Well talk about it over the coming hour here. We had the best Consumer Sentiment survey in six years this morning, and the market sold off. Around the earnings have not been all that bad. So we have a lot to talk about coming up this hour here. Yeah, and were certainly coming off of the lows right now as we approach the final stretch. The market also keeping a close eye onto drama in d. C. Over the Federal Reserve. Who will be the next chairman after bernanke . So much so today, the white house tried to calm things down by saying, no decision has been made. No decision is imminent. But the Larry Summers rumors are invoking a lot of reaction. Well get the very latest from washington and analysis from our own Steve Liesman and Rick Santelli on the next chairman. Meanwhile, more developments in the government versus steve cohens hedge fund s. A. C. Capital, who not only wants to shutter the firm, but its trying to get all of the money, as well, possibly leaving cohen penniless. Whats behind the move, the outcome could have longreaching consequences. Well deal with that. Such an extraordinary story were on top of. Well bring you the latest. Lets look at the markets. For the week, we have weakness going on. The Dow Jones Industrials average down about 37 points. Look at that chart. Having bounced off of the lows, which were reaching about 11 00 a. M. This morning. And looking very close right now to inching back to the highs of the day. Down 37 points at 15,518 on the Dow Jones Industrials average. Nasdaq looks like this. Similar chart pattern in terms of the bounce. Bouncing off of the lows on the nasdaq, as you can see. We are positive here, just turning positive on the nasdaq, by a fraction at 3,605. Last trade there. And the stand poors index, the similar chart pattern, looking intraday, where the bounce happens about the same time. Were very close to even on the Standard Poors right now, bill. Yeah. And then you factor in the nasdaq, which is having its best week or best month in about a year and a half. The russell 2000, bob pisani, having the best month in almost two years here. Right. Small caps are leading. Thats a sign the u. S. Is still the place to be, even though theres talk about europe bottoming and maybe getting back into emerging markets. Lets look at the trading action today, folks. And we had a little problem earlier on, weakness in japan weighed on the u. S. Didnt like the inflation numbers, the yen went up. Thats always bad. The commodities were weak on china concerns, and some talk about china order commodities to cut production. All of the material stocks were down. And around 11 00, maria right, the market dropped. A comment from the imf essentially scolding the Federal Reserve saying if youre not careful communicating better, improving your transparency, youre going to cause another rise in Interest Rates. Essentially, scolding the fed. That kind of dropped the market, because they warned we could have a rise in rates. Low volumes in the markets, and thats a factor. Two historic highs on earnings. Great numbers from starbucks. Hope you all saw howard on squawk on the street this morning, expanding the products overseas. Expanding innovation here in the united states. Absolutely ten. Were talk ing about comps up. Black decker had good numbers. The doityourself segment is strong. A sign that housing and the Home Improvement market is strong. Here we are, folks, in terms of earnings. Were halfway through. The important thing is, were looking okay for the Third Quarter. 5. 1 rise in earnings expectations for the Third Quarter. Only at 6 going into it. Theyre not dropping it much. Companies are basically promising things will get better. Who knows whether that will happen . Here we are on the week so far, still on the downside. I do want to note transportation stocks really hurt here. Most of the week weve had a lot of the railroads to the weak side. Bill and maria, back to you. All right, bob, thank you very much. Were in this last hour of trading for the week. Markets coming off the morning low, down just 37 on the dow right now. Our Closing Bell Exchange welcoming jerry from oppenheimer and rich peterson from s s p capital, and enjoying the lovely day. Jerry, weve noticed beautiful. Isnt this great . Good for you guys. Weve noticed in the earnings reports once again for another quarter, jerry, good on the bottom line, but what were calling a revenue recession. Why are revenues so light again, do you think . You know, its really hard to know. I mean, everybody says margins cant be sustained where theyve been, where we keep doing better on efficiency, but were not seeing a lot of topline growth. I think the Consumer Confidence number, i think, helps us. Household wealth being a little bit better with the housing market. Going into the third and Fourth Quarter, i think well see a pickup in revenue. But clearly, consumers have been conservative, and especially businesses have been very careful about Capital Investment and about hiring, and thats, i think, ckept revenues down even as businesses are making good money. What will it take, rich, to move the needle on that . Jerry makes the right point. Were seeing earnings growth, but revenue is in decline. With regard to revenue, its not a new phenomenon. Weve been experiencing it since the Fourth Quarter of 2011. Last year, we had 4 revenue growth, this year only 2 . The other story is about earnings. The fact that alcoa reported back on april 8th, expectations for less than 3 . Now at 4. 5 . However, if you strip out the financials, the numbers have come down. Exfinancials, down less than 1 ,. 8 . So its all financials . A combination from the fed. In fact, seven of the ten s p 500 sectors have seen declines in expectations, only discretionary, financials, have risen in terms of growth expectations from april 8th. Yeah, rich, rich, the softness the softness in revenue and the better bottom lines cant go on forever. You know, theres only so much cost cutting you can do or whatever it is theyre doing to improve the bottom line. How much longer can we put up with this, rich . Well, you know, again, i think, bill, managers are really trying to address a variety of different factors. The factors, all of the cash on the Balance Sheet and they dont know what to do with it. The fact is well see improvement in revenues going into the third and Fourth Quarter. Those numbers may come down. unintelligible improve in the third and Fourth Quarters. However, i think its true. You know, is it revenue recession . No, coming out of the Energy Materials sector. Look what youre saying. Jerry, react to this. Hes saying its all financials. Dont tell me about the quality. This is not great quality. Well, yeah, financials have been have had leadership. In terms of earnings, revisions, expectations, we saw some upward revisions in industrials. Its actually an interesting contrast. Weve seen some upward revisions in industrials and weve seen the upward revisions in things like utilities and consumer staples, which is really kind of peculi peculiar. I think whats going on, in todays market action, is just a metaphor for whats going on. It used to be the friday technical, where everybody was afraid to go home long on friday. I think now everybodys afraid to go home short on friday. And thats why the markets improving. At some point, businesses are going to say what investors are saying. My competitions getting ahead of me. Ive got to start hiring. Ive got to start expanding. Were seeing some Capital Expenditure numbers, durable goods numbers were okay. I think thats the direction everybodys fearful. I think what will be important is next week we get the fomc meeting, the statement on wednesday. And honestly, on friday, the nonfarm payroll for july. And the gdp. Right. Which will be lousy. Yeah, but it wont be very good. What do you think the number will be, jerry . It looks like it will be a percent or so, the kind of thing were seeing. In a way, thats good news, because the weakness is heavily in inventories. This is another example of everybodys waiting, waiting, waiting for somebody else to do something. Inventories are still very lean, and they have been for the last three quarters. That suggests theres some upside potential. At some point, it cant sell from empty shelves. Rich, you putting money into the market here . Well, i dont you know, im just the economist. Yes, i would put money into this market now. Would you . Were expecting higher prices towards years end. Were seeing improving economy. Capital goods, orders are improving, homes are improving, employment is improving. That being said, earnings arent unintelligible , but again, its accommodation. Once the accommodation is pulled away, thats going to affect the bottom line. All right. Well leave it there. Gentlemen, thank you very much. Thanks, guys. Meanwhile, the story weve been covering now, s. A. C. Capital is pleading not guilty to the governments Insider Trading charges, as the government literally goes for broke with the firm. Kayla has the very latest developments right now. Kayla . Reporter maria, it was a short hearing that went the way many expected, a swift not guilty plea on behalf of s. A. C. Capital, in the face of the criminal indictment over charges of wire and securities fraud from the u. S. Attorneys office. And even though steve cohen didnt appear today, and he wasnt named personally in that indictment, the signature on that not guilty plea signed steve, from steve cohen himself. The not guilty plea pits s. A. C. Against the u. S. Attorney for the southern district. Thats preet bharara, whose track record on pursuing these Insider Trading cases that go to trial, its a 100 success rate. Hes tried one other recent case against a big firm, even though it was on a smaller scale than s. A. C. , but this certainly would be the most highprofile case yet given that it concerns the entirety of s. A. C. Capital and all of its 950 employees. S. A. C. Responded to the indictment yesterday with a statement saying, quote, the handful of men who admit they broke the law does not reflect the honesty, integrity, and character of the thousands of men and women who have worked at s. A. C. Over the past 21 years. S. A. C. Will continue to operate as we work through these matters. The firm will continue to operate and it seeks a protective order with the feds in order to protect the investor assets as well as its business relationships on wall street. That could be in jeopardy. If they do move to seize some of s. A. C. s assets. A civil suit filed separately yesterday goes after any and all assets at s. A. C. That were commingled or were associated with illegally gotten gains. Bharara said those were in the hundreds of millions of dollars. But, guys, this could go into the billions if its successful. So certainly one to watch. A 60day period where theyll be reviewing firm communications, building a case, interviewing potential witnesses, and certainly is not the last that were going to hear from this trial going forward. Guys, back to you. That is extraordinary, kayla. Great stuff. Were going to keep watching that. It continues to develop. I know youre on it, and we know that right now, i understand you also have news on jpmorgan, kayla. Reporter maria, a press release coming out moments ago saying that jpmorgan is exploring Strategic Alternatives for its physical commodities business. This is very interesting, considering that the New York Times ran a story over the weekend raising questions about the conflicts of interest some of these banks like goldman sachs, Morgan Stanley, and jpmorgan, that have physical warehouses that store commodities like aluminum and copper and other commodities, too. Jpmorgan is now the first bank thats publicly come forward and actually said, you know what, we understand the conflict and are looking at structures to run this spinoff, a jv, or a sale. We havent seen that from the other banks. They havent commented at length about that story. But jpmorgan certainly moving forward and saying if it doesnt make sense for a bank to be in this business, then we will evaluate not being in this business. Maria . Yeah, once again, regulation dictating strategy there, or anticipated regulation. Kayla, thank you. Kayla taushy with the latest. If we wait long enough, maria, we could go positive. It would be one of the rare days if we do. The dow was down triple digits, down 140 points at the low. Here we are down 17. At the high of the day, we were down just 7. So were headed in that direction. Once again, bill, the market feeling like it wants to go higher. Well ride this out going into the close. Up next, fed fight. Some Senate Democrats now urging president obama to pick janet yellen, not Larry Summers, to replace Federal Reserve chairman ben bernanke. Meanwhile, the white house saying today it is not doing anything until at least the fall. Up next were taking you live to washington, and Steve Liesman and Rick Santelli will sort it out. Back in a moment. And amazon shares rallying, despite earnings that some felt were disappointing. Up next, why cant anything stop this stock right now, which is trying to close at another record high . Both sides of the trade are coming up, maria. Also, were going to find out who is wall streets top athlete, and they are betting on the race, because all of the winnings go to fighting pediatric cancer. Its coming up on the closing bell. Back in a moment. First day of my life by bright eyes youre not just looking for a house. Youre looking for a place for your life to happen. Speculation about the next fed chairman had the white house today trying to stem the bickering about who might be replacing ben bernanke. Ayman has the details from washington. Reporter hi ya, bill. Youve heard the expression trial balloon. Thats what weve been seeing this week with the circulation of the possibility of Lawrence Summers to be named as the new fed chairman to replace ben bernanke sometime this fall, possibly. That seems like a classic case of a trial balloon the white house floating that name, trying to gauge what the reaction is. The white house, as you say, forced to come out today and announce that no decision is expected on this, of course, until the fall. And meanwhile, in response to this trial balloon, weve seen a group of Senate Democrats circulating a letter, theyre saying they back janet yellen. Shes the current vicechairman of the Federal Reserve system. And a former white house insider tells me today that it feels to this former insider like Lawrence Summers is the pick, but the white house is waiting to see what kind of blowback they might get as a result of this pick. This insider telling me that it doesnt feel like theyve gotten enough negative blowback here to dissuade them this week from nominating Lawrence Summers at some point this fall when it comes to it. Whats Larry Summers big advantage . Its face time with the president. Larry summers has been close to president obama in moments of intense crisis, including leading some of the phone calls with the president ial candidate in the financial crisis in 2008 in the leadup to his big meeting with president bush and john mccain. Lawrence summers was there at his side. Janet yellen doesnt have that advantage. She was at the San Francisco fed. That seems to be the big thing thats driving this advantage now for summers, but well have to see whether the blowback plays any role and whether think shift their tune going into the fall. Bill . All right, eamon, stay right there, please. Lets bring in steve and rick, to talk about the replacement. Steve, why is there such divisiveness on this idea . You know, i think that ultimately, there are strong feelings about fed policy out there. I think that plays in it on the one hand. I also think that people have their feelings about some of the politics of this. Larry summers, perhaps seen as a much more political figure than janet yellen. Janet yellen is really an economist, a Monetary Policy expert. And our data show that wall street overwhelmingly likes janet yellen over Larry Summers. Well, i mean, rick, whats your take on Larry Summers as the head of the fed . Well, i think from a resume standpoint, theres no doubt that hes qualified, and janet yellen is qualified. It doesnt surprise me that the street wants janet yellen, because they like the continuity of the programs. Just look at corporate profits and the stock market. But in terms of Larry Summers, theres no doubt that hes the guy they want. You could call it floating balloons, but i think its much more. Everybody was hunkered down for janet yellen. This is a bit of a kabuki dance. I think theyre trying to vet the negatives, and in the negatives, he has so many bags and so much baggage, southwest would take all of the net worth of s. A. C. To get him through security. You know, guys, one of the negatives that the white house is looking at, and former white house insider telling me that, you know, the big question for Larry Summers is in terms of communications. Weve seen how Important Communications is for the Federal Reserve, talking to the market, not trying to talk them u