Closing bell is coming up next, everybody. See you tomorrow. Hi, everybody. We enter the final stretch. Welcome to the closing bell. Im Maria Bartiromo at the new york stock exchange. Hi, bill. How you doing, maria . Im bill griffith. Did facebook overpromise and underdeliver . Now what we know what its big mystery announcement is, investors unimpressed. Stock down on record volume today. This may be the day apple closes behind 500. It will be the first time thats happened in 11 months. Herb greenberg is here on why he thinks he could get worse for apple. And the always colorful senator alan simpson is with us, no bigger advocate of getting americas debt and deficit under control, but does he think the debt ceiling is the leverage that republicans should use to get that done . Hell join us exclusively, and i know youre going to ask him about that. Absolutely. Lets check out the action on the street right here. Heres how things are shaping up with less than an hour to go. The Dow Jones Industrial average hitting basically at the highs of the day. Had been down around 60 points earlier. Talking about a gain of 20 points on the blue chip average. Fractional move at 13,527. Nasdaq chart pattern looks similar. Take a look though its negative. Down about nine points on the nasdaq, a quarter points lower and the s p 500 looks like this. Similar chart pattern as the dow up a fraction on the Standard Poors but still thats the high of the afternoon. Lets get more on the markets in todays Closing Bell Exchange by hank smith and steve from comcast funds and our own rick santelli. Hello. Good to see you guys. Thank you so much for joining us. Hank smith, we havent heard from you in a while. Let me kick this off with you. How are you investing going into all of these earnings coming out from the banks this week as ahead of that debt ceiling debate . Sure, maria. Our Equity Portfolios are fully invested. We see no reason 2013 cant deliver very similar returns as 2012 did. The fact is we still have a good fundamental backdrop. The economy is expanding. Its not contracting or growing. Value sheets are strong and valuations are very attractive so what is there not to like . Youre our resident skeptic today, and i would point not to the normal averages that we quote every day, but look at the dow transportation average which could close at an alltime high today. The transportation companies, often a leading indicator for the economy. If they are doing well. Chances are the economy is going to get better. Wouldnt that make you want to buy stocks right now. It does. Were not were actually a little bit more bullish, esespecially the First Six Months of the year. We still are expecting slow growth, commodities where were shorting assets, but in terms of u. S. And in terms of international, we do expect growth, and we are excited about whats happening, but later on in the year i think its going to be another story. What do you mean by that, later on in the year . Whats going to be the upset later on in the year . Theres a lot more issues coming out in terms of europe later in the year. Right now its all about its all about expectations of positive growth that we have in the u. S. , but, you know, we still have issues, and investors have got to focus on weve got an incredible spending problem. Theres still problems in europe so we dont really believe that this year is going to be like last year, but we do expect small positive returns though. Rick santelli, i want to ask you about the race to the bottom in the currency markets. The euro is at an 11month high against the dollar and the yen is scheduled to move lower if the bank of japan wants its way, and a lot of people are saying that could benefit gold in a big way which is starting to move higher again. What do you make of the currency wars going on right now . I think they are going to heat up and the central players where it heats up will be between germans and the japanese over exports of cars, but i agree with you, and i also think that if we look at how they are going to develop in the near term, i would think that the trigger for that will be when the dollar yen, for example, gets above 90 and the euro yen significant levels, and real quickly ive had a lot of emails about problems with our bills, but not the ones that you think. Tbills. At the end of 2011 the last time we had a debt ceiling issue we saw bill rates for four week bills and threemonth bills start to move up. Today we had a onemonth bill auction, trading on at five basis points and the auction went off at 9. 5 basis points and many are attributing to anxieties and rule 2a7 from the s. E. C. Which gives you rules on what kind of time frames can you have with respect to holding in the money funds and a little bit of selling today may be from that group as well. Anxiety over the debt ceiling crisis . Exactly. About getting principal back as ridiculous as it may sound. David, jump in here. Feels like a slow volume day again. Are people waiting on some of the banks earnings because tomorrow weve, of course, got some bigies . Waiting on earnings, but earnings expectations are very low. I think 60 to 70 of stocks will beat their estimates this quarter, and im going to watch for guidance over the balance of the year, maria. Now youll have three guests here who are going to be favorably disposed to the market and that makes me a little bit nervous. Nevertheless i think the average individual investor is skill quite skeptical. Institutional markets are yet, still, and yet 60 of all stocks in the s p are yielding more than the tenyear u. S. Treasury, and that type of environment where dividends are going to grow 10 this year, that can be a good backdrop on stocks like ford that developed its dividend last week, lowes on the Home Improvement side and dresser injuries and transindustries. With all due respect, jpmorgan out yesterday saying that maybe the dividend play is last years play and maybe now is the time to get into riskier assets in equities because they feel like the economy is going to start to pick up. So youre sticking with the dividend play though . I am. For these two reasons. One, bill, the growth of dividends is the story. Not the absolute yield. Its the growth in dividends and that can be names like qualcomm, apple, ford is my example. Second. When investors look much like 1994 and 1999, when Interest Rates went higher, the tenyear treasury was yielding, was returning minus 3 for those two calendar years. People will come back to the stock market, but they will come back to the stock market in the safer yield and dividendgrowing stories. That is why i think the catalyst for david dents will still be in place in respect to what jpmorgan said. There was definitely a sigh of relief after that fiscal cliff deal where dividend taxes just went to 20 . A lot of upset and anticipation that it would go higher but 20 is a great number. Exactly. Steven hammer, setting some highs of the day right now. Youre bullish at least for the shortterm here, how much higher do you go . I have no doubt in the next six months. We could potentially see anywhere from a 5 to 10 increase in the u. S. Stock market, but we need to be cautiously optimistic, and to us its all about earnings and its all about volatility which is why we wait based on risk, and investors need to be cautious to where they invest money and they still need to stick with quality. Okay. Hank smith. Whats going to take us to these new highs, do you think . Well, look, i think weve seen in the beginning of this year finally some money coming out of bond mondayfunds going i equity funds. For five years its been just the opposite so perhaps were at the very beginning of what could be a very powerful trend providing a ton of fuel to the equity markets, and we agree. Look, dividends are still very attractive, as long as you have dividend yields in excess of fixed income yields. This is not a crowded trade. Its only a crowded conversation, so it is still a great opportunity for investors coming out of bond funds to get into dividend payers. What did you say, david . Its the growth in dividends thats the real story. Right. Versus the absolute yield. You vennel to look at utilities to see an underperformer with the high yield versus those companies that are growing the dividend. Thats the key. Good point. Thanks, gentlemen. Appreciate your time. Goldman sachs and chase kicking off the big stream of Bank Earnings coming out tomorrow that maria was mentioning. Kayla tausche has our preview. Reporter five banks on deck this week. Tomorrow were expecting a document dump from jpmorgan, not just its Fourth Quarter earnings, also an exhaustive report on misdoes, record profits and still expected over 24 billion in revenue. The street will be watching Goldman Sachs for big jumps in profit to 378 per share and looking for cues on corporate confidence and wall street compensation. On thursday we have noising files on citigroup and bank of america taking charges from mortgage settlements which could slash b of a shares. 96 cents is what the street expects. Morgan stanley out on friday, and what investors want is questions on restruck tourituri layoffs. Market at the highs of the day. Up just about 19 points. Herb greenberg with a question about apple, the stock in danger of close below 500 a share today and now herb is wondering out loud is apple is out of big ideas. Hes coming up next. And facebooks big idea, the big social search announcement hours ago, investors not cheering this news, not yet, but will Mark Zuckerbergs new idea be a revenue driver . Check it out and after the bell dont miss my exclusive interview with alan simpson. Well get his take on whether the debt ceiling should be used to force spending cuts from the government. [ male announcer ] some day, your life will flash before your eyes. Make it worth watching. The new 2013 lexus ls. An entirely new pursuit. With multiple lacerations to the wing and a fractured beak. Surgery was successful, but he will be in a cast until it is fully healed, possibly several months. So, if the duck isnt able to work, how will he pay for his Living Expenses . Aflac. Like his rent and car payments . Aflac. What about gas and groceries . Aflac. Cell phone . Aflac, but i doubt hell be using his phone for quite a while cause like i said, he has a fractured beak. [ male announcer ] send the aflac duck a getwell card at getwellduck. Com. Welcome back. This is the chart of the day. If this is going to continue right here and close, this is going to be the first time that apple closes below 500 since february of last year. So for this year apple is the worst performing stock on the nasdaq 100 and the second worst on the s p 500, bill. Our Herb Greenberg thinks he knows, why and he says apple may be having what he calls an innovation problem, arguing that new generation of devices like the iphone just are not different enough to make people rush out and buy them. I always do that, jay, think of peter, paul and mary. Jay yarrow from Business Insider argues that a shortterm view of the bigger apple story is what we need right now. Herb, make your case. You have an iphone 4s as you point out and youve been buying other apple things but youre not impressed by the incremental innovation that they have got, right . Whether its an iphone 4s or 5 or mac book pro that i use that is five years old. Weve reached this point like the internet age when were all in and all wired. Apple has done such a great job creating great products that you almost are there where its not incrementally that much better that i need to leap out and buy a new one. Ive got to push back on that one. The Cell Phone Companies and these Technology Names are not necessarily looking at the u. S. Market for the growth. They are looking at the massive population growth outside of the united states. Tim cook says china will be their biggest market. They are looking at population Growth Numbers outside the u. S. And for those folks they are starting not necessarily with the smartphone but with a simple mobile device and thats really what they are betting on. What do you think, jay . I think youre right. Look at the iphone 4 s, can you get any more incremental from the iphone 4, looked exactly like the iphone 4 and what was the iphone 4 s, the best selling iphone of all time. Theres incremental improvements. Doesnt mean people arent buying it. People still appreciate the incremental improvements and to marias point theres a huge market out there. Apple has 5 , 10 , less than 10 of the overall mobile market. Theres still a huge amount of room to grow. Herb, maybe we should ask serie how to solve this. That was an innovation that didnt go the way it should, as was the apple maps. I got the 4s because i was trading up from an older android. If i get tired of this thing. Wait for the next apple device, go over to the android, go back to the android . Will i go back to a blackberry . I dont know. Because we get into this situation where you want something new. You dont want the same old car if your lease is up or buying a new car. This is human nature. Thats kind of not true though, isnt it, because a lot of people just looked at surveys that came out. Theres 70 satisfaction with the iphone. People get locked into the ios ecosystem. Thats the advantage of it. You might be an outlier in that youre willing to flip around from phone to phone. Android to iphone and now you are saying you might. The fact of the matter is they have built this strong ecosystem to say get an ipad and youll like the way that uses. Get an iphone, a mac and whatever else comes down the road. They will work nicely together. Jay just argued against himself because in this case when i agree with you, by the way, jay, and im loathe to probably go somewhere else, but i dont need to rush out and buy it. I just necessarily need. I would like an iphone 5 but theres some issues. Talking about the iphone 6, why go out and buy the iphone 5 if were hearing rumblings of the iphone 6 . Thats what stopped me from getting the iphone 5. All of this talk about apple losing its school and something is going on with innovation coming to a halt, i guess you have to find out if were actually seeing talented employees walk, because at the end of the day when steve jobs was alive you had all these talent xwers followiat all ent engineers following steve to a. Im wonder if theres evidence that some of the engineers are leaving and innovating are going elsewhere. Do we have any evidence of that . That would be a real turning point. I havent seen that. You have someone like Bob Mansfield in charge of hardware engineer who wanted to leave and tim cook got him to stay so they are able to retain the smart poem they want to retain. It might be the level below those guys and when i talk to people that i know in the valley actually talking to the folks at apple and who have been around apple for a long time. They talk about the more midlevel engineers who waited a year and are now sort of looking elsewhere or maybe looking elsewhere. Maybe looking elsewhere. Lets make one point very clear. Apple is a spectacular company. They have done spectacular products. They will be innovating from here until there. Its a question of incrementally making it what we need, the way we did five years ago because everything is getting so much closer. Its like flat screen tvs. Do you really need to go out and buy a new one right now unless theres really something new. Lets face it. Lets face it. The only reason were having this conversation is because of the stock in the last few months has gone from 700 to below 500. If it was still at 700, would we be having this conversation, herb . I wrote a piece in october 2nd making this case. Stock was a lot higher. To your point about this idea of incremental upgrades, this is how apple has always been. Just look at the difference of the first ipad, the second ipad and third ipad. Look at the iphone line, always been incremental in the lineup. This is what apple does. It is incremental. No such thing as a massive change, right . So they have been operating pretty well on this system of incremental upgrades so i dont see why the wheels are going to fall off and people will give up. Remember, even with the android product, people are now adapting that more than they are look, i just think people are going to smartphones. Got their smartphone and have to make a decision when they want to upgrade. Everybodys favorite water cooler discussion right now. What up with apple . Good job, guys. See you a little later. Setting highs for the day but not saying a whole lot. The dow up right now, up about 24 points. And facebooks mystery announcement turned out to be a dud in the eyes of some investors can. A new social search function really help facebook monetize the business . Thats next. And disturbing new data on how often people are tapping into their 401 k retirement plans well before retirement age, and it could affect every single one of us down the line. Big story no one else is talking about. But we got it here on closing bell. Stay tuned for that. [ man ] ive been out there most of my life. You name it. Ive hooked it. But theres one. One thats always eluded me. Thought i had it in the blizzard of 93. Ha never even came close. Sometimes, i actually think its mocking me. [ engine revs ] what . quattro welcome back. Facebook failed to live up to its ipo high and its been the companys big mystery announcement and now failing to live up to expectations. Julia boorstin was there at Mark Zuckerbergs event there and is live from facebook headquarters. Reporter Ceo Mark Zuckerberg unveiled graft search, one of the three most pillar of the company, a way to search people, photos within your social graph. You can see where your friends have visited, find single friends nearby if youre looking to date. Facebook wants users to spend more time in its network giving it more opportunity to show ads. We believe that if we give people the tools to map out this graph then that map that people build can be the basis for building a lot of different kinds of services for connecting. So why is the stock trading lower . Graph search has beta tested for a few thousand people. Doesnt include new ads and isnt on mobile devices. The social network is trying to take a bite out of a number of different businesses now. Google, linkedin and yelp and match. Com and the implications are hunk. Users are pointed to bing search results along with those ads and we can certainly expect facebook to pair ads next to all search results down the line. One thing to keep in mind is that pr