over 200 points, and it was, right, down at 248 at the low, and then closed higher, was back on october 4th, 2011. it's always feasible. an hour in the markets to go. we could still close higher if we continue the comeback. >> thanks for watching, everybody. >> "closing bell" is next. hi, everybody. we enter the final stretch. welcome to "closing bell." i'm maria bart rome mae at the new york stock exchange where we're seeing another wild day of trading. a major comeback, bill. >> the dow was down 248 points -- 248 points -- at the low of the day. maybe within the last half hour, we were down just 25 points. big, big comeback. the same thing for the bond market, which we'll get into as well. is it possible, although we're starting to move lower again, that we could finish positive for this day? what do you think? >> 71 points -- >> that would be asking a lot. >> it's a lot to go up. this market feels like there are

buyers who want it to go up. it's aggressive to go positive. >> we have a lot of fed speaking this week, fed members. ironically, the thing that turned the market around was the biggest hawk on the fed, richard fisher, when he said, "yes, there needs to be a tapering, but not right away." he don't want to go from wild turkey to cold turkey, he said. >> right. and he's usually the one who says, this is way too much money. >> exactly. >> let's look at where we stand as we approach the final hour. the dow is down 72 points, as you can see there. that's about half of 1%. as you can see, we are just shy of the highs of the day, where bill just showed you, down just 25 points a minute ago, 15 minutes or so. the nasdaq looks like this. double-digit decline here, too. again, similar chart pattern. showing the market very close to the lows of the day, and the highs of the day. down just 20 point, after erasing much of the earlier sell-off. the s&p looks like this, down

just about 10 points. how much more selling is in store? josh lipton, what are you hearing from the traders on the floor? >> reporter: hey there, maria, listen, in the red here but well off our session lows. the dow, as you mentioned, had been down 248, now down about 62. the s&p had been down 32, now you're down about 10. we woke up this morning, you had really twin concerns of fed tapering, chinese liquidity, but you did see the bounce this afternoon. traders pitting that on the bond market, a comeback of sorts. and a lot of fed speak today, dudley saying there's not enough stimulus. one saying stimulus, at least until the unemployment falls below 7%. fisher saying we'll be in slow-growth mode for a while. if you dig under the hood of the s&p 500 now, you'll see more defensive tone -- materials and financials are lower. staples and utilities are higher. and finally, we want to end on the commodity stocks. obviously, some concern about chai dmees stocks.

-- chinese stocks. commodity stocks like ach lower in today's trade. back to you. >> thank you so much. we want to break it down now in the "closing bell exchange," michael from the inflation rotation fund, jonathan from meridian equity corners, lincoln from strategic financial group, and our own rick santelli. good to see you. thank you for joining us. jonathan, you're in the middle of the trading. what does it look like down here in terms of order flow? you think we could go positive with the dow down 5 5 points now? >> like you said before, i think it's aggressive. if the market closed now, everybody would be happy with the performance we've seen today. we're in the last week of the quarter here. i think investors are waiting to see how this week will play out and still confused with all of the volatility that we continue to see in this market. we've been waiting for something to spark this market, give investors the reason to come back into this market. clearly, the information that we got out of the fed today, the

comments will help our markets. all of a sudden, main street is watching the 10-year. everyone has been talking about this. it's something that equity players from main street have never really focused on before. so now we see this volatility in the 10-year, it's giving the reason for equity players to come back in the market on the buy side now. as far as the week's concerned, we normally see the activity toward the end of the week. some of it is probably being played into the markets now. >> let's talk about the 10 year. michael, you'd be buying these hand over fists now, wouldn't you? >> yeah, look, i think there's a couple of things going on. you had a massive overreaction to the fed, and i think it's become very clear that rising yields, when it's this sharp, are a deflationary shot. that, in turn, means yields probably fall once again. everyone's declaring the end of the bond bull -- excuse me, the deflation bull is not over. emerging markets are weak. i think the fed was testing the market's patience, trying to see if they could taper. instead, the market said, if you're going to taper, we're

going to take a guillotine to your neck. >> it's interesting you say that, it was an overreaction to the federal reserve. what do we know now? that the fed is considering buying fewer bonds perhaps as early as september. and a huge market reaction, is the huge correction over at the end of the day? >> i think the correction in bonds is probably very much over, especially as we hear the fed speeches coming out this week to counter what bernanke said last week. the stock market is still more vulnerable than fixed income, at least at these levels. >> lincoln ellis, i know you wanted to short this market, even with today's comeback, is that still the case? >> well, look, i think this all seems cyclically normal. both jonathan and michael are right on a number of accounts. investors in the u.s. have been interested in being in this market. those who have not participated are looking for levels like this to come in. two, the deflationary pressures very much evident in the inflation numbers really suggests that bonds aren't going to go anywhere anytime soon. in fact, michael may be right,

this is a potential buying opportunity. but at the end of the day, the emerging economies and the commodities have really been telling you that dick fisher is right. you're looking at a slower and lower growth outlook, not just for the emerging economies or for china, but for the world in general. and that means a repricing of risk, and, therefore, a repricing of equities, and that's what's happening in the u.s., the only place that intraday today remain positive for the year. so very interesting markets. but, you know, it's a place where investors can start to look across the asset classes and begin to wade back in. >> it's really interesting. i'm glad you brought up emerging markets, because the emerging markets have seen so much in terms of outflows. i mean, when was the last time you saw what was going on in brazil happening in brazil? >> huge decline. >> the protesters, it feels like something serious has changed there. i'm wondering if the economic story to invest in the markets has also changed, lincoln? >> well, certainly the sort of

headline risks that become much more prominent. not just in brazil, but turkey, the arab spring, even in places in southeast asia. so, yes, investors have been much more tepid in terms of their enthusiasm for the emerging market story. if you look where the organic growth will come, out of the economies, it will come out of the emerging economies. not out of the developed markets. the developed markets have too much debt overhang. they have too much problems in terms of the employment. the organic growth is coming from the emerging market, so keep an eye out there. it could be a good place to be invested. >> rick, what do you make of the comeback of the 10 year today, and the 30 year, for that matter? >> well, if i look at a two-day chart, as you run through the charts, you'll see the intraday, today, a low yield right around 2.50. if you take the low yield on friday at 2.37 and high intraday yield today at 2.65, the average is right around 2.50, 2.51.

so if i was a technical trader looking at momentum, as easy as it is to say it's all over, the fact that we held there and rates went back up, i'd be a little concerned. use 2.50 at your pivot. a lot of unintended consequences. everybody wants to point to the fed for everything going on. i think you can only keep a basketball under water so long. rates pop. now, will they be able to talk it back? probably, just because the momentum runs out. and one unintended consequence, you can point to the agencies as well, big talk on this floor, and their customers, that the dodd-frank is one of the reasons it's been such a sell-off, because many of these big institutions are remiss from getting involved in the bond market for that very reason. >> michael? >> yeah, and i've heard very similar things as far as that goes. it's this butterfly effect, rick. i think that's probably why bonds, the classic fear trade, will go back to their historical relationship against stocks. it's driven by the yields falling once again.

>> what about rick's point, you could maybe see yields going higher from here? you feel like the correction may be over? >> yeah, i think anything is possible, but if they keep rising higher with inflation not really reacting, that's bullish for bonds. this is a tremendous opportunity with hindsight, given there's no way the fed request possibly back away. their paranoia is in place. >> so bonds versus stocks, how do you allocate capital? >> now, in our strategies, we're fully in treasuries. i think that's from a relative momentum perspective a better long trade for stocks, either long or short, given the risks to emerging economies that are obviously getting into the headlines. >> jonathan, how much are you guys watching the bond market? is that calling the shots now for equities? >> it is. it's something we focus on all the time. not always direct correlation to how we trade and what we're trading, but it seems now that watching the bond market and watching the equity market simultaneously, and watching the correlation, has become a big play in how we're trading our stocks. >> by the way, i don't know if they have the chart in the booth

ready, but have crystal call this thing up. she was showing me earlier a correlation between the dow and the vix. you can do today or for the last month, or whatever it is. go ahead. the volatility traders -- look at this. this is today. when the dow was down 248 points, the vix was at 21. and it's come all the way back. we're down just 57 points right now. mirror image today. mirror image. thank you, guys. >> thanks, everybody. >> see you later. heading toward the close, 50 minutes left. what a crazy day we've got going here so far. the dow was down 248. we're down 57 points. what do you think? >> well, listen, i think this market wants to bounce. i don't know that it goes positive by the close. part of this is because of what's going on in china. >> yes, it is. >> more pain in china. more pain in the u.s. markets. what companies are most at risk to this global downturn, and how you should play it. that's next. also, buckle up. this is the last week of the quarter. many traders think we're in for

a wild ride, not just today, but the rest of the week. we'll talk to traders at the major exchanges about what to expect from this market this week. that and much more coming up on the most important hour of the trading day, that would be right now, on the "closing bell." ♪

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welcome back. the dow is down 65 points. we're over here now. the dow is down at the low of the day, down 6% from the all-time high hit in may 22nd. of course, fears of a possible credit squeeze not only here but in china have been weighing on the market today. our chief international correspondent michelle is here with the very latest on china. >> yes. and it is a real credit squeeze happening in china. the u.s. market sold off today early in the morning, largely because of what happened in shanghai overnight. and take a look at the shanghai market. it got punished, declined by more than 5%. you can see it's been falling steadily for the last couple of weeks. huge decline. why? because there were reports in the chinese newspapers -- remember most of them are controlled by the government -- the tighter monetary policy in china was here to stay. that being said, we did see some loosening in the credit

situation over there. let's bring up the bank offer rate. if you don't know what that means, don't worry about it. it means what one bank has to pay if it borrows money from another bank. you look to the right, the big spike, those were nose-bleed levels late last week, where we saw a huge squeeze going on in the chinese banking system. and it led to near panic. if we saw this kind of rate happening in the united states, we would think the apocalypse had arrived. take a look, though. it has since declined. the chinese authorities stepped in some way. what is important to note, though, is the level is still elevated. when you look to the left of the chart, it is still very high. why are they doing this? they are doing this on purpose, to shake out what they call the shadow banking system. a nongovernment-controlled bank, so they interviewed a chinese trader. take a look at this. before all of this started, you could borrow money in the interbank market, between 2%,

3%, lend it through the shadow banking market, the shaky, subprime products, pawnshops, et cetera, and make 1.5% easily, if you were willing to do something risky. now that the chinese central bank has tightened the money, how much will you make? 0.4%. that's on purpose. this is exactly what the chinese central bank would like to see, because they want to put an end to this. don straussheim has long been a guest on cnbc for many years, called the top and the bottom of the shanghai market on many times, based on the commentary, is this a lehman moment? he said, no, this is not september 2008. this is not a chinese financial crisis. beijing, and referring to the central bank, can provide liquidity at any time. this is the central bank trying to reset expectations in china. money just won't be as cheap anymore. this is important. the monetary policy in china has

changed and changed dramatically. >> wow. >> we don't know how it will play out. the intentions are good, but the unintended consequences are unknown. this could end badly. it could end well. >> sounds familiar, right? >> keep in mind, they started this before bernanke. they started this three weeks ago. it's come to light now, and we've all noticed it because of bernanke. >> michelle, stay right there. we want to talk about china in a moment. let's get breaking news on the irs. over to you. >> hi, maria. the irs has finished its own internal report in the wake of the political targeting scandal. and out in the past minute is this new report in which they say they'll implement a variety of changes at the irs in response to the scandal to make sure it doesn't happen again. one interesting finding, though, is they say they've eliminated the bolo list, or be on the lookout list. if you remember, those were the lists that got the irs in trouble by targeting specific conservative-sounding group names. they say that they've eliminated

those entirely. what's more, in a conference call with reporters earlier this afternoon, they said that they found more in additional inappropriate bolo list terms as they were searching through how this process had been used inside the irs. they say they're going to turn over those terms to capitol hill. they said they're going to release them publicly at some point shortly. they would not give those of us reporters on the conference call earlier today any indication of what those inappropriate terms may have been. but they said there were other bolo, be on the lookout terms, that the irs was using that it should not have been using. they say they'll release that information at some point. that's the jist of that report. >> all right. we'll be on the lookout for that report. >> that's right. be on the lookout for be on the lookout. back to china. a number of u.s. corporations have major exposure. what to do now? >> let's talk about it with harry clark, chairman and ceo of clark capital management with

$3 billion under management, and michelle is still with us here. robert luna, what do you do? what do you make of what's going on in china as they try to rein in some of the inefficiencies within their debt market right now and the impact that'll have on their economy? >> you know, i think it's pretty simple, bill. what's going on in china right now is the same thing that's going on in our own market, and michelle kind of hinted to the fact that people are worried right now that this could be a possible lehman moment. what's happening right now in markets is foreign central banks, our own fed right now, is taking that putaway from the market. the same thing they let happen with lehman brothers in 2008. when that put was taken away and they were allowed to fail. so if people are concerned with right now, it's not necessarily the fact that goldman came out and said that gdp would go to 7.8% next year and, you know, that's not the fact. because if it was, you would see that market rallying right now. it's trading at nine times forward earnings. china is down 25% since january

this year. it's not a valuation call. it's a liquidity call, and that's what the market is trying to price in right now. >> harry, you have gotten out of china. when you did do that and how did you do it? what's your big concern here? >> the big concern is their manufacturing was pulling back for several months, maria. they're now in contracted territory on the manufacturing indexes. we saw that earlier in the year. we got out of there in february, march, the markets started to go south. as i said, the market's down 20%, 25%, bear market territory. it's too early to go in there and pick. you know, people keep asking me, harry, what about the big companies you like, like caterpillar, one of my favorites. caterpillar has only 3% of its revenues out of china. almost nothing. there are some companies that have 60%. wynn resorts, las vegas sands, the gambling, 60% of the revenues come from that gambling area. yum brand, pizza hut, kentucky fried chicken, 37% from china.

i don't think they'll suffer, but some of the semiconductor and technology companies are going to suffer. qualcomm, broadcom, corning glass, they have 40%, 50% of the revenues out of china. they're going to suffer. they haven't suffered yet. i believe they'll be good buys down the road. >> michelle, is it interesting that, you know, as we're watching china deal with this issue, you're watching now greece suffering mightily. you're watching brazil going through much of the same kind of situation right now. >> yeah, absolutely. and i think all of these come together, and you have to wonder where on earth is it safe to put your money at this point, right? which some people argue is what makes the u.s. the -- i think it's not a case of inequality rising. inequality has gone down every single year for the last 14 years in brazil. >> just not fast enough. >> just not fast enough. i think it's more the fact that

you get really frustrated trying to drive around brazil. do you know brazil has the third largest roads system in the entire world but only 12% are paved? their railroad system has actually gotten 30% smaller since 1930, even though their economy has grown tremendously, the population has grown tremendously, and the population's expectations have grown tremendously. >> and now people are upset they spend so much money on the world cup operations -- >> exactly. how about paving some roads? >> on the healthcare for the people. >> right. >> it's turned into a social unrest story. >> which must be startling to the president, because she is a socialist who came to power on, you know, a socialist platform, and they're going against her. >> robert, we're talking about turmoil, not just in china, not just brazil, greece. when does this become a buying opportunity? >> you know what, i think, bill, the unique thing is everyone has been talking about this pullback of 5%, 10%. but when it actually happens, nobody wants to step in. i think selectively right now is

a buying opportunity. harry mentioned the name that we like quite a bit right here, which is caterpillar. like he mentioned, they don't have that much revenue coming right now from china. and when you just look at the alternatives out there, are you going to jump into a 10-year notoriety now that's paying 2.6%, when you can buy caterpillar that's giving you a 3% yield? this is a company that's maintained that dividend, even in the face of the crisis we experienced in 2008 and 2009. not only that, but they've been growing that dividend at almost 9% compounded rate. so there are selective opportunities right now that if you've been sitting on the sidelines, this is your opportunity to get in. i think short-term, we could test the 200-day moving average. about 4%, 5%. but if you're a long-term investors, this is the time to step up and high buy high-quality names. >> all right. thank you, folks. >> u.s. is the place to be, guys. >> all right. u.s. the first place to be. >> point well taken, harry. thanks, michelle. heading toward the close, about 35 minutes left. the dow kind of losing ground

here a little bit, down 80 points. but again, we were down 248 at the low of the day. >> and the fear over the fed and china, is the summer sell-off about to heat up? we'll look next. also, during this day, apple fell below $400 for the first time since april. the word is apple employees are looking to jump ship because of the stock price plunge. but when we come back, we'll hear from somebody who says now may be the perfect time to buy this beaten-down stock. we'll talk about that when we come back. [ male announcer ] my client gloria

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welcome back. stocks kicking off the last week of the second quarter sharply in the red. 9 the major indices on pace for the worst june in years. it's way off the worst levels of the afternoon, which called for a decline of 250 points. apple shares falling below $400, meantime, for the% time in two months. seema on apple watch today. >> just when the street was starting to think that all of the negativity surrounding apple and its pipeline, as well as its capital allocation program, that all that had been priced into the stock, the shares broke $400.

a key support level in today's trade. the stock getting hit by two different factors. jeffries analyst missic who hasn't been bullish on the stock, cut the price target to $405 and global equities research writing that the recent drop in apple shares is causing serious employee retention problems at apple. and out of all of the stocks, apple has the largest weighting on the nasdaq 100. over the past week, the shares have lost about 6%. i will point out, though, as apple trades lower, bill, blackberry shares are spiking. >> oh, yes, well, some people are getting those new q-10s. that's a helpful thing there. thank you, seema, very much. let's get to one of the favorite topics on talking numbers. is now the time to take a bite out of apple shares? on the technical side, it's carter, chief market technician off oppenheimer, and on the fundamental side, steve, a cnbc contributor. carter, what do you think? is this a buy opportunity yet? >> we think so.

>> is it? >> yeah. let's look at the chart. we have a long-term chart here. what's important is there was a point in time when apple was a darling. if you look from the '09 low to the highs of 2012, it traded in a well-defined channel, and a ninefold increase. we overshot the channel and now a symmetrical undershoot. and just as it was euphoric at the top, it's despondent at the bottom. you wouldn't expect anything but employee dissatisfaction, and that's a time to be doing something, not following the crowd. we like it here. the stock is also on this give-back, exactly 50% down -- or 50% retracement of that move from the '09 low to the 2012 high. >> all right. steve? >> carter, i completely agree with you, and i think here, fundamentally, at $400, apple is every bit as delicious as mom's apple pie. i think when you get a company with this kind of rock-solid financials, at only nine times forward earnings, and when you get the design and engineering

talent of cupertino, which is still extreme, you have to be a buyer of the stock. i would mention one further point that's important. it's completely noncorrelated. if you look at apple over the last year or so, it does not at all track the s&p. that's a very attractive asset of this stock, a great diversification tool for your portfolio to own apple. >> it used to, though -- i mean, there was a time when apple became a market bellwether. it was a leader in this market. why do you like it if it's not, now, steve? >> but, bill, i'm saying, that, to me, is what's interesting. i hated the stock at 700. >> right. >> when you couldn't find a bear out there. this shows wall street's thinking is all wrong. everybody loves apple at 700. everyone hates it at 400. >> yeah. >> that's backwards thinking. i'm saying that once apple lost leadership, it also lost correlations. it does not trade just like the market. it trades very independently. apple is in its own world most days. and i'm saying that is actually

an asset for fund managers and even individuals to get a stock that's not necessarily just going to go up and down with the market, that there's actual outlie in apple. >> got it. very good. thank you, guys. appreciate your thoughts. for more on apple, log onto talkingnumbers.cnbc.com, for an exclusive interview. and the market under pressure as we approach the final 30 minutes. the dow down, well off the lows, but still showing a double-digit decline. the nasdaq also under pressure. >> and they're in danger of closing out the second quarter in the red. when we come back, a trio of top traders tell us how they are investing as we head into the second half of this year. will, we'll talk with one money manager cutting his investment in china. where in the world is he putting money to work? we'll look at that later on on "closing bell." stay with us. tdd# 1-800-345-2550 [ trader ] when i'm trading, i'm totally focused.

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here we go. the final week of the second quarter. will it be as wild the rest of the week as today has been?

we've called in the experts. jonathan from parody energy, john brady from rjo brian and albert, and the oil went from lower to higher. bond yields from higher to lower. stocks from lower to not as bad. you know, ben, what is going on today here? >> volatility cuts both ways, and you're seeing the move back up off the lows. you had the mr. fisher, dudley making comments today. so you had the hawks turning to doves. interestingly enough, mr. fisher used farrell hogs as the reference. we know bulls and bears make money, hogs get slaughtered. today, the bears got slaughtered with the hogs. i think the whole week -- i should say, tomorrow as well, you'll probably get a calming of the storm on wednesday and thursday, and a real pickup of volatility on friday for the last day of the quarter, as you get a rebalancing in the russell and window dressing. but tomorrow is technically the

last day of the month for most portfolios. >> yeah, it's a good point, because that russell is going to create huge volume in the final hour of trading. we know that. and i guess there's positioning ahead of the end of the quarter. jonathan, how do you want to position yourself knowing the estimates call for the earnings to grow, even though you have the sequester, how do you position for quarter end? >> i think we're going to probably push higher still with crude oil. we're going to get back up to probably 96, maybe not by the end of this week. most likely into next week. it will be a short week next week. so i don't think a lot of people want to go in not being long, with all of the crisis stuff going on in the middle east now spreading into lebanon. and we have all of the flooding going on in canada that's really affecting the pipe liens as well. >> so you think 93 was a support level for wti? >> we got down into the mid-90s, probably around 92.30, about the 200-day moving average. we didn't really get there. that's probably going to be the most support. right now, we're looking at

95 -- the 50-day moving average and 100-day, around $94 as the next level of support for the rest of this week. >> john brady, what are you expecting this week? >> bill, i think things will quiet down between now and the end of the month. fed officials, i think 16 speaking over the next trading sessions. >> lucky us. >> they'll make the choice to corral the market volatility. i think in the short term, investors might take advantage of higher than otherwise yields in the five and seven-year sector. the treasury sector has been annihilated. keep in mind inflation is lower. yields are heading higher, and that tends to spell greater volatility in the months to come. >> ben, navigate the rest of the afternoon and the russell rebalance. what are you expecting with the rest of the activity this week? a buyer or a seller? >> short as a trader and long-term investor, i'm selectively adding to the stocks i think have been thrown out with the bath water, so to speak. so goldman put out a great list today about stocks to be buying

for their dividend and the fact they've been coming under pressure. i would be looking particularly in the energy sector, the high-dividend paying on the service side of the equation, or the pipeline companies. some of the utilities follow in that same sector. overall, i still think the market has some work to do on the onside. this has been some pretty significant momentum. so as a market maker, i would still play from the short side. as a long-term investor, i would be adding selectively. >> john brady, back to the fed speak. no question, this is the most transparent fed we've ever had. i mean, we get everybody talking at the same time. >> that's true. >> at the same time, are we too confused about what they're saying right now? >> oh, i think that's definitely part of the picture here, bill. you know what's happened in the bond market is the bond market has gone beyond pricing and tapering. two-year notes are starting to price in fed tightening. so markets are forward-looking here. the fed may have underestimated -- by the treasury market. likewise, too, you have something unique here. it appears that fed chairman

bernanke is a lame duck. you may see them being more independent than otherwise, like st. louis president last friday, lending itself to even more volatility. >> oh, boy. >> that's right. >> it will be like an fmoc meeting out in the open. >> some of the guys were already independence speakers. >> absolutely, they were. fisher is -- >> yeah, and also an unprecedented situation now in the fed. we've never seen so much quantitative easing and monetary stimulus. so i think they have to be transparent to a certain point. >> oh, absolutely -- >> but they're doing it all in a very tricky time, with inflation heading lower and real yields heading higher, and a rather delicate housing recovery taking place. the fed officials have really got to try to thread the needle. the committee's got its work cut out to it. >> you're e you're adding volat the equation.

today, you know, it couldn't be more dovish. it appears they might be running for the chairmanship spot against yellen. >> that's a good point. >> thanks, everybody. appreciate it. >> thank you. >> heading to the close, about 20 minutes left. down 56 points. at the low, down 248. then we were down 25. so we've come off the high there. >> we had gained in the second quarter, but this market is in danger of giving up the second quarter gains. up next, we'll break down the stocks leading the sell-off, and the ones weathering the best. >> and rising interest rates are not only impacting wall street, but they've impacted your home and auto purchase, the credit card bills, and a whole lot more. we'll explain why later on the "closing bell." vietnam in 1972. [ all ] fort benning, georgia in 1999. [ male announcer ] usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection and because usaa's commitment to serve military members,

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welcome back. red arrows piercing wall street with the major indiess on pace for the worst month of june since 2010. >> mary thompson breaks down those stocks that have been leading this recent sell-off. mary? >> hey there, bill. since sitting at an all-time high on may 22nd, it's down. the leaders include coal company and a big homebuilder. the storage company down 31%.

like a lot of other firms, it's about to become a reit as a way to avoid paying corporate taxes, but the irs wants to look at the firms before they do so. so that's kept pressure on iron mountain. and peabody energy and cliff natural resources, down 31% and 27% respectively. of course, they've been underperforming the broader market, hurt by demand, especially in coal use. as well as poor pricing. and the federal reserve is looking to cut back on the bond-buying program. this kept interest rates low. well, after benefitting the low-rate environment, investors are betting that homebuilders will be hurt when interest and mortgage rates start to rise. you can see d.r. horton is one of those trading to the downside as well, since the all-time high. there are a few more -- or i should say there are more than a few firms weather this market pullback fairly well, including micron technology, amidstrong demand for its memory champions

and after posting its first quarterly profit in two years. back to you. >> all right. breaking news we want to get to on microsoft and oracle. and to jon fortt we go with that story. over to, jon. >> yeah, maria, as we had been expecting, microsoft and oracle announcing a big partnership for the cloud. it's relevant a little bit sooner than i and some others had expected. first, let me lay out what this is. effective now, oracle customers will be able to run oracle software both on windows server hyper-v, the virtualized server, as well as the cloud service, which can also be set up privately. this is important from a license perspective, because, look, of course, microsoft, in terms of it p operating systems, biggest name out there. in the cloud, they were not playing nice together. steve ballmer is on this call, so is sat ya, and so is mark

heard, a co-president at oracle, leading the charge on hardware and also on sales. they're talking about how customers forced this together. really, this is the story of two enterprise enemies at this point, now coming together to prevent being disrupted by this cloud trend we've seen through so many companies -- salesforce, et cetera -- out there. that's the concern on microsoft's side. of course, salesforce runs oracle database. so two big powers coming together. they used to be at each other threats, but the cloud creates strange bedfellows, maria. >> that's interesting, jon. about 14 minutes before the closing bell sounds for the day. we are worsening again. when we come back, deutsche bank says do not fear the taper. why he says it will be a good thing for stocks in the long run. and last week, house speaker john boehner told me what he thinks is behind the market sell-off. >> the sell-off is in large part

due to the policies that we've had coming out of the federal reserve. >> so does how majority leader eric cantor agree with the fed being behind this market slump? we'll find out in an exclusive interview with the republican leader later on "closing bell." join me next hour. to make their money do more. (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies." otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel,

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ten minutes before the closing bell. >> yes, the market is off the lows. we got word that there is some stock for sell, not a major number, but it is weighing on the market. >> about 200 million to the sell side. with us is aaron gibbs and joe lavornia from deutsche bank. the market freaking out about the taper talk last week, having a taper tantrum, if you will. you're not worried? >> the rates are starting such a low level, it's natural for the yields to back up, not even normal levels. these are still low levels. and my guess is we have further room to run. >> erin, in terms of the fundamental backdrop, the earnings going into the next quarter, what's your expectation? >> we're still looking for about 6%, 7% growth. we're still looking for new record highs, but we expect the same type of thing, missing on

the top line, meeting the bottom line. >> 6% in growth? >> 6% in earnings for the year. we're still -- it's been hovering around -- it's been between 6% for the whole year for 2013 for eps growth, and it's the same story over and over, missing on the top line but beating the estimates. >> will fundamentals mean more than they have than in the last few earning cycles here? >> no, i think right now what we're talking about is interest rates. that's really what's moving the market. how much you can afford, what your disposable income is. >> as the rates rise, are there sectors you're expecting to do better than others? >> yes. >> even though i recognize your point these are still extraordinarily low levels -- >> i would say home building, which sounds crazy, because you think, how could it do well with the rates higher? >> and they've gotten crushed. >> but again, the rates have further room to run. as the yield curve steepens, the banks will lend. it's not until the rates become

extraordinarily restrictive, which is probably 5.5%, 6%, that you'll see it weaken. some tech, semiconductors, for example, all of those should do well in a rising rate environment, as long as rates don't go extraordinarily high. that doesn't happen until the fed raises interest rates. >> what rate does start to eat into the stock market here, do you think? we hit 2.66 and the market was down 248 points today. >> bill, my guess is it has to be over 5%. >> okay. >> and our firm view is that there's still plenty of room for multiple expansion. so this is still -- still some time to go. >> is it wanted for this market nervousness on the heels of what we learned from the fed, you think? >> i think, you know, when you look at the language in all of the reports, the language is exactly the same. it's just the market reaction has been different. so i think there's been a healthy debate with the fed in the past five months, and i really do feel it's been a bit overblown. it's been a subpar recovery. we really don't have the

fundamentals for tapering to start this year. >> and for that reason, you guys have been really emphasizing the defensive stocks, especially those dividend payers? you still like them? >> yeah, we still like the dividends, and i like the homebuilders and the reits, because they are high dividend payers, for different reasons but the same industry. you can get great income and they've beaten up like crazy, they're actually good valuations now. >> with the negativity around the emerging markets, the u.s. or some of the beaten-down groups? >> no, u.s. >> avoid brazil? avoid china? >> i think the emerging markets have weaker growth prospects relative to what trend has been, for example, in china. the u.s., i hate to say it because of the theme, but a bad house in good neighborhood. >> all right. good to see you both. thank you so much. coming back with the closing countdown, what has been a crazy day and could be the beginning of a crazy week. >> and after the bell, we'll lay out the three things that will

signal a turnaround for this market sell-off. stay with us. it's monday.

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♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ welcome back. 3 1/2 minutes. we started without you. >> yeah, we did. >> let me show you what kind of turnaround day we had, though. the charts really tell the story. here we go. the dow down 248 points on the low today, then a huge comeback, much of it attributable to the

fed speak with richard fisher using terms like -- he doesn't want to see the tapering begin too soon. he wants it to be a long-term paid. so with a hawk talking dovishly, the market came back. a decline of just 25 point, and now heading lower, down 118. a big turnaround, though. same thing for the 10-year yield. got up to 2.66% at the peak this morning, then collapsed. we were down to, what, 2.53, i think. now we've come back to 2.56 here. a big turn it around there. finally, on oil, the oil prices were up here, up to, what, $97. this is a much longer chart here. how about an intraday, guys? we can show them what we had. we got up to $98 and came back. at any rate, it's close enough for us. peter costa, what's going on here? >> yeah, tell us from the standpoint from you what the

heck happened today. >> when you look at the market, when it gets to certain levels, it becomes shaky. when you have any kind of news like we had this morning coming out of china, the market reacts very, very swiftly to it. it's a lot easier to sell than it is to buy. the markets move much faster on the downside than they do on the upside. i think that's what happened this morning. i think getting positive or semipositive comments from the fed kind of helped it. but, you know what it is, we have a very, very -- this was not the most popular rally we'd ever had. so i think the reaction is when there's anything negative, it's an overreaction. >> well, when we got down just 25 points, i mean, it was a clear, you know, people wanted to be in this market, to take it down -- up -- from down 248 to up 25. that's conviction. is this a knee-jerk trader's market? >> it's a knee-jerk trader's market. and one thing i'm seeing, which is unusual for a monday, we have good volume. >> yeah. >> and after friday -- you can't

look at friday, it was a separate instance. >> that was expiration day. you expect a lot of volume. >> this is fairly good volume today. i think that's a positive sign. even though we're down 125 po t points, we did rally on strength and volume. >> it doesn't bother you the volume is on a down day? >> no, absolutely not. if you have concurrent down days with large volume, you have to take another look. we've rallied 100-some-odd points -- actually, rallied almost 200 points and the table is being taken off the table now. >> i'm going to get ready for the next hour. eric cantor the next hour. >> looking forward to that. can we see the end of the volatility? it's the last week of the quarter? >> to be honest, i was not expecting volatility like this week. i thought we had gotten our fix of it last week and the week before. yeah, you know what? with fed commentary coming out, i absolutely do think that we're going to see more volatility. >> which is, for us, a great, because it's a trader's environment. >> that's what traders love.

thanks, peter. we're going out with the market heading lower once again, well off the lows of the session. we were down 248 points. here we go. down about 140 on the close of trade. stay tuned. a very important hour of -- the second hour of "closing bell" coming up with house majority leader eric cantor, back with maria bartiromo. i'll see you tomorrow. and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to "closing bell." i'm maria bartiromo. another wild one on wall street. the dow at its worst plunged 248 points before significantly paring the losses. looking at how we're settling out, the best point of the day, if you are a bull, was when the market was down just 25 points. and look where we're closing out today on this monday afternoon. a decline of 140 point, almost 1% lower for the dow. the volume picked up, as you just heard. y