stocks slammed for the second day in a week. stocks plunging on weak earnings. not far off our lows for the session overall. and the stakes are only getting higher as the election approaches. >> jfk had a great line from his father that a lot of smart business men turn out to be dumb sobs when it comes to politics. >> guys like you set this country so far behind. we are a laughing stock throughout the world. >> you are a laughing stock. the ipad mini shrank apple stock. >> this is ipad mini.

[ applause ] >> does this mean the hype of the year is in. fresh from the trading floor this is "fast money." live from the nasdaq market site in new york times square. good evening stocks tumble on disappointing earnings. materials and financial post the worst drop since the summer. what is the take on today's trade? >> it did look brutal. i don't know if it was dupont that started it going and the reception to apple which i'm sure we tend to touch on at some point didn't really help things. >> what do you do in this? >> we brought a little bit of hedge back. we know days like -- >> you were buying weakness today? >> bought a little macy's and a little market hedge back.

i didn't see anything materially change. >> today it is interesting you mentioned dupont. there was weakness. it was a little bit of everything. we had a little europe and global growth concerns and oil. after a very complacent couple of months since the central bank action people are thinking about the election year and the fiscal cliff. it seemed to creshendo. i am not a hedge fund. what i did today is i owned some november puts. i spread them. i'm taking the opportunity of the heightened volatility and looking to reduce cost. i still think we have lower lows to meet. >> a couple of places we stopped out at small positions and resource names. in a place where the s&p has broken significant support around 1430 and a lot of guys are looking at the chart saying

nothing to 1375 basic resources were down. i think dupont had broader implication in terms of the sentiment. >> it is ups and united tech and 3m. all talking about growth and that is just the american companies that reported today. >> i think what everybody is saying here is what is different about all of this and why it feels more like people are taking profits on bad earnings is the breadth. >> do you think we go from here? >> i think there are sectors that people had no convictions on and there is more to come off of the places. >> you don't think it is going lower. >> they are never going to be able to pick the bottom. if you look since the peak in mid september the market was off. something like a macy's we buy that today. >> you notice that karen and

pete are dressed identically today? >> i think today gave us a lot of great opportunities. you are looking for certain names and we see a break down in the s&p. we have been trading in that range. 1430, 1460 back and forth today. we open below there. we push below there and push all the way down. you talk about resource names right in your backyard. today as it is on near its lows trading $22 a share somebody buys the november upside calls. that definitely was a strike for me to say i want to get in this name. i try to buy the options and the stock. i got a hit on my options. >> when things look worse that was interesting because i was listening to the half time on "fast money" and people are saying i don't want to touch anything. i am looking for opportunities. it doesn't mean you buy because something is being sold off. why is this being sold off?

is it going down with the herd? >> you don't think the market goes down further from here? >> the market could go lower absolutely. specific names and i still think this is a market that is all about specific names. you can look at a single sector. dupont's numbers were terrible. that is what you are looking for. >> what were you doing today? >> i think one of the interesting things to note a lot of demand decreases in these markets and correlation continues to rise. you mentioned ups, that stock caught me a little bit by surprise because it was disappointing. some of the industrial names were cheap last week so chasing something because it is cheap isn't necessarily a great strategy if the market is

weakening because you have things like caterpillar. you want to look for comps in the space. they might be trading at a small premium. they have small businesses. >> let's start bringing in bob from the floor of the new york stock exchange. >> confusion is what i heard all throughout the day. there is an old saying the market is going to disappoint the greatest number of participants. take a look at the dow. there were a lot of people betting we would get a nice rally off the lows in the last hour going into the close. there were other people betting the thing would fall apart and we would end up down 400 points. we started with a bang and ended with a wimper. we didn't do much in the last hour. if you look at the major sectors today there wasn't many areas to hide. even the more defensive areas and health care areas and consumer staples were to the down side along with most of the

financials. the materials were week. futurest at 6:00 a.m. when dupont's numbers came out that was the major of the day. here is the core of the problem. we all know that earnings were going to be flat to negative this quarter and they are coming about in line with expectations. we are seeing revenues only up 1%. for the fourth quarter now we are only talking 3% or 4% increase in revenues. >> stay with us if you would. let's bring in our capital market. you are saying this has to do with the election. >> it's great to speak with you and i love pete's outfit. pete, it is a spectacular outfit. simon you said in half time today a good point that a lot of times people come on air and say something differently when they are up on the balcony before they come on set. i was somewhat surprised when i said today it is not about the

earnings. of course, earnings have been disappointing. i felt the set up in terms of the market reaction today and really for the next two weeks was much more about the idea that people are beginning to realize whoever wins that election in two weeks that in both scenarios it is negative for the stock market in the short term. it is the realization that people are starting to factor that in. >> what is positive two weeks ago? people are making an argument that maybe the fiscal cliff gets done before the elections or obama stays and punch bowl stays and bernanke stays. there was an argument in the other direction two weeks ago. >> i believe when you were seeing through early october was the early performance catch up. i recently showed that apple was everybody had a market waiting. a lot of that happened between the summer into the early part of october. what has happened not just two

weeks ago people said they have to be here for the election but people start to worry about how it can be wrong. i think what changed two weeks ago is people realizet that a romney win is not good for the stock market. >> why do you say that? >> as he spoke about last night he is going to take a very strong standpoint in terms of the strengthening dollar. >> spell it out for me. what does that mean for the stock market? >> it is not my view. i'm sourcing this from some of the global macrofunds. he said he will be tough on china. he doesn't say it but you can read behind the lines his treasury secretary will have a strong policy and doesn't want bernanke. we know bernanke has leaked out that he may not stick around. we know that bernanke is probably responsible for the

stock market moves in the first place. >> every secretary has had a strong policy. >> there is the perception that the obama administration is very antibusiness and a romney administration would be much more probusiness and less regulation and that would free up some of the hesitation that a lot of ceos are saying they want to wait and see the outcome and they probably want to wait and see and hope that romney wins. how would that not be a positive for the stock market? >> i think everything you have said goes back to the middle part of the summer. that has been part of what i think bernanke has been the great part of it. >> in the middle of the summer obama was ahead by like 12. >> you and i both know a lot of large were placing big bets on the idea that romney was going to start to do better after the first debate. you have to remember that the

market is always a forward looking indicator. and i think no matter what happens after the election the stock market goes down and that is what you are seeing now. >> he is flying directly in the face of what you said clearly. don't let anybody tels you this was not about earnings today. >> i just watch the markets and the biggest drop occurred at 6:00 a.m. when the futures dropped eight points in a few minutes when dupont's earnings came out. it is obvious the market reacted. the biggest event was the dupont surprise on the revenue on the forward guidance. i don't doubt worries about bernanke and the election play into where stocks are moving right now. there is no doubt that the reduced revenues that companies are seeing now is a major problem for pricing stocks. that is what is moving them today. >> gentleman, it is good to talk to you both.

i will see you both on squawk on the street tomorrow morning. who is right in your view? >> i think the one thing they are missing out on here is all the tech companies and there was a great article talking about the $1.5 trillion sitting on the balance sheets. i think at some point they will deploy some of that. not all of that money. that would be bullish and that would probably be something related to the tax codes and all of what we all talk about which is all of the money offshore. i think in terms of a romney i think that is why i would be a little more bullish on the business front because of that. >> let's break off and talk about others that we have had not least the gyrations on netflix as that stock report is being monitored. >> netflix not moving on which man might be the president in a little bit because if you are getting dvds by nail you

probably have bayonets. it is a pretty simple situation. they have negative cash flow and guiding a q 4 loss. domestic subscriptions missed, as well. there is no shot at getting the 7 million number for the year. it is probably 2 million below that. >> said he had to hit 1.8 million this quarter to hit the full year. we have to take a quick break. we will talk about netflix and more on the selloff. facebook share holder will be here to tell us if he is still a believer in mark zuckerburg's strategy and whether he is ready to pull the trigger and buy more stock. look at the chart. more on facebook next

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. the vix surge. the fear index surging and that is above the 200-day moving average. >> it's up above all the different moving averages, the 50, the 100 and 200. it closed near about 1770 and finished about 1860 and then up before it pulled back. i think that is a reason to be cognizant of where it is right now. i don't think you want to overread that. that tells you something more. >> we were talking about if you look before the week before all this central bank action in early september, march 2013 futures were almost near 28. you know where they are right now? they are below 22. you have the short term spot vix spike. what investors are telling you they are much less worried about

things. >> than more worried? >> less worried. >> are they getting more worried by the day? >> if we continue the path we have had the last two days i would say that level will start to -- >> in general right now they are not -- >> excellent use. busy evening. lots of after hours action. facebook surging substantially after reporting its third quarter results. the company posting a big jump in ad revenue. julia is monitoring the facebook earnings call. a think of great beauty. what are they saying? >> well, simon, mark zuckerburg came straight out the gate to focus on mobile and say what a great opportunity mobile is saying people under estimate how demobile is for facebook. people on mobile use facebook more skpauchb we will monetize mobile better than the desktop. he acknowledged that there is a perception saying he wanted to disspell the myth talking about the fact that $153 million in

this past quarter came from mobile saying this is just the beginning. they are starting to roll out mobile ads. talking about how they are working with advertisers to make it easy to convert ads into the facebook format and really target users. i'm going to continue to monitor. i think the mobile story is really strong and zuckerburg acknowledged what a drag this was on the stock. >> if the revenues are up at 32% they are no longer decel rating in the earnings revenue. >> i am more worried about technical issues with the stock. at the end of the month we have two big lockups. their growth in mobile is phenomenal. so 60% of the users are now on mobile. it was 45% a year ago. i think even yesterday on the show with michelle no one knows what monetization means.

i'm not sure who is on the lead with this thing. they have delivered two pretty decent quarters in a row. >> let's bring in a facebook investor. you must feel relieved. >> thank you for having me. it is clear they beat the numbers and more importantly than the street consensus they have the buy side consensus. they were about 1.24 and came out at 1.26. the most important number by far and away from what you saw was the reacceleration of the advertising revenues. >> let's talk about the point about the lockups. >> they were a big concern. you have over a billion shares coming due over the next couple of months. one of the big things you have seen is since the ipo management has not sold one share. zuckerburg did sell to cover taxes. you see the cfo, any of the key

directors and top management has not sold. it is definitely a concern and a risk. i own it not for this quarter or the near term fluctuations but because i spend the whole day speaking to industry personnel and they tell me what they see as far as this coming out. >> mobile products? >> one of the biggest is facebook exchange. that is where they place ads on the website. that is desktop, as well. the mobile ad network is huge. where do i get this information from? talking to agencies and personnel. and facebook is by far and away the leader. >> some might say you are naive to say insiders won't sell. >> you could say that. >> $40 billion in value is a

fact. >> i spend time talking to people in the industry who are buying the ads and are very bullish on near term products. you start to imagine things like e commerce. >> going by the fundamentals you have a valuation that expects very significant improvement in the fundamentals. where do you think the stock could go? >> i think 20% returns or a doubling in the stock over the next 2 1/2 years or so. you start to see some acceleration on advertising here that could be faster. it is a great return for investors. >> on a big evening for facebook and clearly a buiusy evening he. will newly investors be the big losers. find out why this one safe investment may not be as risk free as you think. >> as the market breaks down

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tonight we learn that netflix only generated 1.1 million new subscribers in its third quarter. that means it is not going to hit the 7 million target it has for the year and the stock getting absolutely thumped off. karen, would you short from here? >> we are long quick spreads so the weeklies expire on friday. i think for a lot of the year it was about subs and now they are going to probably try to move you away from focusing on the subs. focus on international subgrowth. that wasn't terrible. the red ink is pretty significant and we will see it for a long time. i would not step into netflix. >> these guys have a massive credibility issue. it goes up and down and short interest is mounting here. this is a company that might be not be a stand alone. it may be a tab on a stronger company like amazon or something like this. as online doesn't take hold and

the bricks and mortar stuff doesn't work it is obsolete. >> really remember blockbuster? >> yes. very well. we are two weeks away from the presidential election. obama and romney touched on the tax plans and the tax exempt status of bonds. joining us here is peter hayes. good evening. you do raise red flags and think the market is not pricing in the risk now. >> the market is largely ignoring what might be a negative outcome. you have to remember where we are pricing. it means the market isn't factoring any benefit to the

we think there is a good chance they will go up for certain income. if that happens that means that

tax exemption becomes more powerful. from an income perspective makes total sense. >> interesting. nice to meet you. let's do the pops and drops, movers you might have missed. we have a big pop on coach today up 7% more than 7%. >> good earnings on coach. it was a little promotional but all in all looked pretty good. >> it was a drop on tronox. >> it was taken to the trash and beaten with with this. paints, polymers, this is where the guys make the money. dupont sold them down. this is a buying opportunity. >> a drop for western digital. >> not nearly as big of a drop as it started off the day. it climbed throughout the day

and had guidance. it was a little bit cautious. when you look at earnings per share growth still in front of them i like this name. i think it is a great opportunity at these levels. >> and the pop for yahoo up over 5%. >> talk about a bright spot in what is a technology driven tech bracket. this is more about a turn around in a special situation. investors are buying into the short term results. >> one of the big stories of the week caterpillar a drop again today. >> after disappointing earnings on monday today we are seeing sales forecast for 2013 that are somewhere

three days. they are selling assets. not good enough. >> will the pops and drops never

end? they drop. >> here is a stock trading near 52 week highs just last week. they missed this quarter and guided down for the balance of the year. some of the multinationals with heavy exposure. >> whirlpool was a pop today. up 8%. >> if you are looking for a reason to be bullish in the market. how about whirlpool? they raise the guidance. this name continues to perform and down south of the border in south america strong numbers coming from there where you saw the tax and the currency. >> a pop for the options desk. united parcels services. >> in general i thought they were pretty mediocre at best. i think people are hanging their hat on the asian export number and that is why a lot of people might have been short. see the stock pop a little bit. i think this stock is a little

bit expensive. >> and a pop for the cool kids. a new study from the national bureau for economic research has answered the question of who owns more after school, nerds or popular cool kids. it was a unique measure of friend count to determine popularity. good news. according to the study popular kids end up making about 10% more than their friend challenged peers. >> who wants to speak up about nerds? >> never. >> cool kids? >> i was definitely a nerd. i know it is hard to believe. next on fast wall street gets rocked by a steep selloff. is buying on the pullback the smartest move you can make? we are talking to the streets biggest bull. and the mini ipad is out and the reviews is coming in to "fast

money." find out if the tablet translates into a big win for share holders.

welcome back to "fast money" live from the nasdaq market

site. let's get another update on what is happening on facebook's earnings. has zuckerburg been on it himself? >> absolutely. he kicked off the calls. he continues to weigh in. he is answering a question right now. they have addressed a range of topics. one area that is not doing as well as that mobile growth that we discussed is payments. facebook's payment revenue is down 9%. that comes from zynga contributing 20% less than it did a year ago. that is a significant decline making it a smaller piece of the revenue. there is other really positive news about advertising. the cost per ad has increased 7% across the board. in u.s. and canada the price per ad increased 20%. in europe the price per ad decreased. it is interesting to look at the ad decreases. average revenue per user is up

4% around the world. i'm going to continue listening in. back to you. >> a big pop, of course. >> did you hear that? >> i always like that. >> let's get back to the market. the dow down 243 if you have just joined us. is this the start of a deeper selloff. take a listen to what market timer had to say on yesterday's edition of "fast money." >> we cannot turn positive on the market. the overall trend of the market is definitely down. we are going to see a very long extended decline. we made the highs for the year. >> we have made the highs for the year. that is what the man said on this show last night. let's contrast that with a bullish taste. barry is a market strategist and one of the biggest bulls on the

street with a 1600 target. >> if it falls in line then things could rally. >> how would you explain the way what is happening at the moment? how do you analyze today's selloff? >> i don't explain it away in the sense that ever since the first debate as your earlier speaker said, romney's rise has been associated with a deflation strong currency, anticentral bank movement. if you think about japan which faced a similar balance sheet recession that is exactly the wrong prescription. so this market is probably reacting to that somewhat. >> how do you explain 60% of the s&p missing when the bar was low? you have the finance ministry saying the worst is not over. you have europe that was very

quiet during a period when people were facing economic reality. that pushed us down to may and june. how can you argue 1,600 when you are getting earnings that will probably have all analysts begin to recast their estimates? >> we talked about the equity risk premium. the market has had a great deal of worry and doubt about the level of earnings. the earnings were visions which started to lessen in terms of negative effect. as earnings revisions hit resistance in early october the market did, as well. what we need is to go out with a little more confidence. that is going to occur in the political sphere. big, big movements coming on right now. we have to decide on greece, spain, as well. and then, of course, china and the u.s. will select new leaders.

we should go out with a rally. >> you talk about the areas that push us higher. one is materials and the other is financial. is there anything specific you can point to in the financials? you are talking about money center banks or regional banks. can you be more specific on which ones? >> banks with the clearing of the housing market should do well with loan growth just in time because net interest margins have compressed. as far as materials go we look for copper and iron ore because china has to do stimulus programs to continue fixed investment gdp to make room for restructuring in 2013 and beyond. and the euro requires them to get their financial house in order and some of the capital flight to come back. >> 138. most people watching i hope you are right with the call for 1,600 for the year.

barry banister joining us there. the selloff of the corporate level on monster beverage deepened. it has lost basically a quarter of its market capitalization in two days on reports of a possible connection between the energy drink and a handful of deaths. big bets being made today. >> this seemed more of like we saw somebody trading the march 55 call spread risk reversal. sounds convoluted. selling the strike puts to buy the 42.5/55 call spread. basically the deal here is they will be long at 42.5 if the stock rallies through the strike or long at 35 if it falls further. you can see the increased options premiums help set up a risk/reward relationship. they are willing to draw a line in the sand because this goes

out to march. >> interesting. >> it reminds me of dating myself. remember the juice maker that had issues and never recovered. >> i think you can throw this on with green mountain, netflix and some of the stories that were high valuation the last year or two that broke. that person selling those 35 puts you better have a lot of conviction or be ready to own it. >> remember when mikey from the life commercials died because he had pop rocks and drank a six pack of cokes. next on fast apple about to shake up the tablet market again with its ipad mini and keep share holders smiling. find out what is behind this curtain on the other side of the break. [ male announcer ] the markets keep moving. make sure the news keeps coming

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the price action on the release of the ipad mini there was disappointment on price and maybe an indication that they might not reach numbers on overall ipad sales. incredible moves today in apple. back to you. >> i guess one of the reasons the market looks so poor by the close was the fact that apple came down to the lows. apple not unveiling one new tablet today but two. the ipad mini was joined by the fourth generation ipad. will the new devices be a big hit with consumers around the world? he is executive director at c net. five devices in all that they launched today. the ipad mini is the one that people will be focused on. $329 with the 16 gigabytes. is it a killer. >> i think people were disappointed it wasn't $299. it is more of a thought at $329

and goes to $429. apple has almost turned over its whole store now. there is a ton of new products. it will be interesting to see how consumers respond to choices. >> when i read the book on steve jobs one of the things i took away was when jobs came back and saw the skews he almost had a heart attack and killed all these products. all of a sudden we have a new 4 inch ipod at $300. we have an 8 inch ipad at $329. we have the ipad 2 at $400. isn't this a really crowded mobile tablety space for apple? does this risk this massive cannibalization of all of the products? >> i wouldn't say massive but it was a little weird that they left the ipad 2 out there at $399. i think apple is trying to cover all the bases.

i feel a little burned because i bought the ipad 3 and i'm not going to run out and get the ipad 4 right away. i might get the ipad mini but there is a lot of competition with the smaller tablets. >> if you looked at apple as a business and what they did today would you say apple still has it? it is at the edge of innovation and investors can continue to deliver what they have in the past? >> there are people with the bigger ipad that will buy the ipad mini. the big loser here is microsoft. everyone forgets they came out with a surface tablet and it is forgotten. >> the big launch is on thursday. we have the launch to go. give them credit for that. >> and windows 8, as well. >> were expectations so high for the surface? it didn't seem like people were thinking it would be -- >> it isn't even a windows 8 product and you can't upgrade

it. >> this is going to be the category. isn't this the new growth category around the world? >> that is the point around the

okay for final trades. >> if you long dish, consider selling the november 38th calls. >> i did. bob peck i did. i think the add revenues go higher on mobile, i like facebook. >> i like short exposure. >> erj. defense.