yeah. ♪ and we enter the final stretch of the trading day. hi, everybody. welcome to the and we enter the final stretch of the trading day. hi, everybody. welcome to the "closing bell." i'm maria bartiromo coming to you live from the rbc trading floor. bill? >> and bill griffeth. hello, maria. we're at the new york stock exchange. markets with fear of a global slow down have been weighing on the equities. the dow posted the fourth loss in the fifth last trading sessions. below the 1400 market for the first time in five days despite the better than expected weekly job claims numbers, the best in four years.

oil down again today. that's putting pressure on the energy sector so far. here's a look at the major averages. down 87 points on the dow. almost back to the lows of the session. the nasdaq is down 16 points. it eeked out that small gain yesterday but not today. s&p, as we mentioned back below 1400. down 11 points. maria? >> bill all of those fears about a global slow down has been sending significant money. rbc and the recent wall street selloff, whether or not they see more retail investorses. we're coming to you from the fixed income at the trading floor. as for the market, we are seeing shares of nike on the move today. the sports apparel giant will report numbers after the bell. the company is expected to earn $1.17 a share. this is the fiscal third quarter for nike. we'll have analysis coming p in the next hour of the "closing bell." we're watching shares of

mcdonald's. ceo jim skinner announcing his retirement. later on, we're taking a look at how this move can affect mcdonald's shareholders with him stepping down. market once again under pressure. >> we've got a lot to cover in the next couple of hours. jobless claims figure hit multi-year lows. not enough, though, to overcome global growth concerns, primarily from china. the manufacturing report was less than expected. how much of an impact will it have on investors here in the united states? plus, are we seeing signs of retail investors coming back here in the united states? joining us is bob pisani and rick santelli. it appears that the fear trade is back again. our fundamentals look good but they are trading on global concerns right now. >> yeah. it's a very interesting issue.

it's like looking at derivatives in cthe cal cue las. if you take spain, for example, the rates are testing the highest for the year on 10's is at 5.5%. it's high on unemployment. they already have growth issues in these economies. now all of a sudden you push interest rates lower, not only because of growth but because of the credit issues on the country's slowing and even how china may be impacted with regard to buying or not buying more treasuries, for example. >> bob, our market has had a good run any way from the october lows. we were probably due for a correction. >> and i guess the question i want to direct rick to is, how much is china slowing, five month of contraction that we've

been seeing in the manufacturing sector, we got those numbers today and the argument has been we are overplaying the iran risk and underplaying the china slowing risk. they want rate cuts in china. it looks like the chinese are not going to give it to them. they want to slow down the real estate bubble and they seem to be less concerned about still stimulating the economy. are the krin niece at one point going to bite the bullet and look at how their economy is more stimulating. >> i think china is going to be a very difficult topic, bob. because you have a new political regime coming in that started in november culminating now. and i do think that no matter how great the growth rate is, i'll go back to calculus, there is no doubt that they are slowing gdp and the infrastructure and that's going to make a dent in global growth and how that funnels into the u.s. is how anybody's guess right now. >> you know, earlier today they were debating whether or not the

u.s. can decouple itself from china. demand from china is very important for a lot of the commodities and services. >> and that's why we are seeing this slowing down. the australias of the world, canadas of the world -- >> exactly. >> that's why energy stocks have been hit so badly. they are the hit. china consumes about 85 million barrels a day, we're maybe 21 million, china is right behind us, a quarter of the world's supply. on the margins, what they do very much impacts us. that's why, for example, the energy stocks are down and consumer stocks that have more heavy exposure to the u.s. are doing better. >> and also now maybe why we're not seeing the retail investor come back to this market, right? >> you know, they keep asking me this. by and large we are not seeing inflows into u.s. equity funds. by and large, certainly for the last few weeks, there are outflows. look at this, bill. stocks versus bonds.

barclays aggregate bond fund. when is the last time you saw them down on a bond quarter. maybe when they get their quarterly statements that will change a little but i'm not even sure of that. >> and you wonder where the money might go. thank you, rick. bob, stick around. we'll see you here at the new york stock exchange as well. maria? >> bill, it's not just the retail investor that people are focusing on. hedge funds have been underperforming. they have missed much of this move. so we are watching to see whether or not we see that market come back into the market or perhaps there's a feeling after this run-up year to date they have actually missed the move. there's a lot of money on the side lines and if in fact we were able to see that money move into equities, that would create a powerful rally. there's more fear than anything else. that fear has sent so much money into fixed income. today we're coming to you live from the rbc market trading floor. this floor sees an average daily

trading floor of $13 billion. it's one of the largest trading floors in new york. 72,000 square feet. nearly 1,000 seats. in equities, the firm is a big trader in financial services sectors. energy and equities trading over there. right now we are in the fixed income area. the big business here is fixed income. this floor trades on average $10 billion a day in u.s. treasuries. the firm has a huge presence in munibonds. through february, rbc has been the fourth largest underwriter of u.s. munibonds. when i speak with rbc head of rate strategy as well as heads bond research, we're going to get an insight into what is going on in this market. whether or not we're seeing that kind of flow into munis and treasuries. we're seeing the dow under

pressure and what is driving the selloff. over to you, mary. >> hey, marie. the story hasn't changed since the first hour of trading as we head into the last hour of trade. the story being concerned about a decline in global growth because of the manufacturing data that came out of china. so let's take a look at sectors that are pacing this decline t won't surprise you that these are linked to the global growth story. we're seeing weakness in -- let's start over here. energy down 2.25%. materials, industrials, we're seeing a gain in consumer stateme staples. these continue to be the biggest loser, arch coal as well as console energy. not only there are there concerns about growing growth, moving on, the other big losers

include material stocks within that group, minor freeport macmoran. from the country for mining and, of course, steel. you can see both of them under pressure. u.s. steel off 6 3/4%. even if the economy slows, people want to spend money on food and drink, specifically alcoholic drinks. shares of the bourban maker are leading in consumer staple stocks. maria. back to you. or bill, i should say. maybe i had one of those drinks. >> they tend to buy those alcoholic drinks when time gets tough. a classic defensive play, maria. all right. we're heading towards the closing day. just off the lows, we were down more than 90 just a moment ago. >> we want to talk about volume next, bill. how are these low trading volumes impacting the exchange space? we're going to speak with the

chairman, terry duffy. he's live with me in an exclusive interview. we'll get into it, next up. also, a huge management change in mcdonald's. how jim skinner's retirement could affect the stock. and then, should you run and buy nike's shares ahead of the earnings? nike reports earnings after the bell. we'll have instant analysis of those earnings right at the bell when the company reports the quarter. as we head to break, i think we're going to show you the s&p heat map. a lot more red than green today. you're watching the "closing bell" here on cnbc, first in business worldwide. moving back. [ engine turns over, tires squeal ] introducing the lexus enform app suite -- available now on the all-new 2013 lexus gs. there's no going back. see your lexus dealer.

demand media expands on the big board.

welcome back. a little more than 45 minutes left in the trading day.

dow industrials on a losing streak after the manufacturing reports we saw out of europe and china. the dow was down 107 at the low this morning. we should point out the s&p is back below 1400 today, the first time in five trading sessions that it's been down there. it was dragged lower today by energy and material and financials. and allow me to tee this up for you, maria. check out the new york stock exchange in the past week. zigs and zags there. the longer term trend is a steady decline from a week ago. as we all know, it's been declining here in 2012. don't we know that? >> yes, we do. and when we spoke with the ceo, he's only expecting one month of positive volume. a year which i thought was astounding. we're only expecting one month.

>> and i consider this the new normal. >> yes. we're going to talk about that with carry duffy. craig donahue, the cfo since 2004, will step down in december 2012. the board has appointed terry duffy, who is currently executive chairman to the expanded role of executive chairman and president. joining me to talk about that as well as volume in a cnbc exclusive is mr. duffy himself. it's always great to see you. >> thank you, maria. it's great to be here. i love the canadian banks and the canadian sports. i'm a big hockey fan and they are smart business men as well. >> thank you for that. thank you for watching, you guys.

all right. you have new expanded roles. what is behind these changes and tell me how your life changes. >> my life gets busier. for craig, he spent 23 years at the firm and benefiting at the cme and benefited by having craig there. there always comes a time where you go through changes and it's been a good transition for everybody. a lot of people don't know pupender gill. gill has been an operational guy but it's been craig, gill, and myself making most of the strategic decisions together. now they are going to see a lot more gill. i'm going to be involved in more day to day operations and i thought it was important for gill to take the title of ceo, which was regulatory work and things of that nature. >> tell me about the market and how you deal with the market numbers that we're seeing, this lack of ability to get into this

market. retail investors are on the side lines. how do you see it? >> the volumes, one of the things we've told investors is it's the hardest thing to predict. and i don't know why somebody would say that because it's really hard to predict what will happen but future volumes are the hardest thing to predict there are times when we look at volumes and they look anemic. i never can count out volume from one day to the next because you never know what is going to happen. what i think is behind it is the market is at the same place it was a year ago. if you look back at 2011, from the start of 2011 to the end of 2011, the market ended up a few points from where it started from. i think people had seen enough and they packed up shop for the year. that's why i think the volume

was off substantially now, do you think that there's a new mode to raise dividends? do you think we're going to see companies raise this low-growth environment, that everybody is looking for a yield? yes. one of the things is that we increased our dividend to 50% and add fifth variable dividend at the end of the year that is attractive. people need yoold. >> i know that cme has been a deficit between 700 and 900 million. what is behind those numbers?

why the discrepancy? >> there's a couple hundred million dollars either in the broker dealer that went into the segregated accounts so you have to add or subtract 200 million from that number. and then there are foreign accounts which are foreign accounts held overseas and if you add those in, they get bigger. the moneys missing are between 5 and $700 million in the u.s. >> another hit on investors who are skeptical of this market. the money is gone. we don't know where it is. >> right. >> so what kind of investor protections can you talk about? >> well, one of the things that has been approved is company called lsoc. that means basically we're going to separate somebody's moneys that is going to go into the otc trading to begin with.

i think it's just step one of many steps that we need to do for customers' protection. the most important thing is customer protection and market credibility. that's what we base every decision on what we do. and we look at lsoc to give the customer the ultimate comfort. >> real quick, are you seeing the money flow into the commodity space because we're seeing a real turn over in that area? >> it comes and goes. one of the big influences of money coming into the commodity spaces in the food sector and energy sector. those markets have been relatively stable for a while with the energy market upticking some. >> all right. we'll leave it there. thanks for being on the program. >> thank you. >> terry duffy. bill, over to you. >> all right. we have about 40 minutes to go. selling has insense tensified.

the dow is down 104. very close the low of the day. >> that's about at the low. we're going to look at nike. should you be taking profits ahead of the earnings or double down on this hot stock? it has been a place to be. we've got numbers next as we look at nike. plus, just because gasoline prices could threaten president obama's re-election in the fall? we'll look at both sides of the aisle. still to come here. as we look at major commodities, mostly in the red with the exception of corn and sugar. back in a moment. ♪ [ male announcer ] the 2012 m-class continually monitors blind spots, scans the road to reveal potential threats, even helps awaken its driver if he begins to doze. so in the blink of an eye it will have performed more active safety measures than most cars will in a lifetime.

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welcome back. i'm sharon epperson. keep in mind, a lot of this had to do with the data coming out of china. the pmi data very disappointing and we saw, according to some traders, some of the outflows from etfs. not only gold and silver losing some ground. back to you. >> okay, sharon, thank you very

much. we are looking at nike shares. you have a few minutes to trade the stocks should you choose to. but should you be buying or selling? with a look at nike, it's paul who recovers the name from morning star. do you like these numbers here? >> we certainly do. let's look at the chart over the last few years. in 2010 we bought it around the $60 level and then went into a correction pattern, what we call a rectangle pattern. we consolidated, came out of there at the same level, about $86 a share. we ran up to about 126. we're in an up trend now. >> and you think it continues higher from here? >> we do. it's giving us good signals. >> paul, fundamentally, a company like nike, their raw

material costs keep going up. that can squeeze margins. do you like the company at this point? >> we like nike in general. it has great returns on capital. the input costs that you point out, they peaked at the end of 2011. so even though there's going to be some pressure at the beginning of 2012 that is starting to roll off, we're actually seeing gross margins increase a bit. >> and you like it at this point? >> i have a hold on it. when you look at the fundamentals out on the street, you've got the olympics. >> maybe it's already in the stock price at this point. >> exactly. >> how much higher could it go? >> so technically, we saw 20%

before the correction. 20% off after the correction. that's what we would look for. look for signs of weakness. if not, we think you get another $20. up to 126. >> wow. that would be quite a rise. gentlemen, thank you. >> i was just going to say, i think people are going to look at the olympics and then see what happens then. >> thank you very much. maria? >> bill, thank you so much. we're 30 minutes away from the "closing bell." we're coming to you from the rbc trading floor. we're still talking about a decline of about 90 points. that's pretty close to the lows. the dow set to close lower for a fourth time in the last five trading sessions. up next, learn how to protect your portfolio from any pullbacks. that's next. stay with us. tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab.

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welcome back. bob pisani on the floor. we bounced a little bit off of that and it's very simple, five straight months of contraction in manufacturing, people are saying perhaps there's legs to this story about china slowing. from the moment, in the last few days, china is a big play on energy. they consume about a quarter of all of the world's oil. that's the weakest sector on the financials also on the weak side. guys, back to you. >> all right. bob, thank you so much. meanwhile, mortgage rates jumping to five-month highs today. that tops business headlines. freddie mac says the average rate of 30-year fix climbed to 4.08. the effective higher rates

should be minimum as long as the increases are limited. weekly jobless claims, number of americans and the moving average for claims also dropping to a four-year low of 355,000. rose to .7%, the economists say that this year's wild winter has contributed to economic recovery. jim skinner has announced his retirement from mcdonald's and the stock has done well under his tenure. making his time the most successful in any dow come

noent. phil, what do we know about the new ceo? is the agenda in place that skinner put in place? >> i think it is in place in the shares. the new ceo is the former coo. don thompson was the coo for the last couple of years. he's well regarded on wall street. the investment community knows what to do when they take over. >> mcdonalds has been so successful. should investors be worried that the results might slip without him at the helm? >> i think it comes down to whether or not they can build on those core areas that have been the focus over the last several years. they got back to focusing on execution, making sure that they did the best job. that has exploded, maria.

don thompson was a proponent pushing for expansion in that area. as long as they continue to focus can, then i think investors will likely approve with what they see from mcdonalds. >> we're all talking about a slowdown s that what it is? a slow down or something snels. >> complacency. i think they face margins being pressured in different markets around the world. currency as well as commodity costs. complacency. they have been successful in the 24-hour menu or selectively growing in areas around the world. they have been very effective at staying focus under jim skinner. can they remain focused under don? >> and the china growth story is a an important story for

mcdonald's. >> absolutely. and that's a huge component. for europe as well. >> thanks so much. phil lebeau, thank you. phil? >> on "squawk on the street" tomorrow, be sure to tune in for that exclusive interview only here on cnbc tomorrow morning right here on cnbc. stops off the low, as concern for growth with a rally in euro zone concerns back in play. should investors reduce the international exposure? joining us with their thoughts on that, larry can for and ron mullen camp, is a long-time manager. good to see you both. anybody want to fund mcdonalds, by the way? i'm not kidding. when they change ceos, do you change the stocks, necessarily?

>> i am not current on mcdonald's. >> it's definitely a growth story. it is for sure. you're out with the latest quarterly look on the global outlook. this six-month run we've had in the u.s. since early october, you find that a relief rally and you think it's over. now what? >> we think what has happened is the absence of disaster. europe didn't fall apart. the global economy didn't fall apart. china didn't crash. what we're seeing is the u.s. on a self-sustaining growth run and trade deficits getting bigger, we start to see germany do better, brazil do better and the assets look a little expensive given that there's still problems there. out of u.s. investment trade and

equities especially in the u.s. and other kind of countries. >> is that how we should trade our own stocks here, be concerned about what is going on overseas? our fundamentals are getting better here. >> yeah, very gradually. and we thought that was a good time to buy the international banks. even barclays is not expanding a lot. jpmorgan and citigroup, we think, benefits from that. we see no reasons to own bonds right now. so real interest rates are now negative. so we've said to people for a couple years, we want rock solid balance sheets.

well, any time that you fear things, you want good balance sheets. but, for instance, we own at&t, that i haven't owned in forever. their yield is higher than the yield on their bonds. so we think there is room in there. >> the financials, for example, you're like one of those international exposure banks. are you going more defensive? is that what you're saying here? >> no. it's quite the opposite. in other words, it's a different type of rally that we think we have going forward. i think ron is right. i think what has happened is, stocks have looked better, more attractive relative bonds all along. even more so. we're getting growth and higher inflation, the equities look more attractive. >> we're out of time but let me get a sense of the sectors. >> technology, health care, energy all look pretty good and i think the financials, especially in the u.s., look

better after the stress tests are over, starting to pay back to stockholders. i think it's a better place. >> i want to get your thoughts on both -- >> and larry ckantor coming bac later. maria? >> the dow jones industrial has been down 100 but we're improving just a little bit before the closing bell sounds for the day. meanwhile, investors should bet on a rebound by shorter term maturities. and how rbc's bottom line is being impacted. i'll speak with mark standish and douglas mcgregor. plus, here's a look at the big financials. a down day. we're back after this. ♪

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it's a stock that is more expensive than apple and may be able to hit $1,000 a share in the next two years. that's what piper jaffray is saying. and the cholesterol drug could be a game changer. it could approve to be more effective than statins. the street, very bullish, reiterating a buy on that stock. maria and bill, back to you. >> it has been an incredible run. seema, thank you. we're seeing about 15 minutes left in the trading session. we have turned things around. off the lows of the day, marks the composite third down day over the past five sessions.

volatility index edging higher and as we see the stock market come back, the vix is moving lower. earlier in the session is, but not right now. >> we're coming to you from the new york trading floor. today we have an auction to deal with. selling $13 billion of tips at an auction at a record low negative yield. why are investors flocking to yields that are at rock bottom levels. let's take a walk over here to the head of the u.s. rate strategy? that's mike clarity who is joining me. maintaining this negative ten-year yield where we've seen some uptick, how was the auction today? >> it was slightly sloppy but that's not unusual for a tip

auction. that said, you've got a ten-year yield of a quarter of a percent. so there's still this significant hovering for safety in the market. >> amazing. and you're still seeing a consistent flow of funds into the ten-year even though we're talking about rock bottom numbers? >> right. these funds do continue to grow. you get retail interest. i think it's a combination of people looking for safety and then some other people really concerned that inflation will get out of control with the aggressive fed policy the last week has had a significant selloff. we've now settled down a bit. we think further out the curve is shopping around the levels

for a bit but the front-end of the curve is extremely cheap. it's hard to make the map work. even though they ignore and tightening, it's still hard to the very aggressive fed to make it fair. >> by the way, they were talking about coming from the bottom. 100 basis points. still talking about very, very low numbers. so how do you want to invest in this market? tell me what you are telling clients here. >> again, given the cheapness of the front end of the curve, i think it's an opportunity to buy two and three-year paper. you could see yields break higher. it's a time to stay out of the way and buy short. >> we'll leave it there. mike, thank you for talking to us. thank you for giving us your

take in the middle of a very, very busy market. bill, over to you. >> all right. coming back kind of slow but with 15 minutes left, the dow is down 68. was down 107. the nasdaq is on the comeback, maria? water may not be a commodity but courtney reagan is working the story. >> water is not as sexy as oil but it's essential to life. that's coming up. [ male announcer ] the next generation of lexus

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i'm back i'm back on the floor. one of the big ipos today of the exact target, my friend making the market there. 19 tlarz a share, they will use for general corporate purposes.

exact targets based in indianapolis. marketing am plications based on cloud based platforms. that was the key part of this component and they helped through all of the usual suspects. exact target charges annual and multi-year subscriptions. revenues outgrew them. they were up 55% in that time frame. here's what the chart has done today. et, the ticker symbol, up more than 40% at the new york stock exchange. maria? >> big debut there for exact target. thanks, bill. meanwhile, today is world water day. while it may not be a tradeable commodity, there are plenty of

ways that traders can get their feet wet. over to you, courtney. >> thanks, maria. there are a number of ways to play the water trade from etfs to mutual funds and water-related equities. according to jeffreys, and both small cap utility stocks, middlesex water has dividends above 4%. compared to the ratio of 16 for most material names suggesting a growth trend for the players. some of the best performing water plays, the power shares water portfolio up more than 14% year to date and up 65% since 2009. what's water technology? a company that makes bowl water

pumps and up nearly 17% year to date. there are certain caveats to investing in water. it's a highly fragmented market with longer time horizons. the companies are more ill-liquid, no punt intended, i promise, than other sectors. >> thank you so much. there's a huge demand for water. later, we continue with our liquid assets theme. we'll be right back with the closing countdown. do stay with us. we're trading ahead of the close and we're just a few minutes away from the "closing bell." stay with us. you're watching the "closing bell" on cnbc, first in business worldwide. [ donovan ] i hit a wall.

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we'll even throw in up to $600 when you open a new account or roll over an old 401(k). so who's in control now, mayans? >> okay. we're inside four minutes here. we will finish lower. with the decline, it looks like the s&p and the dow are on track for the weakest decline since december. however, the dow is still on track for the sixth consecutive positive month going back to the lows. we were talking to larry kantor.

if if was a fundamental trade the growth would have gone higher. today the s&p down nine points we spent five days trading sharply lower and off the lows of the session at $105 and even the grains moved lower today. soy beans moved lower after a report came out that export sales were the lowest in seven weeks and some of that is attributable to the slow down in china. so we are off the lows. you get the risk off trade so the risk off trades go higher here. it's a ten-year yield lower today. prices were higher.

down to 2.27% on that ten-year note, which means gold should have gone higher as well. because lately it's been a hedge. but not today. it's been a risk on trade and price of gold down $8 to $16.42 per ounce. technology in a very mixed trade here. larry cantor is still here with me. what else do you like here? you like the financials that are going to continue to grow in this environment here. what about commodity-based sectors as well? >> right. so energy, we think, oil. we think those are better. >> natural gas -- >> we think it goes a little lower. we like some of the metals actually. i think one thing to look at,

bill, is economies that go from weaker to stronger. >> but for you it's a growth sector? >> i think that's part of it. the inflation is going up because the quantities are going up. we see growth and inflation. >> will the price growth exceed inflation? >> yeah, i think inflation is going to come higher and that's one of the reasons why we want to focus more on equities. >> do you think yields are going higher? >> i do. not a lot. but we've still got negative yield and yet real rates are still negative. that tells us that they have to go higher. >> as we head towards the close, we will finish lower but off the lows of the session we get ready for