over in the uk and they were down 5, 6, 7 and 8%. we're seeing a spillover into the emerging market areas and some of the brazilian stocks are also a bit on the weak side across the board on the emerging market area. gold stocks, you saw sue putting up the gold chart there. we're looking at the lowest levels now for some of these gold stocks for july. for example, gold corp are down 5% and you have to go back to july to see $23 on that corp. good news in the retail group. a number of very important companies and macy's abercrombie and kohl's raised their guidance and same-store sales numbers are generally above expectations and only a few of them are trading to the upside. tradertalk.cnbc.com. how are we looking over at the nasdaq? >> we're getting thumped pretty good. 2.2% to the down side and almost 5 to 1 declines. i want to look at a year to date of the nasdaq because it's down more than 5.5% year to date. it's obviously lagging behind the other two major indices and

the tech was a leader and now is a laggard. we've talked about it a lot in 2010. cisco, the one blip on the screen, up 1.1% and each john chambers talking about a broader recovery outside of the exact stock. people aren't buying into it. look at the big names and what they're doing. ebay down 2%, apple more than 3%, google down, 2.3% and dell also getting hit and microsoft which we were talking about solidifying itself above 30 and now it will slip below 28 if things get going and amazon.com down 2.3%. retail, of course, we have the comp sales and a mixed picture and we want to give you quick stories. children's place, 12% to the good in january. the expect aifgsz up 1% up 1.8 and cost owe and zumy's also in positive territory. incredible movement in gold and oil and let's go to sharon epperson. >> the jobless claims data didn't help the bulls and the traders are wondering where is this growth going to come from with the economic growth and

what does that mean for investment demand as well as fundamental demand. the result with the technical selling that's happening here in the commodities with the oil prices that have dipped below $73 a barrel just a little while ago and we're looking at weakness across the board in the commodity sector and look at the crb index. this is an index that includes energy and metals and also grains, meat, all of these commodities are lower on the session. metals, meanwhile, the meltdown there is quite severe. you heard bob mention woot going on with gold stocks and they're poised for the biggest drop since december 2008. silver is at a five-month low and palladium is getting hit harder because of the toyota problems and who will buy a car and near the catalytic converters. rick santelli, over to you in chicago. >> thanks sharon. i'll have to go fast here. look at the chart while i talk. we have the euro versus the dollar, pound versus the dollar.

they're both at their worst levels against the greenback since mid-may, all of last year. what's going on in there's a deja vu to this, many traders pointed out. think about it. equities are going down. the credit defaults associated with the countries and those declining are getting expensive. hey, is that a deja vu about the way some of the banking stocks in the u.s. were trading in the early days of the crisis? you know, go after the stocks and then buy the credit default swaps and this is a vicious cycle that many say credit default swaps are weapons of mass destruction, and we see it in play again. michelle, back to you. >> oh, that is going to be the debate that we'll have to have over the next couple of days. let's get specific about the sovereign debt risk that bob pisani was talking about at the top of the show. the country of portugal after the close last night tried to borrow $500 million euros from investors. they couldn't do it. they only got 300 million in the

parlance of the debt world that is called a failed auction. let's go to concerns nbc's guy johnson who joins us with more on all of the issues riling europe right now. guy? >> and there are plenty of them as well, michelle. that auction, and there are serious concerns with the portuguese government. we have a vote taking place which could cause lisbon problems with its reg ans. the auto me of the regions are very, very high. the spending problems are significant, but will they be able to get spending under control. the madrid market was down very, very sharply today. we've got the portuguese market down by 5% as well. what is interesting is that the euro has taken a really taken a thumping on the back of this. let me show you what was happening. we were talking about what was going on with the dollar index. the boss of the ecb getting quite upset today. he says you know what? you a greg gait the debt and you only come up with public

deficits of 6% to gdp. he says the u.s. has a story which is down 10%. he's trying to go on the defensive for the euro zone. these are peripheral countries and they're not big and they're not going have a big impact. you saw that very much priced into the euro today. let's take a look at the bond spre spreads and they spent a long time focusing on greece. jean claude was happy about what greece is doing. it is hitting its budget quite hard at the moment and trying to draw in those deficits. portugal, big, big spread today though widening and the shift has come from greece to portugal to the iberian peninsula and they're asking questions about who ultimately will be next here in europe? could it be spain? that is a much bigger part of the euro zone and the uk is being talked about as well. >> guy johnson, thank you very much. major index declines and let's get to the "power lunch" market insiders. paul paflick is with banion partners and ned riley, ceo of

riley asset management. mr. pavlick, by any polite terms this is a test of the markets in the united states. do you think the u.s. markets will pass that test? >> i do. i think if you take a look at what's going on in europe, is this the disease that's going to kill the patient over there? i don't think it is. what you're seeing is a relatively bad flu over there and it will knock the patient out for a couple of days and it will make him stagger, but he'll eventually come back to help. greece is trying to fix their problem and, you know, spain, portugal. that's going have to be the next step, but i don't necessarily believe that this is something that is going to be long lasting and put it into context. you're seeing better economic news in the united states. you're seeing growth in china of over 10%. if you're a long-term investor and you want to use this kind of weakness in the market as a buying opportunity. if you're a trader what you want to be doing is watching 1071 on the s&p 500.

>> we're at 1072 right now. >> i was going to say, we're almost there. >> we held it on friday and we possibly can hold it today. if we hold it today there's a dead possibility we get a good employment number tomorrow and everyone here will be happy. ? ned riley, let me follow up there. he says the u.s. economy is growing, but so is the u.s. debt and is there a lesson as guy johnson suggested here in the story of europe for the u.s. economy because the debt here as a percentage of gdp ain't so pretty either. ned? >> no, it isn't that pretty, tyler. yeah. we always kind of look at the crisis point and had is a crisis point, obviously, for global finance. we've been through these periods before. everybody worries about the deficit when the percentages are at their maximum. of course, they are, we're in recession still globally. as far as i'm concerned the deficits will be their widest when economics are their slowest and they will improve as we go

along and economic growth starts to catch up. portugal and some of these other countries that are mentioned now, but look, we had a debt wide, worldwide crisis a year ago. we are out of it now and there's a peripheral damage being done and no question about it. >> i don't know, bob pavlick, whether or not the argument is made both sides depending which way you want to look at it. you can say we're all interdependent upon each other and that it is a global financial system and then i would argue you cannot discount sovereign debt and the fact that greece, portugal and spain and now ireland's cdss are widening out and it's a spider web of financial institutions doing business here and doing business there. so i would be remiss to write it off so quickly. >> absolutely. there are some concerns, but let's take a look at what's going on with the weakening euro. that could be a good thing. you look at the situation and you try to put a little bit of lipstick on this and you can

actually see some order flow going into europe. the u.s. entered into the recession first and you're out of the recession before europe any they entered in after us and they'll exit after us. however, with the weakened europe that could drive some order flow into that country. what you want to be doing is for positioning yourself for growth if you're an investor going forward. you want to look at the cyclical sectors that will be opportunistic going forward in the market. take a look at industrials. >> if i can just get in one last question, ned riley, i know we're worried about portugal and sovereign debt, but how much of this is a psychological factor and a lot of the wall street guys are still scarred and you can't believe the comeback we've had since the march lows. ned? we had to give up something, basically. and we traced just a little bit of move. i'm very, very positive about the market right now. profits are in great shape. maybe the weak stronger dollar

makes a difference and it does weaken the international side a the bit and we have liquidity plentiful out there, it's incredible. inflation is still low and we have people on the sidelines just the way i want them. i want them to look at that wall of worry and see it a mile high because that means we have a lot of garbage to go through before we get to that euphoria point where everyone it is now is the time to buy. >> i'm waiting for that euphoria. good to see you. we appreciate. one thing i'll point out today is whether or not the dollar will be the reserve currency when it is hitting the fan. >> self-healing in that way. >> it is not the gold market today. yeah, that's very true. >> let's talk about toyota which is continuing to slide on fallout from the safety issue, the recall. so some might be asking, i don't know where they are, is the stock a bargain player right now and should you avoid it? >> we'll talk about that. >> big pharma, big oil and we have the scorecard coming up in

earnings central. matt nesto joins us. he has some of the hottest stocks on the mid-cap area and what's on the area? >> if dna is the way i have a life science toolmaker that is absolutely on fire today. you won't believe the move in the stock and i'll give it to you in just a few minutes. "power lurch" is back in two minutes. whwhwhwhwhwhwhwhwhwhwhwh

>> all righty. we're coming into the homestretch on earnings central. let's look at the scorecard to show you where we stand and the numbers are pretty good, michelle. >> we have nearly 300 companies in the s&p 500 that have reported. 75% of them have beaten earnings expectations and 70% have beaten on revenues. >> and the beautiful blended eps which is an a malgum of who's reported and what the expect ags remain for those who have want up 206% there and the expectation was for a 184% gain. so ahead on that blended revenue growth up a more modest 8%. the expectation was 7%. >> that may be why we don't see quite the reaction some had hoped. when you say 75% beading you might get a petter reaction in the stock market and the revenues are not quite. >> which brings us to screen number two which brings us to the surprise factor here overall in the s&p, the surprise factor

of the eps has been 14% and the performance of the s&p sn since earnings season began down 6.4% and you see the pattern there. consumer discretionary down 27% and higher than the average estimates. >> technology has beaten by 22%. that sector has gotten hammered and it is down 9.4%. you're drawing there and it won't do it. there you also see materials and we've been watching those, the commodity stocks getting hammered in reese want days. there's the update. >> it was all priced in, tyler. >> sell on the news. >> dennis? >> all right. more fallout from the toyota recall. first problem was gas pedal and now it's brakes. today highway safety regulators announcing a formal investigation of rate problems involving the 2010 prius hybrid. here's a look at the one-month chart of toyota and down another 2% today. down 15%, 16% in a week. join us from troy, michigan, with more, phil?

>> we first got word yesterday that there might be some issue regarding the prius brakes and it could lead to an investigation and here's what the federal government is looking into. when you talk about the prius, there have been complaints that the 2010 model year and that's the year we're talking about, the 2010 model year, those brakes do not function properly. 124 complaints and four accidents have been linked to the prius brakes failing in the united states or want working properly, we should say. the brakes do not immediately respond on bumpy roads. this could take shine off of toyota's halo car. just how popular is the prius. it is the number four-selling vehicle for the company. it is a brand that pretty much dominates hybrid sales within the industry here in the u.s. it was the one to establish the whole thing with hybrids. it is the one that they could turn into a fourth possible brand for toyota. one toyota executive this morning in japan denied that this is the -- the problems are the result of the company cutting corners.

>> translator: we would not think of sacrificing quality for the sake of cutting costs. it would not make economic sense. >> while it may not make economic sense especially when you take a look at how well toyota has been doing over the last 15 years, but also take a look at the last quarter. some people will look at this and say what? their net profit was up given these problems? keep in mind, the quarter ending in december is what we're looking at here. they beat wall street estimates and they raised guidance for the nextiary. that said, they remain under pressure down 15% in the last month, sue. to talk about how much the prius means to this dump and the comp the impact of the investigation and we talk about how this brand, the prius brand, if you will, how important it is to toyota. we cannot overstate that because a lot of people look at this and say it's just the hybrid cars and we're just looking at the brakes, it goes beyond that. we're not going let you go yet,

so stay with us because we'll talk about this crisis, whether it's a bump in the road for toyota's stock, long-term or not, on the phone, tim ghriskey, senior portfolio manager at solaris asset management and he owns shares of toyota, but he's want bought more since the recall was out. let's talk about why. tim, nice to have you with us. >> sorry i'm want there in person. >> i wish you were because the story doesn't seem to be going away and i guess that's the question if you're a shareholder. i know you're not adding to your position. are you considering that or do you think this is a long-term issue for the stock? we don't know it's a longer term issue and we would be considering to ad when the stock stabilizes here. these types of recalls don't have long lasting effects. if you look back to the ford explorer with the rollover and the tire issues and the sales picked up two months later and they resumed growth to actually higher levels a year and a half later. so, you know, we see this as a

temporary issue for the company. >> the options action that was negative that indicates there may be more downside to the stock. how do you determine that it has stabilized? what kind of price action do you look for? >> exactly what you referred to. the options stabilizing and the options action stabilizing and the stock price stabilizing. it's a little bit hard because we're also in the middle of a market correction here. so that's impacting the performance of the stock as well, but, you know, we're simply looking for stabilization and the price momentum and value buyers coming in here because this is a distress situation with real value in terms of the earnings, for a very high quality company, aa accredit rating and very strong historic sales growth and the operating margins above the peer. so this is a quality company and worth a higher multiple at some point. >> tyler here. phil lebeau has made a point that if there's pleasure from toyota's pain, it might be down

to honda and/or hyundai. i can help with all of the manufacturers and even help ford and gm which would not be a bad thing in terms of the american economy at all. if you look at toyota, you've got a big part of the production here in the states throughout the south. they are a big presence in terms of the auto manufacturing industry in the states now. so what hurts them in terms of the american economy, hopefully benefits other u.s. manufacturers. >> what could help you that might help you sell toyota. is there anything that you're watching that might push you? >> we've watched throughout this crisis and unfortunately, it's been one issue after another. we thought it was a very contained, small issue that had punished the stock and that's when we took the opportunity to buy it. you know this prius issue that's just come up certainly is a concern, but it doesn't seem anywhere as significant as the

accelerator issue. at some point here the pleading stops and you have a high-quality stock at a discount price. >> when this phil lebeau? that's the question. you feel like the centipede and the shoe keeps dropping every day. >> i think there's an element here that let's make sure the regulators are saying let's make sure of all of the problems with toyotas and once we know that we do the investigations. is it possible that we could hear about another defect involving another vehicle or line of vehicles? that's possible, but for the most part you're hearing anyone come out of the woodwork. if you don't hear investigations then likely wah you will hear is the investigations focusing on what we already know. >> thanks, phil. up next, it is the big wall street mystery. why hasn't goldman sachs fessed up about those big bonuses? those actual numbers. how much is ceo lord blankfein getting? we'll have the latest buzz when we come back. >> with the market up 204 points

and the financials with bank of america shares getting hit especially hard after the company is slapped with charges by the new york attorney general. we will explain and we're also taking a look at want only the dow, but also moves to the is up side with this market with cisco systems rising on a better than expected quarterly profit and an upbeat forecast. it's up better than 1%. >> it was supposed to help today. >> it was, but it's not doing anything today. we're up 200 points.

bank of america facing new charges over its december 2008 acquisition of merrill lynch. this as the sec seeks to settle charges with the bank for the second time. cnbc's mary thompson joins us with more. >> dennis, along with the bank, new york attorney general andrew cuomo is filing civil fraud charges against b of a's former ceo ken lewis and former cfo joe

price who oversees strategy at the form. lewis and price duped investors into approving the merrill deal by want disclosing merrill's massive losses ahead of the shareholders vote and that the company was duped into providing billions in aid after b of a said it would back out of the deal unless uncle sam ponied up. that was an arrogant scheme hatched by the bank's top executives saying they could play by their own set of rules and they created an enormous fraud and american taxpayers paid billions for bank-america's misdeeds. the charges were without merit as did lawyers for mr. lewis and mr. price. the sec had access to the same information and found no bases to enter a fraud charge against the firm or individuals. the sec saying it is seeking court approval for a $150 million settlement with the bank over violations of proxy rules. this concerns the bank's failure to disclose per you will's losses to shareholders andst failure to disclose payments of billions in bonuses to payroll

employees. they're the judge threw out a $33 million settlement proposed by the two sides. he said if the bank's axe were as egregious as the banks allege, a fine should be imposed. the 150 million in the proposed settlement would be distributed to b of a shareholders and if it is approved the two go to trial. >> we have a rrth remarkable development. the judge saying you're not being tough enough on the individuals and the sec comes back with $150 million instead of 3 million and como charges individuals here. it's a divergent path, isn't it? cuomo wants to run for governor, doesn't he? is i'm sure that has nothing to do with it. >> this story dove tails with another big bonus story and david faber joinsous that. lots of questions are out there about why we don't know what the bonuses are at goldman sachs,

very particularly, lloyd blank fooin. they haven't announced yet and it's a big mystery as to why, why not? how much? david, what are you hearing. >> mr. blankfein's compensation which will be all in stock, of course, including the other 29 members of the management committee at goldman sachs has been an issue that many people have been watching in part because it will be a barometer of what everybody else feels comfortable paying themeses although we already know what the compensation is for a number of other wall street head honchos and certainly the focus has been on mr. blankfein, more on jamie dimon, partners at goldman sachs as i reported was over a week ago got there and were already told what they're going to earn. they haven't been paid yet. 60% in stock and 40% in cash and interesting that the board hasn't yet told blankfein and he's got 48 howevers in which to file a form four and we'll learn about it when they tell him or when he's filed with the sec. the times reported 140 million

and goldman sachs dumped all of that immediately, right? look at the actions that they've taken. they're approving a say on pay proposal for shareholders. the 30 members of the management committee are being paid all in cash -- or excuse me, all in stock and they've invested three years and can't be sold for five years. to think that they would pay him $100 million, a ridiculous bonus that year? no way. it would be very difficult. >> do either of you think it's possible upon the new york times raises the question is jamie dimon at all waiting to announce their bonus until they see lord blankfein's because that will be a measure. that's been the suggestion in the printed press. >> i don't believe the boards will act in that way. >> they were sitting at the adults table. >> who was that? >> i think that was matt nesto. >> no, i don't believe so. i think the boards will make their decision and certainly there will be criticism regardless of what blankfein pays himself unless it's absolutely nothing. >> they can't do anything without getting persecuted for

it and embody the evils of wall street. i've asked so many people on wall street, what's the number and that's sort of where -- and somehow. >> you want to highlight the bottom of the screen and the stock of interest to the viewer and the long-term counterparty credit rating to double a plus from aaa. remember, they had indicated they might do this in the wake of the burlington northern acquisition. >> interesting to note. >> all of this will not stem the debate on compensation and whether in pack, compensation levels are correct or how it's going to change in the future. >> goldman did have a record year. >> i do want to point out that i was told that bee are not going to hear about it this week. we believy being not even hear about it next week, but think about it, friday of next week, long weekend gives it time to simmer down. >> just a thought. >> thanks, mary, thanks david, very much. coming up in the next hour we'll talk more about bonuses. should they have their taxes raised? two senators are proposing

legislation which will do exactly that. we'll debate in our power grid. >> and then straight ahead, we have a stock that will help you sleep at night. it's off the chart ofs as well and then there's "the fast money halftime report." and then there's us. i know a lot of you guys are thinking on the sell-off what should i buy. you might want to wait before you pull the trigger. we'll talk about financials as well as materials and tech stocks. we'll ask the traders what they think are buys right now and which you want to leave in the rubble. also we'll get the view from the front lines on this sovereign debt concern, tim seymour phones in from moscow and gives us his take on whether the crisis is spedding. first, more power lunch right after this. ♪ throughout our lives, we encounter new opportunities. at the hartford, we help you pursue them with confidence.

by preparing you for tomorrow. while protecting what you have today. you've counted on us for 200 years. let's embrace tomorrow. and with the hartford behind you, achieve what's ahead of you.

>> you're looking at the share price of berkshire hathaway. it is down $2900 or 2% and you can look at the per-share price on the class a stock. why? well, pause s&p 500 just minutes ago reduced the credit rating on berkshire and its subsidiaries

to aa plus to aaa all because of the basically because of the acquisition of the burlington northern santa fe for approximately 26 billion in cash and stock. we're going to take a quick break and come back and follow up on this story and all of the other things that are happening on this very busy and very fascinating day in the markets around the world. we'll be right back.

here's a stock that may be off your radar, but it should be on your radar. temp you are pedic, basically since the bottom, it is up 589%. one year it was up 263%. you've seen those commercials, the couple that gets up with no aches, no pains and completely in love after a wonderful night's sleep. he is the managing director with raymond james. nice to have you here. >> nice to be with you. you like the stock generally speaking and you're worried about the run that it has had. tell us why. >> well, the stock has had a good run off the about the bottom, as you mentioned. the valuation to me is challenging at this time. they've done a lot in terms of the way that they market their product, and i'm not just talking about the commercials that i mentioned where everybody has the perfect night sleep, but they've gone to social networking as well and that has changed the game for them compared to their competitors.

>> they've been doing that for a long time. they've had a direct marketing effort and they've been doing through that channel since the beginning. what they've done most recently is doing things with the merchandising to increase the audience for it. a new part of the product is their es or extra soft collection which is marketed under the cloud name. so they've interviewsed earlier in the fall, the clouds supreme which sold very well and just that the las vegas market which opened monday. they've introduced the cloud. >> what would make you change the hold rating which you currently have on the stock and put it back in the buy category? >> i think it would be valuation based, and we would like it see it in come a bit and it's selling at 2.8 times sales which is pricey for my taste. >> what about the cash? the debt to cash ratio? are there any issues there and if not, there's been some questions about whether or not they might be looking to do some acquisitions some. >> well, we haven't -- i'm want

sure that there's any acquisition that makes a whole lot of sense other than perhaps some of the licensees they have in other parts of the world. their debt to ebitda right now is at about 1.6 times so that's not a worry. that was a worry earlier last year which is why the stock got down as low as it did. >> thank you very much. appreciate it. >> you're quite welcome. >> see what a good night's sleep can get you? 589% on the stock since the bottom. >> still ahead. the china challenge. the internet freedom, sarls sales and the dalai lama and a whole lot more. are we heading for a full-blown economic war for that nation, and two senators building tax executive bonuses at banks that have bailout money. is that a fair move or is it war on wall street? >> up next, melissa and the gang are ready to go. "the fast money halftime report" is on deck, but let's look at the dow, the nasdaq and the s&p all with losses of greater than 2% on this rather dramatic day

in the markets.

welcome to "the fast money halftime report." we are getting to the heart of the action as it is happening. wall street's worries about sof rib debt issues have traders fleeing for safety.

>> the fast money grew, the negotiator, guy adami and carter worth of oppenheimer asset manageme management. guy, i want to kick it off with you. is this it? and implied in that question is are we headed for a bear market at this point? >> we're in the midst of it girl. how are you, mel? >> great, aside from the sell-off. >> we told you when intel reported, good news, bad action. we tried to warn you then. goldman sachs, look at the 195 level a couple of among thes ago. look at what the stock has done since we've been trying to warn folks. you don't have to play defense. things go down faster than they go up. we said it last halftime report and you can make more money on the way down and you have to learn how to skate backwards as well as forward, mel. let's see how backward we are going go. carter worth, let's head to the chart of the day and talk about how much damage you see ahead. >> think the most important point is we desperately need

this to be happening. that uncorrected eight months, nine months, continue months in a row off the march low. this is what you need in order to keep things somewhat healthy. so 1150 is our high, 1150 spot 4-5 about two weeks ago and we're looking at 1050 and we think that will be the point at which there will be some buying interest that emerges, if you will, and that will be enough of a correction, about 9% to, let's say, allow for things to stabilize and we're not in the camp that will cut dramatically below that level. we are healthy and so forth. >> we should note from our intraday high, we're off by 7.5% in total as of today's session. dr. jay, we're seeing with the sell-off with the vix ballooning. brian was telling me very handy stuff. whenever we see the vix spike 10%, the week following we usually see it resume to normal

and by about 15% which tells me the next week could be key. >> absolutely, mel, that level carter talked about, the first one, 1070. monday i was talking about these technicals have been exactly what the market's trading off of. we blue back up to 1100 and now we pulled back to ten 70. 1070 area is very critical. people running around in a firecracker factory as rick santelli would say, lighting matches. they're trying to get this thing moving fast tore the down side to the extent that they can do that, that fear index will pick up even more. look for it to trade close to 28 on this move. >> we want to move on to the next trade. commodities getting crushed today. zack care bell sees opportunities. you like freeport-mcmoran? is that correct at these levels? >> i don't know where we are in the past 20 minutes and we're down below 67 again. this is more than a 20%

correction offst highs and that's true for you could pick dozens of commodity company names in addition to the raw materials because the fact is the global story, and i know i sound like a broken record in hammering on this, but it is the story of the past year that propels you into this market. i totally agree with carter. this is absolutely necessary. we should have seen this correction, but now is not the time to go, okay, another leg down. greece is not going to bring the global economy to its knees. i want to take the other side of this argument on freeport-mcmoran. if you told me to buy on the dips six months ago, we would be exactly where we are today and it's simply not taking into consideration that china being pull back the spending and the state grid will reduce spending by about 20%. that may not be factored into copper prices right now. >> this is where we get to, the two-week timeframe so you're buying free port at 66 because you hope it goes on 72 next week or you're doing what i'm doing, yes, short-term trading on the

position and for a longer term thesis. i don't believe china will cut back enough on the spending because they're committed to their 8% to 9% growth target, whatever that means. you will have a lot of construction that will propel the cost of copper and yes, freeport and copper is the purist equity china play you can think of. >> dr. j., last night your brother talked about u.s. steel. heavy call activity and you are long the fame. how are you feeling abouttoday, slaughter? >> those names are near the top of the list of the stocks being slaughtered but i'd rather by an options spread at one-tenth the valuation of the stock or less, maybe 5% of the value of the stock, then on the stocks because if is it a pivot point at 1070 in the s&p you're going to be a happy camper, you're going to double up on your money. if it slides to 1050, you don't get cleaned out. that's being proactive investor like zack's talking about instead of sitting back and

wonders, what happened. >> let's drill down on one of the biggest reasons behind the sell-off, concern about sovereign debt risk. tim s seymour calling in from moscow. >> i'm here at a conference where a lot of the big guns, people like rubini. and some of ta leave's comments hit the tape from russia concerned and bets against u.s. treasury. but it's coming out of europe. it's portugal now putting out a plan to cut deficit below 3% of gapd, which, by the way, i don't think they can do soon. ewe know about greece. spain's down 6% today. so the markets are going after the weak players here. it's -- we're getting the macro numbers and the market's response. so i think there's a lot of risk. if you talk to investors here, people are bullish about the growth coming out of the emerging world and to the extent that can support develop. there are so many major global risks. it's not just portugal and

southern europe. u.s.-china relations have never been worse on the trade front. a number of issues in washington. all of these things are coming to a boil. when you look at charts, the guys are talking about attractive levels like freeport and u.s. steel but these things are broken. i don't think you buy these stocks at these levels. >> i want to get your perspective on the cds spreads blowing out around the world. are we in a situation where there is sort of fear and we're in this downward spiral? we saw it when the investment banks blew out. there was panic and spreads kept widening. is there panic fueling the this move? >> i think there's panic and as it does it comes from the debt guys first. guy that are long on the debt side in some places that are protecting themselves and your krfrmt cds, i think you're getting a market reaction to real

concerns. i do think the problem is, you're not getting any strong statements out of the eu. you're not getting any sense of panic from a number of the leaders that you need to see policy leadership on, and that's a concern for the markets, because the markets are falling through on their own. >> tim, we will speak to you tonight. >> mel, any conference where rubini is speaking, it's a panic inducing event. i don't see why greece is different from the middle east. they'll be bailed out. there's a lot of worry. the question is, does that trigger increasing leg down, and i don't see that now. >> fair point. let's turn our sights to cisco systems, one stock holding on to gains, just barely. there's a lot of carnage across the tech space. guy adami, names talking positively about on the desk, seagate, trading sharply lower. you see this pullback as any buying

opportunity? >> they're broken. we've talked about the names and good news in terms of earnings. look at intel, pretty good. but the trading action was lousy. that is a -- we tried to warn people then. if you're zack and look-term, these are attractive. trading from long side, trying to pick a bottom, i don't think you can do it. these names are broken. the only reason cisco is higher today is because it's down 12% over the last couple of weeks, frankly, and it was the last big tech name to report. if he reported a couple of weeks ago, it would be down with everything else. >> carter, when it comes to cisco, i'm getting notes from other technical analysts that it needs to close 2350 in order for the tech chad to resume higher. right now we're at 23.20. what's your guess? >> we think cisco's fine and the other marquee names have given back enough, 100 points off the top of google, apple, big names are down to to levels to where the buys are emerge. so we think a lot of the damage is done in that sense. >> going to take a break on t"te

halftime report". ceo of sara lee joins us discuss the seek krets of tcrets of the success. halftime, though, back after this. stocks in the soverei. can tomorrow's jobs report save us? we head to the prop desk for your set up. he already made head leans on "fast" where is a ledge dare investor headed next? the chairwoman with exclusive access takes us inside the money and reveals his latest big move. plus, a classic american company in the midst of a comeback story. the boss of sara lee gives us the secret ingredient behind its success on america's post-market success on america's post-market show tonight.

time to call the close. carter, kick it off. >> sure. we've seen lows for the day and end up, the dow down 190, s&p at 1075 level. >> zeke? >> i'm buying some commodity names we talked about, global industrials but buying sdfs to protect. >> guy adami? >> with respect to mr. schwartz, dollar on the rise. commodities feel the pain. elevator down. >> that was a haiku, fyi. >> tonight on the desk with you, i'll be taking a look at levels for steel and gold stocks and where we might be buying. >> dr. j., see you tonight. that does it for us at "halftime." tonight on "fast money," continuing coverage of the sell-off and exclusive access to bill ackerman's investment conference. sue? >> we are watching the mark extremely carefully. we take a look at whether or not another component of that might be a coming trade war with

china. we will talk about that, and much more coming up on the second hour of "power lunch." welcome, everybody, to the second hour of "power lunch." dramatic day on wall street, and in world markets all over the globe. the markets continuing to slide, sovereign debt and economic concerns. the dow, basically, all in red. no one in the green, not even cisco, which was earlier today. the s&p, only a handful of stocks there higher, among them, unisis and ncr 10% higher. >> i'm sue herera. the president lunching with top business executives to talk about the economy and job creation. among attending, heads of american express, microsoft's steve ballmer and frederick smith and john chambers. cisco, coincidentally, leading the few nasdaq stocks in the green today.

>> i'm michelle caruso-cabrera, overseas worries don't stop with sovereign debt. is a major trade war with china about toic night? >> i'm dennis kneale. start with bob pisani at the big board, sir? >> reporter: similar to january and february last year, it wasn't pretty there either. we dropped all through january. last week we stabilized january. then after a few calm days in the beginning of february, last year, we dropped again. didn't hit a bottom until the beginning of march. the big sectors, we're clearly in correction territory in some of the groups that we watch closely here. the gold stocks have been down notely. many down 7%, 8%. much of the decline is today from the january 19th highs that we saw in the market. semi cuconductors down 11%. airlines, health care services. if you find a correction more than 10%, these sectors are in connection territory. then the materials, where you get a lot of phrases like broken

stocks thrown around. 20% declines or more in some big names here. u.s. steel, look at that since its earnings report, has not been the same, straight down the last three weeks. freeport mcmoran, iamgold, gold stocks down. rio tinto, alcoa, on the down side. nasdaq, lowest level since november. >> that's right. you don't need me to tell you how hard the nasdaq's getting hit. i want to give you perspective on how broad based it was. 6-1 declines now it's 5-1, across the board. i talked about the big caps. let's look sector by sector. bob pisani touched on the semiconductors. the philly semiconductor index down 3%. intel down 3%. broadcom the only name bucking the trend because of earnings, barely holding on, 6 cents to the upside. amazon and apple, focusing on stock prices, not news.

amazon bought a touch-screen start-up. let's see what the next version of the kindle looks like as they try to compete with the ipad. oil getting hit. the dollar, what about solar? j.a. solar, sun power, first solar, smacked today. ja, down 7.6%. fee wars with brokers, t. rowe price and charles schwab both down, schwab slightly outperforming the market. it's down 2%. let's go to rick in chicago. >> reporter: thanks. in many ways, this is a rerun, as we've been talking about on cnbc all day. the types of trades that caused very much pressure in bank stocks in the country during the heart of the credit crisis seems to be playing out on an equal footing in europe. and different parts of the countries that, of course, formerly considered i merging countries. is this going to be enough to continue this negative spiral?

i can't tell you that. but i can tell you, it's been a huge positive for the dollar, as you know. you see it in this chart. as that occurs, there's many people, of course, getting hurt in the dollar denominated commodities that many may have overvalued what their movements were about. interest rates, it's not only our rates moving down, we're also seeing boom rates move down as well. the story's not an easy one to decipher from the fixed income credit equity and derivatives side. >> it's all intertwined. there's a sense of panic right now in those that are dealing in credit default swaps, as it per takens to sovereign debt, and the fears started royaling the european and overseas markets today. guy johnson has more on how is it continuing to play out across the pond for us. hi, guy. >> sue, yeah, we spent the last few weeks very much talking about what's happening in grease and concerns out of athens. athen is starting to get to

grips with its problems. what we're starting to see is the story spread. today it spread to portugal, the other extreme of europe. banks got hit hard. we saw the ten year portuguese bond up around 80 basis points. so the spread widening coming through there. you see the credit default swaps, obviously, pricing in, more concern. various reasons why we're having problems in portugal. let me get to the root cause of what's happening in europe to the smaller countries. debt to gdp ratio problem is large. 2009, portugal estimated to be 77.4. 2010 when we get up to 84.6. the problems start to come through. let's flip it over and show you what is happening in greece, which is getting to grips with what's happening. 2010, 108% of gdp. those numbers are getting quite dramatic. these are small countries in europe. the real worry, why today's move from greece to portugal is a problem is it goes from portugal

to spain. now spains a much bigger country within the euro zone, a significantly larger country within the euro zone. as that experiences the problems portugal's had today that could pose a real issue for the euro zone, well jean-claude trichet in brussels step in before that to provide a bailout plan for maybe portugal, greece, to stop that happening? but the other thing that is talked about here in europe is what is happening in the united kingdom. the bank paused qe, pimco said that market is sitting on a bed of nitroglycerin. could the uk be next? that's the real threat. >> that is what they're focusing on here as well, guy. ty? let's bring in stew schweitzer in new york. good to have you with us. >> tough day. >> how or whiched should we be about the credit default swap

spreads, as it pertains to part geez, span irk, greek debt? what is it telling us? >> i think it's telling us that we've swapped a private debt problem for a public debt problem, and not just in america but around the world. and what investors are really concerned about is that it's going to take a long time and a lot of austerity to bring the deficits and the debts back into line. >> i wonder if, what we're seeing in europe, is the beginning of bond vigilanteism. investors saying we're done footing the bill and what happens in the united states you wonder, does this happen here at some point? >> well, you know, i think you're exactly right. this is a different kind of bond vigilanteism than the kind we saw in the '80s when it was vigilanteism against inflation. you're right, there is so much debt. let's face it, you know in response to the austerity

measures in greece, they've called a national strike for later this month, for the 24th of this month. >> for investors, because as guy rightly pointed out, portugal and greece are smaller countries, perhaps they're able to put it under the radar. but ireland cds swaps are widening out, uk cds swaps are widening out, considerably. that brings in the u.s. component of multinational corporations that have large exposure to those parts of the world. do you agree that that's the sleeping giant that's out there? >> before we answer that, stu, could i interrupt to point out we're getting word from a japanese news service that toyota is going to recall some priuss, about 200,000, 270,000, in japan, for those aforementions brake problems. these are only priuses made and sole within the domestic market. >> raises the question of whether they have a global

problem rather than a u.s. problem. >> certainly. stu, go ahead. >> they've sold those cars made in japan, here as well. >> it's not japanese? >> the headline says u.s. and japan the recall is in. >> i beg your pardon. i thought it was just japan, as i was told earlier. >> i'm sure it's global. they make the cars in japan and sell them wherever, including here. >> a follow-up on a quick quick on the credit default swaps i hate hearing swaps mentioned on a day like today. a year after meltdown we haven't d and cauterized this problem. how could it be this kind of fear-inspiring, uncontrolled element? >> could you address the uk question i put to you? >> yeah, these are a lot of questions, that's inflation right there, let me tell you. i think -- look, it's natural here that all of these fears would be resurfacing. we don't yet know if this

expansi expansion's going to be sustainable on its own. the big message out of all of this is, if the expansion were to prove unsustainable without more support, there's very limited scope for additional support to come from governments around the world. so we really do need this thing to be able to keep going on its own. personally, i'm relatively optimistic about the u.s. you started by asking about the u.s., sue. but i think that the u.s. is a long way from greek, portugal, spain, even french kind of deficit problems. >> let me bring in simon hobbs, who has joined us. what about the uk? their budget problems are as bad or worse than ours. >> that's a tougher call. >> i think on the question of the euro zone, we should point out that we're not going through the currency crisis that would be happening if it didn't exist. rather than picking off individual markets and becoming self-fulfilling prophesies you have a megacurrency that is

under pressure. i think we should approach it very much from a glass half-full standpoint in that respect. it is a political organization. it probably won't break down, it's inconceivable -- >> you don't think it could fracture it? >> if it withstands the challenge, that's really bullish for europe longer term. >> remember, you've got over 300 million people use the euro every day, crossing boarders and they won't let it break apart. the bigger issue, probably here, it's a symptom of the withdrawal of the risk trade. the free money's ending in europe. suddenly everything's beginning to blowout. and we will see this happen around the world. and the most important thing, i think, now the affect it will have on the dollar. if the risk trade is withdrawn everywhere, haw howe dramatically will the dollar rise and what will the effect of that be on reducing the dollar carry trade and the risk trade? you've seen metals down today. it's all moving. the world indices down 2.2%. >> simon, your prediction is working out.

you said a year of dollar strength. >> this is the last reserve currency in the world and as everything blows up it will the dollar -- >> they go to the safe dollar, though we thought the safe dollar was too weak. >> even the yen has been a haven. >> pushed the dollar down. >> we've got a 3% move to the upside in the yen, stu. tell me. >> yeah. i think one of the possibilities here is, despite toyota's problems that japan, which of course, has seen 20 years of malaise, could outperform at leaf temporarily. >> wow. >> i find it amazing that i would say that, frankly. >> i know. i was kind of -- >> a bunch of hedge funds have that trade on right now. >> i'm longer term. i remain worried about japan, but it seems, to me, putting toyota aside for the moment, it seems to me to be less affected by all of this. one thing about japan is it's in the right part of the world. asia is still relatively okay

here, even with china's tightening. they're tightening because growth is good. i think asia looks good to me here. >> thank you, stu. always a pleasure to have you with us. >> always a pleasure, thank you. >> simon, thank you. we'll see you later today. straight ahead -- the showdown with china, speaking of asia. google, the internet, freedom, arm sales, currency manipulation. people think we're looking at an economic war with china. would that be like starting a fight with your own loan shark? plus, the metals continuing their meltdown. gold, silver, platinum, palladium, trading lower. and all three major stock indexes going down right with it.

as they say in horror movies -- >> they say be afraid, be very afraid. is that how we should be thinking about china? let's look at the bill of goods here. google, threatening to pull out of china over censorship and cyberattacks. china says, make my day. chn warns if president obama meets with the dalai lama and would undermine our relationship. we say, too bad, we're meeting with him, anyway. hillary clinton suggests china reconsider supplying oil to iran. so far, the u.s. has failed to get china on board for economic sanctions on iran. item, china tells us not to sell arms to taiwan. we say, make my day, we're going

to do just that. china plans to retaliate with sap sap sap sap sanctions on companies involved, like boeing. is a war brewing? business professor at the university of california irvine, author of "the coming china wars." he's a cnbc contributor. dan griswold, director of the kato center for trade policy stories. we have no time left after that. peter, let me start with you. it is never has dennis mentioned, a good idea to pick a fight with your lender. >> look, tyler, i wrote the coming china wars three years ago and everything i wrote in the book is coming true. go down the list. they use weapons like currency manipulation in massive export subsidies to attack our economy and steal our jobs. they hack the pentagon. they steal our technology and military secrets so they can build weapons against us. now, they've opened a new front

where they're hacking american enterprise to steal our technology and trade secrets and threaten the financial nuclear option, which is dumping our bonds, basically threaten us this not do anything on trade reform on tibet and taiwan. we've had two presidents in the white house now that have totally ignored this problem. bush's problem he was nero playing the fiddle while the manufacturing burned. between arlen specter and barack obama, which was just priceless, we've got neville chamberlain in the white house, who is cueless, this is important, job -- >> dan, got to get in here. >> the best job program right now, trade reform with china. >> you have a whole book of this. dan griswold, any counters to that? are you as worried? >> yeah, i'm afraid peter's wrong on every front. we'll have foreign policies

conflicts with china. we have a trade relationship it would be a tragedy for people in the united states and china if this escalate flood a commercialer war. americans benefit, first as consume consumers. >> right, right dan. >> but secondly, china is the number three market for u.s. exports. it's virtually the only major mark where we've had rapidly growing -- it's the only one where -- >> politically. >> it's the only market where -- >> jobs shipped overseas, china's a target. you can get -- make a lot of hay out of an argument that china's more an enemy than a friend, economically. >> we -- no, you can't. we have high unemployment in the country because of mismanaged poll sfriz washingticies from w including the housing bubble. if the president wants to ramp up exports we can't do it without china. >> dan, that is so wrong, dan,

when the president got up there at the -- when the president got up there in the state of the union address and started talking about driving this economy by selling exports, he had nothing. the best jobs program now is to give the chinese to stop manipulating the currency, stop engaging from a massive export subsidy. if smith and ricardo were around, they'd be screaming at you because, what china does is not free trade, it's mercantilism. >> dan, this one threat peter cited, the chinese could sell bonds they hold in u.s. treasury, sell u.s. stocks, isn't china too deep into our economy to do anything like that? they can't sell the first big tranche of that stuff without killing the prices of everything else that they hold? >> they would be stupid to do that. people like peter have been predicting that this is some lever they hold over us. it would be foolish. they're not going to kick u.s. companies out of china because they're bringing technology and helping them. >> peter? i love your stuff, peter but --

i love your stuff but you've been doing this a lot. i never heard one thing from you, what you want to do instead. do you want to bail out of china, peter? for cell phones, for cars -- >> dennis, hold on. >> no, he was asking a question. you didn't let him ask it. >> i'm trying toan answer your question. the best weapon for china, one you don't have to use. they're holding money and threatening backed off the country, backed off tim geithner, backed off barack obama, from branding china a currency manipulator. obama said he would do that when he's on the campaign trail in pennsylvania and ohio. geithner said -- >> is that how our problems are solved? that's your strategy? >> do you want u.s. companies to do business there or not, peter? >> i want this american economy and american enterprise to be able to compete with china on a level playing field. we will be able to win that war but we can't fight with two

hands tied behind our backs which is too high in taxes and the chinese manipulating the currency. >> thanks very much. all of the fuss with china wasn't enough, they're taking their panda bears back, too. all girls cry together. two giant pandas born in american zoos are heading back to china. the 4-year-old and 3-year-old will be part of a breeding program in their endangered species native land. guess who's doing the flying? fedex hauling that precious cargo. this is not part of the china trade war. >> what did we do? >> i think they ran out. >> the pandas were born in america. they're going to bring their own brand of capitalism right into china. >> always hopeful. >> all right. >> you never give up the story. you may not have heard of it but it runs billions for college endowments and charities. where are they put their money?

stick around. we'll talk to the person there and get reaction to what's go on in the markets. some of the most active stocks in the market. citigroup. bank of america, ge, ford, pfizer, all lower across the board in the sell-off. the dow off 200 points. with fidelity, you can take your trading around the world, because now you can trade u.s. and foreign stocks online, in 12 markets, 24 hours a day, all from the same account, and settle in u.s. dollars or the local currency. plus, we'll guide you with international research and realtime quotes, so you can diversify your portfolio, wherever -- whenever. and we'll be on call around the clock, while you trade around the globe. fidelity investments. turn here.

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we hires 2000 people last quarter, a thousand in committal, a thousand through acquisitio acquisition, committing 2,000 to 3,000 over the next 2 to 3 quarters. >> he's hiring. this is a cautious guy.

that was john chambers on "squawk on the street" talking about new hiring spree, this, after oracle last week said it also is adding to its ranks. now, is this the sure sign that tech is fully back in business? let's get to our silicon valley bureau chief, jim goldman, keeping a tally. jim? >> reporter: dennis, you mentions how cautious he is. maybe john chambers is throwing caution to the wind, now that the economy seems to be turning around, certainly for tech. silicon valley's unemployment rate down to 11.5%. jobless figures aren't in a dramatic reversal not yet, there are signs that momentum is certainly moving in right direction. let's talk about cisco for a second, because that news of up to 3,000 hires followed 2,000 jobs the company added last quarter, a thousand, yes, from acquisitions but you can't discount how important those thousand new hires are. the news from oracle, it would

be laying off a thousand workers was muted by the plan to add 2,000 sales jobs as part of the plan to again rate $1.5 billion in profits from the recent acquisition from sun microsystems. 338 positions opened now. tesla will use part of the proceeds from its $100 million ipo to hire hundreds of new workers for a silicon valley plant. solyndra, $300 million ipo, fund a manufacturing plant in fremont, and that could create up to a thousand new jobs. aol says it will beef up its silicon valley presence, doubling the workforce from 300 to 600 employees even after laying off a third of the workforce, or 2300 heads. google has slowed its hiring pace of quarters past, the company added 170 new workers. dice.com says silicon valley listings are up 23% since last

february. 3400 open positions now available. guys, back to you. >> thank you very much, jim goldman. well a huge drop hit u.s. endowments as belt tightening and market gyrations hit colleges right in the wallet. last year, higher education endowment returns fell 18.7%, the big of the drop in returns since the depression. billions lost, compared wirth the previous years. so what caused those losses and perhaps more importantly, how do they recover in 2010? what are the winning investment strategies this time around? answers on that from jogriswold. good to see you again, john. welcome back. >> thanks, sue. pleasure to be here. >> you did the survey and interviewed and talked to 842 u.s. institutions. the problem with this last market event was it didn't matter how you were hedged, you

got hit on every front. i was very struck by the fact that the managed futures and commodity side of things got hit hard as well. >> that's correct, sue. we saw a broad-based decline, obviously, as most investors experienced themselves in the last two years. i think the good was was that many of the henling strategies employed by the sophisticated endowment managers did work. you saw better returns, still negative, but better returns in things like marketable alternatives, hedge funds, absolute return strategies, private capital helped in certain kays. venture capital, private equity. some did not do as well, but in general, the marketable stocks, both domestic and foreign, took a tremendous hit. but, of course, as we know now, those have come roaring back. this databased on the year ending june 30th, i should make that clear. >> let's look ahead to 2010. given what they all went through

what all of the colleges and universities went through what kind of as set allocation changes and market bet changes are you seeing them employ this year? >> well, the data we have from this -- from last fiscal year doesn't indicate a significant shift in asset allocation at that time. currently, i think, most endowments, we've heard from our clients and from industry sources, indicates that people are looking for opportunities. those opportunities, of course, are just emerging now in many cases. but clearly, the stock market has rebounded, as i said, particularly emerging markets. probably various sectors of the private capital market are in recovery, certainly the hiring news that you just reported as indicators -- as indication of that. hedge fund, of course, depending on which strategy you employ could be useful going forward. and they had one of best years ever last calendar year.

>> what about the management of the money. one of the things we're hearing from a lot of people and from institutions is that relying less on outside managers and doing this more in-house. what about the big endowments? have they changed their approach from outside management versus internal. >> we've heard from harvard they're planning on managing a good proportion of the endowment internally. but yale and others, on the other hand, continue, have been, and continue to manage through subadvisers outside, managers outside. i don't think that's changing. i think the majority of endowments below certainly $2 billion or $3 billion are managing with outside managers, primarily. but there is a certain amount of internal management as well. >> john we have to leave it there. thank you. >> good to see you. >> before we go to break, what's happening in brazil right now. a big sell-off. the sell-off in the united states triggers by concerns

about europe, now throughout the hemisphere. bovespa off 5%. >> and the red continues to spread. we are covering -- half hour now, we'll track the markets minute by minute. matt nesto will have the big movers blinking on the radar screen. off the charts. a lot of action in the stock after a big upgrade. we'll school you on a company up 40% since the bottom. i never as a woman thought i'd get a heart attack.

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welcome back to "power lunch." the stories we're following at 35 past the hour. new york attorney general filing civil charges against bank of america and its former ceo, ken lewis, saying the bank and lewis misled investors about the merrill lynch acquisition. b of a contends charges are without merit.

the one stock hitting aa new 52-week low on the s&p 500. memc. members of the russell 1,000 mitting new 52-week highs, including this one, broadridge financial. dennis? >> you know, enough of the usual suspects. let's go after some of the overlooked names that are big movers today. matt nesto's finding out what is off the charts. what's off the charts? >> it's wacky today. i don't know if you saw, the stock's up 30%, best single-day move in six months and this, after this company did what it wasn't supposed to do, made money. imagine that. four cents a share versus a dime loss estimate overnight. they also said they're profitable this year in 2010. they make life science tools for genome research, dna research, based in santa clara, 1,000 employees and $500 million market cap. also worth a peek today, look at the weakness, the downtrend in

wilmington trust. this is the bank that the dupont heirs founded with people in 1903. down 22% during that periods of time. six consecutive days down since they missed on their earnings. 20% short interest, tripled over the past 12 months. wilmington trust struggling. t. rowe price the largest shareholder there. timberland is down, the worst performer in the mid cap index today. big volume, 150% of the 10-day average. and this, after their fourth quarter beat but revenues were just a hair soft and it's getting pounded for that today. overly punished, some might say. and there you go. timber hand. back to you. >> michelle? >> dennis, we're going to stay with that mission looking at stocks off the chart, under the radar. intraday high yesterday of 63.80 levels of the stock hasn't seen

since january 2009. is the stock on the rise? time for investors are to get in. devries, jeff silver. for viewers, we know it's an education company but what do they do? >> they have four different verticals best known for devrie university, offering bachelors degrees in business management, technology, et cetera. but they also have a number of other properties. they run a medical school and a veterinary school called ross university. they also have the becker cpa and cfa review business. it's a diversified company but focus on education. >> why is the stock up 42%, since the march lows? >> the company is on a roll. except for the more cyclical aspects, which would be the becker and stylus cpa review business, their business is on fire. they have what i'll call a

lower-end on the health care business that does nonagree programs in allied health, and fla that's a countercyclical business. that business is booming. like the medical school, seeing record enrollments here. >> isn't there, though, an overhang from washington? i've been reading articles in the paper how they're going to crack down on loans, specifically, to these kind of schools, right? >> right. and that's a headwind for the entire sector. we could talk for hours about this. what the department of educat n education's trying to do is limit student loan debt. it's from a public policy thing, it's a good thing to do i'm a parent i think it's a great thing to do. but devry is a high-quality company, focusing on the programs where there's an offbalance between the amount of cost of education and the earnings premium that you get from re degree. for devry programs, for the most part, there's strong value proposition. so hopefully this company

doesn't get whacked by any change. >> buy, sell, hold? >> it's buy. >> he says it with conviction. jeff, thank you for joining us. head down to the floor of the new york stock exchange and ask steve grasso to explain the self-off, if explanation is needed. we've got a pretty good idea. he'll tell us where markets will end. >> right now on the down side, deep in the red on the dow jones industrial average, which is off 208 points. the nasdaq is off 49.5, that's about 2.25%. the s&p off 2.75% or 26 points.

welcome back to "power lunch." i'm sharon epperson. traders here in the gold ring are settling final trades, as we look at gold prices poised to have the biggest one-day drop in a year, since december 2008. a $50 slide here in gold prices and it's not only gold that's taking a hit, as investors seem to have lost their appetite for risk. looking at oil prices here that are down below $73 a barrel, having slids considerably today. as well as a lot of other commodities across the board. is it the dollar, the dollar's strength across the europe ro, strongest level since july that has weighed on commodities across the board. metals hard hit. copper's held up well, only down 3%. silver down 5%. and platinum and palladium add to their problems. toyota recall issues and catalytic converters that folks are not going to need when not buying cars.

a big slide in palladium, down 6%. >> thank you for the perfect setup to go to steve grasso, of stewart frankel on the floor of the new york stock exchange. politics is not factoring into the market but sovereign debt is, the dollar is and yesterday you very aptly said don't commit new money into the market. what do you do? >> it's too crucial of a point. we're at 1069 in the s&ps. you want to look for the next level is 1065. this market has been driven by levels and levels in washington and that's where we're at now, still at the level game. you want to watch 1065 level. do not commit any capital until you see whether it proves itself there, holds it, or we're going to go lower. i do believe we'll go lower. yes, it's about sovereign debt today. when you see credit spreads widen that equals fear, fear is universal language. doesn't matter how big the economy is. >> one of the problems for viewers is, where do they go for

safety? it's not a gold play because of the dollar's strength. it's not a commodity play today. you get no return in the treasury market. where do you go? >> a pure play where everyone rushes for cover, rush for the sidelines. and, as you stated, everyone thought gold was that gold play that fear play, unfortunately, there's no place to hide. what people are doing today, as well as the last couple of days, sell all of the money making positions and go into cash and they wait for the smoke to settle. and that's what you're going to see now. right now, i would advise people if you're out of the market, stay out. >> we tested the lows of the trading session a minute ago, down 225 on the dow jones industrial average. does it get better or worse from here, going into the close? >> it depends. look at the level on the s&p, the cash, 1065. if we hold the level, the level is crucial because that was the bottom end of a trend line from 2009. so that upward sloping trend line that was the bottom end of the channel. so everyone can key on that level, if we break that level to the downside, we're probably going to test down to 1050.

i think, unfortunately, we're headed down to 1,000 in the s&p. not today, let me qualify that. >> i was going to say, not by the close. >> i don't want e-mails on that. i did think we'd sell off middle of the year. we're seeing the sell-off earlier than i thought. >> thank you, steve. see you later. the politics of pay. two senators introducing a bill today to tax bonuses for executives at banks that got bailout money, even if they've paid it back. smart move or a war on wall street? that's our power grid debate exnext. the vix surging as stocks tumble. we indicated it was up 18%. there you see it up 17.5%, as you look at that measure of fear. highest now since january 27th.

washington cracking down on wall street bonuses again. democratic senators, barbara box somewhere jim webb, introducing a bill today to impose a 50% tax

on 2009 bonuses that exceed $400,000. this affects firms that received, with a "d," more than $5 billion in bailout money. is this the right move? opposing views from democratic strategist and tony fratto. >> chris, you like this idea? >> i've never been a big fan of taxes, some people may find that strange as a democrat. at least the stereotype. here, i think people need to understand what's happening here why there's a populist anger and why banks are target. they keep making ridiculously dumb mistakes. when you get bailed out and receive trillions of dollars in funds to basically survive and nen you turn around and thumb your nose at american people and reward those employees, many employees that got you in that situation with multi billion dollar bonus packages, you're

going to lead to these type of situations where bonus tax is the only thing viable. >> tony? >> i think chris is right, this is a reaction to populist anger out there, but that doesn't mean it's good leadership and it's short sided. the way i think about it, michelle, the two best jobs, i can think of, are general manager for the flosnew york yas or director for human resources for a foreign bank. if we want to keep restricting pay at u.s. institutions, for u.s. talent, they're going to go to foreign banks and we're seeing that already. foreign banks are taking the best and the brightest from american financial institutions. >> tony, but here's the mistake in your logic. the europeans, in particular the british and the french, are the ones leading this charge. >> exactly. >> they're more punitive in terms of their approach, you would argue, than we're proposing. listen, i think there's two ways to look at this. either the banks and the washington firms are understand the populist anger out there and

take the proactive measures to address it themselves or force democratic legislators and the congress and the white house to do it. >> chris what do you say to the jpmorgans of the world, when brought into that room, with hank paulson, they did him a favor, because we all know now that that -- you're going to take this money, you're going to like taking this money was to bail out another firm that will go unnamed because they didn't want the firm to stand out. now you punish all of the people for doing the government a favorer? >> i'm not sure they did the government a favor. i'm not sure -- we done live in a system where they were forced to do this. >> they were forced. we know they were forced. >> that's a bit of a stretch. >> no, it's not. >> putting that aside, let's not get into the weeds about that these are institutions we know made terrible mistakes to contributed to the financial crisis that almost brought the system down. >> did jpmorgan do that? >> i don't know if jpmorgan did it or not. >> that's the point. >> this is about vengeance. if that is the way to think

about it we're trying to make policy based on vengeance. we need to make it based on what is the best policy for the u.s. economy. >> it's not vengeance. >> of course it's vengeance. >> no. it's responsibility. it's responsibility. if people, whether wall street bankers or wall street firms or individuals if they're not responsible, government has an obligation to come in and make them responsible. let me add this in one last point. >> okay. >> i don't see any republican, i can guarantee you this, i don't see republicans who expect to win in the fall who are going to go out and defend wall street. what you're seeing, you saw this in massachusetts, they're running away from wall street. >> i stand alone in defending wall street but to make it sound as though wall street has not suffered pain through this, they fired tens of thousands of workers, it's having a huge impact. >> that is true. >> in new york state. >> they did. they turned around and caved themselves multibillion dollar bonuses. >> chris, what's left is are good performers who have brought great value to the financial

system and they deserve to be compensated. they're out there doing their jobs and making money and creating a great benefit and asset. for all of the venom spewed on wall street i don't know a country in the world who wouldn't trade places with the united states of america and take wall street off our hands. >> the question of fairness, and this is where i think the obligation, i'll go back to my point, it is an obligation, i think, wall street firms and bankers to understand the populist anger. listen, they have to do this, because if they don't it is only going to make this political dynamic that they're facing worse. >> tony, a lot of the profits being made -- put aside the t.a.r.p., which is it gift we're focused on -- but when the fed puts money at zero and bankers can then just get yields on treasuries, they've got a huge spend. any idiot can make money. it's by design, those profits are easily made. it doesn't take brilliance to do it. why do they deserve the money? >> look, it's not their fault that the fed has the say set to zero. they have to deal with the economic environment in front of

them. >> that's debatable, too. >> should they fix it roh by not making money? should they not go out and make those investments that return value to their firms? is that the lesson? leave it to -- shall we leave it to other banks to financial institutions, foreign banks? >> guys, we've got to go. >> the banks could be taking more proactive steps to address this, whether foreclosures, whether dealing with the real economic pain that average people are going through. >> chris, tony, good to see you. we know this issue's going on and on. >> i was going to say, glad we solved that. >> every time they discuss wall street bonuses and people's pain, you know what happens going on there. >> we'll look at the broader market picture with the dow significantly off right now. >> yeah. just off its lows of the day, not by much. off better than 2% on the dow. 219 points.

that is not a pretty chart.

the dow jones industrial average off 225 points, better than 2%, almost 2.25% on the day, teting lows for the trading session. no safe haven in the session. >> it's sliding down there, now riding right along the bottom, with plenty of things to worry about. >> except treasury being the safe haven, right? >> maybe. maybe. >> we have seen yields come down. >> but gold has not. >> the s&p breaking through a support level at 1071, 1072. and as steve grasso said a few moments ago, he thinks maybe on its way to 1,000. >> thatt bothers plea the most, hearing grasso capitulating 1000 to rebuild. let's remember, mkm says, this is a pause but fundamental reasons for stocks to go up fourth quarter productivity came out, huge, way up, 70% of s&p earnings on revenue, on top

line. all is not lost everybody despite the pigs in portugal. >> you did need a sell-off. what did we go? ten months without a correct. a very long time. >> but we were talking earlier today, there is so much fear, because people feel so scarred by the heart attack that the system had three years ago. >> you should believe in it i think. >> we'll continue all day on cnbc to follow the sell-off. we'll see you on "power lunch" tomorrow. >> have a great rest of the day. stocks areplunging on wall street on fear today, fear that america cannot get back on its economic feet, and fear of certain things about debt, fear including this city. people are worried its a sign of things to come about it is 9:00 at night in lithuania, the latest symptom of a global debt crisis that could send markets

significantly lower. it is 2:00 at new york's jfk international airport. at this moment a passenger could be smuggling in millions of dollars, and that is just the tip of the money laundering iceberg. the next big threat to america's banks, today on "street signs." welcome to our program. i'm erin burnett. thanks for spending part of your afternoon with us. we are "power lunch" mentioning down 231 points for the dow. bob pisani's at big board, brian schactman at the nasdaq. a quick summary why we are where we are. >> reporter: how do you price sovereign risk? nobody know thousands do it. i don't know how to do it. remember the whole thing with subprime? it's not a big risk everybody it's small. it's small but the risk was the congaugen contagion into the primary. look for volume. let's me show you charts where there's big volume that people are paying attenti