>> thank you so much. we will see you later. that will do it for closing bell. things really accelerated. have a great night. >> earnings kick off and following all the big moves. no deal, day 8. so what's the fallout for business as usual outside of the capital. joins us with the real cost of the shut down show down. and smart balance for your portfolio.

so the question we asked tonight, is the sell-off that everyone says you should buy or are the markets too complacent? >> today was the first day that i really felt fear in the marketplace. this morning i sold s&p futures short. i am still short those and will remain so until 1620. to do after the end of the debt ceiling, november 1, that type of thing. the question is whether or not they are going to be paid.

they yielded 35 basis points today. so what the market is say iing that's what really got the fear going in the market. >> are you more concerned today versus yesterday based on the t-bill note reaching the high est since 2008. >> we're going to look back and say that was an inflection point and also equity investors coming out of stuff that has worked really well and coming out very hard. two days in a row. we will talk about him in a little bit. that, to me, just speaks to the appetite of risk taking right now. and it doesn't exist. so if you're owning stocks right now, i think you had better befrom paired for the next week or so. >> and we saw the flight to safety.

but across the board when you look at financials, they sold off some of the canaries in the coal mine, if you will. to me, we talked about ibm the last three or . >> i think it now sets us up. we can talk about why that level is important. 1670 becomes resistance. the real tell will be when the headline comes out that whatever grand bargain -- >> what is the magnitude and how

long does it last? i think the magnitude is probably 20 to 25 s&p points. >> watching the president speak and then the very brief. i keep waiting for the grown up to come in and, you know, just be the mediator and come up with a solution and then i repped they are allegedly the grown ups. that is actually somewhat disconcerting. the irony is that obviously as the market sells off, that sense of urgency for both sides has to be ratcheted up. that is a good thing. i have been -- i want to add to things that i don't feel are particularly market sensitive. so something like something like

a hertz. i think business travel could maybe be curtailed. you couldn't ignore the fact that the vix is just shy of the june 20th high of the year. >> obviously we are starting to see some activity in the options market that expresses a great deal more concern than we had all of last week. those growth names where there was a lot of complacency and people were trying to pursue that into the end of the year and catch beta going into year's end and now they are giving up hope. they have started to do that. however, i don't really feel that much more concerned today than i did yesterday or last

friday. dysfunction persists. but i do understand why people would start insuring their portfolios more aggressively. >> we're talking about names anywhere from tesla to linked in that were once can't lose trades for a long time. >> we know how this ends. i don't know when it's going to end. >> truly a netflix linked in and pandora all declining in today's session. >> i think a lot of the stocks

are going to come back up. or possibly retest them. but the point i'm trying to make and i only make one explanation and netflix is not a garbage stock. they make no sense. so, you know, we have to see the cycle play out. but i do not think you go in and buy these things. i'm going to make one other point. this is one of the driving factors of the rallies into the spring and summer. they have come down a lot. they have destroyed the shorts here. >> theoretically if you believe that the s&p is going to go down you believe that momentum names

will get sketchy. >> the other name that i was talking about is linked in. now if you get a bounce in linked in, i would use that as my stop and reshort it again. i think that gets hurt. not a garbage company. but i think it gets hurt in this environment. >> the interesting thing today is that now it's below the day that they issued all the equity. so now made that round trip. we did see linked in stock rise. you need to defie expectations and now it's back. >> 240 was our line in the sand. and you saw it sell off today on what it was for linked in. pretty heavy volume day. 240 then becomes resistance. not that i like -- i'm not a round number person but 200 was a level that gets interesting. and i think you may be able to ahead of earnings, which is october 29. and your resistance becomes 240.

>> let's go off the charts with the big sell off today. >> i don't think that it's anything that we should be surprised about. the market's breath has been deteriorating for months. they peaked in may. as the market continues to make higher highs, less and less stocks are participating. every time we're on the show this is actually a chart of the s&p 500. the first thing that stands out is the shaded area up here. this is the day that the fomc came out with their announcement.

do monster fail braeak outs stat with a failed rally. this is the breath that i was telling you about. we are seeing lower high, lower highs, lower highs. you could throw the bioteches in there as well. the bioteches and internet stocks were essentially the last men standing. i think that speaks to the point of that chart where there is just less and less good, right? here is linked in. this is just one example. you guys talked about a few of them. this is the shaded area right here. when you see a consolidation in a big move and you see these consolidations and it is taking a break, that is genuinely healthy and you expect it to break out to the upside.

what we saw in linked in, the exact opposite. it broke down. it's been deteriorating the entire year so i can't say that i'm surprised. >> in terms of the s&p, 1620 with 1625 you mentioned, where does this whole bull rally, where is the level where things get really dicey? >> that is all. i think that the big level that we really want to watch on a more secular basis is really the june lows, the 1560ish area. that level better hold.

>> yum brands, take a look at it dropping after missing third quarter earnings. . recently left the dough beating on the top of the bottom lines. after this break, former dell cfo donald carty ways in on why he is looking to the railroads right now. plus in keeping with the sell-off. clients are always learning more

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>> amazon and google all very big drags. >> look at the past couple of days. amazon has lost something to the tune of 5%. this slide began yesterday. >> and it's been pretty rapid. today was the first day that i thought there was significant increase in volume. then it gets interesting, obviously, as long as the market continues to look interesting. >> let's move on to the stalemate in the nation's capital.

always great to see you. >> great to be with you. >> you serve on a lot of boards. the name is in the news and that is talisman energy. has the board entertained icahn's session? >> it is no secret that the board has been highly focused on creating shareholder value. obviously the board and management team will be glad to hear about it. this is is a company that is doing its best to figure out how to maximize shareholder values.

>> our last board meeting was last week. we are aware that our shareholders are interested in us examining strategic options. >> all right. so basically carl should give you a call? >> i have known carl for a lot of years. i have a great deal of respect for carl's intellect. we would be delighted to hear his ideas. >> how is this impacting you and some of your colleagues? the business world? >> i think generally, we see this as the current politics of washington. i don't think there is is a huge amount of alarm that this won't eventually get settled.

i think most business conversations i'm involved with today are conversations where it is assumed that this will get resolved. >> if that's the case. >> we haven't seen a recovery that has been anywhere close to prior recoveries. >> recovery has been very slow and steady. i think that while almost every industry would like to see the economy moving more quickly than it is, i think there has been some satisfaction that it has moved along in a positive direction. and i think most of us have the expectation that it will continue to do so. >> the airlines, i want you to

speak about specific names but you obviously have great insight. >> you have had a an awful long time for the industry to restructure it. all the time since deregulation, almost 40 years ago. and it has been an ongoing prosays but i think there is a general feeling within the industry that the structure of the industry with oil prices having been relatively flat, i think the airlines do look forward to a better profitability than they have

seen in many, many years. >> you just brought up oil prices which leads me into the rails. to get some of the oil out. how does that impact. >> i think there is so much going on in the energy sector in north america today with all of these plays. and so much new oil being found in new places that it is almost impossible for the pipeline business to keep up with the infrastructure build up. it's not just moving oil.

today we have got a booming business that is moving out of wisconsin around all of north america. >> let's get a quick trade out of this. you mentioned the rails and benefitting from moving the oil. >> i think it's a negative. >> talk abouts can city. that would be one that i would stay away from. >> it popped up its head a few times and failed miserably each time. so to the point, i think you can wait on this one. it's a name that i have liked a

number of times. it's at a stock that has had trouble. wait for the earnings to release. >> time now for pops and drops. big movers of the day. karen? >> i think it was actually news that carl or his colleagues, i think it is maybe some disappointment that he wasn't going to do something more than that. >> drop here for trip advisor. >> i think the price line sucked everything down. i think this is is a no touch. i think you have got to wait on all of these names. they are no one day events. i think you have got to be on the sideline. >> drop for masco. >> downgrade from key bank. obviously tied to the home builders. >> got a pop here for u.s. natural gas. ung up 2%.

>> nat gas up almost 4%. >> what is the temperature that you put socks on? >> the first day that you see snow in the air. >> that's a long ways away. >> a drop here for ibm of about 2%. >> massive under performer. you know, to me, a huge level.

>> including a blue stripe and 3d bells. but the new benjamins come at a top dollar price. they are 40% more expensive. do we have a spending problem right now. >> you and i we go to the table that we like to play together. slap those things down. >> i don't gamble. >> it is a billion dollar market. a small cap stock at a time when money is flowing into the market. and you know, it is an intriguing company. >> we will take you straight to the source.

the chairman and ceo joining us live for an exclusive interview. could they be the greece of the u.s.? ♪

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or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial. >> melissa, if you want to talk about one socks. take a look at some of the more well known businesses. election down 5%.

interview down 9%. you get picture. these biotech stocks have been hot performers. they were up about 60% year to date going into today. biotech for a few years. >> probably since that last worst day ever. i just want to be there for continued consolidation. >> let's move on here. the gluten free craze has generated hundreds of millions of dollars and one company is betting that it's not just a fad. smart brands recently refocused their products to compliment gluten free diets. >> when they go to bolder brands they want a gluten free brand.

>> and then smart balance, our spreads business is about 40% of the mix. >> you have been really aggressively expanding when it comes to international markets. can you comment as to where you are seeing the most growth here in the u.s. at this point? is it safe way and the targets of the world? >> the gluten free trend really was -- has been born really in the natural foods channel. but it's beginning to cross over.

so i think that over the next three to five years you will see gluten free really work its way into all the channels where, you know, where really there are wheat based products today where people need an al turntive. >> you have some of the products here on set. this is a red flag that our colleague had brought up in a piece that he did for the street.com. he points out that sales growth have actually been down in the second quarter, 36%. that is down from 62%. we are seeing such rapid expansion, why are sales down? >> his math and numbers are wrong. he was transposing the two brands numbers. the growth has been very consistent and robust. it has been about 50%. the shipment numbers are moving pretty much in step with

consumption although we do tend to have new distribution hits. >> so we are really the only strategic player of scale that is really devoted against that consumer.

>> we recently bought a small brand which is starting the diabetic. >> i think we can do that best as an independent company.

>> it is a high short interest. it makes you wonder does somebody come knocking on. >> as a risk reward wise, it's not a bad place to get it. >> does the massive debt load make it resemble crisis stricken greece? and how hard will the woes hit bond funds next? 24/7. i'm sorry, i'm just really reluctant to try new things. really? what's wrong with trying new things? look! mommy's new vacuum! (cat screech) you feel that in your muscles? i do... drink water. it's a long story. well, not having branches let's us give you great rates and service.

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>> welcome back to. let's take a check on yum brands here. the company lowering full year guidance. china results lower than expected. >> this is a tough stock. the stock just moves around like crazy. that places it flat on the year. i think you have got to wait and let this thing shake out here. to me i think they have a mild

disability to forecast their business in china where they get 50% of their revenue. so i don't really love this one here. >> you read what the company suz. they are also going to engage in aggressive marketing techniques in order to reengage the pup lick and trust. >> they did regain some trust. you took the hard landing of china off the table. >> isn't this a specific to jum brands problem with their chicken? they did have a chicken issue. it's coming back or this is is a wider economy wide. i wouldn't go out shorting china

tomorrowment. >> increasingly worried. could it be the grooe of the united states? >> hey there guys. good to see the governor of peurto rico is in meetings today. there is a lot of it and it has been getting punished as you can see. why? they have got a lot of debt considering its size. 720 billion dollars in tradeable paper.

right now they have been closed to the capital marks. do you have exposure? high lie likely. peurt rico gives you triple exemption. they pay you interest and you don't pay tax. the fund with the most exposure. if you own this one you shouldn't be surprised. specifically because of the triple exemption. they are also going to have a lot of exposure but if you have not been reading you are in trouble.

they have been telling you how much exposure they have. >> 2039 is when you have k have a 30 year bond. would you buy snit. >> all right. thank you for that. for more on what this could mean for fund managers. >> the larger the percentage that funds hold. the more those funds are going to decline in net asset value. what is very interest something that you have a number of different issuers.

they have a lien on sale tax revenues. those are the ones trading at 8%. basically people are saying what is the discount that i'm willing to pay. >> i have been saying it for well over a year. >> here we are. explain to me and all the viewers. periodically it is voted on state hood. it does not pay federal taxes. it is an entity that could conceivably get a federal bailout, but bear in mind that

no state has gotten federal bail outs. obviously put a crimp in that. there has been talk of creating something like a financial control bird. but you still have to deal with the fact that you have the structural deficit and high unemployment and you have taxes that need to be raised. you have spending that needs to be cut. some of which has already been done. but you got a lot of things that still need to come into place here. >> last question and that is are distressed investors now starting to nstart ing to sniff around? >> they are sniffing around. when you're at the gym and the people know you're in the municipal bond business you know they are looking at it very carefully. >> some gym you go to.

>> linked in, facebook and yelp all got crushed today. some traders are making big bets that the pain is about to get worse. we will tell you how much when we come right back. i love having a free checked bag

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>> we saw a lot of activity. linked in about three times its average daily. faeg are face book has one other thing going for it. you zeroed in on linked in. >> this is is a stock that a lot of people have been wondering when exactly the pain was going to start.

we saw people making bets that pain might continue. those are making bearish bets that linked in is going to fall. given the valuation, it seems to me that dan was highlighting this at the beginning of the show. there is a lot of fly right there. so possibly that buyer was really protecting himself from just an overflow of just supply coming outd.

>> mel, actually made that point. >> about the equity offering. >> appendix list. maybe he listens not as well. check it our website. >> tonight's executive edge is next. ♪ [ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are

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>> the president sits on high and says i will not negotiate and everybody is supposed to lay down. i don't understand that. >> the government shut down continues so there is no real

international trade data but we won't leave you hanging because steve will give us his number. he is so much like the government now that he is not ready. >> i can't believe that you're late. >> it was a nightmare. >> having such a conversation talks, negotiations, shouldn't require hanging the threats of a government shut down or economic chaos over the heads of the american people. >> we can't raise the debt ceiling without something

something to raise more money. >> did you catch the backdrop that boehner had in the first snip it? hash tag, let's talk. >> it's changed. they are doing an awful lot of talking. get off the tv and get in the same room and just chat. >> that's a twitter thing. how this hash tag has taken over. i know he. >> now that we discussed what happened, let's look ahead to the minutes from the september fomc meeting due out tomorrow.

>> watch the bond market. we get them and it is suggested that there is in fighting in the fed. that's the place i would go to short if you start to see some weakness. >> next up, costco getting earnings up before the bell. >> much like yum. walmart, target, they both report into august. costco has been a massive out performer. the stock has sold off here.

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>> final trade time. >> i think it's time to substitute calls. mckesson is one of today's winners. >> long october calls. >> vlo. >> karen? >> yes, i'm going to sell some

out of the money puts against some puts that are at the money. >> these defensive type names, proctor and gamble had a nice game. see that? arm and hammer. >> all right. >> hammer. >> i'm melissa lee, thanks for watching. stay tuned, "mad money's" up right now. the "lightning round" is sponsored by td ameritrade. coming up -- looking for a way to play what's next in tech? cramer's got his eyes locked on the company powering google glass. it's already displayed a stunning performance. quadrupling this year alone. but, could technical signals point to more. call me at 1-800-743-cnbc. how did this market come unglued so quickly? what happened today? before we panic, let's get a little perspective about the session, dow sank 160