like to see Congress Pass a measure averdict cuts. Not exactly overwhelming number that reflects alarm bells weve been hearing. Time for lou dobbs to jump in. The sky will not fall, is it . I cant imagine how anybody would have gotten that position. Dont you love janet napolitano. Ashley land borders. Land borders. The borders she refuses to secure. These are some of the silliest people who have ever served in the United States government, folks. It is that simple. I said on my broadcast last night what were watching is the most farcical administration that i can recall. It is pitiful to watch, really. Were talking about, as, finally the Congressional Budget Office came out with a statement on the actual costs of sequestration will be, in outlays, for fiscal 2013, 44 billion. About 1 of the total budget. And you listen, as we did to the surrogates from the cabinet of this great presidency and you would think, as you say, the sky is falling. That the economy will just be destroyed. These folks are going to be held accountable, at least in the public consciousness, if not the public conscience come monday when the world is not an entirely different place. This is the height of irresponsibility. We have bob woodward being attacked viciously by this white house because he had the guts to say, he hasnt seen this kind of madness in a long time. And they, david plouffe, attacking the man. Viciously. I got to tell you. This is scurrilous what this administration is doing. There is nothing funny bit. And it is an idealogical and political attack which i will say to you, david plouffe, and to the obama white house, you will regret. Ashley the question on impact to the u. S. Economy, buried in the weeds this week, ben bernanke, Federal Reserve chairman said, well sequestration might shave off 40 basis points. A half a percent but later in the year it should bounce right book. It will not do a thing. These markets, where are these markets . You just showed us. 40 points from an alltime high. Investors are telling the administration to. Lori that was a better hand gesture than napolitano. More of an arm gesture. These markets are saying youre behaving like idiots in washington. We have no time for it. We have a vote coming up on a republican plan that would effectively turn over to the administration, the power for 85 billion in cuts. This is a gambit by the Republican Party in the midst of a very important moment in history and theyre political cuteness just overwhelmed them. This is crazy. Lori do you think the republicans will be able to stick by their guns and prevent anymore tax revenue increases . How do you think this will all sort out . I think it will basically go ahead. It will amount to nothing. If the Republican Party is not careful here, if the Republican Party is not careful here, they are going to seal their fate because they are acting with many voices, with many views, instead of one voice and one view, and one direction in the National Interest in perfect public view. That has consequences. Ashley is the gop split as you now as you suggest . You have the hard right and the moderates. There is no Common Ground between those two . Ashley, it is more than conservatives and liberals within the Republican Party itself. This is a contest, i mean youve got eric cantor and john boehner. It is hard to describe them as significantly principled conservatives. Its impossible to call them much more than moderate. But yet there is a contest, if you will, that, for anonymity, for whatever reason, they simply cant find a message, a position, that they hoed so dear that they will go forward with a message. And that seems to be the problem, you know, i was talking with senator john barosso, to i who i think is one. Finest senators in this country and he is a clear and intelligent voice. There are few right now operating. We watched the republican speckel of challenging chuck halg hagel and two weeks vote for him. Lori only four right . Four voted for him but they had to permit cloture. Lori a technicality. A technicality that matters. Ashley lou dobbs, thank you as always for being here. Thank you. Ashley dont forget lou, you can see him every day at this time. Of course it is at 7 00 and 10 00 p. M. Eastern tonight, you can catch bullies, veteran Journalist Bob Woodward and the obama administration. Woodward claimed the administration threatened him for simply telling the truth about sequestration. Lori im on lous ateam tonight. Ashley whats that . Lori im on lous ateam. Ashley wow allstar cast. We mean a. Ashley aplus team. Lori im shameless. Ashley you are. Thats okay. Lori investors weighing if they should pull out of troubled hedge fund sac capital. Charlie gasparino has the exclusive new details next. Ashley will today be the day . The dow is closing in on a all had of time. Ail time high. As we head into break hear is the 10 and 30year treasury. [ cows moo ] [ sizzling ] more rain. [ thunder rumbles ] [ male announcer ] when the world moves. Futures move first. Learn futures from experienced pr with dedicated chats and daily live webinars. And trade with papermoney to testdrive the market. All on thinkorswim. From td ameritrade. You are gonna need a wingman. And my cash back keeps the party going. But my Airline Miles take it worldwide. [ male announcer ] it shouldnt be this hard. With creditcards. Com, its easy to search hundreds of cards and apply online. Creditcards. Com. Im Dennis Kneale with your fox business brief. The International Monetary fund warning it will likely cut the growth forecasts for the United States and the Global Economy if automatic spending cuts take effect in the u. S. Tomorrow. Imf is saying that the biggest trading partners with the u. S. Likely to be most effected by the impact of the socalled sequester. Food and Drug Administration commissioner Margaret Hamburg has a warning of her own. She says the upcoming spending cuts will mean fewer food safety inspections and increased risk to the consumer. The cuts could delay the new food safety law requiring the agency to boost inspection. Looking for a way to reduce stress at work . Brink fido. A virginia commonwealth study said that bringing pets to work reduces the stress. That is the latest from fox business, giving you the power to prosper lori what is. Ashley what is the test used by major investors deciding whether or not to yank money out of the troubled hedge fund sac capital . Charlie gasparino has the exclusive new details. He joins us by phone. Charlie, what have you found out . As you guys know 1. 7 billion has been yanked out of sac capital. That will come out over the next year the way the schedule works. We should point out the next redemption date, that was the past redemption date in february. The next redemption date will be in may. There are a lot of people weighing their odds and looking at their options whether to take money out. Here are the four things. Im getting this from major investors, people at blackstone, major investors have big money in there and still have not taken all of it out. What theyre looking essentially is management turnover. Number one, very low management turnover at sac capital. Number two, returns. We should point out sac has pretty good returns. N january of this year they are up 2 . Number three. This is kind of huge. Theyre looking at whats known as the statute of limitations involving steve cone. Now heres the key. The, one of the big cases that are out there involving cohen, including this matthew martola business, the statute of limitations ends in july. Every day we get closer to that, looks like steve cohen will not get indicted. Those are the basic tests here. I could tell you that everything is basically panning out okay for sac capital. We should point out that investors kind of like some redemptions. Guess what . When a firm like this, 14 billion under management gets smaller it is easier to manage. You can make more money out of it. Sac has its own capital of their members. Steve cohen has 6 billion. Partners have another two billion. It is still formidable without the outside money. The big things, guys, is the indictment. And will the statute of limitations run out. I tell you that july date is pretty key. Thats when it is over. If they dont bring a case against him by july, what a lot of big investors are saying they probably wont bring a case because a lot of these charges stem from 2008, and before. And by the way, there is five years for you right there. Thats where we are right now. May is a big date in terms of redemptions. If they think that, that cohen could get indicted between may and june and may and july, you could see a lot more money coming out. Billions. I would say much more than 1. 7 billion. It all depends. Does the guy that has been indicted on that one big kise does he flip and doesnt look like he will. Listen, this is a bet. Like the market. The betting right now is that every day it gets closer to july, money will not come out. Steve cohen survives. Ashley charlie, quickly, you can only take out 25 per quarter. It would take you a year so get all your money out anyway, right . Yeah. But still, when you start, you know, pulling the plug its a cascading effect. And you know, yes, you cant pull it out all at once. It looks like he is getting indicted. Im not saying he is. It is clear that the government wants matthew martima to flip. There has been no secret about that every day closer to july he doesnt, guess what . It is, steve cohen must be doing high fives. That is the potentially the due date. Ashley very good stuff. Charlie gasparino. Charlie, thanks for joining us with the latest on sac capital. Very interesting. Lori lets check with markets with nicole on the floor of the new york stock exchange. Were get being ever so close to the alltime record on the dow. Not the alltime, i should be clear. A record on the dow. Youre right. It would be our alltime closing high, lori. Youre right on the money with that one. Thats what were looking at here. October 9th of 2007, we set the alltime closing high of 14,164. As you can see here were about 40 points away. Obviously is a really big deal. The vix, the fear index, it taking a big breather. You may remember earlier in the week, remember monday we lost over 200 points and the vix had been surging about 34 going into the closing bell . We completely erased what we saw in those gains on the vix, right . The fears and concerns that have been, concerns about the economy, concerns about what the fed might think, and concerns about italy and their austerity measures and whether or not they would continue with that and of course the sequestration tomorrow, that seems to be the one remaining factor, the one wildcard but other than that we obviously had very accommodative Monetary Policy here and abroad. It gives the opportunity for the markets to take off to get closer to the record highs. Thank you. Lori thanks, nicole for clarifying that. It is so fascinating youre not seeing a rush to the exits a day before the sequestration. Ashley not at all. Lori that sends so much. That the market is confidence. Ashley hohum. Lori exactly. Ashley the dow and s p as we know flirting with new highs. Lets see what traders are saying in pits of the cme. Sandra smith has reaction in todays trade. Sandra. Hey, ashley. It is real interesting. Things are settling down here in the cme group in chicago. Traders are in the wait and see mode. We have the rally on hand with the dow up 47 points. You see in the background the calm has set in, wait and see marked for identification for the end of the day. Will we hang onto the gains . Will we hit the alltime high on the dow . Traders expected a little bit of pushback in the stock market. Not getting any of that. They were using the fiscal cliff action as sort of a guideline of the doesnt seem to be a blueprint for budget talks so to speak. Traders waiting to see how we wrap up the day. A lot of people are looking at the fact Goldman Sachs pud out a report heading to this week that hedge fund were most exposed to the stock market than they have been in six years. Everybody is watching the stock market. Guess what, guys . As the stock market continues to rally, money flows out of the Precious Metals markets. Gold and silver both getting hit today. Were watching it for you guys. Back to you. Lori . Ashley good point on that, sandra. Thank you very much. Lori pandora users there are new rules if you listen to the online station on the mobile phone. Reaction next. Ashley look at some of the days winners and losers on the nasdaq as we head to break. [ lisa ] my names lisa, and chantix helped me quit. I honestly loved sming, and i honestly didnt think i would ever quit. [ male announcer ] along with support, chantix is proven to help people quit smoking. It reduces the urge to smoke. It put me at ease that you could smoke on the first week. 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Ashley pandora changing its tune and placing a limit on free listening for mobil. Shibani joshi has all the details. The fact we get free streaming music is pretty remarkable. You expect as the years and industry evolve that is going to change and pandora is getting hip with all of that making small incremental changes to try to bring in incremental revenue. There is two ways to look at it. The stock price is down reacting favorably to the news, when the news leaked on tuesday night. Yesterday it was up. Trading a little bit lower here. Pandora shareholders are looking for important measures to deal, these important measures to deal with rising costs 6 acquiring new music. The cost of act choiring acquiring new music take up to 60 of revenues. This is good news or a winwin for pandora. Shareholders and pandora users are scratching their head what will happen. Tim westergren is a great music lover and great entrepreneur in the industry. Saying the per track royalty rates have increased more than 25 over the last three years and are scheduled to increase an additional 6 over the next two years. But heres a catch here. The limit is, 40 hours per week. And that is, a small sliver of the affected user base. If nct they think only 2. 6 million users will be impacted. The company has 65 million users overall. Stifel nicolaus very happy billion this move reiterating a buy on pandora shares saying mobile listening cap, this mobile listening cap could generate significant cost savings and have to be good for margins. Overall a winwin, affecting a very small percentage of the population. Ashley . Lori . Ashley interesting. Shibani joshi, thank you so much. Lori here is an interesting economic indicator. The tooth fairy. Looks like she is loosening up her purse strings. A new poll by delta dental the average tooth in 2012 was worth 2. 42. Up more than 15 from 2011 but this could mean more than just some good news for kids. Parents annual tooth fairy payments have been used to predict the state of the economy and if this highly scientific index is correct, this year will be a great one for the markets. Just look at the dow today, flirting with a record. Ashley i would love ben bernanke to testify in front of the Senate Banking committee and cite the latest study on the tooth fairy. What i want to know how did it come out to 2. 42 . That means there are twigses. Dont you give go bucks, five bucks. Lori children lose their teeth and lose one or two at a time. It is average. Let me tell you something. If i put two bucks under the pillow would not be satisfied. Ashley the wow. Lori okay. We do have an alltime high on the dow, 14,000 oh, not yet. Misunderstood my direction. Ashley 34 points away from. Lori 34 points shy. Still a firm gain. 57 points. 14,132. Ashley were keeping an eye on that. Tracy byrnes and i will take you through the next hour of trading. He went from shorting apple to buying it. Zacks senior strategist jared levy will tell us why he changed his mind. Dont go away. Well be right back. [ male announcer ] hodo you engineer a true automotive breakthrough . You give it bold new styling, unsurpass luxury and nearly 1,000 improvements. Introducing the redesigned 2013 glk. See your authorized mercedesbenz dealer for exceptional offers through mercedesbenz financial services. Tracy hey, goods afternoon, im tracy byrnes. Ashley im ashley webster. Getting closer. The dow is at session highs. Now within about 37 points or there abouts of hitting its alltime closing high. It could break the milestone at any moment. Were watching for it of course all hour. Tracy and two lastditch efforts to stop automatic spending cuts just hours away and will they work . I doubt it. Sorry. The latest developments ahead. Plus what will really happen on day one . Will it be less chaotic than some in washington want us to believe . Ashley will we survive . Golden state grab. Arizona and other states setting up shop inside of california trying to lure away taxweary businesses. Arizona governor jan brewer will tell us whether it is working or not straight ahead. Tracy it is top of the hour. Time for stocks as we do every 15 minutes. Nicole petallides on the floor of the exchange. Up 54 points. A big difference when i talked to you at noon. Right. This is really an exciting time for wall street especially for everybody who lost so much during the financial crisis when we saw the dow down to 6500. Back in 2007 these were the levels where we were. We are just about 30 points or so, give a little more than at that, away from our alltime closing high set back in october of 2007. The Dow Jones Industrials right now gaining almost half of 1 . There you go. 34 points to be exact, away from our alltime closing high set back on october 9th. The majority of the sectors are in the green. The vix, fear index has completely erased obviously all that worry that we saw on monday. Actually turned into the red. Were watching most of the sectors here. Drug stocks, bank stocks, retailers. Banks are lagging a little bit, doing very well. Less concern about europe. Less concern about the fed. A little focus still of course on washington for tomorrow. You should say were having a winning month and obviously alltime highs taking a look at. Back to you. Good stuff, nicole. We like to hear that see you in 15 minutes. Ashley with the market closing in on another winning month how long can this rally last . That is what everyone is asking. Joining us chad morgan lander, Portfolio Manager at stifel nicolaus. Chad, look, as the markets edge toward these alltime highs, the Economic Data anemic. Heading in the right direction but not very quickly. The fed is printing money happily. Is the rally fact or fiction . Well its fact. I mean you have a liquidit liquiditydrawn rally and we believe that the rally could continue up to around 1575 for the s p 500. But we have to have a handoff between a liquidit liquiditydriven rally and actually an earningsdriven rally. Anything past 1575 we would be more comfortable if we started to see earning growth for the s p. Earnings growth for the s p for q4 of last year was only around 3. 6 . So it was rather lackluster. We need to see a reacceleration of that. Ashley so what is driving the markets . You say it is a twopart story. Explain. Well, you have the liquidity event, right . The Federal Reserve will continue to push on the gas accelerator. A rough estimate of 85 billion every month. And we think thats going to continue well into 2014. But also what you have happening here, you have a growth story on the economy. The economy seems to be improving. You are starting to see the Real Estate Market improve. So now you have housing prices being lifted. Youre starting to see manufacturing here in the United States slowly improve. And also, global, Global Growth is slowly improving and reaccelerating. But what we really need to see again, ashley, you need to see this turn into an earnings driven kind of rally. Ashley in the meantime, what are you telling your clients right now . How do they play this environment . So, on our allcap equity portfolio were right now overweight Technology Stocks and several Technology Companies that we have in our portfolio are the likes of cisco, oracle, and accenture. All three of these companies are trading with a, a lower multiple than the s p 500. Theyre all consistently growing. And theyre quite profitable. And they have very little debt actually. Ashley it is interesting you mentioned tech because you have the likes of apple and facebook and google. Would you buy those stocks on the dip right now . Well, we would be buying those stocks on the dip. The likes of apple, for example, that is also and in our portfolio. We do like that. It has about 125 of cash on its Balance Sheet. Its got a very good earnings yield and we think though, that just because of the debate about, what theyre going to do with the cash on their Balance Sheet, were looking more towards apple for innovative story. That they will continue to come out with hightech cell phones that population are going to want and it will be a growth story for the coming years. Ashley how concerned are you about europe . It has been lurking back there. It has been back in the headlines with the italian election. Could this be a year, it has been off the radar for a little while. Are you concerned that could flare up and hurt the markets here . That is definitely on the radar screen and the european issue in general is somewhat sluggish. In fact it is contracting. The european economy is contracting by half a percent in 2013. And in 2014 perhaps it will still be contracting. The italian issue though is a very special issue because the more populist vote is starting to become more of the majority. I think thats still though has several years to play out before it becomes quite disruptive to the equity markets you about it is something to keep in mind from a risk perspective. Ashley chad, before we have to end this conversation what target do yyu have on the s p . Well 1575 on the s p 500, and that would indicate from here on in for the end of the year of total return of around 6 . For the ten year bond, we think the 10year treasury will trade around 2 to 2. 25 . Ashley very good. Lots of great information. Chad morganlander with stifel nicolaus. Thanks so much. Thank you for having me, ashley. Tracy were less than 36 hours from the socalled results of the sequester. We need it. Shirts for that. There are lastditch efforts to try to avert 85 billion in automatic spending cuts. Our rich edson is capitol hill. Everyone is waiting for the sky to fall, rich. What the heck. If that is what is going to happen. At least seems doubtful at least friday this isnt going to be avoided. The senate will vote on two proposals in what you call a lastditch effort to avoid automatic spending cuts set to begin tomorrow. Both will fail. The republican proposal louse the president to move money from one area to the next to at least lessen the blow of these spending cuts. The democratic proposal, it replaces almost one full year of these spending cuts with other spending cuts and tax increases over the next decade. Both proposals will fail. And so basically you have had republican and Democratic Leaders out all day with no change in position, or rhetoric. If you address the tax expenditure issue, it will limit the amount of deductions people can take you will have a fairer tax system and you will not have to then take food out of the mouths of seen jurors. How much more money do we want to steal from the American People to fund more government . Im for no more. The house is done for the day after these votes. The senate will be done for the week. That is about it for them. Theyre not coming in tomorrow. Congressional leaders head to the white house to talk to the president. Something republicans have called little more than a photoopportunity. Back to you. Tracy we have had lots of those lately, rich edson. Lots of photoops. Thank you, sir. Ashley and little else. Another battle is escalating over the spending cuts but this one between the white house and legendary reporter bob woodward. The white house is denying woodwards claim, a quote, a very Senior Member the administration told him he would regret his reporting on the sequester. Fox news has learned the source of the alleged threat was National Economic Council Director gene sperling. Woodward reported that the automatic spending cuts were the white houses idea and president obama was trying to remove the goalposts by replacing the sequester with tax hikes and spending cuts instead of just spending cuts. The white house denies that but says no threat was intended. Former obama aid david plouffe, tweeted quote, watching woodward is the last two days, imagining my died Dole Mike Schmidt facing live pitching again. Perfection gained once is rarely repeated. Tracy unnecessary, mr. Plouffe. Ashley getting ugly. Tracy you know what . He is right. Woodward is right. How about that . Ashley he picked on the wrong guy. Tracy bigtime. What happens on day one of the spending cuts . Will the sky fall . Will teachers really be laid off and airplanes grounded as some want you to believe . Peter barnes will bring reality back next. Ashley plus, california poaching. Arizona governor jan brewer tells us how her state is selling itself to California Companies fed up with high taxes. 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Tdd 18003452550 ive also got a dedicated team of schwab trading specialists. Tdd 18003452550 with no trade minimums. All this tdd 18003452550 and only 8. 95 a trade. Tdd 18003452550 after all, im in is to win, right . Tdd 18003452550 open a schwab account and you can earn up to 600 cash tdd 18003452550 and 150 commissionfree online trades. Tdd 18003452550 call 18883334034. Tracy that time of day. We have to make a little money with charles payne. This hour charles is hoping Investors Cash in on a major cloud and web hosting pioneer that this stuff confuses me. It does confuse everyone, rack space. Made a lot of fun of the name. Tracy fresh off my sexual harrassment seminar. Ashley obviously didnt learn anything. Does anyone ever learn things from those . Rack space, until recently this was a mindboggling company. If you look up the last five years, the stock went from five to whatever a gazillion dollars a share. Got ush crushed here recently. With the cloud obviously you have more competition. In addition to that, there is more and more technology coming out. Some of this new Technology Comes online it hurts them. These guys have to cut their prices by 33 . Ashley ouch. It really crushed the stock bigtime, but, bouncing off. Ashley hate it when that happens. That is pretty clear. But i think that, it might have hit a bottom, you know. There is nothing clearcut like this. Not a lot of volume. Only thing i did use was a fiveyear chart. This is coming off the bottom of the trading channel. I will tell you there is a big difference between the private cloud and public cloud. These guys do private cloud stuff. In other words they go to the company. They put cloud stuff on top of existing infrastructure where it is a lot more secure. Amazon does the public cloud stuff. Anyone can join amazon to use their cloud stuff. That is growing. This private Cloud Business eventually one estimate, forrester said it will be 159 billion industry by 2020. This company had a major hiccup. I watched it for a long time. It is a amazing momentum stock. The good news when it goes up it goes up but bad news when it goes down it hit as sheer cliff. I think it is oversold here. Everyone is going there, there is no doubt about that. It is just a matter of these guys, they will outgrow the industry next five years. Every agrees. Just having Pricing Power and bringing it to the bottom line. Tracy interesting you have a private cloud and public cloud. Ashley a lot of clouds. A lot of clouds. Tracy can you he bring in the cloud . I dont know. Charles payne. Thank you. Ashley good stuff. It is quarter past or coming up to it. Time to check markets. Nicole at the nyse where we go every 15 minutes. Nicole, getting closer to the alltime closing high. This is a very exciting time, ashley and tracy. Youre talking about the fact were getting closer and closer to the alltime closing high we set back in october 2007. There it is, 14,164. You could see were just 20 one points away. Could today be the day . The vix, fear index pulled back. You have 408 of 5 hundred names in the s p five with up arrows. I want to quickly get through retailers. There were a lot of concerns about jcpenney. They came out with a very dismal fourth quarter. Over 52 weeks it is down almost 50 . There it is down 15 . A quick look at also coles, profit kohls, profit falling. Another name we will continue to follow. Back to you. Ashley nicole, well check back with you in 15 minutes. Tracy you dont want to be jcpenney today. Breaking news ashley. Ashley looks like detroit may get close to a state takeover. Detroits mayor david binge that Governor Rick Snyder will announce tomorrow whether the debtridden city needs emergency manager. The mayor and city council say know because they dont want state coming in. The governor says it may only way to get to the bottom of the huge debt problem. They have a pensions and a mess and dont have a way to. Tracy it is the citys Board Holding them back. Ashley a tremendous amount of people and property they get no taxes on. It is a real mess and sad story. A emergency manager could come in or be nouned or could come in or her tomorrow. Tracy well definitely keep you posted on that. Ashley yeah. Tracy could a new proposal to reduce the deficit coming after your 401 k . Say independent eight so. Well have details to overhaul the tax code next. Ashley first look how the dollar is moving against these foreign currencies. The euro as you can sees, down against the dollar. Under the 1. 31 mark. U. K. Pound making a slight gain against the greenback. Well be right back. But we can still help you see your big picture. 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Order now and also get this shredder to keep your documents out of the wrong hands a 29 dollar value, free. Get protected now. Call the number on your screen or go to lifelock. Com to try lifelock protection risk free for a full 60 days. Use promo code gethelp. Pluset this document shredder free but only if you act right now. Call the number on your screen now 20 minutes past the hour right now. Im jamie colby. This is your fox news minute. Well, its happened and its changed. Benedict xvi papacy is over. The first pope to retire in 600 years will now be known as pope emeritus. In his Farewell Speech to the cardinals he promised unconditional reference and obedience to whoever his successor is. Secretary of state Hillary Clinton said the u. S. Will help Syrian Rebels with 60 million in nonlethal assistance. That is medical supplies and food that will go directly to Syrian Rebels for the very first time. Aid does not include any weapons or armored vehicles. Bradley manning, the army private charged in the biggest leak of classified material in u. S. History is offering a guilty plea to 10 of 22 charges against him. Manning would plead guilty sending00 of thoses of classified documents to the wikileaks website. If the judge accepts the plea, manning faces up to 20 years in prison. Those are the latest headlines. Im jamie colby. I will send it back to tracy. Tracy jamie colby, thanks very much. Sure thing. Tracy concerns about spend having raised calls for a complete overhaul of the tax code. Now theres talk that tax breaks like your 401 k could be at risk but our next guest wrote a report expanding tax breaks to more americans and small businesses. She is the Vice President and codirector of the economic studies at brookings institute. Karen, thanks for being with us right now. Youre thinking there should be more tax breaks for low income, low income taxpayers and small businesses. How come . Well, you know, the paper is really about making the tax code more effective. So the fact is the federal government is spending a ton money on these Retirement Savings programs and it is not clear that these programs are serving their intended purposes. So, you know, much of the subsidy goes to higher income households. I think the thinking there is that those guys do most of the saving and thats entirely correct. But the problem is that these guys are saving a lot anyway and Research Suggests that giving them more of a subsidy doesnt, doesnt encourage them it save more. It real locates savings. Tracy what about people that dont get the tax breaks . Most of them are limited at a certain income tax level anyway. So theyre saving on their own. Lower income people, well thanks to the payroll tax hike they need the money to make the bills. I dont think it has much to do with the tax benefits. Yeah. Well, so thats, that is something that the paper does address. There are, so first of all, there are some families that dont have the income to save but what i share with my numbers there are lots and lots of families, 40 of the American Families dont have large amounts of Financial Assets that could be saving. Yes, theyre not very responsive to the current types of incentives we have in the tax code. What we know does work is 401 k plans. They are easy. Er they, get households over that hurdle figuring out how to do the saving because you can automatically enroll people with contribution raises. That seems to work well. I argue in the paper that it makes sense to try to give firms tax breaks so that they will establish more of these plans. Tracy but, i mean, taking away from the wealthy, they dont get that stuff to begin with, right . Youre limited at 16,000, 17,000 for your 401 k now regardless of your income tax bracket. Cutting deductions and credits for the wealthy will not help the savings problem here. What im proposing we cap the deductions at 28 . It saves a small amount of money and it is enough money to put in some measures that would encourage an expansion of 401 k like accounts and still leave some money left over to help to lower the deficit. Tracy yeah. Well, you know what . You have got to get, you have got to get them to stay away from the 401 k , thats for sure. Karen from the brookings institution. Thank you. Ashley we have breaking news with Nicole Petallides down at the floor of the new york stock exchange. Nicole, what you got . Actually the crowd is behind me, right . You can zoom out and see the big crowd there. Where herbalife is actually halted. It was very interesting. Right. You had news pending. Thats why we saw it halted. Were talking now about new members being moved to the board of herbalife, carl icahns favorite. That is obviously what were watching for as far as the headlines crossing. You can see the stock which obviously since the middle of december has been jerked around with so much volatility based on carl icahn, also ackman over at pershing square. Is it a ponzi scheme . Is it a Great Company . They clearly denied that. Carl icahn stood behind the company while ackman stood by his claims. Really their accounting seems a little fuzzy to him. So over the last, since the middle of december weve really seen this stock going back and forth. Today is no different. As you can sigh the crowd is back there, continue to follow it. Go into the crowd and try to get a feel when it may reopen. As we noted they will nominate two icahn representatives to the board and that was something that everybody had speculated and of course carl icahn has been a real supporter of herbalife, unlike ackman of pershing who has been obviously a big, big, critic. Back to you. Ashley yeah. The question remains is it more a case of icahn hating ackman so taking the opposite stance on herbalife. Thank you, nicole. Well keep an eye on that. The dow as we know within striking distance of a alltime high. What will it take to cross the milestone. Sandra smith talking with traders in the cme in the pits talking about todays trade. Ive been talking to them. A lot of traders expecting some sort of pullback considering were 19 points shy in the dow right now of that alltime high. Not getting that pushback, in fact right now. In fact the dow is up 69 points right near the highs of the session. So, traders are making bets and placing those bets on the table whether or not were going to close at that new high today. A lot of them are leaning towards, were going to see buyers flood into the end of the market today. S p 500, by the way, most professionable traders watches s p. If you look at 1624, it is three away from its alltime high. But it is hitting key Technical Levels sitting at 1524. Its alltime high by the way . 1565. The nasdaq a far cry from the 2000 high it hit. It is 30 7 off its high. Look at oil prices. Commodities are also moving today. While stocks go up, money goes into the stock market out of the commodities market. Oil prices are down, gold, silver, getting kicked around. Silver is down for the eight of the last he have 11 last trading sessions, guys. There is bearishness. Money is coming out and following a stock market rally. Everybody is waiting to see how things wrap up the day. Back to you. Ashley sandra, thank you very much. Senior editor charlie brady, 33 stocks hitting alltime highs today including clorox, general mills. Consumer staples. 33 stocks hitting alltime high. Tracy stocks are still going up. A lot of people called for the end of that rally, right . Billions in automatic spending cuts just hours away. You might not feel their effects right away. Peter barnes will tell you everything you need to know next. Ashley first lets take a look at some of todays winners and losers on the s p. Well be right back. Break break news, charlie joining us on the phone with the latest news concerning herbal life. Charlie, shares, of course, started trading, again, but whats the latest you heard . We have carl icon getting much more deeply involved in the company. Either he really hates bill akman, which we know, or he theys that herbal life is an amazing company. This is is this is what hes done, he upped his stake slightly. There was rumors all week. Its somewhat below 13, and now its at 13. 6 . Moreover, he gets two board seats honor for life, gets two seats, icon partners, whatever the companys name is, hes going to get two seats on the companys board, and on top of that, hes got the ability now, according to the press release and what they say is hes got the authority to buy and increase the stake another 25 . Its interesting news. Guys, whats the stock doing right now in its up nearly 7 now, charlie, up 2. 5, 6. 67 . Caller there you have it. This shows you the power of the social media, power of twitter, and the power of rue moeings. Over the last couple days, ive gotten people on my twitter page saying we understand youre going to break a story about carl upping his stake. Im not kidding you. I can show you the messages. What i told them is, you know, i dont know hes upping the stake, and im not interviewing him, but i tried to check out the rumor calling him, the company, really got nowhere, but there it is, a day later, two days later, he has upping his stake slightly now. Hes got the authority to up it even more. He has board seats. This is really fascinating. Its fascinating in this way. Carl icon, as you know, for a lot of reasons we dont have to get into, hates bill akman, the famous short seller who says herbal life is a scheme. He is betting with a lot of money now. Its it seems to me well, i mean, carl has money to burn. You know hes worth probably 10 billion, but, you know, you dont go in this much unless purely hatred. He must see something here. Take it for what its worth, people, betting on this stock. I will tell you one thing about herbal life. It is a stock thats heavily traded. Our viewers that trade stocks, you know, this things moves, you know, with a blink, and you know its up 7 now. This is another if youre a bull on this stock, this is another sort of point in your favor. Carl icahn getting in big, a guy with a big track record, goes back many years. Bill has a good track record as well, but thats where we are right now. You know, the storys unfolding. Like i said, you, you know, sometimes theres rumors and then theres rumors. And then we have this. Charlie, as always, thank you very much. Caller any time. The stock was up close to 7 , dropping back just a little bit, but, still, popping on the news that carl icahn increasing his state in herbal life to 13. 6 , and he can take it up to 25 . Right. A good point, this is a lot of money we talk about. Beyond hatred. Beyond the hatred. I think, but what do i know. Charlie knows more than i. Lets go to the floor. Nicole has more on this. Hey, nicole. Thats right. Ten minutes ago, i showed you the crowd standing here when the stock was halted. Look at herbal life, up 6. 8 at 40 even. Also, what do you make of this; right . You know, obviously, some tough bad blood. You think icahn is a true believer in herbal life . Upping the stake in the nature, certainly higher than ordinary get unless he was just going to take the company out. This is about putting bill on his back. You think so, huh . I do. Swressing you say that. Hes been really a very adamant about the fact he thinks the whole thing is a pyramid ponzi scheme and the guy shorting herbal life. Icahn putting guys on the board, two of them, and upping the stake. You dont think hes a long term believer in this one . I cant get inside of mr. Icahns mine and what he does. Thats true. Every move he said and statement made on this deal appears he wants to purr ri bury bill. Thats what hes doing. Once he gets on the board, it will be more difficult to make money. A real battle of the big guys. It really is. Fun to watch actually. Quick on the alltime highs, closer and closer, 25 points away. Yeah, exactly, well see. Somebody wants to push it up there, fundamentals or not, doesnt surprise me a bit. Back to you. Fundamentals or not, thats right. Thank you so much. Like the home run derby, right . Thats true. Fact or fiction, rally, doesnt matter. Tax flight, arizona, trying to recruit tax weary businesses to relocate. Next, the arizona governor, jan brewer, why she says her state is better for business. Of course. First, as we do every day at this time of day, the ten and 30years treasury. Ten year down 1. 89 . In the 30, just slightly down as well. Oh, sorry, unchanged, 3. 1 . Well be right back. [ 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 testdrive the market. All on thinkorswim. From td ameritrade. To fly home for the big family reunion. You must be garths father . Hello. Mother. Mother traveling is easy with the venture card because you can fly airline anytime. Two wds. Double miles this guy can act. Wanna play dodge rock . Oh, you guys and with double miles you can actuay use, you never miss the fun. Beard growing conte and go win whats in your wallet . This is your fox business brief, chrysler adding more than 1200 jobs part of a major investment in transmission and factories in indiana. The ceo says that the auto maker will invest 162 million of plants in the kokomo area. According to the star try tribune, others bid for best buy, but he is trying to regain his position as chairman of the board. A new report from the Federal Reserve bank of new york shows that Young Americans are having a tough time repaying their college loans. 35 of people under the age of 30 were at least 90 days late on student lope payments end of last year. Student loan debt jumped 11 even as other types of borrowing has fallen. Thats the latest on the Fox Business Network giving you the power to prosper. Breaking news oil closing down 71 cents at 92. 05 a barrel, the lowest price so far this year. For the month, oil closing down 5. 6 , its first monthly fall since october. Huh. Weve been talking about california all day. Californias sky high tax inspired several states to actually set up recruiting offices in the golden state to lure away businesses. Adam is live in palo o palo alto with a goff november the state. Whats going on . I have a governor from arizona, jan brewer, joining us live on fox business because arizona, along with communities in virginia and other states, opened offices here, offices that have been open for quite some time to recruit, not only to relocate to their states, but expand in their states. Why is arizona considered california ripe ground, to get businesses to leave . Look at california with everything taking place, we believe arizona, by a long shot, is a lot moretive than what california has to offer. We have statistics why businesses move to arizona. For instance, look at the Corporate Tax rate. In arizona, the Corporate Tax rate is 6. 9 , but in three years, its going to drop 30 . In california, its 8. 4 . Are the businesses, when they talk about at least expanding into arizona, is that one of the issues you hear . Are there other issues . Theres a concern about a lot of business things that impact their businesses, the quality of life, skilled work force state, and when i became governor, it was my major milestone, if you will, of my administration was to make arizona business friendly and let the world know were open for business. When you talk about business friendly, there was a survey done here in california by the business round table, and 62 of the Business Leader surveyed said this state is very difficult, californias difficult to do business in. You talk about arizona. The cost of doing business is much cheaper in a place like phoenix. We have statistics, i dont think well pull the graphic, but, for instance, in phoenix, median price for a family home, 159,000. San jose, the area here in california, 535,000. To attract business, you look at the cost of labor and housing. Its a player for you . A huge player. Its the quality of life. A great lifestyle, the quality of life in a very much less expense. What i did when i became governor, the day i was sworn in, is i put a moratorium on rules and regulations, which in california, is a killer. You know, it makes business not able to function. Theres a moratorium for stability. Thats one of the things the Business Leaders we speak to here talk about being a negative for california, the regulation. Theres fact that states will sometimes offer incentives for businesses to relocate or expand. Arizona offers incentives, but its done differently in other states, that, fringe, if you have a tax credit for research and development. Intel expanding investments in arizona, but they dont get the tax credit until they meet a certain threshold . We believe in performance. If they perform, they get the tax incentive. It works well for the state, the taxpayers of arizona, and for the business, and its encouraging to have a goal to reach. Governor of arizona, jan brewer, thank you for joining me. See the governor in a longer form interview at 5 p. M. With melissa francis. She has jamie dimon, and well have the Lieutenant Governor of california to respond to the governor and other critics saying business is bad in california. Well have a response in one hourment back to you. Thank the arizona governor, jan brewer. I love that, she said, we want performance. Thats right. Do something. Put up or shut up. It is a quarter till. Time for stocks, a busy day for nicole on the floor of the new york stock exchain. At one point, 15 points or there abbut. Exciting day; right . An exciting time. Weve been waiting to see how close and how fast wed get back to the highs set back in 2007. As you noted, ashley, its been busy, 15 points from the alltime closing high we set back on object 9th. The vix, the fear index, pulled back. One thing that was concernedd yesterday, for example, gained, didnt see heavy volume. Thats something to watch in the back half of the trading day. Wheres the volume and conviction . However, you have to note theres gainers, retail, drugs, banks, oil services, transports, owl all in a day where the dollar is stronger. Not easy to take off in the mapper with a strong dollar the way we are. Commodities pulling back. Take a look at pandora, certainly, one we continue to watch. They pay a lot in royalties and had rising royalty costs. They are going to introduce a 40hour per month limit on the free listening of, of course, their limit. Down 4. 2 . Back to you. All right, nicole, thank you very much. All right, so can the 2013 rally last all the way into march . Which is tomorrow. [laughter] derek levy is here next. Just one day. Todays winners and lossers on the nasdaq. Well be right back. Friday night, buddy. You are gonna need a wingman. And my cash back keeps the party going. But my Airline Miles take it worldwide. [ male announcer ] it suldnt be this hard. With creditcards. Com, its easy toearch hundreds of cards and apply online. Creditcards. Com. Moodys says they continue to have concerns about companies that borrowed heavily to issue special dividends before that big federal tax hike. Liz mcdonald on this story, joining us with the bottom line, liz . Continuing fallout. Companies trying to beat that year end deadline, that tax hike on dividends rose to nearly 24 under obama care and federal tax code. What we see now is moodys has a report, hey, watch out, theres a bunch of concerns out there, and they are worried about a whole number of companies that have, basically, not just borrowed, but using up the cash on the Balance Sheet to issue the special dividends and advance the tax hikes. Youll see on the screen, that conos is added, and hsa, a hospital operator, and other companies borrowed on the list, but the big deal, watch for the investors, all the stocks, watch out, Balance Sheets could be under pressure. Some of the Companies Used up to 30 or more of the cash equivalent on their Balance Sheets. The fact they are using cash to issue the dividends, thats a big deal to the ratings agencies. They are watching to see if the companies, bow rowing costs or pressure down the road, and any downdraft in the market. Those are the stocks to watch for in case theres any of a downdraft in the market. Back to you. All right, liz, thanks so much. All right. Well, stocks on track to score another winning month. Dow and s p near record highs. Where do we go from here . Joining us with much more, senior equity strategist, jared levy in the house. Thats rare. Good to be here. A good day too, because the weathers been awful. [laughter] what do you think about the market . So so much butter today. So much. I talked for the past two months, i got more bullish. I have not got bullish because the markets are that much better, but its just really theres no other place to go. Yeah. Theres a lot of momentum now, and Economic Data is just sort of status quo, which is fine, and whats interesting is investors are not looking for anything crazy or blowout numbers from anything. Remember, theres the caveat from the fed that if things are too good, we pull the punch bowl. Why not get the retail guy back . Whats that . The retail guy wont come back, you guys, the traders, are the ones making money these days. Thats true. The fact is the retail trader looked around him or her and sees things not good, businesses failing, see Companies Closing down, you know, jpmorgan is laying off folks. The point being is on main street, it has not gotten better, but, remember, its not about objectivity. Its about subjectivity, about what we feel as traders. On the trading side, its moving. The alltime high, you dont buy well tip back 5 . I buy that. You know, im glad you brought it up. Look at the russell 2,000, its been making a series of lower highs and lower lows over the past couple weeks, indicative of pull back. I look at the russell because the small caps, listen, folks invest in small caps take bigger risk. If it looks weak, and if it doesnt hit 919 in the next day, theres a pull back. Watch it closely. Thats all well see is the 4 to 5 , and then we keep going. Where should Retail Investors put the money . Apple, first of all, you were standard mortality standard mortality you were shorting and what are you doing now . Shaken out sort of the, you know, sally come lately traders, and the folks remaining in apple are the die hards. The news is out. You know, we know they have got off track. We know the they will be releasing probably cheaper iphones, good in the short term. I dont like apple long term, its losing its pizazz. If you buy it, its cheap enough, you shouldnt get hurt too too much. Youre buying . Buying it here. Okay. You are buying reits. Theres two on the list. Pmc is one i like. It is one of those stocks where its not wellknown, but what you need to know it this. Its a stock that basically buys disstressed debt. You know, mortgages that are not performing, get them pennys on the dollarment you guys came in in the mess of 2000, 2009, gobbled up the mess and the money. The stocks cheap enough, the earnings growth, a good deal. And beneficial tax treatment on the reit too. Rainier as well. People want to make money with housing with rates low. I dont like housing so much, not jazzed about it. Rainier lumber company, timber. Timber. Price of lumber, through the roof. I know, everyones doing any construction complains about it. You had trees on the list. Thank you so much. Great to be with you. Great stuff. The cachet of Business Class without the heavy ticket price for a small price. Sounds good. United offers average passenger perks with the frequent fliers for as little as nine bucks, uniteds premier access gives priority boarding, zip through the security lines, you might think it upsets the airlines elite high paying business travelers, but they will limit the number of premier customers to avoid hold ups on the jetways so for nine bucks, be a big shot. Liz claman goes through the last hour of trading, one of the tough strategists on wall street of ubs telling us if the rally has legs with the dow near all time highs. Countdown cot countdown to the closing bell, its next