recently caught by florida shrimp fishermen. of course, they let it go which is the fair thing to do because it's the second time ever, brian, that one of these beauties have been seen in the gulf of mexico. normally they are off the coast of japan. >> from something ugly to beautiful. >> hey yellow to our newest "street signs" member, nolan john natale. andrea our producer and joe at home welcomed a new baby boy into the world yesterday. can't wait to meet the little guy and hope brother julian is doing well. andrea, if you're out there, we love you. >> big shout-out. >> good to be here. >> thank you, miles. >> and thanks for watching "street signs," everybody. "closing bell" starts right now. >> welcome to "closing bell." i'm kelly evans here at the new york stock exchange where stocks have been down since the start. >> it is may, you know. >> yes.

we were down three out of the last four days. >> going away. >> isn't it tuesday, or wednesday already? >> this is tuesday. actually an update. a down day so far. we're off the lows of the session right now, but this could be nothing if you believe david leonard, and he says it's overvaluations from the market and the headline in his column use the word bubble, and it lays out why stocks are expensive once again and david will join us to make his case on that. >> yes. >> that is coming up. one stock that isn't nearly as expensive as it was at the end of the year is twitter. it's getting hammered today, down more than 10%. just a few months ago, again, trading above $70 a share. now around 32 and sinking 16% today, so what is going on with twitter. >> the lockup ended. >> yes, indeed. we'll find out for you. talk a little bit more about who the sellers are and if there's any more value. >> we have a fleury of major

earnings coming out in about an hour that could move the markets for tomorrow. disney is the biggest of the bunch, but you also have whole foods, groupon, activision and the market results and response coming up in the next hour. >> the dow is off 1189 point. pretty steadily sinking throughout the session thus far. meanwhile, the nasdaq, take a look at what's happening with this index. down 1.2%, shedding 50 point to 40.87. the s&p, finally the proud market gauge, done 15 points to 1869 today. >> here we go. let's talk about it in our closing bell exchange with contributor heather huse, mark tepper with strategic wealth patters in and ryan destrich from shafer's investment research and our own rick santelli.

mark, are you related? >> no, no, relation at all. you're right, i do wish. >> if you hadn't heard, institutional investor out with the list of who made what on wall street last year and mr. david tepper made a cool $3.5 billion last year. >> not too shabby. >> not too bad if you can get it here. >> ryan, i know you don't want to buy the mantra, the old sage sell in may and go away, but i would point out that the dow peaked on april 30th and hit an all-time high and haven't looked back since that time. what's going on here. >> you're right. you talk about sell in may and go away. >> may is actually up 70% of the time which is the second strongest month only to december so when i hear sell in may. to me the overall sentiment is low. look at the aaai poll, the four-week moving averages, the lowest it's been in a year. yes, small caps are breaking down, defensive names are leading. i think this cheap market could stick around. quick stat.

the s&p last nine weeks has been up and down, nine straight weeks. four times the last 20 years, historically three month later it's still choppy so this could be the norm, unfortunately. >> well, we've got to talk as well at the same time what's going on in the rate space. rick santelli, that 0-year. it's on everybody's minds and lips and we're looking again at yields which have fallen so significantly this year that that asset is up 12%. i mean, if you held on to this part of the market you'd be doing all right. >> a lot better. >> yeah, no. it seems to me the only area of the marketplace that's more unloved than the rally in stocks has been the 2014 rally and the long end of the market. whether it's 30s or 10s to a lesser extent. actually now all the way down to 5s all profitable with regard to where they settled. yields are lower right now than where they were on december 31st but there's so much more. of course, many believe, like i do, that the long end is telling us that growth is probably going to have a two handle after we get done with all the gyrations

whether we mean inversion over the next couple of quarters. something bigger. the last chart you're looking at is the 113 basis points that separate boon yields and jet lag and what we've been talking about for over a year. that trade is what the ecb and mario draghi have tried to accomplish with rate in the southern part of europe, but yet their economy isn't better. we have dislocations in currency. the euro at the highest level since october 11 against the dollar, dollar index at the lowest levels since october of 2012 so you can say the dollar is lower because rates are lower, that makes sense, but, hey, the economies in the u.s. are better than the economies in europe. >> rick, did you ever think you'd be standing other in 2014, not in 2025, talking about the italian ten-year below 3% in the spread between that and the u.s. ten-year at this point, do you think those two could invert? >> wow. >> i'll tell you what, if i was an investor i would look up at

the yields in the u.s. and buy the long dated treasuries and would sell the yields in europe that didn't make sense because in the end the central bankers of the world aren't going to have enough fingers to plug all the holes in the dikes. >> heather huse with this topsy turvy market we're describing here, just bears in mind there is risk involved in investing. >> a lot of risk involved in investing, and i think the pullback we saw mid-march in the nasdaq and the high-flying momentum names what, we call the high beta social media darlings, 9.6% on the nasdaq right there, telling the retail investor, look, there's always risk in the markets and then, of course, you have the sell in may and go away seasonal trend, and over the long run the macro data is improving. we see flows to rick's point both on the -- in the bond markets and the equity space right now, but i think people are on hold or pause and perhaps sitting on their hand and the macro data is improving, such as retail sales, confidence, the manufacturing and ism data.

>> i'm curious how much you think going back to what we're seeing in the market. dow is off 119 point. geo politics, even if you want to talk about what's happening with rates, do you think it's concerns about different parts of the globe, areas of concern or is that something we're used to go try to explain something that can't be explained. >> geopolitical tensions are always a concern, but when you're looking at more of a long-term investment strategy like we do, we don't concern ourselves too much with it, but at the same point in time, what we've really seen is while the economic data has been pretty decent recently it hasn't been blockbuster, earnings season was decent, but it wasn't a blockbuster earnings season, so, you know, we're really just kind of digesting, you know, a 30% upward movement in the stock market last year and we need to see better earnings growth on a going forward basis in order for stocks to -- >> speaking of blockbusters, do you think disney's report will be a blockbuster? what names do you like in the market? >> we favor the value plays over

the growth plays and energy and financials in particular are you two sectors most attractive. chevron would be an example of an energy stock and wells fargo is one of the financials that we like. the energy sector makes up 13% of the market's earnings and represents only 10% of the market's market cap so there's obviously some pretty good disparity there and we would expect that to close over the next couple of years and as far as financials go, we think financials will benefit from an uptick in capital spending that we would expect over the course of the next couple of years. businesses need to reinvest in themselves and have to finance that somewhat. >> maybe the cash will be put to work, 1.25 trillion on the s&p balance sheets of the non-financial companies. 216 of those companies have over a billion sitting in cash so when ceos gain more confidence to put cash to work, help capital expenditures, research and development and invest in the next big thing, that would be good for the economy. >> buybacks in dividends which a lot of people are putting money to.

>> we'll be talking to david leonhard in the "new york times" whose column used the word bubble in the headline to describe the stock market. i mean, do you think we're in a bubble? a lot of people feel we're inexpensive or overvalued right now. where do you stand? >> you know, i don't believe the market is overvalued right now, bill, but i do think there are certain sectors a bit overheated. we're big fans of the value stocks style of investing. they have outperformed by about 2%. some of the high-flying tech names that led last year have rich valuations so the trends towards oils and utilities have legs in this especially challenging time from may to okay. we see value overseas as well. the recovery in europe has momentum. >> you buying italian 10%?

>> we like the gdp numbers in europe. >> ryan, we were talking about overvaluation. >> which, by the way, is eroding as we speak here. the dow is down 122 points. >> that's true. >> by the time we get to david leonhard, maybe he'll change his mind. >> the juke bond space and high-yield space there's ton of action and consideration that valuation, you know, there would be -- yields in that space would have to rise almost seven percentage points in order to bring the stock market into fair value here. square for us the kinds of activity that we're seeing and if we should be concerned about the ways companies are able to raise money, some of the lower quality companies that are able to raise money. >> definite concerns when you talk about smaller money. look at russell 2000, speaking of smaller companies.

above the 200-day moving average, might close below that, off the record from 1996. zions that we're overvalued and the theme i've heard so far is the value names are starting to do well, big-cap technology names and oracle, hpg, names that will continue to get a bid. i know mark said he liked financials. the other sign of financials, had a weak move down lower and a lot of optimism and analysts continuing to defend them. to me, stay away from financials and go long the value technology names. >> i'll ask you this question, heather. look at the averages right now. the nasdaq is down more than 50 points, 1.25% drop. the dow keeps going lower here. >> those stocks that led on the way up, again, the nasdaq, and that sector that led us on the way up seems to also lead on the downside, so i think the panel, all seems we're agreeing there's

some reversion from growth back to value sector so you're seeing a lot of the high-flying momentum names, again, sell off, including biotech and even social media right now, and i think investors want to go back to dividend payers. there's a thirst for yield right now. as the ten-year the bellwether -- >> i'm curious what you make of this as well. the blue chips, a lot of dividend names aren't necessarily that cheap. >> not that cheap in terms of valuation, cheaper than the nasdaq. >> yeah, maybe cheaper than nasdaq, but after the selloff. >> i think if investors, again, there's an insatiable thirst for yield with the ten-year yielding only 2.59 and that's why you're gravitating back towards some of the names in the dow jones that investors also seem more complacent and comfortable with that will close the convergence with. >> if everybody is jumping in to buy the dividend-producing stocks because of low interest rates, think about the reduce leverage that ensues should

equities start to move lower quickly. because what you're going to see is a lot of selling very quickly in those dividend names. now i'm not saying that's going to happen. >> you think when the rates rise the dividend names will sell off like the utilities? >> no, i'm saying when equities start to move lower, should we get a correction, that that's going to be the area that's going to see the selling the most aggressive. >> and i think it could be nasdaq. >> and i don't see yield curves rising any time soon. >> i think it could be the nasdaq. we'll see. >> thanks very much for joining us. heather, see you later in the hour. >> yes, sir. >> heading to the close on this tuesday, not seeing a turnaround. >> no, no. it would take quite a bit with the dow down 106 points with about b 45 minutes to go into the close. the s&p 500 off 13 and the nasdaq off almost 50 at this hour. >> and relatively speaking, the dow and s&p are still not that far from record territory. is it time to worry about a market b-u-b-b-l-le?

david leonhard says maybe the market is overvalued. we'll duke it out with ron insana who recently turned bullish on this market. >> and what about the future of the twitter microblogging site? >> and remember this from four years ago. >> you've seen a flight to safety within gold, a flight to quality. >> just impossible. >> a flight out of equities from almost every single major sector. we have seen it accelerate throughout the day. >> yeah. the flash crash. we're going to talk to the pros about how much has really changed since that day four years ago. by some accounts not that much has changed. you're watching cnbc, first in business worldwide. stay tuned. stay tuned.

you've reached the age where you know how things work. this is the age of knowing what needs to be done. so why let erectile dysfunction get in your way? talk to your doctor about viagra. 20 million men already have. ask your doctor if your heart is healthy enough for sex. do not take viagra if you take nitrates for chest pain; it may cause an unsafe drop in blood pressure. side effects include headache, flushing, upset stomach, and abnormal vision. to avoid long- term injury, seek immediate medical help for an erection lasting more than four hours. stop taking viagra and call your doctor right away if you experience a sudden decrease or loss in vision or hearing. this is the age of taking action. viagra. talk to you doctor.

female narrator: the mattress price wars are on the mattress price wars are on at sleep train. we challenged the manufacturers to offer even lower prices. now it's posturepedic versus beautyrest with big savings of up to $400 off. serta icomfort and tempur-pedic go head-to-head with three years' interest-free financing. plus, free same-day delivery, set-up, and removal of your old set. when brands compete, you save. mattress price wars are on now at sleep train. ♪ your ticket to a better night's sleep ♪ welcome back. minus signs today and the selling has intensified here in the last 30 or 40 minute, the dow just off the lows and down 100 points at this hour. the nasdaq is the one taking the hit today down over a percent, or 44 points.

>> let's get a look at what names are moving the market. dom? >> we'll start off with general electric currently trading, again, you can see there in an interesting change. the french president is saying the company's $17 billion for alston's business is insufficient and ge shares down a quarter percent on that news and merck is selling its u.s. consumer brands business to germany's buyer group. shares down 2.3%. one of the leading decliners in the dow. momentum stocks taking a hit. talking about that in the last segment. price line, amazon, tesla, all moving lower on the day. can you see decent sized moves for the momentum stocks and one stock in the green is office depot, gaining ground after posting better than expected quarterly profits and announcing it will close at least 400 stores, office depot up 14% on the news and the debacle of the day has to be twitter, down double digits as a six-month lockup period and really

restrictive sales of 82% of its outstanding stock and that restriction ended. twitter is currently down towards session lows, down 17%, so the selling pressure for twitter has been increasing as the day has been going on, but, again, some bad news there for a lot of big name stocks. billy, kelly, back over to you guys. >> thank you. let's focus on twitter. has this decline created a buying opportunity in the social media company, or is there even more selling ahead? >> a member of the cnbc chief executive network sees nothing but upside from here. jeff reeves from investorplace.com says there's no clear money-making model in the stock so it will continue to suffer. welcome to you both. dave, first to you. you like the name here. is it because it's fallen so sharply? would you load up today? >> look. it has nothing to do with what's going on with a stock price fluctuation. this is a very powerful business for marketers. let's remember, social media

companies don't get paid by the users but by the marketers, and i'm a professional marketer. the twitter platform, particularly for complex or business-to-business marketing is a vastly capable, really powerful platform, like the wild west, it only started to be exploited, and the things that you can do with it and the search driven properties of it are like nothing you see anywhere else in the social media world. >> all right. >> and the usership is just hitting its stride, and to me there's nothing like it on the marketplace. >> so you're taking a little higher altitude view beyond the stock price. >> it is down 40% going into today and now down another 16% today. you don't like this stock. is it going much lower? >> the narrative of twitter is really sexy and fun to talk about things like that. bottom line is the bottom line. i'm not so concerned about the lockup period but the earnings we've seen.

skwen i don't think you have to be a mammoth property like facebook to have a million users and linkedin has shown if you can monetize you can make some money. investors are just not that risk on for this anymore. it's on twitter to change the narrative and with slow user growth and not too much profits, the narrative is negative. >> what about mopub and the earnings power there, to the point that david was making, this as a marketing platform for mobile, not necessarily as a social network? >> i'm no dummy either and work in dejtal media and serve ads as well as investors, a deflationary market for online advertising, look at google's details or yahoo! or aol, so i'm not going to doubt the power. i use and love twitter, but, i mean, making money on that and charging a good wage, getting a good profit margin from that that you can pass on it's a lot

harder than people think it is. >> what about this idea, you obviously like it, it's been effective for you and a game-changer for a lot of people but haven't figured out how to make money. that's the concern of a lot of people right now. >> look, that's a question of scale. when you say there's no way to make money. revenue is up 100%. it's the ability to target which is so critical in that deflationary environment he was just talking about. it's unlike any other thing that you see, and i would tell you that the dynamic of it, that short tell me what i want to know, not what you want to feed me, the fundamental facebook dynamic is let me shove a bunch of stuff at you, like 1960s television. twitter is a very intelligent powerful platform that does take some time for users to figure out but it's just like saying did people take the time to figure out how an smartphone works. my mom uses an smartphone now because it's a powerful

structurally efficient way for her to get knowledge of, a much more interesting economic engine than was the dumb phone before, and that's what you'll find with twitter. you can target users by who they follow and the key words that they use. >> is that something that we have -- that's the same market we've had for a lot of tech stocks. it's all gumdrops and puppy dogs. >> i don't think that's right at all. i think that that would reflect kind of a lack of understanding about how cutting-edge marketing is use twitter, and i would also tell you it's definitely the wild west. everybody doesn't have that model. >> one at a time, guys. >> go ahead, jeff. >> that's the thing, i don't doubt the power of twitter, to reach out and get customers and things like that. whether or not it's good for the market or its downstream does not matter for the twitter investment. it's all about the margins and when you talk about scale, again, the sequential year over

year user margin, and i don't see margins. i don't doubt the power of social media broadly, and power in the internet and aol still managed to imploeds. >> the difference between you two, one is a user/consumer and the other is an investor and you're telling two very different stories here, dave. >> that's right, but, i mean, think about what he just said. he said just because it's good for the customers, ie the marketers, the poem who want to pay twitter money, just because it's good for customers doesn't mean it's going to be a good business, i mean, i don't know what defines a good business other than something that delivers results, delivers benefits for its customers, and i can tell you, and, again, it's just the tip of the iceberg, this platform does it, and i don't know how else to look at it. >> quickly, last word, jeff. >> are we being too short-sighted, is that what dave is saying? >> i admire dave for taking the long view on that, but the fact of the matter is a good business is not a good stock and look at

valuation particularly now. it's valued at about 19 billion market cap is what'sapp is, do the math, twitter's user base is a $9 billion valuation, it's a good business, powerful tool and as an investor valuation matters to me. i'm not buying it. i'm not shorting it but i'm not buying it. >> good place to leave you. >> thank you both. >> actually both made convincing cases, i thought. >> 35 minutes to go to the closing bell. the dow is off triple digits, off 103 point. a tough day for markets, especially in the last 90 minutes where we've moved lower. nasdaq moved down 44. the s&p is off 13. >> a little history here. remember the flash crash from four years ago today? >> there is fear in this market. you can take a look at what has happened with the vix,

absolutely exploding today. >> someone in here warns that the technical glitch leading up to the flash crash have yet to be fixed 100%. we'll talk flash crash bugs coming up. >> potential glitches aside. someone here sounding the alarm on a market bubble we could be facing right now. we'll debate both sides of this one coming up right after this. just take a closer look.

it works how you want to work. with a fidelity investment professional... or managing your investments on your own. helping you find new ways to plan for retirement. and save on taxes where you can. so you can invest in the life that you want today. tap into the full power of your fidelity greenline. call or come in today for a free one-on-one review.

the news just broke that obama will nominate timothy geithner as next treasury secretary. >> we saw credit default swaps narrow which speaks to the confidence that the market has in tim geithner. >> the dow in 5,600 point range

and in the last hour of trading, basically a 530-point gain. >> what you're seeing in the market is a big expression of, wow, what a great choice. >> welcome back, a headline in the "new york times" today, take a look. it's time to worry about stock market bubbles. it's longtime editor david leonhard. >> and along for us with this conversation is ron insana. i noticed the headline used the word bubble but you never did use that word in your call um today. it was the point you were trying to make that the market is expensive or that we're back in bubble territory. what were you trying to say here? >> there's a line line between those two, right, when the market gets expensive it does have bubbly aspects to it so i don't have the problem with raising the question of how bubbly the market is. when you look at what i consider

to be the most fundamental measure of the value of stocks which is this graham/dod or schiller measure of measure of pes, stocks have been more expensive in three times, 1920s, 1990s and the run up to the crisis, and i think that should give us some pause about the valuation of the margot right now and make us think that the most likely scenario is that returns going forward won't be especially great. >> so ron, what's wrong with that argument? >> well, i think, first of all, absolute valuation terms that's absolutely 100% correct. a huge fan of david's, by the way. >> thank you. >> a difference between overvaluation and a bubble. a bubble has very specific characteristics associated with it, one of which is, and with david's column included here, there's a universal love and a universal belief that a certain asset class will go up forever. more people are talking about bubbles than they are talking about bull markets, and there's also no retail participation to speak of. it doesn't feel like 1990. certainly statistically not like

1929 or like 2007 in real estate, so the bubble characteristics are missing. relative valuations are in the norm. interest rate is less than 2%, a fair market pe of 18 or 19 so unless those things change materially we can stay at these valuations for a while. >> david einhorn who was talking separately with regard to the tech part of the market and everybody's point if you want to talk about froth or bubbles says he doesn't even think that that space is overvalued. what would you say to that? >> the issue is the market is normally valued only if the period that we're in right now is going to continue for a very long time, only if we're in a period where you'll have extremely low interest rates, only if we're in a period where we'll have a high and growing share of economic growth go to corporate profits. if all those things continued a infinitum then maybe the market is normally valued, but when you look on a longer-term basis the market's valuation depends on

those things, and that's when you look at it relative to average earnings over the past ten years it's not normally valued. it's quite expensive. >> and the problem for investors, of course, it's not clear that there's any better alternative. >> well, that's the thing. >> shouldn't have such high expectations. >> saying where else are you going to invest when the fed is pushing down rates as much as they have the last five years? if you're looking for a decent return the stock market has been the place to go, whether you wanted to invest in securities or not, right? >> and saying it has been the place to go is not the same thing as saying it will be the place to go. >> a lot of people claim a lot of folks, maybe including me in this, saying that this time it's different. this time is not the same as those other peaks. we don't have companies coming public, 1,000 internet companies coming public with no revenues, no profits. they are coming public with revenues and profits. they have gotten frothy and the market has been more discerning about these things and with

respect to the interest rates picture, i'm in the camp that interest rates will stay extremely low and where they are for far longer than most people believe and in that regard relative valuations become more important than absolute valuations. i'd be in the minority camp talking about rates staying down for a long time, but i think they will stay down for a very long time. >> the point i was trying to make off the top of the hour. if you want to talk about places that look extended, the credit market and relative to that stocks look like a bargain which is to say one thing to look at them in isolation and another to say relative to what's happening in other parts of the market and cheaper than they might on their own. >> from the 1998 period to 2008, a secular bear market. i believe we're in a secular bull market. this year may represent a pause where profits will catch up, valuations will be grown into as opposed to grown out of, so i'm in a much different camp than the folks worried about bubbles and absolute valuations right

now. >> and if nothing else, david, contrarian bulls would probably be thanking the "new york times" for putting the word bubble in the headline. >> creates a buying opportunity. >> there you go. thank you for joining us. all big fans of you. >> see you both later. >> 30 minute left in the trading session with the dow down 107. the nasdaq, again, has had the greatest volatility recently. up sharper than the dow. it is down more than the dow today. >> a lot of action will continue after the closing bell. a flood of earnings are due out. disney, groupon and whole food. we'll bring you the numbers live as soon as they hit wall street and how that could affect your portfolio. >> and up next, remember the day that wall street fell over a cliff and came right back. it happened in a matter of minute, four years ago today. >> we're down 500, almost down -- >> no, we were down 900 points

plus in total. dipped below 10,000 again. we had a very nice bounce off of the worst levels. does that tell you anything? >> yeah. we'll talk about lessons learned since the flash crash and the chances that history could repeat itself sooner than you think. back in a moment. back in a mome. announcer: where can an investor be a name and not a number? scottrade. ron: i'm never alone with scottrade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions,

i can talk to someone who knows exactly how i trade. because i don't trade like everybody. i trade like me. that's why i'm with scottrade. announcer: scottrade- proud to be ranked "best overall client experience." woman: welcome to learning. spanish in the car.c on. passenger: you've got to be kidding me. driver: this is good. woman: vamanos. driver & passenger: vamanos. woman: gracias. driver & passenger: gracias. passenger: trece horas en el carro sin parar y no traes musica. driver: mira entra y comprame unas papitas. vo: get up to 795 miles per tank in the tdi clean diesel. the volkswagen passat. recipient of the j.d. power appeal award, two years in a row.

it's been pretty crazy and all of a sudden it went from fairly quiet to a lot of screaming, and all of a sudden -- all of a sudden here we started hearing screaming buy, buy, buy orders. >> relax. that was four years ago. that's not today. >> we should be careful playing these replays. today marks the fourth anniversary of the flash crash when the dow unexpectedly plummeted by almost 1,000 points and rebounded just as sharply. left the whole rebounding world puzzled and they are vows. >> despite the passage of time not much has changed in the trading platform which causes many analysts to worry that a flash crash could happen again. see if there's genuine concerns. and our own bob pisani who you just saw there on air the day of the president bush, and you were

there at the krading floor and we had to pull you into duty to talk about what was going on there. a crazy day. >> we were actually covering a charity event at btig, the annual sports celebrity day and interviewing the yankees fans, crank yankees players and all of a sudden things started falling apart and a lot of people stood up and said what happened to my stocks? stocks literally went through the floor. accenture traded to a penny, i remember a guy standing up and screaming. really was quite a day and things have changed and they have made a few improvements, but i think there's still room for more improvements, do you agree, larry? >> i agree. definitely a lot of room there to improve the situation. when you look at some of the trading bands some do not suspend trading or reverse trading until a 30% reverse and nowadays a $20 million trade is very common and a 25% loss means a loss of $5 million before you

can actually do anything about it. >> there will be a halt and a stock will move in some cases 5%, others 10% in a five-minute period and halt for a few minutes on a rolling basis. that's done a lot i think to stabilize the market. larry, i don't know how you feel, but i think the probability of a flash crash like we had on that day four years ago is a little less likely thanks to the limit up limit down rules that we have in place right now. >> bob, i definitely agree it's less likely that that type of flash crash could reoccur, but if we look back at history, we've had crashes in 1929, '37, '87, back to 2008 and 2010, and there are different reasons why these crashes occur, so the risk is still there. there's 13 registered exchanges, 15 trading platforms all integrated and everybody's desire to trade quicker and quicker, 25 milliseconds for

some people is too long. >> wasn't it just computers run amuck, just a mistake? it wasn't like anybody was rushing for the exits at the same time for some news or whatever. the computers just ran amuck. >> there were some macro issues, great concerns about the stability of greece and portugal at the time, so that were macro issues going on, but by and large we had -- if you look at the s.e.c. report, they blamed some traders who put in some very big sell orders at certain key times, and i think you have to take the high frequency traders have to take a high part of the blame, so-called liquidity providers, and when things got rough they pulled a lot of bids and another big problem is they get uncertain message trafficking, unsure what the pricing would be and when you saw that everybody pulled their bids in general. you're right about that, larry, the complications of the market, 13 different exchanges means a lot of points of failures and a lot of complications. i would love to see it more

simple. we don't need 13 exchanges and 40 dart pools but tough changing that right now >> you mentioned several other examples of crashes or panics in the market, but isn't the point about a flash crash that it wasn't like the rest and that it was to bill's point something that was more of a phenomenon of a computerized trading and market structure and had anything that allowed for that kind of unprecedented in some way event because of the technology involved? has anything been done to keep that from happening again? >> oh, great question, kell, and absolutely. every crash has been different and that flash crash was, as bob had alluded to, multiple factors and had the debt crisis in europe that was going on and then you had the high frequency trading that basically walked away and took the liquidity with it, so, you know, michael lewis's book just recently has brought back the whole high frequency debate and their role in this marketplace so they are still there. the macro issues aren't there,

and if you look at the newspaper today, you have stepped up aggression coming out of russia and possibly some aggression going on in the baltics republics, so there will always be that macro trigger. it's just a matter of questioning whether the exchanges have put in the proper controls to prevent a move like we had. >> that's an interesting question. what will the s.e.c. do in light of the michael lewis book, and the my sense talking to people, it will be pretty modest changes. i know they are concerned about dart pools, and there is an issue with 40% of the trading occurring off the exchanges. i think they will start a very limited program that will require some of the dark pools to improve pricing overall. a limited program, not a systemwide program. >> gentlemen, thank you. good to see you. bob, we'll see you later. >> thank you. >> heading off the close, dow off 108 points and that's no flash crash. the s&p 500 off 14, 47 on the nasdaq. you know, the day of the flash crash, i had gotten off a plane and remember checking e-mail and

seeing, you know, these alerts, market off 600, 700, 800 points. >> i was on my sabbatical at that time. no idea what was happening. >> blissfully unaware. >> i was somewhere. wall street's bracing for a barrage of after-the-bell earnings, disney, groupon, whole foods among them and many more. which numbers analysts are expecting next and bring you those results the instant they hit the tape. can't afford to miss that coming up here. >> a new study finding female ceos being forced out more likely than the male counterparts and a ceo shown the door herself, carly fiorina formerly of hp. we'll be right back. ♪ ♪

drivers want to go further with their electrical vehicles. but you can't take a trip from lisbon to stockholm

if you can't plan and re-charge along the way. the european commission is using cloud to make this possible. creating a single charging and billing network across 28 countries. so drivers can travel as far as they want to go and when they want to go.

minus signs on a tuesday which is unusual lately because the trend lately has been for tuesday to be the best day of the week for the stock market. >> sure. >> usually have a positive -- >> think we borrowed it into the last hour of the session yesterday to some extent. >> not happening. down 112 points on the dow jones industrial average right now. >> and we do have big-name earnings reports due out after the close. domini highlights the numbers we're watching. hey, dom. >> lots of earnings coming out after the bell so let's start off with the big one. disney, street expecting 96 cents a share in terms of

earnings for its second quarter on revenues of 11.3 billion. investors are looking for the company's read on entertainment industry. theme parks a big part of that industry as well and then consumer goods as well for disney. also, check out what's happening with whole foods after the bell today, reporting its second quarter earnings as well. expected to earn 41 cents a share on sales of $3.3 billion. ahead of that trading down half a percent. groupon, always an interesting one. a possible volatile trade. expecting a loss of three cents a share in terms of its first-quarter earnings on sales of $738 million. can you see groupon drifting towards session lows, down about 3%. we'll end with two video gam games-makers, blizzard will be looking to earn a dime on first-quarter sales of $668 million and activision down half a percent and analysts are predicting a different number for electronic arts on $812 million. a very busy day after the bell.

all those results and we'll be flashing them through the next hour for all the breaking news. >> dom multitasking as only he can. >> 12 minutes left in the trading session with the dow down 115. the nasdaq has taken the hit today, down 50%, 1.25%. >> coming up, they make how much? we'll tally up the richest hedge fund managers and the results are eye-popping. do the returns justify this kind of compensation? we'll be right back. 'll be righ. (mother vo) when i was pregnant

...i got lots of advice, but i needed information i could trust. unitedhealthcare's innovative, simple program helps moms stay on track with their doctors to get the right care and guidance. (anncr vo) that's health in numbers. unitedhealthcare. those little cialis tadalafil for daily use helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away.

ask your doctor about cialis for daily use and a free 30-tablet trial.

welcome back. eight minutes to go here. the dow heading lower down 119, almost 120 points. again, unusual for a tuesday. lately tuesday has been the positive day for the week, and look at nasdaq down 1.3% or 53 points. joining me right now, heather hughes back and christine short from capital iq joining us as well. you made that point earlier in the hour. the growth fund, the air is coming out while the focus has been on value stocks lately. >> yeah. >> or defensive issues. >> into the defensive names.

seeing the nasdaq pull back the most right now. you get a little bit of sell in may and go away. in boxing it's the shots you don't see coming that hurt the most and today wasn't expected. do have positive macro economic data. no new news out of ukraine and the geopolitical tensions and not the fed qe taper so what's going on in the markets? >> do we lay this to earnings to some degree, christine? how have they done so far? >> lackluster. >> it's really been a mixed bag. 66% of companies have beat their estimates, and that's in comparison to 64% historically. >> so the estimates have come down. >> analysts have certainly lowered the bar but higher on the beat weight and i'm talking jpmorgan, the bank of americas, where you're seeing the biggest misses and why you're looking at low single digit growth for 2.6% in the third quarter. >> do you want to start thinking about putting these on a shopping list. >> right when the valuations are a little bit cheaper.

again, i think right now, pretty irrational today. markets can remain rational longer than you and i can remain solvent so though i don't follow keynesian economics, i think that's something a broken clock is right, what, twice a day. >> so i've heard. >> we're not quite sure, yet investors, retail guys are waiting on the sidelines. it is sell in may, seasonal trend. i wouldn't be surprised. if you are, you haven't been paying attention. haven't been watching. >> do you think there's something to that as well. i did point out earlier that the dow hit his peak, all-time high april 30th and haven't looked back yet, down three out of the last four days and yesterday wassing in to right home about. >> saw this a week ago with tech stocks falling offer and validated by the fact that pes got very rich and those really need to get down a bit and if you look at how earnings have affected the stock markets, we're up almost 4% as of last night's closing from the peak of

earnings season so i do think some of the better than expect ed results played in the stock market. perhaps we'll see good results after the bell. looking for a lot of big names, ea, disney, whole foods. >> and we'll talk about those in a moment. we'll take a quick break as the market continues to trade lower. after the bell, this bunch of earnings due out including from disney, groupon, whole foods and others. we'll have full team coverage of the numbers and what they may mean for your investments as well. stay tuned. you're watching cnbc, first in business worldwide. siness world. 24/7. i'm sorry, i'm just really reluctant to try new things. really? what's wrong with trying new things? look! mommy's new vacuum! (cat screech) you feel that in your muscles? i do... drink water. it's a long story. well, not having branches let's us give you great rates and service. i'd like that. a new way to bank. a better way to save.

ally bank. your money needs an ally. honestly, the off-season isn't i've got a lot to do. that's why i got my surface. it's great for watching game film and drawing up plays. it's got onenote, so i can stay on top of my to-do list, which has been absolutely absurd since the big game. with skype, it's just really easy to stay in touch with the kids i work with. alright, russell you are good to go! alright, fellas. alright, russ. back to work!

afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve. who found a magic seashell. it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ so the magic shell went back to being a...shell. get live squawks right in your trading platform

with thinkorswim from td ameritrade. last couple of minutes here, here the point i was making earlier, this is april 30th, last day of the -- of the year. hit the all-time high for the dow, and it's been down since that time, so so far they are selling in may and going away, and today we're down another 128 points. now we get the earnings coming out here. here we go. we'll have disney, all of them down here. disney, activision, whole foods and groupon and whispernumber.com told the me while they are expecting the market is 96-cent profit from disney, which isner number is $1 right now. christine. what are you hearing? disney is the big one that we're waiting for. >> two companies within the consumer discretionary sector and disney being one of them.

expected to grow 22% year over year and if they come in at 96%. and we've got trip adviser. they are expected to grow about 10% from a year ago, and, again, internet retailers have been really hot this quarter. of course, amazon missed. however, overall retailers expected to be up 25% for the quarter. >> do you have a favorite on that list? >> activision, whole foods, groupon. >> whoever is beating on the top line. >> i think revenue is important. >> disney's done pretty well. >> great, yeah. >> i think that -- i don't know any economies that have thrived just by cost-cutting alone so i think the success will come from top line growth. we've cut costs to the bottom of the barrel so maybe we'll get good earnings results from disney. again, ceos, i think when they feel confident in this market they will begin to reinvest some of the cash that's on the balance sheets, and i have to point out admiral of our fleet, aig ceo bob benmosche ringing the bell today. >> there she goes again. >> one of the few guests that

hosts the show here on cnbc. always good to see you. >> thank you very much. >> aig taking us out after they reported earnings and spent time with us yesterday, and now get ready for other big ones, disney, activision, electronic arts, groupon and whole foods coming up next on the second hour of "closing bell" with kelly evans. >> thank you, bill. welcome to "closing bell" on a tuesday. not a turnaround here. in fact, it looks like stocks are going out on their lows. here's how we're finishing up the day. the dow losing about 130 points here as we finish up the session. we'll take a look across the nasdaq, the s&p 500 as well as the nasdaq off 1.4%, shedding 57 points, going out on the lows, the s&p 500 off 16 points, 1867 is the level there. let's get straight to it with today's panel. joining me now is kathleen pelly from queen's ann gate capital manager, "shark tank" investor

kevin ollie, sharon epperson and kate kelly and will grasso will join us in an hour or two when he's finished trading on the floor. kathleen, welcome. macro, geopolitics, going out on the lows of the session tid? what's responsible here for the jitters, do you think? >> when you look at some of the other macro assets, you didn't get the same kind of response you think you should have in a big selloff in stocks. gold was actually down on the day. treasury yields didn't move much, so it looked like it was something equity specific moving markets. >> hasn't raised your hackles too much. >> doesn't look like it's geopolitical? >> kate? >> isn't there a disconnect. i was just at the conference yesterday listening to a whole bunch of money managers including those who you know very well, and jones said the correlations broke down and friday was a perfect case as to why treasuries should have fallen, great economic data, payroll numbers, et cetera and treasuries rose. i don't know how to make sense

of it. he even said he day dreams about being on "dancing with the stars" sometimes because work is so frustrating. are you getting a touch of this, and how do you look for conviction in the market? >> i've seen paul dance, and i don't think that's a good idea. i think that the correlations have broken down, and, you know, we found out at the beginning of the year that the correlations might break down but they have broken down in a way that isn't intuitive so that the dollar correlations with gold, for instance, have broken down. something that you think would stay pretty steady, treasury correlations with certain commodities, base metals correlations with -- with the s&p which is usually positively correlated and have gone negative so all the correlations have moved in a really strange way and given the different things happening in the global economy with the u.s., you know, clearly picking up steam here, you would think it's the perfect time to be short treasuries and yet we haven't seen that move. >> many of the traders i'm talking about, too, very concerned about the low volatility we're seeing and particularly the momentum traders, kathleen. is that impacting what we're

seeing happening in the market? >> i've heard people describe it as a crash. is that overstating it? >> in volatility it doesn't make that much sense. this kind of move is hard to really get your arms around. >> i'm curious, kevin. here's the kind of unspoken question that underlies a lot of this, i guess. should we be troubled by this? you know, to your point about watching the bond space. it this calling into question the optimism expressed across equities and maybe across parts of the u.s. economy, or is this a place of opportunity, a normalization and a healthy sign here that we've moved away from such a macro-dominated market? >> every day i look at it and say to myself if i have an incremental dollar to invest, i basically have two choices. do i put it into mixed income where i can make about 4.5% and double the debt short duration under 36 months, that's good, or do i believe i'll make 7% in the equity market? last week i believed that i would get 6% earnings growth and

2% dividend yield, 8%. today i'm beginning to question. am i going to get my 6% vote growth? every day when we have a schizophrenic reaction it's because some incremental investor like me says i'm not going to get 8% and i'll put my incremental dollar into 4% for 24 month. this was the ying and yang of the market. give me good earnings reports in the next 20 minutes i'll wake up feeling frisky and buy more equities tomorrow. >> speaking of the equities market and the uncertainty of it, the other thing i'm wondering is whether we'll see more did i georgens among different stock sessions. hearing more about a bubble mentality. david einhorn spoke about it yesterday and dan loeb, another hedge fund manager also talking about it. we obviously saw drops in some of the stocks that they were talking about, but, still. >> i was just going to say speaking of the tech sector to some extent, electronic earnings are out.

josh lipton has the numbers for us. stocks on the move. josh? >> ea just reporting. the street was looking for 11 cents on 812 million. ea reports 48 cents on 914 million so a healthy beat there on the bottom and the top. ea also giving us full-year guidance. the street was looking for 1.52 on 4.1 billion. ea guides for 185 on 4.1 billion. now, on this conference call, you want to hear more insight about how their core franchises are performing. that's madden and fifa as well, as its cost-cutting initiatives. that conference call will start at 5:00 p.m. eastern. i'll be on it and giving you headlines as they cross. kelly, back for you. >> great stuff, josh. thank you. that stock up sharply after hours. groupon's earnings are out. this one we're watching for as well. dominic joins us from the breaking news desk with those numbers. dom? >> kelly, what we've got here is a loss of one cent per share,

compared to a three cent per share loss that analysts were expecting. sales or revenues also coming in better than expectationed, $758 million versus average analyst estimates for $738 million. they also go on to say that they are happy, at least the ceo is saying, they had a record quarter in terms of demand with worldwide billions increasing, 29% and reaching their highest level ever. also included an outlook for the second quarter. in the second quarter of 2014 groupon expects continued investment to accelerate long-term growth. as a result for the second quarter of 2014 they expect revenue between $725 million and $775 million and look at price per share evenings of break even to two cents her share in terms of adjusted eastbounda and nongap earnings per share so, again, the outlook for revenues in the second quarter, again, between 725 million and 775 million. also a beat on earnings and beat

on sales. the stock is reacting positively. it was up about 5% on the news and now down about 5% other in choppy trade. we'll bring you more details and a choppy trade for groupon, beat on the bottom line and top line and some optimism for some of the revenue numbers for the second quarter. kelly, back over to you? >> thanks very much. >> this is the point i wanted to raise when i mentioned the hedge stocks. i think we'll start to see a divergence here. hearing how it's a stock picker's market and fundamentals will start to matter. i'm not sure that that team has played out yet and here's a pair of names where you had a disappointing situation and a positive one. you're seeing the divergent reaction and i'm wondering if you'll see more choosiness as people look at the tech sector. >> steve, thank you for joining us or stand by for one more

moment, if you would, out from whole food. that stock appears to be sharply to the downside. >> whole foods is plunging in the after hours. big muss, 38 cents a share. analysts were looking for a number of 41 cents a share. revenue number was pretty much in line, 3.32 billion, expected 3.34. it looks like where the pain was felt in the comp store sales and why analysts were paying very close attention to. the estimate 5.2%. comp store sales, 4.5%, so that was a pretty big miss when you look at the sales of stores that are open at least a year. you can expect a lot of questions on the call coming up in the 5:00 hour. sales getting pressured and down 8.5%. >> high expectations also for this name and a pretty big move. groupon is trying to find sweks.

ea is popping and what's grabbing your attention. >> the gay who came in long twitter so i might need a little smelling salt. >> is that a concern with this company or is it an issue of how many employees have stock? >> if that had been great numbers going into this lockup expiration you wouldn't have seen this sort of building up of action on the sell side, so i think it's a combination of everything, and, once again, you did see facebook bottom out a month after their lockup expired, so people are hoping better, for better monetization going forward and something that clicks. if you're in it for the long tall you're in it for the long haul and you need to remember on a day like today you need to give it air to breathe. no spence going in if you're not

long the name, go with the three-day rule. wait, let it breathe and make a higher low in the next couple of days. if it doesn't do that, the worst is not over. >> the last earnings report. activision's quarterly results are out. josh lipton rejoins us. we just saw ea's shares popping. what can you tell us about activision. >> a similar story, kelly, so the street here was looking for ten cents on 688 million. activision reporting 19 cents on 772 million, so a healthy beat there. guidance a by the high. and on the conference call analysts are saying i want to see how recent releases are important and any sight we can get about destiny. we'll be on the conference call starting at 4:30 eastern and bring you all the headlines we have. kelly, back to you.

>> all right. a lot to monitor on that front. josh, thank you. appreciate your views. everybody on the panel. catch more of bill galasso coming up and they will be covering all of the after-hours action, disney, groupon and a bunch of conference calls about to get under way. disney's earnings out any minute now. how does that company -- how that company does, i should say, an extremely good proxy for the broader economy. analysis on that coming up next, and apple shares have been red hot and last ear when stocks were soaring, apple was tanking and a study that finds more female ceos are more likely to be forced out of the jobs of their malle counterparts. you're watching cnbc, first in

business worldwide. siness world. with the technology of cloud, we changed all that. i can sing something into my device. up to the cloud it goes. back down it comes sounding better. we break down the walls of creation, and we give music creation for the masses. ♪ ♪ tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading.

>> this is not the kind of day

welcome back. disney earnings out any moment now. as we await the results let's get insight from robert lewina, larry haverty and the panel is here as well. robert, what numbers are you

looking for here? >> yeah. we're going -- the whisper number was at $1 and i myself is thinking disney could come out at 1.01. earnings estimates around 96 cents a share and interesting to see what happened with the films division. estimate of 1.5 billion. as you know, kelly, "frozen" has been a tremendous hit and no one is talking about "captain america" and that just surpassed 600 million so a lot of good news coming out of there. >> there's so much good news priced into this name. got an update from topeka, finally capitulated and raised their price targets and cautious since initiation. is that a potential concern here? >> no. i think this company could be in a golden two or three-year period, kelly, up to and maybe passing the opening of the park in shanghai. the films are doing terrific, and the question on the films is going to be how much cash is going to accumulate? it doesn't accumulate the minute

the film is released, but it comes in very quickly. i'm expecting the consumer environment to be very good. i think businesses are absolutely berserk in florida and everything we hear is positive about what's going on there. the economy seems to be very strong which will help the local business. i think the only weak spot is the interactive area, and i think disney really needs a video game company. the video game industry -- >> a couple of them just got a little more expensive. >> well, i think the fun is just beginning. there's 145 million people in china to play video games an hour a month or more, and the number is growing very rapidly, and you're seeing video game park being built opposite maccow and this is something disney has

struggled with. see if they are interested. they do have a good game competing with activision, disney infinity, their first real sign of progress in that business, but rest of the company, kelly, i think we'll find is firing on all cylinders. when the stock fires on all cylinders it's highly likely to get out of control on the up side. this is a stock that get enormous public support when things are going well so look for the stock to be up pretty nicely, and this quarter is a really murderous comparison. the next quarter will be real easy. watch the next quarter. >> watching the next quarter or next big blockbuster movie to see if it's going to do the same as "frozen," such a tremendous success and i wonder if there's too much anticipation build up for the next big movie, the "sleeping beauty" movie that my 9-year-old can't wait for it to oh. so much anticipation, is it hinging on the next big film? >> the "star wars" franchise. >> hold that thought.

morgan brennan is going to join us. disney's earnings report is out and let's walk through the numbers, morgan. how did they do. >> reporter: pardon the pun but mickey brought the money. walt disney company, second-quarter fiscal earnings, $1.11. that handley beat the street's estimates of 96 cents per share. that was adjusted on a revenue of 11.65 billion. >> wow. >> again, a beat versus 11.25 billion in consensus estimates. i'm just going to give you there's five -- five divisions for disney. i'm going to give you the three biggest because they have been getting the most attention. the first lion's share of ref knew is media networks which came in at 5.11 billion, parks and resorts, 3.56 billion in revenue and lastly studio. $1.8 billion in revenue and perhaps not so surprisingly strong performance from "frozen" really fueling the number there. we'll keep going through this report, and we'll bring you back any other headlines as we find them. kelly, back to you. >> great stuff, morgan. thanks very much.

robert, what do you think? >> like i was saying, the 1.8 was really the big number, expectation was 1.5 billion but $1.11, a blowout number. a company that's continuing to hit on all cylinders. you just talk about the innovation that is going on in disney and the execution. talked about marvel and just an example of what's going on with exaccuse. one of the earlier ships, cruise ships, let's not forget they are in that business, the disney magic, came out of a six-week drydock, complete new renovation to the ship, one of the big themes right now is marvel, and captain america, so right as the movie is hitting steam with consumers, they are going to go on the ship and will be able to sell there and go to the theme parks. once they come out with a blockbuster hit, just no end in sight of what they can do and the profits they can reap from customers with those brands. >> optimism across the board. shares up 2%, 2.5% after hours. get the final word here.

$1.11. >> well, i think the thing that's really interesting here is the cash, and -- and the thing with something like "frozen" is just generates a mind-boggling amount of cash and does most of it very quickly, and the company has usually been pretty aggressive in using the cash for share repurchases. with the shanghai park winding down, the last stages of it. not a lot of places where capital is going out the door. >> do you think they should raise the dividend even more? >> i think they will do everything, buy shares, raise the dividend. it's -- it's just going to be a great two or three years for the conditions and i think the stock has made me ybe 30%, 40% upside that period, a unique worldwide franchise. >> instead of going to disney this summer is buy the stock, is that what you're saying? >> i like that. >> finance tip out there. >> yeah. >> guys, thank you. >> larry, robert, really

appreciate it. >> staple shares to the movie tickets. >> "frozen" is a juggernaut. it's been hugely popular. every time i talk to somebody, their kids are watching it on demand. >> are you getting investment tips from your 4 and 5-year-old? >> a total possibility. this was a little bit of a comeback to them. they had given up on making their own cg and animated films outside of the pixar franchise and this was a real expensive experiment. obviously worked out very well. >> and see if it can be replicated. i don't know if there can be another "frozen." >> we're on our fifth new spider-man movie. >> and all the "star wars" stuff coming up. >> don't miss "squawk on the street," discussion with ceo and chairman bob eager. don't miss a moment of that. my next guest says buyer beware. what apple's stock will leave a sour taste in your mouth and the

top ten highest paid hedge fund managers made nearly $22 billion combined last year. hedge funds those have underperformed in the stock market and did so in 2013 and they have done so year to date. coming up, hear from one critic who says this kind of performance doesn't justify the enormous payouts. we'll be right back. 'll be righ. (mother vo) when i was pregnant...

i got more advice than i knew what to do with. what i needed was information i could trust on how to take care of me and my baby. luckily, unitedhealthcare has a simple program that helps moms stay on track with their doctors and get the right care and guidance-before and after the baby is born. simple is good right now. (anncr vo) innovations that work for you. that's health in numbers. unitedhealthcare. i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 of the web's leading job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers;

go to ziprecruiter.com/offer2. we know we're not the center of your life, but we'll do our best to help you connect to what is. welcome back. a lot of big movers this hour. a slew of earnings report and dominic chu joins us to recap

them. >> reporter: a lot still flowing in. let's get you up to speed on some that have gone over. disney moving higher in the after hours after easily beating second-quarter earnings expectations. can you see for disney's shares they are up just 1.5%, 2% in the after-market trade and trip advisersing moving lower, down about 15% after reporting first-quarter profits of 54 cents a share. that's a penny lower than estimates. sales also coming in below expectations. again, that stock is down about 14.5% right now. whole foods posting better second quarter earnings of 38 cents a share. three cents -- at least three cents shy of wall street forecasts. revenues coming in and comparable store sales numbers disappointing for a lot of investors. whole foods down in the after markets trade. groupon reporting a loss of 1% a share in its first quarter. better than expectations. revenues coming in better than expected and that stock is currently down 5% in the after-market trade. activision on the video game side of things posting better

than expected first-quarter profits and that stock is up 4% and a very good quarter on the video game side as well for electronics arts, posted better than expected fourth-quarter results and raised guidance. ea shares a nice rocket higher, up 15% so far on the trade. more details for all of these other new companies coming out with earnings, but right now those are the big movers. back to you. >> a busy afternoon for you. really appreciate it. let's talk another stock seeing big moves today and that's apple. since reporting its secretary kwurders earnings the company has surged 14% while the broader market has remained relatively flat, just about .1%. two years since apple and the overall market have been basically moving in opposite directions. 2013, apple had a tough year, the overall market soared. this year it's kind of the opposite. apple solidly higher, the s&p not so much. despite trading back above the $600 mark, apple handley outperforming the s&p 500. my next guest is more bearish on apple than ever, and if he's

right, would that be good news for the stock market given the contrarian performance? >> joining me now is ricardoman. first of all, sir, have to admit the stock has not moved the way you expected. >> kelly, nice to be with you again. the stock has done exactly what i expected. one week after the top at 705, i said apple has made its long-term top and it will now go down. the targets, even my last target of 420 was hit, i have an ultimate target in about a year and a half or so which would be 320, but apple has had nothing but a bear-market rally. >> a lot of people who wouldn't have minded being on the other side of that bear market rally? >> how about -- how about the bear market plunge of $320 a share? let's face it, nobody bought at $385. >> how quickly do you think that's going to happen here? are you saying this is a blip,

that no one should get involved with the shares because they are going straight down from here? >> well, kelly, two weeks ago i was on your program and bearish on apple and it's had a rally. we should not forget that, you know, you don't buy a stock for two weeks. we do it in our trading services but don't do it as investors, and apple has had a bear market rally. when the stock loses $320 per share of its value, it's a bear market. apple is in a bear market, and all the apple groupies really refuse to believe that. they love the little iphone and love the little gadgets, but they forget, for example, apple just reported a 5% drop in sales in march, you know. was that weather-related? i don't think the weather was that bad in march. >> i want to get some thoughts here from the panel to the points that you've made. kate in. >> i just have a quick question for bert on a blue sky question. to what degree is the company still going through a post-steve

jobs adjustment? >> reading this weekend about tim cook and some of the issues he inherited from jobs and also the question of whether he's as the same quality level of jobs as ceo and a controversiy over e-mails exchanged with eric schmidt and other competitors about hiring practices to. what degree was apple run by this visionary and occultive personality and they can't continue on that trajectory? >> that's a good question and exactly my point. i have written, a year and a half ago i said every new product released under the new ceo has been a disappointment, in features and what it did for the customer. the camera is so inferior to the competitor's. i can make you a list of 50 different items where apple has the -- the lower products, so what we have here is a new rejet

stream and leadership in the country and all those who love apple apparently forgot to read the obituaries. you cannot go back and say apple did this three years ago, four years ago, five years ago. >> kevin o'leary, do you like apple, and what do you think about this company? >> let me ask you this question regarding a thesis you've got. value investor and started to look at the stock when it had a dividend. i don't care about the products or leadership. i care about free cash after capital expenditures, and on that metric this company is a screaming buy for me as a value investors, and so as long as cash keeps increasing, why is your thesis right? why would i short the stock right now? that would be a huge mistake. >> well, mr. wonderful, you are a very smart person, i love watching you on "shark tank," but when you buy apple stock, you are buying it with after-tax money. in order to get pre-tax money that you still have to pay taxes

on, i would rather than doing that. you're pike the stock of a company with 88% of its earnings abroad. >> but they are bringing back the cash. i'm a cash guy. issuing cash to repateates the-. they bower, against it with low yield and cash and saying this is a goal mine. shot me the cash. i think you're going to be wrong, bert, i think you're going to go on the wrong side of the trade because too many guys like me looking at the cash. >> nobody has a monopoly on being right or being wrong, and i'm always willing to reconsider. i look at all of my investments every day, but, kevin, you have to realize that when you -- i have 88% of your cash locked up

aproud where it's interesting 2% interesting, it's not good for the question. when i were tim clock, i'd open -- >> got to blame the government for screwed up tax policy on that and give get it to the cfo. >> we'll have to separate you two for now. >> doesn't matter who you play. the situation is what it is. >> and we're going to bring you back. we'll see what happens with the shares. sharon makes a point. a widely owned name. what happens to apple is hugely important to the overall talk. >> why do hedge funds managers make hundreds of millions, even billions in dollars? and are female ceos forced out mar than males? a new study says yes, indeed and carly firn ya disagrees.

she will join us later on "closing bell." "closing bell." u is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. cozy or cool? "meow" or "woof"? exactly the way you want it ... until boom, it's bedtime! your mattress is a battleground of thwarted desire. enter the all-new sleep number classic series. designed to let couples sleep together in individualized comfort. starting at just $699.99 for a queen mattress. he's the softy. his sleep number setting is 35. you're the rock, at 60. and snoring? sleep number's even got an adjustment for that. find your sleep number setting only at a sleep number store. know better sleep with sleep number.

de>>who's got twond rhooves and just got ae. claim status update from geico? this guy, that's who. sfx: bing. and i just got a...oh no, that's mom. sorry. claim status updates. just a tap away on the geico app.

welcome back. along with earnings news on pepsi this hour. let's send it out to dominic for a market flash. >> here's what's happening with pepsico. the company will boost its quarterly dividend by 15.5% to

65.5 cents a share and the yield will be approximate hi 3.1%. it's the company's 42nd consecutive annual increase, pepsico up half a percent, not a major move but another one of the shareholder-friendly dividend boosts. a lot of blue chip companies tend to do this to reward their shareholders. in this case pepsico the latest to boost its dividend. back over to you. >> 3.1% when the 30-year is yielding 3.14. >> an interesting trade-off for sure. >> thank you, dom. >> so, there's rich and then there's hedge fund rich. a list of the top earning hedge fund earnings and the billions that they made in 2013. jeff cox breaks it down for us. >> reporter: thanks, kelly. with the return of about 9% in 2014, it was a ho-hum year for the hedge fund industry when compared to the stock market which gained about 30%, but not for these guys who we're going to look at now. institutional investor compiled the list of the highest paid 25

hedge fund managers. top ten managers made a combined $21.5 billion. let's look at a few of them. number five -- number three, john paulson, paulson and company, $2.3 billion. steve cohen from s.a.c. capital advisers, he won't be on this list next year because of the problems that they had with the firm last year, $2.4 billion, number one, dave tepper from asset manager with $3.5 billion. frequented cnbc guest leon cooperman made $825 million and third points, dan loeb who brought in $57 million and nelson belts at 375 million and david einhorn 350 million and bill ackman.

being a hedge fund manager can still be a pretty nice way to eke out a living. >> do the return hedge funds managers earn the money that they are paid. good to see you, brad. hedge funds have become so big, have proliferated and is there a reason that the guys are able to make the money that they are? >> it depends, the answer. depends on what their strategy is. a manager who is investing stocks probably should be benchmark versus the s&p 500, so it's a very difficult question and clear answer. it's a little bit opaque. >> let me ask you this. do you think generally these payouts are warranted or justified? >> depends on how they did. a manager that was up 40 last year and then invested in stocks and the s&p was up 32, i think

the pace should be re-tweaked a bit. the 8% overperformance he should carry interest on that piece, not the entire, a manager up 15, are you really excited about that? >> kathleen, what do you think? should we -- should we be changing the 2 in 20 model here? >> i think the 2 in 20 mod sell changing. to brad's point, certainly managers on that list that did outperform air benchmarks and are getting paid on that. most of the top ones were pretty close or above their benchmarks but you're seeing fees coming down now through the space and a move towards more of these more liquid strategies and a merger between mutual fund strategies and hedge fund strategies so all that will add additional pressure on fees. >> there's a great interest in trying to get what the hedge funds can get and investment strategies and mutual funds have gained a lot of momentum and some have outperformed some of

the hedge funds. i'm wondering how much that has to do with the concerns and criticism, brad, of what the hedge fund managers are getting paid. >> you can see on the screen, ali baba has filed for its openio. kayla tausche is going through the details and will join us in a moment with the details. brad, please, go ahead. >> still very earnings and the liquid alternative has been very excited. run two liquid alternative mutual funds and i've been investing hedge funds in 25 years and a lot of people doing hedge fund strategies, over 200. >> i want to make a point about this data set. some guys go out to the park at night and turn over rocks and eat grubs. this is a nasty business if you're small so focusing on the outliers it makes it sundays like every hedge fund manager is making a fortune. if you don't have $600 million you're not breaking even.

>> kevin, i want to talk to brad for a second about this ongoing trend because, you know, investors have been pushing back on the 2 and 20 model as well as the lack of ability to get in and out of the investments, right? they want liquidity. they don't want eight quarter gates where they have to get their money back over the course of two years or something like that and that's something you addressed with the more liquid strategies, but i have to say also, kevin, i hear you. this list is interesting. look at steve cohen, the number two earner in a year when his company was literally indicted. i give him credit for great performance. they made 20% last year, but with 3 in 50 of course he's making that much and if you look at it that way the legal ramifications don't matter. >> incredible. we'll leave it there for now. breaking news and thanks, brad, for joining us. >> our thanks to jeff as well. much more on ali baba's ipo filing as soon as we come back. keep it right here. ep it right . five tech stocks with more than a 10%...

change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. how much money do you think you'll need when you retire? then we gave each person a ribbon to show how many years that amount might last. i was trying to, like, pull it a little further. [ woman ] got me to 70 years old. i'm going to have to rethink this thing. it's hard to imagine how much we'll need for a retirement that could last 30 years or more. so maybe we need to approach things differently, if we want to be ready for a longer retirement. ♪

if today is tuesdayady for a longer retirement. today, we greet you. treat you. care for you. today, you can come to cleveland clinic

for anything, everything or just to get that "thing" checked out. big, small, and yes, the best heart care in the nation. it's here everyday, for everyone. that's the power the power, that's the power of today. cleveland clinic. call today, for an appointment today. welcome back. ali baba is filing for its ipo here. kayla tausche looking through the details fours what. are you learning, kayla? >> we're seeing the f1 for ali baba, very few details, a $1 billion placeholder for what ali baba hopes to raise through this offering. we're hearing it could be upwards of $20 billion, one of the biggest ipos in u.s. history, but, of course, they are just going to hold that place with $1 billion. no symbol, no exchange quite yet. no idea on timing because, of

course, the s.e.c. will need to go through this document. we're seeing six banks as expected lists in alphabet call order on the front of this filing document. one of the main numbers that investors are going to be looking at is gross merchandise volume. that's the amounts that transacted and goods bought and sold on the ali baba platform. last year that was $248 billion, a multiple of the business that amazon and ebay do on their businesses so it shows you the scale of what ali baba is doing here. a big pores of that is mobile, not as many as expected so those are the two key numbers most people will be chewing on. more when we go through the document, more about margins and exactly how much is processed in payments. those are other key figures investors are watching for. for now back to you. >> kayla, thanks very much. we'll see if yahoo! shares are moving after hours on this. also get a view here from bert

dohmet. let's talk about this business and what we learned from this filing. ali baba, kayla mentioned $248 billion in gross merchandise volume. >> yes, kelly, you know, i think it's a great company. i just think that they waited about six month too long to do this offering. the stock probably won't come to market until later this summer, and that will be a terrible time. i think by that time the crisis that is happening in china, they are having an enormous credit crisis, is going to taint the stock so the launch obviously will be successful. wall street has to pull off the stops out for this. they have to call in all the chips. anyone who owes them any favors, they have to get them to buy in order to make the -- the launch successful. but thereafter you have to watch out. if i were buying that stock on the openings, i wouldn't stick around very long because the -- the china crisis is going to taint the stock. >> okay. >> and it's going to go down. >> understood. >> thank you, bert, for sticking

around. >> my pleasure. >> want to get more from brian hamilton who joins us now on the line. brian, what do you make from what you see in this filing? >> well, here's what i like. the company is actually making money for a tech company, hallelujah. you know, we've been covering these companies for a year. we have a tech company that's got about a 40% margin, which i really like. that's the big positive. >> 40% margin, how does that stack up with the competitors, brian? >> well, it's very, very good, and as you know, if you lock at other companies like twitter, they were losing 25% net margin, so i think it's a good company. i am worried, however, as the previous gentleman, that it's a little bit late in the cycle, so if you're getting in now, you know, it might not be a real long run play. >> and you just heard some concerns from bert about the backdrop here that china, having a credit crisis that it may or may not be heading into, could weigh on the shares and make

them less attractive. do you agree it could be the macro that makes it less important for ali baba? >> i think it's a good point but i'm not into guessing the economy and credit crunches and all that stuff. i don't think that's what investors should do, look at the financial performance of the company. it's very good. i think there's big bombs in here, potentially, by the way. as you know, in the accounting standards, the regulations, s.e.c. compliance, there are footnotes that have to be read, and they are definitely immaterial when you're looking at chinese ipos. >> we'll leave it right there. brian, please stick around. after the break we'll have more from him, from our other guests on the panel from our alibaba's f-1 filing. keep it here. keep it here. oud it goes. oud it goes. back down it comes sounding better. we break down the walls of creation, and we give music creation for the masses. ♪ ♪

cozy or cool? "meow" or "woof"? exactly the way you want it ... until boom, it's bedtime! your mattress is a battleground of thwarted desire. enter the all-new sleep number classic series. designed to let couples sleep together in individualized comfort. starting at just $699.99 for a queen mattress. he's the softy. his sleep number setting is 35. you're the rock, at 60. and snoring? sleep number's even got an adjustment for that. find your sleep number setting only at a sleep number store. know better sleep with sleep number. so ally bank really has no hthat's right, no hidden fees.s? it's just that i'm worried about, you know, "hidden things." ok, why's that? well uhhh... surprise!!! um...

well, it's true. at ally there are no hidden fees. not one. that's nice. no hidden fees, no worries. ally bank. your money needs an ally.

welcome back. the chinese commerce giant alibaba has filed for its ipo. we'll give you detail on how profitable the business is. we want some more thoughts from our panel along with john ford as they continue to look through the details of this report. larry, first to you. look, $5.5 billion in revenue. 618 million users. $240 billion in gross

merchandise here. what value do you think is going to be placed for these shares? >> by the time we get the first day of trade, we're looking at over $200 billion. so $110 billion or so. 10 cents does video games and collects money on micro transactions in video games. 39% of people in the world are on the internet right now. zuckerberg wants them all to get connected. there's tremendous internet usage in china relevant to the stage of development in the country. 61% of chinese use the internet versus 21% in the world. alibaba has a phenomenal share of this ecommerce. the china like to play games. they like to gamble and use the internet. this is the business model of choice. you have a dominant market share. you have high margins, rapid growth. in three years, kelly, more

people are going to join the internet in china than the tv household population in the united states. so the game is if you will, just beginning. i have traveled over there for about 25 years. and what happened in 25 years is truly astounding. >> yes. >> it plays into alibaba's hands because they don't have the same retail infrastructure that most developed countries have. they're under infrastructure if you will. >> yes. larry, hold on one second. i want to get some thoughts from john as well. john, how would you characterize what we're finding out about this company relative to expectations. >> this is the deepest insight u.s. investors are getting into the evolution of the chinese evolution. their main focus will continue

to be china. it has enormous scale within china. you mentioned that 136 million mobile active user number. 8 million annual active sellers. on page 143 of this f-1 document. they do an education unusual for what we see in an s-1 of exactly what each segment of alalibaba' business does. they start off and explain how people buy movie tickets on mobile. how they might furnish their house using parts bought here. they give another example of how chinese consumers were able to buy crates of u.s. cherries in advance and get them shipped within 72 hours. but for the consumer within china, this also breaks down the ownership. soft bank how it owns 34.4%.

yahoo 22.6% and and how it does business within china. >> i was going to say to you and kevin, i want to know whether kevin would buy these shares and whether you think the shares the general public should be looking at as well? >> if i want to make a call tonight on alibaba, i don't have to wait. i can buy the hold code. you're going to see some amazing volatility as people take this data and try and figure out where this is going to price. the way to do it is either go long or short, yahoo. you can buy a proxy on this deal right now. there's no value in the rest of yahoo's business. this is a holding company for its holdings in alibaba, the world's largest internet play, or ipo and all that. >> sharon? >> i think there are lot of questions about the accounting standards.

i think individual investors would have to know about bhefor getting into it and the fraud allegations from the past. >> final thoughts on this big ipo coming up after a short break. keep it here. you, my friend are a master of diversification. who would have thought three cheese lasagna would go with chocolate cake and ceviche? the same guy who thought that small caps and bond funds would go with a merging markets. it's a masterpiece. thanks. clearly you are type e. you made it phil. welcome home.

now what's our strategy with the fondue? diversifying your portfolio? e*trade gives you the tools and resources to get it right. are you type e*? honestly, the off-season isn't i've got a lot to do. that's why i got my surface. it's great for watching game film and drawing up plays. it's got onenote, so i can stay on top of my to-do list, which has been absolutely absurd since the big game. with skype, it's just really easy to stay in touch with the kids i work with. alright, russell you are good to go!

alright, fellas. alright, russ. back to work! little things, anyone can do. it steals your memories. your independence. insures support. a breakthrough. and sooner than you'd like... ...sooner than you think. ...you die from alzheimer's disease. ...we cure alzheimer's disease. every little click, call, or donation adds up to something big. alzheimer's association. the brains behind saving yours.

welcome back. what an hour. we have had a ton of earnings. we have learned about alibaba as a company, how big it is. kevin, you were seeing if you want to buy into chinese commerce you should buy shares off off off of yahoo. >> if you think the range is going to be that high, $200 billion. yahoo is worthless. it's a holding company. it holds its share of alibaba. i just speak the truth. >> kathleen, how concern should people be about the general health and buying power of chinese consumers? >> i would be worried about the chinese consumer right now. i think the earnings power has been run up by the unemployment. and i believe they're slipping.

>> alibaba's ambition to expand into u.s. markets and how efforts on both sides of the pacific have fall tered. >> thank you all for being here. we're going to send it over to the "fast money" crew and let them help us go through these earnings and all the things happening with alibaba. >> breaking news. alibaba filing for its ipo moments ago. we are digging deeper. plus we have got someone who says the company is worth $195 billion and major earnings news. conference calls going on for disney, whole foods and grew upon. a number of the momentum movers. groupon. all falling in the after hour session. twitter, shares sinking