let's take a look at the big moves here. you want to know how choppy it is and how difficult it is to make money. i want to show you the transports. big day on the upside and new high and transports are down 160 points today. that's choppy trading. difficult to make money in that environment. how about the retail stocks. told you yesterday, all the big names up 3%, 4%, jcpenney, coach, abercrombie, guess what, all the big names down 2% to 3%. the home builders. the high beta names that are frequently traded all up 3%, some 4%. yesterday, today, the exact mirror image and all of them down 3%, 4% and 5%. the global market, the trend has been lower, but bear in mind, we are only one, oh, about 25 points off of the highs on the s&p 500. spain nine-month low and france and uk all the european markets at about two-month lows.

tradertalk.cnbc.com. >> bob, you got that right. biggest one-day slide for the nasdaq since february 4th. bob just said it, down 3% today on the nasdaq right here. that's a loss of 73 points. i'll take you through large cap and wildly held technology stocks. look at some of the declines across the board. 3% from cisco and just about 3% from yahoo! and microsoft. ebay leading to the down side today. down 4%, down 4.5%. and down more than 5% and stabilized just a little bit here. but google is down 3% today as is google. get the picture, two, three, four. some 5% declines through big cap and technology. nutrisystem is up and it's up big. earnings revenue beat and they were upgraded, as well. that's the story here at the nasdaq. let's head down to bertha coombs at the nasdaq. >> we're not finding anything here on the floor with the euro

plunging to that low and the dollar strengthening and just hammered commodities. already weak coming into today after we got weak economic data out of china and whatever premium we were seeing as far as the crude curve in terms of the outer months being higher valued because of potential concerns about the bp gulf oil spill that's disappearing with the rest of the selloff today. the coast guard right now saying there are no further destructions, only three natural gas rigs continue to be shut down, but that's one thing that traders are eyeing. they say if we get any sense that this continues into next week and some of the those supply boats that go out to the rigs to supply them can't get out there and those rigs have to be shut down, you will be, you will see a swift turn around here in energy prices. rick santelli, over to you in chicago. >> thanks, bertha. you know, when we talk flight to safety, we all

understand that buying long maturities specifically but becomes the safe harbor. d8well.re's a downside that, as that is the yield curve. not that many months ago we were at 290 plus. today we're at the lowest, the tightest since december of last year. at 267 basis points. there's a lot of traders caught the wrong way, which brings in another load of buyers in the long maturities reversing those steepner trades in lieu of flight to safety. if you look at the ten-year in our country the yields are down close to two-month yields. that's the dynamic working out. we're looking at what's going on in the stock markets in europe. it wasn't like one big drop and traders say this is important. look at the intr day on the cac. you will see it a was a steady slide the entire session.

now, i believe we're going to michelle. >> thank you so much. the selloff that we're seeing started across the pond with the european markets taking a big hit. guy johnson is in london with more. guy, our understanding is that there were heavy rumors over there that spain was going to be next, so much so that the prime minister had to come out and quash rumors that they were imminently in need of a bailout, too. >> that is one of the factors that has been in place here in europe. you were talking about the losses on the cacs and the dax but if you look at peripheral europe and greece down by 3.68 today and spain and portugal down by 4.2%. today has been about the contagion concerns. banks are being sold off very, very aggressive. i'll get on to that in a moment. yields picking up again, the greek two-year back up to nearly 13% again today and there is real concern that the story is spreading. think about it.

germany and it still hasn't signed off germany on the greek rescue plan. will it be prepared to fund a rescue plan for spain or portugal. does that mean the country are off on their own at the moment without the backing of the euro zone or will the ecb and all about having an impact on the euro today. you have been mentioning 1.3040 is where we're trading at the moment. there's a lot of options activity just below that level. let me just quickly show you the banks. ubs out with good numbers and big exposure to greece out tomorrow down to 5.7%. guys, back over to you. indices here in the united states, of course, following europe. did a little better after europe started to close. the question is, whether or not this is the beginning of what some are calling for that 10% or 15% correction.ç let's talk about that and take a look at the volatility right now in this market.

we're watching the vix index very closely. it's up almost 21% at 24.38, the last trade on that particular index. let's talk to our insiders and find out how perhaps you can protect your portfolio. drew canali and jeff carter independent trader and bernie mcsherry senior vice president of strategic initiatives and steve liesman. a terrific group to analyze this market. jeff,ual i'll start with you because we're seeing a lot of money flow into the markets in your neck of the woods seeking safety, but a risk to that, as well. when you're going with the herd, is there not? what is the feeling down there right now? >> i think there is a risk of going with the herd because it's not like the u.s. doesn't have its own structural problems going forward. if you look at the amount of debt we have. i mean, steve and rick have talked about it for a long time. interestingly, yesterday a friend of mine wrote at trader.com called this break. he saw the market firm up and

the bonds and he said something doesn't look right. last night he kind of called it and i think you can read too much into a one-day activity over, you know, in the s&p. i think one of the things that you have to pay attention to is what the germans are going to do. >> that's the key question. is it not, drew? >> that's the real key question. >> drew, the germans dragged their feet in terms of giving greece its aid package. a lot of people felt they should have come out and given some sort of indication that spain was going to be okay. they didn't do that so now the assumption is that spain is not going to be okay. if you're an investor in this market, how do you protect your portfolio? >> we have a position in the dollar and you do need to pay attention to the germans because retirement age there is 67 and it's 55 in greece. once the german population really comprehends this, all these aid packages are going to come into question. this is a real problem for the

investor and you need to be ultradiversified. >> what does that mean? i think somebody watching today might be thinking, drew, is there something that i can do today, if we know that, for example, all these aid packages are perhaps in doubt, so uncertain and we're going to go through and over the five, six days we had triple-digit move. volatility is definitely back. anything they can do to easeç their concerns when investors thought they could ease their concerns. >> what you want to to is what we're doing and that is diversified across emerging markets and large cap, small cap and carry the whole spread of stocks in equities there. and used fixed income to a third of the portfolio and short maturities and very high quality and aul tearier investments which would include gold and market neutral strategies and, like i mentioned before, we're still long the dollar.

>> i want to get to steve liesman with the implications for the fed and the market. bernie, what is the feeling down there in terms of how much farther this market can go. a lot of people think it is the beginning of the 10% to 15% that everybody is calling for. >> it feels very reminiscent in what it felt like in the fall of 2008. rumors that people going after morgan stanley stock and it wasn't until the t.a.r.p. was announced and uncertainty until the congress approved the package before we got stabilization and a lot of feeling here we don't see that conviction out of europe right now. no clear signal that germany will step in there and hold the line. >> they may not have the money to do spain and ireland. >> so, steve, europe goes bust, then what? >> you know, to me, i don't think europe is going to go bust. i think it will maybe have a down draft and the issue that is interesting to me, market decline comes while the economic data has essentially been beating expectations, not only

today with factory orders, pending home sales data suggests, maybe some of it was tax related and am mortgage rates seem to be fairly well contained and yesterday the ism data and housing data coming up and should look pretty good. maybe the market has priced this all in and moving on to a new regime and more concerned about fiscal tightening that might come next year as a result of unwinding of some of the easy money. >> i think that's more worrisome, steve -- >> can i jump in with a question. >> can i just finish this one point, tyler. the market has priced in the news before it right now when it comes to the economy. >> ty? >> i would turn to you, steve, the guy i always turn to when i don't know who to ask. i'll qái you this. do you see in this the possible, the possible end of the euro zone and the single currency? my argument is simply that. the political support for it is going to erode in countries like greece where it already has, spain where it presumably will

and where they have 20% unemployment and portugal where they have very high unemployment and very high guarantees as they do in much of the euro zone for public sector retirement and pensions. and those countries are going to say the heck with living all these strictures. it was better when we had our own currency and we could manipulate the policies. >> we could print some money. >> when you had flexibility. >> it's actually the other way around as to the other benefits of the euro. they have flowed to the more emerging type countries from the more developed countries. but i would say, tyler, we're a long way of the erosion of the euro zone, we are a lot closer to major changes that would just kind of deal with the issues before it and what they will do as soon as they get a breath here is adjust the struckturable changes. >> we don't know, folks, the fact of the matter is when politics get into the process and we've just lived it here, the facts kind of don't matter.

and if populism takes over, the rationality could go away, right? >> i think you also have to get into the idea that the global recovery story is down a little bit here. european growth is going to be slower than expected going forward. people are tapping on the brake and you've got to call into question the whole recovery story and probably adjust it lower. >> guys, i'll throw this to drew, eventually. let's step back here a minute. we're down over 200 on the dow and i'm hearing illusions to the fall of '08 and let me just venture to say that greece is up, greece is down. europe, how much of this is caused by a return of fear? that car bomb in times square could be linked to terrorism. it would signal a new approach to mini bombings that would make us feel nervous all the time. wall street is made up of people, guys. drew, no factor here at all in this?

>> i think what you're looking for is probably what the job's report is on friday. and you want to see a number of 200,000 or greater and that might restore some confidence to this market. and i will remi'you all, if you average that number until 2016, we would just barely cover the jobs we lost. >> the terror thing, no one else thinks that is affecting people? >> i don't see the terror thing at this point. >> why, jeff, do you absolutely think it cannot be? there has been a lot of headline risk for this market. >> did the bomb go off? no. they got the guy. you feel comfortable about that. this is european related. >> somebody who has spent a lot of time in order to get that statuses. i think it raises concerns about -- >> i think you read too much into the naturalized american citizen thing. is he really -- >> dennis, i'm going to give you a very partial okay on that one. because i would say that markets

sell-off like this not often for a single reason but a whole bunch of reasons and if you put greece together with that with the terrorist incident maybe you reach a breaking point where people just decide, it is better to sell. >> thanks, guys. >> can i just say one thing? >> are we going to take a break? we're going to take a quick break and then we will keep everybody in place and talk more about this market sell-off which we're follow tick by tick. we're all over it. watching the currency side of things as well as the equity side of things. earnings are out, as well. take a quick break and be right back. 1,400 lbs of cargo. but only one can do it while driving on electricity. the gmc sierra hybrid. the most fuel-efficient full-size pickup on the road. may the best truck win.

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let's get you caught up on the market. the major indices with major losses right now. but we have about a 215-point loss or 242-loss now on the dow jones industrial average and better than 2% move to the downside in the nasdaq. our panel is all back with us. i'm going to come to you, jeff carter, if i could, and want you to give me a thumbs up or thumbs down on trades going on in the market right now and whether

it's too late for our oviewers to get in on the trade. too late to short the euro? >> i wouldn't sell it today, but you can look for out of the money puts and buy some puts and play the market over time because i think there's a big fight going on behind the scenes over who's going to run the ecb. 65% of germans see that there are no incentives built in to any bailout to stop greece or any of the bigs from doing this again. >> too late to sqci in treasuries? >> i think there could be more room there depending on how far down the market decides to break. i wouldn't be a buyer ahead of the market on friday. >> we're seeing a lot of action in that particular market of the sector. too late for that in. >> any pullbacks in commodities, i'd be a buyer. >> the market is not pricing in, perhaps, the economic data. what if all this great economic data that we have been getting has been priced in in the big rally that we have seen up until

now with the major indexes up 8% and is the market now telling us that the growth isn't nearly as strong going forward and that we get a half hearted recovery. maybe this is what is priced next. >> michelle, i am not going to make that conclusion from one day's trade. down 245 today. i don't see any clear conviction of direction of the trade. the only thing i think you can conclude from these particular levels is that the market has a change where it's comfortable and hits the top of that range and wants to sell off. and when i see the data come in the way it's been coming in and the market really not react that much in the way that you'd expect and i don't see it being priced in, especially when the data beats expectations. i think there is another leg to come here and that's from the thing we have forgotten about and the cost of topline growth. if people go back to work and the economy keeps moving, you'll

have top line growth. >> ernie, let me ask you, though, we focused a lot on different indicators, but i'm struck by the fact that copper has been selling off all month, which is usually an indication of the economy, of the worldwide economy because it's used in so many parts of the global economy and at the same time china is trying so aggressively to tap down that market. should we be looking at those signals and be worried about that? >> i think we have to be worried about that and we'rer with well through earning season now. two-thirds of companies have been earning and they're doing great. i think a lot of that is priced in and people look beyond this a month or two and there's choppy waters ahead. i agree that we're not necessarily turning over here but we'reç going to be buffete by news on either side for a few weeks. >> all righty, guys, thank you. thanks for joining us on this special coverage of the selloff that we have going on. up next, the business council meeting in washington.

some very big names in attendance. >> tyler mathisen is one of them he's standing by with franklin raines and "power lunch" exclusive on the other side of this break. ♪ well, look who's here. it's ellen. hey, mayor white. how you doing? great. come on in. would you like to see our new police department? yeah, all right. this way. and here it is. completely networked. so, anything happening, suz?

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and on this day where there is an awful lot of attention being paid to the price reaction on wall street, also a lot of tangz being paid here at the business council meeting here in washington where the president spoke about an hour ago covering everything for the need of financial reform to the need to control the deficit. joining me from the meeting is a man who knows a little bit about how to control deficits. in fact, he was the last guy running omb when it there was balance in the budget and he knows about housing. he is now at revolution health. mr. raines, good it have you

with us. >> thank you. >> i want to get a sense of what the room was like. i was watching the speech here. after the speech, the president spent some time talking to federal executives include, it was not interrupted by applause. >> that's true. the president gave a very serious talk and i think he wasn'tx pecting to get a big reaction. he was talking about why his policies made sense to an audience that had multiple experiences and they have been beat up a little bit and support things that the administration does. i think the administration is still working out its arrangements with the business community. >> does business feel picked on by the business administration? >> i think the answer would be yes that the administration scored political points at their expense. of course, a lot of the political points were earned and the president is not as though he is making this up about the problems in the business

community, but i think the two sides are still trying to work out a way to deal with each other. >> the president spoke forthrightly but i don't believe i ever heard him mention the words fannie mae or freddie. can you really reform finance in this country without reforming fannie and freddie. >> primarily focused on protecting consumers and fannie and freddie through its history was bull works in protecting consumers in the mortgage area. there is a lot to be actually learned there. in terms of reform dealing with too big to fail and those issues, i think that ultimately you can't have a completely reform system without figuring out what you're going to do with these two very large companies that are providing the bulk of mortgage finance. >> aren't they the ultimate sort of living, breathing models for too big to fail. the taxpayers have put in something like $120 billion into

propping up those two institutions. how do you fix them? or do we need to do away with them? there's lots of countries like canada and many in europe who don't have any corlets to fannie and freddie and have higher rates of home ownership. >> but they also have passed on the risk to the homeowner of interest rate moves. in this country the average person can get a 30-year fixed rate mortgage. that's not true around the world. how much risk do you want to put on to consumers and how much financial institutions and others should be bearing. but i think fannie and freddie, there has to be a way found going forward. today they and the fha are 100% of the mortgage markets and we have seen in this last crisis that ordinary financial institutions will withdraw from that market at the slightest indication of problems and you simply can't have a country like ours with a large middle class that doesn't have a functioning mortgage market all the time.

>> but canada does. canada has a mortgage market and people get it and they don't have the deductibility of mortgage interest and yet they have 68% home interest. why not wind down fannie and freddie and do you think in your mind's eye they will be here like anything in the role ten years from now? >> my guess is they will be here. there will be tinkering around theç ownership and they could become cooperatives. but i think the american system and its focus on 30-year fixed rate mortgages is a very powerful, very powerful thing. canada is a country of 20, 25 million people with adjustable rate mortgages, four banks, not a very consumer friendly environment. although, if you put the burden on the consumers, it's true. you won't have as many crises. >> i want to get to fiscal policy, but i don't want to leave fannie and freddie and the

housing bubble too quickly. about reforming fannie and freddie and he says we cannot reform these government-sponsored enterprises unless we confront the reckless business practices have affected the entire commercial banking sector and the u.s. economy as a whole. how responsible was fannie for the housing bubble and what ensued and what level of accountability do you personally take for the decisions you made as the ceo that may have contributed to the collapse of the housing market and the mortgage finance system in this country. >> an old friend and a long-time customer of fannie mae, i didn't have a lot of respect for him. you know, when i was at fannie mae, we had a very tough risk management structure. but that was five, that was almost six years ago and instead of staying the course, as later management said, they changed that structure in order to become a bigger player in the

market. they were losing market share by maintaining their tough standards. they wanted to be a player, they jumped in and they bought a lot of things they shouldn't have bought. they testified to this themselves, so i'm not really speaking out of turn here. and that really led to the company's failing financially because they took on more risk than they should have. >> were you following what you thought to be congressional mandates to expand the kind of mortgages that fannie mae would go in and buy? >> well, we did have mandates for buying affordable loans, but when i was there, we managed the company according to risk. i wanted to do nothing that put the future of the company at risk and we didn't. in fact, if you look at what happened since then, almost all the lossesç that fannie mae experienced came from mortgages that were bought two years after we left. >> you left in 2004, let the record show. >> that's correct. >> i wonder as you watched or reacted to the geldman sacks hearings last week there wasn't a moment when you thought, wow,

they got the wrong company up here. they're looking at a company whose role was no where near as central to the housing market collapse as the company fannie and freddie were. >> well, i don't think that's true. they may have had the wrong company amongst the gold investment banks because goldman was not as big a player in some of the mortgages like lehman brothers, but most of the erosion and credit standards happened on wall street. it didn't happen in the gses. led with the subsecuritization of subprime loans and nonconforming loans that didn't fit the fannie and freddie standards. they really were the engine. goldman was not necessarily the leader of that. so, in some ways, it's unfair to pick on them. but as john mac has said, the entire industry let down its standards and with along with the rating agencies. >> they're telling me we have to

go, but i have to ask you about the deficit, which is so huge. how you were the last guy running and we were in surplus at that time. give me the three things that you think we need to do to get the budget back in balance, apart from grow the economy, which is probably the single best way to do it. but can you do that and raise taxes at the same time? >> when we balanced the budget it was 19% gdp. today revenue is only 15% and spending is 25%. so, we've got this huge deficit. so, to me, it's pretty simple. you have to cut spending back to more historic levels that we have been able to support in this country. >> thank you very much, appreciate it. thank you very much, tyler. take a look at the dow jones industrial average. more market coverage after this. off the lows of the session, but still down triple digits. more than 200 points. 251-point decline for the dow. sitting right on the nose,

10,900. the decline of more than 2%. we'll have more market coverage right after this brick.

with the market down

citigroup and pank of america on theç negative side andifieser e lone gainer by almost 2%. powershares, sirius, vrc, intel all in the red. back in a moment.

welcome back to "power lunch." punishing selloff going on here. the dow jones industrial average off. lots of fears coming out of europe but what's going to happen with whether some of those countries can pay back their debt. david faber here on set. what is the impact, if the worse-case scenario happens. ? david, do we see major hedge fund failure or problems with banks here? to what degree are we talking about a truly worrisome consequences? >> that is the consideration. greece is one thing, but, of course, spain is a very different story in terms of the size of the economy. $1.6 trillion, the size of its debt. now, nobody is saying, excuse me, spain is anywhere near a default or restructuring. but ultimately the theme i'm hearing from certain people, michelle, is simply, is it really the way to solve a massive debt crisis by adding more debt. which is what they're doing in

greece. >> and in the u.s. >> and in the u.s. and how long can you continue to do that without requiring restructuring of that debt. if that were to happen and there was a pound down there would be significantly losses among the banking community in europe and among many investors and there is always the fear of continued contagion and what builds from that. >> we should note that the imf is out with a statement saying there are no rumors that spain requested a bailout. >> prime minister earlier today, sue, saying that these rumors are crazy and complete solvency and doesn't mean investors are saying, hey, i'll lend to spain, but i want toç do it at a high rate. >> wasn't aig, sorry, michelle, a far bigger systemic risk to the global financial system than greece or spain? >> i wouldn't say that. no, not spain. >> i would. >> not spain. you can. if they really, if that were to

happen, you have to imagine that is very significant. if it is that one and investors pull back from meeting the financing needs and we are, of course, one, as well. >> david faber, thank you so much. still ahead, we're all over this market selloff. in-depth coverage at the top of the hour and then go back to tyler mathisen the ceo of a $13 billion industrial company called eaton corporation. the fast money halftime report coming up.

welcome to the fast money halftime report. the markets tumbling with all three indices off 3%. the nasdaq leading those concerns sending investors fleeing for safety. let's get straight to the word on the street right now. lot to talk about, pete, patty edwards and carter worth of oppenheimer asset management. patty edwards, first of all, the sovereign debt crisis over in europe and delayed reaction to some of the data we got from china. weaker than expected pmi numbers

and worries to hit the markets today. >> that's true. not only that, but we also have australia raising their rates overnight. there's worries about inflation and some places trying to slow down and some places trying to get going. when you start looking at that. i think there's a reason to maybe step back and at least look at your portfolio and make sure you're not too far out there on the edge. >> anthony, you're plugged into the hedge fund world. what are you hearing out there in terms of the bets they have placed and whether we should be concerned about ripple effects with the markets selling off here? >> you have a lot of headline risk right now. look at the market volatility. you have four days now in a row where you have greater or less than 1% in terms of the move in volatility. this has only happened four times in the last 50 years. so, people are very concerned on the hedge fund side, as we said last week, the hedge funds are looking for more defensive names. lower p/e names like pfizer, we

mengdzed it on the show. >> the latest data inç terms tt it is in record highs. the euro hitting a new one-year low against the dollar. a very crowded trade, but one that seems to continue to work. what do you see in the charts for the euro straight ahead? >> it does continue to work. we tried once or twice to go against it and the truth is, it's wrong to do. established downtrend and no indication that the selling pressures on its course and heading into the october, march lows of '09. >> pete, you know what stands out when you see big market moves, anthony mentioned the plus up 1% and down more than 1% and so on and so forth. that equals higher volatility and intra day spikes in the virx oorx x. so, in terms of how to harness that volatility in your favor, what do you do right now? >> i think the difficulty is you would have wanted to start positioning when we had that lower volatility and now it's late because of the fact that we're talking about a 25%. this actually might not be ash

late as you might think, however, because the movement we're getting now and looking at the volatility index itself. if you have a 25, you're expecting about an 18, 19-point move and today you're getting a 30-point move. maybe the volatility is actually still on the cheap side. i'm sure there are some folks out there that are interested to maybe sell but i can tell you this, the volatilities not really reflected in the kind of movement we're getting in the market and to anthony's point maybe more movement to the south. if that's the case, we'll see volatilities go higher. >> let's bring it back home to how this might impact u.s. companies here. we checked with s&p 500 and they crunched some numbers for us in terms of the companies most exposed to europe and we should note this data was compiled for s&p for sale between 2003 and 2008 which is why you see schering-plough on the top of the list and that was acquired by murveg. this is a percent of total sales. get a picture here of which

company the earning story. patty edwards, does this cause you concern? do you think we are headed for a period where we are going to see head winds? because of the stronger dollar, weaker euro. >> i think that there's certainly some head winds. this is why i have been saying you have to pick your stocks individually. and, frankly, if i was looking for overseas exposure, i was trying to avoidç europe before. you have to know where your companies are getting their money from and you want to be avoiding your on open and that's been true for six months or more. >> you know what might be scary to investors at this point in time is the fact that not only are we seeing these head winds coming out of europe because it is not just the currency helped winds but a whole notion the entire euro zone is in for a period of slower economic growth. we also have china, it is still hot but it is slowing. pmi, lowest in the six months here. so at this point it is almost like where do you go. relatively speaking, u.s. in your view the best place to be. >> well, i think so. i mean, the where as you go question is a difficult one because everywhere else that you look and most everybody now has

some major exposure globally as it is. so i think if you are looking for certain areas of if you want to call it safety although i don't believe that there is anything that's completely safe, obviously as patty and anthony and everybody has been talking about, you are looking for certain areas that have a little less exposure to that and also going to pay new the meantime. dividend yield and lower p/es. that brings you to pfizers and america and teva. numbers were out and strong when you look at that time projections. the generic space, took a hit this quarter. i think some of these are opportunities and if you are looking for something that's less to this volatility you are looking at now thoeshgs are names that will probably do you well in the meantime. >> can you take a look at the health care space? does it look like it is all right technically. >> well, here is what it is. almost a case of just being contrarian. charts are so bad in many cases that they are good. it is just -- atrocious patterns. they are defensive.

this is a time to be -- go for them. >> go for walmart and pfizer. >> couple that, though, with your view on the entire s&p 500. how does that chart look? is it -- does it look so bad it might look good? >> right. here's what we are playing for. s&p is okay. here's -- i think we are playing for the january highs. that's 11501, 160 or thereabouts. perfect bounce off the 150 average, 5. straight up three-month move. normal enough giveback i would use again the january tops 1150 as a reference point let's head deeper to the top story of the day. european weighing on the markets. brian kelly, b.k. conundrum capital. everybody is looking at greece and you are looking at the uk. why? what's the impact here? >> absolutely.ç mine, we talk about spain bag very big economy but the uk is bigger. they have a lot more depth than spain and greece. they also have elections coming up thursday. there are thoughts of the -- hung parliament which means they

may not be able to cut their deficit. your play here is you want to be short the british pound going into the end of the week. >> trouble in the uk and germany maybe does want to foot the bill for the bailouts. what's the odds you would place in the euro zone breaking up? >> i think they are higher than they have ever been. you know, i -- i would say that 50/50 shot. i think germany is the one that will pull out. obviously nobody can be kicked out. germany actually has been -- they are not going to foot the bill. they pull out you see a massive devaluation in the euro which would be positive for german exports. >> thanks for phoning in and i will show you tonight on the show. let's talk about goldman sachs. surprise, surprise. goldman sachs is higher on this. .1 of a percent. the firm is being hit with private lawsuits but may have hit a bottom perhaps. anthony, what are you hearing here for goldman? >> well, listen they are on a major charm offensive and 1:00 this afternoon, lloyd will be addressing the private wealth management clients of the firm.

they clearly are trying to redirect the firm in a lot of different areas. again, it doesn't seem like they are in mode with the sec. i think there will be an overhang on this stock. lot of selling pressure last week was made up for a little bit this week. but still great uncertainty for goldman zbleer what i would do to be a fly on the wall this afternoon. on much more after this. goldman grill continues. mounting civil charges put a notch in the financial key businesses. top attorney weighs in. legendary investor whitney tillson joins us. tonight at 5:00 p.m. eastern on cnbc. 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

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welcome back to "fast money halftime" report. we want to clarify something. a conference call happening tomorrow afternoon shall, not this afternoon. still would love to be a fly on the wall today or tomorrow. patty edwards. >> you know, it is down 3%. you are still looking at best in class company. i flow's a little bit of concern about the justice department -- somebody is looking into them. anyway, given that, look at where the support is. i think once you get down to about 250 the stock starts to make a little bit more sense again. i'm certainly holding now but i would be adding to positions at 250. >> time now to call the close on this very ugly day. carter, kick it off. >> we will be lower. lower than where we are now. >> even lower. all right. anthony. >> yes. probably down about 2.5%, unfortunately. continued selling pressure. >> lower than we are now. patty edwards. >> looking to pick things up.

not diving in yet. knives are clattering to the ground. >> pete, any knives you wouldn't catch? >> not now. the pressure is on. goldman sachs will be something if we can get any turn from that stock the market has chance to turn. otherwise we are going south. >> right now we are down about 2% on the dow. down 3% on the nasdaq. goldman sachs shares higher by .7 today. that does it for us on "fast money." >> we are following the market tick by tick as you are, melissa. still to come, euro's role in the debt cfears. that on "power lunch," plus a on whole lot more. welcome to the second hour of "power lunch." i'm sue herera. eric holder is addressing reporters on the terrorism arrest in the u.s. in terms of

that times square incident. he will be taking to the podium in a few moments. additional arrests have been made in pakistan and incidentally, that moment when the arrests were announced by pakistani officials that's when we saw the dow jones move to the lows of the dav3 we are monitoring the situation in washington and wall street and will bring you the relative headlines. >> i'm dennis kneale. the dow has the biggest one-day drop since february 4. nasdaq logs its biggest one-day tumble in april 20, 2009. >> i'm tyler mathisen. we are covering everything from chemical processing to

anywhere? >> a small group of consumer stocks on the upside. wouldn't take much comfort from that. we are basically about 8-1, 7-1 declining to advancing stocks. the three big problems here. one, decoupling idea for the u.s. is not accurate long term. i think most traders believe that. even though it can work on an train day basis. two, spain is a much bigger problem than greece is. even though spain says they don't need bailout. number three, look what's going on in china a 7-month low. chinese are actively trying to

moderate not just property market but equity market as well. >> bob, actually, rick santelli if i could turn to you. one of the -- levels that we are watching and -- key technical level as it pertains to the euro is the 130 mark. if that does not hold, what are the implications for the dollar and what happens in your markets as a result of that? >> well, you know, i think 130 is always important because it is psychological. i personally think the 132 area was a much bigger area, 132.75. we couldn't close below after many train day attempts. where can it go? lot depends, in my opinion, on the elections and the uk. i think that if you see a movement that is public anti-bailout in the uk, that has big ramification force all of the perceptions with bailout packages in eastern europe. so i -- i think that 130 could be meaningless. technically my next big is port on the charts 1 -- 124.5-ish.

>> scott wapner, are you talking to traders that think this is a great run and now they are taking some profits or using a lot of of these events to take profits? especially in technology where there have been great runs for some particular stocks. >> i'm so glad you asked me that question. it is a point that i have been trying to make. are we really to believe that terrorism is the issue for the market to be down today? why wasn't did it down yesterday? the event happened over the weekend. are we to believe friday the market was so concerned -- >> to play devil's advocate, at the time we were told it was not an international event. and now it looks like it might be. >> but i would still make the argument, sue, that on friday, we are so worried about greece and the markets are down, monday we are not so worried anymore. market is up. today we are so worried so the mark set down. it is really more of what michelle said. >> you got me there. the fact that people are buying on the dips and that's pushed the market higher. then they are looking for any excuse to the market.

these happen to be those excuses. europe situation, yes, it is important. more so what it is doing to the euro and in relation to what it is doing to the dollar. dramatic impact on the trade today. the dollar is -- strong. >> i think that the -- the problem -- scott, i think you have a good point. i think the problem the trading community is having is that this kind of topy action, transports are up 135 on monday. down 135 on tuesday. and is indicative of -- at least short-term market tops. very topy action. i think that's got what's -- what's got some of the traders concerned. >> steve liesman. >> scott's point, more technical than it is necessarily anything related to these -- i mean, we have been talking about greece how long? >> steve made a great point earlier on your program where he said the mark set in a quote, unquote comfortable range. i subscribe to exactly that whole thing. i think it is more technical than anything else. >> right. >> art, if we just had to assess the relative risk here, i just want to say that -- lehman with all those aig, all -- trillions

of dollars, far bigger systemic risk than greece or even spain. what do you say, art? >> absolutely. i think we are missing the point. that's absolutely correct. you look at -- greece in terms of the magnitude of a -- its difficulties, global economy, it doesn't show up like an aig or lehman. the thing you have to remember, though, this is important here. this is probably going to be an event where, yes, we are going to spend a few days. i don't necessarily think that market at the top because of the increase of volatility. what it is marking is saying we have gotten to a point we learned how to sell stocks, too. we are not going in any direction higher. this will settle out at some point in time. we created bargains and people are l get back in the marketplace. >> i'm not going to put any money on it. >> volatility we have seen recently as -- unusual compared to the prior year, yeah, and -- this is -- indicative in the past of toppy markets. >> confidence. don't dismiss confidence.

if we learned anything in the summer of '08, whatever fairy dusts holds us is bigger than greece individually. >> on that note, rick, thank you so much. art good to see you. rick and scott and bob, thank you so much. tyler, over to you. >> thanks very much. stocks are getting hammered on the euro zone debt worries. among other things. what are some of the nation's top ceos thinking about a possible on global contagion president. president addressed ceos earlier today. sandy cupler, eaton corp. glad to have you with us. address the question of greece and the concerns about europe. do you a lot of your business non-u.s., how much? >> about 55% of our zblis 55%. how concerned are you about long-term woes in europe. >> put in the perspective what's

going well first. asian pacific is doing well. to the point people are concerned about growth rates in india and china. brazil has been very strong. the u.s. then followed in third place. europe has been the slowest growing of the economy coming back. clearly what we are see sing with less transparency, financial banking systems in europe, seeing recurrent role in thunder, greece, spain or portugal. that's what you are seeing reflected in the markets. concern how flat it will turn growth the next couple of years in europe. >> the president was making his case today for financial services, financial regulatory reform. what was the reaction like in the room after the speech to his remarks? >> yeah. i think they are great for -- great majority of business leaders are in favor both of financial regulatory reform so we have an active and decreed sxibl capable financial set of institutions around the world and continuing governances. where our concern is today is that both investors as we are seeing today and businesses

don't like risk. and so as we go through the changes and financial regulatory reform much of what's also embedded in the bills in the senate and house has to do with long-standing advocacy of change in corporate governor rans. we are concerned about that, particularly proxy access. >> everybody says that in concept i'm for financial regulatory reform. but that the devil to use the cliche street is totally in the details. one of the things you were mentioning, in addition to proxy access, is that in the house bill, they mandate that the chairman's role and the ceo's role must be separated. >> right. and those are the types of concepts we say unsupported by fact in terms of improvement. if we think back, enron, gm, all that separate chairman, ceos, didn't prevent problems there. on the converse bill gates could not be an independent chairman of microsoft. i think -- not many investors that would think that would be a good idea. again, we like the sec approach where they are required in the

2010 proxy season. number of new disclosures about the leadership and about risk and these are appropriate disclosures a board must talk to the shareholders every year. let the board come up with what -- optimal solution is for the corporation having informed point of view. we think that's the way to approach the subject. >> do you think dodd bill gets it mostly right? >> the exception of proxy access. your approximately access is an issue that the state of delaware, year ago moved with -- allows shareholders by a majority to decide whether they want to have proxy access allowed for share holders to elect directors. we think that's the right approach. the bill that's in the dodd bill says 1% of the shareholders holding shares only for two years could nominate a director and we think that leads to a lot of special interests and a lot of short termism and not long-term investment we want to see. >> let's talk about what you really love which is running your business. improving? if so, where? >> from a regional point of view, improved in asia first and brazil and europe.

about a third of our businesses early cycle businesses, automotive, heavy duty truck in the united states. some of the power quality elements, ups equipment that goes with computers, they are up strongly around the world. the real surprise as we announce ad week ago, earnings release, bookings and hydraulics business, up 88% from a year ago. clearly, perfectly awful number as year ago. we are beginning to see the economy strengthen on a broader basis. we still have another year on the late cycle businesses. the good news is we are up off the floor and growing strongly and we are very profitable in first quarter after having had a loss a year ago. we are coming out of the worst times. >> cleveland re-sign lebron james? >> we hope go always asking the tough questions. >> thank you very much. >> up next, back inform the gulf oil disaster. it is spreading. more than 200,000 gallons a day. now pouring into the gulf. serious worries could it hit the florida shores soon.

>> what now does florida bush back hard on more offshore drilling? some answers from senator bill nelson. he's also on the select intelligence committee and ask him about the times square terror probe and much more in two minutes' time.

in washington at this hour, we are waiting for attorney general eric holder to come out and make comments about the arrest made in pakistan of a

possible terror suspect linked to times square bombing. we are monitoring that situation and going to talk about that as well with our next guest. we are going to talk about terrorism and that oil spill in the gulf of mexico. which, of course, as you know, threatening local and state economies. joining from us capitol hill is senator bill nelson of florida who wants to raise the oil spill liability cap from 75 million to $10 billion. pleasure to have you with us, senator. >> thank you, ma'am. >> before i turn you to the terrible situation in the gulf and oil spill there, you are involved with intelligence here in the united states and we have the -- wait for attorney general to make comments. we have heard that there has been another suspect arrested in pakistan. it is changing the complexion, is it not, of the incident in times square? what's your reaction to that? >> yes, ma'am. this is increasingly a -- modus operandi of what we are seeing that people are now operating as a lone wolf but that they have a support structure and it may be

somebody that does the actual bombing with them or do it alone. and in this case, fortunately, t -- the good news is it didn't go off. and that the police were right there. >> should anything be changed, senator, as a result of this particular incident and the fact that there seem to be an international link to this particular suspect? >> these things go on all the time. and a lot of them you never hear about because there are folks all around the world in our -- intelligence community that are protecting us on a day-to-day basis. >> do you think, senator nelson -- dennis kneale. does this times square attempted bombing -- barbecue bomber, mark the start of the new strategy by terror groups rather than going

for the big thing that kills thousands, go for small bombings that kill a few but undermine confidence and raise fear across the land? >> precisely. that's what the definition of a tri terrorist is, to create terror. whether it is a small incident or big incident. but if this truck bomb had gone off in times square, it would have been a big incident. >> senator nelson, tell bus what you are attempting when it comes to liability payments due to the spill in the gulf. >> well, the potential environmental and economic disaster from my state of florida is so huge that you can imagine the season is just starting for some of the world's most beautiful beaches in northwest florida and this oil slick is sitting off the beach by about 30 miles right now. if the wind reverses and takes it ashore, you can see what an

economic loss that that's going to be for all of that part of florida. and that doesn't even talk about the loss to all of the fisheries. so $57 million cap is nothing compared to the potential that this could cause all along the gulf coast. >> is on -- but -- what i hear there, this isn't necessarily money for cleanup. this is almost like indemnity, pay back losses due to tourism, that kind of thing? >> of course. as a matter of fact, the cap on the existing law is $75 million for economic damages. >> how old is that cap? >> that i'm not sure. but i wouldn't be surprised if it wasn't enacted shortly after the "exxon valdez." that would have been two decades ago. >> i mean, economic data.

just to play devil's advocate, economic damage is offset bay bunch of economic spending in the same area for the rescue. right? how do you parse that and figure it out? >> i'm in your sure what your question was. the oil companies under this law have the responsibility for the actual cleanup expenses. but their cap and liability on any economic damages of all the loss of business, the -- whether it is fisheries or tourism, that's what's capped at $75 million. >> what about more deep water drilling. you were quoted by one news service saying any attempt to push forward deep water drilling is dead on arrival on capitol hill. >> well, i think the president's five-year plan is dead on arrival. and i have -- what i certainly hope is that the administration on any exploratory wells now are going to suspend that until woe get to the bottom of it and find

out what caused this accident. so we will know how to prevent it in the future. >> but -- "the new york times," page one today, had a story say thing oil spill as massive as it is, is nothing compared to with past oil spills and making too big of a deal out of this. offshore drilling and ever deeper water is a key way we can stop buying so much oil from the middle east and put the brakes on that because of a spill? >> well, we certainly ought to where the tradeoffs are not worth it. and you shouldn't be trading off the entire economy of florida. >> okay. >> for drilling where the geology says there's not very much zbloyl thank you very much. >> thanks. >> all right. that -- gulf oil disaster now, the focus of the previously scheduled annual offshore technology conference in houston opinion jane wells joins from us there live. jane? >> it is the talk of the conference. talk about timing. this is the largest turnout they

had in 30 years. 70,000 people expected here. they have a waiting list for exhibitors. it is supposed to be a reflection of boom times and offshore projects. what about now? they tell me the mood is sober as many want to know what kind of equipment lit take to fix the spill and who is going to make it. >> ironically, the companies that are building the rigs and building the blowout equipment and so forth are going to be spending a lot of money to come up with new safety designs. and the oil companies are going to have to pay for that very many if they want to lease the drilling rigs in the future. >> there's no doubt in my mind that i'm thinking that -- and everybody else here is thinking about what could we be doing, what should we be doing differently. we are anything differently about. >> it this is a remotely operated vehicle. capable of diving to depths of 3,000 meters, 10,000 feet. >> yeah. getting a lot of attention are the $5 million remote operated vehicle systems and also new lifeboats designed specifically for oil riggs, unlike the

regular ship's lifeboats in the bp incident. >> we have a -- since 1982 never hurt anybody or injured anybody in the lifeboat. that may not seen important to you but it is very important. >> how many people can fit into that? >> 60 people. >> we generally had a lot more interest there in the rvs because there has been so much media attention about the spill in the gulf of mexico. people want to learn more about these systems and how they work. what they can do and how they may able to help the situation. >> now, because these are such long-term projects, people here are saying there's no impact right now because of the spill but there is this sense of limbo many tell me. especially with the words you are hearing out of washington. >> thank you so much, jane wells. won't want to show you a live picture coming to washington, d.c. attorney general holder is holding a news conference. he is accompanied with the director of homeland security. janet napolitano and new york

city police commissioner. they are giving details and we are monitor thing. any news that comes from it, we will let you know about it. remember, we have already told you that they have arrested somebody overseas in connection with the attempted bombing in times square. >> this plot -- >> actually, we are going to listen in. let's listen to attorney general eric holder. >> lethal terrorist attack causing death and destruction in the heart of new york city. stark reminder of the reality that we face today in the country. reality that there is a constant threat from those that wish to do us harm because of our way of life. there are organized terrorist networks, they are targeting us. there are lone terrorists here at home. abroad, who are targeting us. as months, even years go by without a successful terrorist attack, most dangerous lesson we can draw is a false impression that this threat no longer exists. it does. and the department of justice and our partners in the national

security community have no higher priority than disrupting those attempts and bringing those that plot them to justice. in this case, that that's exactly what the dedicated agents and prosecutors from the department and various law enforcement agencies have achieved through exemplary investigative efforts. over the last two days, sxhen women from the fbi, department's national security division, and u.s. attorney's offices worked with nypd, dhs, state and local partners to doggedly track the evidence in this case. the quick action from fbi agents was critical to alerting customs and border patrol agents that arrested him last night at jfk airport as he was attempting to flee the country. fbi agents have been able to glean additional evidence from search i searching shahzad's home and car. they are working with other jurisdictions to gather intelligence to this case.

we are coordinating with other members of the national security team to ensure that we use every resource available to bring everyone responsible to justice. these agents and prosecutors are the backbone of our national security efforts. many of them doing their jobs outside the spotlight of the media. i want to commend them for their results in this case and unwavering commitment to their jobs. we owe them our gratitude and respect. i want to take this opportunity to remind all americans how important it is to remain vigilant. the suv in times square was first noted by an alert bystander who reported it to authorities. by being aware of his is your oubdings and by thinking quickly he helped save lives thwart ad potentially devastating attack. as always, anyone that notices any us is person us activity should report it to the appropriate law enforcement agencies. i would like attorney it over to secretary napolitano. >> thank you, attorney general

holder. as you know, late last night, u.s. customs and border patrol agents at new york's jfk airport april helpeded and detained faisal shahzad with connection to saturday night's failed bombing attempt in times square. due to the vigilance of officers, working with all of our law enforcement partners, relying on enhanced security measures, cdp was able to quickly identify and apprehend the suspect. i want to express my gratitude to all of the federal, state, local law enforce many personnel whose cooperation and hard work on this case led to the swift identification and apprehension of shahzad. this was a great team effort and law enforcement work in this case was truly exemplary. in particular, i would like to thank the dedicated men and

women at the department of homeland security whose work on the case was instrumental and apprehending this suspect. customs and border protections successfully apprehended the suspect and after its agents and analysts had been tracking outbound flights for potential suspect for the past three days. immigration and customs enforcement agents served an important role in the joint terrorism task force in new york. as the lead law enforce many agency on the international aspects of the investigation interviewing witnesses and running down leads. the transportation security administration was conducting targeted operations at regional and international airports and designed to identify and apprehend potential suspect. i would also like to give special thanks to the alert citizens in new york city whose crucial tips helped authorities prevent what could have been a deadly explosion. what happened on saturday shows that the critical role that the

american people play in the security of our country. if anybody ever had any doubt about it, this failed bombing attempt, clearly shows the value of the saying that if you see something, say something. thank you and now i would like to turn it over to assistant director john pistol. . >> thank you. i would like to -- >> we have the basic headlines. heard from janet napolitano and attorney general holder talking about the situation with the attempted bombing in times square. and the arrest and what do you think? i am partly cloudy or no? we have seen -- >> a lot of -- >> i thought it was after the pakistani comments, the pakistani officials are saying that they have detained at least one man and one an lust -- e-mailed me that one of the things that struck him was the phrase at least one man. and in pakistan.

in connection with the times square bombing. he was a friend of the suspect that has been arrested in that bombing. and what i'm hearing from knew sources anyway is that it brings an international dimension to what you mentioned earlier, dennis. changes the dynamic of this particular event. >> right. >> changes it from someone that perhaps was inept and attempted to bomb times square to -- >> i -- >> tornlg report. that was the original report. >> yeah. >> very touch zblashg changes it to an -- possible international incident. >> we go out of our way, public officials, media, when an attack like this do not instantly assume it is middle east terror but sometimes you have to go after where you got to go. i want to know was this guy's name on a watch list? did some of the airports see the name show up? >> they say they were monitoring flights. he was apparently not on the radar when it came to national security. at least to the wire reports

that i have been reading. >> market did touchdown 277 in the negative after those -- wire reports. it has come off of the worst levels. still down 237 points. with an a+ credit rating in good times and bad, sun life financial should be famous. we're working on it. so you're seriously proposing we change our name to sun life valley? do we still get to go skiing?

(announcer) sooner or later, you'll know our name. sun life financial.

welcome back to power. to the business council here in washington, d.c. joining us for another cnbc exclusive is sir martin, ceo of

wpp group. >> good afternoon. >> you heard the president today. you were mentioning earlier that if you were to read the room it was that business is anxious about increasing regulation. >> yeah. early reading of the room because we just heard the speech. it is the first of 24 -- first session but 24 hour day where we will see people from the administration. when i think anxiety level is high, people worried about the impact of regulation. not -- not saying that they don't understand that regulation has on come given the fiscal we have to do it. anxiety about the scale of the legislation, what the legislation means. i mean, we heard about proxy votes and concerns about that. concern about tackation of overseas earnings. those are the issues, i think, that the regulatory issues worry about. having said that, put it in historical context, going back to the late 20s, early 30s, it isn't is your prigs.

given the scale and severity of the recession, regulatory excess ander and convention is something we have been here before or a long time ago. i think comparison is a fair one. >> usually get some sort of regulatory reaction. >> interesting, i think it will make the attractions of the corporate sector less and less. i -- you pick up talking to executives. particularly in the united states. questions about you -- raising an earlier interview between the split and chairman of ceo where we are well aware of. you have to have a chairman of the ce onto get on one another. key issue. balance of power and european companies, uk companies that split in our own case, we have a nonexecutive chairman. works well. that relationship has to be a good one. >> let's talk about your business. year ago you described it as peering into the abyss. how much bet rer things now in the various areas of your business? and -- where? >> okay. it has less worse than in the second half of last year. remarkable turnaround in the first quarter of this year.

particularly in the united states. i described it as america bites back. i think that has happened. now, in terms of geographically, the bricks and brazil, russian, india, china a oil price where it is and going further, even russia. not vix. some people describe it. it is bricks. even pakistan, given tissues it faces, vietnam. colombia, mexico. argentina, brazil obviously within it as well. it is new media. it is mobile. and it is pc-driven media. video content driven and the social networking revolution that we have seen. and last but not least in our own case, talking our own book, definitely, consumer insight. understanding how consumers have changed and how corporate consumers change. it is not just selling to you or i as a consumer in the street or in the store. it is on we think about our clients and how they have changed in terms of the attitude towards growth and managing

costs. >> kind of sprawly one. let's step one. the future of your business has a lot do with digital. social networking or whatever. have you gone out and bought companies in the digital -- >> or begancally. >> yes. the other way do it is grow it totally organically. some may not work. >> pricing issue, particularly in the united states, one that's become tougher bus we have seen overseas competitors and japanese and south korean and -- invade the market if that's not too strong a term and paid very high pricings p. barbarian examples of deals. not big ones. prices are very high. razor fish was a high price, too. issue is one of time. and -- if you are -- if you have a legacy company as we do, increasingly non-legacy assets, you have to change very, very

quickly. organic growth stronger. may sound strange coming from somebody like me but it is stronger than growth by acquisition and you don't have the time to do it. you have to do it by judicious blend of both. encouraging them. whatever to grow their business digitally. you have to graft on acquisitions and buy businesses or make investments which we have done a lot of. example there. e-mail, e-mail development, e-commerce. you have to do that. it is a multi-faceted strategy. >> thank you very much. >> thank you very much. >> continued good luck. >> thank you. >> matt nesto running the numbers. we head to the floor of the big board to take the real-time pulse of the volatile markets, still down better than 200 points. >> in a few minutes, apple turning into a bully? reports are the feds may open an

an thank you trust probe into an apple deal with apps developers. we will tell you what's going on when "power lunch" continues.

226 points 2shgs% on the dow jones industrial average. let's join steve grasso. >> good to see. >> did you how is the afternoon shaping up? dipped down to 277 on the negative side and seem to have steadyed out here. the late afternoon looks dicey to some. what do you think? >> i think they mate try to rally them in the last hour or so in the day. remember that level we talked about, dennis and i. 1180 in the s&p. now it is only significant if it closed below that. so a lot of guys are keying in depending what charts you are looking at. 1175 or 1180. right in that wheel house now. >> do you view this as a technical sell-off or do you view it as linked to the fundamentals? >> no. i'm going to go with technicals on this. i don't think it has anything to do with the dash terrorist threat. of course it is always a compone

component. you can a equate for oil based on dollar movement. you will see the knee-jerk reaction with gold rallying and i don't see that today. i don't think it is a terrorist issue versus an oil issue, greece issue and whole euro zone issue. >> all right. the volatile, vix was up 20%. what is that telling you now? mine the obvious is that volatility is up and it has been up, however, for some time now. there are those that are pointing to that particular index as a reason to get out of this market this afternoon. >> i think that the due diligence would be probably to stay on the sidelines at this point. you can't in good conscious tell the retail investor to take money out of cash and put it back into this market. because we spoke about it yesterday. this level could signify another 50 points at least in the s&p to the downside. you could rally back here and anything is fair game. i think we are probably going to head lower short term. >> does a break in the euro below the 130 mark factor into your work at all? >> it does on a macro level because it will be becoming more

technical and affect conscious at this point. so people watching the dollar moves. remember the old relationships of higher dollar, weaker oil, inverse relationships, they don't exist anymore. i think you have to be conscious of trading the day. >> thank you, steve. appreciate it. >> thanks, guys. >> dennis? >> let's continue tearing apart the markets. they are doing a good job of it themselves. for that let's bring in the one-man wrecking crew, matt nesto. >> this is the third 2% decline we have had inside after week and a half. it really -- if you take a look at april 26th when the sell-off started, the nasdaq is -- you know, on its way to a correction. 10% is a correction, you are getting there. almost halfway there. and you can see the s&p down about 3.5% during the time. looking at some of the sectors, all ten of which trading lower here today, materials, energy, tech, financials. again, from the -- close of business, april 3rd, april 23rd, 26th, materials, down 6.5%.

technology is down about 5%. as well. look at the key stocks, again, during that period of time, we are in a little stealth bear market. look to get back in kodak. cleveland cliffs. wffr. alcoa, worst performer in the dow. citigroup one of the worst in the oex, s&p 100. look at this, you euro haters. you are having a great time. twice as much fun to the downside when the euro fails. load the boat and help yourself. it is working. i also have -- tracked personally 40 large cap liquid adrs, european adrs. these are some that are blowing up today. other names like national bank of greece, fiat, bmw and telecom, interestingly, guys, of those 40ure even adrs, there's one that's trading higher today.

>> the irony here. irony, dennis? bp is the only one higher? >> it will be interested. >> interesting. thank you very much. stocks are sliding. euro hitting a one-ier low against the dollars. you heard sue and steve talking about worries about greece and whether or not they are going to be able to get through this and also the situation with the arrest of the attempted bomber in times square. right. let's get inside on the currency markets. chief currency expert p mark ryan, head of veer much for ubs. good to see you. brian, let me start with you. level of 130 for the euro, this is the lowest level we have seen in a year. does it break this level? can it go lower from here? >> definitely. it is a question of timing. 130 psychological level with big level juan to keep an eye on. down to under 129. that's where a nice long-term trend comes in. overall, the -- the -- problems facing greece, problems facing the peripheral countries in

europe, inability of the ecb to enact further measures, you would undermining the euro in the process, suggest that we are looking at lower euro. several months to come. >> we were doing a press conference held by attorney general holder that, in fact, the suspect in the attempted bombing of times square had been on a no-fly list on monday. and that was perhaps how they were able to arrest him as he was trying to leave for dubai. to what degree is the rise in the dollar coming as a result of those concerns about terrorism and people trying to be less risk-averse? >> that's pretty low in my radar screen. to be honest. what we are looking at today is a perfect storm coming from two main sources come back to support the dollar. first was chinese moves, again on the monday. and again on tuesday. and chinese moves to raise their reserve -- reserve requirement ratio and then also a drop in their manufacturing index. some slow and coming out of china. that's why you are seeing such a

spillover effect into the commodities and commodity currency. lower demand out of china equates to lower oil and lower gold and lower australian, lower weaker canadian dollars and other obviously is the euro zone and fears there. >> mike, at what point do you think that -- the test comes for the ecb and germany and the rest of the euro zone as it pertains to spain. i mean the flag they did not come out and say anything positive about spain, actually, led to the speculation that there was a problem with spain. i mean, it seems to be coming unravelled regardless of what happens with greece. how do you invest against that? >> well, fighting a difficult battle. each time they address an issue, whether it is greece, portugal, something pops up with spain. you have to address that. and i think it is systematic of the problems encountering they had taunt to crack the broad program that would be in conjunction with the imf and would, you know, be a t.a.r.p. like solution not meant to address a single country but a broad systemic support program and they don that.

they went for the -- we are going to provide enough backstop work, get them true, this but without devil raysing the broader issues. what you do is invie -- you line up the next most vulnerable set of players and that's when you start -- >> do you think this is contagion? do you think lit spread? >> i think what will happen is the fears and concerns about who the next might be is certainly going to go over to the credit markets and seeing on a credit spread basis. i'm not forecasting spain will go through the same type of fiscal problems we are going to see in greece. fundamentals are different. we have seen the way markets worked before. you pick up the weakest and then go after the next weakest. >> brian, you know, for all intents and purposes, u.s. dollars should be really weak here. right? we printed so much money and all that. yet, it is in another rally. doesn't it mean the dollar always relative to other currencies will end up being strong and not weak? >> certainly in times of distress, that's the case. the dollar has not lost its safe haven status when the you mo what hits the fan and the dollar

comes out on top. >> despite -- >> looks to be the case again. we are looking at it with theure oh it is losing the luster as international reserve currency. who will benefit from that, dollar. >> does it survive? milton said it doesn't survive the next great recession. >>ure go does it make it? >> i think it will. yes. it is -- always been a political ex-er ice and not going let it go and will take the steps necessary to -- won't break up, does not mean it is not going to weaken. plenty of trading opportunities on the downslide do they break up? i mean, you can almost argue greece would be better if you could have its own currency again. >> again, i think that the -- that's the easy solution. that's probably something that -- you know, the easy way out for this. i'm not sure that this benefits its whole euro zone area. i still we can have as a political -- that's what the eu is. what you have -- go through, political solution. right now, there is not the political will on the -- the -- across the players to make sure you see this kind of broad based solution put in place. >> thank you so much.

>> thanks. >> thank you. >> and up next, apple in the crosshairs. will the feds hit that tech giant with an antitrust suit with the dealings of the apps developers. obviously, very, very tough. if you are long stocks. check out am's shares over the past year. stock down 2.5% today. it is up 96.5% over the last 12 months. (announcer) roundup extended control does two jobs... at once. one: kills weeds to the root. two: forms a barrier, preventing new ones for up to four months. roundup extended control. once upon a time, mutual funds promised to simplify investing. what happened? i used to ask my broker for advice.

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the big flap between april and adobe may have placed apple in the crosshairs of antitrust. what this might mean for the popular iphone app. >> apple's new iphone policy forbids app developers from using third party programs to develop their programs. developers creating products using adobe flash will have to create a totally separate

version of of the app if they want to sell it at the apple's app store which goes back to the battle between april and adobe. claiming apple is shutting out the software from mobile devices bullying its way through the markets in which it competes. steve jobs last week complained adobe's software is unstable, insecure and unreliable and apple is trying to protect the platform from outside software that may threaten the overall quality. the question for investigators will be whether april sl abusing its power because of the widespread success of iphone and increasingly ipad or whether apple has the right to control what apps are available on the store and have developers create them. some developers are complaining apple's rules force them to go out of their way to created an additional version of their software for apple rather than developing one product that runs on all platforms, including research in motion, microsoft, google, even palm for that matter. legal experts say apple isn't excluding developers. saying it is apple's store so

that apple gets to make the rules. if developers don't like it, they should simply go somewhere else. there's much more on the blog. this is going to be interesting to watch, techcheck.cnbc.com. >> more followup thoughts on the idea of the fed looking at that when we return. >> that's right. plus we also are going to take a closer look at the market. there are a couple of winners this market. not many. but we will have them for you. a special edition of "street signs" with cramer hanging out for the whole hour to help you through the market day.

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adobe and am are feuding. three things to think about here. first of all, you know the high-tech industry is the best industry we have going in america and new administration is looking at apple in -- google and antitrust, intel. i wish they would let that alone. second thought. there is no monopoly at play here. the iphone is less than 10% of the market. adobe complained to the feds that it is a problem. stop complaining to the feds and compete. >> we have a sell-off, ty. getting a little bit better.

down 231 points. >> yes. i would say that there is a bit of a disconnect here from -- from the idea the market is down so much today. and it is being gripped by fear on the one hand and on the other hand, boy, the executives you talked to here and we had on, they are seeing their businesses improve a great deal. that's it for "power lunch." >> trish regan and jim cramer, "street signs" begins right now. 2:00 p.m. wall street where the market sell-off continues. dow having its worst day since february. nasdaq having its biggest drop since last june. all ten s&p large cap groups are lower. fear rules the day. is this the return of volatility? hello, everyone. welcome to "street signs." i'm trish regan. erin burnett is heading back from the gulf. jim cramer is with me the entire hour. we are calling the session coming up here the panic.

>> excitement to. >> it yeah, little excitement. we are seeing lots of pan wick the dow off 230 now. we wouldn't discuss the reasons behind it and help everyone navigate this volatile market. there are ways to make money. jim will share that with you. let's get to the trading floor. bob pisani, scott wapner, rick santelli. mr. pisani, our first. >> is my e-mail filled with traders that are bearish, decoupling the idea the u.s. will do better, it is not working today. if you compare it the way the rest of the world is trading we are still down not as much as everybody else. the s&p is down little over 2%. compare that to where we have been ending off the other ones. spain was down 5%. russia down 4%. brazil is down 3%. right now, still trading. germany ended the day down all of these markets have a considerably worse than ours for the last several weeks. clearly we are not decoupling but not dropping nearly as much as the rest of the world. how about the european banks? all down. noticeably. 48%. ale