Recapping the day's news and newsmakers through the lens of CNBC.
Shamed former New York Governor and State Attorney General Eliot Spitzer wants back in politics and wants your vote again, this time for New York City Comptroller. But before that, he needs your signature by Thursday to get on the ballot. He should have no problem in that, but beating out favorite Scott Stringer and his $3.5 million war chest might be a tall order for former "Client 9," who earned the ire of Wall Street with his prosecutorial record and the scorn of the electorate because of his 2008 prostitution scandal. For those who love irony, Spitzer will be running against the former madam who was accused of supplying him with call girls.
Spitzer appeared on CNBC on Wednesday and spoke about his goal of using the comptroller position to return power to shareholders of publicly traded corporations, including working with big institutional investors.
"This isn't about political activism, let me just take that off the board. This is about the appropriate role shareholders as owners of entities should play. Ownership trumps regulation...Neither regulation nor prosecution can generate good judgment within organizations. Only ownership can generate that."—Spitzer
"I don't want to sit in judgment of you on any of these things. But my question is can you understand how someone that could see you in your position, knowing what the possible consequences could be to your family and to your political aspirations, and it's almost as if you wonder whether there's a screw loose."—CNBC's Joe Kernen
Rising Rates Already Smacking Housing
So much for the housing recovery, some are saying, as mortgage applications for new homes fell 3.5 percent last week and are down 28 percent in the past month. Quickly rising rates are the reason. Sure, the market has seen rates go up before, but not so far so fast. There is no precedent for a 45 percent spike in just six weeks. The end result? Rising home prices will stabilize and could fall as buyers stay on the sidelines waiting for rates to go back down. But that's unlikely to happen, many believe. One analyst is predicting a 19 percent jump in cancellations among home builders and a big drop in existing home sales and prices.
"The quick rate spike is unprecedented, but if you want to see what happened when government stimulus suddenly ends, check out the hangover from the home buyer tax credit in 2010. New home sales dropped 38 percent in a single month."—CNBC's Diana Olick
"What we've done with all the stimulus in the mortgage market is do some serious damage to the natural order of housing where first-time buyers become repeat buyers and move-up buyers in the future."—Mark Hanson, mortgage analyst with Hanson Advisers
Bulls Are Back in Town
After fretting over Fed policy, the market has seen serious gains this week, and some are speculating that pessimism and panic has been replaced by bullishness that could last until the end of the year at least. Sure, the market was in negative territory today after news broke of slow imports and exports out of China, but not as badly as it would have been had the same news come out just a few weeks ago.
"As long as Mr. Bernanke stays behind us, pushing us along, I think [a bull market] can last a bit longer. I think it can extend until the end of the year. Yes, those China numbers were definitely concerning, but look at the reaction from China and look at the reaction here. The reaction isn't as negative as expected."—Pete Najarian of OptionMonster
Opportunities Among Middling Earnings
The market can expect a mediocre earnings season but there are some bright spots. For one, stocks in the S&P 500 that have U.S.-focused earnings should outperform those with overseas operations due to currency concerns. And consumer discretionary stocks remain attractive, as well as technology and industrial sectors. Companies helped last quarter by Federal Reserve stimulus are now expecting less support and any share appreciation will have to be from earnings and revenues going forward.
"I think earnings will be OK, not great, good enough. I think we will waffle around in the market's trading range."—Bob Doll, chief equity strategist at Nuveen Asset Management
"I think we have an economy that is OK. I'm not going to pound the table, but OK."—Doll
In a blow to Apple, a Federal judge has ruled that the company conspired to raise e-book prices. The company maintains that it did not and is sure to appeal the decision before a hearing to fix damages begins. The Department of Justice is claiming a big victory and said that pricing of the conspiring publishers' e-books went up by an average of 18 percent—all the publishers settled with the DoJ before going to court. Company watchers say that as long as the case focuses on books, the blow shouldn't be too bad for Apple, which will nevertheless vigorously fight the ruling. After, all the real fight could be over videos.
"Books, again, strategically aren't where the fight is. It's not clear that this ruling is going to have a lot of repercussions going forward. Just a bad headline for Apple."—CNBC's John Fortt
—By Doug Cubberley, Special to CNBC.com