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tv   Closing Bell  CNBC  May 15, 2015 3:00pm-5:01pm EDT

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good afternoon and welcome to the "closing bell," everybody. i'm kelly evans, here at the new york stock exchange. >> i'm bill griffeth. of course we will be covering the markets over the next hour but first, you probably have heard by now the verdict in the penalty phase of the boston marathon bombing case is in. however, it's going to be a while before we know whether dzhokhar tsarnaev gets life or death. there's a lengthy process to go through, a number of questions to be answered by the jury in this case. it's going to take a while. it will be later in this hour before we know whether he gets life or death. >> we'll bring that to you as soon as it happens. keeping an eye on markets here in the meantime we're closing out the week in which we've seen swings of strong session yesterday. today's stocks largely holding that but one stock getting absolutely grilled. pollo loco. >> getting killed. >> the chicken chain's full-year guidance disappointed investors. how much of that outlook has to do with fears over the bird flu
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outbreak? we speak to the company's ceo, coming up. >> also lyft you know, l-y-f-t are raising another $150 million right now, the majority coming from carl icahn. coming up we'll discuss how much this cash and icahn's name can help lyft compete with uber. >> more of those puns are awaiting us. the story today, bill that has everybody talking from silicon valley to back here on wall street. what are carl icahn's intentions and what does it signal about the prospects for these two in the markets? >> exactly. >> the dow, we'll start with the blue chips there, up about 3 points. the s&p roughly flat. remember yesterday with the close of 2121. that was a new all-time high for the index. the dow is still 30 points away from where it needs to be. >> 18,288 is the number we need to keep an eye out for. >> 33 points shy at the moment. the nasdaq slightly under
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pressure and still has a few points to go as well if it wants a new high water mark. >> this is the third friday of the month, therefore, it is expiration day as well. we could get volatility as we head toward the close of trade. let's talk about a lot of things in our "closing bell" exchange. joining us, peter anderson from congress wealth management here at the new york stock exchange. mike balkan and rick santelli is in chicago as well. volatility has been mostly peter, in the treasury markets. i mean you know tremendous increase on the long end of the curve there. what do you make of that? that's what we've been talking a lot about this week. what does that do to the equity market do you think? >> i love fridays. i think the volatility does take a little bit of a respite going into the weekend but your point is well taken. i think we're still trying to digest when interest rates are going to rise. i know we've talked about that for a long period of time now. but the thing that's positive about this right now, i think,
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is that we're going so slow that we're now starting to digest the real impact of a slight raise in interest rates. i think it's going to be okay. as long as it's done say, a quarter percentage point maybe the end of this year maybe the beginning of next year. people are finally starting to say i think we can live with this. the so-called bond refugees might actually come back into the market when they start seeing that rates will be rising just a little bit but not too much. >> make the case for small caps here, especially as we head into a rising rate environment. is this typically a better period for them. >> when rates go up small cap stocks, the whole market will take a hit. the mark set starting to digest that. i think that's what the fed wants. history has shown that after a 09 120, 180-day period after small caps rise interest rates do well. that's a leading indicator the economy is probably starting to improve. >> you're talking about the
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rising tide in the treasury market. you've talked about the trading range we've been lifting as well. now traders are wondering whether or not the s&p with that record yesterday is going to break out of its own trading range here. i mean are we starting to see a new phase for the markets do you think? or are we making too much of it right now? >> i think some of the very strange tendencies of the fixed income market really for the last six weeks are evidence of that. the range in equities you could argue, yes, maybe we stretched the upside a bit. but let's take a macro view. let's forget the micro details. the economy is slowing. whether anybody wants to be objective and admit that that's their issue. we had a historic buildup in inventories last year that helped propel the second and third quarter numbers. it fell flat. you can see it in the ism. retail sales, durable goods, everything seems to say the dynamics have pulled the
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activity forward. in that arena, i would think it would make for equities to question how much they could stretch through the top of the range, forgetting the argument about significant downside. this isn't rocket science. it's more of an art than a science. but my feeling is the wild card is that we're going to on any given day, have a tendency to have a more wild range to higher yields and lower prices. we are at a two-week low on ten-year-year-olds. i think the phase of readjustment might be temporarily over which means the other side of the mountain is a range. 2.17 is the key to pay attention to on closing yields. >> mike you were saying rates would be going higher stocks would do better if the economy is performing better. which is it? >> rates, we all agree, rates is probably going up. the question is the timing of when they'll go up. i think the market is digesting that now. i think rick may be right that it's growing somewhat.
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but not a lot. we're seeing it in our company's earnings little bit of growth tepid growth nothing after the charts and all. >> one thing we've been watching this week, for a while now, is oil. it's locking in its first ever nine consecutive week winning streak. jackie deangelis is stepping from the nymex to give us the lowdown on that. >> pretty remarkable, that's in terms of the data that we from thompson reuters. we haven't seen a streak like this since they've been keeping track in the 80s. we've seen eight straight weeks of gains but not nine. we did close a little bit lower, $59.69. we were down 19 cents on the day. we rebounded a little bit after those baker hughes recount numbers came out. we did lose more oil rigs eight of them. we're down 871 since last year that's more than 50% decline. these numbers tend to be supportive of oil prices. there's still a lot of people out there, analysts investors alike saying not so fast.
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we are going to probably see the price stabilization here or potentially an increase as we go into the summer driving season. they think there's more downside ahead when that demand falls off. that could be as soon as the fall. back to you. >> that's a point, jackie. peter, it's so interesting. we've had this massive drop in oil prices at least until the last rebound there. consumer confidence this morning, it took a step back. again, it was disappointing. again, this goes back to the question, which way is this economy moving? >> well there's another way you can look at oil prices too. i'm a big fan of looking at other data sources to get some insight. if you look at the high yield market for instance, last august, that market was flashing sell sell on any kind of oil-related company. we've run that screen again and now what it's saying is maybe not a red flashing light but yellow, it's almost green. that's another source of data that tells you, maybe oil really does have legs under it and there will be strength going into the summer.
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maybe the consumer is just a little bit fickle. we're all kind of confused trying to figure out where we are in this. >> sure. >> if you look at nontraditional data and try to meld that together, maybe that will give you more insight such as the high yield market. >> we heard as we head toward the close there's selling pressure on two intrasensitive sectors, utilities and reits. somewhere somebody believes sectors are going higher unlike the small caps where rising rates are going to hurt. >> i would agree with that. you don't want to be in those stocks if rates are going higher. i'm a small cap guy. we love the small cap market. we think over the long run, we think small caps will be a great place to be. >> you mentioned a couple consumer plays here i-max and six flags. are you talking about a global consumer or do you see basis in the u.s.?
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>> we love i-max because we think not only do they have a great international play but there's domestic opportunities, too. i-max, you think about them here in the u.s. it's fully saturated. china is growing like crazy, japan, korea, that's exciting also. we have a terrific movie slate here. probably the next two or three years is the best slate of movies we've seen from i-max. the third thing is they have new laser technology which will allow them to take their digital platform and move it into traation dl athletetra traditional theaters. >> it's a company doing all the right things. >> six flags, same thing. they're the largest regional operator of theme parks in the world. they're starting to open parks in dubai and china. it's a licensing development. they're letting operators over there do it. >> >> they're setting up atms is
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simply what they're doing. what's your single best idea. >> hsni one of our top holding. merger and equity activity. >> doing market search on that one at home. >> yes we've done a lot of market research on that at home. do i urge you to look more deeply into that. there is a lot of behind the scenes going on maneuvering between those two companies. >> and we've already talked. you don't have to respond to this. we've already talked in the past, recent activity that we've seen more mergers because of the anticipation of higher rates. the cost of doing business is going to go up. you want to get in before it gets more expensive. >> buy now before it's more expensive. >> what a concept. >> gentlemen, good to see you all. >> thanks, everybody. your thoughts on today's market action. >> 50 minutes to go until the close here. trying to hold on to yesterday's gains. we're a half point above
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yesterday's level, the dow adding 4 and the nasdaq slightly negative on the session. netflix, a big winner on the final trading day of the week. dominic chu will tell us what's driving the media disrupter and the rest of the day's movers when we come back. and getting that $100 million boost from billionaire investor carl icahn. find out how lyft plans to put all that capital to work. ameriprise asked people a simple question: can you keep your lifestyle in retirement?
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a verdict in the penalty phase of the boston marathon bombing case is starting to be read right now in the courtroom. sue herera has breaking news for us. >> indeed bill. the jury deliberated about 15 hours. right now what's happening in the court is the defense and dzhokhar tsarnaev are standing. the judge is reading the verdict. there are a number of key questions, however that they have to go through before they get to the key and final question, which is will he be sentenced to life in prison or will he be sentenced to death? they have to go through each one of these questions and list how the jury found on each one of those questions. for example, the jury has found
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that the government has proven at least one of the factors necessary to permit consideration of the death penalty. the clerk is reading this. the judge is reading it. we're going to monitor it and as soon as they work their way through some of these key questions and there are a number of them we will get right back to you. once again, it is that last question that will decide dzhokhar tsarnaev's fate. bill, back to you. >> that's many minutes away. let's get you back to the markets here. it's been a volatile week in the treasuries. prime example would be the ten-year note. this is the yield. we hit a high in the 2.30 about 2.32 i think it was. we're at 2.14 today. just in that five-day period we've seen an 18 to 20 basis point move here. >> huge moves and this is the story of the week. he indicated some of the selling pressure on the rate sensitive
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names today. dominic chu is coraling some of the big movers of the day for us. >> there is that sense of churning. let's talk about the individual names making news. netflix soaring in trading over the $600 mark for the first time ever. reports are that the video streaming site is planning to enter china's online video market. those shares up by 5%. dillard's, the big retailer did report a slight drop in first quarter profits yesterday as merchandise sales fell anden convenientries rose. down by about 8% today. flying tiger, a home goods store, now, again -- flying higher rather -- flying tiger has officially. i'm sorry. that's the end of my look here. again, back over to you guys. >> you're welcome to join us on that if you want. >> i want to talk about flying
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high tiger. why not. >> flying tiger, a home goods store known primarily in europe and asia. it's landed in the u.s. they offer clever products at affordable prices. >> the founder is with us here getting ready for tomorrow's grand opening. we're glad you're here with us in the meantime. i'm sure you're distracted and thinking about what's going on over there to get ready. why come to the u.s. now? >> well, i think the u.s. is very, very big market it's very interesting. we want to see how how a danish store will do in the states. we have taken a completely danish store, put it on broadway, on 21st street. we want to see what happens we think it will work really well. let's see. >> the stuff is really cheap. it's this ikea but at a price point of $5 to $10. people are excited because it's colorful and catchy. the flip side you're in a lot of other countries now.
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what took you so long to come to the u.s.? >> well i think first you look at the markets. there's also logistics and so on. the u.s. mark set quite different than european. we want to see how it works now in the states but we have now 450 stores in europe that are working well. now it's time to bring it to the u.s. >> do you have to tailor products to the united states or can you sell the same thing? >> we sell exactly the same. we can want to take a danish lifestyle, denmark is one of the happiest countries in the world. we want to give that and share that with people in the states which is colorful which is design and very easy to get. we want to see how that works. >> not terribly long ago on his weekly program, john oliver drew attention to some of the fast fashion concepts that are cheap, that have high turnover and that lead to poor business practices around the world all to give u.s. consumers a lower price point. he's quite popular with millennials and the younger
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audience and quite popular here in new york city. there's potentially a risk that this whole moment for what you're doing in your industry these price points high turnover has passed. are you concerned that the customers want to spend a little bit more but to get one item that will last them for quite a while? >> i think that is exactly what we're doing. we're finding a new way in doing so. when we ask a customer how do they feel going into tiger, they say normally when i go into a discount store i feel very poor. when i go into tiger, i feel like a millionaire. i can afford it all. it's a new type of shop. we're taking discount in a completely new way, good quality, good design character, the danish lifestyle. that's what we want to do. >> i'm sure you're on your knees hoping and begging the dollar to continue to go higher. >> we also buy products where we pay the dollar. it's even. >> it would make things cheaper erer
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here for people coming to the united states. >> where are these products made? >> 07% is made in china. with our design. 30% is food quality. >> leonard, flying tiger, coming to the united states. it opens tomorrow morning here in new york city. we wish you luck. >> anything that puts a skip in the step of folks at 21st and broadway i am in favor of. >> like they need that an extra bonus there. 40 minutes left in the training session. before we get to expiration as well. there could be volatility in price and volume. right now, the dow is virtually unchanged at this hour. >> the dow transports have been on a slippery slope, gaining ground today. but someone expects them to resume their downward slide. they debate the bear and bull cases for the transport, next. >> and lyft getting a lift. a $100 million infusion from
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billionaire investor carl icahn. how concerned should rival uber be about that? the pros will talk about that coming up on "closing bell." stay tuned.
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we've talked about many of the major averages hitting record highs in the last couple of months. different story for the transports they've had quite the pattern since the year began. look at the volatility for 2015 so far. while it's all over the place, so far, net/net, the index is
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down 5% or more this year. one of our next guests says something just isn't right with this sector and he thinks things could get worse for the transportation stocks. >> let's brawl this important one out. carl werth,. >> we know it's the precondition that sets up weakness, which this in the 13 14 period. it's the best performing theme of the market with the exception of biotech. virtually doubles. it's been rolling over since friday, november 28th. there's nothing random about that day. that is the day that opec said we're not going to cut. we're going to see this through to the end. ever since, the transports come dominated by rails and certain truckers and the airlines which should be benefiting have stalled. the presumption is that this big bullish to bearish reversal this big topping out formation has more to run.
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>> gary i'm guessing you're with hodges the name hodges to me says value. you perhaps see value with the decline in a lot of these transportation stocks, yes? >> bill you're right. we think the airlines are poised to move higher. and they've cut their capacity. they've consolidated. they have pricing power. operating margins are improving. we believe this oil will stay lower for longer. so we think that's going to provide a big tail wind for the airlines. we love american at the hodges fund. we like southwest airlines. we think their earnings and cash flow will drive higher and move these stocks up that will reverse the downward trend and the transportation averages. >> gary don't you think the average is already telling you which direction matters more as oil prices keep dropping? would you feel more comfortable if oil stabilized. >> we think it will stabilize in
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that 55 to 65 range. we think that will be of benefit to the airlines. they made great money when oil was $100 a barrel. we think they'll make a lot more this year. they're all giving cash back to shareholders returning cash in the way of dividends. they've got great share buy backs and we just think this is a buying opportunity. and that looking out over the next 12 months the airlines will be a lot higher. >> carter you've got some stocks that you would avoid. are you shorting these guys? you're looking at night transportation, old dominion freight and kansas city southern in the rail sector. are these shorts for you? >> absolutely. these are heretofore great winners and lost their way and look to be rolling over in a sinister way, in the sense they are unable to attract capital. all equities are enjoying a lot of buying interest. so those sort of topping out
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formations are hard to reverse. one thing that is important about the dow jones industrial average, it's a price weighted index. you have big stocks like unp and fedex up at $102 a share, which collectively amount to more than all the airlines in the index. so airlines do not look as bad as this. i think that's important to say. they cannot influence the index the way -- >> carter. >> yes, please. >> just real quick before we go we've seen oil prices up 30% off their lows. if the argument is true why are we seeing more strength in the transport index in correlation with that? >> that's right. you would have to think it has to be one, if oil is back up airlines should be falling. nothing is coming to life. the airlines aren't bouncing with the move up nor are the rails or the truckers. it's suspicious activity and it's been going on now for six months and it started with a fundamental data point, friday november 28th opec's meeting.
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>> something to keep an eye on. the dow theorists are keeping an eye on those, too. thank you for joining us today. >> thank you. time for a "cnbc news update" with sue herera. and we are breaking news watch right now. there is a verdict in the penalty phase of the trial of boston marathon bomber dzhokhar tsarnaev. it is being read as we speak. we still don't know what the tsarnaev verdict will be whether he's been sentenced to life in prison or death. as soon as that's announced we'll have that for you. it's snowing in the san bernardino mountains, up to 6 inches fell as part of a storm system that swept through drought-stricken california despite the precipitation, though, it's done little to ease the water woes in that state. the ncaa men's basketball rules committee recommended reducing the shot clock from 35 to 30 seconds as a way of
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speeding up the game that's reached historic lows in terms of scoring. the shot clock was last reduced for the 1993-'94 season from 45 seconds to 35 seconds. the wnba suspended brittney griner and glory johnson after being arrested an charges of assault and disorderly conduct last month. the two league all-stars were married last week. that's your news update at this hour. i'm going to turn it back to you. court is working rapidly through these questions before we get to whether he gets life in prison or death. i'll be back in just a few moments probably with that verdict. back to you. >> very good sue. thank you very much. meantime 30 minutes left in the trading session. the dow is down a point. waiting for expiration to happen here as well. see what kind of bias we get, the up side or down side. >> i'm thinking about the 45-second shot clock. can you imagine that today? >> no. >> only 20 years ago. really slow down the game. >> it would.
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you think carl icahn pumps $100 million into lyft. i think some of our producers would like to put a 45-second shot clock on interviews. also ahead, el pollo loco shares in the dog house. we're going back to sue herera? we have that verdict, apparently. back to sue. yes, indeed we do. dzhokhar tsarnaev has been sentenced to death at this point. this is lethal injection. the jury's sentencing, dzhokhar tsarnaev, the convicted boston marathon bomber to death by lethal injection. bill and kelly, as we were going through these jury questions, there was only one question upon which they were not unanimous. and i find that very striking. the question basically asked whether or not in committing acting of violence and terrorism did he make statements suggesting that others would be justified in committing acts of
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violence and terrorism against the united states as well? that was the only count where the jury was not unanimous. when the jury was asked whether or not he was basically influenced by his brother tamerlan, three of the jurors only three of the jurors agreed that he was influenced by his brother tamerlan who as you know was killed. 15 hours were deliberated by the jury. they have sentenced him to death by lethal injection at this point. we're going to be going through all of these questions, bill and kelly and trying to discern what the jury was thinking when they were talking about these questions. they were difficult questions. and it was very complicated, because in reading through these questions, some of the questions only pertain to certain capital counts. they really had to work diligently and make sure that the question they were considering relayed to the specific capital count. there was no reaction.
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we're getting color from the court right now. they have concluded the penalty phase of u.s. versus dzhokhar tsarnaev. he has been sentenced to death by lethal injection. this formally concludes, the judge says the penalty phase of this particular trial. tsarnaev will remain in custody. he will be formally sentenced by the judge at a later date in months ahead. by law, vicks will be allowed to make impact statements at that hearing. tsarnaev himself will also be given the opportunity to speak at that time. there's not a date set for that at this point. it will be some day in the months ahead. he will remain in custody, obviously, ahead of that particular hearing. you can see that there is security in front of the courthouse. that is the courthouse in downtown boston where not only media but press have gathered. we expect attorneys from both sides to make statements. you might recall that the defense attorney judy clarke
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she's quite renown she admitted and kind of shocked people in the first day of the trial by admitting that dzhokhar tsarnaev did commit the crime. the defense's sole purpose in this was to get that out of the way and literally focus on whether or not they could avoid the death penalty. we now know they have not succeeded in that particular case. he will be sentenced to death by lethal injection. kelly, bill back to you. >> all right, sue, thank you very much. we want to bring in criminal defense lawyer kent schaeffer who has represented three defendants facing the death penalty. kent clearly the cornerstone as sue mentioned of judy clarke's defense was not whether he committed the crime. he clearly did, but whether he was under the undue influence of his older brother tamerlan. as sue just mentioned, only three of the jurors agreed with that. the rest of them did not. was that a good defense to mount or were they just unsuccessful
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in what was a well-intentioned defense motion. >> i think that was the only defense that a responsible lawyer could urge. he could deny the act in which case not only there was overwhelming evidence of guilt but a jury would see that he was clearly unremorseful and, you know is trying to deny responsibility for which punishment would have been certain. at least this way, if she's going for mitigation right from the beginning. you have to understand the context in which this occurred and what was going through his mind at the time. >> looking at some of the precedence here. we've only seen a couple cases in the last couple of decades where the federal authorities have put somebody to death. how long do you think it will be before this happens? >> you know realistically we could be talking about ten years. and i think that was part of
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judy clarke's argument is that at least if you put this guy in super max for the rest of his life punishment is certain. if you go -- if you sentence him to death and you're looking at direct appeals, appeals to the supreme court. you're looking at writs of habeas corpus. these things take several years each. if he's ever put to death we coulden talking about ten years from now. there could be the reversal of the guilt or innocence or punishment stage and the whole thing starts over again. >> should the defense have fought harder for a change of venue? we know what the impact was on the city of boston in all of this. it is an unforgettable time for the citizens of boston all they went through, in the weeks and months in the aftermath of that two years ago. was it possible for him to get a fail trial in that sense? >> you know looking back on it in hindsight you might say it certainly wouldn't have hurt to do it. the truth is when you get a change of venue, you go to the
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closest location where you could go and still receive -- get a jury that's not been tainted by publicity. he would have ended up in trial in springfield or some jurisdiction that's fairly close and the evidence would have been the same there. people are going to be outraged by mass murders and terrorism and all the things that were present in this case. so i don't think it would have been any different anywhere you tried the case. even if it's on the west coast. >> what about this sentence death by lethal injection which came under a lot of controversy after that oklahoma case a couple of years ago. should we expect any changes? >> yes, i think that that's something that's currently being litigated now, as a manorner in which death is carried out. we've seen cruel and unusual arguments being made because the drugs that are being used to put people to death cause a lot of unnecessary pain. they're often not effective. drug companies are refusing to
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provide them any more. death by lethal injection is something that's going to be hitting the supreme court any day. and people are going to of course will have to decide whether or not that's a manner of inflicting death that is unnecessarily painful and, therefore, unconstitutional. it's okay to shoot somebody or hang them or put them in a gas chamber but you don't want to give them a drug that will hurt them prior to the time they die. >> as this goes out for a couple more -- goes on for a couple more years as well public attitudes have shifted. in some cases, the public thinks a life sentence without parole is more of a punishment for some people. could that affect the outcome longer term for this case or going forward? >> it will be hard in this case. that was part of judy clarke's argument. if you put somebody in super max where they're virtually in a coffin 23 hours a day underground and they will never come up or have human contact
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with others, that's worse than death. a jury rejected that. although nowadays juries typically buy that and they accept it. it is true. whether that will have impact on a court of appeals is doubtful. they decide legal issues. but if the case does get reversed or some sort of legal issue, mainly under the government's thinking, they may go for death a second time. >> we have dzhokhar tsarnaev getting the death penalty today from that jury in boston. kent thanks for joining us. appreciate it very much. and with 20 minutes left the dow is up a point. we'll have more "closing bell" after this. [ male announcer ] legalzoom has helped start over 1 million businesses. if you have a business idea, we have a personalized legal solution
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they only had to agree on one count and he would have been subject to either life in prison or death. but death, they had to degree unanimously on at least one count. they convicted him on that on count 4, 5, with 9, 10, 14 and 15. so at this point the judge is addressing the jurors. he says that the inconvenience of all of the jurors serving on the jury has been considerable. he called them a model for future juries. at that point, multiple jurors have broken down and are crying. including the forewoman. there's a lot of emotion in that courtroom right now. once again, there is now a waiting period where he will remain incarcerated until the sentence is formally given by the judge. and at that point he can make statements and -- not the judge but tsarnaev and also the victims' families can make statements. we're still getting color, bill. i'll keep you posted. back to you guys.
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>> all right. we hear that often, sue, that even though you agree that the death penalty was appropriate in this case it's not an easy decision to make sentencing somebody to death. that's for sure. >> tears by the forewoman as sue just told us there. >> we'll be back with more "closing bell" right after this. ♪ ♪ ♪ at chase, we celebrate small businesses every day through programs like mission main street grants. last years' grant recipients are achieving amazing things. carving a name for myself and creating local jobs. creating more programs for these little bookworms. bringing a taste of louisiana to the world. at chase, we're proud to support our grant recipients and small businesses like yours. so you can take the next big step. [ male announcer ] your love for trading never stops. so open an account with schwab. and when a
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slight gains here today. the nasdaq down by 6 points bill. >> after a volatile week a quiet finish. >> a shares of lyft get an uplift thanks to a cash infusion by carl icahn. >> the famed investor leading a round of $150 million in new funding for lyft with 100 million of that cash coming from icahn enterprises. in a statement, icahn said ride sharing is poised to become a fundamental component of our transportation infrastructure. lyft says it will use the funding to deepen its foot print in u.s. lyft is operating in 59 cities
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across the country. currently lyft's valuation is still at $2.5 billion which pales in comparison to its biggest rival uber. uber's latest reported funding round could bring the startup to a valuation of $50 billion or more, making it the richest startup in the world. it makes icahn and andreasen horowitz, investors in the same company. an andreasen says all it fair in love war and ride sharing. >> money knows no border. they all come together there. >> that's right. >> thank you, kate very much. what does $100 million and the icahn name for lyft in the long run? joining us, andrew romans. thanks for joining us today. what do you make of this investment by carl icahn? >> i think it's interesting transaction. it sends a signal in the market that in the past venture
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capitalists would invest and hand the baton to the public mark wet an ipo. when you see carl icahn joining us $680 million financing round it sends a signal that companies are staying private longer. they're raising the capital they need to execute and there may even be liquidity for fonders or early investors. >> i was almost going to ask if this means we'll see a lyft ipo before perhaps the end of the year. >> i don't know. i mean the key comment on that is that companies would have had to ipo in the past to do what lyft is doing or uber's doing. when you see this happening with investors like carl icahn, they don't really need to ipo. they have the money they need. they're able to execute and there might be liquidity for founders or early investors. ipo is the only way out. >> icahn said he saw value there relative to the valuation for uber. he sees growth in the industry but he saw value in this
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particular company right? >> yes. i think so. i think -- we don't have the details but i guess that means if you look at the multiples of sales to valuation in uber he found he was getting a bargain with the multiples of where the business is with lyft. >> do you see a valuation like what we're seeing on uber placed on lyft anytime soon? >> it's hard to say. i think when -- sometimes it's in the details, too. we know valuation but we don't know all the terms. sometimes with an investment of 1.5 billion into uber they might have negotiated that the first money out is that 1.5 billion. so that 1.5 billion is a fraction of the exit value. so they're actually not so bothered what the valuation is. valuation goes up if you give a preference to the new investor that he gets all his money out first. and that's been lifting valuations and a lot of growth stage deals we see in the
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valley. >> that's an important point, andrew i'm glad you raised it. we'll leave it right there for the time being. andrew romans joining us. he's a partner at rubicon venture capital, bill. >> thanks for having me. >> lyft one of the big winners in the financial world. take a look at el pollo loco. it's one of the big losers today. it beat earnings when it announced but fell sharply after the bell. after its guidance disappointed investors. >> for more on this drop and what's in store for the second quarter, including how the company plans to handle the bird flu outbreak, we're joined in a cnbc exclusive el pollo loco ceo steve sather. >> welcome, liz. sorry. welcome, kelly. >> let's clarify. you say the guidance was out there in the market last night. perhaps it was the sales growth coming in light that spooked
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people. >> yes. i think first of all i think we had a good quarter. as you mentioned we exceeded on revenue. we exceeded on earnings per share and we had sales of 5.1%. we feel very good about our business. we did, again, re-affirm our full-year eps guidance and full-year same-store sales that being said i think as we discussed in the call a little bit of softness we saw in q2 as we were testing multiple proteins. and that concludes next week as we head into what we think will be very popular, our new chicken salad. hand carved chicken salads which starts next thursday. i think exciting on top of that is we've got as well our 5 under 500 line which has been very popular will include the hand carved chicken salads. >> it's funny you bring that up. i was going to ask, so many of the fast casual and fast food chains, there's this bleeding everybody's going after the same
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mechanism. they're going after breakfast. they're all introducing the salads they're all going to coffee. are they going to play the same game by innovating constantly? >> i don't think it's playing the same game for us. as you know our positioning is what we call qsr plus. we have high quality food like you'd find in fast casuals like panera or chipotle. we bring that at the speed, convenience and value. we've been giving you great healthy chicken for years and we're just doing that now across our menu. if you look at the things we've produced like quesadillas and the new salads that are coming out. we've had those on our menu. we think we're a leader in this positioning. >> you guys put up 5.1% sales growth in the quarter that just ended. >> yes. >> shake shack did almost 12%. how are you going to get shack-like growth? >> well first of all, we've had
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15 consecutive quarters of positive same-store sales growth. so we've had the very strong multiple year comp sales growth and 5.1% is certainly above our -- it's actually above the guidance that we've given of 3% to 5%. which we re-affirmed yesterday, both on same-store sales and our earnings per share guidance. we feel very strong about the long-term positioning of our concept and really we're focused now on new unit growth which we talked about yesterday on the call in our texas growth. >> right. steve sather of el pollo loco thank you were thanks for joining us. >> thank you very much. >> have a great weekend. coming up on the closing countdown, the dow is up 7. didn't get to mention it here on air, art cashin was pointing out it was $600 million to buy, was the buy is there but he feels like it's paring off quickly
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here. >> back with the closing countdown, right after this. there's some facts about seaworld we'd like you to know. we don't collect killer whales from the wild. and haven't for 35 years. with the hightest standard of animal care in the world, our whales are healthy. they're thriving. i wouldn't work here if they weren't. and government research shows they live just as long as whales in the wild. caring for these whales, we have a great responsibility to get that right. and we take it very seriously. because we love them. and we know you love them too.
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welcome back.
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heading into the last three minutes of trade. it's a friday. let's show you what happened this week. the markets. i'm showing you the dow. it was the s&p that made an all-time high yesterday. and any positive close will be another new all-time high. the dow has about 22 23 points to go before it hits an all-time high. it's in striking range. but this is what happened as we got sell-off early this week and then sideways action before the rally yesterday. we've gone sideways essentially today. ten-year yield, much more volatility. we piqued early in the week. the reversal of yields for stock prices then it just went south. we had a high yield of 2.32 2.33, i think it was. now we're at 2.14 on that ten-year yield. had a good ten-year auction by the way this week as well. quickly on the price of oil, crude oil, we were going for a ninth straight week of gains, weekly gains, didn't happen.
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slight pull-up back on the close there but for the week the price of oil was up 7.2%. we're back below $60 a barrel. michael guyad is with us and courtney reagan joins us as well. where are you putting your money right now? are equities going to be down or what do you think is happening. >> short term we have a couple things that are positive. you had a yield spike. emerging markets haven't sold off. periods high volatility have been weak in terms of historical leadership. that's positive short term. right now we are in large caps. that's where the momentum still is. you do have i think, intermediate term problems. i just came back from california receiving the 2015 named wagner award, co-author of peace, lumber underperforms gold. volatility rises, you might have
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a correction. lumber has been weak consistent with all this other economic data -- >> because the demand for housing, building is still there. >> you should not see something noncyclical do better than something that is cyclical, lumber. that may suggest later on in a few months we may see volatility in equities. >> retail sales have not been there this year. >> they haven't. next week we get earnings from walmart, target home depot, lowe's. name a retailer, they're probably reporting next week. especially what's going to happen with the strengthening dollar with some of the retailers, the brands that play internationally. that's a big thing to watch. >> do you see the dollar continuing higher at some point? >> well inflation expectations have risen alongside oil. that's why you're seeing the dollar weakness. >> good luck to yellen even though she probably should. >> we'll see when the first rate
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increase comes. good to see you again. courtney, have a good weekend. we're going out with minor gains here. looks like we've got another record for the s&p 500 index. and we'll see what happens next week. have a good weekend, everybody. here's the second hour of the "closing bell" now with kelly evans and company. welcome to the "closing bell," everybody. i'm kelly evans. for the most part holding on to the gains. let's take a look at how we're finishing up the session with the s&p 500 adding about a point and a half. that should be good enough for a new closing high for this index. a 2,122 and change. the dow adding change there. 20 points off its record high. the nasdaq down actually underperformer of the day, giving up 2.5 points. just above that 5050 level.
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>> sharon epperson robert frank and david seaburg is riding along with the market action today. good to see you as well. robert first to you. in a way, we've had so many different headlines from different asset classes. stocks today weren't moving that much. we've had big moves in the ten-year, a record week for art prices. what do you think we're learning here? >> you nailed it. across the board asset class inflation. the real cpi that should should be looking at is the christy's price index. they had a billion dollars in sales in 48 hours, including $180 million picasso, the most expensive painting ever sold. it just reminds us that all of these asset classes are driven by the supply of money, not fundamentals. >> is it driven by demand -- this is nouriel roubini earlier this week said these record high art prices it doesn't
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economically mean anything. it's money laundering. what should we take as a conclusion from that? >> the art market is not the stock market. it is the tip of the spear when you talk about the asset classes being driven by a massive amount of liquidity that by the way, is more and more concentrated into a smaller group of people. >> right. >> that includes stocks. that includes bonds. that includes all financial assets. there just aren't that many things to do with it. >> sharon, what do you think the lessons are? >> looking outside of the people with that very small group that still want to be invested in the market. as we see the slow grind higher and higher though it is incremental, it is positive. when you look at talking to technical analysts look at where we're going, we're not breaking new lows and we're not -- we're getting to new highs slowly. that may continue. we may have pullbacks. we may have a major pullback. it's a major reason to stay in
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the market. >> i wonder if we'll start to get people shifting money from fixed income to equities which is what we're seeing in the market today. when we talked to art cashin the selling pressure was on those rateeits and the rate sensitive areas, utilities. >> as robert touched on every asset class if you're somebody like me looks expensive. that if you're an investor is a problem. a lot of people myself included -- >> not commodities. >> i'm sitting on 40% cash. not commodities. that's a relatively small piece of the overall asset puzzle. if you're an investor and you look at bonds, they look expensive. it's hard to look at the stock market and say it's a great deal trading at 10 or 11 times earnings. it's hard to look at a $180 million picasso and say, yeah that guy got a great deal. he got it for under 200. >> by the same token, don't you
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feel like you know because of all that cash that's in and out of the market that you're missing something? >> i don't, no i don't feel -- i actually don't feel like i'm missing something. but then again, you know it's easy for me not to be missing something because i rode the stock market back up. >> right, right. >> if on the other hand i was sitting on the outside looking in and missed that move, i was sitting around going, maybe i'll take a little more profit. >> right. that's a smart mindset. if you've seen significant gains, this is the time that maybe you want to take the profits and re-allocate them elsewhere. where am i going to find the best deals? am i going to get a deal anywhere? >> you should crowd source the purchase of a picasso. i'm sure you could get enough suckers out there to put up 180 million. >> we learned the biggest flows, you'd be shocked if i said to you where do you think most of the money has gone in terms of any asset class this year?
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the answer is fixed income. >> yes. >> it remains so popular. >> people see that as the same trade, still. >> this question of how are we supposed to gauge exactly how strong this economy is? yes, we have people pouring money into art but at the same time the consumer confidence number this morning wasn't great. some of the retail earnings have been disappointing at best. we're going to get more of them next week. where are you watching? >> look you said it clearly. the disappointment in the economic side has been you know really painful. i look at it and say, look at the negative surprises we've seen this year thus far this year in '15. it's across the board. i said to myself, the markets at all-time highs, how is it sustainable? there's a lot of complacency out there. investors are sitting back watching the market grind higher. they're actually afraid. it's getting to the point they're afraid they'll miss a move much higher. when they start to jump in and push this market high you may
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see a spike up but watch out below. i'll tell you what there's no protection that's been put in place. so a pullback could be very significant. >> when are we going to get that? david seaburg you're in touch with a lot of investors day in and day out. who's putting the money into stocks today? >> well i'll tell you what the volumes on the institutional side are down dramatically. you know some firms are struggling because volumes are so weak. people are complacent, they're holding on to positions, not turning over portfolios like they were in the past. feeling that the market can continue to rise here. we're at the point, though, where, you know unless we start to see a real uptick top line growth in earnings look buybacks aren't going to be there forever. >> right. >> we have to make sure we're starting to see real earnings that will produce growth that allow these companies to justify the multiples. i don't see it. >> you have a very weird setup
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here, which is the market certainly equity markets have traded in a narrow range. you have a lot of money sloshing around. you get weird things like the bond market over the last few weeks has been volatile. the 30-year yield has pulled back a lot. >> right. the yield was over 2.3% just on tuesday. >> yes. there was consensus trade. long european bonds. that trade came off. there was a massive sell. i understand how that took place. we talked a couple days about that reversing or reverting back. that's what we're seeing. i look at equities and say, look at the conviction right? when you look at the options market, the demand for upside policy isn't there. we talk about that all the time. >> you were going to say, robert? >> following up on evans' point, if it is driven by the money sloshing around and it is separate from fundamentals and the economy, what would stop it? the central banks around the world, it is global now, don't show signs of dramatic
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tightening anytime soon. even if the fed acts in september through december. all that money sloshing around will keep sloshing around. >> the trigger today was mario draghi came out this morning basically said we're never ending qe. i'm just going to keep this thing going for as long as possible. all of a sudden people thought german bunds which were a terrible value all week are all of a sudden a good deal because the central banks are buying them. >> the european data the gdp data earlier this week was better than expected. they thought maybe they start to taper bond buying. he's saying don't worry. the same conversation is now taking place over there. >> it's taking place over there and causing investors to look. if they're not looking here for domestic equities they're looking international, at europe. they're saying this is where i'm going to put my money. we're not sure what's going to happen with the u.s. stock market, maybe it's best to take those profits and put them in other countries. >> yes david, before we let you
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go one name next week everybody should be watching? >> i say foot locker. they're reporting on friday. i think nike will be a massive beneficiary if foot locker puts up good numbers. 85% of their sales are nike products. it's a read-through into nike and the strength we're seeing in the brand. >> love it. thank you, sir. thanks for joining us this afternoon. david seaburg. more coming up with david and the rest of the crew on "fast money" at 5:00. two biotech and pharma names could be having make or break moments next week as well. we'll tell you which stocks you should be watching on "symptom therapy" at 5:00. how did a fake filing make it into the s.e.c.'s database and stay there? starbucks customers steaming mad after criminals reportedly stole their money through the coffee chain's mobile payment system. coming up we'll hear from one victim and find out how starbucks is trying to resolve this attack. you're watching cnbc, first in business worldwide.
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le fatout from the avon takeover hoax still reverberating on wall street. what we learned here is that it's a lot easier to get access
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to the s.e.c.'s edgar database than any of us thought. i've been talking to experts over the past few days and they say all you need to do is fill out a two-page document called the s.e.c. i.d. form. you send that in and they send you back with the security codes on this system. this is what happened with this fake company filing a t.o. form once they got access to the s.e.c.'s system. that is a tender offer allegedly for avan, avon is tagged in the system. everybody who subscribes to avon information in the s.e.c. system sees that filing including the wire services. it goes out to the whole wide world. nobody of it was true. and according to all the sores i've been talking to, the s.e.c. doesn't check whether these -- didn't check the accuracy of the
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information. the s.e.c. says under federal securities laws, filers are responsible for the truthfulness of their filings and subject to enforcement actions when they are false or misleading. the s.e.c. is saying it's not their job to tell whether or not documents filed on edgar is accurate. it's their job to simply set up a public disclosure system for the documents to go out. a lot of questions now being raised about whether that's the right way to do business at the s.e.c. >> sure, ayman. the fbi reportedly looking into it as web. eamon javers in washington. we're joined by the former inspect general of the securities and exchange commission. david, i'll start with you. what's your reaction? is this a known situation that it's so easy to tap the s.e.c.'s data database? >> i think it's astonishing, frankly. people understand it's not a difficult or complicated process
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to put information on. there's an assumption that the s.e.c. is doing something, that they're looking at it in some way and not passing on the information completely. so it's of great concern that you know potentially somebody could use a government database in order to perpetrate fraud. >> you seem pretty upset by this, too. especially by the fact the filing remains on the site. >> it's up now. it's one thing to complain about the fact they don't have security in the front gates. it's another thing to say they're not ringing the alarm once they know the criminal is inside. as eamon just said this is a faulty document. the primary mission isn't enforcement. its primary mission is investor protection. i don't see how it protects investors to have a known false document sitting on its website at the top of avon's filing chart. >> right. we know yesterday when this was first released over the news
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wire, this false bid -- avon shifted notably on this. >> notably. and so much more than even people had expected it would. because it has been beaten down so much over the last several years. what this highlights is yes, i'm one who definitely believes investor protection should be the role of the s.e.c. and in many areas for retail investors they're doing a great job. here's evidence that even if you go to the place where you're supposed to go to get more information, the information that you may seek is incorrect and it's still there. >> it would seem that this is a significant kind of loophole. when it comes to matters like this i'm a caveat emtore person. if people are trading it around beginning on rumors and bad information. >> if it's rumors and bad information. >> this is a rumor and bad
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information. >> you didn't necessarily know that at the time. it went up on the website. >> my point is nobody is validating the information. i don't see what stops anybody from just putting up whatever they want. >> i have a question for david. i know he was involved in the madoff case which the s.e.c. is sort of now compensating for by saying we're cracking down on insider trader issues. are they the keystone cops of the financial services industry? have they gotten better or is this a sign that they're really not good at what they're supposed to do. >> they have gotten better. the bureaucracy, this is how it works, you know. it's funny because when you look at the user manual it looks like the s.e.c. is doing something to authenticate or to validate this information and they're not. the problem is if the s.e.c. starts spending time validating
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this information, then you're going to have months of delays before the information is put on the public site. and so then you won't have disclosure to investors. on the other hand, as was said earlier, there's no excuse for not taking it down now. they certainly should take things down if there's even a suspicion that they're false. >> exactly. >> you can take it down pending a further review and investigation. don't leave it up there. >> depending on what the fbi finds, could the s.e.c. then be forced to do anything? what kind of -- how would they work together in terms of rectifying the situation for the future? >> well i mean clearly somebody inside the s.e.c. should look at this issue. in terms of the fbi, i think the focus is on who provided this information, obviously it's a crime to provide false information like that whether there was manipulation in trading that was done as a result. that could be the potential. in terms of the s.e.c. it needs to look inward and make sure
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they have a process in place that works much better than this. >> dan, a last word to you. i wonder if there's any way to get action on this is for it to happen a bunch more times? >> what's interest is it did happen two years ago -- three years ago, sorry, with rocky mountain chocolate company. a takeover bid from an equally suspicious bidder. that time they stole from gctr. that document from three years ago, which was found to be fraudulent at the time that's still on the s.e.c.'s website today. it might have to happen dozens more times for them to care. >> we'll leave it right there. david cotts and dan primac. starbucks using the coffee chain's mobile app to pay are reportedly getting a lot more than a latte. customers say hackers are stealing money through those customer accounts.
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and one victim that lost more than 500 bucks from this. and high-end motor coaches, perfect for tailgating with your friends. the company's founder is here to discuss crowd-powered travel on the "closing bell." it took tennis legend serena williams, fencing champion tim morehouse and the rockettes years to master their craft. but only moments to master paying bills at depositing checks at the atm and transferring funds on the mobile app. technology designed for you. so you can easily master the way you bank.
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we reached out to starbucks for comment and we were directed to the starbucks online security account web page which says news reports that the starbucks mobile app has been hacked are false. joining us now is one of the viblgs s victims of the hack. jean, let's start with you. tell us what happened. >> it happened to me about six months ago, back in december. i was driving down the freeway with my starbucks app notifying me i was making $50 payments to starbucks. it notifies me about different payments. i pulled over. i found out that about 11 purchases had been made with my payment information from my starbucks account and sent to some random e-mail. >> how much jean have you lost
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altogether because of this? >> i have lost about $550. >> have you received communication to starbucks? have you brought it to their attention or tried? >> i tried to contact starbucks just like you guys i got directed to the customer pass word information. eventually i contacted the company that runs their payment services and the only thing they told me was to -- that they have nothing to do with that part. >> joe lumas, your reaction to both this particular, what appears to be a hack and starbucks' denial? >> that really comes down to who's at fault and what the cause of the issue is. is it bad password management? secondly i put starbucks at fault because they should have multilevel authentication.
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if you log into certain accounts you get a text message, the two-factor way of doing business. we're seeing companies not still adopt to this way of doing business. there's more responsibility here than to protect your customers. they have to heighten their security a little bit. drop box has been an issue in the past. >> about 16 million people move this mobile payment system for starbucks. it's convenient. a lot of people want this easy access to be able to get their coffee. how should they be protecting themselves? what should they put in place to protect their money and identity? >> passward management is the first steps to protecting yourself. download free applications. there's last pass one pass all these different applications
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that help you develop strong passward pass passwords. we're talking about random numbers and characters more than eight or ten characters long. we're never going to remember something like that. that's why these password politics are out there to protect us. the second line of defense is making sure you're not clicking on suspicious e-mails so you don't have an infection on your computer or mobile device with malware. make a request to starbucks and these other organizations saying will you turn on two factor authentication? if the users demand it the corporations will follow. >> that's exactly it. jean you work in i.t. correct. >> it was a secure password that i didn't use anywhere else.
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i'm almost certain -- all my computers are secure. my phone is secure. there's nothing really that would lead me to lose that password on my own. >> how can it be that sharon says that -- how many 16 million accounts and we have poor jean here. am i missing something here? if this was a sustained -- if this was a systemic problem, causing aggravation to hundreds or thousands of starbucks customers, you would think they would make the tradeoff on the two-step identification and they would go that way. >> it sounds to me like they're making a commercial decision not to do it. >> have you gotten money back? >> yes. i got my money back because i was protected by my paypal account, not because of starbucks. it's not only me that this happened to.
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i know other customers that have went through the exact same situation. >> jean, thanks for joining us. sorry about that and glad paypal was able to make you whole. more on the mobile payment space tonight with the nbc disrupter klarna. it will launch service in the u.s. you don't want to miss that. time few for a "cnbc news update" with sue herera. above the marathon bomber dzhokhar tsarnaev has been sentenced to death by lethal injection for his role in the 2013 terror attack in boston. the federal jury in massachusetts reached that decision after more than 14 hours of deliberations over three days. he was convicted last month of all 30 federal charges against him. 17 of which carried the possibility of the death penalty. the youngest victim of tuesday's deadly amtrak crash was remembered today. the funeral for u.s. naval
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academy justin zemser. a message to employees saying 1,450 employees will be laid off with another 1,400 furloughed. the layoff totals 39% of its work force. end of an era. toys "r" us is closing the only physical f.a.o. schwarz location on fifth avenue in new york city. it will take place on july 15th. this after earlier reports the toy store was considering a move because of high rent in new york city. that is your "cnbc news update." back to you, kelly. >> i can't believe they're closing, sue. >> i know. that's a favorite place at the holidays for kids to go. it's one of the most expensive properties in new york city in terms of retail space. >> maybe they didn't buy enough
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toys. it's your fault. >> it's your fault. >> a buddy of mine was ceo. >> i feel like i've bought enough toys that toys "r" us should be just fine. and the rigging settlement with ubs, a settlement after ubs vialed the deal. is the government unfairly targeting ubs here? we'll talk about that next. who needs a backyard barbecue when you can get a burger hot dog and chips on one bun? that's what crammed into carl jury's american burger. and you can share it with one click. wow. how do you find the time to do all this? easy. we combined every birthday and holiday into one celebration. (different holidays being shouted) back to work, guys! i love this times of year. for all the confidence you need. td ameritrade. you got this.
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welcome back. four major banks, barclays, jpmorgan and royal bank of scotland are expected to plead guilty in a far-reaching case of rigging currencies. the deal is now being thrown out and ubs will have to plead guilty just like the others. is this crackdown long overdue or is it way overdoing it? gentlemen, welcome to you both. mark, do you think that is unfair to ubs in this case?
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>> i think it's unfair to the ubs shareholders kelly. anytime we've talked about criminal prosecutions of corporate entities and not real people, it's the shareholders that pay the price. it's the shareholders' money that gets used to pay the government considered by the corporations as part of their legal reserves and life goes on. it's too much too late and it's going too far. >> andrew? >> cry me a river. we have banks that have been violates in the federal securities laws. it's not shoddy mortgages, it's libor, money laundering, a whole bunch of stuff that worked after 2008. think about the savings and loan crisis. think about arthur anderson. after they were indicted we had no issues with respect to companies shredding documents. it works. indict them. that will clear the problem up. >> they put them out of business. other accounting firms.
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look at sarbanes oxley. once we started throwing guys like that in prison, it's cleaned up other companies. >> the examples you just cited are individuals. dennis kozlowski spent a lot of time in jail. these prosecutions, these fines i'm complaining about, no one is individually responsible but the shareholders wind up paying the bryce. how does that make sense? >> explain to me where the government settled with ubs and now they're coming back and giving them criminal prosecution. how is that possible? not a double jeopardy issue with corporations? >> it's a technical issue, bonn bob. what happened with ubs, they were not allowed to commit any quote, unquote, further u.s. crimes. >> i see. >> they self-disclosed additional infractions and the justice department said within excuse me you weren't supposed to do this again.
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you don't get a deferred prosecution agreement. i understand that i'm not advocating giving banks and wall street a pass. what i'm asking for is the realization that main street through the teachers' pension funds and the carpenters this is going to pay the government. >> you can separate the two, though. >> there's absolutely no reason why you can't indict both. hold on. the company is made up of individuals. the department of justice definitely deserves blame for not also bringing criminal indictments against people engaged in wrongdoing. the two aren't mutually exclusive. you can do both. until you start doing both you'll continue to have these problems. >> i agree with you on that point. the problem is there is not going to be the equivalent obligation on the part of banks and culture -- wall street culture in general to change the way they do things while things can be accounted for as a legal reserve. the street doesn't care. the stocks don't move
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dramatically. it's remarkable that it continue. >> there's a lot of collateral damage that we don't realize. institutional investors cannot invest with institutions that has criminal charges against it. >> maybe they shouldn't be. to what extent should we be crying a river for shareholders? >> there are consequences the shareholders that have nothing do do to do -- >> these institutions compete against each other for capital, ultimately the capital should go to the best sturs of it. >> i agree with you completely. main street has little say by and large in where their money is invested. they're invested in pension savings. we've tried everything else. let's indict the banks, let's consider indicting individuals and see if this clears it up. nothing else has worked yet. >> i want to see personal accountability, andrew. until that changes, making the
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shareholders pay the tab makes no sense to me whatsoever. >> we'll leave it there, gentlemen. the second leg in the race for horse racing's triple crown is tomorrow. while the hers are warming up for the freakness, racing fans are poring over programs and post positions. it basically comes down to chance. four mistakes to avoid when dumb money outweighs smart money at the track. we'll explain. stay with us. when a moment spontaneously turns romantic why pause to take a pill? and why stop what you're doing to find a bathroom? cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions
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you can bet there will be plenty of money wagered on american pharaoh. eric chemmy joins us now. >> hi, kelly. exactly right. when we think about the stock market, we know most of the american invested there is by big institutional funds, if you're a retail person it's hard to beat the big money, the smart money. that is not true when it comes to this race in particular. in a normal saturday weekend, $50 million is bet on horse racing across the entire country. but for this one race we might see $150 million. most of that money, almost all of that money is the dumb money. when there's that much dumb money coming into a race bet on by people who don't know anything about horse racing there are opportunities to take advantage. i got this information from the founder of
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they have all the data. the first thing they said is don't bet on any grey horse. a lot of people think if you bet on the grey horses you can see them, they're more visually appealing. but they're not any faster. that's the first mistake to avoid. the next thing to avoid, are the horses in post number 7. a lot of people think 7 is a lucky number. they'll just say put $100 on 7. because 7 is lucky, you don't want to bet on that. you might think these are silly. i'm telling you, these are the things that matter the data says to avoid this. you want to avoid the longest shot. a horse at 30-1 if it's the worse horse in the race it's probably a 50-1 or a 100-1 horse. on the flip side look at the other extreme, the biggest favorite, in this case american pharaoh. when there's a favorite that big, don't put your money there either. there's a lot of other people,
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the dumb money, that want to get that easy win. my final advice if you really wanted to bet on american pharaoh and do it despite the advice not to bet on him, bet on him to place, not win. there's a free option there. you can get the money whether he finishes first or second. you have an opportunity to make some "m" money. check it all out at >> i'm the smart money, eric. that's what we all think. >> that's what you all think. >> you are the smart money. you're not going to wager a cent. >> no, no you want to wager on these good trades. if you take the placement. these are positive expected value trades. these have the opportunity to make money over the long term in a statistically significant way. >> you should be a stock market promoter. eric chemi back at headquarters. if you're looking for a way to get to the preakness, rally
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bus connects you with other riders traveling to the same event. joining us here at post nine is founder and ceo of rally bus. welcome. >> thanks for having me on. >> i love this. why did he call it rally bus? it's because of the jon stewart rally on washington a couple years ago. >> that's how we started. jon stewart and colbert had a rally a few years back. being a web developer i created an app that lets people sign up for rides from their town down to d.c. i didn't have the money to risk or sponsor these buses. i required a minimum number of people to sign up before we confirmed the bus. >> then you were like a matching service, kind of like uber is today. >> we put it out there, within a month we got 5,000 people together from 50 different cities across 20 states. >> is that how big you are right
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now, in 50 different cities? how do you sign up how do you do it? >> we received reservations -- >> it's a ten-hour drive. i'm trying to come up with options. >> that's what we are, another option. we see so much happening in the transportation and mobility space these days, we've received over res vagus in 1,100 cities we offer service to every event you can think of. if you don't see it create your own, add your own rally point. we need 25 people to sign up along a route and we have a bus. >> where do you get the buses and drivers from? >> that's the great thing. what we're talking about is a sleeping industry that we're putting the technology and business model innovation on. the charter bus industry is out there, 4,000 bus companies, 40,000 buses. one-tenth as many taxis but they have ten times the capacity. they have extra capacity. that's what we're doing. bringing them to life. bringing these buses sitting around in parking lots to life.
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>> do you have to sign away your life basically? if you go on a rally bus? in index. >> they're the safest form much road travel out there, the greenest form and they're all insured. >> i hope it makes the traffic better. it couldn't be worse than when you're trying to go to some of these events f. we keep doing what we're doing right we'll be affecting the larger scale things. we're taking 25 cars off the road for every bus we send to preakness. >> does that mean you would never do a deal with an uber or lift? or it just seems like a perfect union. >> there's options. we do like that. we hope to make that union one day. >> which horse are you betting on? >> not number 7. >> not the grey one either. >> thank you. what can a conductor teach a
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ceo? we'll find out from an orchestra conductor that spoke to leaders at google and intel. summer is just around the corner. that means beaches and barbecues. would you eat this new burger? we'll be right back.
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built for business. welcome back. world are buying and selling. dominic dominic chu. >> warren buffett first. they have boosted their position in was parts 47%. also 21st century fox to about 6.2 million shares. and refiner phillips 66 to about 7.5 million shares. they have decreased their positions in national oil well barko by 65% to 2 million shares. interestingly enough, we know that warren buffett says he was going to boost his ibm stake. as of the end of the last quarter he boosted it by 3%. notably, that 3% boost is about $450 million worth of stock. no small feat there.
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on the an loosa said new stakes in jet blue. about 4.7 million shares. also 1 million shares in d.r. horton. they have cut their stake in united continental, whirlpool and gotten out of their american airlines stake. notable moves. and more to come as the afternoon continues. former orchestra conductor talcum has a message for corporate america. he lays out his reasoning in his newly released book the ignorant maestro. already he has cult consulted with i had withly known firms like google intel. welcome. >> thank you. >> the great lessons that you have learn are -- how do these companies do? what's the best way to inspire brilliance among your workers. >> it's not easy but if you look outside your field of expertise into music making for example, you can see a lot of interesting
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things. and they are all sort of condenserd because the music is bringing everything together in a very intense and fast way. and so you can look at the way conductors actually make people perform better. they cannot play themselves. they cannot even know in advance how those people will play. they can try to dictate everything but then they are just mediocre. if they are really great they do something else. >> and that something? >> one of the keys seems to be body language. if a conductor is very happy, are they instilling in their workers the members that they are going to have a good time in what they are doing? if they are too dogmatic too much like a dictator then what are they going to do? is that the key really the body languages that a conductor has that's something in a a ceo or a manager has to think about when leading teams. >> i would say it's very important to have the right mood, atmosphere optimism and
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all that. but that's just the start. what you really need to create is a space in which people can actually learn something. this is why the work in music is mostly about gaps. and it's about making yourself ignorant enough so something can happen in the gaps that you have never envisioned. >> isn't the company and what you are supposed to do within a company, which is people battling to get ahead and to get compensated and to get paid very different motivation, a different sort of fundamental drive than it is in music where number one you do have a sheet of music in front of you. it can be interpreted in different ways but you are there for music. isn't it a different fundamental motivation? is it really fair to compare the two. >>? you have a romantic and beautiful way of looking at musicians. but musicians are human, too, and they want to be acknowledged and they want to be compensated for what they do. every human thing is there. i would say even more because they are artists and have big
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egos. and the thing is how not to depress them how not to make them small to be able to control them but rather to let them thrive as individuals and make a better whole. >> one of the key takeaways, it seems, is that you need to not do too much. in other words to get up there and give each musician the ability to perform at his or her best for a better yoet come overall? >> that's true. but just doing nothing will not get you anywhere. the thing is how to do little enough to inspire people, and then support them in their quest. if you are trying to validate a specific result or outcome, then you are actually limiting them. but if you validate the process, you hold them within the process you get to somewhere you didn't know. that's why i call the book the ignorant maestro. >> we have to leave it there, is there one company that comes to mine that you think has done this the best? >> there are so many good people out there, i wouldn't want to
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name one. but obviously the culture inspired by google is something that caron converges very well with my messages. >> certainly does. thanks for joining us. >> thank you snooir. memory day weekend is the unofficial start of measure is here in the u.s. that means barbecues. carlos jr. or hardees is making it easy for customers to get those essentials. the twist, it's all on one bun. at chase, we celebrate small businesses every day through programs like mission main street grants. last years' grant recipients are achieving amazing things. carving a name for myself and creating local jobs. creating more programs for these little bookworms. bringing a taste of louisiana to the world. at chase, we're proud to support our grant recipients and small businesses like yours. so you can take the next big step.
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welcome back. here's a barbecue -- >> i can't keep a straight face. >> can you blame me? look at this. >> you are laughing. >> it is a barbecue you can hold with one hand. carl's jr. or hardees out with the american thick burger today. a cheeseberger topped with a hot dog and kettle cooked chips. my favorite part of this is that it was ten years in the development. >> does that come with a parental advisory. do they allow children eating that. >> would you allow your son to eat night no i could see my son eating that in a short period of time but not all on one.
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>> that's what america is all about, that particular burger. everything in the kitchen sink. >> i would eat thatberger if they added one thing, and that would be bacon. >> ew! and and now we're talking. >> i think the hot dog have a bacon-filled lining in them. >> how many calories if you have to ask. >> it's not that bad, i would guess 650. >> no way. no way. >> it's 1030. very must told me. just little bit off. i want to try this. i would try this -- i would not do the crazy sweet donut burger thing that somebody came out with a few years ago. >> subway came out with the thing where they stuck frito chips in the middle of the sandwich. i was with my son and we were driving somewhere. we pulled into a subway because he kind of likes it. and the first person there on line was having one of those frito specials. >> >>o. >> it might do well. >> thanks everybody for being
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here this afternoon. have a great weekend. that does it foreclosing belle. fast money is coming up in just moments. >> i think the bun should be a donut. that would be more american. we're going to talk about 13 f filings today. we're going to trade them. >> lots of great stuff in there. >> thank. fast money starts right now ma aim melissa lee, tim see more david seeberg david kelly and stave brasso joins us. netflix topping $600 for the first time. we've got the real deal on the next catalyst that could take the stock higher. plus the fade to black. no we are not talking the rally in stocks. we are talked the end of the madmen era this weekend. it turns out the show is good for much more than drinking and ad stales. if you had listened to don draper you could have made big money. first, filings. >> the biggest and best investors are buying or out of let's get the


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