>> i still don't believe you bowl. >> thanks for watching "street signs," everybody. >> "closing bell" is next, see you tomorrow. hi, everybody, welcome to "closing bell." we entered the final stretch of trading. a good sell off happened here after the latest federal reserve minutes offered no strong hints about propping up this economy. >> i'm tyler mattison. and the fed agrees they may need to take more action if the economy does stall. but the markets have been selling off on that note.

right now the dow industrials down 88 points, and you can see, talk about your fiscal cliff, there is your market cliff right there at 2:00 down moving lower. the nasdaq off 26 points, a little less than 1%, and the s&p 500 sits right now at 1336, down 4.5 points. if we finish in the red, that will make five days in a row for the dow and the s&p 500. so let's get right to the panels. >> yes, we will get on the hot button issues. we have rick santelli and brian shactman. things really started to worsen as soon as those headlines crossed the hires. >> there wasn't necessarily a shock about the valuation of the

economy, i think that was made clear in the statement, and all of data the traders seemed to follow with cnbc. i think the shock was they anticipated more discussion about forming new qe programs beyond the extension of the twist. they were disappointed, they moved down, there was not a similar move in treasuries. the big news today was at 1:00 eastern, and off the charts crazy high demand, one out of the highest i have seen in many years, if ever. >> that's extraordinary. i'm looking at the banks here and it's interesting to note that the banks are trading higher here. that's certainly one of the bether performing groups. you like the financials, right? >> i do, and i think this earnings season, across the board, not just for financials,

but i think this earning season will be a pretty good one. so many people have sold banks, that i don't know how many sellers there are left. >> i just want to ask rob, why rob thinks it's going to be pretty good. because i'm not getting a lot of the same feed back. >> i think when you look at some of the early pronouncements that we have seen, i think that the tone there -- i think we're set for catastrophe here, and in my opinion, it's not going to be as bad as people think. >> let me jump in if i might and ask the bearded one, how you see those fed minutes, and when rick santelli was on at one and i was there with him, and talking about the auction, it sounds

good for the bonds but it speaks to the risk aversion in the market, doesn't it? >> yes, i popped rick an e-mail and i said it's right around the corner. that's what i thought in europe a couple weeks ago. i didn't think we would go up a percent this year. we will see 1% on the ten year. look what happened when there was no mention of qe 3 at 2:00 this afternoon. you saw the move back up in the ten year, and the equities go down. what that tells me is the equity market doesn't care about qe. it's not going to buy into it. they know the serum has not had an impact on the economy. >> can you really say it has not had an impact on improving the economy? yes we know that the numbers have been horrible, but you don't think that it's helped in any way? >> it had an impact on equity

prices. it put a certain floor on other asset prices, but it has not created a single job. not one transaction in terms of a financial services transaction. >> we need fiscal help and a tax policy and things like that to get businesses to create jobs. >> we need a better stability in capital markets around the world that are not fortified by something that will not be there forever. >> i want to add that the traders and people trolling for the trade, one element of the minute was was that there is disagreement over the threshold you need to reach to do something like qe 3, and that means it probably needs to get worse in the economy for that totally on the table, and that's part of the negative sentiment as well. >> but they make the right point in the valuations. that's why you look at certain

groups like the financials. barclays and jpmorgan. listen to what jamie dimon told mary thompson in june about this. >> some people are directly involved and we'll think it through. we'll do the right thing, not the blood thirsty thing, we'll do the right thing all things considered. >> i guess that's what people want. should these executives have to claw millions in compensation back? what do you think? >> he sounds great, when you watch it, he sounds great the way he explains it. the whole issue of claw backs is interesting because the question is should executives have to take money back for what they were paid as something that happened after the fact.

remember what it is? it was a way of clawing back. you signed documents and something that should be there. claw backs are saying we'll take money back from you because you didn't give results you said you would give. >> that's a terrible precedent. some people think jaim yi dimon should take one too, but gary brings up a great point every time you have a bad trade you will lose from your salary? >> it does set a precedence there and brian brings up a good point. this is dangerous. >> we have seen the rule of law shredded in the gm bankruptcy proceeding. i don't care if it's jamie dimon or a small bank, if they had a from vision was that triggered

by what happened with the whale, that's fine, but if thant didn't have a stipulation that's wrong. >> you can't claw back money because you made a bad trade. there's a different story when there's fraud or wrong doing, but -- >> do you draw a distinction then between jamie die monoand robert die monowho is involved now and left at barclays in the wake of the $450 million settlement they paid. >> yes, one is a bad execution and one is a bad strategy. the the other is about deceit and possible manipulation of a market, completely different matters. we want to get to our twitter question of the day, one of national importance, please sweet us as "closing bell."

weapon want to know it's about our colleague gary kaminsky's new look. to beard or not to beard? >> what are you going to vote for? >> i'll have to check -- i'm going to check out maria bartiromo to see what you say. >> i usually go for a beard, i think it's very nice. see your responses on air at the end of the program. we'll take a short break here on the closing bell, a market down 75 points on the dow. >> he is somewhere in between with that beard. we have a lot more heading your way on this busy edition of "closing bell." >> the china effect. luxury retailer feeling the pinch from a slowing chinese economy. is this a bad sign for other

high-end companies? what it means for investors, next. and cashing in on the libor lute. u.s. states and municipalities piling into the lawsuit. are they the ones guilty of mismanagement? and there is an app for what? an escape plan for bad dates. that could drive more people on to the site. it's all ahead, here. [ male announcer ] summer is here. and so too is the summer event. now get an incredible offer on the powerful c250 sport sedan. but hurry before this opportunity...disappears. the mercedes-benz summer event ends july 31st.

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>> who gets hurt when china slows down. >> in the years following the great recession, luxury retail sales soared, but this could be the beginning of the end. it was short of expectations and worry some to investors looking long for the high end retail. they're famous for a plaid

print, but it's not the european debt crisis that's concerning, but the slow down in china. chinese revenue growth fell to the mid-teens. the asia pacific region makes up the largest sales by percent. it's just the beginning of slowing sales. the fiscal forecast appears unchanged. the company is mindful of negative data, but focuses on what if can control. and goldman sachss are removed burberry from their list. >> will china's economy slow other high-end retailers? >> chinese government said

growth slowed to 7.3 to 7.5% this year. >> down from 8%. >> still remarkable, and the middle class consumer is going at 15% to 20% a year. >> so are you seeing any slow down on the ground right now? >> still strong, remaining our projections. so out with earnings soon, so we should know if that statement will hold up. our next guest says the slow down in china will impact us, and eric says -- you heard what he said, he said china is slowing but it's not hurting us. should he be more worried than he seems to be? >> it has changed a lot, and we have gotten numbers hearing that

growth is slowing there. burberry is decelerating, and well get another data point tornado night to see if that has further come in. >> erica, u know there has been a lot of talk about china slowing down, and what we know that 8% is still 8%. do you think some of this is backed into the stock prices of the luxtuury retailers. i think what we're seeing so far is a softer landing. >> what do you want to do then? >> i think from an investment standpoint there are really atrackive opportunities within the sector. i think there is an opportunity

where coach has seen their growth recently come from from entering a lot of tier two and tier three stores. they have a majority of sales in china and for coach it's 6%. so they're growing, they have a middle class consumer verses the luxury consumer, and also the opportunity to gain market shares, especially in mens. >> erica, coach has not announced it's next earnings date just yet, but when it does, do you think that coach will revise it's outlook and he will be a let more speculative. >> they're reporting at the end of this month, and i would suspect that we have seen the slew of data come out that's negative, coach said they saw a slow down in the tier one in the big cities in china, and since

they just went into europe, 30% of the business come from the chinese tourism, so is that slowing down too? that's the big question. >> thank you for being with us. we have about 42 minutes left before the closing bell, and right now the dow is down and so are other equities, maria? >> no daily show, no colbert, and no snooki. >> and you knew they were coming, the wave of lawsuits for the interest rate setting. this is america you can try to blame anybody you want. that story next.

so long, sponge bob, you're all wet. 20 million direct tv customers are now without 25 channels. we have the latest on the latest

fight in tv land. . viacom and direct tv have starting meeting this afternoon to stop the biggest black out ever. the daily show, jersey shore, pulling back it's online offerings so it cannot serve as a alternative during the blackout. it's bad news for both, shared of both are trading lower today. they sent a letter to viacom. we caught up with both ceos of both companies, and here is what they had to say. >> in the seven years since we last did a direct tv deal, we

have successfully and peacefully concluded the affiliate agreements with every other distributor in the united states. >> content prices have been rising more than twice of the price. even in our proposal, it was a significant increase over what we pay them today. >> now, as the negotiations go on, we'll have to see lounge the black outlasts. one of directv's competitors might snap up some of the customers. maria, over to you. >> thank you, julia, so much. in this mess, we wondered what is the better investment right now?

that is the subject of today's talking numbers. on the technical side, and on the fundamentals we have david bank, an analyst. good to have you both on the program. david, who will win this fight? >> hands down content always wins. we've never had one of these were content didn't win. and ennis, what looks better to you? >> they look very similar, but look at a three-year chart first for directv, it's a strong bull market, and in the last year it ran into resistance. directv has hold off. you can see the 40 to $45 level.

but the one thing that i would note here is viacom braemed it last year. we're seeing buyers less aggressive on the rallies. i think viacom -- >> you want to buy directv. >> yes. >> i can't -- what i would say is this. we view viacom as being on sale right now. they have sustained double digit growth thanks in part to massive buy backs in progress and earnings acceleration and affiliate fees. they're very cheap and we find it very attractive. >> even though it broke that level you talked about, it went back up and continued higher. >> and directv as well, it

should be an interesting battle. >> thank you. >> the dow is down 78, the nasdaq off about 43 this hour. we'll have more on the rigging scandal. >> i never in my wildest imagination thought they would call up and saying lower the rate and calling other banks and doing the same thing. >> the city of battle more pursuing banks in manhattan federal court saying that they are partly to blame. does the blame have real consequences? we will discuss both sides of that later, and e-harmony says

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welcome welcome back, 30 minutes left in the trading day. things were worsening after the fed minutes came out at 2:00 p.m. eastern. >> growth concerns are feeding on the industrial sector. and i will start with cummins. they are falling near the lows of the day. look at the other names there. if you want to know how independent they are, fluor has 75% of their sales outside of the u.s. oil has really held up and it has gotten more strength since the fed minutes came out. they're all examples of strength in the energy sector that have gotten stronger in the last half hour. >> the stakes just got higher in

the interest rate scandal. they are claiming the rate rigging is partly to blame for their own financial distress. baltimore leading the charge, and others like massachusetts, nassau county, and others may follow. >> our guests say these moves are ridiculous, you can't blame the bad decisions on the scandal. >> first of all, this is not about if barclays did something acollie jous, they did. you will start seeing other pension funds grasping at straws to try to avoid the possibility for the lending decisions. if baltimore today a different

rate for it, if it had been a lower libor rate, they would have borrowed more money. the fact is these are totally separate issues. it's not about if they did anything right or wrong, it's that they have their own issues and they're looking to deflect attention from that. let's get your reaction to what sheila said this morning. >> i think it was very serious, you know -- there has always been a judgment factor with libor. there also always been a fudge factor, but i never, in my middlest imagination thought traders would overtly call up -- you mean regulators? >> calling other banks, that's outrageous. >> there's no question we have banks that took advantage of municipalitie municipalities. and the fact there might be

other reasons why they might be in a bad financial shape. that's not a justification for what they did. it is bad and a primary reason why these knew mispalties are in the place they're in and making excuses for wall street is not the answer. >> how specifically did they lose money? >> they were supposed to get a higher rate on the interest rate swaps they were supposed to get. >> is it money borrowed verses money lost here? >> this is a primary cause, if the rate was 1.1%, it is absolutely the case they would have borrowed more because the liabilities they were thinking about is what the interest payment should be and what they need to service. there's no way you can say this is the primary cause.

>> you know what you do, what you can't fight on liability you fight on damages. that's what banks, lowers, and guests are trying to do. >> don't put me into a box i'm not in, i know we're all in boxes on tv, but i'm not apologizing for wall street or making a justification. if you want to deal with it, deal with it municipal problems. >> how big does this get, andrew? what do you think? one professor said it could lead to the banks paying out tens of millions of dollars? what's your expectation? you keep talking about bar clays and there's so many other banks involved. >> we scratched the top of the iceberg for it. you multiply byfire of six banks, and not just here in the united states. this was used worldwide. i would put the number at $10

billion and it could go higher. >> what do you think about that zach? >> the cost of litigation will be larger than settling. it isn't a particularly high penalty given the trillions of dollars involved. even back to sheila's comment, libor is a consortium and is a kabal. there is not a lovely magical wizard behind the curtain, but banks. but the rate is what was quoted. cities borrowed based on what they believed the rate to be and not one that they believed the rate would do. >> excuses again, we have an apology for the banks for what we think is criminal activity. >> we're not here to throw out

unnecessary things. i'm stating my view, you are stating yours, i would appreciate it if you stuck with the point and argued your view, i don't appreciate it. >> thank you very much for being with us andrew and zach. in the meantime, let's go to bert bertha now. >> house keeping and food services for hospitals and nursing homes are surging. just about a dollar shy of the year high on twice the daily volume. >> thank you so much. in the final stretch, 20 minutes for the market bell sounds. >> so, is it time to play defense in the message from one of our stock pros is that. why you need this message. we'll tell you when we come back. >> and from first to worst, we told you about the best state in the nation for business.

now we'll have the low down on the worst states for business. >> and today's twitter question, and as we're saying, this is critical for all of america. to beard or not to beard. shave it or keep it? what do you think of gary kaminsky's new look? tweet us @cnbcclosingbell. >> first, before we go to break, the dividend. which airline stock has risen the most so far this year? jetblue, southwest, or united continental? this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination...

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beforet just before the break we asked which airline stock has risen the most so far this year? yet blue, southwest, or united continental?

now the payoff, united continental that has climbed about 30% year to date. >> u.s. markets down sharply at this hour as you see the industrials down about half a percent. the s&p down about one fifth of one percent. those losses accelerated around 2:00 p.m. eastern. richard bernstein is joining us now. they said things today have worsened in terms of sentiment, what's your take on the fed today? >> i don't think the fed had to do qe 3 because we have a 150 ten year. if they want lower interest rates, i think europe has gotten them for us. but the other thing though in terms of the action you're

seeing today, is people time and time again are waiting for the government whether it be monetary fiscal policy to bring us back to where we were. that's not going to happen. we're on the downside of a credit bubble. any time you see monetary and fiscal policy go against reflags of the credit bubble the markets get upset, that will take a little transition period to work that out. >> so what will it take? >> when you have a 150 ten year, it's hard to argue the stoke is not under values and pricing in bad things. if you didn't like it at the 3% ten year, you have a be very bearish not to like it. i think sentiment could not be better. equities are no longer the asset class of choice. it's corporates or something else. i think the longer term picture is very bright. >> richard, let me turn you back

if i might. there is a jackson hole conference next month, then we get into the political convention season and the heart of the election season. the fed is supposedly a-political, but they're very politically sensitive. do you think absent any kind of shock to the system, the fed will do anything or make any policy changing between now and year end? >> i think we have to take into account that the ten year is at 150. if they're at 200 or 225, that's a more difficult question. i think it dipped below 1.5% today. if they want lower long-term interest rates, we're getting it already. if we see the ten year start to back up, then the appropriate is greater that the ted would do

something before the election. >> why would they back up though? >> i don't think they will. >> so in terms of yield, how do you get it in this market? >> i think to some extent, if you're a yield investor, i think there's lots of great opportunities in the equity market for yield. if you're looking at income and you don't care about short-term volatility, but if you're bullish like i am, you want to look at things like high yield. >> thank you, rich. this market is improving a bit, down 58 points on the dow jones industrial average. are the groups away from the banks leading this market lower and off of the worst levels? >> this is a fun story coming up, technology coming to the

rescue, e-harmony, they have an app to help bail you out of a bad date while it's in progress. why do they need such an app? >> after the bell, severe drought in the midwest continuing to take a toll on crops. we'll run through potential winners, stick around. ♪

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welcome back. on the upside for this market, we'll see if it closes better here. down 35 points. jc penney is under pressure but also off of the lows.

they went from b plus to bb minus. they have gone further into jump territory. the new pricing and merchandising strategy will cause further disruptions to operations. >> you know, i was one of those guys early on that was very positive on this turn around, and i literally have thrown that out because it's so obvious. they went from funk to funk, and they say further operational issues over the next year, they say new prices and merchandising, and one of those bearish analyst on the street came out with a report today just piling on saying they're facing serious cash flow problems. he thinks that management -- he said management stated next

february -- he says that would be a remarkable achievement. so the story just keeps going from bad to worse, and you know i think the company is losing all support. >> and the fact that it's come back, herg, what do yo think? >> look, this is a company that could have one ounce of good news and the stock will soar. i know i sit here and we talk about a lot of -- about this company on "street signs" and others, and it's just -- i think the problems are going to continue to come. that's what it seems like based on all of data. >> this market is coming up the way back, what whiplash this afternoon.

the dow was down. down more than 90 points on the dow industrials. now we have real buying coming in and the markets cutting those losses down 30 points once again. a real come back. the s&p now positive up two points, but tyler, the real question i have to ask you with have you ever had a bad date and needed a rescue call. >> i can't say why, but many of the women i was out with probably needed it. >> there is a bad date rescue app from e harmony. >> thanks for having me. >> i don't know where you get this. an app for a bad date, you're in the business of match making,

why have this app at all? >> we created it basically as a fun and engaging way to save people from a bad date and get them into a great date. most importantly when you're sick and tired of bad dates, one click gets you to better dated. >> so i'm at the table, having a terrible time, i have it preprogrammed so it rings at 9:50, and there's a script. my mom says i have a leaky pipe, you're helping people lie, jeremy. >> we're helping them get out of a bad situation and into a bet every situation, that's really important. >> we'll check out the app, thank you jeremy. >> up next, we're coming right back with the closing count

down. >> after the bell join us. what is the worst state to do business? ? scott cohn is going through the bottom of the list. what are the worst states for business. state with us. -- stay with us. [ male announcer ] feeling like a shadow of your former self?

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bring'll we'll bring you to the closing bell in a moment, but let's go to hampton pearson. >> they have just voted to repeal the 2010 affordable care act. 244 yays, 185 nays, and five democrats voting with the republicans for repeal of ba obamacare. it's now doomed in the senate. republicans in the house see an advantage going forward because they now have their democratic opponents in support of an

unpopular law. democrats see an advantage because of what people like about the affordable care act because it has been implemented. but again, the house on record having repealed the affordable care act. >> thank you. we have three minutes left to go before the closing bell sounds for the day. the dow has basically cut it's losses of a few moments ago in half, now down 43 points. same story for nasdaq off 13, earlier it was down 25, and the s&p is positive by three quarters of a point. >> let's talk about the big movers in today's session. we have rich bernstein, what do you expect? jpmorgan will be important on

friday, what do you expect? >> earnings could be tough because the dollar has apreachuated. it's now up more than 11% year on year. that means for nonu.s. earnings, speaking in generalities, they have to be up 11% overseas. i think they're likely to be disappointing again. >> i know you're expecting profit estimates to keep coming down. is this priced? ? >> we have seen a couple big surprises over the past couple days. we saw alcoa, all big surprises, and revisions starting to come down by analyst since the beginning of last quarter, second quarter. i think we will see investors keep flocking to safety and yield. all of those companies are up more than 10% this year. >> what do you think is going on

today. we're cutting losses in half, not bad at all. >> i think within the day, people get a little bit of rationality. they run away from stocks, but then where will you go. do you want to play commodities, probably not. so i think people have a knee jerk reaction, and then the question is where do i go? >> and equities you like the multinationals? >> dividend payers yes, multinationals, no because of what i said about the dollar. the highest growth rate in the world right now is for the russell 2,000. >> smaller companies. >> where do you want to the be exposed here? >> industrials have been beaten up like crazy, and we see value there for productivity gains