to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. you know, today is starting to feel like the super bowl last night. from the get-go it was ugly if you are a bull. it was ugly for the broncos. here we go again. the bulls are in trouble. the dow, the s&p and the nasdaq moving down to very significant levels of daily moving averages and the rest. we will tell you all about that and discuss whether this is a correction or the start of something bigger, maybe something even more frightening. the darling of asia, just a few months ago, is now in correction

territory, off its high down 9.6% so far this year, one month ago. the russian market is in the correction zone, too. brazil, turkey and the topics not far behind. if the u.s. market continues to fall, what kind of impact will we see potentially on housing in this country? we are starting to get some answers today. and snow, well, it is a big problem today in much of the country. i think roger goodell has a direct line to mother nature, because the snow started here within six hours of the end of that game. another storm is going to hit major population centers on wednesday and then forecasters believe a third storm all in one week is also on the way. the airlines are really starting to feel some pain. snow has really grounded the industry in many ways. will the airlines raise ticket prices to pass along the pain to passengers like you and me? we start, though, with the markets and sue is here snuggly.

>> i am. it is a mess outside in the snow and it sure is a mess inside, if you're long this market. we're watching the ten-year note. see that 2.61%. the market is challenging the 260 mark. if we break below the 260 mark, that is extremely negative for the dow jones industrial average and that is what everybody is watching right now. seema mody, the index is down on a percentage basis quite significantly today. the dow is not faring well either. we will start out with bob biseasb pisani. how does it feel down there? >> feels like they are trying to make a bottom but it's tentative. take a look at the s&p 500. we started out and almost immediately moved south. when 10:00 happened, we had the ism services number, market took another leg down. we were expecting about 56, disappointing at 51. the market is not in a forgiving mood. don't want to hear about whether the weather is bad or whatever the problem is, immediately sold as the s&p 500 came out. tell you something very unusual.

put up how the major sectors are doing. look at the small cap, midcap and s&p 500. the midcap is down almost twice as much as the s&p 500 and small cap, too, that is a rather unusual spread there. a lot of people are suspecting that a lot of big etf traders have been selling the etfs around these. the volume has been very heavy. let me give you an example. airline stocks, delta, everybody loves the airlines. business is exploding. yet look, they're down, delta is down 3% today. it was up over 100% last year but this industry is doing really well right now. this is not selloff on fundamentals. this is selloff because we got to sell something right now. same thing with mexico. we all know emerging markets are in trouble. everybody loves mexico, close to the u.s., growing consumer culture, positive balance of payments. everybody was buying this teat e end of last year and selling eem. it's down today. mexico is down 10%, the etf for this is down 10% this year along with all the other ones.

in other words, they are not discriminating between the good countries and bad countries. they are basically selling just about everything in the emerging markets. >> they certainly are. technically, we have seen some deterioration on a technical basis in the dow jones industrial average and also in the nasdaq which on a percentage basis is faring the worst today of the major indices. let's check in with seema over at the nasdaq. >> we are now at session lows, the nasdaq down almost 2% on the day. rebalancing, investors taking in profits from 2013. that's what i'm hearing as a catalyst behind today's drop in prices. plus, in terms of economic data, hasn't been that strong over the past month when you're looking at data from here in the u.s. as well as markets like in china. in fact, since that disappointing pmi report from china came out, the nasdaq has slid more than 4%. on the technical side, the nasdaq and nasdaq 100 are trading below their 50 day moving averages but well above their 200 day moving averages so those are the two levels that market technicians are watching.

stocks that are weighing on the composite, biotech and semiconductors lower on the day but leave it up to apple to buck the downward trend of the market. apple right now topping the nasdaq 100. this of course coming in after losing 8% last week due to disappointing earnings. sue? >> thank you. we will get back to you in just a little bit. to sheila dharmarajan for a market flash. >> check out shares of whirlpool, continuing freefall from its high mark in january. it fell nearly 7% last week after its q-4 earnings report came in a little light. it's down a whopping 20% over the past two weeks. the long term investors can't complain too much. that stock is up over 85% the previous two years. tyler? >> thanks very much. the nfl clearly not happy about that blowout in the game last night at the meadowlands but they are thrilled they missed today's weather in new york city. it is nasty out there. windy, snowy, icy, not good.

both rush hours are going to be a mess here. that snow started probably as i said six hours after the lombardi trophy was hoisted at the meadowlands. the airlines have had 4,000 delays today and 1500 cancellations. if you're trying to get home to seattle or denver, wherever, you're having a hard time today. see who is going to pay the price for all these cancellations. our man on the airlines, phil lebeau is on the case. >> you know who's going to pay the price. >> i do indeed. >> ask the people who are in new york or philly today. i want to bring in josh martz, who is in charge of moss flight, an aviation consulting company which has been tracking the cancellations and delays we have seen in the industry over the last month. josh, give us some perspective, exactly how bad the month of january was for the airline industry when it comes to cancellations and delays. >> well, i think it's safe to say it can't get any worse. january was an all-time low point, so to speak, for the

airline business when it comes to cancellations. primarily due to factors outside of their control. it's just hard to overstate the impact that the sequential weather events had in january and the cost that put on airline cost structures. >> yet when you look at the cancellations, the majority of them are with regional airlines, the regional carriers, the small regional jets that are feeding the hubs. why are they affected more than your mainline point-to-point large city flights? >> the best way to think about it is the following. when you have bad weather, there are a certain number of runway slots and air space sequencing that's available for a given aircraft. the airlines try to prioritize the aircraft that have the most number of people on board. that's why you see the smaller airplanes that are operated by regional carriers canceled first, so that the 200 or 300 passenger airplanes can take priority in the system. >> a lot of people flying from small cities have been out of luck for the last month. i'm curious, how much are the new pilot rules and those that

went into effect on january 1st, the supply of pilots out there, tight supply of pilots, how much is that impacting what we have seen from the airlines causing some of these cancellations? >> it's having a big impact. you see it particularly during the periods of stress due to weather. to put it simply, the new regulations limited the amount of time pilots could be on duty, whether they were flying or not. what that means is that when you have extensive flight delays, particularly towards the end of a given day, the airlines simply have crews that are no longer eligible to fly. that leads to a lot of cancellations. this will get better over time as airlines hire additional pilots and introduce new technology to manage it, but there is definitely going to be an adjustment period. >> big question, josh. are we going to see higher ticket prices because of all of these delays and the loss the airlines have incurred? >> i think you will over the coming years because airline staffing will have to go up. these regulations will force airlines to hire additional pilots so they can operate flights. ultimately, you will see that

come down to ticket prices that we pay. >> josh, joining us from washington, d.c. today. bottom line, it was a terrible month and terrible start to the month of february. let's hope it gets better from here on out. >> the latest forecasts don't look like it will get better but we'll try and focus on the positive. look at this video from arkansas. parts of that state got up to six inches starting yesterday. there were dozens of car accidents, as you can see. today, the east is the target and this is not the only storm that forecasters believe will hit this week. here's the weather channel's keith carson. >> take you through the rest of the afternoon here, you notice the snow quickly tapering off in new york and philly and this thing is totally out of here around 4:00 or 5:00 so it will be a relatively quick-moving storm but pretty high impact with some pretty good snowfall totals, considering the short period of time. we're looking at five to eight in the purple here so that includes new york city, down into philadelphia, just to the north of d.c. then we kind of feather it out to three to five in the darker

blue and one to three out towards the pittsburgh area. we have an active pattern, because the jet stream is dipping down and bringing these storms out of the gulf so we will see another one for tuesday and wednesday. all indications are this storm system will be spatially larger and more impactful than what we're seeing today across the midatlantic. so by tomorrow night, right back in the snow, new york all the way to boston. then as we head into wednesday, the storm system becomes more of a new england event but boston, probably the battleground for the rain/snow line. new york should change over probably to some rain, down into jersey, d.c. certainly changing over to rain but snowfall amounts in excess of over six inches. but wait, there's more. this is tuesday-wednesday. the computer models telling us there will be another storm as we head into late weekend, early next week. >> well, we will keep our fingers crossed. sheila? >> check out shares of a stock falling after a report from

streaming media which is that apple may be building its own content delivery network. the report says that apple has traditionally relied on other providers. maybe not the case anymore. check out level three. that stock is also trading lower as well. >> sheila, thank you very much. the weather is a mess, we keep saying. the market is a mess, too. dominic chu and sara eisen are standing by to help us muddle through it as we talk about correction lessons. >> well, some big name pros are weighing in on what they think are the bull and bear cases for this market. what they like and what they would do. i'll have that for you next. >> and there are a lot of similarities between the u.s. market and the japanese market in the last several weeks. does that mean we are going the way of japan? into a correction?

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nasty day for the markets. japan in correction mode. are we headed that way, too? sara eisen reporting on similarities and differences but first let's go to dominic chu on some lessons from prior corrections.

>> let's talk about the definitions of a stock market correction. they vary but the gist is straightforward. a pullback in prices from what has been an uptrend overall. some traders use a 10% discount as the mark of such an event. the dow and s&p 500 are both about halfway to that point. it's one of the bearish cases for stocks right now. so far today, the dow industrials have fallen below that 200 day moving average or its longer term trend line, if you will. that hasn't happened since december of 2012. then there are other markets around the world like japan and russia which are already in correction phases themselves. federated investment strategist linda dissel is looking at negatives like positive weakness in manufacturing and of course, durable goods orders as well. however, these market dips have happened in the past and investors who have bought on that weakness have been rewarded, going all the way back to the depths of the crisis in 2009. having a shopping list ready may be prudent and some experts like

bank of america see opportunity in pullbacks like this. >> i do see this as a great buying opportunity for some of the higher quality names in the s&p 500 that have sold off on emerging markets exposure or sold off just because they have a whiff of exposure to some of these regions that are flashing dangerous signals. >> the last big correction we had was in 2011 and if you're looking for where the positive action is this time around, year-to-date, take a look at the airline stocks. gas utility companies and biotech companies are actually up in a down market. remember, that last big correction did lead to the record highs that we saw earlier this year. >> thank you very much. before we bring in sara eisen, look at this comparison chart. the spy ticker symbol is the etf that tracks the s&p 500. ewj, that's not an airport code, it tracks japanese stocks. you see a fairly close mirror image until the last few days.

is that a sign of the u.s. market maybe falling farther faster? sara? >> the answer to your question is not necessarily. technically speaking, correction means stocks pull back 10% from the peak and yes, we saw it overnight in japan. the market there technically entering correction territory, down 10% from the last trading day of december when it hit its highest level in more than six years. traders there citing china and emerging market slowdown, disappointing earnings for the weakness in stocks there. sound familiar? take a look at this. the chart, strong correlation between u.s. and japanese markets lately. but i did talk to a number of equity strategists and pros and the short answer is a correction there does not necessarily mean that a correction here comes next. for one, the nikkei, the japanese market, surged 57% in 2013. that was its biggest year since 1972. so clearly it got a lot of people locking in their gains

and japan has had a much more tremendous move over the past 18 months. another key difference, japan is in the middle of a major experiment, a massive quantitative easing to fight deflation and pump up growth. the jury is still out on whether any of that is going to work. the u.s., on the other hand, is doing much better, so much so that our central bank, the fed, is in tapering mode or actually starting to scale back the quantitative easing. and worth pointing out, the u.s. economy has been a bright spot in the global economy. fourth quarter gdp last week showed 3.2% growth. the consumer at least is alive and doing all right. oppenheimer's chief equity strategist says economic growth in this country, earnings in this country so far counter a good part of the drag you're seeing coming from emerging markets, sluggishness in europe. it doesn't mean we're not in for more pain and perhaps even as much as a 5% to 10% move here as the world adjusts to a tough global environment and a world of tapering.

clearly you are seeing the fear play out today. but as bianco research says, it's not that japan is a leading indicator for u.s. stocks. it's just correcting a little bit harder. sue? >> thank you very much. the market's about to basically close in on some key technical levels. that's another big part of today's story. we will talk about that in two minutes. i have the flu, i took medicine but i still have symptoms. [ sneeze ] [ male announcer ] truth is not all flu products treat all your symptoms. what? [ male announcer ] alka-seltzer plus severe cold and flu speeds relief to these eight symptoms. [ breath of relief ] thanks. [ male announcer ] you're welcome. ready? go.

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welcome back to "power lunch." i'm sheila dharmarajan with a market flash. josa. banks board has rejected a proposal. they are in touch to buy eddie bauer, owned by golden gate capital. it looks like these two companies are not suited for each other. >> i would agree on that one. thank you. a fresh month and more declines for the markets both here and abroad in correction territory as we mentioned is japan's nikkei, closing at a fresh two and a half month low today, down about 10% since its six-year high on december 30th. plus the dow jones industrials currently less than 4% from

entering correction territory and challenging some key technical levels. so what should investors be watching out for right now? joining us is jim mcdonald, chief investment strategist with northern trust and hugh johnson, chief investment officer of hugh johnson advisors. welcome, gentlemen. nice to have you here. you have made the bullish care repeatedly but it seems as though that's being challenged at this point. it seems as though they are at a bit of an inflection point, if you will. >> yeah. this is pretty important. obviously we had a good year in 2013. i would argue that in 2013 we got to a level about 6% overvalued. i don't think this one's going to be over until we're about 6% undervalued and we have widespread pessimism. so it's going to take time. i think the real question, the question you're asking, is is this just going to be a correction. is it going to be a 10% correction. well, it's going to be at least that. is it going to be something worse. a bear market that's accompanied by a recession.

my answer to that question is really that it's only going to be a correction in an ongoing bull market and the reason i say that is it's very hard to make the case that the u.s. economy in 2014 or '15 is going to go into a recession. i would call this a very stiff challenging correction in an ongoing bull market but if we have further to go and further in time, i don't know if it's march or april but sometime this year, we will make the turn. >> one of the issues, though, is the fact that the emerging markets make up on a global basis a much larger percentage than they did in terms of investment dollars put into those emerging markets. what does that mean for the u.s. market and do you buy hugh's thesis that this is going to be a sharp correction but just a correction? >> well, making the case for the correction is how far the market's gone. without a correction we've gone 143 days without the market going down 5% which is what we

have now experienced today with the s&p so we have been overdue for some selling. if you look at what's going on in the emerging market front, thankfully that's happening at a time when europe is accelerating in its growth, not robustly but somewhat. the u.s. economy we think still looks relatively durable and japanese growth is holding up okay. so we do think that will mitigate some of the softness that we're clearly experiencing in the emerging market economies. >> we're at the lows of the day in the dow, the s&p, the nasdaq and the transports, and the ten-year note is on the verge of breaking the 2.6% level. the bond market, i'm just pushing back a little because the bond market seems to be indicating that maybe it is just a sharp correction but that there might be something else out there. we just broke the 2.6% level. >> yeah. you can't dismiss the possibility of something more being out there. i have looked really hard at these numbers. i have tried to answer that question, is it going to be worse, are we in for a double

dip recession, another financial crisis. my answer is no. i think the primary reason i say that is i look at all of the emerging markets and how much -- how important they are to the u.s. economy. and the answer is if you add them all up, the ones that are really having problems, argentina, brazil, to some extent turkey, india even, and maybe a little bit less than china, if you look at all that, it comes to 4.5%. yes, our economy will take some hit. yes, our exports are going to be hurt to some extent. very much as happened in 1997 and '98 but is it going to cause a recession. in my judgment when you crunch all the numbers, the answer to that question is no. so it turns out to be yes, a very stiff correction in an ongoing cycle which includes a bull market and an economic recovery. >> so jim, if you are a longer term investor, because that's what a lot of our viewers are, this could be an opportunity, if

you have a disciplined strategy for investing in the market, i would assume that in your book, reacting to the type of volatility we have seen in the last week is not the way to play this market. >> we do think reacting to the markets is a mistake. if you look at what's causing consternation now, we have some soft data in the u.s., probably somewhat influenced by weather, then if you look at what's happening on the interest rate front, you talk about the ten-year dipping below 2.6, guess what, that helps support the interest rate sensitive parts of the economy. home builders were up 8% last week as a reflection of that. there will be some benefit from the lower interest rates into the real economy. >> gentlemen, thank you very much. appreciate your perspective. ty, over to you. rick santelli is tracking the action and there is plenty of it at the cme. >> there is indeed. what might be most fascinating is you look at this ten-year, yes, we are down about five basis points. we settle at 264. as if on cue, we just dipped

below 260. what's critical here is that prior to the release of the 10:00 eastern data from ism, the treasury market was hovering around 267. so what really makes this most notable isn't that we are moving towards carry trades and affected by the nikkei because we are, as sara has been pointing out, but today, in addition, this was weak data. there are two dynamics going on here. the reason so many of the traders on this floor are focusing on 260 is because we haven't been below 260 since the last week in october. now all the comps will shift back, predicated on where the market closes. another bit of a misconception out there, don't jumble everything in the dollar index. it doesn't look so bad. look at a year-to-date of the dollar yen. looks bad. well, the dollar index is very euro-centric. understanding that may keep you from getting in trouble because the most common viewed chart on

this trading floor over the last two weeks has been the dollar yen. tyler? >> rick, thank you very much for that tip to watch the dollar yen. let's go to the nasdaq. seema mody following the big movers and most of them moving lower. >> we are down triple digits on the day. the nasdaq composite down 2.5%. the nasdaq also just broke 4,000, a key psychological level that traders watch. so a bearish scenario shaping up for the nasdaq. there seems to be a fundamental and a technical story at play here. we have weak economic data coupled with indexes breaking key support levels. many of the winners on the nasdaq 100 have now turned negative. you are seeing apple shares trade between positive and negative territory. investors continue to hit the sell button on biotech and biotech of course, one of the winning sectors in 2013. celgene one of those trading in

negative territory. internet is lagging. amazon trading lower by about 3.5%, leading this index lower after reporting weaker than expected top and bottom line numbers. lastly, facebook. facebook did hit a record high this morning but since then, the stock has turned negative following increased selling pressure. but again, nasdaq breaking 4,000, now down 2.5% on the day. >> seema, thank you very much. the money in the market is going to two places. the bond market and the metals market. let's check out where metals are right now. we have seen a 19 point gain in the gold market and silver is positive as well by 1.5%. so significant moves to the upside on the gold market. part of that is linked to the selloff on wall street. part of it is linked to that weak ism data today. silver also has a gain of 1.5% but copper, platinum and palladium are basically on the downside fractionally. let's go back to the floor of the new york stock exchange and

bob, we broke that 2.6 point on the ten-year but the transports are really getting killed today as well. >> the lowest level in awhile on the ten-year breaking 2.60. we are at the lows for the day. important thing is take a look at the s&p 500. once we broke the ism number, it came in disappointing 51, they just sold off immediately on that. it's full of references to the poor weather. one guy responded, said we experienced a lot of late deliveries during the past week due to the weather shutting down truck lines. that was a plastics guy. same thing with car and auto sales. gm, ford, toyota, all said severe weather was hurting sales. you see they are to the downside. here's what's interesting. look at the major indices. normally, you will see a relationship between the s&p midcap, small cap and russell 2,000 but we are down at one point earlier today, the midcap was twice as much down as the s&p 500. that's a little unusual. we have seen very heavy selling in the midcap etf and russell 2,000 etf. we could have 2.5 times the

normal volume in those areas. that suggests a number of professional traders are using etfs to lighten up on their positions right now. shows you how important etfs have become. >> absolutely. thank you very much. we pointed out that ten-year. the drop below the 2.6% mark on the ten-year puts it at the lowest yield since april 8th. puts it in perspective for us. rough day for the auto sector as well. january sales certainly not good. bob just highlighted those. there's a board of big guys. ford, general motors, toyota and honda. another major hack attack. it wasn't a retail store this time. this time the target was the american business traveler. we're back in two. ♪ ♪ ♪

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it's been a bad 24 hours for bulls and broncos. the dow industrials down 250 points, right around the lows of the day, 15,446. look at the s&p 500 down almost 2% to 33 points but look at nasdaq there, off more than 100 points or 100 plus, hovering right around 4,000. we were just a little bit lower

a few moments ago. major averages tumbling after a variety of economic indicators including some weak automobile sales and other such things have caused them to pull back yet again. wall street trying to shake off the first down january for the dow and s&p since 2010, but a weak reading on that manufacturing sector and construction spending also fueling concerns, as we just mentioned. what are you seeing here? is this merely a rather routine pullback vish correction or could it be something more disturbing? >> great to be on, tyler. we think the markets just needed a breather at this point. we have had almost 900 days without a 10% correction, yet at the same time, we are seeing a lot of warnings globally, the u.s. economy is doing better but we are seeing china and emerging markets slowing down. we just saw manufacturing slow down.

we are seeing the nikkei in japan not only did it struggle to stay above 16,000 but it actually dropped below 15,000. we are seeing a retail slowdown, we are seeing car sales worsen and overall, we are not seeing appealing valuations so there's no bottom in sight for this correction, yet at the same time, this might be a good time to at least buy stocks that haven't blown up as much as some of the high flyers. >> take me to that point. i notice you are cautiously long in some of the names that did not really participate, some of the commodity names, coal, iron and so forth. explain that and you're short a variety of sort of household names including, as i recall, facebook, twitter, ford motor and others. ubs among them. >> yeah. we're not short facebook and twitter, but what we're looking at is right now, if you believe in a balance in the global

economy or at least recovery in the u.s., what you want to do is look at the commodity stocks. they are the most depressed sector out there. i'm bearish on gold and if you think the global slowdown continues in china, then you don't want to necessarily be in commodity stocks but at the same time, they do offer the best valuation. so we're looking at iron, steel, coal, aluminum and especially natural gas, which we think is the best place to be over the next couple years. so those offer good valuations at least if the economy does continue up. >> let me probe some of those short positions or ones that we have you down as saying you are bearish on, including we just showed jpmorgan and ubs and we had you bearish on twitter and facebook. maybe you're not short but you don't like them. >> yes. what we're looking at is companies that are especially vulnerable if there is a continued slowdown in china or companies that are very dependent on them, something like ford, we are already seeing slowdown in sales. they are trying to expand around

the world. starbucks as well, they are trying to expand around the world and are seeing a slowdown. home depot which is reliant on housing. twitter and facebook, we are avoiding them because they are such high flyers that even if they do have room to grow here, it's not necessarily the best place to be because there's not much upside to them in comparison with the other names we like. >> thank you very much for joining us today. yoni jacobs. thanks very much. now to sheila dharmarajan for a market flash. >> let's talk about the dow, because it is at session lows right now. in fact, we are currently trading at 15,432. leading the way down is verizon and at & t, after at & t announced plans to cut prices on its shared data plans by 20%. the feeling on wall street was that verizon would be forced to follow suit. general electric, disney and microsoft also rounding out the top five losers on the dow. hacking america just took a new and scary turn for anyone that uses a credit card.

eamon javers is in washington with that part of the story. >> yeah, it really is starting to feel like anybody who uses a credit card, particularly business travelers, could be at risk of a data breach. this new report out today from security researcher bryant crebbs who says a company called wright lodging is apparently experiencing a data breach. it's an interesting firm because it manages hotels under better named consumer facing brands like courtyard's, residents inn and hampton inn. we asked what happened here. we got this statement. an investigation is in process and we will provide meaningful information as soon as it becomes available. that's what they're saying now. what is being reported is this was apparently not the actual hotel reservation credit card interface that was affected here, but purchases made inside those hotels, so gift store, restaurant, that kind of thing. if you stayed at one of those operations that was controlled by white lodging, and purchased something in the restaurant, you

might be at risk here. we don't have a whole lot more information than that. we will bring it to you as soon as the company gives us more detail. >> terrific. we will watch for that. that's a story affecting millions and millions of people. eamon javers in washington, thank you. now it's basically time for a look at the transportations and before we do that, the dow has ticked down 270 points. the s&p is at its low of the day. the nasdaq is suffering a triple digit loss as well. in the countdown, we will talk transportation. if it takes to the roads or is in the skies, no doubt it's in the headlines today. phil lebeau has it covered for us. let's start with those auto sales. abysmal, some people are using that word. the weather this time, although it's used frequently as an excuse in various parts of retail, seems to really have had an effect here. >> i think it's a legitimate excuse. look, there's no way of sugar coating the fact these were ugly numbers from the auto makers, when you look at gm, ford and toyota. they were all down between 6% and 9%.

gm down 11.9%. the thing to keep in mind, these numbers were all worse than expected. significantly worse than expected. if you look at where the weakness was, it's the eastern half of the united states. because of these two storm systems that went through at the beginning and the end of the month, look, the central u.s. was down more than 10%. southeast down 1% to 5%, double digit losses in the east. the west coast, however, where we saw relatively nice weather, up at least 10%. so that's what we saw in the month of january, and in fact, when we get the steaales rate number later today, the expectation is the winter storms took such a chunk out of sales that the sales rate for the month will come in probably between 15.2 and $15.3 million, well below the estimate of $15.7 million. here's the thing to keep in mind. the auto makers are not adjusting sales expectations for february or for the first quarter and the expectation is that we should see more normalized sales in february provided we don't have too many more storms. >> well, we will see, because there are two still in the

forecast just this week, phil. meantime, a new rule was handed down. the u.s. is setting up those rules for car-to-car communication. one, what is that and two, how important is it? >> well, the significance here is that what we'll see in the future, i'm guessing probably four or five years out, they haven't set a timeline yet, you will see all new vehicles have the ability to send signals and communicate with other new vehicles on the road. the idea being that as you approach a blind intersection, you may not realize that a car is approaching but your vehicle will and then the automatic braking system will kick in. what we're seeing is the beginning of the federal government shifting from keeping us alive when we're in an accident to preventing accidents, and this is a seismic shift for the industry. it cannot be overstated how significant this is in terms of what we'll see from our new vehicles say five, six years from now. >> terrific. thank you very much. appreciate it. ty, over to you. where is all this selling coming from? well, one place is the nasdaq.

seema mody is there. >> a very interesting story popping up regarding the health of the retail investor. i'll have that for you after this break. when you order the works you want everything. an expert ford technician knows your car's health depends on a full, complete checkup. the works. because when it comes to feeling safe behind the wheel, going the distance and saving at the pump you want it all. get our multi-point inspection with a a synthetic blend oil change, tire rotation, brake inspection and more for $29.95 or less. get a complete vehicle checkup. only at your ford dealer.

but with less energy, moodiness, and a low sex drive, i had to do something. i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications.

serious side effects could include increased risk of prostate cancer, worsening prostate symptoms, decreased sperm count, ankle, feet or body swelling, enlarged or painful breasts, problems breathing while sleeping and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. ask your doctor about axiron. in today's yahoo! finance question of the day, we asked should airlines raise prices on flights to make up for their losses from those weather-related delays and cancellations last month. 8% say yes, they need to make up for that lost revenue. 21% say no, they need to take the hit as part of their business model. 71% say they should have already accounted for potential weather related losses. all right. "street signs" is up at 2:00. i know mandy will have more on the markets for us. absolutely. we are watching the selling but also lots of news coming out of

herbalife. herb greenberg just calls it plain puzzling. also, is bad news for the market as it goes through a rocky patch at the moment, good news for housing? that's our question and also, those that have changed the way we do business by maybe doing a little dirty business themselves. lots of things come up top of the hour. we are all over the markets today so do make sure you tune in. back to you on "power lunch." the markets are all over the place at this hour. with the market down so much, what are retail investors doing? seema mody is following this angle. >> you know, conventional wisdom says that retail investors tend to be the last to arrive when the market is on the upswing but proprietary data from sandler o'neill indicates that retail activity surged in the month of january, up 30%, much higher than the historical average of 15%. analyst rich repetto tells me that basically means most of the recent moves in the market involved a high level of activity from retail investors.

in fact, retail investors have had exposure to the recent volatility in the market. when you see an increase in retail investors -- retail investor activity it's typically a contrarian indicator. paul hickey noted that individual investor confidence was at the highs of the year in the last week of december and then retail investors are taking some profits from last year's 30% runup. both paul hickey and jim eurio mentioned pent-up tax related selling. whether this is a real indicator of the overall stock market is still unclear but in terms of who benefits from a jump in retail activity, analysts at sandler o'neill say think e-trading platform. some of the names include e-trade, interactive brokers, charles schwab and ameritrade. it's a rough day for the bulls, the worst in quite awhile. let's get you up to date on the markets. the dow jones industrial average up 1.75%, 273 to the negative

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welcome back to "power lunch." i'm sheila dharmarajan. crude oil tanker charter rates are expected to decline due to weakening global demand for oil and increasing opec production. take a look. tankers all down around 6%. sue? >> the losses don't stop there. we are going back to the markets and have bob pisani and kenny pulcari on the floor. kenny, what's your reaction to this? it's pretty broad-based. the russell 2,000 is that close to going into bear market territory. what do you think? >> you know, you and i have been talking about this. we have all been talking about it. the sense that the market needed to reprice based on the recent

data that's come out, the fact that the market had this big runup last year ahead of all the supposed good data and now the data is here and what's happening? some of it's mixed so there's a repricing in the marketplace. once it starts, you get some technical difficulty which then feeds on momentum sellers and you've got this kind of downward spiral we have at the moment. we broke technically through 1765, haven't been able to hold there like we did the last five or six times we tested it. now it's a new trading range. >> the market dropped when the ism number came out. i think the real problem is they're having a little trouble figuring out how much the weather is playing into this. if you read the ism report, it is full of references to poor weather from the responsibility e respondents. i think it's clear the weather had some impact in january. we don't know how much. i think people are concerned the non-farm payroll number will be weaker than expected. the markets are not giving

everybody a get out of jail free card on the weather. >> how long can we keep blaming the weather for negative economic data? at a certain point it's ridiculous. >> at a certain point, january really was crummy. come on. in chicago it was two degrees for all those days. think about that. whole swath of the country where people really just didn't go out. i want to turn to the question of tax related selling that was raised a moment or so ago. earlier this year a lot of people were saying the market's selling off because people waited to book profits until the new tax year, meaning they don't have to pay tax on those gains until 2015. but now this feels completely beyond that, right? >> yes. the thing i would point out, i have been pointing out all day, very unusual volume in the biggest etfs out there, particularly the midcap etf, small cap etf and even the spdr. volume has been very heavy in mid to small caps. that suggests to me that

professional traders are moving around positions here, lightening up on positions for sure. they don't put out a press release on it but the activity would suggest they clearly are. >> you know, let's broaden it out to the longer term investor. if you have a set discipline of investing a certain amount of money every month in this market, this could be an opportunity for you as long as you're careful about where you allocate that money to. >> that's true. if you've got the plan in place, you actually are looking for an opportunity like this, because if you're doing it consistently, as long as you stay the course, and you've got time on your side, opportunities like this are great for you. listen, put yourself in place of the long term asset manager. they also are in that same position. looking and waiting for this opportunity to be able to take all this money and put it to work at better prices in a very consistent way. there's no sense of panic down here. you should make that very clear. there's no sense of like everyone is throwing the kitchen sink out the door. they're not at all. but there is some pressure

repricing in the market based on this new economic outlook. >> what does the ten-year note say? we were talking about that just a few minutes ago. the ten-year note seems to be indicating that there's something more to this. we're trying to figure out which way the current flows. >> stock traders get very confused when currencies and interest rates come into play, but clearly, there is money coming out of the yen carry trade, clearly that's been impacting interest rates to a certain extent. money is coming back into the safe haven of the united states. i'm not sure -- i'm not sure that unwinding some of this excess liquidity that's out there is not necessarily a bad idea. >> we want to go to sheila dharmarajan for a quick market update. >> we are going to be talking about herbalife which is giving up its initial gains after estimating fourth quarter profits and sales above expectations. this is after bill ackman struck back with claims about a former top herbalife distributor raising new questions about the company's sales practices.

he charged on a new website that herbalife found new distributors through a business that had been convicted in canada ten years ago of running an illegal pyramid scheme. so the battle continues. >> a final quick word here. bob, you first. very fast. >> i think the important thing is watch what happens in the next two days. markets stabilize in emerging markets, i think we will get some break. >> ten seconds. >> technically, 1735 is the next level you have to look to for some real support. >> "street signs" after a break.

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little help here. this is cnbc breaking news now. >> stocks this year are like the denver broncos must be feeling today. they would love a do-over. hello, everybody. a bad year getting worse. the dow down 269 points. we are now down nearly 7% just this year. you've got concern over weaker economic data, a china slowdown, japan, you name it, it's out there. the only good news, mortgage rates likely to drop again as people flood back into bonds. >> a pretty rocky start to february trading after an equally rocky january which gave the dow its worst start to a new year since