this weekend. >> he tried to sell it? >> tried to sell it for scrap. >> just looking at it t does look better than a piece of junk. >> you would think. >> and $14,000 is a lot to pay for something at a flea market. it's not a true flea market find. >> thanks for watching "street signs," everybody. >> "closing bell" is next. welcome to "the closing bell" on this thursday. i'm kelly evans at the new york stock exchange. >> dayton beat ohio. i'm already out $1 billion on my back et. >> i'm so sorry. i'm just pulling for syracuse. but keep it here, people. a lot coming up. >> what are we talking about? markets bouncing back after those confusing comments from janet yellen yesterday that sent stocks reeling this time yesterday. but now some worry if the new fed chair has a communication problem. maybe she said too much. there's a debate about that going on right now.

and we'll talk about that, whether the market's weary of chair yellen. >> also, we're expecting perfection. anyway, when the bell rings in about an hour, that's when the action here might really heat up. at 4:00 p.m., a new crucial rounds of bank stress test results are due out. we'll have that vital report on which banks made the grade and which did not, if any. >> and the financials have been very strong today, as they were yesterday. >> 18% of the s&p 500. jpmorgan is up like 6% this week. so expectations, if you want to put it this way, are pretty high. we'll find out more in about an hour. plus, nike reporting earnings. keep it here for the numbers on that one and what it means for consumers. of course, tomorrow morning we'll shift our focus to tiffany. that's still some time away. >> a busy hour next hour. that'll be fun. plus, google's larry page says

if he had to give away his billions, he would rather give all that money to elon musk than any charity. now, before you judge him, wait until you hear why he said that. a lot of different views on this. i tweeted this story out earlier today. got a huge response back. lot of debate. lot of thoughts on what larry page said about that and why. we'll get to that coming up. >> that's right. >> you want me to do this? >> i do. >> all right. let's show you what the markets did. the dow up 130 points at the peak today. we're up less than 100 now. anything can happen in this most important hour of the trading day. stick around. we're up to 16,318. nasdaq's been strong, up 12-plus points or a third of a percent at 4,320. the s&p 500 up about ten points at 1870. now to our "closing bell" exchange.

kenny, why is the market up today? >> listen, we had this bounce. we bounced off of 1840. i also think after people had an opportunity to think about what happened yesterday, the commentary that janet yellen made, i think they really thought, what did she really say that was wrong? in fact, she probably said everything that needed to be said, right? that taper is coming off the table, rates are going up, you better get used to it. she was very transparent and qualified her statements. she came up with a plan. she came up with how she was going to do the plan, what he was going to look at. quite honestly, i think yesterday's reaction was all the automated, high-frequency guides that read the headlines, think it's negative, create sell orders, knock the market down. volume didn't pick up. large asset managers were comfortable. today, boom, they take it back to the highs. >> i invite everyone to go back when this is over, replay on your dvr at a slow pace.

there's a lot of good stuff in there, really. that was three minutes in one minute. >> you know, todd, what's interesting today is people are focusing perhaps a little less on the timing, whether yellen did or didn't intend to reveal something there and more on the fact that all of this is fundamentally a good sign for the economy if you believe the recovery will remain intact. >> i think that's very interesting. look at the lei today. that's a good number. we've never gone into recession when the lei is positive and the yield curve is steep. the feed is still easy here. that's a good place for u.s. equities. >> heather hughes, what's this market telling us? we've had a pretty good week after a pretty rough week last week. even with the yellen selloff yesterday. >> we can't blame the weather anymore, right? i think what kenny -- just to tag along on what kenny was saying, we've recouped most of the stock market losses from yesterday thus far. i think the fed statement yesterday didn't shock most fed watchers in the beginning. well, today. initially the market saw it as,

okay, this may be more hawkish than anticipated or expected. we saw rates rise. and we saw the market pull back. but today we're seeing rates at that same stable range. maybe seeing bond outflows as people are thinking, hey, maybe rates rise in the future, and that's why you're seeing the stock market recoup some of those losses. >> do you expect those bond outflows to pick up? how worried should people be in the fixed income space? >> i think they're certainly going to be worried. i would agree with kenny. i thought janet did a fantastic job yesterday. i think she injected some much-needed reality and shook off some of the complacency in the market and prepared us for a gently rising yield environment. that said, there are still an awful lot of institutions that have money to put to work. either in the long end of the market for pension funds or in the short end where yields are a bit higher for corporate cash. >> yeah, so when people start to look, robert, at their portfolios, the fact they've

been sitting in bonds -- and i guess here i'm talking a little bit about the retail audience as well. they've been in fixed income for the last several years. they're looking at stocks now, worried potentially about losses on the fixed income side. so what would you advise them? >> well, there are always going to be investors that need fixed income. they need the interest payments. they need the steady cash flow. and we're telling them to look at newer fixed income bond funds, not the old traditional funds that existed in the past. look more at floating rate bond funz. look more at the bank loan market, which is also floating rate. and look at a lot of these unconstrained bond funds that are out there that have the ability to manage interest rate sensitivity. >> huge growth in some of those products, bill. >> yeah. rick santelli, we've seen a snap back for stocks today. have bonds done the same thing? we had a real flattening of the yield curve yesterday post-news conference. what about today? >> well, i know that, you know, the convention of wisdom is that's a foregone conclusion rates go up. janet yellen was transparent. i'm not saying she wasn't, but

when there's nothing on the other side of the window to see, just because it's clean doesn't mean the picture is better. if i look at a 277 ten-year, not only is it unchanged from yesterday, it's actually still not going to be the highest yield close that we've had recently. we closed at a higher yield on march 7th. over a week ago. so i'm not sure i buy in. we're still 26 basis points lower for the year. lower for the year on a ten year. most of the sticking -- let me get this right. they're doing a taper, which means they're not buying as many long maturities. on the short ends, they're promising not to raise rates. what happened yesterday? transparent -- the part they're not buying anymore rallied and the part they say scouts honor we're not going to change that, sold off. to me, there's a normalization coming. it's going to be uneven. there's doses of reality that the fed's exit is still never going to be transparent until they decide actually what it is. >> listen, rick, that might be

true, that might be true, and i suspect the market may get weaker, but i don't think it's going to happen until april. we're in the last two weeks after march. it's the end of the first quarter of reporting season. markets are all-time highs. the market feels good right now. asset managers want to see dr-- >> what's going to happen in april exactly? >> april starts a new quarter. you may get a reanalysis. you may see prices come in a little bit. >> so why do we pay so much attention with this reanalysis coming to the potential the tightening may happen a couple months earlier this 2015? kenny, can you tell me what you're going to have in your refrigerator in a year and a half? >> no, but i absolutely agree with you. why was there all that excitement yesterday? i agree. >> todd, there are people out there saying if anything, what this is going to do is make yellen sort of make it all the more important to have those fed watchers, those people within the news business, for example, who have that access to fed officials to explain their

thinking because we no longer have those two obvious targets to keep an eye on. so we're frankly going to be a little more reliant on reading all of these tea leaves, are we not? >> i think that's true. i think you're going to see more volatility in the fixed income space. look at how many big asset managers are positioned in the belly of the curve. look at their navs yesterday. there's going to be a little bit of an unwind there. there's going to be volatility there. also, look at the dissent within the federal reserve. you're starting to see the hawks take a little more power. you see a change in the guidance. the fed needs credibility at this point. with this happening, you could lose a little bit of that credibility and see more volatility. >> interesting point. >> and investors may be suffering from this sort of bipolar disorder, serious lack of imagination. we're now at $55 billion coming per month. this widely held view that treasury is a consensus, that they have nowhere to run but higher. we live in this all-or-nothing world. we either distrust stocks to the point that 2.77% on a ten-year

seems appealing and allurining we're employeeing all this money into those high-flying social media high-beta stocks. very volatile names. look at the bank stocks. they seem to take this news and like it on the backs that, hey, we're not easing as much. rates may be heading higher, hence borrowing cheaper. we make higher profits as our borrowing costs rise. >> well, the financial report cards are coming on those stress tests. thank you, all. appreciate your thoughts on today's markets. see you later. head wag toward the close. we're losing ground here. the dow, as we mentioned, at the peak today was up 130 points in this snapback rally. took us back above levels before the news conference yesterday, before we heard from the fed. now we're up just 91 points on the industrial average. >> and take a look at the nasdaq. you want to know how much of this is some of those financials. it's only up 0.25% today.

was this a rookie mistake, or should investors be more concerned by this stumble? that's coming up. >> both side of that story. and there are two sides. also, will rising interest rates spell trouble for dividend paying stocks? will they be less desirable? we'll look at that sector that's been very, very big for our viewers coming up. and the fed is set to release the latest bank stress test results at 4:00 eastern. we'll get exclusive reaction from former house financial services committee chairman b r barney frank. keep it here. you're watching cnbc, first in business worldwide.

welcome back. here's a look at markets. the dow up 95 points. stocks generally rebounding a bit today. that's after yesterday's fed-fueled stumble. >> dom chu, we were doing fine, and them some time after noon eastern, it just took off. what triggered that? >> again, what you're looking at is a bold market here. financials are helping lead the way higher. if you look at individual stories, first of all, look at shares of some of the ipos.

mediwound, q2 holdings both debuting today. mediwounds produces treatments for burns and hard-to-heal wounds. q2 trades on the new york stock exchange. both surging more than 20% on trading today. now, there's also shares of apollo global, the investment management firm. it's in the red as the president is stepping down. he did start his tenure with apollo in 2010 following a 20-year career with investment banking at goldman sachs. another personnel change story. this is mcdonald's announcing the chief operating officer tim fenton will retire effective october 1st. the company has announced they're not going to replace that c.o.o. position. this is part of a global restructuring program. and lastly, hewlett-packard increased their dividend to 16 cents a share. back to you guys. >> great stuff, dom. stay there if you will. we want to talk more about stocks like hp that pay a good

dividend and what a rising interest rate might mean for investors in these names. >> joe, some companies are not for paying a higher dividend rather than putting it to work. you know, they're not -- capital spending is not going up appreciably right now. so all the money they take in they're just returning to investors. good idea, bad idea? what do you think? >> well, in the short run, you can't argue with it too much. we're well aware that we're in a slow-growth economy. in fact, it's been a slow nominal growth economy. for a business to invest in capital or to invest in labor, they've got to be somewhat assured they're going to have a decent rate of return on that investment. it's just been, you know, hard for a lot of companies to determine. so last year during 2013, we did see companies in the s&p 500 return about a 15% higher level of dividends to investors as well as share repurchases to investors, which is a solid

investor recording technique for companies. >> if i'm an investor thinking about where to put my money and i look at fixed income and i'm worried about rising rates and i look at stocks and think, you know what, maybe those investments will appreciate as the economic backdrop improves, then i can capture the dividend. is that the right way to think about the stock market here, or has sort of the whole dividend payout move kind of peaked? >> well, kelly, i think that the dividend paying stocks is just a great place to be. a couple points. one, remember the income on dividends is tax advantaged. that was made permanent on january 1st of last year. so that's a very positive thing for investors. secondarily, if we are looking at a little bit higher yield curve over the next two years at the longer end as well as at the short end of the curve, where you want to gravitate to is companies that do a great job of growing their dividend over time. two good examples would be a company like colgate or johnson

& johnson. they've grown their dividend for 51 consecutive years and both should grow their dividend in excess of 40% over the next four years. that will help offset the competition for dividend paying stocks from a higher level of fixed income yeeds. >> but overall, dom, as you know, dividend paying stocks tend not to do historically speaking -- do not do well in a rising interest rate environment, do they? >> no, the simple explanation is you're talking about competing instruments. if you can earn a similar return for an investment grade bond as you can for a stock, you sometimes go to the stock because you want the, perhaps, growth. sometimes you go towards the bond because it's safer. when that competition heats up, yes, those dividend paying stocks tend to underperform. you think utilities in that sector, telecom, communications equipment. those types of companies are the ones that don't do as well. now, where investors like to see things happen in the growth side of things, if the interest rate environment starts to rise, is

you go towards growth companies like technology, cyclical names like industrial. sometimes they pay dividends as well, which is why a lot of experts say, look at some of these big tech names like microsoft and intel. they pay dividends. they have a chance at perhaps showing some growth. that's one of the reasons why you're seeing perhaps some gravitate more towards that sector rotation rather than going towards utilities. >> joseph, i'm curious about the impact. there are a couple different ways people can return capital. it can do a traditional dividend or do a buyback. in fact, a lot of companies worry about dividends because then they feel like they're stuck. if they ever want to change or tweak it down the road, it sends a hugely negative signal to the investment community. a lot of them have been opting for buybacks. as an investor here, should i look at those dividend-paying names and the names doing big buyback programs as giving me the same kind of advantage, or should i focus on the income generation specifically? >> well, kelly, we really try to focus on dividend payers that have had long track records and are really assured of being able to grow that dividend over time because if a company is raising

their dividend, that's really a signal to investors that the board as well as the management feels very good about the prospects of the company. so we prefer to see companies raising their dividend and paying that out to investors that way as opposed to doing it through share repower churchase. you're going to find it's really your big, brand name companies that have global growth that are doing the best job now of returning that capital to us in terms of higher dividend payments. >> we can see the financials start to pick up a pace as well. thank you both so much for your thoughts. important issue. got about 40 minutes until the close now. we're holding around these levels here with the dow just a touch below the triple-digit line on the day. the s&p 500 gaining almost ten points. 1878 is the high water mark there. now -- >> the language that we use in this statement is considerable

periods, probably means something on the order of around six months or that type of thing. >> there it was. the stock market went south on that. should her statement over when the fed would raise interest rates raise a red flag for invest investors or not? both sides of that issue coming up in a moment. then we'll hear from someone who says you should tap into your home equity to buy stocks. >> oh, yeah. that's a good idea. >> yes, really. he wrote about it in a widely talked about piece earlier this week. herb greenberg read it and didn't like it. they'll go head to head on this controversial idea coming up on "the closing bell." keep it right here. ep it right . no two people have the same financial goals. pnc investments works with you to understand yours and helps plan for your retirement.

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welcome back. fed chair janet yellen sent the market tumbling yesterday. let's listen again to the moment that everyone was talking about and trading on. >> the language that we use in this statement is considerable period. so, you know, this is the kind of term it's hard to define, t but, you know, probably means something on the order of around six months or that type of thing. >> as soon as she said that, markets started to sell off. we were down hard, as they say, but we've bounced back today. the street now wary, maybe, of what and how the fed chair

communicates. let's talk about this. greg ip is u.s. economics editor at "the economist." well plugged in for a long time at the fed. he's also a cnbc contributor. jeff cox, finance editor at cnbc.com, and mark is director of financial regulation studies at the cato institute. the prevailing wisdom today, greg s that was a gaffe of some kind, she overspoke, said more than she should. you think it was deliberate. why? >> you e no, the definition of a gaffe in washington is something that's true that you didn't mean to actually say out loud. so i think that this six months is probably not a bad approximation of what with the fed things is actually going to happen. she probably didn't mean to give it the sense of precision that markets extracted from that, but the overall impression is the right one. that impression is as follows. if you thought that fed was going to start tightening in middle of 2015, the risks are greater that may move sooner than that rather than later than

that. so we need to pay special attention, not just to the data, but to every word that comes out of her mouth and her colleague's mouth to find out how they think that disinflationary slack in the economy is disappearing. >> jeff, if you think back to bernanke last year when he quite purposefully began to talk about how the fed could taper by september and the carnage that caused over the summer, the move even earlier in the year in interest its rates. point being, the move from yesterday to today in the ten year has not been all that significant. stocks are rallying here again. so in terms of market reaction, it's actually been relatively muted, if not cheering everything that's happened. >> i think you make a great point, kelly. it feels to me like taper two, when bernanke came out last may, spooked the markets. but the one thing that i think you have to watch for, too, is that shortly after bernanke made those comments, and i think it's why markets sort of normalized after that and eventually rallied, was because he and some

other fed presidents came back and basically walked back on those comments. they said, wait a minute, you guys are reading too much into this. hold the bell here, you know. so then the markets kind of calmed down. i think that probably there was a little bit of this yesterday. i'm not so sure i'm in the camp with what greg said, but i do believe you'll see now that the fed governors will come out and they'll start to say, hey, you know, wait a minute, this is going to be a slow process. it's going to be a gradual process. but i do believe as what happened with bernanke did last year, this is good for the markets to get a little jolt ahead of time to say, hey, guys, we're getting ready to move here. >> mark, you think the six-month statement was a mistake. why? >> well, i think the six-month time frame is a mistake. i think making the statement for clarity is the right thing to do. i was way off. i was thinking considerable time meant like three or four months. seems longer to me. we'll see. i think it's a very good question whether you'll see other members start backtracking this.

quite frankly, i think once we're at the point where the tapering ends, we shouldn't be more than a month or two away from raising the short-term rates. >> guys, something to remember here is this isn't the fed's first rodeo with this language of considerable period. we heard this back in 2003. late in 2003 they used a consider period language. i think it was about august. sorry, it wasn't so late. then january they came out with another statement. in august of 2004 was when they actually raised the rates. there was a ten-month gap there. you go to yellen's language yesterday, and you see a six-month gap. so that may be something that the market is thinking about as well. >> and greg, what's so interesting, you know this better than anyone. a lot of people are wondering whether it's now back to the future here where for as transparent as the fed s as many press conferences as they do, the fact they've removed one of their targets and left it as a we'll let you know when we see it kind of thing makes people like you.

>> look, i think the temptation is to think it's back to the greenspan era where we all hungn to to the mumbled gems of wisdom from the maestro's mouth and gave our own interpretation to it. that's not what's going on here. the fed dropped the unemployment rate threshold from their guidance because they were forced to, not because they wanted to. they still would like to give more precision than a greenspan fed would have wanted to. all those years that the fed was using considerable period a decade ago, they didn't put a number on that. one of the reasons we're dealing with this volatility is because janet yellen, like ben bernanke before her, didn't like to mumtabmum mumble. she wants to put numbers out there. i want to make mark feel better. six months is just the average of a range of possibilities with a very large standard deviation. . >> i'm caught up with with the body language and attitude she assumed while she was answering that question. her pause in the middle of that was -- >> it wasn't a forceful answer at all. >> -- was for a considerable

period of time. do you think she had the number in mind and debated, should i actually utter this six-month period, and then she did. did you think she really meant to come out with that, greg? you say you think it was deliberate. you know, it sure felt like it was just a spur of the moment decision that she made that she probably lives to regret now. >> i'm not saying that -- i'm not sure if she meant to put a six-month number out there, but the number out there is based on something. it's based on the conversation she an her colleagues had around the table. it's based on the bluebook and greenbook fraforecast that the staff presented to the fed. it's not a number plucked out of the air. you need to be careful about attaching too much precision to it. as i said, it's a useful warning to all of us, to the market, that there are risks now that the fed moves sooner rather than later than you thought. >> and mark, just real quick, how should we think about the communication that will come from a yellen fed? >> well, i hope that what we're

going to see is actually a little more definitiveness here. very much there's a margin of error around this six months. i think putting a number out there is helpful. so i hope this means she's not going to take the market reaction as a bad sign and she's going to continue to try to give some hard, bright lines to live by. i hope this is the first of many, not the end. >> fascinating. >> well, she finds out in a hurry that off-the-cuff remarks are set in stone immediately when you're the fed chair. thank you, all. good to see you. appreciate it. 30 minutes away from the close. continue to lose ground here. the dow was up 130 points at the peak today in this snap-back rally. now it's a gain of just 87. >>? corporate news, alibaba taking aim at facebook's whatsapp deal, opening a similar service called tango. up next, the founder will tell us about this deal and the growth potential more broadly of the space. meanwhile, dow component nike getting ready to report earnings after the bell tonight, as if we didn't have other

things to think about. we'll have instant analysis and reaction to this potentially market-moving report. stay tuned for that as well. fo.

welcome back. mobile messaging has been on fire. first, facebook bought whatsapp

for $16. now china's alibaba is taking a similar take on another company. >> morgan has details. >> i call this the thumbs race. it's internet giants putting major money into mobile messaging. tango is pulling in $280 million from alibaba and others. that's giving it a valuation of just over $1 billion. so alibaba's $215 million bet coming just weeks after another asian e-commerce company bought viber for $900 million. of course, facebook's me mega whatsapp deal. here's how tango's different. for starters, it already has ads. and it's a, quote, social messaging site. so it has networking and content sharing as well. you can chat with friends or make new ones. there's a gaming section. also, song sharing thanks to a spotify partnership.

rivals by comparison are utility apps. they're focused more purely on communications, at least for now. so now social messaging still relatively new here in the states, but it's really big in asia. that's thanks to companies like wechat and k-co. perhaps not that surprising that china's e-commerce giant is investing. and tango is growing fast. over the past year, registered users have doubled to 200 million. back to you guys. >> morgan, thanks very much. okay. joining us now in a first on cnbc interview, it's tango ceo. great to have you with us on this day. appreciate it. >> thanks for having me. >> so first of all, what can you tell us? how much does this value your company at, more than $1 billion? >> you know, we're really not focused on the exact number here. what's important is for us to, you know, be able to use this capital to continue expanding as aggressively as possible and, you know, be a global

competitor. >> how big is the texting market? what kind of pie are we talking about here? >> you know, it's actually a huge market. when you think about it, this year alone there's twice as many text messages being sent on services like tango than on the carry yers like a carriers like at&t or verizon. we're talking about billions and billions of dollars in market cap being displaced here. i think we're just scratching the surface. this is the first disruption of many to come that mobile messages services like ours can bring about. >> yeah, and you have acknowledged this is one of the most competitive spaces out there. i think you have something like 200 million registered users. that pales in comparison to some. but it depends what you mean by social media and messaging. in this space, can only one or only a few ultimately win, and how do you position yourselves to win in what's already quickly maturing?

>> i think there are going to be a range of winners in the same way there's the coexistence of several carriers today in this space. what we're really focused on is the north american market as well as western europe and the middle east. that's where we have our strongest base. i say that -- we actually have a slightly different take on the market. we think here in the u.s., what matters is not only to get free communications like as many text messages as you want or as many calls or video calls that you can place. actually, the carriers already with their unlimited plans do a little bit of that. for us, it's putting together these free communications and then a service where you can have fun through social networks or through content like games or music. you know, i think we want our members to enjoy themselves. providing the combination of these experiences really, really works. >> i was going to ask you what the draw would be. if everybody's free, for the most part, you know, what differentiates you from another free texting service, but you've

already answered that. so what is to keep this business from becoming so kmodtized if you have to start charging to some degree? or do you have to assume a business model that is not unlike a facebook or another company that just continues to grow to find new revenue streams out there? >> and advertising streams. >> exactly. can you remain just a texting service eventually? >> look, i think our big advantage is that we can offer other communications for free because our revenue comes from the games that we offer to our members or the advertisement that we show on the social networking aspect of our service. and i think that, you know, when you're engaged in a race and if you can avoid charging for more growth or more engagement the way that whatsapp does with subscriptions or skype with selling minutes, that puts you

at -- >> eric -- sorry. go ahead. >> so members who buy games end up playing these games more, sending more messages and using tango more. that's kind of a virtual loop we really like to see. that's why i'm convinced that's the right strategy in this market. >> when do you expect to be profitable? >> you know, we're working on this. i hope that, you know, in the next couple of years, you know, you'll see tango as a large and independent, sustainable company. we want to take this as far as we can. >> and why when you mention that you want your -- you're focusing on north american, the middle east, you just got a huge infusion from alibaba. are they not looking at leveraging you in the chinese space, or are they more focused on giving you the capital to be big in those markets you named? >> you know, i think both are interesting for them. we're certainly also present in asia. we've got a lot of members in thailand and singapore, taiwan and hong kong. i think tango is offered in 224 countries globally. to me, alibaba coming in is like

inheriting a crystal ball. there's been so much innovation in this space coming from asia that we can kind of peer into the future. having them at our sides is really going to help us shape the strategy moving forward. >> last question, the one that probably keeps ceos like you up nights. i have children in their early 20s. highly fickle when it comes to technology and where they get their services otherwise. you have a fickle audience. there's that intangible cool factor that comes and goes in a whim. you know, you'll be hot for a time, but what's -- then suddenly you won't. how do you avoid that? >> oh, you know, i'm not concerned about that at all. actually, tango has done extremely well at attracting audiences of all ages. with the video calling component, we connect grandparents with their grand kids, even if they live on the other side of the country. you know, that type of connection doesn't just grow uncool. i think speaking to your friends and family members is probably

one of the most crucial human needs. so i don't see that going away any time soon. >> yes, we hope that stays that way. eric setton from tango, thank you so much for joining us. >> thank you. >> on a big day for that company. about 20 minutes to go before the close now. the dow is up 90 points. the nasdaq is actually lagging a bit today, only up 8 while the s&p is adding 9. >> nike has been one of the few dow stocks in the red today. will it get some help, though, from its earnings report that is due after the bell tonight? when we come back, what investors are expecting from nike and we'll of course have those numbers for you the moment they are released. we'll have the market response and the instant analysis. that's expected around 4:15 eastern time. >> also ahead, don't miss reaction to the fed's bank stress tests from the man who helped to create those very tests. former house financial services committee chairman barney frank joins us. that's all coming up on "the closing bell" 37 keep it here. ".

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welcome back. we are just minutes away now from nike's earnings report. >> what are investors expecting from the dow component? sarah joins is us now with a quick preview. >> good to see you. well, the super bowl happened last quarter. the world cup is coming up. no question it's a big year for

nike. but why i like nike earnings, because how it does says a lot about the global economy and consumer spending power. here's what you want to watch. western europe, for one. nike's had an amazing comeback last time around. double-digit percentage growth in the home of adidas. europe is back from recession, back to spending on sports gear. nike has been certainly taking share here. china is another question mark. mark parker, the ceo, telling me a few weeks ago it is the second most important market to nike. it's been a wild card. he did say china is turning a corner, and we saw it in future orders. but investors aren't convinced how strongly it's going to come back. then the u.s., north america, the number one market, 40% of revenues for this company. we'll see how the rough weather and the tough holiday sales played out for nike. last quarter, they miss the slightly on expectations for north america. but the future orders do look solid. keep in mind this stock is up

almost 50% in the past year. it's been one of the best performers in the dow jones industrial average. so hopes are certainly high. could be a reason the stock is selling off into earnings. >> yeah, sarah, it has been somewhat weak today. thank you very much. president obama meanwhile imposing new sanctions on russia over its annexation of crimea. >> eamon javers joins us with the latest details. >> hi, kbil. well, president obama this morning said those sanctions will apply to 16 russian government officials. also, to four people that the administration is calling cronies of russian president vladimir putin and also a bank. that bank is being called by the administration today a crony bank for the russian government. the president said this is all about sending a message to vladimir putin and the russians. take a listen. >> the russian people need to know and mr. putin needs to understand that ukrainians

shouldn't have to choose between the west and russia. we want the ukrainian people to determine their own destiny and to have good relations with the united states, with russia, with europe, with anyone that they choose. >> and one of the keys to this, guys, is that the treasury is now authorized by the president to impose sanctions on specific sectors of the russian economy. that could include mining or metals or other things. they haven't done that yet, but that's the next step in this sort of sliding scale of sanctions that the white house is engaged in. >> eamon, thank you very much. bill, don't you agree there's something a little bizarre? the naming of individuals on both sides, the public way. maybe it's just that social med media. >> it is an odd chess match. that is for sure.

>> we have some saying they're honored they're on the list. >> john mccain said the same thing when they learned that the american congressmen were being banned entry into russia at the same time. >> strange. >> the resumption, i guess, of cold war. sure doesn't feel like it here. art came by a little while ago reminding us that trading right now is going to be influenced by tomorrow's expirations. the third friday of the month. you'll see stock index futures and options going off the board. a lot of trading, lot of volume, lot of volatility going on between now and then. that could be influencing today's trading. >> so what a bumpy ride it's been for tesla. new jersey driving into a big pothole by banning those direct awe though sales. now arizona may be on the verge of reversing its own ban. why arizona suddenly is having an apparent change of heart. and here's a question. would you be better off leaving your money to charity or to an innovator like tesla founder

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heading toward the close with about eight minutes left in the trading session. the dow now up 88 points. again, we were up 130 at the peak today. but once again, the index futures and options expiration of tomorrow is going to have an influence on this market. should have thought of that earlier. art pointing that out to us helpfully as we head toward the close tonight. joining me right now, doug from ing investment management and mike from high tower. post-yellen news conference, it's becoming clearer rates are going to head higher. does that trouble you as an equity investor? >> absolutely not. if anyone thought before yesterday they shouldn't have managed their duration, if anyone thought the market wasn't going to have to react to higher rates, they were not paying attention to the game. i see the recovery today as a correction of what was probably an aberrational behavior yesterday. the world economy still has growth. i don't think it changes the big picture. >> what do you think?

>> i think janet yellen is doing a great job. she said exactly what she needed to say. the fed needs to step aside. they're handing the baton back to the markets. now fundamentals are going to drag. we saw good data today. the philly fed, unemployment claims, housing permits and starts were looking good. fundamentals are driving the market. >> financials have done well this week. of course, we're getting ready for the bank stress tests, which will be out momentarily. utilities have gone down. presumably, both are doing that because of the expectation of higher rates. what do you invest in as you expectation those higher rates? >> in the bond side, we've managed the durations down. we think the technology sector still is a great place. they have obviously low debt. they're not exposed on the balance sheet. they have growth and global growth. i think a basket of technology stocks is still the easiest place to start with. >> what's your best idea? >> i would diversify on a broad global basis. if you want to hedge interest rate risks, senior loans,

floating rate loans will reset with higher rates. >> all right. stay there. we're going to bring mike and doug back as we get ready for the close here. we continue to come back from those highs of the session when the dow was up 130. we'll have the closing countdown in a moment. and it's housing crisis déjà vu. somebody here says you should take out a home equity loan and buy stocks with the cash that's got herb greenberg riled up and ready to debate. you don't want to miss what promises to be and epic clash coming up be. you're watching cnbc, first in business worldwide. siness world. baron of the build-out. you need a permit... to be this awesome. and you...rent from national. because only national lets you choose any car in the aisle... and go. and only national is ranked highest in car rental customer satisfaction by j.d. power. (aaron) purrrfect. (vo) meee-ow, business pro. meee-ow. go national. go like a pro.

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up almost 100 points now. very instructive. this is the week for the dow jones industrial average. all the volatility we've been through. through it all, still up about 1.5% for the week. so net/net, even with yesterday's big selloff, we are up for the week. financials have done very well today. we're ready for those stress tests. results coming out after the top of the bell. stick around for this next hour. it's going to be very critical to know how the banks have done with the stress tests. all of them as a group showing good gains going into those results. nike reporting earnings in just a few minutes as well. that stock has been one of the best performing dow components this year, but not today. even on a 100-point up day, that stock is down a fraction right

now. we'll keep an eye on nike as we come out. back with mike and doug. you were just telling me, you do like the consumer discretionary, which nike is part of right now. >> yeah, consumer discretionary because consumers are a game changer. 78% of the economy. we're at record retail sales. the housing boom. all helping consumers. we saw personal income going up. the consumer is in very good shape. >> you agree? >> i do agree. i also believe we're going to see a cap-ex spend here. we know capacity yutilization i climbing. >> and the financials. to highlight, they've done very well going into the stress tests. the expectations of higher rates, you would think we're heading into a good period for them right now. >> first of all, i think rising rates a proxy for economic growth. you want rates to go up. and i think the banks are going to pass this test. the fed has made sure of that. that's money in the bank. >> all right. gentlemen, good to see you both.

we're going to go out with good gains. we'll keep an eye on this for tomorrow on expiration day, the kind of volatility and volume that usually brings. you also have nike earnings and the bank stress tests and the always informative and entertaining barney frank. what more could you want coming up on the second hour of "the closing bell" with kelly evans. i'll see you tomorrow. >> thank you, bill. welcome to "the closing bell" on a crucial thursday afternoon. i'm kelly evans. let's begin with how we're wrapping up at day on wall street. a strong rally. this after yesterday's press conference from janet yellen at the federal reserve. today, a bounceback. the dow adding 109 points at the close. the nasdaq up 11. the s&p up 11 as well. before we get into all of this, we are meanwhile getting the results from the federal reserve's bank stress test program. kayla joins us now with them. kayla? >> well, kelly, of the 30 banks that participated in the federal

reserve's annual stress test, only one of them failed to meet the capital requirements. that is zions. it's a first timer. keep an eye on that stock, which after hours is down nearly 4%. all other banks posted a tier-one capital ratio. that clears the 5% hurdle for depression-like conditions, where equities are halved, unemployment tops 11%, and asia would see a sharp slowdown rnd that plan. wells fargo best with a tier-one common of 8%. b of a and morgan stanley had the lowest of those ratios respectively. those major banks were also asked to estimate how much they would lose if their biggest trading partner defaulted unexpectedly. that hypothetical, the fed said, would see b of a lose $49 billion and citi lose $45

billion. morgan stanley, under that trading scenario, would lose the least. now, a couple additions this year. larger fed estimates for litigation costs associated with the financial crisis. that's due to rather substantial increases in the price tag of settlements like those inked by jpmorgan this year. in the less severe scenario, another addition there. the fed asked to test their balance sheets for a 300-basis point rise in interest rates. that's thought to prepare banks for this rate rise. the rate of loan losses this year actually decreasing in a severely adverse scenario even though more banks are getting tested. fed officials say the reason for that is banks are actually selling off riskier assets. they're slimming down their loan portfolios. that's making them healthier. even the next financial crisis is not expected to be as stringent. that's moving in the right direction. >> kayla, thanks very much. stay with us, if you will. i want to bring in david ellison

for more on the stress test results. also with me, today's "closing bell" panel. great to have all of you with us. to david, sir, can you give me your first thoughts here on any names in particular that stand out and what about zions? >> well, i think generally the fed is taking all of these extreme positions on the downside and the banks are all passing. it shows you how safe and well capitalized the industry is. i think that's the most important thing. we've had three years of this industry being, you know, getting better and this is the end of that process. i think the industry is in great shape. the market has to recognize that. >> i disagree. i think there are a lot of risks in the banking sector. you saw jpmorgan had the london whale, an $8 billion loss, blew a hole in the bank. citigroup with fraud in mexico.

i think there are a lot of risks. they're dealing with hedge funds. they've got risky mortgage lending. i think this test doesn't show me a lot. i'm still concerned about the banks.kelly, i would say the sa thing too. i think there's a risk. i was surprised to hear the last comment she made about the fact that banks are decreasing their bad assets. i'm seeing actually from large banks and community banks that they have huge pipelines of loans. i don't understand how we canth. >> i'm looking at the data from the fed. right now it says were we to have this severe loss, at least a couple basis points better than what we saw last year. so the evidence from the fed, from the balance sheets being turned in and exercised through the stress tests are, in fact,

performing better. >> david, i want to zero in on something for a second and see if we can put up a chart to show whether any of these big names in particular are moving after hours. we've had some sharp rallies today. jpm up almost 6% this week. do you see any reason for investors to make big moves in and out of some of these names as a result of these tests? >> no, i think this is a process. we've gone from a very risky system to a system that continues to get saver. this is just quote/unquote a test along the way. if we had done these tests three years ago, they all would have failed and looked bankrupt. i think the process is very healthy. we're moving in the right direction. that's why the market's going up. that's why the housing market is getting better. that's why the customonsumer is getting stronger. it's all playing into it. this is a process. >> anthony, what do you think about the financials?

>> we're very favorable on the financials. what we have to add for viewers is they've had a leverage play off the financial reserve for five straight years. they're borrowing at zero. leveraging that and been replenishing their balance sheets. i think this is a very big proce positive for the future. forget about the stock market for a second. these banks are getting healthier. >> what about the concerns they just raised? >> i'm getting there. they're eventually going to loan that money and it's going to expand the economy. then the federal reserve chairman is going to have a problem with inflation. that's going to be the discussion on this panel in about nine months. >> that's what i see is the what if. it looks great right now at this static moment in time, but it's the what if with the pipeline they're building now in these banks. what is the quality of what they're -- because they can lend it out so cheap, because they're borrowing so cheap. are we going back to cowboy

days? that's my concern. >> we know how active the junk bond market, the high-yield market has been for the last couple years as rates have stayed low. we're not going back to the cowboy days on the consumer side, certainly. only jpmorgan has lent out a considerably small amount of money. i would worry about the corporate side eventually. if we see the economy start to weaken, there might be some trip-ups in some of those covenants. as of right now, the banks aren't really lending a lot of this money. >> i'm still concerned about the risk controls. i don't think these banks have adequate risk controls. i think that's something that needs to be looked at. >> quick word, john fort. >> i'm not a banking guy, but when you see 29 out of 30 pass, it's kind of nice. somebody failed. at least there's some standard here. somebody failed. you want to see them do some makeup work.

that's good. this could inspire confidence, certainly. >> and everyone, stay right there. i want to bring in barney frank, the former chairman of the house financial services committee. of course, one of the creators behind these tests. it's great to see you, barney. thanks for being here. what's your initial reaction to these results? >> i'm very encouraged. first of all, it has generally been agreed that the stress tests that regulators have been administering are tougher than the european tests. everybody passed in europe. we've gotten ahead of the european area in terms of toughness of regulation. those stress tests are real. secondly, i understand the concern, well, they'll get back into it. two things mentioned were the london whale, which were derivativ derivatives, and mortgage lending. that ignores the fact that in the statue, we wrote very strict rules in there. they cannot make the kind of mortgage loans they used to make.

these loans to people without any income, these ninja loans, as they were called, et cetera, they're now unenforceable. they can't be made. the consumer bureau has done a good job of enforcing that. secondly, a great job at the trading commission. the ability of any entity to get in over its head on derivatives has been diminished. there's a requirement for greater capital. but there are also specific requirements transaction by transaction. so going forward, both the derivative trades and particularly the residential mortgage market are going to be run in a much better way by law. >> barney, what do you stay to people who say what these tests are accomplishing and what this scrutiny is accomplishing is showing up the banking system but pushing a lot of activity to the sidelines, into the shadows, or out of the country? >> well, in the first place, when they talk about out of the banking system, we were very clear in the law that we were

regulating not just the banks but the nonbanks. nobody can make the kind of mortgage loans that used to get people into trouble, whether they're banks or not banks. derivative trades have to have the capital, the margin rather. there is regulation -- we didn't regulate by institution as much as we regulated by function. i think there's very little likelihood of that happening. and the consumer bureau has power to get into a number of areas outside the banking system. as to moving it outside the country, that was a concern, but -- and there has been a tendency, at least early on for some of the financial institutions, to assume the role of the 13-year-old child of divorce parents playing mommy off against daddy. we have been -- when i was there and i think since, there's been a lot of coordination with the europeans. by the way, one of the key controversies now is, and some of the securities industry people are suing, under the

trading commission, if you're an american institution and you are conducting some derivative trades through a subsidiary, like the london whale situation, we will regulate you with american rules unless people can show us that the regulation in the country where it's taking place are good enough. so we do have regulation. if you're an american institution, you don't escape regulation by opening up an office in another country. >> well, right. and congressman, i want to bring in the panel for one moment. finally, how safe is the u.s. financial system today? have you achieved what the stated goal of this legislation was from the get go, and what is that goal, to prevent another financial crisis? >> well, it's to prevent another financial crisis while allowing the banking system to play the important role it has to play in the economy. i agree with the panelist who said what this does is set the stage for active lending activity. i've been urging the regulators,

yes, we have a dual mission here. one, to make sure things are safe. two, there's a lot of safety -- there's no noise in the cemetery. you don't want to achieve safety by shutting things down. i think this is a good sign you can reach the loans. in terms of have we made the system safer than it was? partly that was the self-interest of the institutions. partly it was the set of rules that have been imposed. as i said, it's both the capital and some very good regulation of specific activities like derivatives and residential mortgages. the answer is we have made improvement and we are still in the business and watching. >> want to get kayla in here as well with more details on these results. kayla? >> well, kelly, we weren't expecting to get news on the back of today's stress test performance about capital plans, but we have just gotten a release on the wires right now from discover financial saying that because of its performance on the stress test where it did clear the capital hurdle as well as the lerch ratio, that it will increase its next quarterly

dividend to 24 cents a share from 20 cents a theshare. it will also increase stock repurchases up to $1.6 billion over the next four quarters. we had been expecting banks to start announcing their capital return plans next wednesday. that's the second part of this plan. but nonetheless, we have some news from discover out this afternoon. >> that is interesting. jake, i want to give you a chance to responds. >> congressman, you wrote a great law. my question is, how well is it being enforced by the s.e.c.? i don't know they have the power, the people in place to regulate these banks. i don't think they understand a lot of the things that you want them to regulate. one thing i'm concerned about, you gave the s.e.c. the authority to write a fiduciary duty law so the banks put the customers ahead of their own interests. that hasn't been implemented. i've got a concern that your great law is not being enforced the way it should be. love to hear your thoughts. >> first of all, i think we will get there.

there is a problem. you mentioned the security exchange commission. the bank regulators are funded automatically by funds, fees, et cetera. the securities exchange commission, the commodities futures trading commission depend on appropriations. my only friend republican colleagues in the house, who control the house and have since the bill went into effect, don't like the regulations, know that it would be politically unwise to try to repeal them, but they have underfunded both the s.e.c. and the cftc. i have to agree they've not yet been adequately funded to have the people, the technology in place. having said that, i would say look at the cftc with the derivative issue. the biggest grant of new authority was to the cftc to deal with derivatives, which have been virtually unregulated. i think that i did a great job. my answer is, we have seen significant improvement. they are getting there piece by piece. on the fiduciary responsibility, we had stronger language.

our friends in the senate cut it back some. that's an issue that i hope we'll still fight. there's one other factor. the regulators were facing a hostile court in washington, d.c., the circuit court of appeals. the big fight over the filibuster on judges and the right of president obama to get some judges confirmed has a lot to do with implementation of this law because he's going to be able to appoint or has appointed judges who will not be hostile to implementing the law as we wrote it. >> any way you can come back to washington? >> yeah, by the shuttle for a day or two at a time. >> going to have to shave the beard. >> guys, breaking news. dom chu joins us. >> so kelly, not a particular positive story for a cyber security firm. this time symantec. we're going to watch those shares. they're currently halted because they've disseminated news they've terminated their ceo. again, they've terminated their ceo, steve bennett. michael brown, a board member right now, is going to replace

him as an interim ceo. the change will happen effective immediately. the company said it was a result of an ongoing deliberative process and not precipitated by any event or impropriety. they did say that mr. brown was part of quantum corporation before joining their board there. so again, these shares are expected to reopen at about 4:20 p.m. eastern time. so we'll watch for any reaction. this is not exactly the most orderly transition of leadership at a company. we'll see how investor react to this. they're expected to reopen trading in the after hours at around 4:20 p.m. symanter replacing its ceo. back to you. >> dom, thank you very much. john fort, quick reaction to the news. >> this is a ceo who had been in place for less than two years, just over a year ago they announced this big turn around plan that they talked about on the last earnings call. they're facing big issues in mobile and the cloud. so to deal with a leadership change at the same time, that's

a big deal. you're going to wonder what numbers caused them to pull the plug at this point. >> absolutely. we're going to get to those earnings. before we do, i want to wrap up the discussion on the financials. any trades here? kassandra, what do you do going into tomorrow? >> sure, absolutely. we certainly would keep sticking with the sector. we're long-term bulls on the entire sector. i think b of a would be probably our top pick. we think it's probably closer to a $30 stock in the next 12 months. >> despite some of the details that showed their shares being a little lower after hours initially on some concern -- like, for example, how they would be impacted by an event from their competitors? >> absolutely. i think probably they're going to be in a position to start doing more return of capital to investor in a more positive way. i think that's going to help the stock a lot. >> major investment banking fees for all of these companies. ipos, refinancing at the

corporate level. >> thanks, guys. thanks to congressman frank for joining us as well on this day. really appreciate it, sir. >> thank you. >> breaking news keeps hitting. nike is out with third-quarter earnings. sarah has the numbers. >> looks like a big beat, kelly, for nike on both the top and bottom line. earnings per share number, 76 cents per share. analysts looking for 72 cents. that's a nice beat. and on revenues as well, coming in higher than analysts were predi predicting. $6.97 billion. the expectation there was $6.68 billion. so higher on the revenues, higher on the earnings per share as well. just looking through some of the other highlights here, it does look like expenses were up 16%. that was a little bit higher than last quarter. of course, they're gearing up for the world cup, also for the olympics. a lot of big spending, of course, on marketing and other promotions from nike. futures orders, the one that a lot of people look at, up 14%.

that was also a little bit higher than last time around. i'm going to go through the geographic breakdown on that. everybody wants to know what western europe is doing, what china is doing. overall, it does look like nike had a pretty solid quarter. you can see that in the share reaction after hours. the stock popping on the news. >> that's right, sarah. thanks very much for that. nike, of course, we're going to get more reaction. the rally in this company significant over the past 52 weeks. is this earnings report enough to keep it going? can you hear me? all right. we'll tell that audio. should we go back to him in a moment? do you want to try one more time? can you hear me? john? okay. we'll work on that sound. in the meantime, we will take a quick break. and then we'll come right back as we sort through this.

coming up, the market recovering from fed chair janet yellen's confusing comments yesterday. next, we'll get the feel of what turned things around today. and the battle between tesla and auto dealers moving into arizona. now some lawmakers are fighting for elon musk. we'll get you the details coming up on "the closing bell." female announcer: what will you get with your new sleep train mattress?

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welcome back. take a look at shares of symantec. they're down 9%, almost 10%, after news they terminated their ceo. >> certainly surprising news here, kelly, for investors and the street. the security and storage company announcing the termination of steve bennett. the surprise when you talk to analysts who cover this company is bennett had not been there long. only a couple years. a very brief, relative tenure. he made a series of promises, including new products and new sales. this game plan of 5% growth, 30% operating margins. that had not happened. the board likely frustrated with that and made this decision. certainly surprising investors. we'll have more as we continue to develop this story. back to you. >> all right. thanks very much, josh.

now, the market rebounding from fed chair janet yellen's remarks yesterday. bob posani was on the floor and saw the dramatic move lower. he was also on the floor today for the afternoon surge. what was the driver? >> another 100-point gain. the driver in the two biggest areas in the s&p 500, financial and technology. some of these are up 6%, 7% in the last two days. jpmorgan, morgan stanley, wells fargo all had a great day. higher interest rates helping things here. again, flatter yield curve may not, but higher interest rates helping things. you talked about the stress test. 29 of 30 passing the stress tests. zions did not. trading down a little in the after hours. roughly 1%. tech, you know how the new tech names have all been big movers. look at old-school tech here. i'm talking microsoft. when was the last time microsoft was up 3%? i think what's going on here is these tech stocks are growthy.

if you get higher interest rate environments, generally that's associated with more growth and you're buying into them. also, a lot of these soolder, my r speculative internet tech names might be played out. >> what if people here are rotating from consumer plays to enterprise plays? do you think that's part of it? >> that could be a little bit too. i want to note, the semiconductor index just broke out to like a 13-year high today. that's a one year. you got to go back to 2001 for a breakout. those are technically significant. the other thing i want to point out is remember what our leaders this year, health care, biotech. they had been a little bit weak recently. i think people are using those gains that you've seen in biotech and pharmaceutical -- there's etfs for both of them to -- for a source of funds to buy into the old-school boring names. >> you're telling me microsoft is a new momo stock. >> i agree with you, but there's some kind of rotation that's

been going on. final thing i want to note, big gain for techs and ipos today. >> and performance today. it continues. q-2 coming early. thank you, bob. the battle over tesla rages on. at issue, the electric carmaker looking to sell direct from its showrooms. auto dealers are fighting that at every turn. we'll tell you what's going on there next. and elon musk also in the news, separately from his cars. google ceo larry page saying he would give musk his millions if he dies. he wouldn't give them to charity. he says the money would be better better used that way. do you agree? tweet us your thoughts. we'll be right back. 'll be righ. to manage your money. that's not much, you think except it's 2 percent every year. does that make a difference? search "cost of financial advisors" ouch! over time it really adds up. then go to e*trade and find out how much our advice costs. spoiler alert. it's low. really? yes, really. e*trade offers investment advice and guidance from dedicated professional financial consultants.

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and if you switch, you could save up to $423. liberty mutual insurance. responsibility. what's your policy? welcome back. the charged up battle over tesla selling cars directly to consumers without auto dealers now moving to arizona. phil lebeau has the details. >> and this might be good news for tesla, kelly. arizona has banned tesla sales over the last couple of years. that might be changing. let's look where the battleground stands in terms of different states. right now there is a committee in new york in the legislature considering whether to implement restrictions when it comes to direct auto sales from the manufacturer to the consumer. dealers in ohio have been pressing for a sales ban for the last couple of years. and in arizona, there's a lawmaker there who is saying, let's lift the sales ban. allow teslas to be sold here. tesla has galleries in arizona and texas, two states where sales are currently banned. what does that mean? they can show the cars, but they can't talk about pricing,

delivery, et cetera. it's also considering arizona as a location for its battery factory, which would mean 6,000 jobs. by the way, auto dealers, when you talk with them, they all say the same thing. franchise laws are good for consumers and also protects their investment. when you look at shares of tesla over the last year, this battle over where they can sell and where they can't sell hasn't slowed down enthusiasm for this stock. many believe that ultimately tesla will have to, if not only consider legal action in new jersey, ultimately take their case to the federal courts and say this is a matter of interstate commerce. tesla has said, we're not ready to say we're going to federal courts, but as this continues, don't be surprised if that's where it goes. >> phil, stay with us. i want to get thoughts here from the panel on tesla as an investment. cassandra, what do you think? >> i like d the stock when we bought it back at 29. we made very good money and sold it. i think it's overvalued is here. but i love the car.

i love the concept of not having to go in and haggle. i really like what they're trying to do with circumventing having dealerships involved. i would personally love to be able to buy a car that way. >> kelly, i'm concerned about consumer protection. what if you get a lemon? what if there's a defect in the car? what if there's fraud at the company? all you have is a car and no place to go. i've seen this movie before. i'm involved in cases for investors against fiskar, an electric car that's in bankruptcy. there's allegations of fraud and defects. i think we have to look at this carefully. >> how is that any different for a dealership? i don't understand the difference between that and a dealership. if you buy a bad car from fisker through a fisker dealer, you're still stuck with a bad car. >> plus, you can go on ebay and buy a car directly. how does that protect consumers? >> i don't think i would do that. they're dealer networks. they have insurance. there's some safety laws and

protection for investors that i think is missing when you go direct. what if you're in new york and they're in california? this is infuriating to me. >> i'm sorry to infuriate you. >> this is like a best buy saying, oh, apple shouldn't be allowed to open up their own stores. we have warranties. it's ridiculous. it's like the carriers trying to block smartphones from gaining share in the market, which at first they really wanted to do. come on. if you're concerned about consumer protection, then have some laws to protect consumers. don't stop with this. absolutely, you should not protect the middleman in a case like this and stop innovation. >> what's your view on the shares here? >> listen, no one is going to be coming out of this panel telling you that the shares are cheap and you should buy them. the stock is very expensive. it's a fantastic product. i would not be short this thing, though, because the markets are going to trade higher. this is something that people buy into, momentum. the battle right now is among crony capitalists. my question is, where are the

green people? where are the environmentalists coming in here to champion for tesla? aren't we rotting the environment with climate change and all this other stuff? i'm saying it a little facetiously. at the end of the day, we need to redesign our laws and our regulations to deal with the new economy and to deal with disruptive forces so we can gain jobs and increase shareholder value. >> those are two different issues. let's set aside the environmental one for a little bit. maybe they understand this may not be a huge environmental plus. but your point about laws being for an older system not accommodating innovation, phil, that's the number one thing you're hearing from people. we understand you have to respect the rule of law, but in this case, is that inhibiting innovation, entrepreneurship across the economy? >> you talk with people who are either supporters of tesla, talk with people who work for tesla. heck, i've talked with some dealers who say privately, look, i really don't think they would

hurt my business, but i don't want to see the franchise system be torn down. that's what this is all about, kelly. the dealers want that system in place because they're fearful if tesla is successful, that five, 10, 15 years down the road it becomes large enough that perhaps somebody like a ford or a general motors or somebody says, well, they don't have to have dealers, why don't we get rid of ours? there you would have a huge battle because those franchise laws are meant to protect dealers from the manufacturers coming in and booting them out of business. that's what this is all about. >> cassandra? >> i bet you that elon musk already has a business model planned to circumvent dealers for any type of car so that you and i can go on the internet and buy the car, they bring it to our door and we never have to step foot in a dealership again. as a woman, i hate doing that. it's the nightmare of my life. anybody that -- >> you can already do that. you can do that in texas. if you're in texas and want a tesla, you can buy one. you can order it through tesla.

they will deliver it to a third party vendor who will deliver it to your house because they can't technically sell through their stores is because they don't have stores in texas. >> well, do i need to move to texas? >> how much of an oversight do you think this has been for elon musk? was he aware about the laws? was he trusting they would change? what happened? >> well, i don't think it was an oversight. i think he truly believes that at the end of the day, you want to strip out the dealer because you want to have the lowest price, he believes, available. let's be honest, dealers are buying from manufacturers. while they may say, well, we're only selling for invoice, we're not making a lot of profit, there is profit built in there. from elon musk's perspective, this is the new economy. you buy directly from the manufacturer. >> and this happens when you try to shake up a market. when apple opened up its retail stores, its third-party dealers sued it. but it ended up being an innovative thing. it ended up being important. other brands followed. so i think when you try to do something like this, you got to

expect resistance. you got to hope the consumer wins. >> generation gap. that's what it is. >> quick last word, jake. >> i think a $250,000 car, i want somebody in my neighborhood when something goes wrong to help me and fix it, not chase elon musk, whatever jet he's on. >> tesla will say they will send people to your driveway. again, that might be some hard scale to muster as they grow. thanks for now, guys. thank you, phil. >> you bet. the mystery of missing malaysian flight 370, meanwhile, continues. today, word from australia that some debris may have been spotted in the southern indian ocean. the latest on that lead right after this. is.

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welcome back. so a new development in the serlg for malaysia airlines flight 370. satellites spotting with they think could be debris in the indian ocean. steve handlesman joins us with the latest. i take it they still don't know for sure. >> no, they don't. experts are warning this could be a false alarm. that these images, in fact, might not show plane debris. but after so many days with nothing, these photos are energizing this probe. here they are.

satellite photos incidentally by a u.s. sat lithe company for the australian company. they were taken four days ago. and this might be pieces of the boeing 777 of malaysian air flight 370. the malaysian government calls this credible evidence. the effort now is to put human eyes on the possible debris. that resumes in a few hours. u.s. and australian search plane crews head out to what is a vast, vast area west of australia to look for plane pieces, if they're there, maybe no bigger than 60 feet. perhaps a wing that would be buoyed up by its empty fuel tank. the plan is to locate the debris, calculate where it drifted from in the 12 days since the impact, and then eventually descend down submersibles to try to get the two black boxes from the plane and to bring up pieces of the engine or entire engine, fuselage pieces. experts say all of those pieces of physical evidence could

positively show how malaysian air flight 370 ended up on the bottom of the indian ocean. if that's, in fact, what happened and those photos, kelly, are, in fact, plane debris and not something else. back to you. >> and so steve, it sounds like the soonest we'll know once we have human eyes on that debris is within, what, four or five hours' time? >> i think it would be minutes. they would get on the radio and say, we're orbiting something and it looks like a plane wing. that would be a huge breakthrough. the experts say that could almost certainly in their judgment lead to a sequence of events that could solve this mystery, but not quickly. kelly, when air france jetliner crashed into the atlantic ocean in 2009, they found pieces, and they eventually found the black boxes. it took two years. those black boxes were there. they found pilot error was the cause of that crash. this one looks more complicated. >> steve, thank you very much. the old adage robbing peter

to pay paul may apply to a story just ahead. a columnist says is you should use the equity if your home to buy stocks. some people think he's crazy, like herb greenberg, who will also join u.s. and what do you think about leaving all your money to somebody like elom musk when you die? google's larry page says he might do just that because the money would be put to better use than if it went to charity. would you follow page's lead? tweet us @cnbcclosing bell. your thoughts after this.

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welcome back. both house prices and the stock market have been moving higher la lately. that's why my next guest is making a controversial recommendation. he says it miekt make sense to tap into your home equity to buy stocks. that idea horrifies herb greenberg, who joins us now as well. it's good to see you both. jonathan, a lot of people bris ld at this notion saying it's extremely dangerous. what's your response to that? >> well, one man on the right makes the majority. so i'm very comfortable with what i wrote. when you look at the history of o investing and the future of global economic growth, they both support my position. >> thoreau also said goodness is the only investment which never fails. why would you take money out of your house, put it in the stock market, and trust you're

effectively making a bet with one of your most important assets here? >> first, let's look at the history of investing. in early 1983, the average house in the united states sold for $88,000. at that time, the dow jones industrial average was under 1100. the average home now sells for about $150,000 to $200,000. basically, it's doubled. the dow closed today at over 16,300. the dow jones industrial average has gone up 1480%. the average value of an american home selling has gone up, let's say, 200% to be generous. i think thoreau would appreciate an asset that has returned seven times more than the other. now -- >> he also went to jail to not pay real estate tax, by the way. but herb, what's your problem with this? >> beyond ridiculous. it's absurd. the reality is if you had bought a home, if you'd used your mortgage or got a home equity loan, say, in 2005, held it to 2008 because, man, you're feeling like a genius now, you would not only have lost your

home, you would have lost your portfolio. when it comes to homes and mortgages, you know, don't use that equity in the home right now if we've learned nothing else but to do anything but improve the home, if that's your biggest investment. i understand some people -- i understand jon says it may be a great investment. come on. not with the money in your home. we've learned that lesson. >> what do you say, jonathan? >> i could not disagree with you more. like i said, i have history on my side. i have the future. i have warren buffett on my side. >> warren buffett would never tell you -- warren buffett would never say, borrow money on your home to buy stocks. as a sophisticated investor, if a sophisticated investor wants to borrow money from their home because they have the money to lose, hey, take the money and do it. when it comes to your home, i'm going to sit here -- i'm doug maddoc on it. that's the one thing you will not borrow against to invest.

>> jonathan, it is the case that people, in order for your idea to work, the stock market has to appreciate over time. so is that what you mean by saying you're betting with warren buffett, that it will appreciate over time? >> in october 16th, 2008, warren buffett wrote in "the new york times" an op-ed. he told americans to buy stocks so they could participate in the record profits that would be set by companies over the next 5, 10, 15, and 20 years. at this time, the participation in the stock market is at its lowest level since 1998. if americans aren't investing in the stock market, they're not going to be participating in those profits. in addition, american household wealth is setting new records too. so americans do have the money to invest. i never said speculate. in my article, i specifically said dividend playing stocks. now, there's many different ways to do it. let me point out one transaction that will benefit the average american. it doesn't have to be a sophisticated investor. the average american right now has about 52% equity in their

house. so say that's $75,000 to $100,000. if they were to take $4,000, $5,000 out each year to finance their retirement accounts, they would get tax breaks for the interest on their mortgage payments, tax breaks for the money put in the retirement account, the dividend income into capital gains would increase tax rate. in addition, the stocks in the retirement account cannot be borrowed on margin, so they would be very stable. they would be leveraged. they could project. the whole thing is, you want long-term investing. >> you want long-term investing, but i'll come back to it. you do not want to tap the equity if your home to go out -- if you got a home equity loan back in 2005, you're currently facing the recast, the mother of all recasts. you're not only under water, you're going to be way under water. you're going to be down at the bottom of the ocean.

i think we can agree to respectfully agree to disagree. i'm talking about the average guy. you talk about dividend stocks. people often leap to the highest dividend stocks. as we all know, they're high dividends for a reason. >> we got to leave it there, guys. finish the thought, herb? >> no. i finished my thought. they're high dividend for a reason. >> may i finish with one thought? >> yes. >> when you look at the investing by warren buffett and coca-cola, exxon mobil and walmart, they're positioned to profit from global economic growth. who will win the $30 trillion debtcathalon. 30% of growth is going to come from emerging markets. no american -- no american home is going to profit from growth in emerging american companies. a lot of great american stocks, like coca-cola, exxon mobil, and walmart, will profit from economic growth. >> herb and jonathan, guys?

>> this is absurd. >> we have to take a break here. we have developments on ukraine. we'll get to all of those after a short break. a short break. no two people have the same financial goals. pnc investments works with you to understand yours and helps plan for your retirement. talk to a pnc investments financial advisor today.

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u.s. sanctions on russia. eamon javers joins us now with the latest on this one. eamon? >> hi, kelly. one of the people sanctioned by the u.s. government is kencenko. gunvar has posted an item to their website, saying he has told his position in the firm. they're saying anticipating potential sanctions to ensure with certainty the continued and uninterrupted operations of gunvor group. the shares seld by mr. timchnko were sold yesterday, to another individual. so, it looks like these shares might have been transferred in advance of the u.s. sanctions. i just spoke to a spokesman for gunvor group on the phone. he said the state department never contacted gunvor about this. and they would like to know the basis for the outrageous

accusations from the u.s. government toward him. >> eamon, thank you for following all of it for us this afternoon. we asked, you tweeted. next, the results of our twitter question. should you leave your money to charity? or is it better in the hands of someone like elon musk? you have two minutes. u have two. huh, fifteen minutes could save you fifteen percent or more on car insurance. everybody knows that. well, did you know pinocchio was a bad motivational speaker? i look around this room and i see nothing but untapped potential. you have potential. you have...oh boy. geico. fifteen minutes could save you fifteen percent or more on car insurance. and his new boss told him two things -- cook what you love, and save your money.

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welcome back. we've been asking you this afternoon, which would be better off? leaving your money to charity? or to an innovator, like elon musk? larry page said he would rather give his billions to musk. and here's what you had to say. donald tweet, it should go half and half. both are noble causes. michael tweets, there's not a lot of charities you can trust to manage your money effectively. elon musk has a proven track record. and yeah. we're going to look at larry page by the numbers, perhaps? the guy's got $32 billion to distribute. what he does with it is pretty telling. there you go. $31.2 billion, in fact. donation, $185 million in google shares. what do you think?

>> no. does he think elon musk doesn't have enough money already to see his dreams come to life? how about fixing education or something with the environment? what happened to don't be evil? why do we give the money to billionaires? >> he's making a different point that there's a huge bureaucracy in the nonprofits. and the assets are not being allocated appropriately. he's making a dramatic statement to get people to talk about it. >> if it was an individual, like bernie madoff, or allen stanford, if you gave the money to him, it would be gone. >> we're not talking about giving it to money managers. we're talking about identifying individuals in the economy, who are entrepreneurs who are innovative and are going to generate more productivity, than if you give it to a charity, which has been well-documented, has not always been put to good use. >> maybe he's just tired. maybe he's tired. bill gates wanted to do his own charity. maybe mr. page is tired and wants to give somebody else the money to do something with.

>> "fast money" coming up in a few moments. melissa lee, what's on tap? >> to help decipher the stress, is this a sell the news event? >> great question. over to you guys. "fast money" starts right now. live from the nasdaq market site. i'm melissa lee. we're following a developing story right now. one bank failing the stress test. pete najarian, jon najarian, and guy adami. 29 banks tested all passed. most of the big banks were rallying ahead of the results. i'll kick it off with a question that goes to kelly. is this a sell-the-news event? >> i don't think so. the space started to get moving yesterday, well before this. people anticipated the stress test coming out. but a lot of it had to do with the higher yields that the banks are going to be