>> good luck. >> my pleasure. >> watch that watch. >> getting a little shifting over here. >> hey, everybody. thank you for watching "street signs." >> "closing bell" is coming up next. see you tomorrow. and welcome to "closing bell," everybody. i'm kelly evans here at the new york stock exchange. >> and i'm bill griffith. we are watching these markets back away from all-time highs. the dow is setting lows for the session right now, down 85 points. the s&p is down about seven points, and the nasdaq is down 22. not a huge selloff, but we are backing away here. >> if you want to talk about huge, it's what's happening in the treasury market today. >> yes. >> or what we should say is a culmination of what's been happening in the treasury market. a week or two ago everyone was saying it's a big contest for rates to go higher. they have decisively moved lower even as the macro data has

improved. it's the talk of the town. >> even as inflation numbers go up, it's counterintuitive. is the stock market bracing for a curveball that it wasn't expecting, a report showing a big jump in inflation on the wholesale level is raising those eyebrows and concerns that if inflation really is starting to rear its ugly head it could change everything for stocks and the economy. we will take a closer look at that story coming up here momentarily. >> also ahead, more problems over at the irs. paying out $13 billion in tax credits to people who weren't qualified to get that money. the problem so bad that one in four payments shouldn't have been made, and this has been going on for years. why hasn't it been fixed? larry cud lowe is coming in and weigh i weighing on thoughts. >> and the flap over flappy bird. so addictive that its young vietnamese create ore pulled the game because the pressure, he says, was running his life even though it made him a

multi-millionaire almost overnight. what was he thinking. well, that creator will tell us. he joins us today in an exclusive interview to explain why he did what he did and what his plans are to the future. >> i'm really looking forward to that. >> how about you play him in flappy bird and say -- >> i try not to start playing because i apparently would never stop. >> understand. >> speaking of starting and stopping. here's where we are in the markets right now. the dow is down 87 points this hour. the nasdaq is off by about 22. the s&p 500 is down 7, and the real story, as i've mentioned, is the fact that the ten-year treasury rate keeps moving lower, bill. we may be talking about mortgage rates going below 4% again. we'll see what happens. let's talk about it. jack bouroudjian from index financial partners, keith fitzgerald from money map press, and our own rick santelli. we think others will join us shortly, but they like to be fashionably late to some of these events. i'll start with mr. market.

rick, riddle us this. inflation numbers came in pretty hot for the second month running and, of course treasury yields fall. what's going on? >> well, imagine the cubs win five in a row. there's your strong inflation data, does it really change the outhook for the fact that the cubs aren't going to be in any october playoffs, okay? i think that there are issues keeping treasury yields down that at the moment are actually bigger than inflation picking up a bit, and i have one question, kell, before i continue. what macro data other than the jobs numbers are you considering are really good? >> well, if i wanted to paint a picture about the economy picking up momentum i'd do it in the following way. consumer confidence numbers are the highest -- >> consumer confidence, that's not a hard number. >> the jobs report last month. >> what's a hard number? if you want to talk about the four sort of pillars, take the nbr which looks at business cycles and they talk about what's happening with industrial

production, pretty steady gains, a lot with the caveat of what happened in january. >> the top-tier data, the real data, is the retail sales, the gdp. >> even the retail sales the month before last was okay. >> exactly, exactly. >> there's a four-letter word that's appropriate. >> fits and starts, fits and starts, and that's one of the reason. the globe has been on the wrong side of the trade, but anybody who thinks this is just short covering, it's been so orderly since january 1st, two-way market. bund yields at 137, and french yields at 180. >> and that's why i wonder if it's europe. if you have the bund out there indicating that the ecb might be moving next month, do you think that news today is what's helped push rates here in the u.s. down? >> do you really think that we can be great -- can we be great and europe be horrible? know the relative answer here. oh, we're better than europe, okay. well, the cubs are better than a

minor league team but that doesn't really say much, okay. so to me we see all the answers, but see the stock market and we're not objective, in my opinion, about assessing what's going on or what the bond market is trying to say? what were you going to say, keith fitzgerald? >> i'm with rick. there's a four-letter word and that's risk. what trade remembers all about, what's going on with the ukraine and data because there isn't a single data point, this is all about uncertainty and the fact that traders -- >> why when the ukraine situation seems to have de-escalated for the time being, when jobless claims are improving, why is it now that we're seeing the rally in the treasury space? >> well, again, traders are very, very specific. they don't care what policy womks do, what putin and they don't care except what's going on in the market. they don't want to risk the uncertainty of having a fed making things up, sta statistics measuring the wrong stuff and having economic data that feels good but is not yet a trend. >> jack bouroudjian, you're very

quiet so far. >> you know what, because i've been waiting to jump in. it's not a four-letter word, it's a five-letter word, it's wrong. the bond market has been wrong. it's been wrong for the last five years. it was wrong last may. in fact, a lot of what we're seeing -- >> what do you mean wrong? >> think of it this way. >> are you saying that stocks -- >> the signals that are being sent by the bond market are indicative of a recession looming. we are not seeing the stock market -- >> a recession. hey, jack, jack, look at corporate earnings. >> are you seeing the numbers i'm looking at, corporate profitability about as high -- >> what are the facts in the facts are that we have a low interest rate environment. we've got corporate balance sheets that are healthier than ever before and all-time highs in the stock market. you know what that is, that's good. that's not bad. that's not bad. what are you looking at right now? >> jack, jack.

>> one at a time. >> rick, go ahead. >> caracas is up 200% over the last year, jack, okay? it's not only about the price of stocks. there's a lot of other things that go into the mix, and we are well above the 140 historic low in 10s and way above the 160 a year ago may. those are recession levels and if you want to see recession, just maybe wait about seven or eight months. >> we saw a rate down to 1.8%. we kept people out of the stock market and we saw the stock market rally 200 s&p handles off of that. >> we didn't keep people out of the stock market. >> a lot bought and paid for. >> that 1.8% in the ten-year yield kept more money on the sidelines because they were worried about what was happening with the economy. the bottom line -- >> they had a better return in your stock market year-to-date so far. >> let me add bob pisani in here for a second and bob, good luck. down almost 100 points now so what's with the selloff all of a

sudden? >> look, i'm with jack. i'm a glass half full guy, but i can't help but think the bond market is on to something here. look, at this point in the whole cycle we were supposed to having the central bank sort of moving away from the stimulus and passing it on to a stronger global economy. what do we see? bank of england is talking about keeping rates low for several years. ecb is talking about lowering rates at this point, hardly indicative of ending stimulus and dovish economic policies, and we have some disappointing economic data. so far i'm -- i want to see the numbers get better, but i haven't seen really anywhere near just a skate philosophy but what i would say pretty mediocre growth in the economic fund. >> rick, is it possible that part of the dynamic here is the supply side because the u.s. deficit has improved so much that the treasury is issuing more inflation-like notes and the supply of bonds out there for people who want or need to pick up yields say in this space just isn't meeting the demand,

and that's what's pushing rates lower here, is that possible? >> oh, it's definitely possible, but keep in mine, you're playing a dangerous game here. yes, the deficits are way smaller than the first term of this administration, but still larger than any previous administration so you've got to watch it. so -- >> need to know the role in history. >> it is an issue, i get it, and the dislocations of the central banks. you know, kelly, the fed and the central banks of the world bought all the good paper, so, yes, another unintended consequence. i think you're going to see interest rates and equities in the economy out of phase for years. there's going to be a point where if the inflation data keeps showing up, two, three, four months down the road, could you see a huge spike in rates that doesn't coordinate with any fundamental aspect of the economy and thank you, central banks. >> david kelly joins us from the

jpmorgan global funds. pondering why yields are going lower even as the inflation data, for example, comes in hot here. >> let's be clear. this is not ukraine or geopolitical because the vix index is so low. not worries about deflation because gaps about nominal bonds and tips is pretty high. and it's not recession worries. what this is is a mismatch between supply and demand for bonds. three-quarters of the people who hold u.s. treasuries don't care about the price, you know. federal reserve, foreign central banks, mutual fund owners trying to rebalance their portfolios, pension funds trying to match long-lived liabilities. to paraphrase mickey cantor, it's not about the economy. >> what does that mean, david? if that's going to be the case, what does it mean for stocks and what does it mean for the economy going forward? >> it means it's a dove signal. the treasury market is telling

you nothing right now and you have to go back to look at the economy and where earnings are going and that will tell you the true direction of the stock market which i still think is up. >> wow. >> that got everybody quiet all of a sudden. >> he was right for the first part. >> you've got one of the most crowded trades right now where you're long u.s. treasuries and short european debt. when that trade starts to come off the velocity -- >> who is short european debt? >> everybody. >> every major market-maker. >> they are selling the spread, but they are not short. >> come on, rick, you know what's going on. >> there's no way, guys, no way. >> david, guys, hold on one second. david just made a great point. made a great point and one that's going to be very important going forward. rick, if that's the case, i mean, perhaps you can't trust the signals come out of treasury market or forget about the signals or perhaps rates will be structurally lower here for

quite some time. >> well, you know what? i think that last guest really nailed it, that there are deep pockets. there's liability asset issued out here where pension funds, insurance companies, they are. they are going to hold forever, and i agree with him, but i think where he gets a little bit off the track is that if you monitor all the big number releases and you watch how treasuries and world fixed income react, they react in logical ways like yesterday's weak retail sales so i think it's all of the above. >> no. >> got to go, bob. >> if the cpi is along stronger and parallels the ppi -- >> it's more cooked than a christmas goose. >> could be over 2% for the first time in some time. >> i don't know who just happened here but it just happened. thank you for all the participati participation. david, good to see you. >> we're headed towards the close. dow is down 96 points, pulling back from the all-time highs we've been hitting earlier this week. >> sears is looking to sell its 51% stake in sears canada.

what then becomes sears of a company as a retail chain, we should say? will it survive? we'll talk to some retail pros for their list of retail hopefuls aside from sears coming up. >> also ahead, don't be evil. a group of activist shareholders pushing google's board to practice what it preaches in that regard when it comes to paying taxes, but the question is is it evil for google to legally avoid paying as much in taxes as it could? a lively debate just like we had is still ahead here. >> plus, the internal revenue service goofing again, this time paying over $13 billion in improper tax credits according to the interim watchdog. our larry kudlow weighing in on the mess. keep it right here.

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welcome back. a group of shareholders urging google to stop using every local method available to avoid paying taxes, something every group is doing, especially in tech. this will keep with google's mantra of frankly don't be evil and would it put it at a competitive disadvantage without

exploiting the loopholes? >> joining us is david garrity from gba research and robert lewina from sure vest wealth management who, by the way, is a google shareholder, and you say it's legal, why not? if these laws are available to them to lower their tax base, and right now it's down about 15% effectively, you say okay, it's legal, right? >> well, that's absolutely it. it's not google's responsibility or even within their capabilities to set global tax code. what is in their responsibility a is to maximize shareholder value and part of maximizing shareholder value is operating as efficiently as possible within that code. i mean, i'm a wealth manager. our clients come to us to preserve and growth their wealth, and part of that is making sure that we minimize taxes. we're not taking short-term capital gains, using appropriate accounts, so as a shareholder i think everything they are doing is completely right on and the idea that they are somehow evil for this is somehow ludicrous.

>> so, robert, what about you? >> david, what do you think? >> i think it's interesting here. we have to look at google which is a company that has indicated in its philosophy that they essentially want to operate in a way which basically shows they are good citizens, that they basically think not just about the short term, whatever, you know, robert might have to say about that, but they look at the longer term and think of themselves in the context of stewardship. i think you have to look at the news today. we had the ceo of ibm who said at the end of the analyst meeting, i'm not just a ceo. i'm a steward, and what you look at when you look not just at google or ibm but you also look across other companies, and they do rely upon certain common goods that are provided to them by the governments of the country where they operate, an education system, research and development grants. from that standpoint one might make the argument that maximizing the short term is extremely short sighted. obviously i wouldn't want to draw any parallels between

corporations liking that and cliven bundy basically grazing cattle on federal lands without paying fees for 20 years but if you go far enough there isn't much difference. >> robert? >> the problem is the implication with that is if google pays more in taxes, that global governments are somehow going to take this money and somehow are going to create a better life for the citizens, and i think that's crazy. that's never paid out before. what creates a better life and corporate governments is when people have jobs. when people have jobs they feel valued and good things happen. by google paying more in taxes is ridiculous. i spent time out on their campus with management, in everything from brand new employees there, the thing that google is doing in that community to support local community, interest to their employees and charities is far more than most companies are doing, so, again, i think this is the wrong company and the wrong argument to have with google. >> robert, what if it were a different company so if there was another tech company out this doing all these double

dutch, whatever you want to call them, setups, to book revenue, you know, to keep it offshore and then not bring the money become and reinvest it in this country, whatever you want to call it. if it were a different company would the same principle that you're talking about stand? >> well, i mean, look, i think every individual and every corporation at some point has some type of moral obligation to give back to their community, but i think there's limitations with that, so when you're looking at google, like i said, they go above and beyond. if you have a company that's absolutely just draining the local community there, i probably would have a different argument, but like i said, that's not google. if you know the company, that's not what they are doing and everything they are doing is well within their rights, and i think they are a good steward of shareholder capital, and i don't think this is the right argument. >> good stewards for here. don't publicly traded companies have a fiduciary responsibility to their shareholders to do what they can on the profit side and the tax side to try to maximize

shareholder value in any way they can? >> certainly there are fiduciary obligations and duties and with corporations it's basically resulted in very short-term earnings or profit maximization. i've been ceo of a public company. i know what it means to basically try to manage yourself for quarterly results to make your numbers all look good. here in this context, you know, you might want to be looking at some of the private companies. might lock at what someone like warren buffett might say about what it means to be operating in the context of the u.s. economy and how important it is to support these common goods that benefit not only that company but others. i think the other thing that robert neglects to look at is that there is basically reform taking place within the context of the g-20 and the oecd to basically bring the tax code up to date to match the digital economy so there will be a higher tax rate faced perfectively for google and other digital companies, you know, over the course of probably the last three to five years. obviously the companies could

decide to act ahead of that or if robert suggests that they could basically be greedy and decide not to do anything. >> the thing is warren buffett, if you look at the tax rate that he's paying is not 35%. same thing with bill gates. if you say that bill gates is not doing anything to help the better good of society in the global economy, i think that's ridiculous, so just because you're utilizing the tax code to your advantage and shareholders advantage does not make you a bad person or bad corporation. >> got to go at this point. thank you for some good insights on that initiative there. appreciate it. >> 40 minutes to go to the close and the dow here is down almost triple digits. down 93 points. the s&p and nasdaq are almost negative. >> sears looking hot. it's up almost 30% this month so why do so many people think sears is going the way of the dinosaur. plus, we have stock pickers with their favorite retail plays. we're talking retail when we come back. >> also coming up, the middle east respiratory syndrome or

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welcome back. the dow today off about 39 points this hour. similar losses, about half a percent each for the s&p and nasdaq. 1888 is where that broad market index stands at the moment, bill, and we've downdiscussing what's been happening in the treasury space. again, low yields, that is cheerily the theme of the session here as well. >> once again one of the indices that we're not showing, the russell 2000, the broader market down 1.4%. that's the big loser again today. dominic chu, tell us about some of the movers here. >> pierre: all right. bill kelly, let's talk a little bit first about one of the large-cap companies. we'll start with deere who cited deteriorating conditions in the soviet union. they are down to session lows, around 2.25% to the downside. ibm, also holding its analyst meeting this morning. they repeated its financial goal of hitting $20 a share in earnings in 2015, but investors aren't too impressed. that stock is currently down session lows, 1.5% on the

downside as well. fred's came off its lows on a report from deal reporter that it's in talks with strategic suiters. you can see fred's shares are off 2% and well off the session lows and keurig green mountain falling as north coast resumed coverage of the company with a sell rating. says it expects growth rates to slow and the k-cup products on increased competition, keurig green mountain down 2.5%, almost 3% on the day as well. flip side, kate spade grew, stock up about 9%, and we'll end on the retail them to as well. sears holding is considering selling its canadian operations. sear shares, you can see there, down about 3%. also, bill, kelly, at session lows. back over to you. >> thank you very much, dom. sears has been soaring lately this month, about 20%. many say that stock is more of a trade than an investment though right now. >> if you were to make an investment in retail right now, which one would or should it be? joining us now with the top

retail picks, liz dunn, and eric beador, an analyst over at green capital. welcome to you both. eric, i'm going to start with you because there's one in particular here that caught my eye, abercrombie & fitch. tell me about it. >> yeah. this has been an unloved name in an unloved sector the teen space. you look at what this company has done. they have gone to become much more improved in terms of corporate governance. you have a set of independent directors. you have the potential for further new management to come in in terms of brand managers, and when we look at it, the company has said they will have $145 million in cost savings this year. we in the street assume a materially less amount there so we think this company has extremely clean inventories and they are really positioned just by cost savings alone in the near term to drive upside on a stock that's almost unloved universally. >> liz, your first pick is macy's, came through the bad winter and a lot of retailers were crying fowl because of the

bad winter. macy's did pretty well. why? >> they had some sales shortfalls in the first quarter and stuck to their merchandising plans and those really paid off. i thought the most impressive thing was gross margins were solid and didn't see deteriorati deterioration, you know, despite weak top line and the cash flow is tremendous, raising their buyback and dividend. it was just a very strong quarter for macy's. >> i'm going to steal a little bit of your thunder here, guys, and give our viewers of what other names you like, urban and ann. want to go back to the sears point for one minute here. eric, if the strategy, and there's a great piece on yahoo! b this today, if the strategy is to specifically shed the businesses who they think can get a good return for investors and then monetize some of the licenses, for example, for some of their top brands, is this -- is sears almost as a holding company the best way to manage a declining core brand, a core

retailer here? >> sure. we don't cover sears, but when we look at it for a retailer, if you're a retailer in a mature environment and you're mature and don't have a lot of growth prospects, you'll never get a premium multiple on the street and you won't get a lot of respect for investors so to be able to blow up the company and recognize value from that more than the stock is worth, that's a very rational piece for managers of mature companies to do. i've not done the analysis, but to us we have a number of other players that think about this process if they are a mature company. >> that's exactly is. >> liz, this is going to be a really interesting case. if eddie lampard can make this work there are those who might see their own secular decline and try to make it a go. >> the department store industry is mostly mature, and i think that we've got some dinosaurs out there that had a lot of excess properties and just a lot of excess businesses that maybe could be monetized otherwise. i don't cover sears either, but

i don't disagree with what eric says. >> fewer people do cover sears these days, i will say. it's not highly covered. good to see you both. thank you for your thoughts on retail today, appreciate it. >> half an hour to go, and the dow is now off 101 points. the s&p by about eight or nine there, and the nasdaq is off around 30. i'm squinting, bill. >> yes. >> almost 30 points right now, and as i pointed out the russell 2000, when we get a chance to show that, that's the big loser today, again, down 1.4% right now. >> meantime, here's that story -- there's the russell. irs, the watchdog says the agency paid out more than $13 billion with a "b" in tax credits by mistake last year, 13 billion. the latest developments. we have larry kudlow's take on the whole mess coming up next. >> also ahead, new york attorney general eric schneiderman going off air bnb trying to subpoena its customer records.

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okay. going into the last half house, the selling is picking up pace in the u.s. stock market. the dow down 117 right now. that's the low of the session

right noh there. same for the nasdaq, down .84% or 34 points and the s&p down 11 and, again, highlight again, the small caps, the russell 2000 which has been flirting with correction territory being up 10% from its recent highs, down another 1.5%. that's the big loser. >> is it the trenders or the countertrend? that's the question. let's send it over to dominic chu for a quick market flash. >> a small-cap stock is moping in the opposite direction to the upside. world wrestling entertainment. this on reports by wrestling observers that nbc universal could announce a new tv deal as early as tomorrow. wwe shares, they are spiking towards session highs, up about 6%, so at least one small-cap stock, kelly, moving in the upsid direction. back over to you. >> dom, thanks very much. the internal revenue service under fire, an agency watchdog saying the irs paid outmore than $13 billion in tax credits last

year by mistake. eamon javers following the story. >> give us details. >> there's a watchdog that oversees the irs and treasury and did a report pointing their finger to a long-standing problem which is the overpayment of earned income tax credit payments to people who don't deserve them entirely or giving people too much money. here's what they found in a nutshell starting with some of the big numbers. they say the inspector general says that 22% to 26% of 2013 eitc payments were, in fact, improper. they also say that between $13.3 billion and $15.6 billion of improper payments were made that year. they also say that the irs is not providing some of the required information about all this under the law. now, some of the questions here are how much fraud is involved in that $13 billion. the experts i've talked to say there could be plenty of fraud in there, but it's not necessarily entirely fraud.

a lot of this stems to errors by paid tax preparers, and also some confusion over who is entitled to take credit under the tax code for children in some of today's complicated family structures, not always clear in families who gets the earned income tax credit for each additional child. complicated stuff and billions going out door and the inspector general saying a lot is improper. >> eamon, stay with us. our own larry kudlow is in the house. >> just itching to go. >> eamon, i find this an interesting story. for one thing i think the refundable earned income tax credit serves a very important purpose, all right. it's an anti-poverty program. but having said that, i'm interested in the possibility that the irs is a big problem here, that they can't even figure out the complexity of their own rules and regulations which is, you know, the problem with the rest of the bloody tax code which is why i want a nice simple flat tax. tell me, how much of this is the

irs' problem? >> well, the inspector general says in the report, larry, that the eitc is what they call a high-risk program for problems and so, therefore, it should be monitored at a higher level, and the inspector general says, if you read between the reads, seem a little frustrated with the irs not providing the montrick or providing the information that it's supposed to provide and not doing enough here to correct this problem. $13 billion, no matter how you slice it, is a lot of money, especially if these deficit-conscious time. >> if some of the news reports in the associated press, for example, over the last couple of years, it could be as much as $150 billion. so you're talking real money here. >> right. >> is that why this program, eamon, which everybody says would be a better way to structure something like raising the minimum wage, hasn't really gone forward? is there some sort of tacit understanding in washington that this ring is rife with fraud? >> people have known about overpayment in the eitc for years. it's been going on for years.

i think it's just a bureaucratic thing of this not being an easy thing to get your arms around because we're talking about millions and millions of taxpayers here and unpacking their individual family structures and who is entitled to what can be very, very complicated, so i don't think the policy decisions are being driven by that, but clearly there's sort of a regulatory effort here by the inspector general to fix this thing. >> you've come here to pound the table for tax reform that you think would solve this. >> 27 million families get this, just to your point, a good question. you really have only two options, milton friedman's negative income tax if you go back a long time. a refundable tax credit or you have a direct wage spending subsidy. either way, you're going to have issues, all right? my point is, yeah, i want -- i want the simplest least complex tax code possible at the lowest rates, and want to get rid of all the crony capitalist deductions, that's what i want, but i also want this.

the irs, which is in hot water with the lois lerner problem, okay, this is an agency now that i think is rife with problems and bad management. you're seeing another manifesttation. this has knowing to do with lois lerner, it has to do however, with the poor management of the irs which is a behemoth agency. it is out of control and it's being badly run. >> when i started my career, my dear friend, in the early 1980s, you were at the white house. >> i was. >> don regan was the treasury secretary, and don regan was talking about this very same thing, tax simplification. we've got to reduce the size of the -- i mean, we've been talking about this for 30 years now, larry. there's no appetite for it. >> and, bill -- >> we did it in 1981, and the really big one was 1986. >> '86. >> we actually reduced federal register pages in the 1986 tax code. >> i'll give you that, but look what's happened since then. >> we have no bipartisan

agreement, all right, including the white house. this is going to change when the republicans take the senate in november, okay. this is going to change. you're going to see many proposals. we've already had a couple for a flat tax, we're going to see many flat tax and simplification proposals, but they don't have the numbers yet. i just want -- i want to see the irs -- look, new management, okay. right now we have to live with what we've got. >> is this a management question or too big to manage question? >> including the irs? >> if it's not funded properly. >> the defense department. there ear always going to be issues in these gigantic bureaucracies, a pity we have to have the gigantic bureaucracies. the irs keeps getting into hot water, kelly. what does that tell you, kelly? >> that's what i'm saying. what's the better way to keep this from happening? >> there should be a housecleaning in the irs, that's what we learned from the charitable deduction issue.

i mean a real housecleaning. >> got to go. eamon, thank you. i know you would add more, but tick, tock, 30 seconds, my gift to you, why it's going down. >> as an old bond economist, the ten-year is going down for two reasons, mostly number one the real interest rate that's falling. that means the bond market is not optimistic about the future of the economy. >> or inflation, which to bill's point, even though the readings have been better, inflation expectations are actually stable if not lower. >> it's all coming down. again, it's the real interest rates that are bringing it down. that's a negative for the economy. second point, janet yellen will not raise the fed funds rate in my lifetime. that's what the bond market is saying. >> the bond market pushes the fed around and vice versa. >> they are betting on a zero funds rate, i'm guessing, all through next year, all right? they are betting no big comeback in the economy and flat fund

rate. that's what they are betting at. right on wrong. >> i want you living a long time. good to see you. thanks, larry. >> wow. >> that's a statement. heading towards the close, 18 minutes left. come off the lows just a smidge. down 108 points on the dow jones industrial average. >> yeah. now, as some of the world's best cancer doctors are prepping for the annual meeting at the end of the month, a smoke peek at the new cancer drugs in the pipe loin that are scheduled to be revealed later today, and that's coming up next. >> plus getting up to speed on the middle east respiratory syndrome. it's been called mers, and it's expanding now to 18 different countries. you need to know about this. don't touch the remote.

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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. welcome back. so the losses here, we're seeing the dow off 106 points, the s&p almost 10 and the nasdaq almost 0, so it is a mirror image, bill, of some of the reflexive gains we saw friday into monday. a couple of strong sessions there, but today not the case. in fact, certainly giving up some of those. >> indeed. all right. a busy day in the medical front. we have the middle east respiratory syndrome, mers,

continues to spread, and we're watching out for new cancer drugs that will take center stage at this big oncologist meeting taking place late they are month. meg? >> the biggest cancer research event of the year starts late they are month in chicago, but tonight the majority of the data will drop. that's at 5:00 p.m. analyst say it's the big pharma companies that will really dominate the headlines. looking at stocks including bristol meyers merck, astrazeneca and including others cll incyte. those will be important. switching directions a little bit over to mers. the world health organization saying they met and are even more concerned about the spread of mers. reaching 18 countries, including the netherlands reported today. there's been 536 cases confirmed by the world health organization. so far 145 deaths. again, this is mainly centered

in the saudi arabia area, but we've had two cases here in the united states. now, i reached out today to two major vaccine-makers including merck and pfizer, they are not working on a advantages ian and some that i spoke with said this is appropriate saying that the spread is relatively limited right now. >> that's true. sars infected like 8,000 people in year one. troubling but not quite as bad so far, but thank you, meg. the nasdaq is down sharply and the russell 2000 has been the hardest hit so far today. >> coming up on the program. have you flapped lately? i'll speak exclusively with flappy bird's creator about becoming an overnight sensation. why he pulled the game down even though he was making millions from it. an incredible story is later on "closing bell."

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okay. nine minutes left in the trading session. coming off the lows, but, again,

a selloff day not only for the blue chips but the secondaries, the small caps. also if we showed you the russell 2000, it's down 1.5%, so it's near the session low. joining me right now is larry mcdonald from new edge usa and marian kesler from beckham capital management. had pretty good gains going earlier this week. all-time highs and now they want to sell off today. >> market taking a bit of a breather. acquisition news has been pretty positive for stock prices. >> the market has been so herky jerky here, really all last year. saw the market go straight up and no volatility whatsoever. volatility isn't bad for stocks. you get the opportunity to buy stocks a little bit cheaper and sell your winners. >> speaking of herky jerky, the ten-year yield plunging today, even though inflation data was very strong. am i -- are those apples and oranges, or is there no cause and effect now? >> there's so many things going

on. i think it's a capitulation moment for people that are short treasuries. want to start to get long. very bullish on treasuries from the 3% level at new edge, but i would say the capitulation level, just too many people getting out in terms of covering -- >> why not, do you think? >> i think it's because of a number of things. dodd/frank is ringing in wacky dynamics in terms of supply of treasuries, and i think that the economy is just not as strong. the entire street, i've said this before, bill, the entire street on january 1st was bearish on treasuries. every single analyst, everybody can't be right. >> expected yield to rise as the fed is tapering and it hasn't happened so far. >> too many people on one side of the boat and now they are on the other. >> we've had really combating disinflation over the last five, six years, so for a little bit of movement in the pti, that's a positive for stocks. >> two months does not a trend

make, but we've had two hot numbers on the ppi the last couple of month here. >> we have. >> is it possible that the fed is behind the inflation curve, do you think? >> it's always positive. >> yes, right. >> but, you know, we're starting to see an improvement in the economy, housing, employment, across the board globally, with perhaps the exception of china which is an unknown, we're seeing stronger growth. >> i'll bring you two back. we'll come back here in a moment with the closing countdown and see how we close here, what kind of minus signs we have for the day and after the bell a new survey shows happy days are here again for travelers. really? wait until you hear how flyers rated their satisfaction with airlines. i want to know who these people are, but we'll ask that question come up and kelly's panel weighs in on their latest flying experience, though it's always face in first class, i suspect. we'll talk about that coming up as well.

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♪ ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade. all right. inside the 3:00 mark. heroes what we've done today, selling. minor amount in the -- in the morning and it just kind of drifted low in the afternoon which is what we've seen lately except for the early part of this week so this is more in line with what we've seen lately. the dow is finishing down about

100 point or.06%. the bigger hit has been on the smaller caps, as i mentioned. the russell 2000 the one getting clobbered today, down 1.5%, maybe flirting with that correction territory where it's down 10% roughly from its most recent high so we'll keep an eye on that if that's what's happening again. conundrum today has been the ten-year yield which has fallen sharply. down to.02% at its low right here and down a little bit and back with marian and larry and bob pisani as well. do you like small caps here, or would you go with them since they have been beaten down so much here? is that an area that you like in. >> still a lot of value in large cap stocks, particularly in the m & a market, but we're still seeing the best valuation in the large-cap arena. >> go with the quality. >> go with the quality and if you can find them out of favor, but, you know, attractively

valued stocks. still buying them. >> you're buying ten years is what you're telling us here? ? now is the time to go the other way, sell bonds. everybody that's caught short is getting -- >> you think yields will -- >> we have a capitulation model that measures pain, really, and the amount of pain that's in the tbt, and we were at an event last week, and the amount of shorts getting carted out is very, very high right now. >> we should see yields move up, and i do not buy the theory that the bond market is lying because there's a mismatch in sly/demand. >> we should have seen by this time central banks around the world, slowly getting out of the stimulus bus and passing it on to a higher, stronger, global economy. neither one of those things have happened. there's a reason why yields are

low. >> wouldn't be the first time that we've had a disjointed market, that's for sure, but it's happening again today. thank you for your thoughts. >> going out just off the lows of the session. what happened to the all-time highs. let's talk about that, and have we mentioned cisco earnings are coming up as well. all that and more coming up on the second hour of "closing bell" with kelly evans. i'll see you tomorrow? welcome, everybody, to "closing bell." i'm kelly evans. wall street averages backing away from all-time highs, decisively so. dow hooks like it's shedding 100 points, 14,614 and the nasdaq meanwhile has opinion taking it on the chin and leading the sort of countertrend rally that we had the last couple of days. today it's off 30 point. the s&p is shedding about nine and the russell sunday pressure. small caps didn't look that great and the russell is off 9% from its year-to-date all-time

highs. here me is marcus lamodis and carly fiorina and our own seema mody and stephanie link is joining us and also from las vegas is "fast money" trader brian kelly. >> i said something about a trade and countertrend. what is the trend in the market today? >> so the trend is a continued rotation away from grow, away from small caps and more into value and more into yield. look at the ten-year bond yields and it it is, 2.5% 2.of% so that's not attractive now and why utilities have led the market, staples, pharmaceuticals, not boy tech the u.s. economy is okay. not in a recession, it's about 2%, 3%, so that's not good enough, to be the break out that a lot of people were expecting.

>> new yield plays in the stock market, can't get it somewhere else? >> shares say what? southwestern, may being is olds going on, at a new high and m y macy's did the same thing and that quarter was okay. that's what people are looking for. >> the quarter was okay but macy's quarter was down. >> a penny better than expected. >> top line? >> sales were also impacted a little bit by weather. i'm not saying everything is perfect at macy, but they are doing the right thing that investors will look for when they are trying to find some yields in this market. >> having a big debate at top of the last hour about what the trend is in the economy here right now and to be -- the extent to which the u.s. may be a different story. carly, i would love to know with the lens that you have of what's happening elsewhere and what you see here. what do you think is the case, is growth picking up --

>> if you're looking to yield you come to the equity markets in the u.s. we know europe is stumbling along, some quarters it's okay, some question it is. we all hold our breath and then we see that the economy isn't doing all that well and we're still uncertain. that's the story. you can't bet on a sector. i completely agree that you have to bid on stocks and look for yields in specific names. >> the mixed market that the market is sending traders is driving traders crazy, on main street and wall street as well. focus on the yield on bonds dropping, that indicates lower growth and lower inflation, or do you focus on mia activity?

>> that's why i say we're not headed to a recession. i think our growing at 3%, 2%. >> welly. >> the mbna activity is -- is it boy same-store numbers. >> well, it may also be an issue of consolidation. how have you -- >> if our worried about the macro environment, they wouldn't be using the cash but would hoard the cash. brian and kelly, what say you? what are people talking balance? >> the behavior of the market has changed. the sentiment has changed. when you have the momentum meltdown over the last six weeks or so, it's exactly what we're talking about, the idea that the economy is going to start

ripping along. the hope for that is completely gone right now so it doesn't justify high pes. you know, take the bond market out of it. there may be some anomalies going on there in the very short term. look at the small caps. if the u.s. economy was at a 4% gdp growth rate which a lot of economists have, small caps is where you want to be, especial ly china. >> brian, people have also made the case that the very rotation they are citing for not being reflective growth they are saying it's because of growth. they don't need to -- you can just park your money no more st. i guess i can see that as a lot

of the high growth names are down 50%, 60% in the last several weeks. that doesn't say everything is going great. you might get a mild rotation in the economy is getting better, but it doesn't that way to me. >> what about retail sales, marcus? >> saw a resurgence in the month of april and i'm not the one bought on the winter being bad and that's the cause of it. i'm seeing confidence. in my own businesses i'm comfortable spending money, particularly on the beingation side. i am second guessing myself when i see gash leaving the so wondering if i have you had hold it. >> there's a structural issue that will hold that growth. >> what are we destroying? >> a lot of people would think with all the focus on scarredups and capital the venture of new

businesses is creating -- venture call tap hits 4% of the new and small businesses. most startups get their money from family, friends, community banking which is having a tough time so actually the small business market is not doing that well. >> getting started from friend, family and me. >> as you can see on the sysco just reporting, the street was looking at 48 cents and cisco reports 51 cents so a beat there on the bottom and the top. in terms of capital return, cisco saying it repurchased 90 million shares for a total of 2 billion during q3. the call here will be critical, analyst looking for color on guidance, on i.t. spend,

booking, backlogs. the call starts at 4:30 even and i'll be bringing you head dines. >> let's brirk in jason and ross for their thoughts on civico earnings. >> i know you weren't loving the name going into but what about now? they are doing relatively fine for lowered expectations but what's there to love about sysco? they need macro economic growth to really make more money and we just heard a whole panel discuss how that's not happening so i just don't see how cisco is going to meaningfully grow their business right now. >> hang on a second. looking two some of the details of this report. eric, what say you? >> well, i -- i tend to agree with ross on the fact that the lowered expectations are a bar that they artificially set.

i think the more interesting thing is when they give the call, give a little bit more perspective on what the order growth was, and that's really probably what investors are more interested in at this point, trying to -- >> well, this company has had a hauf time in switching with the new equipment, do either of you think we'll see in items on the flopt or is this better cost cutting on a bit of lowered expectation sghz they have been making progress on some of the areas. they have added -- they have been waiting for the service provider piece to come on. i suspect that that also picked up for them, so, yeah, i think there's some interesting drivers that they got going on.

it's just a question of when does the slower growth areas get offset but the new emerge is areas? >> and i also think that the growth areas they are vesting in, particularly things like the data centers, margins aren't as good as they have been on their tra diggal business so they are wrestling with that as well, i think. >> you don't really invest in shares of sysco for growth, because it's one of those value plays. pirs up 7% and one thing we'll say is do you look at a company like this and say it's a great company or do you look at one of the high growth names that's bringing in sales? >> another $2 billion buyback market. >> i just have to ask a question. with their market share and the fact that their product doesn't research as other products, do that have contributed to the decline in their sales summer? their product is great. i use it myself. >> rob? >> i think in general if you

look at this company, nothing exciting has happened in sewing. >> what do you want to have happen? >> they need to get into a different business and focus on growth. a have company, we haven't seen anything now from john chim percent for cosong. >> absolutely. >> what sector would you like him to target? >> he can have vertically on horsaint i but he needs to be in businesses that are growing. >> quick last word because we've got to go. >> i do think there's a lot of moving parts behind the scenes. i do think we'll see a ceo transition over the next few quarters. i do think this you'll have some -- >> what's that? >> that are move the stock up i

remember when sick was one of the four horsemen. thank you for your perspectives. actually, brian is coming up with the rest of the "fast money" craw at 5:00 pm. they will sit down with strig business receivers. all of that coming up in the next 45 but first a quick market flash before the break. dom? >> a bloomberg report saying that insurers will reduce the size of insurance policies that sears suppliers get for guaranteeing that they will get paid by companies like sears, in essence, what they are owned. sears down 5.5% and a weaker tried in the last five minutes. kelly, back over to you.

>> pierre: a new ary that go ahead -- a look next at how much prices will have to wore for -- airline passenger satisfaction is enjoying and speaking of flying high. flappy bird, one of the met popular mobile games around until its creator abruptly pulled the game. coming up, he's here to tell us what he did it and when the game may be coming back. keep it right here. you're watching cnbc, first in business worldwide.

welcome back. another earnings aher the. dom chu, what did you tell us. >> seaworld, entertainment. light trading, the stock is moving just a bit lower in a jumpy after-hours trade. the company reported a wider loss than expected in the first quarter. sales also coming in a bit shy of analyst expectations as well. it was down 4 pant 2%, at one point it's down half a percent and, again, on light trading, only 6,300 shares, kelly, have traded so far in the after market, something we'll keep an

eye on. back over to you. >> not making too much of a splash there. wall street is getting a bit of an inflation shock today. also shocked is the way the treasury market reacted. the government reported that producer prices took a jump, the larkest increase in a year and a half and now former fed chair alan greenspan adding the inflation concerns. take a listen. >> i've not forecast that inflation is about run. i doubt it very much, but the presumption that its no longer on the horizon i think is a mistake. >> mike: all right. so are higher inflation rates around the corner, and with that would the fed feel pressured to raise rates sooner than expected, join us now is our own steve liesman president of bianco research. great to see you both. do you buy this. let me put it this way. why don't the treasury market seem to care today that the

picking up and the cpr tomorrow might show thing in. >> because the producer price index is not the measure that the fed watches, they prefer the pce index. consumer prices have a spotty record of being leading indicator for pciocte. interesting that these numbers went up but not indicative that the rest of the numbers will follow suit. >> i know for some sort of structural reasons it may show an increase but at this point shouldn't there be more of a reaction to prices moving out of the disinflation zone? >> kell what, time is it? >> 4:18:20 on the east coast. >> how many hours or minutes ago were we worried about disinflation? that's what i'm saying. >> last week or two weeks ago i brought along a chart that you can lock at and jim looked at which basically shows it's the express policy of the most powerful central bank in the

world to raise inflation. we' apparently want inflation t go at least somewhat higher so what we see now is indicative is the aim of central bank policy. i find it interesting that you do get a little bit of an increase in inflation, at least these are wholesale prices, and all of a sudden all the inflationistas, the i told you so folks are coming out. there's two years worth of inflation data, the pce and preferred indicator, not one of those yellow lines, no yellow line is above 2% so it's not really that big of a deal right now and i don't think it moves the fed any sooner than planned. >> and i agree with steve. one of the bigger challenges, i want to know when the prices are actually going to clear the market. i've seen wholesalers push to the final and want to see it clear to the consumer before -- >> you can't pass prices along?

i'm scared taking it on. until i'm comfortable that i have enough behind me to push it to the consumer, i'm good. >> tell the people that they work for you, what they should do before passing along an increase in wholesale prices to the consumer. >> cut expenses, cut expenses, cut expenses. i don't want to lose market share. >> increase efficiency and find another supplier. >> but a -- >> that's the world. >> a lot of people are sitting with a lot of inventory, an i feel like the wholesalers are producing a little ahead of the curve right now and they are pushing pricing and are getting away with it. >> i would add one other thing that we were warned that food prices would rise given the california water situation. i mean, this isn't actually surprising what we're seeing in food, and i completely agree that until it's passed along to the consume, and i frankly don't think that's going to happen any

time soon. >> aren't we making a little bit much of this considering there was a big methodology change, you look at the core, like the old version, that it was only .5%. >> i'll let jim weigh on this but they did go back and did it for a while before they went public so i think we're comparing apples to apples, should be a better indicator of the economy. they used to look at this economy as -- it took only 30 or 40 years to make that change to sort of gauge the u.s. economy. we didn't do more with getting service sector indicators with a current discussion of data. >> what do you think is the going inflation rate over the next three to six months? >> it's probably going to be very close to where it's been now and i assume we're talking about cpi or consumer prices. somewhere in the 1.5 range. it's going to be a number where

the fed is going to want to see it a little bit higher. receive mentioned, their target is 2%, so they are going to want to see it go higher, and it's not going to. it's going to stay where it is right now. >> this is important for tomorrow morning as well. we'll get the cpi report at 8:30. not just that which has had changes. you know it's medical pricing around this time last year. >> and that's picked up, by the way, from the wholesale report. >> i was just going to say. if that jumped 50% tomorrow, how should people look at that? >> are we going to look through it in. >> i don't think you're going to see much of a market reaction out of cpi numbers it's completely outside. right now the bond market, and that assumes what we're talking about. if the bond market is trading on a completely different set of indicators, completely different set of metrics right now, everybody is short bonds, and -- and there's no more selling left to do in bonds. the only decision left right now is for somebody who is taking

pain being in the market covering back and buying short and why we have the lowest yield since last october and i don't think that's going to trade. the capitulation trade is on and i think the capitulation trade we see now is a lot larger than people think. bonds can fall a lot more before this is over with. >> wow. >> where do you think this is headed? >> what's the number, jim? >> low 2s. >> going to go to the low 2s. >> look, steve, every segment on this network is about the fed, and everybody concludes bond yields are going up. has anybody said bond yield are going down? that's the problem with the market right now. >> you just did. >> 100% of people -- >> i know i did and i'm a rarity and why you brought me on to say t.100% of economists surveyed right now -- >> in our cnbc survey. >> everybody. i mean, everybody in the survey said yield are going to go up. what does that mean? they all sold already, so when we get bad news, good, now i'm going to make money.

i saw jack bouroudjian an hour ago demanding that bonds go down. he's already shorted the market. he's not selling. that's why it doesn't go down anymore. >> especially the impact this could have on the housing market and mott to mention the price of every asset. we'll continue to follow the trends. tomorrow morning, going to be interesting. an explanation of why hiking prices instead of expanding can be very good for the bottom line. take a listen. >> the research that i it up and down michigan avenue, you're about $4 to $5 on average cheaper. >> oh, yeah. >> than anybody else. >> do you go out to eat? >> when i can. >> what's the typical bill for you? >> more than it is here. >> $40. >> so if it was $11 would you notice? >> so people who want to watch

more of this, marcus, how does it work? >> logon to cnbc.com, under "business fix," sort of a buzz set of "the profit." we're going out to see a number of different businesses and giving them tips on how to expand margins rather than just continuing to grow. >> so much we could say about what that tells us about how the economy is working? >> is there a case and why does he want customer record dating back three years? is this an example of e-commerce being faster than regulations? that's next and baggage fee, record high satisfaction, check. yes. shocking new details. a survey of online satisfaction coming up later on "closing bell," and a major shake-up at the "new york times." the executive editor is out. what is behind this sudden move? it happened just a couple hours ago.

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theers who want to make a little extra munch the company has listings in 34,000 cities, including new york, where the state's attorney general, eric schneiderman said it's just an end run around the laws of subletting apartment, hotel regulations and this week a supreme court judge blocked schneiderman's demand for all of their posts in new york state ruling the subpoena was too broad. airbnb which is based in san francisco -- >> are a substantial number of air bnb hosts may be violating the law, kelly, since they operate across the country. regulators in every state are going to be watching this one close. >> that's for sure. scott, thank you. i want to bring in a key player, it's the editorial director of

skiff, commissioned the report that the attorney general used in his report. you guys don't have a dog in this fight. you're trying to get a sense of who is using ayebnb and what they are doing with it? >> it's a travel intelligence company that does data for the travel industry. we're looking at airbnb for quite some time, a fascinating company that's changing how people dramatically. >> how many people are using airbnb and how particular is it to this case in new york that people are renting out the unit that they own and live in or even in that case doing things that are against the law? >> one of the reasons we've paid close attention to them is we really want to understand the numbers behind their business. we want to share a lot of numbers that are pr driven about how many rentals they have and what cape of relationships they have, but it's a very opaque company because most companies are relatively opaque at that time so what we wanted to do is get down and say what's a rental

really like, similar to how they position themselves in the marketplace, somebody renting their place up from time to time to make ends meet or is it entrepreneurs who bought a few units in town and renting them out on a regular basis like a hotel so what we've seep, especially in the new york market, one, that we're based here and, two, new york is such an important market for them in the u.s., it's new york and san francisco that's so important, what they are doing here is kind of indicative of how they operate elsewhere, too, and new york is unique because it has very strict zoning laws and regulation laws. >> co-ops. >> landlords and rent control. so basically, you know, new york has a very restrictive law. you can't rent out your place for less than 30 days a month and you have to be present if you do a rental for less time. >> ayebnb is breaking the law, the people who use it are breaking the law. >> perhaps. >> the hosts are. >> you know, i think jason brings up a point.

airbnb, if you look at business model, a fascinating platform and in some ways it allows customers who can't afford the expensive hotels, the prices that hotels dictate or offer and gives them another platform and way to experience a city by offering them more affordable prices. i think there might be some confusion or debate about whether their business policy is intact but i think it's a great platform. i think it overall could potentially work. >> this is a classic case of a disruptive business model shaking everybody up. it's like the taxi and the limo drivers going after uber. the hotel industry sunday pressure, have gone to the attorney general saying these guys aren't paying taxes. the reason they are successful is so many consumers think it's a fantastic platform and they like actually -- i know a lot of people who use airbnb. not because they don't want to pay money at a hotel room, they like people and want to meet people. >> in other words, regulation

will just have to follow this because there's a concern -- >> it may not. sadly regulators tend to -- honestly regulators tend to protect existing entities in an industry and existing players in an industry tend to use regulation to protect their competitive positions. >> marcus, we've talked about this in the case of the car dealers blocking tesla from doing direct sales. should airbnb be allowed to go forward or should it be blocked? >> are you renting a room or the whole place? >> depends. >> i don't want to stay in a room in somebody's place. >> a lot of people do actually. a lot of people find it interesting. >> in budapest once, you know, stayed in his apartment when he was gone. >> look, i'm an advocate for looking for new ways to do things but today the law is very clear. today the law is very clear, and to try to circumvent that by using an internet platform is trouble some, much like the

dealer platform. if you want to change it, there's a way to do it and this isn't the way. >> jason, last word. do you think the regulators will have to craft something around this service so that it continues to exist? >> i don't necessarily think so. i think as opposed to uber, there's airbnb and residents in neighborhoods who don't necessarily within the a german backpacker living next door to them, a different one every other night. >> thank you, jason. >> thank you. >> hot button issue. i mean, i will honestly be surprised if -- >> what about property values. >> a lot of people don't want different people staying there every night like he mentioned. it's already a huge business. an unexpected change at the top of the "new york times." what does this mean for the future of the gray lady? that's next, and the buzz surrounding the mobile game flappy bird continues. coming up, game's creator tells us how much money this game is generating and how he plans to

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welcome back. big news in the media world today. in fact, just in the last couple of hours. the "new york times" announcing jill abramson is leaving her post as executive editor and dean paquette, managing editor

of the newspaper, will take over her newspaper and in doing so he'll be the first african-american executive editor at the "times." no reason was given for abramson's departure. joining us now is the author of the book "murdoch's world." david, great to have you here. were you surprised by this news? >> absolutely. i was stunned and i can say with certainty so were members of the newsroom at the "new york times," including a number of very senior executives on the news side. this is where salsburger acted precipitously. there's been some tension between the executive editor and managing editor of "the times" and washington bureau chief. been at the paper for a while and some tension over some of the shifts. mark thompson, the former head of the bbc who is now the ceo of the parent "times" company has made a real push for the idea of video, and salsburger was supportive of that and abramson less so. the fact that there's a dispute

about exactly what the digital future holds wouldn't seem to appropriate tate such an abrupt departure. she wasn't even allowed it address staff as her -- as the announcement of her departure was made by arthur salsburger, jr., the paper's corporate chairman and also publisher. >> shares were down almost 5% today, we should add. carly, what do you make of it? >> obviously it was abrupt and unexpected and i think it's odd that in the announcement nothing was said about her, nothing about her tenure, nothing about her accomplishments, nothing about her contribution. i mean, perhaps there was tension, but it did seem a bit cold to me to welcome the new editor and say nothing about the departing editor. >> that's why, david, i'm curious about is was this perceived -- was she perceived as a figure whose time was limited just more recently, or was it almost from the get-grow? what's your sense here of how long this must have been simmering? >> well, look, i mean, go back

to just 2011 when she was announced with great fanfare as the first female executive editor of the nation's most prestigious newspaper. q.the times" has typically gotten rid of executive editors and allowed them to pick their own departure and have a hand in t.bill keller, her mentor was allowed to take a victory lap, given a lot of kudos and visited high peaks and valleys. his predecessor harold raines was unceremoniously fired among the jason blair scandal. those are the highs and lows. when you have something described as basically a management problem by mr. salsburger without any explanation to the staff, much less the greater public, it's a signal that there was a -- a severing of collegiality there that really sets off some instability and uncertainty within "the times" newsroom. >> so you don't think that this is something to do with the fundamentals of the company, of the industry trends, the

challenges from digital and their competitive positioning? >> i think -- >> even so, you would say something about the departing editor. >> mr. salsburger is going to lose a lot of friends who work for him today. people look up to the owner to set the tone and mod and carly is right. regardless of what reason she's leaving for, do it with dignity and respect and allow people to leave with her dignity. today she's looking like show was thrown out. >> last word, david. >> one other thing to mention it's not as though jill abramson, although a very smart, tough, investigative and political reporter herself, it's not as though she's against the idea of the digital innovations that need to take shape for the "new york times" and for other news organizations, including yours and mine. she actually steeped herself in the digital side of "the times" before taking over as the top editor, taking essentially a six-month sabbatical to steep herself in those issues and while there was a recent report by mr. sals burger's son, also a junior editor at the newspaper,

arguing that "the times" should be more aggressive about embracing a dimgtal future and finding innovations she was seen as open and receptive to that. she was a tough executive there and sometimes turned off some of her staffers as a result, but, you know, somebody very respected as a journalist, someone who would have perhaps received a more courteous sendoff at the end of her tenure. >> and we'll see how "the times" covers this story in tomorrow's paper. >> thank you. >> flappy bird is on its way back. the addictive video game will soon return to phones, tablets and the owner will join us on his follow-up project and it's not often you hear passengers raving about a great flight and consumer satisfaction hitting an all-time hit even though as passengers get hit with new increasingly more expensive fees. that story straight ahead. ♪

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welcome back. take a look at sysco shares of almost 7% popping after reporting earnings, and josh lipton is digging through the report for us. josh? >> yeah, kelly, so cisco is reporting after the bell, and you saw q3 they beat on the bottom and the top and now on the conference call john chambers giving some guidance here. q4 revenue guidance, chambers saying down 1% to 3%, but that implies revenue of about 12 to

12.3 billion that was better than what the streets were looking for. analyst thought q4 revenue would clock in around 11.8 billion so clearly that news pleasing the analyst. we're on the conference call and will bring you more headlines as we get them, kelly. >> thanks very much, sir. mobile gaming sensation flappy bird, it took the world by storm when it launched last year. over 15 million downloads. it became the most downloaded free game in the ios app store and so popular that many were angered when flappy bird was removed in february. the app still isn't available again and joining me in an exclusive interview to talk about flappy bird's success and why he pulled the game is founder don with en. >> thank you. >> you were concerned flappy bird was too addictive? >> yeah. >> is it gone forever, or are you going to bring it back? >> actually i'm going to bring it back but not soon. >> not soon. >> are there going to be changess? >> yeah, a lot of change.

>> like what? >> like some -- >> what do you want to do with the game? >> make it so a lot of multi-players in town. >> multi-players? >> yeah? >> because it's boring to play alone. >> not many people found it boring. >> yeah. >> they said it was addictive. >> this will be less addictive. >> what's wrong with it being addictive? >> i think people save the time for something else more productive. >> do you regret having created the game? >> actually, no. that is my remarkable success. >> and were you making -- you're still making money from it, is that correct? >> $50,000 a day at the peak. is that still the case? >> no. >> less?

>> yeah. >> today it's not much. >> not much. >> yeah. >> so you wanted -- you want people to have more time to spend away from the game. >> yeah. >> you're going to turn it into something that's more multi-player. >> yeah. >> what is your vision for flappy bird, and generally are there going to be other video games that you develop along with it? >> yes, definitely. i have a lot of game coming up, and there's going to be some jumping from building to building. >> whatever you do i'm sure it's going to be a hit. how has it been for you, all of the fame, the attention and the success of this game? >> i'm sorry? >> how has it been for you? >> actually i feel a lot of pressure, yeah. i have to have some fun. >> you have to have some fun. outside of flappy bird. thanks so much for being here. congratulations on the gape, and

i have a feeling that the multi-player version is going to be just as popular. >> thank you, kelly. >> it's good to see you. >> thank you. >> what's heating up at cnbc.com hot list today? that's next, and forget her reality mtv show or the failed country music career, jessica simpson has a fashion line that's generating millions in revenue. tomorrow she will join us on "closing bell" to tell us all about it. we're moving our compay to new york state. the numbers are impressive. over 400,000 new private sector jobs... making new york state number two in the nation in new private sector job creation... with 10 regional development strategies to fit your business needs. and now it's even better because they've introduced startup new york... with the state creating dozens of tax-free zones where businesses pay no taxes for ten years. become the next business to discover the new new york. [ male announcer ] see if your business qualifies.

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welcome back. studies have concluded there are more million airs and billion airs than pre2000 crisis. it's been getting a lot of clicks on cnbc.com. allen wastler joins us. >> you got to be more tech logically savvy. the top 40% controls close to 40 trillion dollars worth of investable assets. you have got to appeal to a lot more people. that's the new normal. we have a list of the top 100 wealth managers in the united states to help people make the connection.

that's one big poll on the site. number two, out of the salt conference in las vegas. one guy is warning about the downside in the stokt market. people are loving that story. the pentagon has a zombie plan, yes foreign policy magazine came out with an article talking about the pentagon zombie plan. you may be able to handle whatever reality throws at you. >> i'm not so sure. but jane has been doing great stuff from the conference. these new drones and technology coming out. it is scarey stuff. thank you, sir. >> take care. >> you think high prices would be a black eye for any industry. not the airlines. passenger satisfaction is next. coming tomorrow, college graduation season. the class of 2019 and beyond is facing a new fat test.

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it's all about latency. about speeds and feeds. it's all about how fast does it run. i often sit with enterprises who ask me about how mission critical and how's the performance of the cloud. and i tell them, if you can maker gamers happy, you can make anybody happy. that's keeping you from the healthcare you deserve. at humana, we believe if healthcare changes, if it becomes simpler... if frustration and paperwork decrease... if grandparents get to live at home instead of in a home... the gap begins to close. so let's simplify things. let's close the gap between people and care. ♪

. backage fees, overcrowded fees and no problems for u.s.

airlines. given these complaints can be described as surprising. phil. >> very surprising. jd power every year surveys 10,000 or 11,000 fliers and gets a pulse of what's working and not working in the industry. results showing satisfaction has never been higher. it's at a record high compared to in 2006. more inflight services like wi-fi entertainment in the backs of the seats is increasing the satisfaction for those flying. you might be saying wait a second. aren't people upset for checking bags, changing reservation fees? the survey shows there's a greater comfort with that. 44% surveyed which is an increase of 7%, 44% said they think bag fees are reasonable. okay. so which airline do the best according to the survey. jetblue came in number one. think about that live tv

onboard. followed by southwest, alaska and delta. we talk about this all the time. airline stocks had had a heck of a run. it doesn't appear to be slowing down. it is close to an all-time high. not quite there but close. and their wracking up the profits despite the complaints from a lot of people saying too many fees, too crowded. this survey shows a different side of the story. >> is anybody a more frequent flyer than carly. do you think service -- are you satisfied? >> well, you know, of course, sometimes i'm not. but i will say this. i think people are nicer on airplanes and i think people have the biggest impact on customer satisfaction and customer service. when i fly, i fly a wide variety of airlines. i find people are more personable. they're nicer. certainly the technology helps and distracts you a bit. that helps my husband, frank. i think everybody got nice

training. i don't know. >> phil those have gotten a lot better, haven't they? >> they have improved. we had a lot of cancellations in the winter time. all weather related. we have seen on time-arrival performance improve. and to carly's point about the attitude of the staff. that's a big component of the survey. whether or not you get friendly treatment when you board a plane and delta is a good example in part because people are saying they noticed the flight crews are doing a better job. >> people just be nice generally. >> i take issue with this report. i'm a former management consultant and traveling twice a week. and at that time wracking up miles. the experience, very different compared to now where i have lost my status and now boarding number three. >> carly do you think people are nice to you because of status? >> no. no. honestly i don't think that. there are lots of people who don't know who i am. i have noticed it.

if you have status, it's a better flying experience. i think most airlines have fo s focused on training their staff to be more personable. >> we talked about the electronics and that makes a difference. >> we've leave it there. thank you to the panel as well for a great discussion today. now it's time for "fast money" in las vegas. >> announcer: tonight "fast money" hits the road for one of the biggest investment events of the year. the salt conference in las vegas. from the street to the strip, our traders go all in to find out who is hitting big. who is doubling down. and who is playing it close to the best. plus, special vip access to tonight's high roller guesting. mike nobagratz and