when i checked, the futures were positive, but the rioting broke out and that seems to be the cause of our futures declining now to minus -- boy, they're really tumbling, down 13, down 2 points in the last 30 seconds. >> yeah. they're significantly at lows of the session. we've doubled our losses just over the past half an hour just in terms of futures. the other big story today is going to o in washington as we continue to have hearings on what caused the financial crisis. and today the executives that ran bear stearns when it collapsed will be testifying before the fcic, which is the financial crisis inquiry commission. they are obviously doing some of their meetings in public, some in private. this one obviously public in anticipation of their full report on the causes of the crisis, which is anticipated by the end of the year. today, jimmy cayne, former ceo, will be speaking at the fcic, and they're going to be asking what he was doing while the firm was falling. in his testimony, he'll say overwhelming market forces led to the firm's collapse. and as we keep an eye on the

greek protest, we want to check the european markets. they're lower across the board and significantly so. all right, we'll show you the greece, portugal, italy, greece and spain and also one comment, one comment here that i want to make. there's a couple significant things that have happened this week. if you determined on whether there's going to be contagion here. portugal was able to issue debt yesterday. in terms of the last time they had the bid-to-cover ratio at three times. this time it was only 1.9, but there still was demand and they issued six-month bills at 2.96%. spain, mark, is going to be selling debt tomorrow with a five-year maturity. spain, obviously, is a much more significant economy in terms of its weight in the eu at 12.5%, which just so anyone has any sense, that's just about the same as california is to the united states. so, the spanish situation will be a significant one to watch. let's get to louisa bojesen live in london. louisa? >> reporter: you're absolutely right that the spanish economy is a lot more important in many

instances, and especially on that debt story. obviously, we're following the issues in greece now very, very closely as the violence has suddenly turned deadly with these additional news flow within this past hour that we've had with three people having been found dead in a building that was set on fire by some of these protesters. you have approximately 40,000 people protesting in the streets against these austerity measures. and up to now, these antiausterity measures, it has to be said, have been relatively peaceful. it is the third time that we're looking at a very large, organized strike. again, these are eyewitness accounts that it is approximately 40,000 people. it is the worst violence we've seen since the socialist government came to power back in october. police have been doing everything they can to try to stem it from becoming more violent than what it has been today, but they've been attacked by hundreds of these protesters that have been throwing whatever they've been able to get their hands on on the police. again, according to eyewitnesses. they've tried to storm

parliame parliament, the protesters, a number of times now, and the police, they have been fighting back in full riot gear, trying to get to grips with the actual situation. but you have to remember that for the greek people, it's a very, very serious time at the moment because they're worried about getting fired, they're worried about losing their jobs. they're worried about seeing their wages cut quite significantly, and you are going to be looking at a scenario where you're going to see significant deflation. there's no way around it. we saw that in lithuania, back when austerity measures had to take place there, and you saw the inflation picture go from something like 18% to minus 2% over the course of two years, and it's thought that we could be looking at something similar about to take place in greece. >> all right. let's hit the u.s. markets. as we mentioned, the futures have taken a beating here. bob pisani, what's going on? >> well, you've got the moody's may downgrade portugal line, you've got the british parliamentary elections, regional elections in germany, and what it all means is the regular trader types, the buy to differ types, they're sitting on the bench waiting for clarity

here. the european banks, your deutsche bank are all down 2% to 3% again. you know, these banks have dropped about 20% just in the last three weeks. here in the u.s., bp's trading flat it was up a little earlier. there's reports that one of the three oil leaks has been capped, although it's not stemming the flow of oil. hopefully, that dome will be in place in the next couple days. cooper tire, excellent sales, top line really good, revenues jumped 32%. they're selling more tires. that's another good sign for the u.s. economy. anheuser-bus anheuser-busch, i don't know what happened there. they're down fractionally. earnings missed estimates. great sales, though in brazil, china, canada. brazil up 16% their volumes. amr, you know the international business has been weak because of that volcano. it showed up in amr's reports. international travel service reductions cause aid a problem for them. they reported a 1.3% decline in april traffic. tradertalk.cnbc.com. mike huckman, how's the nasdaq? >> not too good at the moment. the premarket indicator down better than 1% right now. of course, "the biggest loser"

aired on nbc last night, but the nasdaq won that more dubious title here yesterday, and that's because the nasdaq was the worst performer of the three major indices, suffering its worst percentage drop in three months and its biggest point drop in 15 months. that, of course, was due largely to a broad-based sell-off in tech. and unfortunately, at this early juncture this morning, it does look like that tech takedown could continue everywhere from the philadelphia semiconductor index to dow components, intel and sysco as well. on the earnings front, investors might be wishing that garmin sales would recalculate their route this morning, because the company that makes the gps devices missed on revenue and profit expectations. those shares down 13% right now. let's go down to john at the nymex. john? >> yeah, well, the greece is the word down hire ere at the nymexr sure. to put this in a tangible fashion for you all, this is the loudest i've heard the floor behind me in a long time. crude oil prices below $80 a

barrel now solidly. gasoline futures down some 20 cents a gallon in the past two days. and it's all about the dollar. you see the dollar index chart, it's a straight rocket shot up. here, crude oil futures are a straight rocket shot down as is gasoline and heating oil. the fears are palpable. we saw moody's cut portugal, looking to cut portugal's credit rating. that's affecting things. we had a very bearish inventory report from the api last night. probably will see more of that at 10:30 from the department of energy. and we're going to see more pressure on the front of the curve as we see these inventories build and the financial fears build. rick, i'm sure it's a similar story over at the grid. >> it is. as a matter of fact, it's similar in some scary ways because we have foreign exchange and interest rates trading with the speed of commodities, as you were just talking about. you know, it's not only the images, it's not only the unrest, it's not only the politics and it's not only

whether the eu will survive in its current form. you know, early this morning, moody's put portugal on review, on review for another possible downgrade to that aa-2 rating. that played into the contagion scenario. don't try to make sense of this from fundamentals. it now has a life of its own. we've seen the euro just plummeted to 128.5 right now. interest rates in the flight to safety here or in the eu tremendous, the lowest ten-year rates of the year for the u.s., under 60 basis points for a european two-year right now. and the bund is trading well under 3% and under 2.90. erin, back to you. >> rick santelli, thank you. more headlines on the economic front crossing just moments ago. the treasury announced it is going to be cutting the size of auctions, how much debt it sells, for the first time since 2007, and they are citing economic growth as the reason for that. they're saying tax receipts are

actually a little bit better than expected. this is a trend steve liesman's been watching closely over the past couple months. steve, what do you read into the headlines? >> well, you know, as you said, it goes to the story that we talked about a few weeks ago. march came in better than a year ago. now april looks like it's come in better than a year ago. we showed the chart yesterday that withheld receipts were up 3%. so, it's part of the economic recovery. it may suggest there's a little bit better underlying job growth. it's a good sign there's still a lot of debt to issue now. what we had today were the best job growth numbers from adp in more than two years, but it wasn't good enough, as you can see, to shake the markets from really a greek funk. analysts have taken a much bigger bump in the report from april to get investors to focus on the string of better-than-expected numbers that have been coming from the u.s. of late. of course, it's ironic that our debt numbers are improving while what's going on in greece. you can see right there. adp, total product employment up 32,000 upwardly revised from 19,000 in march. the nonfarm payroll estimate for

april is 180,000. so, essentially what you need there is 150,000 government jobs, essentially. the census -- that's what economists are looking for. let's break it down by size. a tiny gain for small business with fewer than 50 employees up just 1,000. it is the second in a row, but very small. medium up 17,000, large up 14,000. that is the best number for large businesses since 2006. goods producing were down 18,000. why? because construction continues to lose jobs, down 49,000. moving along, a healthy gain for service-providing and manufacturing up 29,000. the climb from the declines from early '09 has been sharp, but the push into positive territory has been grudging. economists believe you won't get strong job growth until demand has returned and small business credit problems are solved. markets will now turn their attention to jobless claims tomorrow and the jobless report on friday, but it seems like it will take a big number to divert their focus from the meltdown in europe. mark? >> all right, thank you very much, steve liesman.

i'm down on the floor here with two esteemed traders from the floor, bernie mcsherry and terry dolan, benjamin & gerald. terry, you're closer, i'll start with you. what the heck is going on? why do we care what's going on in greece? >> you know, with all due respect to the international problems and other pockets that may be problematic on the forward, on the backdrop, the market was up 15 out of 20 trading days last month and the days it was down were just neutral to slightly down. so the market in my view set itself up for a downdraft anyway. if you recall in the early part of the year when it first broke above 11,000, you know, we talked about the fact the market could easily come in 300, 400 points and still stay within the moving averages and keep the technicals intact. i think that's what you've actually seen. yesterday when i checked the averages around 2:30 in the afternoon or slightly earlier, the dow had basically touched right on the 100-day moving average and then began to turn up. i think this morning you're going to see us get back to yesterday's closing rally for starters and then we'll take a

look and see how much they've breached those numbers. but at this point, i think the trend is positive and i would consider this an opportunity. >> bernie? >> i'm not sure i buy it as an opportunity just yet. i agree with you, we've had a nice run, you know? we've broken the eight-week winnings streak last week, but yeah, we're worried about what's happening in greece because of the issue of slowing growth. i think we all bought into the idea that the global economy's recovering, but maybe we're going to have to lower expectations a bit. i think there are a lot of people around this room who really weren't believers in the rally entirely and they're looking at this as a chance to take a few profits and maybe reassess the 500 points or so lower. >> but some people, like terry, are looking at it as a chance to pick up a few bargains. you, however, said not just yet. >> not just yet. i think we can move a little lower here. i think we'll test some of the support levels this morning. i think there's some nervousness about it. you know, you take a look at those pictures coming over the screen from athens and it doesn't look very encouraging. and you know, we've got 15 countries that have to approve this package for it to go through and i have a feeling not all the citizens of those nations are looking to subsidize

early greek retirement. >> all right, gentlemen. bernie, terry, thank you both very much for sharing your input with us. let's get back upstairs to erin. all right, mark. as you can see, we're looking at pictures of greece again, keeping a close watch there. and as we said, we'll be bringing you live pictures throughout the hour of what is happening in athens. david faber will be talking about the contagion factor next as we approach a five-year offering from spain tomorrow in the debt market. and here's a check on the greek two-year, up 15%. by the way, this is exactly where it has been for a while. so, the pictures may be striking. there has not, though, been a significant change pre and post this austerity announcement in terms of the two-year. and the street poll -- are you a bull or a bear as volatility comes back? squawkonthestreet.cnbc.com.

sny as we watch over my shoulder here, the continued protests in greece, you know, the larger question out there amongst some investors, those who look at sovereign risk and follow it historically and follow default patterns in countries for the last 100 years is simply, can you keep borrowing and spending forever without ultimately meeting some consequence? and perhaps we're starting to see the consequences of that

play out, not just in greece, but throughout the eu, and frankly, even beyond that in terms of the risk that those who are funding these budget deficits, namely, the investors, are willing to take in terms of the return they're willing to take. and ultimately, will it end with massive restructurings of the debt loads of these countries as opposed to aid, in the case of greece, of course, from the eu and the imf? they haven't gotten it yet. we're still waiting for that vote, as you continue to watch those pictures come in from greece. but more specifically, today, as yesterday, we're also going to be focused on other markets -- portugal and spain amongst them. and let's sort of get a look there in terms of athens, spain, portugal, if we can, in terms of what those markets are doing today. while we continue to watch those protests. there's a look at those european markets. you can see they are all down quite sharply again. athens down 4%, spain and

portugal also down more than 3% right now. how's the spain two-year looking? give it a one-week, you can get a sense for that. and as well, ten-year. we've talked about spain. a report today that the deficit will exceed the greek gap, but they are expecting growth in spain. nonetheless, the european commission's forecast is for less growth than spain's forecast, which looks for about 1.8%. they're looking for 0.8%. spain's budget deficit will decline but still be about 9.8% of gross domestic product this year. that would be down from 11.2% in 2009, and these are the numbers that have investors concerned. you know, where does this all end, is the question that many people, when i'm talking to them, ask. how do you get out of this problem without ultimately at some point down the road saying we're just going to pound down a restructuring? that's what we've got to do.

adding more debt when you've got a debt crisis is not necessarily the answer. some are calling it the keynesian end point, if you will. now, they may very well be wrong or this may take years to play out, but there are people in this market who are simply pulling back because of that. by the way, when we do get there, if we get there $1.1 trillion in spanish debt, 8.1 billion in irish debt, you can go through the numbers. it doesn't mean that it's going to be massive financial panic. it simply means that there are going to be losses and then we'll get on with it. of course, over in greece, looks like they've got some things that they're trying to deal with right now. of course, we'll be watching this story as we move along today. it is having yet another impact on our market, as it did yesterday. we'll see, though, as the day goes on, how those yields in portugal, in spain, in ireland, in italy and in greece fair. mark, back to you. >> thank you, david faber. we will be monitoring the situation in greece, of course. the worst rioting we've seen

there since the debt problems began. and big news expected out of the financial crisis probe into the fall of bear stearns. you can see phil angelides there getting ready -- that's obviously not him -- getting ready to bring in the bear stearns folks today. we'll be talking about that in a special report from washington when "squawk on the street" comes back.

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order now and you can get an extra four weeks of awesome meals! 28 breakfasts, lunches, dinners, desserts, and snacks. 140 meals absolutely free. call or click now. don't make me come looking for you. snrwlt, you can see on the right the rioting that's taking place this morning in greece, in athens, and the futures there. we get a little bit of a break because we closed above fair value by two points on the s&ps. still, we are significantly below fair value. and the dow will be down at the

open after a pretty unpleasant day yesterday. down 2.25. all right, let's get more on the picture you're seeing there, greece obviously a part of the problem here. this is interesting looking at these numbers of what they've tried to cut and how difficult the road ahead is going to be. simon hobbs joins us now from hq. what's your sense of where we go from here, simon? >> well, i mean, obviously, it's very difficult if you get these sort of images beamed around the trading floors through europe and obviously here in the united states. the big question was the degree to which the austerity could actually be followed through on, not just in greece, but it also causes this in portugal and in bigger places like spain and the united kingdom through the end of the week as we go through the election. the question remains the degree to which these are a lunatic fringe, if you like, or whether it is an indication that beyond the violence erupting today that it is going to be impossible to

pass through the austerity measures. the indication is still that the ruling party in greece has enough support in the parliament, has enough seats later in the week to push through the austerity measures. but clearly, if you're worried about the environment, when the euro is falling so dramatically, as we've seen this week, then you're only going to be further stressed. if you see this sort of activity on the screens above you as you're trading, be that in the greek debt market, be that on the foreign exchange markets, or indeed, on the bosses throughout europe, erin. >> all right, thank you. >> thank you, simon. the buzz ahead of the open and what the spike in the vix is signaling for stocks. and we'll continue monitoring the financial crisis inquiry commission on the collapse of bear stearns. we'll be back with the opening bell on a busy wednesday morning.

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all right. headlines before the bell. futures falling throughout the morning as riots rage in greece. greek bank stocks are plummeting. the treasury department will offer $78 billion in securities in its quarterly refunding, a small decline from the past quarter amid the economy's recovery. gm recalling 161,000 hummer h-3s. the hoods, apparently, can detach while driving. that wouldn't be good. well, as we count you down to the opening bells, you're looking at pictures of athens. let's bring in john o'donoghue, head of equities at cowan & company. john, obviously, you know, concern, fear, volatility, all of that is back. what's your take on it? temporary situation or beginning of a broader, longer-term sell-off?

>> i'm probably more in the view that it might be a shorter-term correction for a while. i'm not in the overly bearish camp. more sort of cautious, i would say. but i think, you know, this market has been looking for a reason to sell off to some degree, and here we have it. obviously, what's gone on in athens is quite disturbing, and i think the ramifications throughout europe still have to be seen. and you know, we have the election in the uk tomorrow. so, that will be a very interesting outcome when we see that. >> all right. thank you very much, sir. here are the opening bells. at the big board, the boy scouts of america of greater new york. at the nasdaq, charm communications, ticker chrm, a television and ad agency in china celebrating its ipo. >> let's get to our market reporters. and it was interesting looking at futures. they doubled their losses in the early session. we're not fully opened on the dow. they're down only about 39 points. bob pisani, we're not obviously

fully open, but what do you think is going to happen here in the next few minutes? >> what's happened is stocks are not trading on fundamentals. they're trading on what the traders call event risk. and what happens when you get a lot of event risk like now is everybody moves to the sidelines until you get clarity on what's going to happen. so, what's going to be the important things? right now the u.s. futures dropped as soon as the euro started dropping, when everyone was showing those images around the world, the euro dropped, our futures dropped. we had the dollar index at the highest level in a year. s&p's at six-week lows. the ten-year treasuries or two-month highs and are approaching four-month highs right now. that's event risk when you see that. so, what's going to change that is more clarity, in terms of what happens with the british elections, the german regional elections over the weekend and the nonfarm payrolls. then you get a picture of what's going on here. european banks are opening weaker. they've been down 20%, most of them, in the last three weeks. that's a pretty big move to the down side.

british petroleum, bp as it's now called, trading down. it was up earlier. they've capped one leak, but apparently not staunching the flow of oil. cooper tires, excellent revenues, selling a lot more tires. revenues were up 32%. that's real top-line growth overall. anheuser-busch, a little disappointment, but their sales overseas were spectacular, particularly in latin america. that just opened down 2%. finally, the international business in the airlines have been a tough time recently. the volcano has really affected traffic over in europe, and that was very clear in amr's report this morning. tradertalk.cnbc.com. hey, mike, how are we looking at the nasdaq? >> bob, we're not looking so good. right now we're down 1.3% or about 30.5 points. the nasdaq was the worst performer of the three major indices yesterday. it was down almost 3%, but keep in mind, it's up almost 7% so far this year. the declines here yesterday were due largely to a broad-based sell-off in technology stocks. and unfortunately, here at the

open, at least, it does look like that selling pressure is continuing today. we've got apple shares down 3%, for example. the philly semiconductor index down. and it's not just greece and the problems in europe as well. we do have some individual stock stories to talk about here, especially on the earnings front. news corp had pretty good results, especially on the success of "avatar," but it is being downgraded this morning by jpmorgan from overweight to neutral, down 7.5%. and garmin shares off 14%, even though it reaffirmed full-year guidance it missed by a pretty wide margin on revenue and earnings. let's go to john down at the nymex. john? >> yes, hi. that continued, the trading behind me continues to be at a high fever pitch on all the various factors that bob pisani outlined. the greek situation is just engulfing the mindset of traders down here, and all of us, forñr that matter. and the fear trade is definitely on and there's no corner to hide out. brent crude is down over $3 a barrel along with the wti, but

brent crude is maintaining a significant premium to wti futures, which defies sort of what's going on in the continent right now. so, we'll be watching to see if that premium maintains itself, but it's all about the dollar. the dollar's speaking massively here, pushing these commodity prices down. crude oil, heating oil and gasoline. good news for drivers, though, gasoline futures down 20 cents a gallon in two days. rick santelli, i bet it's the same story over there. >> yes, john, and you know, many down here aren't retail investors. i know bob pisani's talking about sidelines, but trust me, it's anything but sidelines. there's huge volume in many of these markets, in the treasury markets, in the institutional equity markets. there's selling going on, and the contagion factor can't be dismissed. maybe it isn't the right course. maybe people should only concentrate on numbers and fundamentals, but that isn't where we are at, and these things tend to continue and get

a life. the euro currency now is getting close to 1.28. yesterday we were arguing whether it could get below 1.30. the bund price are up a full price or darn close. we're only a basis point away from 3.50 in the ten-year, the lowest rates of the year. but what's fascinating is the two-year note in the states is starting to race down as well. so, this isn't necessarily a flattening endeavor going on. the entire current's coming down on that 81 billion down to 78 for the refunding. yes, it's $3 billion less, but $3 billion after coming from the high 20s not that long ago isn't that big of a slice. now let's go to david faber, who has some information on time warner. >> thanks, rick. that's right. you know, of course, everything globally that we're following, don't want to forget that some of our bigger media entertainment companies reported earnings, news corp last night, time warner this morning. time warner down, but that's the market. in fact, the company trumpeting what it is saying is the highest quarterly profit in company

history. rare that i've seen that kind of a headline from time warner, but they chose to go with it in their press release, and fairly much across the board. of course, this is really now a company that is a cable networks company. they had strong performance. interesting to note, they bought back about $670 million worth of stock in the quarter, huge buyback for the company during that period of time, reducing the float fairly significantly when you think about it in terms of that amount of money for one quarter. the call is beginning at 10:30, so we'll have news from time warner, perhaps, after the conference call begins. you know, one question, how much of the ad growth that they saw was currency driven. don't forget the moves in the dollar, yes, lately, but you're talking about a basket weighted currencies against the dollar and what that ultimately may have done. we'll get answers there on time warner. as for news, you heard mike huckman talking about a downgrade. the numbers looked great last night from news corp, but then they guided down 100 million in

ebitda. that surprised people and that's why the stock is also a bit weak this morning. finally, let me end on the bigger story. spain. just want to note, the ten-year in spain is now at the biggest spread it's ever been since the euro was created to the german bund ten-year. the premium between spain's ten-year and germany's ten-year never has been larger. with that, i'll send it back to mark haines. >> all right. thank you very much, david faber. a quick check on the markets. actually, not quite as bad as we feared, given -- well, actually, yeah, it is. sorry. dow is down 85 points. the s&ps, where the futures were down 14, the cash is down 13. so, about what we expected, given the discount on fair value. nasdaq composite really getting hit again, down almost 40 points. let's get the early tick. joining us now, neil hennessey

of hennessy funds and barry james, james funds and co-manager of the james balance golden rainbow fund. i'll start with barry. is this decline on the greek situation a golden rainbow of a buying opportunity? >> not yet, mark. as we see the market's been in a topping phase since january, and there's still way too much bullishness in the market. 36% more bulls than bears. a lot more money going into the bullish types of funds rather than the bearish funds. the volatility index had been very, very low for some time. wall street had a lot of buy recommendations versus sell recommendations. and yet, you had insiders getting the heck out of dodge, selling aggressively. so, we've been lowering equity levels over the last couple months, and we're trying to find ways to protect capital right now instead of looking to deploy it. >> neil, how about you?

>> i think this is just a small-term correction, mark. i mean, if you look at the market's only up 4.5% this year. it's off about 400 points from its high. i mean, just interesting enough, as i sat in the booth right now, even the cameraman said it's time to dump the stocks and get out. and i think it's a panic out there that's still running. you see what's happening in greece, and it just scares people and they just want -- they don't want to go back to what we saw a year ago. and so, they're taking their money out of the market, they're putting it in fixed income, which is clearly not the place to be. but that's what's happening. >> why not fixed income is the place to be? you keep seeing drk. >> been the place to be for the last few days. >> right. you know, looking, again, you've got the greece issues, the refunding. there's not going to be as much debt coming out of the u.s., which is actually maybe a good economic story, if it continues, and you've got 30-years at 4.3%. >> but see, i'm not looking to tomorrow or next week or next month, and i don't think either one of you, erin or mark, would disagree with me. most likely, interest rates are going to be higher in two,

three, five years. and if that's so, bonds are going to be lower. so, whatever you just made in the short-term, you're going to lose on principal in the long-term. >> neil, overall, you are bullish. i mean, you think we're going to go up what, another 7% to 10% this year? >> i think we'll probably close up about 11,800. you've got to remember, i know as ugly as greece is and what's happening in europe, but the companies are so very strong and lean in america that their profits are just going to continue to come to the bottom line, and as we spoke last week, i really think dividends are going to be the play that's going to move the market higher. >> all right. barry james, what's your overall view? what would you do now when everyone is so afraid? what's the move of courage? >> the move of courage is in the bonds. no one likes bonds right now. >> yeah. >> high-quality bonds as it were. yes, it's probably a temporary move, not a permanent move, but as we've seen, we can see bond yields drop a lot. as we look at the marketplace right now, the real concern we have is that the economy is not

having a robust rebound. and if you really look at earnings, while 66% of the s&p 1500 have great positive spris surprises, if you look at the 12-month comparison, earnings are up less than 1% and sales are actually down. so, we don't have the robust recovery that we would like to see, to say that, you know, we have the all clear. prices are not cheap. you have 22 times earnings on the s&p. so, we think that we're probably going to see a lower market. it will provide another great buying opportunity, but for now, the act of courage is to get out of stocks and into bonds. >> there you go. >> neil, barry, thank you both very much. >> thanks both. >> thank you. >> pleasure. >> much more on greece, the surge in volatility. i believe it's up 12% or 13% already this morning. dow down just about 94.

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on folks, welcome back to "squawk on the street." i'm matt nesto. in nautical terms, they say man overboard. on wall street, they say stock overboard. check out this list of adrs, european adrs. i tracked 40 of them. all 40 are down here today, but allied irish banks, la farge, alcatel-lucent, fiat and axa among the hardest hit. of those 40, the best three performers all down less than 3%, bp, bhp billiton and glaxosmithkline. merck downgraded to neutral off the conviction buy list at goldman sachs. it is weaker here today. they think this stock is headed still to $42 a share, which is far ahead of where it is right now. they downgraded the whole pharmaceutical sector as well. did you see hertz this morning, down sharply about 5%, 6%. and this after rival avis sent a letter to dollar thrifty, which

is in a $41-per-share takeout deal with hertz. they said, yeah, we're open to substantially higher bids. there's some back-and-forth language about this was wrong, that was wrong, but the fact remains is you come with a strong offer and we will listen to it. erin, back to you. >> all right, thanks very much to you, matt nesto. now let's talk about volatility. we gave you that headline that volatility was up 14% now. i'm just checking at every instant. all the major indices fell more than 2% yesterday. as you can see, cboe volatility is up, but i want to highlight the dow, which had initially dropped 100 points and now has recovered about a quarter of that. so, we're now down only about 73. how do you trade volatility and what does it signal for stocks? not necessarily always a bad thing. here to discuss, katie stockton, chief market technician with mkm partners and jon najarian with optionmonster.com and a member of "fast money." katie, volatility, good or bad? >> usually, it's a bad thing. so, the vix is negatively

correlated, actually, very strongly negatively correlated to the s&p 500 index. so, that's why when it does spike, it tends to be measured by a correction in the s&p 500. what we've seen recently, it's up more than 80% now off of the mid-april low, and we really haven't seen much of a correction in the s&p 500. and what i think that is is a testament to the positive momentum behind the market. so, in this case, i don't think it's necessarily a terrible thing. >> so, do you think that it is preceding a correction of any magnitude or? >> i don't think it will be that much more significant than what we've seen. i think that we'll see the vix spike in the days ahead. already it's approaching resistance in the 28 up to about the 31, you know, level for the vix. and the s&p 500 does have support in the 1,150 area, that i think is a very important level, and short-term oversold conditions already are coming back for the first time since the january correction. >> jon najarian.

>> erin burnett. >> what do you think? >> well, when the german chancellor merkel uses words like contagion and chain reaction, you can see why that would have a negative impact on the markets, even though we know that the politicians need to move the agendas forward and that's how she's doing it. she's spooking her market and our markets by saying things like that. but erin, just like the other guest said, katie said, we've seen a spike in the volatility that's gone up to nearly the levels of february 5th, which was about 29 and change for the vix. it's still not catching up to, if you will, how much the market is moving. in other words, traders are not betting that we're going to see 1.5% and 2% moves out of the s&p or the nasdaq just yet, and we're likely to run into pretty significant resistance, again, as katie said, up there at that 29 to 31 level for the vix. so, what does that tell me? it tells me that wall street firms that had been providing protection have pulled way back on providing that protection.

they're asking much higher prices for the protection, and it's likely to pull back very quickly from there because this isn't really buying of this protection that's causing the spike. it's basically just the offers, erin, disappearing. you know when the offers disappear, people chase after it, and that's what's happening here. >> so, too late to buy puts, i would bet? >> i think, mark, it's too late to buy puts on an outright purchase. i think you're ludicrous if you do that. it's almost a guaranteed loser because the hurricane's right offshore and you're buying the protection right now. instead, what you should do is, if you're really nervous, buy a puts spread. i looked at the spy under, the spy moments ago -- you could buy the at the money put for the s&p in june and you could sell a put about about lower than that, and it protects you on the s&p. meanwhile, of course, that would offset losses you would be taking on your long positions.

much better trade than getting in here and buying a put and seeing the market make a slight recovery tomorrow and volatility drop by 20%. >> katie stockton, if people believe this is a buying opportunity, what would you buy? >> i would buy financials. that's really the strongest or most promising sector from a relative string standpoint. you've seen loads of breakouts, you know, due to earnings season. earnings have been very well received. and a lot of those are occurring in the banks and regional banks. and i think those are breakouts to believe in and that this pullback is actually constructive in that it improves the risk-reward ratio. >> all right. thank you very much, kate and jon. >> thank you, mark. thanks, erin. >> thanks, guys. >> was that someone with a sense of humor? >> what? >> whoed jon and kate together? >> oh, no. it might just be a sign that you watch too much reality television. this is also a man who watches a

program called "the jersey shore" -- >> i don't watch -- oh, i watch "the jersey shore," but i don't watch much reality tv. it's all over the paper. you don't have to watch to know about it. anyway, more on volatility next and -- you know, welcome back already. geez! and we're watch -- you know, simon never nags. we're watching the rioting in greece very closely. >> and this is the worst rioting in greece we've seen since the debt threat and the austerity measures began, although we should emphasize, this is a country which does riot over a lot of things. so, this is the worst, but it's not like it would be here if it happened, okay? we're also going to talk about oil services stocks right after the break.

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you are looking at pictures of greece, and as we get additional footage, we are bringing it straight to you, so you'll continue to see new footage coming into our -- we're showing you about the riots. obviously, this is in reaction to the austerity measures, as the reaction in greece continues. really, mark, they have no easy solution. partly because they joined the euro -- >> well, i mean that depends on your point of view. requiring people to work until

they're 63 instead of 61, i think that would strike most of us as an easy solution. >> but that won't get them anywhere close to where they need to be to get out of this. >> well, that's true. >> i mean, to really get out of this, they probably should have never been in the euro to begin with, and that's part of the problem. so, they can't get out now because then it would be like the hungarians, remember? when they borrowed all the money in euros and then their own currency plunged and your debt burden is huge and your income is dramatically lower. so, is -- >> well, you know what? they're not that different from us. >> maybe default, again, which they've done half of their years in history. i mean, i -- >> if the bovine fikal matter were to hit the united states debt, we would have a long way to climb out of the hole. all right, let's check out oil, which is plummeting. oil spill in the gulf not just hurting our area of the world. the oil stocks directly involved have taken serious blows. do these stocks have a chance to

recover? should investors steer clear or look it get had now? here with insight is our oil service analyst with rbc capital analysts. kurt, thanks for being with us. >> good morning, mark. >> is this a buying opportunity in these stocks? >> you know, there's a number of occasions where you're going to see sell-offs in these stocks and it may be macro-orbiented o oil price-oriented. in the case of the stocks i'd like to talk about this morning, transocean, cameron and halliburton, a lot of the opportunity is at the heels of the catastrophe that occurred about ten days ago in the gulf of mexico. so you know, you're looking at something like transocean, market cap's down $6 billion over a ten-day period. all the due diligence that i've done, i find it very difficult to come up with an ultimate liability at transocean that could even approach that level. so, i think transocean is definitely one you've got to look at here. >> they've been knocked down so much, okay. i wish we had more time to discuss this. what building is that behind you? >> that's the state capitol building in austin, texas.

>> that's what i thought. thank you very much, kurt. >> all right, take care. >> appreciate it. >> bye now. we have breaking economic data coming up in a couple moments. markets, by the way, significantly recovered. we're now down only about 50 points here for the dow. >> should we blame europe for killing our rally? next up, how to make sure your portfolio is protected from all those guys on the other side of the ocean. compare a well equipped lexus es, to a well-equipped buick lacrosse.

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welcome back to "squawk." april nonmanufacturing ism and spy management is out. 55.4, equalling an unrevised march, and that was also 55.4. and if my database is correct, these continue to be the highest levels and pretty much exactly four years from may of '06. now, it isn't a bad number at that level, but it's definitely a little less than expectations. but obviously, the story of the day is watching yields and sovereigns like the bund or like our ten-year note just plummet in a flight to safety. watching the european currency getting very close to 128 before getting a slight bounce.

every currency future, swiss, euro, british, aussie dollar, canadian dollar, mexican peso are all down. the one currency i see up against the greenback is the yen and we're only talking about a whisker. of course, we have $78 billion in supply for the may refunding, down from $81 billion. they decreased it $3 billion, but they're going to talk about that decrease a lot more than the actual percentage relative to the last mark-ups on these auctions the last nine months. now let's go back to mark and erin. >> all right. thank you very much, rick santelli. i'm here now with bob pisani. well, you seemed a little -- it was a little bit below expectations. look, we bottomed way back in, i think it was the end of 2007 on the ism services number. i think we bottomed at 40 or 39. so, it's been getting better, and all the components of it have generally been getting better as well. i'll tell you what's really important today, erin, is that we're moving in relation to the euro, and that doesn't happen often. but as the euro has rallied here, since we've opened, our market has done better.

we essentially opened at the lows today, down 100 points on the dow and sort of cut that. looking at the chart of the euro, the euro has strengthened as well. our market has done a little better. clearly, this idea of what's going on in europe is affecting how we're trading these days. the other thing is the european banks have been terrible all throughout the morning. >> right. >> those, too, are off their lows here. your usual, deutsche banks, irish banks, they're all looking a little bit better. they're still down, but they're off their lows. and remember, these banks, every day down 2%, 3%, 4%. they're now down 20% in 10, 11, 12 trading days. that's, you know, a slow death for a lot of these and they're going to bottom at some point here. there's going to be opportunities. but remember, these guys, you get tapped on the shoulder very quickly now. >> yes, you do. >> these guys learned very quickly, don't move to the sidelines, take profits quickly. so, that's why you're seeing this. >> and of course, mark, we're getting ready, you know, for spain to issue some five-year notes. they're scheduled to do that tomorrow. portugal got very, very tiny amount out yesterday, but i know they had a downgrade, too. >> all right, thank you, erin.

protests in athens turned deadly. reports coming into cnbc that three people have died in a fire in a bank. the fire broke out during rioting over government austerity measures. tear gas being fired. new pictures coming into cnbc throughout the hour. as we get them, we're screening them to make sure they are not objectionable, obviously, and then we're putting them on the air. we're also learning that moody's may downgrade its view on portugal's debt by two notches. which is what is contributing to this problem. all the so-called pigs trading lower, portugal, ireland, italy, greece and spain. and the euro is getting slammed, hitting a 13-month low versus the dollar. and hanging over one of europe's largest economies outside the eurozo eurozone, the british election and the risk of a hung parliament. and the brits have some serious debt management problems of their own. let's send it across the pond.

louisa bojesen, what's going on? >> reporter: well, on that particular point, mark, first of all, the british elections, interesting, because why does a hung parliament have to necessarily be a negative? the brits are very averse to this, but we are looking at coalitions a lot of other places in europe and functions. it functions in germany it functions in a lot of the other eurozone countries as well. so, that's an interesting point in itself. of course, all eyes today are on greece. we have a paneuropean exchange market that's all red, indicating markets trading in negative territory, but they're not getting dumped on. you're still looking at markets holding up relatively okay in comparison to where we were before the greece violence really took a turn for the worst. you're still looking at markets that are down by only "1%" if you're looking at some of the more northern european markets, you're still looking at greece itself, athens trading lower by some 4%. those are the banks in greece that are being traded down considerably as you would anticipate. the ibex 35 also lower 2% and

the portuguese market off 2%, too. but a lot going on. five-year cdss are at record highs. we are looking once again at the cost of insuring for potential default rising. moody's saying they could be looking to cut portugal. that's why, of course, we saw the dip in the euro, although it has recovered a little bit. you saw pimco saying that the rating agencies really aren't very useful at the moment. you have the eu simultaneously thinking about probing the rating agencies themselves and maybe looking to set up some type of a european rating agency to manage that front. norway, worth mentioning, too. we saw a norwegian rate hike today. so, despite everything that's going on in europe with the potential of sovereign debt defaults, with the greek violence, you're still seeing a rate hike, mark. >> thank you, louisa. for more on the greek debt threat, let's bring in andy bush, global currency and public policy strategist at vmo capital

markets and a cnbc contributor. alec young, analyst at standard & poor's. and of course, bob and rick santelli and erin downstairs. i'll start with andy. is this a buying opportunity, andy? >> well, i think this is very analogous to the t.a.r.p. debate that happened in congress. i think it's amazingly so. this week we're having the officials come out and warn about a contagion to scare the german politicians to voting positive on it. it's very similar to volcker and paulson going before congress and president bush's famous speech that the world is coming to an end unless we had t.a.r.p. so, it's playing out pretty much what i was expecting. i expect this, you know, today and tomorrow to be the peak of the panic as it were. friday, the germans have to vote positively on this or it's really going to descend into madness. so, i would say we've got about three more days of this, but somewhere in here, it's going to plain out and stabilize.

>> alec -- >> what if they never pony up the money? they're going to say they're going to do it but they keep saying that and then you never actually see the money. >> well, i mean, yeah, i mean, that's a possibility. they could vote it down, too, of course, or delay the vote as well. that would, you know, cause even more havoc. but i think they're frightened now. i think they see what the potential for the problem is. and i think they're going to have to vote yes, whether they want to or not. >> but they're not rioting because the germans aren't going to give them the money! they're rioting because they don't want to do what is required to take the money. there's a big difference there. >> yep. and -- >> well, what is your point, rick, that the solution is unworkable because of resistance or what? >> no, i've been saying for months that what this is is austerity isn't something you can force feed. in other words, if the majority of the people in greece work for the government, they voted a government that gives them so many days off, so many days

vacation, they're not going to want to give that back. this is an issue that they don't want to change, and i think that's really the point. no matter what the eu does -- they can give them the money, but ultimately, in the beginning, when the plan was talked about, the strings attached to it were the most important thing politically, and by these images, i say they say they're not going to do it! >> and the markets are reacting perfectly rationally to all this. >> exactly. >> when you get this uncertainty, you get the trading community moving to the sidelines, a large part of them taking profits until we get a little more clarity what's going on not just in the german elections, but the british elections, too, are also over the weekend and the nonfarm payroll numbers will be on friday. erin and i were talking about the fact that the head traders learned the hard way after the 2007-'08 debacle. they get tapped on the shoulder very quickly now and say event risk, guys. be careful here. event risk could translate into fundamental problems very easily. the reaction of the market is very rational. >> let's get alec young's view. al alec? >> yeah. i think you guys are right to highlight all the mixed messages

that we're seeing out of the germans, out of the greeks, and the other factor that i think has investors around the world in stocks worried is that, you know, we thought we were out of the woods on this several months ago when we had news that we were going to get a bailout. so, i think there is risk in sort of, you know, looking at the next couple of days and thinking that we're going to resolve this. as investors, we hate uncertainty. we always want to move forward, price things in and move on. but i'm afraid this is going to be an overhang for markets around the world for the foreseeable future. so, you know, unfortunately, it's very tough to forecast stock markets when you have these kind of headline risks coming at you every day and there's really no realistic sign that this sovereign risk issue is going to be resolved, you know, in may. this is going to last. >> i am suddenly bathed in alpha waves. that means david faber is near and is thinking. david? >> no, you know what? i was just going to echo that -- i will now echo that same point. i think it's an important one for people to understand. it's not as though the debtloads

of these countries are going to go away overnight and we are going to be visiting and revisiting this crisis, if you will, along the way. it's going to be a long road, in fact, unless, of course, we get to this catharsis that some say is inevitable of actual debt restructurings. as tough as that will be, at least it will then put everybody on firmer footing. but there's no doubt, mark, that i think, you know, it may be weeks, it may be months, auctions may go well, but you're not going to eliminate the trillions and trillions of debt these countries ultimately together have and whether or not they're going to be able to handle them and whether the fixed income markets are going to be able to serve their needs. >> and they're also tied together, right? i mean, you know, andy, when you think about it -- >> right. >> -- everyone says, okay, you can get rid of greece, but the problem is greece has obligations to portugal, which has them to italy, which has them to spain. i mean, those economies are incredibly tightly tied together, and obviously, from the big ones you go directly to france and germany. >> right, exactly. so, here's the thing -- where is

the ecb? they have to step in right now and they have to cut interest rates and quantitative ease. the uk did it, the united states did it. we've had some pretty decent results because of that. that is what's got to be the next step to stabilize things. it's not going to come necessarily from the germans voting in parliament to agree to the package. that will help, but the ecb's got to step in. they are woefully behind the curve on what they need to do and they're really hurting the european union right now. >> alec, we have, as you and david pointed out, event risk that is going to create more volatility probably over the next several years. how do you trade that? you have to essentially become a lot more nimble, be willing to come in and out. you can't miss these gigantic rallies we've been having just because there might be an event risk on greece. >> true. >> i think this definitely drives an increase in volatility relative to the really low volatility nice bull move that we've seen over the last year. you are going to have to be more nimble. we like the u.s. on a relative basis in this environment. we have a much better domestic story than europe. asia is starting to have to deal

with, you know, with inflation risks and central bank tightening. that story's starting to unravel a little bit. so, on a relative basis, you want to stay where the domestic fundamentals are the best, and right now i think that's the u.s. >> all right. >> all right. >> everybody, got to wrap it up. thank you very much for your input. >> and let's check crude oil, which has been a big mover. cio of round earth capital and contributor for us, john kilduff is with us. why the drop? >> everything you've been talking about, the greece situation, the uk election tomorrow, all are the seminole inputs right now for where we're going with prices. you know, to the extent that we see uncertainty, the argument for $90 and $100 crude oil goes out the window because we need economic recovery global tlely maintain itself and continue a pace. this throws a monkey wrench into that. this sends investment dollars flying to one spot, the u.s. dollar, and that dollar index tells the story. it's skyrocketed up.

crude oil prices have skyrocketed down. i keep talking about this, though, the one silver lining here for the u.s. consumer, this 20-cent a gallon drop in gasoline price eeferz the last couple days. that should be coming to a pump near you just in time for memorial day. so, there are some hopeful signs there, but it's not really for good reasons, unfortunately. so, that's what i would report to you from down here at the nymex. mark? >> thank you. just ahead, much more on the protests out of greece and market reaction beyond stocks. plus, how you can protect your money from the debt threat and chaos coming out of europe. fireworks of another kind on capitol hill, where former bear stearns executives are defending their roles in the meltdown that brought the global economy to its knees. we will take you there live. and here are some of the biggest losers and winners of the morning.

all righty. about 45 minutes into the tra trading day, we're not doing as badly as we were doing earlier. the dow down almost 100 points, now we're down only 42. so we have come off the lows, but there's nonetheless, no question about it, a negative

haul over the market caused by the rioting in greece. travelers and walmart are the biggest drags on the dow. garmin dropping more than 11% on a weak earnings report. bucking that trend, wabco and synervise holdings up. >> two names we almost never mention. >> yeah. >> but that's not all that's moving. matt nesto at hq with the "realtime flash" and some other names. hello, matt. >> hey, buddy. this is day eight for the top of april 23rd of this rolling correction. we are now down about 4.2% for the s&p 500 and 5.1% for the nasdaq. check out these three sectors, folks, from that high water mark. the materials, gspm, s&p materials sector down 7.3%. far and away the worst. financials, energy and tech would also be in there with more than a 5% giveback over the past eight sessions. interestingly today, energy is the worst. we're seeing a couple of names catch a bid within there, but

the coal stocks continue to get hit. massey, more as a material play as well. occidental, newfield and transocean, which is actually based in zurich. they report earnings after the close today. the stock is up. and i just noticed that devon energy is trading higher, one of the few names higher in the energy index. they made a big public issue not long ago, long before this oil spill, that they were moving onshore and selling their offshore assets. also, discretionary weakness is very pronounced. we have results out from trw. a mild but more than double what analysts were looking for, but not matched up with any increased forecast for the second quarter of the full year. and that goes down. and then ford, the second worst stock in the s&p 500 behind news corp here today. it is down now for the very latest "faber report." >> thanks, matt nesto. you know, there's a stock that matt probably was watching last

night, namely news corp. after the bell, news corp reporting what seemed to be or were very strong numbers, and the stock took off, as you might expect. cable networks were very strong, as, of course, was filmed entertainment, given that "avatar" had hit theaters during the quarter being reported. but that said, it was the call that turned things around when the company surprisingly lowered guidance for this year by about $100 million on the ebitda line, saying comparisons in filmed entertainment are going to be tougher, not, by the way, for when you're going to run into the comparisons against "avatar," but nearer term for a variety of reasons. take a look at what happened to news corp. a couple of downgrades come along this morning as well, and again, those who got in after the bell were certainly disappointed when they listened to the call, and there is a look. by the way, the quarter itself, a very strong one. cable networks now represent more than half in terms of the operating income at the company.

filmed entertainment, of course, also having a very strong showing. as i said, $497 million. you see it right there. there's tv. of course, that's just fox itself. the cable nets led by the fox cable network, news network, and then, of course, the satellite business as well. book publishing and other things. but you see, you get a sense, certainly, for the company and its total segment operating income, up very strongly. those numbers come in, everybody goes, hey, that looks pretty good, buys the stock, and then the guidance is weaker than anticipated. news corp, as you saw, not having a good day. as for time warner, that's also down this morning, but largely because the market overall. does not appear to be a particularly bad quarter in any way. in fact, a pretty good one. the company trumpeting that fact by saying we delivered the highest quarterly profits in company history. of course, the history of this company has been an interesting one, and the company today is not what it once was. no aol, no time warner cable. you're talking about a company

that is largely a studio and a bunch of cable networks. you see the results right there. i had noted this earlier, worth noting again, time warner bought back 22 million shares, spent $666 million doing that between january 1 and april 30th. that share repurchase was increased to $3 billion on january 28th. but again, that's a lot of shares to be retiring, 22 million during the quarter. they want that stock higher. they're not getting their way today. got a lot of cash over there as well. mark, back to you. >> thank you, david faber. all right, the government's still talking about the meltdown. on the hot seat today, the man at the helm of bear stearns when it collapsed. on the list, jimmy cayne. we'll take you inside the hearing, next. and how can you protect your money from the house of cards going down in europe? first it was here, now it's there. we've shown you some of the footage from athens. and we will be back with that trade coming up. the market, by the way, with a significant comeback here in the u.s., and i want to emphasize

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you are looking at a live picture of capitol hill, where former bear stearns executives are right now being questioned about their roles in the downfall of the investment bank. former ceos jimmy cayne and allen schwartz are on deck. they will be testifying shortly. mary thompson is there monitoring the hearing. and mary, do you expect fireworks? what are you focusing on? >> reporter: i think the fcic tends to be a little bit more civil, you could say. certainly, there are some angry exchanges. but what we are seeing today are certainly a couple of themes emerging at the hearings. the executives that have testified said they didn't think anything else could have been done to save the firm and also said that really, bear stearns collapsed, they blamed it on unfounded rumors in march of 2008. here's the company's former cfo,

sam pal sanno. >> our experience the week of march 10th was surprising and unprecedented. bear stearns' reliance on secure funding markets, which had proven durable over many other financial cycles and market shocks, did not hold up. while our capital ratios and liquidity pool remained high by historical standards, fears, rumors and innuendo resulted in irrational behavior that caused a quintessential run on the bear at bear stearns. >> i apologize. that was sam molinaro, the firm's former ceo. now, molinaro's been on the defensive, saying that bear's balance sheet was managed appropriately, it was adequately funded and bear didn't think it was overlevered. bear, of course, was the first investment bank to fail during the crisis. it was sold to jpmorgan in a firesale price in march of 2008. concerns about the firm's exposure to the mortgage market raising concerns about its liquidity at the time, which the bank denied but ultimately did lead to a run on the bank. at the hearing today, the former

decr coo, paul friedman, addressed the issue that he criticized the management of the run two years ago. he apologized for those remarks, saying at the time he was very, very angry why asked if he thought someone was out to get bear at that time, friedman said no, but he said concerning the rumors, the rumors were not true until the telling of those rumors about bear became true. erin, as you mentioned, jimmy cayne is up at noon with his successor, i should say, allen schwartz, the former ceo of bear stearns, and we'll be monitoring that. back to you. >> thank you very much, mary thompson, who, as she said, will be there all day. so, is greece the bear stearns of europe? hmm. be an interesting way of looking at it, because remember, bear is the one that got bailed out. will spain be the lehman? just ahead, we'll show you how to euro-proof your portfolio. we'll be back in a couple of moments. we are a few minutes away from the oil inventory report, which will be a big one today, given that crude is down sharply and

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i'm sharon epperson at the nymex. u.s. oil inventories increased across the board. we saw crude inventories in the past week rise by 2.8 million barrels, more than expected, and we saw gasoline supplies up 1.2 million barrels, distillate fuel supplies up 600,000 barrels. so builds across the board with crude supplies up 2.8 million barrels, but it's not so much

crude supplies or even the oklahoma supplies people are worried about today. it is the contagion, the greek situation and what is happening in europe, and that is why we are seeing oil prices here down $3, nearly $3 below $80 a barrel. we'll continue to monitor that situation, because traders that i talked to here on the floor and hedge fund traders on desks across the country are focused on really the relationship between the commodities and the financial markets, and that is what is causing the pressure that we're seeing right now in oil prices, but the build certainly doesn't happen. erin, mark, back to you. >> thank you very much, sharon. let's get through the rest of our headlines at 31 past the hour. markets are off morning lows, and it's been amazing. we were down 100, then we were down only 17, now we're down about 43. so, we're finding a little bit of footing here. travelers, walmart and p&g are leading the dow right now. the services index, the ism nonmanufacturing, was weaker than had been anticipated for april. 55.4. that's the same level from march, and anything above 50

shows the economy's expanding. so, i guess you can take that as a glass half full, perhaps. crude oil down about 3% today, breaking below $80, although on the back of the headlines sharon was just breaking for you, i'm looking at the board and we are now at $80.12 a barrel. still, though, down about $2.70. mark, how are your internals? >> let's take a look at them. first of all, the dow, as we mentioned, has rallied back well off the bottom. we've recovered about half of what we lost at the open. we're down, still down 0.4%. the nasdaq is hit the hardest, down 0.9%. on the big board, we have 4.5-1 ratio of decliners to advancers, and that is not good. and on the nasdaq, it's a little better than 3-1 or a little worse than 3-1, losers over winners. so, we have an internal which is, i would say a little worse than what we're seeing on the averages. up volume, down volume, let me just quickly do the math in my head.

that's about little more than 5-1 favoring the down side. >> all right, return of volatility. vix up 45% over the past month if you look at that chart. so, we continue to ask as we did last hour, how do you play it? two market experts, here we go, with us. one playing volatility and the big caps, the other saying precious metals, particularly gold is way to go. john myers, tower bridge advisers and dan is portfolio manager of the usaa precious metals and minerals fund. dan, why are precious minerals the way to go now that volatility is up? >> we always recommend them because we think they're good for their diversification benefits. gold specifically is an uncorrelated asset. therefore, it does different things than what everything else is doing. so, having a little bit in the portfolio helps to diversify during these volatile times. >> jim, what is your take? what is the best way? when you're saying volatility and large caps, is that saying ride it out or do you play it in

there? >> well, i still think the tailwinds of rising earnings are going to be good for stocks going forward, but clearly, i think there's a big message in the greek crisis, and that is that sovereign debt nations have to pay attention to deficits and debts, and ultimately, that includes us. i was thinking from what you were saying before about bear stearns being the prelude to lehman, i was thinking more about new century and some of those early subprime companies being a precursor to everything, and that event happened in early 2007. we didn't get the collapse until the fall of 2008. so, the greece situation in the new century. what i would do is try to rein in some volatility and start to recognize that the path going forward may be a little bumpier than we've seen over the last year. >> i have seen not data, but i've seen commentators, and frankly, i have not checked the

facts behind what they're saying, but my point is, i've read and i've heard that frequently, banking crises like the one we had start to unfold in 2008 are, in the past have been followed by sovereign debt crises. jim, you first. do you see that as a logical progression? >> well, it is a logical progression, mark, because what sovereign nations have to do in times of recession is they have to spend a lot and they have to do a lot of deficit spending. but then it's clear afterwards that you have to be prudent on how to come out. >> right. >> greece is clearly not prudent, and you don't want to get to that wall where the world thinks you're not prudent, because you see, you look at your screen right now and see what happens when the world decides that. so, the question is, do you stay out in front of it? we heard in 2005, 2006, 2007 all about subprime, and basically, everyone chose to ignore it. congress in the united states and in the countries of western

europe at some point have to get the message. serially, we're going to start with greece and go to portugal, go to spain, et cetera, but it's not going to end until fiscal responsibility returns to countries and big debt nations. >> dan, do you agree? because if so, then this could be an early warning of problems in bigger and more important countries and we need to take note of that. >> well, we definitely have problems built up in most of the developed markets. they have entitlement problems, they have deficit problems and surplus problems. the only way to get out of it unfortunately is to inflate. you can see what happened when they tried to put curbs into spending and what's happening in greece today. so, the only way tomorrow politicians to get out of it and keep their jobs is going to be to inflate. so that should help the ultimate hard currency, which is gold. >> jim and dan, thank you very much. appreciate your time. >> thanks, mark. >> thank you. >> once again, on the face of all this, the market has rallied back off its lows. that brings us to the street

poll. given all the volatility, are you more bullish or more bearish today? pretty simple question. yeah, we're going up, no, we're going down. and squawkonthestreet.cnbc.com is the place to go vote. we call him mr. stocks? i don't think so. >> no, you call him -- >> we call him a lot of things. >> who wrote that? >> there's el nesto grande, nesto the magnificent -- >> jason wants to call him mr. stocks, but i think mark wants to stick with nesto the magnificent. >> anyway, he's up next with the "realtime flash" and retail and the recovery. >> and the jobs trade. we had headlines on that ahead of the big report on friday. adp showed things getting better. cnbc's crack research staff -- he's on fire today -- coming up in a couple moments. talking about the links to stock on that of the right now we're

down 48. and talking about oil, briefly we dipped below $80, but now we're north of $80 again. >> and actually, oil actually recovered on news that the stocks were bigger than expected. it's kind of upside down. >> we'll be back. i never as a woman thought i'd get a heart attack.

just, out of the blue at 43.

now i'm on an aspirin regimen because it helps me live the life i want to live. [ male announcer ] be sure to talk to your doctor before you begin an aspirin regimen. it's not a big deal to go to your doctor. it is a big deal to have a heart attack.

hi, folks. welcome back to "squawk on the street." so, what's going on here? why's this market pairing losses? one of the groups cutting back, remember i said discretionary was one of the losers? within the discretionary, the retail group is getting a couple bids. some of these names are definitely having a nice day in a weak market. look at tjx, kohl's, abercrombie & fitch, urban outfitters, target, just to name five, all strongly green today.

also financials, getting down to the industry level, you'll see strength in insurance names like xl and assurant, also i.c.e. they've been considered diversified financials. hudson citibank corps and bank of new york mellon also doing well. and also, i mentioned devon energy and the fact that it was one of a few stocks in the energy sector getting a bid here today. well, their earnings are a blowout, $1.85 versus $1.87. 69% revenue growth. $3.2 million versus a $2.4 billion estimate. and the comment from larry nichols says we could not be more pleased and says "this delivers the company to deliver growth on a sustainable basis id. they're divesting their offshore and international assets and moving ofer onshore. nice timing. back to you. >> thank you very much. positive surprise for the

labor market. private employers adding 32,000 jobs in april. now, this is the adp survey. so, who is hiring and how can you play it? a big question, of course, ahead of what you see on the screen there. we're going to be getting the nonfarm payrolls number on friday. bertha coombs is at cnbc with the jobs trade. hi, bertha. >> hi, erin. you know, manufacture and retail were among the sectors which hemorrhaged the most jobs amongst the biggest declines over the last couple years, but now both are showing pretty good signs of life. the adp report showed the biggest private sector gains in april in the service sector, 50u7,000 and manufacturing up 29,000. construction continues to be the sore spot with 49,000 job losses. now, yesterday's ism manufacturing hiring index also showed the fifth straight month employers said that they are willing to add jobs. manufacturers like ford, which has begun to call back workers, albeit cautiously, but because they're seeing new demand, if you take a look at these, caterpillar is not another one of them, calling back about

2,000 furloughed folks. michael gurka says cat and other equipment manufacturers make him believe we're on the verge of seeing hiring resume in construction itself and more demand for construction goods. he likes players like freeport-mcmoran and copper. he says these companies, he sees them hiring domestically and sending some of their workers abroad because they've got global demand. and when it comes to retail, challen challen challenger & christmas says retail layoffs in april were lowest since 2001. consumers are coming back to the mall and retailers like ann taylor lifting their outlook for the first quarter. they say women have stepped up buying. retail analyst dana telsey says apparel retailers are hiring because they're seeing better topline growth. now, i asked her whether a lot of that good news was already priced in. now, she says despite the fact that you've seen the run-up in retail names and saw some that matt talked about, the second quarter is usually seasonably weak, which presents an

investment opportunity, because the stronger performance is going to come in the second half of the year. and high-end retailers, she says, are also back at hiring and she says they're likely to see some of the biggest gains. but on the other side, on the note to clients this week, goldman sachs says right now consumer discretionary industrials are too pricey. when it comes to growth at a reasonable price, they see tech, and particularly, applications software as the best value. now on a down day in tech, guys, that might not be such a bad move. back to you. >> all righty. straight ahead, of all the volatility -- and yes, it's up, even though look at the market. >> yep. >> only down 18 now. i guess that's a little bit of a roller coaster ride. one could be forgiven for having a little bit of, what's the word when you have, your stomach gets -- you're spinning? >> butterflies? nausea? >> no, there's another word. >> about to barf? >> about to barf is sort of the concept. >> i may yack? um -- >> poor trish. why do we have to give her a

segue like this? >> nausea, is it nausea? did mark say that already? >> first, trish regan, what can we expect on "the call"? >> good to see you guys. coming up at the top of the hour, the latest on the greek protests, what it means for u.s. stocks, what it means for your portfolio. we'll also talk live with freeport-mcmoran's ceo, get his take on not only the metals market, but the louisiana oil spill. now, as goldman sachs chief lloyd blankfein tries to calm his wealthy clients here, we'll discuss whether or not he can make it, whether he'll survive. lots ahead only on "the call" at the top of the hour. first, "squawk on the street" is back after this break.

all right, today's market milestones. whole foods. it is the only stock in the s&p today that hit a 52-week high this morning. on the opposite end, smoonto making a new 52-week low. >> and the word was vertigo, how you feel. >> vertigo, okay. >> the feeling you get when greece sends the market up and down and all around would be a will i bit like vertigo to some. greece's prime minister papandreou making his first comments since anger over austerity spilled into the streets. he's vowing to bring all rioters to justice. three people have been killed inside a bank after it was first set on fire. today airports are closed in

athens. riot police are there, tear gas has been used. greek stocks obviously falling. interesting they all were there trading. banks, especially, getting hard hit. for more on the situation, cnbc.com has a special running right now. go check it out. i should say, mark, when you get the news from greece that they have been greece and they have been sending it out to reporters, very coordinated in that. i can always tell where it's coming from because the subject line is in greek. meanwhile, check out the market. we're down only eight points now from almost all the way back. >> all right, if the volatility in stocks across the globe has your stomach in knots or maybe you are experiencing a vertigo, maybe it's time to look beyond stocks. let's find out what armstrong things director of market research and frank lash at futurepath trading. what do you say, addison? >> well, in the oil markets,

certainly, we've seen a return to volatility over the past couple weeks, not just in oil, but in natural gas, as well. this week a little more quiet on the natural gas front. certainly a out of interest in buying long-side protection with the financial players with the december and june being bit here this week. >> what about you, frank? >> gold market right now, we're looking at people positioning on dips. we really have a situation right now where gold is an international currency. we're seeing central banks throughout the world, you know, diversify their holdings and big part of those holdings are going to be gold. you certainly look for the gold market to come back. we had a nice comeback today on a dip down to 1156 and here we're up about $10 off of that low again. traders do come in on these dips in the gold market. we look for the gold to continue to advance. >> we have a nice comeback in stocks, too. why not cite that and say, let's

buy stocks. >> well, there's nothing wrong with trading the equity market either. i think people should be diversified in this world right now and gold offers a good chance at diversification and may well outperform in times of problems with equities, too. >> in what form would you recommend the average retail investor buy gold? there are futures, there are coins and gold etfs, what do you think is best? >> as a future's trader i generally recommend peepinal to the future's market but a lot of smaller investors could certainly invest in gold with the etfs, very popular right now and the gold etf at record levels and record holdings right now and that would probably be a good place for the smaller investor to be trading in if they don't want to make the efforts of trading gold on the future's side. >> what would you say to me if i said, you know what, this looks like a good buying opportunity for equities. >> for equities or for oil?

>> for equities? >> i would be pretty cautious. we have to be concerned about what this euro situation is going to do to the economy and europe and, certainly, we have china starting to slow down and a real potential for a double dip global recession here. i'm not saying it is going to happen. i am saying the it is happening every day. the more the crisises happens the more headwinds and the bigger difficulty we have. i would be very cautious here about getting long. >> if everyone thought there would be a buying opportunity, there wouldn't be a buying opportunity. we're down about 10% from a recent high. >> we're at two-month lows on the front contract. i would be, again, not encouraging people to get long here. i think the market looks weak. i think the fundamentals certainly we've seen the bill not only here in the u.s. but in europe. again, china slowing down. not a lot of fundamental support

for the market out here and if we get a real turn, a real sort of macro shift in the view of what the economy is going to look like here. i think oil has some real problems moving certainly above 87 as we've seen every time it tried to move above here. >> thanks very much. we appreciate it. i want you to know, mark, that five of our viewers called vertigo. we said what's the word? they knew the word. they immediately said. what's wrong with you people? the word is vertigo. >> all right, 6 in 60. promise not to give you a vertigo with that. are you bullish or bearish on stocks today?

in today's street poll we asked if you were bullish or

bearish on stocks today. wow. >> holy cow. right down the middle. >> 51-49. >> right down the middle. >> that's a mandate for the polls. that's the way a politician would talk, right? >> yeah. >> time for 6 in 60. we're all set up. i guess we start today. here's my three. we begin with webmd downgraded from hold to buy. baker hughes and the oil serv e services industry upgraded from a hold to a sell. citi increasing price target to 43. and sprint nextel upgraded to buy from hold at deutch bank and stocks up 3.4%. mark. >> upgraded to action list buy at newscrest. fresh del monty downgraded from buy to hold. firm cutting price target on a stock to 23 and it had been 26.

got about a minute left and i'm dying to find out what you learned on your little jaunt south. >> this is, the thing that struck me the most perhaps was just how, what that region of the country provides to the rest of the country. i mean, every single thing you see, yes, there's tons of sea food but it is all oil services. every truck you pass, even if it's just a regular ford 150 it will say halliburton on the side. a lot of the roads are named after companies we know. halliburton road. plenty of those down there. it is an industry that dominates and as you were saying, a lot of sacrifice has gone into that. when you stand on that coast and you look and all you see are rigs and you think about other parts of the country there is no way that would ever happen. it has nothing to do with what the resources are. it has a lot to do with who has the political clout and we don't want to look at that.

they have made a lot of sacrifices. >> and there's a battle raging right now about where you put wind farms. offshore wind farms. do we keep them out of sight? >> they don't want those on the cape, right? >> we got to go. erin is back at 2:00 on "street signs." in the meantime, time for "the call." indeed, it is. welcome to "the call." i'm trish regan. greece is the word on wall street this morning. the latest for you on the protest and give you market reaction and we'll tell you the best ways to play all this market volatility. good morning. >> good morning, trish, i'm larry kudlow. lloyd blankfein to hold a conference call this afternoon. we'll discuss if blankfein can survive goldman's problems. this is "the call." we are cnbc. it's been another volatile day on wall street. greece is the reason why.

stocks opening lower protest the austerity plan. and stocks came off their lows. the adp employer services report and that monthly job's report showed a better than expected gain of 32,000 jobs. right now take a look at how things are stacking up. we have the s&p moving considerably off its lows there. again, you can see that story, i was just telling you how it dipped so severely early in the session only to get the adp news and rally back up towards the flat line and same story on the dow jones industrial average. but a significant improvement over earlier in the session. meanwhile, over on the tech-heavy nasdaq we're down 14. again, a big rally towards the flat line anyway. crude oil continue to float lower. down $2.29. a loss of almost 3% at $80.45 a barrel.