jeremy knows a lot about economics, jay has a lot of market experience and experience in government. they bring a lot to the table. this was their first meeting, so i think they were in listening mode to some extent, but they have an awful lot to offer, and i really to look forward to working with them, and i'm glad for the first time i believe it's the case, that we had seven governors at a meeting since 2005. that will help douse our other work and our monetary policy work more effectively. >> thank you. >> thank you. hi everybody, welcome to "closing bell." we have been listening to ben bernanke taking questions where he leaves the doer open for more fed action and did not announce any new stimulus measures and the market has worsened since

the chairman has been speaking. >> he did expresence concern about unemployment, it's too high, housing market is too low, and the uncertainty associated with the fiscal cliff that we have been talking about lately could have been impact on the economy down the road. today they extended operation twist bond buying program to try to keep long yields low to prop up the economy right now. >> the market sells off and then comes roaring back. take a look at the major indices as we approach this. the dow jones inching toward the lows of the day again, down about 59 points here. check the nasdaq, similar chart pattern here, down by eight points. not at the lows but moving in that direction, and the s&p 500 looks like this, similar chart

bat earn, things definitely worsened in the last 30 minutes. so let's talk about if they're doing the right things right now and get a reaction from our own panel. we have bob mctier, rick santelli, and steve leisman will join us shortly. what did you make of the policy statement and they're assessment of the economy right now? >> i thought the policy statement did as little as they could do without disturbing markets too much. if they dropped operation twist it would have been a tightening. so just extending that was, in a way, no change at all, and it's a very middle thing. operation twist is not a big deal because it does not affect the fed's balance sheet. >> what about the fed being more

aggressive here, we know things slowed down a bit, i believe it was steve that said why not be more aggressive? was this appropriate just extending operation twist? is it enough? >> i have thought he did leave the door open to do more. he laid out that if inflation was lower and an unemployment is higher, both currently and in their projections, and geoffen the dual mandate, steve is right, that really calls for more. we don't want them to shoo their last arrow before they have to. >> right, i think that's the sense that we got too. >> i think the fed has to be happy, didn't move too much. and again, i really do think this fed policy was just buying themselves some time before they have to make a real decision. it's going to be very difficult for them to keep up twist through the end of the year.

if we look back when they announced twist. they started in october, by january they had to approach the sources of the long-term end -- some of the recent cover to offer ratios have been extremely weak, so they have been having trouble finding paper in the eight to ten year and ten to 20 year budgckets. i think we're going to see them, liquidity disruptions rise, and i think by september there will be a situation where they have to then decide okay, do we scale back the size of twist, or do we start adding mortgage purchases? >> steve leisman joins us, you were the first questioner, and here is a portion of your question and the chairman's answer.

>> how would you react if a young student came and said it was too incremental, and the reason the economy didn't perform is because of that. what do you think the dangers are today for the action still being too incremental pm. >> we cut the federal funds rate in a continuous fashion until december of 2008, and since then we have operated with nontraditional tools. they have been lumpy, but our view of the effects of these programs on the economy is that the total stock of outstanding securities in our portfolio is what determines of level of accommodation that the economy is receiving. >> steve, yours was not the only

question along those lines. did he answer it appropriately? was he on the defensive? >> he makes one point which is the stock of what they bought remains in place. the question had more to do with what if they had done a bigger qe 1. what if they announced twist would remain in place until the end of this year. would the initial impact have been greater? i think what's important is that he did say later on, bill, that they believe this is a substantive step, and they're prepared to do smr. that was really my take away from this press conference. and also acknowledging they're looking at what the bank of england is doing with direct loans out there. they're looking at that very closely, so i think there were a lot of eyebrows raised there. >> i think the assumption they

will be there is keeping the market from worsening. i want the take on the head of the interest rate strategy at rbc, how you want to be invested the rest of the year, let's me check in with rick santelli, what are you seeing now? >> the reaction is pretty much predictable in the credit markets. short-dated treasuries are elevated on the sell side of the twist, and the long end is virtually off changed but well off it's highest yields, and if you look at the dollar index is it better than it was prior to the statement. the way the treasury market is acting, it seems the treasury market will not define if either of those have any type of a

outcome worth notes. >> the markets pretty much mack tored in an extension of operation twist, right? >> i guess that's the wisdom i would look at and say what the treasury market is really factoring in is none of this is doing a good job and redistricting the future is evidence whether you invest or not. >> the do you industrials now down 77 points, certainly a lot worse than when the chairman first began the press conference. >> wigt, whright, what we're ge a perverse reaction. if the fed buys more, equities go up, and so, i think you know, we continue to follow equities for a bit, prices can run a little higher, and then at that stage, you know, we're back to sitting and watching europe.

i think in the absence of deteriorating news out there, ads are so low and we he will drift higher. >> we have a market down 78 points on the do you industrials, nasdaq down about 13. >> and much more ahead on this big fed decision day. >> did the fed do more harm than good with it's latest move, or did the central bank not go far enough, a top economist weighs in next. plus will the fed's move wave the next rally of the bond market rally. that is coming up. should the fed problem up the u.s. economy or let it stand on it's own two feet? tweet us @cnbcclosingbell. ♪

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in silicon valley with that for us. >> up in san francisco, but close enough. first, icloud is down. apple's website says it's down, they will try to get it up as soon as possible. users reporting messages with back ups, can't find -- and apple retail employees getting a pay bump about 25%. there's an issue here with retail employee moral, apple switches policies several weeks or months ago requiring employees to work more weekends and making it difficult on that front. so this could be difficult because we're heading into a quarter where we're possibly going to see iphone 6 coming out. >> tim cook, the task master,

how about that? thank you. >> the market right now is down 63 points, the stocks pulling back during ben bernanke's press conference. we have the latest on equities now. >> down 80, up 30, down 80 again. no qe 3, but mr. bernanke definitely held your hand. they lowered their growth outlook, and that has people concerned a little bit here. finally i want to note that we're seeing gasoline prices hit sixth month lows today, and that should help consumers lout the hot summer. airlines are also on the upside today. >> thank you, let's look closer at the fed's action once again and the aex after the fed announced the plan to keep the operation twist plan in place. it was sell first ask later initially and then stocks came

back as the fed chairman held his news conference, that's when they started to loseground. >> the next guest thinks the fed is almost out of bullets, and bob mctier, thank you for joining us. >> that was one of the questions and i think one of the things that bernanke tried hard to defend, that they're not out of bullets, why do you think they are? >> i share the chairman's view. they're not really out, but they're cautious about using their most valuable tools. they asked why they will not raise the inflation target. the answer is they don't have deflation, this is not japan. >> bob, i think you agree, you eluded earlier they don't want to spend all they've got to do in the near term, but would you

guess if we keep unemployment where it is right now -- that's the indicator you went back to tomb and again, unemployment is still too high, could we see qe 3 before the end of the year do you think? >> yes, i think it's important when you're talking about tools left to distinguish between interest rates and the money supply and money and credit. they're about out of interest rate tools, but they're capacity to expand their balance sheet and bank reserves and so forth is unlimited. that's where the power is. operation twist is a sterileization. it doesn't had a dollar to their balance sheet. i think the important thing right now is to key that balance sheet growing slowly and not letting it shrink. >> what's your expectation for the rest of the year?

will it be enough to off set some of the weakening we have seen? it feels like there is a feeling the fed will be there and also disappointment. >> think the market discounted what the fed did today already. i don't think it will prevent a weak economy from precysting. so there is still a good chance they will act more aggressively in the coming months. >> i think the next step would be a form of quantitative using. but there are other alternatives, again, related to confidence of how long they will keep interest rates low. >> bob, one of the questions had to do with low interest rates and the impact on the banking business and making it less attractive for banks to lend money, which the fed chair suggested he didn't believe.

>> i thought it was good. it hurts bank's ability to make money on the spread, and investing in treasuries, but that makes it more important for banks to find borrowers and investments. >> do you think they're working hard enough? we keep hearing that banks are not lending enough right now. >> but they say they are. >> what's the reality do you think? >> i think their standards may be higher, but i think it takes two to tango and there is a problem on both sides. >> what do you think professor? that lending question is a key part of growth in this economy right now especially for small business in this country, and even jamie dimon had to deal with that in his house testimony. are they lending enough? >> and the standards are higher right now.

it's not just small businesses, but households. we went through a boom and a best, and banks and their regulators are more cautious than before. that's doesn't mean they're not trying hard. if they think the loan may not pay, they're going to be more cautious than they would have five years ago. that's not a bad thing. >> you would think that's what we want. >> thank you both. >> all right, we're heading toward the close, about 40 minutes left, and we're going lower again, this is probably the lowest. >> bernanke spoke, now we want to the invest. they have to trade to make the right decisions now. >> we want your thoughts on what ben bernanke is and is not doing right now. should he let the fed stand on it's own two feet? give us your thoughts on fed policy right now at cnbclosingbell.

we had a decline in energy today. >> yes, we have a lot of headline moved today, let's tart with wti 9.

that's only after breaking below $81 a barrel for the first time since october of last year. it wasn't just what we heard out of the fed, but also trading on fundamentals. today was also an inventory day. we got a surprise build in the crude oil stockpiles. that put pressure on crude oil throughout the day. what we heard from the fed certainly didn't help, continuing to push lower. airlines are moving up as a result in the moves in energy, oil stocks moving lower after what we saw here in crude. i ent to mention that brent settled at a fresh low, lows we have not seen since december of 2010. 35 minutes left until the session end, and ben bernanke

was answering questions in the fed preconcentrate for instance. they're trying to buy more time, take a look at where e we stand. down 82 points, by the way, the dow on course for the fourth decline in the last 12 trading sessions. all ten sectors are going negative today. financials money the better groups, jpmorgan up 2% right now. as long as we are focussing on treasuries we're going to do that now. we have carter wort with us, and you were looking monday, you were saying you felt bond prices would go lower meaning yields would go higher, but in fact, the fed would like to have the opposite happen right know, so you're willing to fight the fed, 1992. >> let's look at it. here is the tlt, and this very dynamic two month run up making all time highs in the tlt.

this equates to a big move -- it's like the ten or 20 year bond. and it equates from 40 to 140. and now they're back up to about 160. we think a break in trend here is coming. we're thinking on the ten year, yields are about 190. >> you're a technician. theoretically you should not be thinking about the fundamentals, but you have a fed bent on keeping the yields as low on possible and hopefully lower in the near term, are you swimming up stream here? >> and this has been going on since 1980. at any given period, it has gone too far. that's the judgment now. just as you had a big move here and yields backed up, and this was a big move, we think that

the move from 14 to 16 is the beginning of more. >> so we might get a little correction? >> and that's still very low rates. >> i got it now, and you're looking at a correction of some sort. thank you for joining us. we have a market lower but off of the lows now, down 69 points. we have just about 20 minutes before the closing bell brings. the chief executive of under armour explains how they can keep outmuscling the competitor. and remember what brought down the housing market? bundling bad loans? is that happening again?

okay, we want you to be updated on gold shares. >> gold closed down for the third straight session, and during mr. bernanke's press conference is moot now. it is down about 1% on the bottom of that market interpreting the fact that we will not see any qe 3 any time

soon. back to you. >> all right, bertha, thank you. another stock we're focussing on is under armour, they have been a high flier this year. now their taking a big step on to nike and addias's turf. >> we want to get into this competition, but let me get your take, first off, on what's going on in the economy here today in terms of demand out there. we're trying to figure out what this demand looks like. it has been slower than some expected. how would you characterize demand out there? >> we have always lived in a little bit of a bubble. we grew 38% last year. we have been a constant grower from, you know, five years to

the first 5 million, and closing a billion dollars. so growth is on our side because we have been speaking to the consumer and in this bubble of sports because they like we what offer and bringing them great products has kept us safe frer the economy that other people are feeling. >> it's so bifurcated. a specific tomb of apparel like yours, but they're looking for value. >> there is a bit of a barbell effect taking place. if you have great products and thought innovation, you are seeing brans separate themselves and others going the other way. we like our positions where we are, and that's why what we're

doing today is talking about $100 plus footwear, but we think there is room for our brand specifically. >> go ahead, darren. >> you have been in footwear for seven years now, introducing this spine technology, a lot of people telling you to get out, why are you till in after year seven, and what are you looking at? you have a 13% in re revenues -- >> the first claim is that some day when we went pub luck, some day footwear would be larger than apparel. we're sticking to our guns on that. so we're just -- we're in chapter two, we're in rounding the first inning, so there is room for great thought

leadership product, a difference that the consumer likes and can get behind. this demonstrates what we learned over the last seven years. it takes time. any new geography, you better have the result and the brand, and we have demonstrated our ability to the do that in fo footwear. >> we were noticing, you know, your stock has done as well as its has, you announced a split stock, no one does that any more. they have a dividend increase or buy back shares, why are you splitting your stock? >> we're old school, bill. i like the idea from the run of where we have been in the market, first of all that we will add ourselves to a much better share and investor base. being down and going from triple digits back to double digits and

we will have a lot of fun running that stock for years to come. this is what we're supposed to do, but we control what happens in our company. these are good things, but that was a thought out decision made at the board level, and it's a good sign that kood things have happened with our brand. >> kevin, i have to ask you about the olympics. there is big business around olympics, you do not have that play, do you feel you need to play in that space especially when it's so big every two years? >> you have to be careful, when you try to keep up with the joness, we know who we are, we grew 38% in 2011. you know, we know who we are and where we are, and we don't have to try to meet anybody else. at the same time we see

ourselves being a global brand. so making sure we take care of things here at home. we have michael phelps and major stars. so a lot of excitement and under coming from around under armour and london, and we have to stick to a cadence. >> my last question is that global play. it's hard to crack into some of these markets without the big soccer money that addiad and nike find. >> in 1998 and 1999 -- $35 million u.s. dollars. then a tipping point occurred. we went from the 110 to is 150.

we're looking saying if you have the resolve and the brand, we're not trying to set recording, our head is down, running hard, and we show up and go to work everyday, but we believe we have a shot. >> kevin, obviously you're doing a good job, we're looking at the numbers, your stock is up 45% in a year, what should we expect for the next couple years? what's an appropriate growth level for investors to digest. >> i think we talked about the projections being in that 20 to 25%. we feel very positive about our outlook and the way that we see 2012 shaping up. but we like to be that expectation where the consumer looks at us a. it's going to be product driven. consumer wills dictate things, and our business is very

consumer centric and what they're looking for, but as long as we stay ahead and keep drivers great product we will be fine. >> good to have you on the program, thank you so much. >> separated at birth i think somehow. look at those two. we're in the final stretch here, 20 minutes until the closing bell sounds for the day. it's down about 42 points on the dow. >> the next guest thinks the fed may have a big move up it's sleeve later this summer. and we want your thoughts on the latest action by the federal reserve, send us a tweet and we'll get your answers on the our later in the program welcome back in a moment. >> first, the dividend. which tech stock is under

which tech stock is under performing this year? oc, rocky mountain high ♪

just before the break, we asked which tech stock is under performing this year.

now the payoff, sandisk that lost more than 20% of it's value year to date. >> i get that wrong ere day. i never get that right. the market based on it's reactions didn't really get what it wanted from the fed today. more monetary stimulus which is fancy talk for moneyprints, but our next guest thinks it is on it's way. >> good to have you both on the program with ladyiladies. it was just buying time today. in our view, the data will slow here. we have uncertainly from europe, as data slows down, i think the

fed, and chairman bernanke addressed this today, ready to take more action. >> what are they waiting for. >> why buy time? if they already think the markets are going to slow down more? >> they want to see see what will happen with the fiscal cliff. we're going to see a massive selloff, i agree with you 100%. >> i think financial conditions are not at the level they were in the past. you need risky asset sell off, consumer confidence needs to plummet before the fed would action. they mentioned this and every knew step has diminishing returns. i think they have to see the conditions before they react. >> and we have to invest, right? >> very few places to make money. i still like equity. the market is discounted for it. there is still risk, certainly

the fiscal cliff, there is a risk of growth deceleration from that, but many of the companies i'm looking at today are trading at historic low levels relative to what their intrinsic value really it like hma, and ryder corporation, and -- >> so you're looking at individual stocks? >> yes from a bottom up perspective. there are a lot selling at very low valuations. >> unjustifiably so? >> yes. once those things -- once there is certainty, stocks are no longer trading at discounts. >> what do you make of this reaction from the markets here, we were as low as 85 points a few moments ago. it seems to be back now. what are investor sentiments

right now? >> it's like having a sick patient, it wants pencil. you are reluctant to give it, you want to wait to make sure the infection is still there. >> what do you think the markets will do if and when the fed -- and i assume you're talking about a qe 3 of some kind? >> yes, in the past any expansion has been risk positive. i think some of the overhangs on the market have to go away. europe is a big risk, i'm not sure the fed has any tools. they have tools to prechbt liquidity from becoming a problem. i do think if they were to act in a very aggressive standpoint, i'm just not sure the extend of that if the fiscal players -- if we don't get much.

>> here is the point, would more qe 3, they made it very clear, unemployment is still too high, the housing market is not recovering fast enough right now, would more quantitative easing help to solve those problems? >> it's a tool the fed has and the fed will continue to use. i think it helps a big increase in interest rates. so do we have as much of an effect from interest rates as we did five years ago? no, is it a negative effect? i don't think so. we have a strained economy. i don't think the fed can do a lot more. >> good to have you on the program, thank you so much. >> okay, heading toward the close, and look what's happening. it's coming back, down 28 points. the headline tomorrow will be unchanged on the market, right? >> you know who else is worried about the fiscal cliff? ben bernanke, he said it an hour ago, you'll hear it next, stay

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well it's all about bernanke today, but it's a big deal when the shift away from the latest move to another topic about ben bernanke. >> yeah, i'm surprised he answered the question. this is what we talked about when they allow tax cuts to expire. spending would go down simultaneously, here is what he said. >> as we move forward in the year, we do anticipate that the association with the fiscal cliff will have economic effects. we hard anecdotes about firms that might contractors that we're not sure about whether they are in place coming in january. more generally at this

magnitude, and i think it will be a negative. >> i'm surprised he answered it. >> i don't think congress is going to do anything about it until after the election. you think -- you think they have to do something or there will be a massive market selloff, there is no way they're going to deal with the fiscal cliff after november to december. everything is expureeing in december. they'll never have enough time if they don't take leadership here, the economy sells off, the economy worsens, they're not that stupid. >> wait, they want to be reelected. it's the impact they would have on the electorate out there. if they vote to keep the tax cuts there, the republicans -- >> i think they will come to an agreement, there is no way they would let dividend taxes, that would be a disaster. they extend some of the tax cuts but not all. >> i think it will fall to the

lame duck congress after the election when it won't matter or have an impact on them personally and if they are reelected. they'll get it done, but it will be compacted as per usual between the time when the election occurs in early novemb november. >> i see one coming here, and in the meantime the dow is coming back, down just 28 points right now. okay, and look at that, the nasdaq -- i'm telling you, the headline tomorrow will be the fed extends operation twist, and the market finishes unchanged. >> and they did downgrade the economic outlook. talking about downgrades. >> i think you're right, as uncertainty about the fiscal cliff picks up, they will feel the need for quantitative easing down the road. that i'll give you. coming back with the closing count down in a minute here.

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five five minutes left in the trading session here. we'll show you the charts, a log of zigzags today, and you will be able to tell when the fed announcement came out. this is the ten year, this and the 30 year, because the fed announcement was that they would extend operation twist. they would keep buying long term securities. so that pushed yields down initially, and then they came back up again. we're still at 1.64%. as for the dow, the same kind of a story. a little sell off on the announcement, it went up, went down, and the headline. the markets are unchanged. we'll talk about that in a moment here, look at the dollar index, that also had little ups and downs today, you will get a

higher dollar today. but the higher dollar took a toll on commodities, for example, the price of oil. wti crew down here in new york, down 4% today, that's the lowest we have seen since october. that's not all the story -- expected department from europe. this is a 17 month low on brent oil. and again, that narrow -- that spread between brent and wti has been narrowing as well. gold also lower today, it's taking a toll on mining shares today. gold down 1% or $16. it has had a good run recently, so maybe we can chalk that up to profit gaining.

we had gainers, technology and financials are going to finish the day with gains here followed by consumer digressionary and discretionary. so when all said and done, what do you make of the market response -- >> i think that he left the door open for further easing kept it from falling apart. >> so they are expecting more quantitative easing? >> no doubt about it. we're holding here above 1350, but like you just said, tomorrow it will be a nonevent, nothing happened today when you read the papers. >> what does this do for you as an investor? do you pick stocks that tend to benefit from this low interest rate environment that the fed is fostering right here? >> we do, we're looking for that as well as trying to find stocks that are dressed due to the

uncertainty in the market. if the fed had come out and done qe 3 today, that would indicate that we're in worse shape. it's hard to know if the market would have been up a lot if they would have given us what the market supposedly wanted. so there is a big psychology factor that we have to watch and trade around, but we're focused on the fundamentals. >> the two best sectors today on what it has been like this year, financials and technology. i know you're a bottoms up stock picker, but do those show up. new things help drive growth. in you're investing in growth there is still technology. >> energy has been a important component in equities this year. interestingly they moved in tandem for the most part. what do you think that does to

the equity market. >> you're right they have gone in that direction. it is greating weaker. that's not a great sign for the market right now. i think the market overall i like in the long run, i think if you buy ek adequateties here you don't want a statement for 18 months but you will be happy when you do. >> go ahead and hope your monthly statement. what about energy? >> i like energy. i do. it's being impacted by the macro, the fear of the global slow down, but the prices of the equities themselves are near historic lows if we're not in total turmoil. >> so if it all works out for you, this is a value investors dream of right now. >> it is, it is. buy at the right praises and trade around. >> thank you, both. that will do it for the first hour here, and we will finish