tv Markets Now FOX Business July 25, 2013 1:00pm-3:01pm EDT
will join us with reaction and why this could cost sac billions good afternoon, everybody. welcome to a new our of markets now. i'm lori rothman. adam: and i'm adam shapiro. what did you come up on the markets. nicole petallides is on the floor of the new york stock exchange. a good day for facebook. >> reporter: this certainly is. the start of the we are seeing. turning into green across the board. all three averages do have green arrows. the dow is now up by six points. had been down earlier. so you see here that we are gaining across the board. you mentioned facebook. that certainly is a name that has garnered plenty of attention. yesterday after the closing bell when they came out with quarterly they talked about ad revenue obviously on the rise. the stock hitting a 52 week high. of 27%. the ipo was $38.
down to about $17 change. people were really upset. you can see, the volume improving greatly as mobil ad revenue is good news. adam: all right. coming up later we will dig into the facebook earnings with michael factor from wedbush securities. lori: a preview. can be crash made by their competitor is crushing them. we will set you up for that as well. in the meantime, worldwide energy consumption is set to surge according to a new report from the apartment of energy. global energy use will grow 56% compared with 2010 levels because of transportation and electricity demands. half of that growth will come from china and india. the bullish report doing very little to spur prices in trading today. of course that is a forward looking report weigh on the future. let's check in with fox business contributor to phil flynn in the pits of the cme. it is interesting here to know, consumption of natural gas is
expected to grow faster than oil or coal. >> and that is the most amazing thing about this report. if you would have talked about this report five years ago we would be talking about oil consumption over the next 50 years intel we could never meet demand. of course we built the better mousetrap. and that shell gas revolution, we are changing energy expectations. a few years ago we would have thought those numbers were ominous, that we could never get there unless we were using wind and solar. the truth of the matter is with natural gas we can make those numbers. and what is good about those numbers is economic growth, economic activity. i find that to be great news. bring on the energy demand. we can meet. natural-gas today is down. that is despite the fact that the injection was smaller than anticipated. why? very cool. cool down quite a bit. it does not feel like the trading floor, but it is down. the other big news, we saw major moves.
way down, probably because of they -- them a wanted cut a deal with biofuel makers. a lot of volatility. lori: i love the economic discussion. the above point you get that? but can't go there because i have to give you to update me on the price of gold. dollar movement influencing that . >> absolutely. we are seeing a big rally. everyone is ready to ride out. top down. we're coming back strong. a lot of talk about the physical market seems to be getting stronger every day. a big speculative short position. of course the durable-goods numbers today, very strong. it might mean better gold demand for work. lori: phil flynn, price futures group, always a pleasure. adam: major averages have hit record after record. could a correction be on its way? our next guest sees the signs and was the one you all about it. joining his right now, president of heritage capitol.
good to have you here. we have been calling for a correction. i can think of the way back to last winter. november and december. we have not seen yet. why do you think now? why is this any different? >> separate correction from routine pullback. routine pullbacks of 47 percent occur at any time for any reason that they're healthy in a bull market. we are overdue. i think before we get to that ten to 20% decline we have to see more of the internal some market deteriorated, and i don't think we are there just yet. adam: what signs should i be looking for? you are saying we will see a ten to 20% decline. give me a time frame. i know people don't like the time the market. >> it is one of two scenarios. either we will, like 87, we will see a high put in july or august 1987. we will have more significant decline september october. if we don't get it then i think we are set for another new high
of around 16,000, maybe 165 in the you will see that correction early in the first quarter. one of two scenarios, but we are just starting to sow the seeds. adam: what other flags, the red flags we should be looking for? 1987 we shot up almost 40 percent and then crashed. at the end of the day, at the end of that year the market still closed up. >> i always thought this year would be a front loaded your meaning you make all of your easy gains the first half of the year in the second half will be much more difficult. no matter what scenario were going to have a decline between august 1st and october 1st. to me that is a certainty. only -- it's an open item. adam: what other red flags? what is it? >> i don't think. the market is fairly valued. at the number one you have high-yield bonds that have not gone back to all-time highs. the first canary dying. liquidity is being sucked out.
i think the next thing to look at is the new york stock exchange. a number of stocks that will be up and down. accumulative line. when that does not make a new high with the market that is a red flag. when the dow transports don't make a high, when industrials do that is another red flag. sentiment, too many folks really excited and enthusiastic about the market, that is probably the biggest red flag. adam: that is usually the sign of a bubble. very quickly, if i am in agreement with you that this august 1st to the next couple of months we will see the pullback, what do i do? what do i do individually? >> the small investor has made a significant amount of money. now is the time to prune the portfolio. if you're doing it yourself. adam: but you don't want to put it in bonds. >> i would say this, if you're talking about a risk-reward basis, if we are going to correct stocks will go down a lot more than bonds of the
scenario is out. and you can give floating-rate bonds that may give you a little crash. treasuries would not worsen the high-yield. i think you can dial back your risk with staples, maybe even utilities at that point. adam: we appreciate you being here. thank you very much. lori: breaking news. grabbing wall street, still waiting for the new york attorney's office, news conference on charges against sac capitol. let's bring in charlie gasparino u.s. been covering the story. >> reporter: the manhattan u.s. attorney. this is the premier law enforcement office in the country, the u.s. attorney for the manhattan basically handles all the wall street cases, drug cases, mob cases, long history and now is handling a case against sac capitol. not indicting steve cohen, indicting sac capitol. we should point out that there is a human side to this.
professionally i think sac is finished. i think it's only a matter of time. we will see something about that later on today. investors the still in there. he is on the fence. he will ask investors later if he should pull out, whether they are going to be redeemed. there is another personal side. i talked to a friend of steve : he said they guy basically has gained 15 pounds in the last couple of months. here's the interesting thing. he said he met him at city field during the all-star games. lori: and mary we have the oppressor. >> three law enforcement actions relating to the sac group of hedge funds. first, we have insider-trading and wire fraud charges against the four entities that principally managed a multi-billion dollar s8 -- sac capital hedge fund which employed the many people responsible for what can only be described as rampant insider trading within those funds.
seconds, we have filed a civil money-laundering charges against numerous sac funds seeking appropriate forfeiture of assets to address sac liability. third, we unsealed today that a guilty plea of yet another portfolio manager at sac, richard li who just this past tuesday pled guilty to committing insider-trading offenses while an employee of sac. he brings to eight the number of employees so far convicted of or charged with insider trading for the benefit of sac. what today's indictment makes clear is this, when so many people from my single hedge fund have engaged in insider trading it is not a coincidence. it is, instead, the predictable product of a substantial and
pervasive institutional failure. as alleged, sac traffic and inside information on a scale without any known precedent in the history of hedge funds. as described in the indictment, the scope of illegal trading was deep and it was wide. it was expanding more than a decade in time involving securities of at least 20 public companies, extending across multiple sectors of the economy and benefited sac to the tune of at least $100 million. today's indictment is not just a narrative of names and numbers. it is more broadly an account of a firm with zero tolerance for low returns but seemingly tremendous tolerance for questionable conduct. so sac became overtime a veritable magnets for market cheaters.
appeared to talk the talk but almost never walk the walk. that is why today the institution itself rather than just individual stands charged with wire and securities fraud. before i review some of the charges in detail, let me introduce our partners in this investigation and prosecution. i am joined by our partner in this and so many other cases, the fbi led by the assistant director in charge of the fbi office here in new york and april brooks, special agent in charge of the fbi criminal division. i want to thank george in april and they're dedicated team, fbi special agent james henkel, matthew callahan, and david mantle, matthew sarsen for their incredibly hard work and assistance, not just on this particular case, but all of the cases that led us to this point. i especially want to acknowledge the career prosecutors from my own office.
they are antonia apps, john sack. they are handling the prosecution. they're chiefs, mark berger and mike smith for his work on the forfeiture aspects of the case as well as asset forfeiture chief sharon : levin and i want to acknowledge the exceptionally hard work and supervision done by the chief of the criminal division and the deputy u.s. attorney richards able. now, let me take a minute to talk about the particulars of today's charges and guilty plea. first the guilty plea we announced today is by one of the sac portfolio managers richard lee. until recently he co-managed a one and 1/4 billion dollar portfolio to focus on special situations like mergers and acquisitions. while still a portfolio manager at sac he obtained inside information's with respect to various securities including yahoo and flee, corporation.
as set forth in the larger indictment, the particular story of his time at sac is emblematic of the broader culture problem at the fund. as alleged, the sac companies hired richard leech said spite -- despite a reputation for insider-trading. indeed, he was hired over objections from the legal department of sac despite specific warnings during the application process, that he had improperly been part of an insider trading group at his prior employer. and so predictably from virtually the inception of his employment at sac in 2009 he began to trade on inside information, contact, as i mentioned, that he pled guilty to two days ago. he is continuing to cooperate with the government's investigation. second, as i mentioned, this morning we filed a civil forfeiture action in federal court. the forfeiture complaint alleges
that the sac companies engaged in money laundering by co-mingling the illegal profits from insider trading with other promote additional insider trading and transferring the profits. our action today does not seek tough freeze any of the assets of sac, and we are always in this case and other cases mindful to minimize risk to third-party investors. in other words, we have not today restrained any money and will discuss with the company a reasonable method going forward to protect all parties, legitimate interests. finally, as i mentioned the indictment unsealed today charges the for sac management companies with insider trading. if you look at the very simple start to my right you will see that the four management companies, sigma capitol, management sac, sac capital
advisers, and intrinsic investors. as i mentioned, the count now is up to eight individuals who, during their time at the portfolio managers or research analysts while at one of the management companies have now either been charged or pled guilty. six have been convicted and two are still awaiting. most recently as i mentioned richard lee who was a portfolio manager at sac who pled guilty on july 20th, 2013. he is not the first because we have one over here who pled guilty in connection with ongoing insider trading at sac. so why are the sac entities being charged? in addition to individuals, sometimes the organizations that employ them are criminally culpable and merit prosecution as well. the sac companies are being held accountable for the criminal acts of so many of their employees because the misconduct
was pervasive, because those employees were acting the -- for the direct financial benefit of the firm and because the company did not effectively police its own precincts. as alleged in the indictment, the sac companies want -- went out of their way to find employees with personal networks of company insiders but did not correspondingly considered whether the employees were using such contacts to obtain inside information despite red flags. by way of one example, an analyst in the tech sector for one of the into the starts today. sac hiring report touted that heat generated investment ideas by mining his industry contact network for data points. now, september he pled guilty to the mining illegal inside information from that very network. more generally the failures of sac to police itself as a laced
in the indictment, red flags and warning signs were repeatedly ignored until late 2009 the compliance a partner rarely reviewed electronic communications by sac employees containing suspicious terms and failed to detect the insider trading by any of the eight sac employees charged today to. and as alleged, in its entire history sac identify possible insider trading by any of its employees just once. and then not -- on that occasion they not only failed to report the matter to law enforcement or regulators, but those individuals were not even terminated from employment. in fact, so far as we can sell sac never reported suspicious trading to any regulator or criminal authority ever. now, as the company it reaps what is those. as alleged sac seated itself with corrupt traders, empowered
to engage in criminal acts by a culture that looked the other way despite red flags all-around sac deliberately encouraged the no-holds-barred pursuit of an age that literally has carried it over the edge into corporate criminality. companies like individuals need to be held to account and need to be deterred from becoming bins of corruption. and so it's all those who run companies and value their enterprises but pay only -- pay attention only to the money their employees make and not having make it, today's indictment hopefully it's your attention. now, it is my honor to call to the podium the head of the fbi here in new york. >> thank you. good afternoon. i have a short statement to read here.
this case is about corporate conduct and corporate responsibility. the indictment says it best. illegal conduct by employees and institutional indifference resulted in insider-trading that was substantial, pervasive, and on a scale without known precedent. sac capitol and its management fostered a culture of permissiveness to be blunt. through the actions and inactions of its management not only tolerated cheating, it encourages it. management at sac capital including the firm's owner and actively recruited portfolio managers and research analysts with access to inside information. once hired these employees were rewarded financially for passing
on inside information for the honor. repeatedly it describes the intimation edge says contacts at the company or my guy at such and such company. compliance at sac to the extent that it existed was willfully and etiquette -- woefully inadequate. that is to say, it was woefully inadequate to the task of monitoring and preventing the acquisition and use of inside information. the compliance department did enable sac capital to say it had a compliance department. adam: we will keep monitoring this press conference. we want to get charlie gasparino back in this discussion for your reaction, but the key -- the question, there are the e-mails on the dell deal. already pled guilty. why no indictments against ?
>> i don't know. we don't know everything about what the government has, they're doing, what they may do. my personal belief is that at some point he will be indicted. just reading this thing he is to all over the place. they may not have the affirmation, the evidence right now, but i can tell you this, before we got cut off low was going to tell you, a mutual friend went tent city field during the all-star game. as you know, the home of the mets. went into his box and he was told point-blank, my number one goal is not to be personally indicted. so -- lori: we have to take a quick break. please stay with us. we will continue to unfold these details. more coming up as i guess you're going one on one. adam: friends would steve cohen. >> of fox contributor. adam: we will be right back. ♪
♪ ♪ ♪ [ male announcer ] if y can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. but hurry, offers end july 31st. going on now at your authorized mercedes-benz dealer. this man is about to be the millionth customer. would you mind if i go ahead of you? instead we had someone go ahead of him and win fiy thousand dollars. congratulations you are our one millionth customer. nobody likes to miss out. that's why ally treats all their customers the same.
numbers. it is more broadly an account of a firm with zero tolerance for low returns but seemingly tremendous tolerance for questionable conduct. and so sac became over time a veritable magnet for market cheaters. lori: let's bring back in our own charlie gasparino and the burning question is, the leader of sac, steve cohen himself, how does he not see criminal charges filed against him? >> yet. lori: yet. >> i wrote a whole book on this i talked to a lost these guys. i can read between the lines. you twice read the indictment. i know adam has. adam: yeah. >> we've been talking about all morning. reading between the lines they are connecting dots to him. we don't have everything they have. charlie, you reporters only get part of the story. they know more than us. i would just say, sit tight. i think personally, not saying this like i want this to happen, i think they will eventually indict steve cohen.
we -- lori: working sac and how the portfolio managers were all sort of -- adam: independent but answered to steve cohen. >> remember what they said. i would point out steve cohen based on a conversation i had with a mutual friend basically said it's a possibility. it is his goal not to get indicted. this is what preet is saying through all this stuff. there is a question where he said, sac gave in a system of insider trading was the greatest in history. we should get the quote because it summarizes his thoughts. he is basically saying this is a criminal enterprise which was set up to create the perfect crime where clusters of traders would exist. they wouldn't talk to each other. they would talk to the man at the top. and the man at the top, they used to talk to him. they didn't say listen, i got illegal information. they used to talk in code. lori: such as? >> i have an edge or very high conviction, one to 10. this is in my book. they believe that is code,
here's insider trading and it protects the guy in the middle. this is like the mob. you protect the buy in the middle. adam: cohen was actually deposed and he kind of messed up as you right about define edge. is that illegal edge? >> by the way after that deposition in 2006, 2007, i have to check the date in the book, they took the word edge out of all the marketing. adam: in the indictment you have e-mail from horvath to steinberg which eventually gets -- i have second happened read from somebody from the company. talking about a dell deal. keep this quiet to yourself. obviously not well-known. cohen sells lots of shares. doesn't lose any money. >> there has been, i think sac said he didn't read that e-mail. whether you believe, i don't know. adam: sent a note to everybody, cohen said a e-mail saying well-done on dell. >> this came from a friend of steve cohelp's. charlie, i will assure you that steve cohen doesn't engage in
illegal activity there is lot of guys around him but it was a pretty lousy compliance system there they didn't check when people said i got a very high conviction. i told him this. i have no reason not to believe you. i have not found the smoking gun on steve cohen. wrote about other people looking for it. but i will tell you if you're the head of a fund and getting this stuff about high convictions -- adam: with an edge. >> you know, you have to go, if you condone it, in my view almost as bad as doing it. lori: you think the fund is done? >> i think later on today, and i reported this, i talked to a few of the existing investors, i think morgan stanley is still an existing investor, sky bridge, i talked to some people that are existing investors, they're expecting to hear from sac today, likely, likely, sac has not commented, force redemptions that the outside money is out. adam: you will be with bo dietl a friend of see cohen's.
don't go anywhere. you're not going anywhere. lori: go to the leg chair. that will be sexy. >> i can cross my legs. lori: please do. see if this is casting a dark shadow on the broader markets. nicole petallides is covering all the action there. nicole. >> traders are watching headlines pertaining to sac capital. dow jones, nasdaq and s&p posting some gains much the nasdaq is best of the bunch, tech-heavy nasdaq up half of 1%. pulte homes came out with their numbers for the quarter and a disappointment in both cases. pulte is down 12 1/2%. d.r. horton is down 9% the group is under pressure. ceo came out talking about rising mortgage rates. how they are so volatile and grew so fast and seeing cancellations because of mortgage rates that have been on the rise. back to you. adam: nicole petallides, thank you. lori: the fed is in new york
bringing criminal charges, this is our top story today against hedge fund sac capital but not against owner steve cohen yet. adam: coming up, charlie gasparino gives us more inside information the legal kind when he talks with one of steve cohen's good friends, bo dietl. lori: look at the market internals here. which are up, which are down with the dow itself up 6 1/2 points. you see there are some losers. back after this. she's still the one for you -
you know it even after all these years. but your erectile dysfunction - you know,that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needingo go frequently or urgently.
tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or that, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial.
fraud. the charges involve alleged insider trading between 1999 and 2010. the justice department says the hedge fund owner, that would be mr. cohen, and this is a quote, enabled and promoted insider-trading scheme by ignoring that indications that trades were made based on insight information. lori: nobody knows nothing by this like senior correspondent charlie gasparino. even wrote a book about it called, "circle of friends." he joins us with a exclusive look inside sac capital and steve cohen with a special guest. >> someone who knows him. richard, bo dietl, private news investigator, fox news contributor. very close friend. you told me texted you just now. >> say what you want to say. steve has nothing to hide on this thing. just watching this interview with the united states attorney, here we go again. all i saw was circumstantial stuff. that is like if one of my
detectives, couple of my detectives went out to intersomeone and assaulted them they want to indict me for assault? >> one of your detectives said i might assault somebody, i might smack somebody -- >> is that what he knew, charlie? >> read the indictment. listen, i don't know what he knew. the indictment said people told him about high conviction levels, gave him hints, this is what the indictment is saying they may be trading on insider information. if you were getting hints from your security guard, knocking somebody out, what would you do? what would you do? >> maybe if i trusted he wouldn't do it. >> would you tell him not to do it? would you tell him not to do it? would you tell hill not to do it? >> did he learn that or is that the u.s. attorney assuming that? >> no. >> my problem it is circumstantial. if they had something on steven why do we wait like this. i don't believe they do, one. >> right. >> i believe about the other guys who are convicted and i worry what kind of deals are made.
you know yourself, sammy gravano and u.s. attorneys office uses guys kill many people and witnesses as lies. i was lied against by alite. i never met the guy. >> a gambino associate. >> he mentioned me which was a damm lie, i told the u.s. attorney. my problem here -- >> your manager, people forget you know so many people on wall street. you manage a company. >> right. >> i know you. if a security guard said, i hate that sob there, i will smack him and i will get him. you know what you would say, whatever his name is, don't do that. >> charlie, i like steve and his wife very, very much. >> you're not answering question. >> my answer to the question is what did steven know? you're presuming that he knew. you have a thousand people working for you and you have a couple of creeps working something out -- >> the indictment says he might not have known it was insider information but he should have gone the extra step and -- >> is it criminal? no. it's not criminal.
maybe civil stuff is working. maybe when he paid that fine, maybe that will work as far as -- >> if you knew someone might be ripping somebody off would you report it? if you knew -- >> you know what criminal is? you have to sit here and tell me my friend steve knew these guys were getting inside information and he knew about it and allowed that i don't believe you have that. >> you grew up in queens. >> ozone park. >> you know bs when you see it. are you telling me as you sit here today all these instances where he should have known. x, y and z are wrong? you're a cop. >> i'm telling you something right now, wherever he goes in the world he trades his own stock. he sits there from 9:00 to 4:00 in front, i can't talk to him. he sits in front of computers and dealing -- >> you're a cop, when you were a cop -- >> he has analyst there is. if you don't, do you know what he has? he has these analysts, p and. he looks at this. >> let me ask you this. you were a cop. >> i'm for making money.
>> if you were a cop, say like a bodega, you saw possible illegal activity was boeing on in there, a lot of people getting busted, you your sixth sense wouldn't say oh maybe, you're going to say, guy owns it is a nice guy. maybe he looks the other way? >> all i see is a guy who is smart businessman, looks valuation of corporation, earnings and profit and losses all that stuff, i see him. i see a guy who sits in front after computer from 9:00 until the place closes. >> i'm not saying steve cohen is mobster. you busted mobsters. >> shouldn't put him in that category. >> i'm not saying he is. when you went after those guys, when you saw criminal activity, you didn't think the guy in the middle knew about it? >> you how much criminal activity is happening on 47th street over here with gold buyer not paying taxes. >> right. >> go after the meat of things. this is person working in business industry betting on corporations about out successfullers in of profit and earnings and all that. >> when you were a cop you would have went for this case.
>> i would not have went for the case. it is circumstantial case. he is a big guy. we said it before. >> you wouldn't have investigated it? >> investigated? yeah. i have to have a smoking gun. for criminal activity you have to have more than circumstantial. if bringing things against steven criminally they better have their case together. >> this is my belief reading that indictment -- >> why didn't the u.s. attorney do it? >> who knows? they don't have the evidence. it is circumstantial. charlie, leave my friend steven alone. >> how is feeling today, tell us? >> i love steve cohen. every charity he is there with his wife, been there for me. any charity, anything i asked them for they have been very -- >> tell me about him. how is he taking all this. >> be honest with you i haven't seen him in a while. i talked to him last week. i happy to care very much about steve. a lot he have people don't know about steve cohen his son enlisted in united states marine corps as enlisted man. let that be known out there. his son went overseas.
his son who marine. the guy with all money still -- >> i love ma reasons. my dad was the marines. >> shows you character. >> that does not excuse what potentially illegal activity or looking the other way. that is essentially what they're saying. you would not look the other way. >> charlie, it has to be proven to me, as a detective, that he knew that was going on. >> did he look the other way? >> i believe, a lot of guys making commissions. you have guys making commissions. how they're getting their information is their business. if they're doing something illegal, lock them up which they did. >> nine guys, that's a lot. fairly large amount of people over the last eight years -- >> look at market, charlie. look at market in the last five years. stevie wonder would win in this market. >> he did more in the market. did 30% returns. >> look in this market, if you're a smart, positive investor you would make a lot of money too, charlie. >> that's not what i'm asking. he basically had a lot of people --
>> you're not going to get me, charlie. i like steve cohen. you're not going there with me. >> let me ask you this. he had substantial amount of people in the fund that worked there, would be problematic. he would admit they're problematic. you don't think that some indication is something is rotten in stanford? >> i say have all your eggs in the carton box, if you only have circumstantial that is not enough to convict. >> of course. >> steven has plenty of lawyers. i'm sure, you know what? somebody else was like this, rudy giuliani. you if you remember he indicted half of wall street. what happened to the indictments? all the indictments were bye-bye. >> he got my call milkin. >> one out of 29. >> biggest one and shut down drexel. better stay away from my friend stevie. >> i will write a story today as a matter of fact. i'm only kidding. thank you, bo. >> all right, charlie. adam: charlie gasparino, on top of it. think one of the quotes from that discussion, perhaps people turning on sac was a couple of
crepitations. lori: great to hear both side of the story and personal information about steve cohen. although the breaking news that the lawmakers refused to comment whether or not an indictment would follow with -- adam: keep watching charlie. keep watching gasparino. he will get it for. sac not only shocker on wall street. facebook wowing investors after reporting its quarterly results. zynga, they work with facebook and zynga reports after the bell. we'll have a analyst's take just ahead. adam: look what is happening with the 10-year treasury. you see right here that the yield is going up. (announcer) scottrade knows our clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help.
because they knoi don't trade like everybody. i trade like me. i'm with scottrade. (announcer) sctrade. voted "best investment services company." [growl] we used to live with a bear. we'd always have to go everywhere with it. get in the front. we drive. it was so embarrasing that we just wanted to say, well, go away. shoo bear. but we can't really tell bears what to do.
moooooommmmmm!!! then one d, it was just gone. mom! [announcer] you are how you sleep. tempur-pedic. adam: time for a fox business brief and "the wall street journal" reports that the faa is issuing a directive to u.s. boeing 787 operators to remove or inspect emergency locator beacons. that directive follows an earlier faa statement in response to ethiopian airlines 787 fire at heathrow airport. mortgage rates are easing for a second straight week after spiking to a two-year high earlier this month. according to freddie mac, average rate on 30 year loan is.81%. federal reserve might slow its bond purchases later this year. after giving hotels low marks, guests are happier with
adam: an update on breaking news. we want to bring you the latest on criminal charges against steve cohen's sac capital, not against cohen. u.s. attorney preet bharara wrapping up his news conference minutes ago. he avoided the some very important questions. the big question at all, one he wouldn't answer whether steve cohen will eventually be indicted. in terms of how much the government might take from the firm he stuck with what was in the indictment which was, and this is quote, hundreds of millions of dollars despite being asked about the potential clawback or fines several times. lori: back to markets as we do every 15, let's check them for you. jonathan corpina on the floor of
the new york stock exchange. jonathan, the dow is virtually flat, one thing buried under a busy news day, business capital spending is at a record high in june we learned this morning. we got uplifting economic data. maybe employment claims not as strong. why isn't that having more impact on investors right now? >> i agree with everything you said so far. all the data should show our market moving higher. you have to look where the market has been. we've had a nice run-up in the market so far. investors are waiting for opportunities to make sales. at this point they're not convinced. they will let the market tread on its own. as we get into next week a ton of economic data will lead the market. investors are waiting to see results of next week's economic data and earnings season continuing into that. for right now the market will held steady as we get to the end of this week. lori: jonathan, thanks very much for your analysis. >> thank you. lori: so facebook is on fire talking about strong earnings. the stock is soaring as the
social media giant reports more active users on mobile then an the desktop. webb bush analyst is up next on whether to buy at these levels. adam: one way to create some buzz. the creative length chipolte went to get people talking on twitter next. [ male announcer ] at his current pace, bob will retire when he's 153, which would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a mortgage. luckily, he found someone who gave him a fresh perspective on hisortfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age. it's not rocket science. it's just common sense. from td ameritrade. [ whirring ] [ dog barks ] i want to treat mo dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art.
lori: hit the like button. facebook a stock to watch on wall street today after second-quarter earnings topped the street. shares are already up 27% in the action. michael pacter, managing director of research at web bush securities. you say it is huge that they beat revenue expectations and they were strong in local ad sales. >> yeah. i think everybody seems focused on mobile but i think actually local is the bigger story because really what we're seeing
is the ad revenue rose much, much faster than the level of engagement. that means ad rates went up and ad rates went up because they have lot more international ads and local ad than they have in the past. local carrefour times more ad revenue. that is trend you will see for quite a while. lori: will that trend translate into the stock price? we're still short of the $38 ipo price. do you see that tracing back that price anytime soon? >> soon is hard to call. if they show revenue breath and advertising on instagram video, yes, i do think so. the problem with facebook everything's a guess. they don't signal what they're going to do. they don't really guide. we're kind of left to our own devices. if they have a similar quality revenue beat an earnings beat next quarter, yeah, i think it could get there. lori: let's shift to zynga now. this is fascinating because
zynga placed out of the gait with a on line gaming provider. candy crush game, king.com put it out. that has taken over the market. >> yeah. lori: what are expectations for zynga after the close tonight? can it break even? >> i think nobody really cares about this quarter. i think we care more about the change at the top. so i think that mark pincus invented a genre. this whole social gaming phenomenon was essentially created by zynga. i think zynga probably dill die lewded itself the social gaming market would grow ott line pay to play market is growing and also mobile. so i think that don will come in and redefine zynga as a free to play gaming company as opposed to social gaming company. more broadly i think that will make the stock move. lori: he is coming in july. this second quarter he is not at the helm. he really has to set the tone
here and you're confident he will do that? >> yeah i think earnings are completely irrelevant. lori: not irrelevant if you have own the shares, i have to come in with that, right. >> i'm sorry. lori: not irrelevant if you own the shares, right? what is your share price expectations? >> i don't think anybody is counting on this quarter being anything other than close to break even. nobody cares if it ace loss of 10 million or profit of 10 million. what they care about is the tone that don sets an are they going to get the cost structure right-sized? do they have growth plans and how will threat get there? will they change strategy to be more of a gaming company to offer casone style games and think that will be more important for them. lori: michael thanks very much. don't miss fox business's coverage of zynga and earnings on "after the bell." adam: you heard of twitter accounts being compromised. you remember when the associated press got hacked and the market plummeted. turns out the latest hacking victim was not a victim at all.
chipolte admits it faked its own twitter hack. tweeted miss tear with us things, mitten 13 password leave around do i have a tweet? chipolte says it was trying to draw attention to its 20th anniversary and have a little fun. they reportedly gained 4,000 additional twitter followers during the faux hack attack. lori: have you heard of the little boy that cried wolf? adam: it could backfire. lori: that could backfire. it is terrible. adam: i still like the burritos. lori: and the margaritas. coming up america's shale boom. tracy byrnes and ashley webster talk about the next surge in production. they will take you through the next hour here on fox business. you doesn't want to miss it. my name is mike and i quit smoking.
chantix (varenicline) is proven to help people quit smoking. [ mike ] when i was taking the chantix, it reduced the urge to smoke. [ malennouncer ] some people had changes in behavior, thinking or mood, hostility, agitation, depressed mood and suicidal thoughts or actions while taking or after stopping chantix. if you notice any of these, stop taking chantix and call your doctor right away. tell your doctor about any history of depression or other mental health problems, which could get worse while taking chantix. don't take chantix if you've had a serious allergic or skin reaction to it. if you develop these, stop taking chantix and see your doctor right away as se can be life-threatening. tell your doctor if you have history of heart or blood vessel problems, or if you develop new or worse symptoms. get medical help right away if y have symptoms of a heart attack or stroke. use caution when driving or operating machinery. common side effects include nausea, trouble sleeping and unusual dreams. it feels wonderful. i don't smoke. i don't smoke. [ male announcer ] ask your doctor if chantix is right for you. to fly home for the bigamilreunion. you must be garth's father? hello. mother. mother! traveling is easy with the venture card because you can fly any airline anytime.
two words. double miles! this guy can act. wanna play dodge rock? oh, you guys! and with double miles you can actuay use, you never miss the fun. beard growing contest and go! ♪ win! what's in your wallet? now get the unmistakable thrill... and the incredible rush... of the mercedes-benz you've always wanted. ♪ but you better get here fast... [ girl ] yay, daddy's here. here you go, honey. thank you. [ male announcer ] because a good thing like this... phew! on't last forever. mmm. [ male announcer ] see your authorized dealer for an incredible offer on the exhilarating c250 sport sedan. but hurry, offers end july 31st. tracy: welcome back. i'm tracy byrnes. ashley: i'm ashley webster.
a magnet for market cheaters, that is what the government is calling sac capital. the multibillion-dollar hedge fund hit to criminal fraud charges tied to quote, systemically insider trading. the latest and what is next for sac investors coming up. tracy: we had wild swings on stocks on earnings hits and misses. we'll have the biggest movers and a preview what is coming up after the bell. our special report also today, america's shale boom today. how investors can make money on the energy surge. we have two analysts that share their picks ahead. ashley: plus t. boone pickens told us earlier this week, fracking, it is safe for the environment. greenpeace executive director phil ratford responds. that is coming up. tracy: you can take a guess what he thinks. ashley: doesn't agree. tracy: time forgoing to the floor of the new york stock exchange. nicole with we're just flat-lining now. >> what a day we've had on wall street. back and forth action.
news on sac. we're in the middle of earnings season. jobless claims that were a disappointment. durable goods that were better. the market is sitting right at the unchanged line for the s&p and the dow. we'll see whether or not we post five straight weeks of gains. right now the dow is looking to snap that. four straight weeks of gains. this week so far is a loser. we're seeing the nasdaq composite, that is the best of the bunch. i wanted to get over to look at headlines on the homebuilders. d.r. horton, we're also looking at pulte group. you san see it is down 11 1/2% pulte here and horton down 9%. both came out with numbers. the executives of d.r. horton noted the rising mortgage rates, how quickly they have risen. they have had cancellations as a result. so their numbers got hit hard ultimately. when i look at the 10-year right now sitting at 2.60%. as we noted we have seen rates on the move to the upside. u.s. dollar has been to the downside. right now the dow is down two. back to you. tracy: thanks, nicole. see you in a bit.
ashley: we have breaking news for you. sac capital hit with criminal charges related to insider trading. elizabeth macdonald outside the is attorney's office with the latest on this story. emac. >> good to be with you be ashley and tracy. we got out of press conference behind us, preet bharara and the assistant director of the fbi new york office calls it systemically. calls it basically the worst insider trading case they have seen in history. substantial pervasive insider trading where sac capital actively recruited research analysts and portfolio managers to have, to basically mine data and mine information at publicly-traded companies. 20 different publicly-traded companies including cisco, yahoo!, dell. preet bharara saying essentially that sac capital turned into basically a magnet for cheaters. here is preet bharara. >> today's indictment though is not just a narrative of names
and numbers. it is more broadly an account of a firm with zero tolerance for low returns but seemingly tremendous tolerance for questionable conduct. and so sac became overtime a veritable magnet for market cheaters. >> and also preet bharara saying that this insider trading took place for more than a decade at sac capital. fox business asked preet bharara whether or not the justice department plans to criminally indict steve cohen. he said we're working on this case as it stand today. eight workers at sac capital either criminally indicted, convicted or charged with insider trading. we also asked george with the fbi whether the fbi is pursuing criminal charges or looking to criminally indict or to get criminally indicted steve cohen, he told fox business that we are working on these leads as they come in. that they are still working the case. it is never good for any firm to
be criminally indicted of the we also asked preet bharara whether or not the justice department is going to get client assets for fitted at sac capital, about $14 billion, $15 billion still there we're hearing from colleagues at "the wall street journal," possibly $10 billion. preet bharara says he will work with sac capital about client assets and whether or not they will get disgorgement of that those assets. he did note hundreds of millions of dollars of illegal insider trading profits at sac capital. whether the $10 billion figure holds remain to be seen. let me get back to steve cohen. fbi and doj were very clear. the firm's manager and actively recruited handsomely paid portfolio managers and research analysts to deliver insider trading tips this was part of the business culture at sac capital. that sac capital sought an insider edge. that edge eventually tipped the edge over the edge into
criminality. so clearly steve cohen is basically is throughout this indictment and not yet criminally charged. we'll watch that developing story as it comes. i will toss it back to you guys. ashley: liz, quickly, you talk about what happens now. the door is firmly wide open, isn't it, for more indictments in this investigation? >> yeah. the door is certainly wide open for more indictments into this investigation. there's another story that was news-breaking today. the doj and fbi did make note that sac capital's insider trading was so systemically and so pervasive they actively recruited a gentleman by the name of richard lee who already has had a known track record for insider trading. they also noted that the business development department at sack capital basically looked for people with the insider trading edge and that their compliance department was effectively a bit of window-dressing t was ineffective and only brought one complaint about insider trading but never brought any complaints about insider trading to law
enforcement. sent it back to you guys. ashley: liz, thank you so much for that. >> sure. ashley: thanks. fox senior business correspondent charlie gasparino is all on this story and he will bring later developments. so stick around. tracy: major averages are kind of trading near the flat line. we're only up five points right now. our next guest thinks we could be in the early stages of a pull back. the next question is, how do you position yourself? above pavlick, chief market strategist. i would be remiss if i didn't ask you though, how does this sac affect you and your business? >> doesn't affect me. hedge fund are completely different what they do. we're a registered investment advisor. clients come and go if they're happy with the performance. if not they leave. hedge fund, they're pretty much locked in. you can only imagine that sac will be locked tighter than a convent right now. the folks there are in a
position they will spend all their time just dedicating their time answering these questions, answering subpoenas. being subpoenaed. it also put as big black mark on the overall industry and that's not good. tracy: that is where it will affect you. >> yeah. tracy: the notion of all of a sudden you're all doing this? >> absolutely. it is not true. folks will say to me in private circles, you know, why don't you get us inside information. we don't do that first of all. plus even if we did do that, if we had access to that information it's illegal. it is the wrong thing to do. you have to keep integrity involved with the business. if this is what is going on at sac they deserve all that comes to them. if they're innocent they should be proven that way. tracy: you're not doing that and that's why you're here. first of all we have to talk about the fact that you think the market is toppy. you think it is ready to tick down a little bit? >> i think it is primed. i think we got a little ahead of ourselves. the market is certainly rallying
off comments from the federal reserve, saying oh, they are going to increase or reduce asset purchases, the amount of mortgages and treasurys that they're buying on a month to month basis. the market pulled back. bernanke saw there was a real shock to the system. he said, maybe not so fast. we'll base it off the economic news. but there's two things bernanke is really talking about. he is talking about asset purchases and also talking about fed fund rate, zero to a quarter percent. tracy: right. >> there's a very good chance they will reduce the asset purchases because we have not this month's fomc meeting but in sent, that our going to have a number of different initial unemployment claims which is showing an improvement in the jobs picture. overall economy is doing okay. manufacturing is doing okay. look at durable good's report, largely on transportation. tracy: right, right. >> you will get a couple more non-farm payroll reports. we think those will be somewhat good and that will lead the fed to the position where they will begin some reduction in asset
purchases and i think the market through winter season starts to give a little bat. tracy: let's quickly talk about your stocks. starbucks is on your list. they're reporting after the bell tonight. >> they are. it is a great company. the economy will improve as we move forward. i'm not all that concerned about any short term volatility that pops up. i want to position for improvement i see later on this year and next year year-round. starbucks will see that and benefit because people will go back to work. they will feel like treating themselves and starbucks will be -- tracy: i still see lines at starbucks. i don't know where the recession was there. utx reported tuesday. missed on revenue and increased guidance. >> stock has been on fire. questions about the honeywell beacon within the airplanes. tracy: right. >> utx now that they own, whatever it is, goodrich, they can supply 80% of the parts to airplane manufacturers. in as utx
representative, here, i've got the order sheet here. tell me what you want to order. they can supply that to airplane manufacturers. tracy: you're buying that. visa yesterday, quickly. beat on earnings. everything is up. guidance is up. we'll keep charge, aren't we? >> visa had a great report. people will use cards more. the article in the paper a couple weeks ago didn't have any new news associated with it. we don't think it has an impact on visa. tracy: good stuff. thanks for commenting on cohen. bob pavlick. thanks very much. ashley: let's go back to elizabeth macdonald following the criminal indictments involving sac capital, the hedge fund. lizzie, you have a perspective from the fbi on this case? >> ashley and tracy we're still not seeing yet a criminal indictment on steve cohen, the founder of sac capital even though the fbi is telling fox business that sack cap tale -- sac capital's founder did actively encourage cheating. the founder of the company
basically actively recruited portfolio managers and research analysts with being ses to inside information. there is even more. that steve cohen rewarded financially his employers for passing on inside information to himself, the owner of sac, steve cohedge. we asked the assistant correct for the fbi's new york office whether we will see a criminal indictment of steve cohen anytime seen. here is george venelellos of the fbi. >> there are big cases. we have to keep wall street honest. we can't keep wall street honest as investors how will you invest in the stock market. >> how bad was the insider trading? how systemically was it? >> well, you know, i don't want to get into that now but it was bad. for a company to be indicted it is not good. >> not good. what about any potential criminal indictment of steve cohen? >> we can't get into that now. we'll go with the evidence wherever it --
>> ashley and tracy, here's the thing, the fbi is very clear and so is preet bharara that, you know, the u.s. district attorney for the southern district of manhattan, they're very clear about what went on at sac capital. they're saying it was such a bad, systemically insider trading problem that it lasted for more than a decade and it got to the point where the compliance department and business department and institutional culture of the firm based as a hear no evil, see no evil kind of business environment. that insider trading was just the thing to do at sac capital. that is throughout the charges and throughout the 41-page indictment. again, we're seeing eight workers have already pleaded guilty or charged with insider trading. we're pursuing whether or not steve cohen will be criminally indicted. that hasn't happened yet. i will give it back to you guys. ashley: liz macdonald. thanks again, liz. charlie gasparino will be here at the bottom of the hour to kind of have his thoughts that have been all over this story from the very beginning.
well the spending battle heating back up in washington. we'll tell you how both side are honing their attack strategy. that's next. tracy: plus our special report, "america's shale boom." two top energy analysts share picks for cashing in on energy surge. speaking of energy, we have to check in on oil, the dow is up about 7 points right now. the oil is up slightly, $105.47 a barrel. we'll be right back.
tracy: it is a quarter past. we have to check on stocks. nicole petallides still on the floor of the new york stock exchange. we're almost green again, nicole. >> that's right. we're watching the back and forth action on the major market averages. take a look at facebook. facebook with a huge, huge move up 26% right now so that is the largest move here for the stock ever. it is getting closer and closer to its ipo price of 38 bucks and this is actually the second highest day in its history on some very heavy volume. all of this is because of the mobile ad revenue they reported.
there was a lot of worries and they reported obviously seeing that agree. zynga by the way is coming out after the bell. zynga and facebook so highly correlated because they actually do crisscross but you're seeing zynga up five 1/2%. deutsche bank has $43 target on facebook. ashley: getting a facebook bounce. tracy: see you in 15 minutes, nicole. ashley: on to the nation's budget. president obama is in florida pushing for more infrastructure spending. meanwhile back in washington house republicans are busy drafting legislation to cut more spending. so it goes. rich edson on capitol hill with the latest. rich. >> republicans are still figuring out in the house of representatives how much specifically they're going to spend next year and what exactly to spend it on. to make one thing clear, previewing president's speech, house speaker john boehner said borrowing and spend something not how you build a durable economic recovery and create lasting jobs. when you look at the president's
tour and what he is talking about in the economy analysts say this makes it a little bit different with the economic fight because now the democrats and the president are playing hard ball. >> markets and businesses got used to threaten shutdown and default and back down. they're not seeing that same dynamic from the other side of the aisle. now that we have both of those, it will be interesting to see what happens. it presents a new risk. >> government spending authority runs out at end of sent. we're looking debt ceiling deadline somewhere mid-october, mid-november. back to you. ashley: rich edson on capitol hill. rich, thank you. tracy: on deck, which energy players are best positioned for america's shale boom? we're going to have two analysts share share picks next. ashley: but first let's take a look how the u.s. dollar is moving right now. well, here we go. it's a little mixed. but for most part lower against most foreign currencies. pound, canadian dollar, japanese yen up against the u.s. dollar. own the peso is down.
always go the extra mile. to treat my low testosterone, i did my research. my doctor and i went with axiron, the only underarm low t treatment. axiron can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant and children should avoid contact where axiron is applied as uneected signof puberty in children or changes in body hair or increasedcne in women may occur. report these symptoms your doctor. tell your doctor about all medical coitions and meditions. serious side effects could include increased risk decreased sperm count; ankle, feet or body swelling; enlarg or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include
residents not to get discouraged. the pontiff said the wealthy need to do more to end social injustice. this is the fourth day of a week-long trip to brazil. back at home former president george h.w. bush went ahead and shaved his head to support the sick son of one of his secret service agents the 2-year-old boy identified as patrick and lost his hair as a result of treatment for lukemia. george and barbara bush lost a daughter to the disease when she was only four. back to you guys. ashley: james mixer thank you very much. appreciate that. on to our special report, america's shale boom. we're looking at the impact on your investments. the surge in shale oil production led many companies to jump into the fracking business. how do you know the best place to put all your money into all this? we have two leading energy analysts from mcquarry.
thanks you both for joining us. jason, let me begin with you in london. seems to me once this shale oil boom has gotten underway ultimately it will be the big guys who will squeeze out the smaller players, do you agree? >> i think ultimately you're correct and we've already seen some of that obviously with exxonmobil buying xto energy a couple years back. that was the biggest transaction. several smaller companies have been acquired over the last couple years. ashley: james, let me get to you too. if that is the case who benefits from that? it seems to me the oil companies, the big ones have been a little slow to the party. >> they have been slow, you're right about that. oil service companies is the big diversified oil service companies that bring technology into the oil play. that would be halliburtons, baker hughes and slumbergers of the world. ashley: okay, schlumberger you pick as your number one. >> number one. ashley: why? >> we like exposure to north america and expose to international markets and we think are growing faster than
north america. schlumberger is the biggest internationally and deepwater and places like middle east which are on fire at this point. ashley: jason, let's get to some your picks. you like chevron. why chevron? >> well, chevron is one of the few companies in the very large integrated space that actually has good visibility on production growth and we actually think that chevron can grow four 1/2 to five peers a year out through 2020. that visibility and level of growth is really unmatched throughout the sector and you get paid 3 1/2% through a dividend in the meantime while they're growing. we think that is a pretty good combination. ashley: jason has small exposure right now to the shale game. is it cheaper for these companies to buy smaller companies already in it or do they go ahead and put in infrastructure for themselves? >> that's a really good question. i think in the u.s. you really have to buy because most of the properties have already been leased up by these smaller companies. i think chevron has really made the decision it has been late to the game.
it doesn't want to pay the high price of acquisition. it would rather look to places like argentina and eastern europe to try to duplicate the shale process in those countries. ashley: james, you mentioned halliburton. it's, what, the largest fracturing company in north america. >> correct. ashley: is it the king right now as far as the fracking business goes? >> in fact they are the king. they have 44% of revenue comes from fracturing. the majority comes from north america which is the biggest fracturing market. ashley: is there room for growth? >> i think so. halliburton can grow 25% plus per year next three to five years. ashley: you think fracking which environmentalists don't like could it end up tied up in a lot of court action? >> i think at this point it has been proven over and over again, we've been fracturing for over 70 years. ashley: not at this table. >> well bee loathe depths of water table. as long as proper procedures are
in place and proper case something in place we think it is environmentally safe. ashley: jason, what do you make about marathon oil? >> marathon is taking advantage what happened with technology. marathon has a strong position in the place called the eagle ford. the reason we think eagle ford is very important because you're producing a lot of oil there and that is still getting very attractive pricing. quite a bit since the shale gas revolution came into being because of oversupply. we don't really expect that to occur to the same extent when it comes to oil. so marathon very strongly positioned there. we think they can actually grow pretty strongly over the next couple years in the range of 8%. ashley: brings up a good point, jason. , james, cost pressure, when the price of nat-gas goes down, does it not get worthwhile to be doing this? the low level has a big impact, doesn't isn't. >> it has. it will cause a big disruption
through oil service industry as the industry shifts to oil shale place. costs are down significantly in the gas plays, we think 4.50 gas will incentivize actual gas activity. ashley: that's a good jason, when you hit 4, 4.50 when you're like in california you're paying it already that will be more incentive to get the natural gas out of the ground? >> i think james is right. i think roughly the level we'll start to stimulate activity. we think over time the price of natural gas will stimulate a lot of incree mental demand. we actually see gas being a very good play over the medium term and you were already at the little of pricing where you start to see more activity levels. ashley: eight buck as gallon in the u.k. where james in. james west, barclays, thank you very much for being here. jason of macquarie. thanks for being here. tracy: $8, i should stop complaining. ashley: it is all relative. tracy: i guess. we'll have way much more on our special report, america's shale
boom. coming up greenpeace responds to a new study finding no evidence that fracking hurts your drinking water. ashley: hmmm. he has been all over the sac story from the very beginning. charlie gasparino is here with what is next for the hedge fund and big money investors. as we head to break, let's look at some of the winners and losers on the s&p. we'll be right back.
places in the world. i do not know shares, but we are watching closely. reporting today after the bell. we have seen shares approaching 52-week high. starbucks continues to expand. just recently working with the parents of an endeavor. try and compete more in the yogurt area. obviously a multibillion-dollar business around the globe. also keeping a close eye on amazon and how it compares to a date. the analyst insiders are looking at the international numbers. also the fresh grocery delivery business and how that may be faring. a lot of news to follow. both of these names. in the meantime, they both have up arrows. ashley: all right. thank you so much. stay tuned to a fox business for complete coverage of today's earnings. coming up after the bell. tracy: and nicole spends so much time at sharp -- starbucks she should own shares.
ashley: a big part of their economy. tracy: we have to go back now to the big story of the day, criminal charges for a multibillion-dollar hedge fund, sac capitol. it was a hotbed for insider trading for years. now sac stands for fox business. what is next? we have to find out. charlie gasparino all over this. >> reporter: to some my interview, the fox news contributor. very close friends. private eye connects new york city cop. above the sea in tonight. he did threaten me if i went after. fifty-seven at least it's on the record. here's the thing. what he couldn't answer that made no sense, he goes, they are making a case. this is circumstantial. why we busted for something somebody else did. here's what he forgets. he's looking to ignore because he wants to go after cohen. he is an ex-con. if he saw a candy store and
there were all these bad guys getting busted for illegal gambling, running numbers, maybe the owner doesn't -- is not directly involved of the honor is they're making money is the stuff goes on. you don't think he should try to close it down? [laughter] tracy: he would investigate you if you jaywalked across the street. >> reporter: and that is what is going on. that is essentially what this indictment says of sac capital. all of this bad stuff going on. he said it was basically insider trading going on. you know, a magnitude that is historic. and whether they can be pointed directly to steve cohen, obviously they can't yet. they are saying that he allowed it, condoned it. his name is all over this thing. they believe that the fund was set up to do one thing and make money off of the legal information. is logical --
ashley: hundreds of employees. in not telling me every one of the new this. handful may be. >> reporter: but on a scale -- i wrote the book on it. if you believe insider trading is bad, there is enough there where you say it occurred on the scale. i will say this, you know, steve cohen has not been charged. if you read this indictment, it sounds like they will eventually get to it. tracy: that is my next question, does eventually go to him? to we indict him? >> reporter: i can't tell you that they will. i can only tell you that they will continue to drive. this says it all. e-mails, messages, talking to people. bad stuff. they stop short of saying he knew it was bad whort the actually prove it. or that he traded on the bad stuff. i mean, it is like one step before. you just have to think that they are setting him up for something like a charge. i don't know that they will.
i know that they want to. ashley: they would have by now with they could. >> reporter: that is the theory. but one thing i do know about these guys, it's very hard for us to monday morning quarterback it. we don't have all the information. they may be working on another type of case. we do know that rico, if they can do a rico case, maybe they could indictment -- indictment of have to worry about the statute of limitations. tracy: you were talking about what this does for the overall industry. killer black spot. >> reporter: sac capital is done. i talked to a couple of the people. they have massive redemptions leading up to a lot of this stuff. there are still a few investors and there. morgan stanley is one of those investors, believing not. i think that after today -- from what i hear from investors they are expecting sac to forcibly redeem shares, meaning give everyone back their shares today, essentially closed down as a public fund.
i don't know how they exist because no wall street firm will deal with them. they're on like a bank. when your bank you need to constantly get funding, borrowing and trading with people. that is why there was the implosion. a short-term basis. there were done. this is not quite that. but they need this tree to sell them and to broker shares for them. if no one is going to trade with them i don't think -- tracy: and you were saying earlier, contemplating a skybridge. >> reporter: in the is the guy. you know he is on the fence, you know -- and anthony told me that he expects them to adjust to redeem the shares. expecting some sort of announcement. i guess we might get it before the end of the day. maybe it's out there. i looked at my blackberry and did not get any notices. tracy: you need to upgrade your phone. you need a little bit of technology. ashley: circa 1989. [laughter] >> reporter: i'm against
technology. ashley: the next one up from the brick. tracy: meanwhile, he knows everything and doesn't even have a smart phone. >> reporter: it works. ashley: that's good. >> reporter: i broke the tarps story. i got a tip. i did on this. i tell you, i went on brand x. i move the markets of 500 points. i move the markets. tracy: i know you did. bin and pencil is all you need. charlie gasparino. you have to read his new book, circle of friends. circle of friends. all the gory i want to make things more secure.
[ whirring ] [ dog bas ] i want to treat mo dogs. ♪ our busess needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to bile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪
bjorn earns unlimited rewas for his small business take theseags to room 12 please. [ garth ] bjors small busiss earns double miles on every purchase every day. produce delivery. [ bjorn ] just put it on my spark card. [ garth why settle for less? ahh, oh! [ garth ] great businesses deserve limited rerd here's your wake up call. [ male announcer ] get the spark business card from capital one and earn unlimited rewards. choose double miles or 2% cash back on every purchase every day. what's in your wallet? [ crows ] now where's the snooze button? ♪ >> reporter: i'm lori rothman with your fox business brief. former goldman bond trader testifying in his civil trial in
new york today. the lawyer misled investors in constructing an investment deal. it is being called the largest scheme ever prosecuted in the united states. five individuals had been indicted after they allegedly stole at least 160 million credit card numbers and $300 million from major corporations. the u.s. attorney for new jersey warned it could be a conservative estimate. the "wall street journal" reporting the faa is issuing a directive for boeing 787 operators to remove emergency locator beacons directly following a statement in response to ethiopian airlines 787 fire at heathrow airport. as the latest from the fox business network, giving you the power to prosper.
natural gas in today's small-business big ideas report, we found the first company to launch a food truck completely powered by natural gas. not just the engines, but the kitchen equipment, the whole kit and caboodle. the company was founded in 2011. it hit the road in february. now this company has seven trucks in its fleet, which are in new york where it has its headquarters. currently 70 employees. that will change. it's going to add 20 new trucks in 11 cities across the country. nat-pizza. ashley: fun. all right. let's talk more about the americans tailbone. we have been hearing about the upside. but the environmentalists really argue that the process could release toxic chemicals into our water supplies. on monday tea boone pickens told us why he thinks it is safe. >> personally 2,000 wells myself. i have never damaged an offer or
anything. sometimes i did not get as much out as i wanted, but i didn't damage anything. and it is just -- i think more than anything else that this is a crowd that is raising money. tracy: well, joining us now with the other side of the story, executive director of greenpeace. thank you for being here because we need to hear the other side of this. what is it that concerns you the most? >> well, he has to be joking. that is absurd what he said. the bottom line is in knows that in order for fracking to exist in this country, halliburton and the natural gas industry needed to convince the government to waive the most basic public health and safe drinking water standards for the fracking cos. before that these companies could not track every now they can get away with anything because the laws don't apply to them. bottom line, it's risky for drinking water.
pollutes -- it puts of global warming pollution, and the american gas association says that it will come out at a price that is probably more expensive than clean energy like solar and wind. tracy: let's talk quickly about what it is. this horizontal pipe shoots water or i should say water is shot horizontal it through the years, polls the natural gas down. that is already in the earth. what is left over is the stuffec chemicals than a separated from the natural gas and go back into the earth. but the argument being, it is so far down below our drinking water and where we go water from that unless these chemicals can rise back up it is not an issue. >> well, there are a lot of arguments but you have to go no farther than communities in pennsylvania to find chemicals in people's drinking water by a natural-gas and people's drinking water which the epa says is causing problems. and they're ignoring the fact that because so much natural gas
leaks out of the earth, that is also causing global warming. we don't need to worry about any of this. the truth is last year 49 percent of your electricity in the united states of america was solar and wind and clean energy. on one side we have this risky fracking and on another side we have today's technology that is clean and we don't have to worry about it. tracy: first of all, we had the governor from pennsylvania on the other day. the department of energy found nothing to be worried about in the water in western pennsylvania. so the government actually did not find the results that you're speaking of. either way it has to happen. they get what you're saying. solar. even nuclear, but it has to be an all-in policy. some point we have to go drill. >> well, the fact that 50 percent of new electricity in the u.s. last year was clean energy, the fact that in iowa 20 percent of the electricity is wind, there is off-the-shelf technology it is clean that is cheaper than building new
natural-gas power plants today. we don't need to take these risks in our communities are without water when we have clean energy the works now and produces more jobs. tracy: i appreciate you being here. if nothing else we need to continue to study the effects. we will be a big boon to our economy. thank you for sharing. >> thank you for having me. ashley: breaking news. sac releasing a statement saying it will continue to operate as it works through criminal charges. it says that handful of men admitting to insider-trading does not reflect integrity or -- the integrity of the firm are the employees. it takes its compliance obligations seriously and never encourage or tolerated insider trading. a lot different than what we heard in the indictments. that response coming from sac. tracy: the saga continues. a quarter till. time for stocks. we head to the floor of the new york stock exchange. your head will be spending
after-hours with all these earnings. what you really focusing on? >> amazon is a great stock to watch. it really gives up a clear picture of what the retail investor and purchaser is doing it this point. if you think, we start to see some of their inventory numbers and production numbers. i think it's very important and will give us some insight. the numbers of begin next week as far as economic data. a big week next week. end of the week. unemployment number. it all ties back again. tracy: you have to be looking at starbucks. knuckleball is there 50 times a day. >> the number-one customer. she has the gold card. clearly if you look at starbucks has a franchising corporation, you can see investors have extra money and want to spend it. tracy: i love me a little skinny been allowed to every now and then. i have to admit. you're great.
ashley: the platinum. isn't that the best? turning heads with a new gadget. we will tell you how it could change tv coming up next. [ male announcer ] what?! investors could lose tens of thousands of dolrs in hidden fees on their 401(k)s?! go to e-trade and roll or your old 401(k)s to a new e-trade retirement account. none of themharge annual fees and all of them offer low cost investments. e-trade. less for us. more for you. all your imptant legal matters in just minutes. protect youramily... and launch your dreams. at legalzoom.com we put the law on your side. ♪ ♪
♪ ashley: google cirque up the internet world when it created one of the first search engines, but a cheap device may lead is shake up the world of television big time. dennis kneale has the details. >> reporter: just introducing a remarkable new gadget that will thrill netflix and youtube a -- viewers and scare the hell out of tech and media titans.
you plug it into a slot on the back of your tv and it plays with video on your big screen. netflix, google, anything you can get. so $35, a task done by rival devices costing 100 to $500. microsoft, sony, apples, they threaten cable giants like comcast and time warner by going over the top. they threaten the channel owners like comcast again and viacom and 21st century fox, our parents. comcast, the name harkens from the internet browser. the king gravity as from the cloud over your own wi-fi network. you don't need your laptop to the videos. you can use your laptop or iphone or ipad as a remote-control for the comcast. the giants are pushing back comcast. up piece of the tv website with time warner letting subscribers pay shows on the tablet. hbo go. for google it is a downsized
trojan horse. it was merely an outlet for amateur home video. a senior executive told me that the real agenda was internet tv. he said we can do it far cheaper. that day now is approaching as more rapidly. that is a big if. they had abundant consumer failures over the years. the nexus mobile phone, online shopping, the motorola purchase that is losing billions. but on sale now. i'll buy it. ashley: already sold out. >> reporter: and i'm getting a copy tonight. will talk about on the 6:00 show. some minutes take that baby home. ashley: just put it in the back of your tv. >> to play right then. now you can suddenly to buy anything under phony comply and the big screen. extremely cool and sleek. tracy: it's kind of like apple.
>> but that's a whole big box. this is just a little fun drive. as much as i sometimes criticize , i don't see how that helps, the cells more i bet you. ashley: amazing. thank you very much. tracy: watch tonight and 6:00 p.m. on the fox business network. coming up now, countdown to the closing bell. what will happen to the billions tied up in sac capital and will the entire hedge fund industry to get on the chin? liz claman will sit down with a big sac investor, former federal prosecutor and our very own charlie gasparino who has been all over this. everything is developing fast. you have to stay tuned. every angle covered. don't go anywhere. ♪
billionaire. who still has money in sac capital? a fox business exclusive with the money manager who is sticking with a hedge fund for now. up in the air, not all airlines are public enemy number one minute comes to customer satisfaction. what about cheryl dissatisfaction? does one lead to the other? we talk exclusively with the ceo of alaska air. an facebook when is a bull load of new friends. the big earnings sending the stock soaring. now analysts are gushing. are they all just johnny-come-latelies or should you listen closely to the analyst community? "countdown to the closing bell" starts right now. ♪ liz: good afternoon. i'm liz claman. is the last hour of trading, and you can of guess what traders are paying attention to right now