Chip average and composite up 38 points, at 3783. And Standard Poors at 1725. Dow and s p at alltime highs. The stocks surging after the Federal Reserve holds off on tapping the brakes on the 85 billion a month bondbuying program. No taper when all is said and done. B bob pisani, reaction on the floor, all status quo, significant . A significant disbelief. Huh . Huh . I was flabbergasted, lets put it that way. The key statement mr. Bernanke made in his press conference here. He said put up full screen Economic Data does not yet provide sufficient confirmation to warrant reducing purchases. Thats what moved the markets. Take a look at dow industrials. From the fed announcement at 2 00 to the height of the market, the dow moved 200 point. Nice move there. We closed off the highs. It was sufficient for historic high. The dow industrials, history high for the transports. History highs for s p and russell 2000. Midcap, not historic high. Sensitive stocks, home building, reits moved up. Mr. Bernanke mentioning emerging markets saying he did talk to individuals in emerging market individuals. There you see moving to the upside. Hmo stocks, theres a lot of concern that the house of republicans have steam in trying to derail obama care. I dont think so. You can see to the downside. A lot of people convinced themselves that even though the data wasnt strong, we would see taper today. A lot of people felt they were misled by the fed. I think everybody just misread what was going on. Very simple. Including myself, by the way. I thought it was going to happen. Thank you so much. Joining us to break it all down, nathan backrack, tony dwyer, and our own rick santelli. Good to see everybody. Tony, let me kick this off with you. What do you do now, now that we know the fed is still in place, tapering is not going to happen and 85 billion in buying every month. How do you invest . Were buying it. I think weve been high on the street this entire year. Were high on the street next year. Inflation, cornflation allowed them to keep curve steep, kept economy and earnings growing. Not a lot of people left in the business that have lived through multiple expansion phases. This, in our view, is very, very the market is acting just like it did during initial valuation expansions of the 1984 to 1987 and 1994 to 1997. I guess now that the Federal Reserve is this decision is out of the way, we turn our attention to earnings. Oracle is just out with earnings. Weve got it on the screen. Looks like a beat on the bottom line but revenue overall for Corporate America has not been great. Lets talk about that nathan, the next catalyst is Third Quarter earnings. What are you expecting . I expect Third Quarter earnings to be very, very soft. Theyll verify what bernanke told us today. I think back in may, he was working on forecasts and then things didnt work out. I think now he had a little discussion with the bond market. It sort of remind me of a disclosure from a drug company that says, dont jack up Interest Rates for four months without having data to support it and for Interest Rate spikes lasting more than four months, please see your fed chair. I think he said to the bond market very clearly, you get rates down around 2. 5 and ill think about tapering again. Until that happens, this is a time to readjust your bond portfolios because thats where most investors have been getting killed . How do you do that . What do i want to do to readjust . Shorten up your i like blkn. Were about half of the way from 3. 0 to 2. 5. Take half and put them on the sidelines. Im not afraid of the stock market but it reminds me if you got a 4. 0, and now with ap classes you can still be an a student. Grades are looking more like a rating agency. Theyre not overpriced. We have to get revenue and bernanke gave us the money to do it. Thats the issue, we dont have revenue. I want to mention oracle. While numbers are out, 59 cents a share is better than the estimate. Revenue at 3. 38 billion below the estimate of 4. 8 billion. Oracle shares at 34. 30. Greg epp, what struck you from the Federal Reserve, what was most important putting the fact they did not taper, but interesting theyre actually talking a little more negative than people thought about the economy going forward, even though the worst the downside has been diminished, he said. What i thought was the most interesting takeaway is how they cited the financial conditions as the reason not to taper. Bond yields shot up way more than expected when they started talking about this six or seven months ago. In other words, can you trace the whole slowdown in the economy that theyre worried about to their own behavior. This leaves us at c, we dont know what theyll do next. Bernanke gave us a road map in june about what they were going to do. They were going to tape later this year. Bernanke didnt fully walk back but virtually did. Leaves us uncertain about their criteria for am they start to taper. Steve liesman, he did zero in on 6. 5 unemployment, later to 7 . Today he was not picking any specific numbers. He did backpedal out of that one. Zooel. . Part. 6. 5 remains as threshold for raising rates with Interest Rate. He didnt mention the 7 threshold for essentially ending quantitative easing. That was missing today. I agree with greg totally about being at sea and not being what the guidance is. Ip to come back to this notion of being a hamster on a treadmill. The fed goes ahead, the economy gets a little better. Fed says were going to taper, rates rise, fed comes through and says, you know what, rates are up too much. Im not going to taper. And so, this can go on forever. And if the rise in rates right now is too much, then, you know, and somebody earlier said, well, the fed is telling the market, if you get down to 2. 5 , ill taper. The bond market has no incentive. Thats not an incentive for the bond market to say, ill bring it down so the bond will taper. I like that notion of being at sea, if you can layer in that notion of a hamster on a treadmill, too. Tony, what do you want to be buying here . Youve talked a lot about technology because thats where the growth is. Now we see a market soaring to new heights, do you get a sense this is sustainable . I mean, valuations getting up there with 17 times. Whats your take . Maria, i still think valuations are on their way. If were republic reply indicating those valuation expansions i mentioned before, the four sectors that outperform each time are financials, information not information. Financials, industrials, health care. In this cycle were favoring information technology, even though they did it back and forth over the last two cycles. I think again this is not about we can make a lot of fundamental excuses and come up with a lot of academic things. Money is flowing into the he can wilt market because of the success in the equity market and backdrop. Which means until that ends, until you get into a pain zone, thats going to continue. Ultimately our target next year is 19 55 so were more focused on that than whats going to happen in the next 15 minutes. Rick santelli, what are you focused on . What happens next . I think we learn something very unique, whenever we get data unexpected or a taper that doesnt arrive on schedule. Look at the chart of the dollar index. Anybody out there who thinks that the dollar isnt hugely affected today is living proof it is. It was drilled afterwards. And the emerging markets that ben bernanke referred to, i remember many lines of mexican central banker agus tin i cant think of his last name. Hell be a guest with us in a couple weeks. He looks at whats going on and he feels that emerging markets are Collateral Damage based on these flipflops in the liquidity. As far as Interest Rates, yes, theyve come down. Im still looking at a 270 tenyear. I think about the not snugging up of rates, the next time this occurs or a next time a tapering is coming up i think the fed chairman is saying very clearly, read my data. Yeah, read my data. You know what he says blah, blah, blah. Thats what i hear. Read my data, everybody. Well gel more on oracles earnings. Bottom line looked better than expected. Top line not so much. Josh lipton. Oracle just reporting let me give you the numbers. The street was looking for eps of 56 cents on revenue of 8. 48 billion. Oracle delivers eps exims at 56 cents. Looking through release, new Software Licenses and Cloud Software subscriptions refer news up 4 to 1. 7 billion, better than expected. Operating margins clock in at 45 . Analysts were looking for just under 44 . On the downside, though, looking at revenues for heart wear systems products, 669 million, that was less than analysts were hoping for, looking for 764 million. Well keep looking through this report and tell you what we find. Back to you. Thanks. Want to get straight to our analyst for reaction on oracle. Dan morgan. Whats your reaction to the oracle earnings. What does it tell you about how the companys doing . I think the key, maria, is that number on the licensing revenue and the cloud subscription figure, 1. 7. The estimate was 1. 63 billion. Thats a good number. Obviously, below on hardware, but hardware has been really hurting them over the last couple of years. I think its a mixed number at this point, just like revenue and earnings are in terms of one being above and one being belowed. I was encouraged by license number being above 1. 7 billion and consensus was 1. 63 billion. What do you want to do with oracle stock, a buyer or seller . Oracle is trading 11 times fiscal year 2014 earning. If you look at projected growth rate, its about 10 for this year, so its about a 1. 1 peg ratio, which is pretty much in line with other Mature Software companies. You know, the stock seems fairly valued. Were holding our position at this point. Obviously, maria, want to hear more on the conference call, see if theyre making any straides n Cloud Computing area. Thats the hot space for oracle right now. Dan, we appreciate it. Dan oracle ceo, larry ellison, minutes away from sending team usa sailing team back into San Francisco bay to defend americas cup as we speak. Next tuesday ill speak with him exclusively at oracle conference. Well talk Cloud Computing, maybe u. S. Cup, and as you join us tuesday for a live exclusive with larry ellison, chairman and ceo at oracle. We have a big lineup of heavy hitters coming your way in this special edition of closing bell coming to you live from blackrocks headquarters in new york city. Ill talk to blackrock ceo larry fink, who oversees 4 trillion. Well talk about on the fed refraining from tapering and what it means for your money. Stay with us for that. World renowned shortseller jim chanos, he sounds off on chinas credit boom that he says is spiraling out of control. Find out how bad he thinks it could get and what that ka do to the u. S. Economy. Youre watching the closing bell on cnbc. Hear comes larry fink to the set. Welcome back. We got the big news out of washington from the Federal Reserve today, sending the market to alltime record highs while investors welcome continued activity, whats the fed telling us about the strength of the economy with the news today they will not be tapering after all . Joining me on the blackrock Trading Floor at blackrock headquarters, our host for the day, chairman and ceo, larry fink. Good to see you. Good to see you. Your reaction to the Federal Reserve, no taper today. Im surprised. Im surprised because i think at the same time the fed was i thought was going to be tapering, the treasury was going to start reducing issuance, which is going to because deficits are shrinking. What im worried about now is the fed is is going to be buying maybe more than than 100 , 110 , 120 of all debt issuance. I think that will create more of a bubble issue in the future and will make it more difficult to unravel this. But i think if i had to sit back and say why did the fed not taper, we have a big were going to have a lot of drama in october. Debt ceiling. The debt ceiling. Nobody is forecasting this, thinking about it. I dont think we should be assuming washington will finally get it. I am very worried about how binary both positions are, republicans and democrats. They already said it, no movement. Obama will not negotiate. Republicans say, really . You can say the sun isnt going to come out tomorrow, but it will. It will create a lot of drama, uncertainty. More importantly, if theres that type of drama, consumers will pull back and it will cause weakening to the economy. With the Federal Reserve knowing how pivotal the events in washington are going to be in october, it may force them to delay any decision of tapering until late october or november. So, well see how this all plays out. I thought the fed had the option of doing a small amount of tapering and giving guidance that would be very good. I think if they did a small amount of tapering with guidance, i think the market would have rallied anyway today. Im not surprised at the rally. Im surprised at their action and their action created even a bigger rally. We saw gold up 45. Home building stocks up 4 . Tenyear, 2. 6 . I dont like that type of movement. I agree with rick, we move now the tenyear range from a 2. 75, 3 type of range to 2. 50 to 2. 75 for the time being. Were in a trading range. Im not as concerned about the tenyear movement. Im more concerned about gold, oil, all the other types of thins that create more volatility, a bigger bubble. We began seeing stability two weeks ago. We were worried about emerging markets. We saw huge evaluations in emerging markets. Starting two weeks ago we saw 5 billion inflows if emerging markets. We began to see stabilization. Im sure tomorrow well see even more flows into emerging markets. But, you know, i thought the market was now equalizing from what the information they had. Thats why i thought the fed had the ability to do a modest amount of tapering and giving modest guidance and the market would have been fine. Im glad you mentioned the etf platform and emerging markets. Im going to get back to that. Thats important. Lets stay in the u. S. Economy for a moment. Because it was so expected, broadly speaking in the market, that the fed would do some kind of tapering, even if it was just a message, were beginning, 10 billion wont move the needle but at least were beginning. I didnt expect the tapering because of the anemic pace of this recovery. Is the fed telling us things are worse than anybody thought, on top of the uncertains, and with the debt ceiling . I think the fed is telling us inflation is below target so that gave them more room. Thats something we underestimated because the level of inflation were seeing, which is below the fed target, it gave the fed was certainly unwilling to change that much policy. Im not sure if it tells us about the ee neem anemic growthn the economy. I believe most of the anemia has to be due to the sequester. If youre in the army, youre not adding jobs. Youre not adding more scientists and doctors and funding going down. So, i actually believe much of weakness in the employment market was more related to the sequester. Once again, washington is causing the problems. And the fed has to now Pay Attention to the actions of washington. We all try to say the fed is agnostic to what goes on in washington and they have to be nonpolitical, but i do believe washington is a source of so many of these problem. If you saw hourly work, if you saw wages, they went up a little bit in the last employment number. So, i think the numbers were not as bad as we said they were. And i think much has to do with the sequester, now having an impact on employment and now, as i said, if the debt ceiling becomes very dramatic now, its going to put another layer of pessimism in the economy. I want to ask you a twopart question here. Your vantage point, seeing so much money moving around the world, youre traveling all the time up. Just got back from mexico, latin america, on your way to singapore tomorrow or this week, why is it companies are sitting on all this cash, 3 3. 3 billion on balance sheets, companies are sitting on it, unwilling to add new heads to the payroll, and at the same time we cant move the needle on unemployment. Isnt this one of the issues youre seeing corporates do better but theyre not moving the money. We have seen improvement in employment. Not as great as we would like to see. We are seeing corporation hiring. Not to the extent they were seeing it. I think it has to do with many issue. The uncertainty of washington has put a layer of uncertainty with ceos. You mean tax policy regulation. Jpmorgan, 800 million. Regulation costs have gone up. Not just for jpmorgan. What is surprising is how many employees they hired to deal with the regulation. And i said that at blackrock. We have hired many, many people, not to the extent of jpmorgan, just to deal with new regulation were facing with all the new filings we have to do with the s. E. C. , the cftc, all the new filings in europe. Weve added many more people in the compliance area, making sure we meet the needs of the new regulation. Youve got to. Obviously, there is hiring in those areas. That may not be productive. I think the key for us is, us being the United States, we need to find jobs that will meet the needs of the middle class. The jobs in the Financial Services area, thats fine. Jobs in the highend area, thats fine. The key for a vital america is finding better jobs for middle class. And one of the areas i think we missed a great opportunity as a country is infrastructure. Infrastructure creates quite a few large jobs in terms of construction. We have not used governmental policy to affectionate, whether roads, bridges, power grids and we need it. One of the reasons weve seen anemia, again, is lack of great governmental policy when it comes to infrastructure. So, where are you seeing the Money Movement . Where are you seeing the flows today . Do you think that changes with inaction today from the Federal Reserve . I mean, youve been right on this. Was it october of 2012 when you 20 11. When you came out and said, look, have you to be in equities. Longevity is the story and you cannot own bonds and keep your money in money market funds instead of e