wenlock and mandeville, the 2012 junior mascots, one in a diaper. >> the other one needs spanx. guys, the market is selling o.off the lows but down 157 points there on the dow and the small caps are leading us lower. we'll keep on watching. >> and welcome to "closing bell," everybody. i'm kelly evans down here at the new york stock exchange. bill, we've got an afternoon selloff, some pinning it to comments about interest rates possibly rising sooner than expected. heard from a lot of fed officials today. >> all kind of reasons why. we're going to go over. i'm bill griff et here at headquarters today. it all started south when the philly fed chair made bullish comments about the economy saying the fed may need to raise interest rates sooner rather than later. that is not what investors like to hear right now, of course, but you had bill dudley saying

something slightly different and art cashin takes issue with all of that. all kinds of reasons why we're selling off here. >> kenny polcari is already shaking his heads. we've got investing legend bill miller coming up, bullish last month when he was on this show, so has that changed? we will find out when we ask him next hour. >> gee whiz technology for you as well, a usb port for your iphone and ipad, not exactly, but the maker of this device we're going to show you says his invention will serve that same purpose essentially where you can take data from your pc or mac and transfer it into your iphone or ipad. how big of a game changer would that be and how can you invest in it? have the person behind the idea coming up later on "closing bell." >> here's where we stand in the markets, and we're focusing on stocks today. talked a lot about bonds and today it's the market selloff that's captured some attention, the dow shedding 150 points or

almost 1%. not many components are in agreement and the nasdaq, saw a rebound yesterday. today a different story. now it's off by 1%. same story for the russell 2000 and here's a broad market gauge, this one is off .8, 1870 is the level there as it's off almost 15 points. >> and the thing shows the russell right quick and that today is the one that's getting hardest hit, down 1.75%. good call there, guys. joining us in our "closing bell" exchange, christine shore from s & p capital iq, steve parker from jpmorgan private bank, the aforementioned kenny polcari who has been shaking his head, jeff cox and, of course, our own rick santelli. kenny p., what are you shaking your head about? >> all kinds of reasons why we're selling off. what's your version? >> the version i think is the calm is certainly from both fed presidents. what's confusing and concerning is they talk as if the economy is firing on all 18 cylinders at

once and we're knocking the cover off the ball and i don't see it. i don't feel it. i don't think that's what the data tells us. i'm not saying that we're not getting slowly better, but i don't think we're moving at the pace at all that his comments would have dictated today which is exactly why the market didn't hear it. it's a shortened week and less participation, moves more exaggerated so don't read too too much into it. confusing to me when he says how strong the economy is and rates are going higher sooner. >> are you talking about plosser, which of the federal officials? >> plosser said it first and dudley essentially reiterated it by saying rates would go up before they finished qe. >> it's nuanced, dudley was saying rates won't go up quite that fast. his was a little more dovish, if you want to put it that way. >> but they said they could go up even before qe ended, did he not? >> he said they would keep reinvesting the proceeds from the portfolio mortgages even after they potentially move on rates. >> okay. >> depends on how you look at it. rick santelli, are we slicing

and dicing too much here? >> well, let's look at the real facts here, okay. i believe that plosser was around 12:30 eastern, and i believe dudley is around 1:00 eastern. the dow yesterday closed at 16,511. it was at 16,4 before any of this impacted the market. we're already down 111 points, okay? so in terms of what they actually said, it wasn't plosser as much as dudley, and what dudley is saying, my cubs are what, 14 games below .500. it would fighting over which seat you wanted to sit at at the world series this october. they are talking about an exit, what comes first, the reason the messy exit can't be anything but messy is because right now it's the prequel to the real exit that is causing all of this. this is the beginning of the exit. everybody knows that the fed and the central banks of the world are losing control of the markets. they want to stay on the offense, but they can't stay on

the offense because the equity markets aren't feeling it, and the weather bounce was never really a big weather bounce. look at this morning's retail sales numbers, so in the end i continue to say if you look at any chart, interest rates are actually moving higher. the spread between the ten-year at 2.54 and what the dow is doing got pretty wide. then all of a sudden the ten-year does what the ten-year has been doing since december 31st, when the equities look iffy, rates are moving down, and that dynamic is in place and just keep watching that nasdaq. if we get under 3996 from february 3rd, i'm telling you, we're going to be at 2.25 that fast. >> right. >> christine shore, help us out here. i mean, you guys at s & p capital iq, look at the fundamentals, the earnings. have they justified the move in the stock market that we've seen, or does it better reflect what the bond market seems to be forecasting right now?

>> well, i would say this is a trend we continue to see. the market is acting very dramatically to any comments out of fed and ignoring forward-looking guidance that might be quite good. as far as earnings, you know, they are sort of adding insult to injury today. a lot of the retailers missed expectations. we had home depot, staples and t.j. maxx reporting this morning, all missed on earnings, and all except for staples missed on revenues as well, so it's not really helping the markets that much, and it's sort of setting up the week as more retailers continue to report. we've got gap. we've got tiffany's and ross stores, several others reporting this week, so it sort of sets the stage for retailers to continue to miss, and like was mentioned, you sort of don't have that weather impact anymore. maybe you have a little bit of it falling to february, but going forward the retailers are really going to have to improve because they are not going to have that weather excuse any longer. as far as we've seen, the markets have reacted quite positively to earnings because they ended up a lot better than

expected. at 3.3%. you remember at the beginning of the season, actually expected to be negative. >> and steve parker, head of multi-asset strategies, can't think of a worse place to be, because everybody is making sense of the different signals we're getting from different asset classes so maybe you can clarify it for us. >> been a tough year. everybody thought coming into the year hasn't worked. when we look at bond market, a lot of people are saying that this is a sign that growth ahead is going to slow, but traditionally stronger relationship between the growth outlook in credit spreads more than you have the bond market and when you lock at what's going on in credit markets, the outlook ahead, and the growth may not come soon, but it's getting better and we think we'll get that bounce. >> i wish you could repeat that three times for everybody. what are credit spreads telling you right now? what's going on? is there a credit boom and what does that mean? >> there is a credit boom. what you're seeing and this speaks to credit and speaks to equities. corp-at-fundamentals are getting

better. balance sheets have improved and growth has picked up. we've seen refinancing. a lot of credit has been pushed out for a number of years, so, you know, the credit markets are getting to a point where they are not as interesting from an investment perspective but when terms of what they are telling you for an outlook for the corporate sector going forward. >> and for stocks. >> they are saying things are good. >> let me get this straight. if i refinance my mortgage and made my personal balance sheet better, that means my job is guaranteed for another five years? i'm sorry. corporate balance sheets being good and refinancing is wonderful, rates are low, but why they are low and what that means for the future of the customers of these companies or the economy or the middle class, i don't see the connection. >> all right. let me add this fun thing to the conversation here and i know you'll want to react to this. kelly has a guest coming up next hour, head of foreign exchange trading at chap delaine and he says the signals we're getting from the currency markets around the world and from the interest

rate markets, the debt markets, to him he wouldn't be surprised if when we look back a recession began here in the united states right about now. >> and, steve, how inconsistent is that -- >> i think about four months ago. >> what's that? >> if i didn't know any better the way the yield curve has been moving and the way interest rates are going it's forecasting a possibility of a recession. >> that's why steve's point is so important and so interesting because, steve, the one part of this that doesn't make any accepts, that's not consistent with recent examples, with logic is what's happening in the credit space, so who do you think is going to be wrong, to rick's point? will we look back and realize that all of this pricing was totally misconstrued and that the economy was quick weak or vice versa? >> when you're looking at the treasury market, not all technically driven, certainly fundamentals have driven rates lower but you think about a market where demand has picked up because of institutional rebalancing, because of heavy demand from central banks around the world and from international

buyers our rates are much lower so that's putting a lot of money into the treasury market. we're not seeing signs of pressure in the credit markets, and that's why we think that the outlook going forward. rick, you talked about the fact that the economy is not picking up. small business -- >> i did not say that. economies are picking up just fine. i think the deflation of potentially equity prices is the one fundamental everybody keeps dancing around, and that's the most proactive fundamental keeping rates down in this country right now. >> let me bring jeff cox into the conversation. your job is to take forecasts like this and try and make sense of them, so we've got one guy talking about a possible recession hitting right about now. had people coming on the program lightly talking about corrections in the stock market to the tune of maybe as much as 25% so what do you make of it here, mr. financial editor? >> look at the big picture here. the correction call has been a steady kind of dull drum beat on the periphery since the bull market began. look at recently where these

calls are starting to come from. you have ralph acampora, guys like piper jaffrey, you have pierre bokfar and last week i was in las vegas and heard david tepper's remarks and he was not alone and people are getting a little bit afraid, at least, started to pull back a bit. just talking to -- and i think that, you know, kenny can bark up on this. if you talk to traders now, they will all tell you, geez, i wish the fed would just get out of way, but every time the fed tries to get out of way, we see this kind of reaction. >> this is what happens. >> and the reason why is because there is that confidence that the private economy can take over when the fed starts to back away. >> exactly, exactly, exactly. >> good job, jeff cox. >> but if the economy is as strong as they say walk away and be done with it. >> exactly. >> let them do it on its own. >> what does that tell you? >> but the market cannot resolve that conundrum. >> last thing, steve, what inning of a credit boom do you

think we're in? >> probably the sixth off seventh inning. >> okay. >> a great trade, had a lot of money in and we're starting to take profits there and move to better opportunity. >> guys, thank you. >> all right. folks, thank you all. fun conversation. >> covered a lot of ground. >> see you later. thanks, jeff, very much. >> heading towards the close. 48 minutes left in the trading seg. the dow jones industrial average is down 146 points, was down 160 something, down about 1% at one time, burks again, here we go again, the small caps, the nasdaq and russell 2000 being hit even harder today, kelly. >> and we'll have much more ahead on the markets. we'll also get bill miller's take. he speaks with me exclusively next hour. he said he thought you could throw a dart at the stock market and things would be up in six months time. his opportunity trust fund has beaten 90% of its rivals over the past five years and bill mooul miller explain how he's put are $2 billion to work. >> homeowner nightmare.

9.7 million americans owe more on their homes than the homes are worth right now. we will speak with zillow's economist behind the new report on underwater mortgages and take a closer look at whether the housing market is holding back the economy right now. >> and memorial day weekend, it's coming up, and it's about more than backyard barbecues and the beach. we're going to speak with a medal of honor recipient turned wall street pro who is ringing today's closing bell. wait until you hear how he saved lives on the wattlefield. it will put today's selloff into some perspective.

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welcome back. once upon a time tuesdays were good for the stock market. that's not been the case for the last few weeks and today that's not the case, the dow down 144, 145 points, was down 165 points at one time, and, again, we're in one of those market days where the small caps, like the russell 2000, being harder hit than the blue chips, but everybody is seeing minus signs across the board. >> dominic chu joins us now with some of the biggest hits. what's happening out there in. >> for the small caps, inching

closer to correction territory. a tough day for the retailers overall. dick's sporting goods, staples, tjx company, urban outfitters taking a hit on weaker than expected earnings report. one bright spot is home depot. it rose despite weaker than expected quarterly results when it raised its full-year outlook and instead of plans to buy back 3.75 million in terms of its stock over the rest of the year. home depot is trading there, up almost 2%. general motors is falling after recalling 2.24 million. that will double the second kwaurd earth charge to $204 million. gm is trading down 3.5%, just off session lows. flip side, red robin gourmet burgers, it soared after posting better than expected first quarter results after comparable sales rose more than 5%. red robin up 13%. bill, kelly in, today's trade. back over to you. >> dom, thank you very much. nice pause here from the battlefield to wall street.

kyle white, who is now an investment analyst for rbc capital markets, was awarded the medal of honor by president obama, a week ago today, for his heroic actions in afghanistan in 2007 where he saved lives while putting his own life at great risk. >> today the new york stock exchange is honoring him. he'll be ringing the closing bell, and before that kyle joins us now here on the floor of the new york stock exchange. welcome and congratulations. >> thank you. >> you got this medal for a time when you thought you might not be making it out of the battlefield. could you tell us briefly about it. >> yeah. when the first shots rang out on 9 november, 2007, i remember telling myself specifically, especially after i was wounded the first time, that i'm not going to make it out of here. i'm going to die on that battlefield, and, you know, as the day progressed i had that locked into my head, and as i was doing each thing that day, it was still like, okay, if i'm

going to die, i'm going to do what i can with the time i have to help my battle buddies. >> you made it out heroically. does it change your perspective now? i'm curious. i'm going to lump this together. we know you went on to the gi bill and studied finance and now you're at rbc in municipal bonds. does it give you a new perspective about the world since you went through a terrible time in afghanistan? >> it does. one lesson i've learned from that day is to never take anything for granted, and, you know, the loss that we sustained that day and those that gave their lives in the defense of the country, it's something i always try to keep in the back of my head and something that helps me go forward each day and try to be the best that i can be. >> so a reception -- recession is not the worst thing we could go through if that's what were to happen. >> no. >> you said you've struggled with post-traumatic stress

disorder like a lot who have come pack from the bat plfield and there's all sorts of headlines now with what's gone wrong with the v.a. hospitals. what more needs to be done to improve the quality of care for our veterans? >> well, i took that first step, you know, and went to my chain of command when i was still active duty so i received a lot of my career while still in the military, and, you know, there's still a stigma around that service member who might have an issue, who might need some help, and what we need to get past them is you can go and get help and things will be okay. >> and what about now that you're working in the private sector for royal bank of canada, are you able to get the same level of understanding, care? or are you finding it difficult? >> the care is out there, but, you know, as we've all known and what we've seen in the media, there's work that needs to be done. >> bill, we will let you go and get you ready to close the bell

today. we honor your service. thank you for your service and congratulations on this distinction from president obama last week. >> thanks for having me. >> and thanks for joining us here on the floor and we'll look for you here at 4:00. if it gets loud down here, never gets louder than when the medal of honor recipients join us. >> a lot of applause as there should be heading towards the close here. >> all right. thank you, kyle. we've got now about half an hour to go. >> yeah. >> 40 minutes to go until the close. the dow is off 140 point. all indexes under pressure, bill. not a lot of green. >> and today's selloff in part triggered about philadelphia fed president charles plosser saying that the central bank may have to hike rates sooner rather than later to stay one step ahead of inflation. we'll talk fed policy sort of giving mixed signals and what the fed may or may not do next. >> it's the first ever usb flash drive that will plug right into new iphones and ipads. the maker of the istick joining

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welcome back. so we're showing all of these indexes today because it's the russell in particular. it's trading at a level 1096, off 1.5%. art cashin and others have been watching that 1080 line very carefully. today it looks like we're giving up yesterday's gains rather than testing those lows just yet. >> here are the words that many think may have started the

selling in earnest today, at least what we've been seeing today. begin raising interest rates sooner rather than later. that was a statement uttered by philadelphia bank president charles plosser around noontime. i will take issue with something rick santelli said. he thought it was later than that is correct right around the time the markets started to sell off. never mind that fed heavyweight bill dudley that head the new york fed made what nuanced observers would say was a little more dovish comments after that, but the markets seemingly seized on the more hawkish words of charles plosser. >> why might the fed be sending out two different people who are singing two different tunes on the same day? with us is our senior economics reporter steve liesman. steve, first of all, to you. was this intentional, or is this just us, you know, reading too much into, well, the known views of a more hawkish and more

dovish member of the fed? >> i don't understand, what's intentional. did plosser mean to talk the market down, or did he intensionally make hawkish comments? >> and bill dudley's comment right after that which seemed to be more dovish? >> i reject the notion that the market sold off. i would find it -- i have great trust in the market, and i just don't see why charles plosser, a known hawk, making hawkish statements that don't move the balcony further or closer to the fed hiking rates or changing policy, i really believe the market is much smarter than that, and the fact that he said they could begin raising rates sooner than later. that's been out there. dudley said the same thing. he also said they could raise rates later than you believe if the economy doesn't perform. there's a tract fed is on. the real news that's being missed in all of this which is dudley making what i think are essentially important do havish comment when he said that the fed may not allow the balance sheet to run off before it raises rates. i believe on balance that's a

dovish comment because the fed is afraid of bringing tightening forward. if there -- >> yes, steve, that's what's so interesting. >> i was going to ask. steve makes this great point, so why is it that the market seems to come under pressure when, if anything, it should be reassured by the remarks? >> my guess it's more about the retail numbers than what plosser said. let's be honest. >> or dudley. >> or dudly. janet yellen is very well in charge of the fed. remember her comments on the hill recently. she's worried about housing. the only thing we know for sure about fed policy is they will let qe wind down by fall and we'll see what happens with the data in the spring and we'll get some kind of rate increase sometime next year, madele, towards the end. no reason the market would have been sold off on plosser. hawk being hawkish is not a reason. >> the market sold off in earnest. when we were down 30 points, another quiet day right until

noontime when the words of plosser came right out, hit the wire and that's when the selling began in earnest so we're just looking at a correlation that exists right now. whether or not the market was selling off on those words or not -- >> for the record, bill, plosser ecomments came out at 12:30. the market already was trending down at noon, as you can see. >> i will say, i don't think so, because i knew what he had said -- i do a segment on channel 4 in new york every day at noon, and at 12:15 i went on and i knew that charles plosser said what he had said at that point. i just have to say. >> diane, help us out, seems to be a disagreement about what the fed is doing and what the impact is on the markets right now. what's your view of this? >> my view is that the fed cannot, as everybody knows, cannot knows if the interest rates are forever. everybody knows that the equity levels are being driven by these zero interest rate, but no one is really considering that

perhaps the economy will improves when the fed raises interest rates, that perhaps the fed's zero rates are a cause of the slow growth that we have been experiencing, and in the '90s the fed raised rates over a short period of time, and the economy in fact strengthened in the late 1990s and we need to think about that being a possibility here rather than reacting to these short-term statements. >> that's an excellent point, diana. the same kind of thing happened when the fed began tightening last time around. it was actually pro-cyclical. >> it's a good point if there's true cause and effect and the cause and effect from diana's statement is suspect. the idea that the fed raised rates causing growth is a little bit fuzzy. >> not at all. not at all. you cannot because it results in a stronger currency. that pulls investment in from abroad. no country has ever devalued its currency to prosperity. >> are you saying we're having trouble selling as many bonds as we sell in this country, having trouble attracting capital from abroad and we need a stronger

dollar to do so? >> i'm saying having zero interest rates has all kinds of adverse effects in the economy that you all are not talking about right now. >> but attracting capital isn't one of them. >> well, attracting investment into the united states, it could be a lot better. it could be a lot bert and it could be a lot stronger and individuals could be doing more investing if rates weren't so low. ironically looking for risk. >> that's fueling both potentially outsize gain and asset prices and contributing to disinflation because of the strong dollar, so we get -- we're sort of in a situation of more and more detachment potentially between asset values and the economy. >> yeah, clearly. we should probably boil it down to the fact that the market has to move on something and the one uncertainty that's out there right now is the timing of these next year so every time you see something tick on the wires, fed governor makes hawkish comments about timing of interest rate hikes, in the absence of some other big moving factor, that's

going to have an impact and you had the bad retail numbers, people worried about the economy a little bit and how it plays out rest of the year and plosser saying we may need to raise rates early so a little opportunity to sell there. i think the bottom line is we don't have any new information on what -- >> i want to correct what ben said. if a federal governor made hawkish comments, it would be, but he's a fed president. >> but isn'ty had a voter? >> our friend john point out it's not as if the feds fund futures have moved on this. if you want to verify whether the market is selling off because the rate expectation has been pulled forward, that's not what the futures market tells us. >> a lightly traded day in the stock market as well so it's easy toe move that market. >> thank you all. >> thanks, guys. >> appreciate your comments. see you later. >> have we reached a conclusion yet, i don't think so. >> nope. >> 30 minute left here in the trading session. still lower. the dow down 134 points just off the low of the session here and the same for all the major

averages. >> in the red all session. here's another ouch. nearly 10 million americans owe more on their homes than they are worth. a new report on these underwater mortgages next. wait until you hear where he sees the most damming right now. >> former nfl players launching a new lawsuit against the nfl alleging that it supplied them with painkillers to mask injuries. we have details on that lawsuit coming up just ahead. (announcer) scottrade knows our clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company."

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welcome back, heading towards the close. coming back off the lows gradually. dow down 129 point. down 165 at one time. all the other major averages starting to come back a little bit kelly. >> let's check in with bob pisani on how things look in the final hour. >> stocks started weak and stayed week and the immediate reason was obvious. really crummy retail earnings reports, not just the weather. guided lower. look at the declines today, maybe because they are buying cell phones and electronics good. consumers are not buying apparel and take a look at the dow. appreciated the debate you just had, but i can tell you this.

the market took a second leg down around noon before plosser and before everybody else. i think the markets drifted lower in the middle of the day and they weren't a major factor. what's concerning is what's going on biotech. the biotech stocks have been very stable for the last couple of weeks, down 1.25%, if that continues for another day or two then i'll get more concerned that we're taking another leg down. so far a one-day trend. >> guys, back to you. >> if charles plosser's call on the economy is right, housing will have to rally though. >> you would think so, but a new study by zillow shows 9.7 million american households are still under water with their mortgages, meaning that they owe the bank more than the home is worth. diana olick is coming through the report and joins us with highlights. diana? >> bill, the report shows that while rising home prices are

giving homeowners back much needed home equity, the low end of the market is still suffering, and that's where we need to see more inventory and if you can't cover the martz then you can't sell the home. more than 10 billion borrowers nationwide under water. that's just under 19%, but in the lowest home prices tier from zero to 100,000, one-third of all borrowers are under water, middle tee, 100,000 to 300,0008% and when homes are above $300,000, that number goes to 10%. when you have less than 20% equity in your home, effectively you can't move because you don't have enough equity to cover the down payment on another home. it's very market to market. go to cnbc.com.

we've built an incredible map. you can see what the equity rate is. a lot of folks talk about tight credit and it's just as much of a hindrance to this robust recovery as we see in tight. >> credit. we now want to bring in stan humphries, receive chist on zillow and author of this report today on underwater homes. >> pleasure to be here. >> what's impeding, the more row bust housing market? >> i think that understanding negative equity helps you understand so much about the housing market. it explains a lot of why we're seeing existing home sales get back to existing levels. a lot of the homes that they would like to buy are being

occupied by people who are deep under water in the mortgages and can't get out of house or sell it to the first-time home buyers. >> different parts of the country vices have come back. where are the houses still under water and why haven't they come back at this point. >> the part, that see the biggest proportion are placed like phoenix and vegas and california markets. where there's the most underwater buyers are markets like atlanta and detroit and tampa where first-time home buyers are disadvantage where the most affordable homes are so high. >> when we start to talk about prescriptions, what, if anything, could or should be done, what are the options out the there? not much you can do except wait for prices to give people back

equity. it's a circular argument. when the prices get too high people can't afford to buy them. what we need to see is getting the first time home buyers back in. we just don't have enough ply. people pointing to jobs. we need a more robust job economy. >> what happened to the principle adjustments banks were doing. is that not happening anymore? what's going on? >> it was happening quite a bit during the mortgage servicing settlement agreement and now banks have worked through the distressed home and are lowering some principle, people with negative equity are not necessarily in trouble. their home isn't worth what they want. people are saying i would love to move, not behind on my mortgage. i can't sell.

can't cover my mortgage. not necessarily about lowering the principal on distress loans, it's about getting enough to sell. >> i want to mention because it relates to all of this. the book called "house of debt" where they talk about a shared responsibility reports which already kind of exists in the market. >> shared appreciation north but a concept where you can write down part of the market principle. it's a way to kind of make it so you don't have as much moral hazard. shared appreciation means that the home owner is not seeing all of the benefit of writing it down. that concept is out there. >> a space to watch. >> thank you both for now. >> thank you. >> thanks, folks. >> 20 minutes left in the trading session. coming back here, kelly. how about we bring everybody back and have a disagreement

about why we're coming back now. >> we can't decide why we sold off and now we're coming back, down 113 on the industrial average, s&p off 9.5 and the nasdaq down 22 points. >> we'll talk to legg mason fund manager speaking with me exclusively in the next hour of the show. his opportunity trust fund has beaten expectations the last five years. >> and a new nfl lawsuit that this time has to do with teams handing out pain pills. that's next. we're moving our company to new york state. the numbers are impressive. over 400,000 new private sector jobs...

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welcome back, got about 15 minutes left. just joining us, had a selloff today and nobody can agree on why. we're coming off the lows, dow down 165 points at the low of the session, a couple hours ago, now down 118, and it's one of those days where the small caps have been leading to the downside. not showing the russell 2000 but down more than a percent at this hour. back to the markets in a moment. the nfl already in the middle of

a settlement over concussions. the league has another lawsuit on its hands and dominic chu has the story. dom? >> a very interesting story from a legal perspective. a group of retired players filed a lawsuit claiming the league illegally supplied them with risky narcotics and other painkillers. that cape of medication that masked their injuries and led to medical complications later on in life. drugs in the beginning that marked conditions that led to problems later on. it names three players including from the 1985 chicago bears, jim mcmahon, chris van horn and defensive end richard dent. lawyers are seeking class action status on behalf of 400 former players, but, still, with the concussions still a problem, an interesting development with regard to whether or not there was any kind of truth to the

idea that doctors were giving drugs out to hide or mask injuries in the past. >> thanks very much. >> i'm here at headquarters, today, why? i'm on "nightly business report." >> check your local listings on pbs. look forward to working with suzy gash as i always do. >> dow down 126 points as we move along. >> look, concussions are specific to the nfl potentially, but this issue with prescription drugs or pain medications, you know, used to offset the symptoms, uwill affect every level. we used to joke about the horse

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for the most part. the nasdaq has come back here. joining us is jeremy hill, i mean, what is your version of -- how sensitive do you think the stock market is to talk about the fed raising rates sooner rather than later, no matter who says it? >> i definitely think that's the biggest risk in the market. not so much a risk that the fed makes a mistake, that's low probability, the bigger risk is there's a mismatch between market expectations and what the fed is saying. plosser came out and said something very opaque, rates rising sooner rather than later and said something very bullish, 3% growth this year, gdp which is a great opportunity to take advantage of some risk assets. >> that applause, that you can hear, while we appreciate jeremy

is here, it's the medal of honor recipient heading to the closing bell platform where we'll be ringing the closing bell here at 4:00. traders give a huge rounds of applause. >> traders on the floor love it when guys like this come to the floor, and they love meeting the traders on the flor, especially a kyle like kyle white who went to work for rbc. so to see him come to wall street, these guys consider him one of their own now and they could not be more pleased to have him going up to ring the closing bell. >> we've talk a little bit about what's been plaguing the market here today.

how are you investing in this climate? >> way too many negativity. a pack of wolves behind. >> we haven't seen a 10% correction for quite a bit of time but we're burying the consensus. assuming the consensus forecast and better growth for the second half of the year is dead. i think we could see better economic data driving prices higher. there's certainly upside potential here. >> why are yields as low as they are right now. >> if the economy is going to pick up pace in the second half, you're not alone in saying that. plenty of people come through who make that statement? why is the bond market making

that statement seemingly as it should? >> i think we're seeing a lot of short covering. the bond market is subject to the vagaries of what's going on also externally so bank of japan action and also ecb act and the ten year as a proxy for risk has come down rather than up and i would look for that to reverse sooner rather than later. >> coming back with the closing countdown. >> that's right. after the bell, legendary fund manager bill miller giving us his take on what's happening in the market right now. keep it right here. you're watching cnbc, first in business worldwide. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one.

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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. welcome back. about three minutes left. tremendous disagreement about why the market sold off when it did and whether or not charles plosser had something to do with it. here's the weight of the evidence. there's the market going sideways right until noon and then we sold off down 165 points. bob pisani is coming in here. i think, you know, the full moon was last week. that's why we should have had all these kind of silly disagreements but today we had it, nonetheless. >> here's the problem. we know why the market was down initially. retail sales were really

disappointment. i was surprised so much lowered guidance for the second quarter. in the middle of the day the market dropped before dudley and plosser dropped out and there's so much contradictory comments. i don't think necessarily moved the markets. i did see the russell 2000 down. i saw them pressing internet stocks and biotech stocks again. remember, those two groups had stabilized in the last week and generally were much better. today they are down again. if we see another day when we're pressed on biotech and internet names, we might concern ourselves. >> we're in a trading range at this point and back testing the lows again. art cashin keeps identifying the support levels we see on the nasdaq and some of the other indices right now and we've failed to go below those. you're right. another couple of selloffs, then

we could be headed lower. >> had a correction in small caps, particularly the ones we were talking about that occurred several weeks ago. i thought that was fine and healthy. the overall big cap market never really moved much. still 1, 1.5% below our historic highs in the s&p 500 so the market has been pretty much sideways for a few days. >> that's why i watch when the russell is pressing the small cap names, the biotech and internet names. one day is not a trend. let's see what happens tomorrow. i'm not expecting better comments from any of the retailers. most of the big names have reported and i think most will be on the disappointing side as well. coming up next hour here on "closing bell," kelly talking to a foreign exchange trader who says why the currency markets

and debt markets are acting the way they are because it's possible that a recession in the u.s. has begun right about now. he'll make his case coming up on "closing bell." i'll see you tomorrow. >> thank you, bill and welcome to "closing bell," everybody. i'm kelly evans and here's how we're finishing up the day on wall street. looks like we have red arrows across the board. the dow closing down about 138 point. it was down about 161. still, as you can see across the board here, it's a mirror image of what we saw yesterday, giving up the gains in the s&p 500, the nasdaq and russell. let's get right to it. joining me now is the panel. "shark tank" investor kevin o'leary and our own jon forth.

"fast money" trader guy adami. guys, is it significant that we came off the lows? >> significant that -- you're always positive, i love that, i guess it's somewhat significant. what's significant is the underperformance of the russell. it tried a couple of times unsuccessfully and teams to want to push through what i think is important support. is it the russell first and transports and s&p and the fact that the russell doesn't want to bounce is the most interesting thing out there. >> it's clear to me that every time the s&p gets to the upper end of its range it hits the red light. it could be hyper growth tech, could be a lot of things that thwart a rally attempt and still there kind of slope back and forth range. i don't see why that should

change any time soon. >> earnings so far from the retail sector weren't painting an encouraging picture. how is the tech space looking post selloff? >> i think it's looking pretty good. we'll get earnings from intuit. brad smith ceo will be on "squawk" in the morning, big turn tax quarter so it's interesting to look at that and see what they have to say about small because because they have a great read. we'll have a better sense of how things shake out and bigger tech names were doing pretty well. we've seen a breakdown and shift back and forth between high valuation stocks doing poorly one day.

netflix up quite well and down zynga and grub hub if i'm updated there, all high valuation stocks, up and down and not following the same trend it was. >> an indication of people generally trying to figure out what direction is cat florida. >> won't be long until we all go and covet the security of a nice fat dividend yield. take the risk of moment mum high names when you can safe in a name like cat florida. >> has a 2.4% dividend yield. >> exactly. >> 5% to 6% earnings growth and 2% guaranteed in my grew, that's 6% to 7% on equities versus madness if you bought a ten-year bond. >> implied within that is the fact that the stocks won't go down at all. there is a chance that the underlying -- >> unless you want a higher yield. there is that chance. >> okay chicken little, a

recession already? >> i don't think we ever got out of first one. you'll no chicken little, want to come down to the nasdaq i'd be more than happy to have the conversation. >> am i going to need to break up a fist fight? >> susan perhaps you can come in and keep these guys in separate corners and talk a little bit about the experience you've had about how you would diagnose it here? >> i think today was really a macro story as everybody was talking about. jpmorgan took a dip this morning. european regulators coming in for colegs and rate-rigging and stocks came back. i think today's store was much more about the fact. >> you're in the fed's fault camp. >> they are overreacting to the fed, we can talk about that. >> michael? >> i don't know about fault. i do think there's a sense of un's out there because of

exactly how the market is being required to absorb, how is will proceed and when it will end and then we get into handicapping and a potential rate rise and it's normal as there's an inflexion point and coming out of the year 2013 when more stocks were up 50% than were down. this is a digestion of a monster straight-up year. >> did you ever think we didn't come out of recession? >> you know, honestly? >> i say that half honestly and half joking. >> people say the housing market has bounced so incredibly well and if you look at it in a vacuum, yeah, it has, but over the last 15 or 20 years, it's not gone anywhere, not unlike the chart of the bank of america. . over the last five years off that '08-'09 low, it has, but look at it ten years ago. we've bounced but off an

incredibly low bottom. we should be much farther along than we are especially with all the stimulus from our felled. >> doubled off the lows generally speaking. seems that that's been the surprising -- >> the market has. the market has, but there's the underlying -- i mean, kelly, you are out there. do you think the economy is as strong as the s&p suggests? i would say no way. >> kevin, go ahead. >> if i have to make 6% an an institutional investor, where's my incremental dollar going tomorrow morning, into the ten year bond or equities? >> this is exactly the pint, these guys have to make a 7%, 8% return and need to find a way to get that in a low yield environment. >> can't get it in a ten-year bond. >> corporate credit. look what we're seeing across the spectrum. >> i'd rather buy the equity of the same company and get 2.2%

diffident yield. >> u.s. treasuries are cheap relative to comparable development market bonds. there's a yield scares at this and that's the story here. nobody wakes up and says i would love to earn 2.3% for the next ten years and nothing else. >> suzanne? >> the entire bond market is so frothy. there isn't a deal that bankers can't get placed right now. everything is going so that's got to start to pull back at some point and we don't know when that is going to be. >> meantime will support the stock markets. what can you do with credit, fund buybacks. don't necessarily need to rely -- >> am i going to go buy greece on my credit card, is that it? >> i'm not talking about consumer credit but corp raft. look what happened with at&t and directv bonds, even as the shares were under pressure

yesterday. those bonds popped. the price went up, all sorts of interesting divergences and our guest last hour from jpmorgan said it as well, it's a credit bomb but not in the sense that you and i might be thinking. >> you'd be happen we 4% the next decade. maybe it's a god thing for equity markets. don't see anybody saying yes, let's buy some stocks. to me that's a good thing. >> i come at the world from a trader's point of view. the investing and the trading hats are two different things, if you ask me where the stock market will be six months from now, no idea. there seems to be warning signs out there that indicates the isn't isn't on strong a footing, we'll see what happens and the

fact that the ten-year which everybody would have sworn up and down if i asked them would be 4%, the fact that it's 3-2-.5%, regardless of what everybody else says says that the recovery is not as robust as everybody thought it was. >> understood. >> good to see you. >> always a pleasure. >> stick around and catch more of guy adami coming up with more of the "fast money" cree. they will be talking to bill fleckenstein of why he thinks there could be a flash crash at any minute. there's your investor sentiment. hear his answer so don't miss a moment of that. salesforce.com is out wednesday is and josh lipton has the numbers. >> sales force just reporting, let me get you those numbers. they report 11 cents on 1.23 billion of expectations on 1.2 billion. guidance, sales force saying expect eps of 11 to 12 cents versus expectations of 12 cents.

saying for revenue, look for 1.29 billion, street looking for 1.2 billion. deferred ref, new up 34% to 2.32 billion, subscription up 36% to 1.1 and 5 billion and services up 50% to 79 million. the conference call starts at 5:00 p.m. eastern and bring you headlines as we get them. kelly, back to you. >> the initial read here for the market is positive. shares up 1.3% in after hours trading. marc benioff is speaking exclusively to jim cramer about the results and that's at 6:00 p.m. eastern. >> straight ahead, the debate on the can i is whether growth will pick up or remain sluggish. forget all that tuck, a recession is beginning right now. a contrarian position next. plus, a fund manager bill miller told me last month that conditions for a bad market

don't exist. found out if he still feels that way in our exclusive interview. that's coming up. minutes could save you 15% or more on car insurance. everybody knows that. well, did you know that game show hosts should only host game shows? samantha, do you take kevin as your lawfully wedded husband... or would you rather have a new caaaaaar!!!! say hello to the season's hottest convertible... ohhh....and say goodbye to samantha. [ male announcer ] geico. 15 minutes could save you 15% or more.

welcome back. figures painting a slower

economic picture. gdp grew at a snails pass of 1% and philly fed president charles plosser says likely to grow at a faster pace the second half of the year, possibly forcing the fed to raise interest rates sooner than expected. my next guest says forget about that. the economy is entering recession and we're in one right now. it is good to see you, doug, and my question is what evidence have you that the economy is in a recession here? >> i think you need to think of plosser estatements today and plosser drink a little bit too much of the qe he's been extolling on the market. when you look at the q1 number, it was negative and people thought it was positive. they blame it on the weather. look at the jolt number or job offers out there relative to where the employment is, the last time we saw the divergence is 2007 when we entered a recession, already have one

quarter of negative growth and durable goods on tuesday will get to be negative which will make people leak down their gdp. >> for the second quarter, we're talking about 4%, so if they lower it it's from a pretty high level. >> you would need three data sets as pessimistic as you just described before you get anybody behind you saying we're in a recession. >> one more time, kevin. >> you would need three data sets, as mess mystic as you just described in a row before you get anybody behind your pied piper and recession strategy. you're making a way out there call. >> it's a way out there call, but if you think about where growth really has been, it really hasn't been anywhere. it's been covered by quantitative easing, and this quantitative easing has slowly been dripping and dripping and dripping away and we're left with a situation where what's the fed going to do to keep the economy point and no plans are in place to do that. when you are look at any sort of data, housing starts, for example, or new home sale, new

home sale numbers are up, why? because of multi-family housing is getting built. it's not people buying houses anymore. they are buying apartments. 20% of the u.s. is still on food stamps. it was 10% back three, four years ago. >> susan, what do you think? >> you know, i'm looking at things like the nifb, small business optimism index which came out last week at its highest level since 2007. they are talking about hiring, talking about increasing inventori inventories, all the good signs we want to hear despite all the scare with obamacare. really feeling very optimistic at the highest point in the recession. that doesn't say to me that we're headed towards any kind of recession. >> there's lots of surveys out there that you can point to and say things are going great. i think things are probably going great in the stock market but people don't look at the stock market when they look at a recession. what they look at are the actual economic numbers, mortgages, for example. people applying for mortgages, this is at a low since

2006-2007. >> what about the simple series of jobless claims? >> if you're right, then jobless claims next week will have to start jumping. every sort of gauge or component that contributes to gdp will have to start breaking down and not just have a month or two of weakness. >> that's absolutely correct. the fed talks about -- the fed says there's going to be a lot of headwind to the economy, dudley said that today. there's no certainty to where we're going. a lot of hope in the market, a lot of hope and expectation that things will be better but i don't think the underlying numbers are telling us this at all. >> this would be the first recession that came as an utter shock to the credit markets which are showing no signs of really softening up very much and financial conditions in general and all the other kind of general leading indicators, as kelly mentioned, jobless claims. seems to me we've had the mid-cycle slowdowns and negative gdp prints in the mitts of a longer term recovery. you don't think the burden of

proof is higher? >> credit markets are doing so well it's because you're forcing yields. not because the fundamentals are better. you have to search out there. >> there would start to be a deterioration at least in the most cyclical parts of the credit market as opposed to the opposite phenomenon happening. >> u.s. treasury market, people are saying there's something wrong. >> the environment of the fed is the same globally. i don't care what country you go to or what jurisdiction you play in, the government and regulatory agencies are providing low interest to everybody so everybody is in the same football field. have you to look at it relatively. i don't see us being worse off than europe or japan right now so if i have to put the incremental dollar to work, i have to do it every day, can you give me a better place to go to work than right here in the nyse. help me. give me a reason that i should not put another dollar to work here in equities. if i really thought a recession was coming, show me another jurisdiction where that's the case.

>> i'm not sure putting money to work in the u.s. equity market is dependant on whether or not there's a recession. when you look at all the dirty shirts out there, maybe the u.s. is the cleanest, doesn't mean it's the best. what i'm really noticing is that there are numbers not coming out good, not as good as people are expecting, a lot of hopium out there and all of the qe that was out there really helping the markets isn't there anymore and it's disappearing, and we need to be prepared for that. what you invest in, people are putting their money into the ten-year, quite obviously that's where money is going. is it still going to go into u.s. markets, because of the argument you made earlier, some want that dividend because you have the upside, but when it comes down to it there's money going into the ten-year and not coming in there from russia or anywhere else, it's because of the rotation happening. >> thank you. >> thank you. >> we're going to bring you back and see what happens. have a good one. >> you just heard why the case for an economy endering a recession. what does bill miller have to

say? last month he was quite bullish on the economy and the markets. we'll have more on that when we come right back. today is tuesday

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names in the market. do you still feel if you threw a dart at the stock market in six months time that pretty much everything would be up? >> i think so. what is interesting is it's a great market for people who want to invest, a time horizon for longer than 30 minute up to three weeks. >> where do you see opportunity? >> amazon i think is buyable for the first time in a number of years. if it takes two years for amazon to get back to where it was a few months ago, that should beat the market 35%, and with amazon in the last quarter what, spooked people was i think the guidance, but the underlying trends that were actually accelerating, dollar growth was 31% in the quarter which outpaced the growth of sales which historically was a very bullish sign. >> what about apple which has punched back above the 600 level and is about to make a stock split? >> the cost is in the low 400s,

not as attractive as it was but still worth 700, 750. >> going back to the big picture, doug was just on talking about how he thinks a recession may have already started in this country. do you feel differently? >> if a recession has started, it would be the mouth unusual recession in u.s. history because first-time claims are at cycle lows and wage growth at cycle highs, the fed is easing, not as much as they were but still easing, earning estimates are rising and yield curve is positive. never a recession under those conditions before. well, it's actually because financial other are doing so good that it is a not on the strength of the u.s. economy. >> i'm not sure what the question is. >> let me put it to you this way. do you worry there's a gap between how financial markets are doing and the underlying performance of the markets here because people are piling in on what they see as a quote, up

quote, bad block? >> i think there's a shortage of truly safe assets in the world which is why you see the german ten-year at 1.3%. in the context of japan at .6 and germany at 1.3 and france at 1.7, the u.s. is actually a high-yielding bond market, so i think that's part of what's driving this, but i think the argument that i hear people make that it's all easing, all the sugar high that we're in. amazon has nothing to do with easing, either does facebook and the most sensitive part of the economy, housing, and you're hearing several saying they are fundamentally cautious on housing. you've been bullish on the home builders. are you bullish still? >> the home builders are really interested. i think there's eight years they went up one year, 2012. down in 2013 and down so far in

2014. fundamentals though rim proving. almost all home builders, the ones we own, trade below market multiples on this year's numbers and way below on next year's numbers and earnings growth faster than the overall market and the arguments that you hear about people who are bearish on home building, household formation is sluggish and homes aren't as affordable as they were and -- the interest rate environment is such that we've had it go up slowing things down. all the arguments that are put forth for home builders on the bearish side are correct, but the problem is they are not arguments for a bear market in home builders but a bull market in home builders, because we're in a very elongate the sector for home building. home mortgages, not single family but multi-family, you're correct but rates and all looks very solid to us. >> if you like housing, could you like autos as well? >> own gm and ford and fireiat

has had a very good year. i think in the context of the market, there's probably better opportunity in things like builders which have more upside i think in the next year or so and we like them. >> on the autos, just had the highest number of recalls in this country or whatever the figure is since 2004, most so than last year and it's only may, et cetera, et cetera, et cetera. what doesn't that matter more in terms of how these will trade. the amount of recalls we're having right now has little to do with auto demand over the next three or four years. if gm were to lose market share on a more permanent basis, that would be cause for concern. >> why do you think it is that so many people are simply in this market for yields? >> aging, people getting old like me, who are looking more

for income. i think the results of the financial crisis has real scared a lot of people and any place they can find safety is what they are looking for and yield basically provides a degree of comfort and safety. >> just interesting because the returns that we've had in the equity space have been so strong but i guess that plays into it. there's the question it can't continue. this can't lost, this can't lost, this can't last. >> the equity market is by no means as expensive as it used, but if you look at it chaired to thwaites, it ought to trade the novel envelope gdp. maybe.07%, .8% growth, that's what we had. >> do you think it's mistaken here? i mean, this would, as you well know, be a different denom none

that we've seen in the post. >> i think, yeah, i think the trish ire market is way off on that. the treasury market, the real yields were 4% in february of 2000, the highest they have ever been, and we were headed in a recession at that point in time. that was forecasting rapid growth, so the treasury market doesn't have any special forecasting ability that the rest of the markets don't have. >> last question. what about bitcoin? >> a lot of money flowing into bitcoin from the venture capital side of things. i think that's bullish. think bitcoyne is stabilizing in the 440 or so range. it may very well be, as warren buffett said, that it turns out to be worthless or it turned out to be a -- >> we just don't know. that would be something. time will tim. good to see you. >> what was behind today eats selloff and then we'll introduce

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welcome back. been another pretty busy after-hours session. dom chu watching up the movers for us. >> let's talk about salesforce hadn't come beating on both the top and bottom line. profits and sales better helped by higher demand for its sales and marketing software. its second quarter sales guidance better than wall street analyst were expecting. in the after hours, that stock up about a percent right new and don't miss "mad money" tonight when sales force ceo marc benioff speaks exclusively with our own jim cramer about those results. that's tonight at 6:00 p.m. eastern of course right here on cnbc. then there's analog devices moving higher in after hours reporting better than expected second quarter profits and that stock is up off session highs about a percent in the after-hours trade and intuit posting better than expected third-quarter earnings and sales, but its fourth-quarter guidance came in light of analyst expectations. that stock is down 4% after hours.

interesting movers today, specifically induet to the downside. kelly, back over to you. >> for more on today's selloff what should investors be watching for tomorrow? we're joined by sheila and rick santelli staying with us in the bond pits and bob pisani right here on the floor of the stock exchange along with the rest of the panel. bob, start us off. >> the immediate reasons stocks were off at the market, very it is appointing retail sales earnings. wasn't the weather. everybody lowered guidance for the second quarter as well. that's have we lowered. did drift lower in the middle of the day and enjoyed listening to the debates about dudley and plosser, but we dropped before their comments came out so i don't think that was a significant factor but it was interesting to hear what they had to say. there were other theories. some people were speculating that good harbor, big etf manager out there was buying and selling certain etfs. not clear how much influence that was, but weak and disappointing guidance is enough. the economic data is not coming in very good. >> all right.

sheila? >> i would agree with that. the nasdaq started out the day more on a positive note, basically flat but as soon as the fed statement came out we definitely saw a downturn. here's what trade remembers telling me. don't need a reason for the market to go down. the market has been in a technical downtrend for the last couple of month. you see the selling happening, one trader says investors right now are trained to de-risk very quickly. here's what's interesting. if you take a look at the nasdaq performance april till now we're basically range bound so either companies haven't been putting good enough performances to buying or the economic news hasn't been good enough, a combination of the both but we've basically been range bound since april here. >> kelly, i think it's going to be interesting to watch the high valuation tech stocks tomorrow morning because sales force kind of led them down. had the quarter where they basically beat. saw the stock pop after hours and it's come back kind of down to earth and down below 1%, and at the same time we've seen the

enterprise giant they were supposed to be disrupting come in pretty strong so a lot of people might be feeling given how strong oracle came in, shouldn't sales force be that much stronger, given what happens to all of the other stocks that sales force tends to lead along and then you've got intuit that has been down quite a bit after earnings. basically beat and frankly fourth quarter for intuit doesn't matter. turbo tax is the big quarter. usually when that stock rallies it does so in the back half of the year. not off of its biggest quarter so it's interesting to see how the bigger techs play off of that as well. >> rick santelli, if you wanted to make a quick 13% this year, where should you have been? >> i like to ask our panel. everybody on the panel raise their hands who would like a nice easy conservative 26% annualized rate for 2014 on investment? everybody raise their hand that would like that. >> because right now the bond is 13.3% total return, may 20th.

do the math. it never ceases to amaze me. >> the 30-year bond. >> yeah. >> 30-year bond, return 13.3 ten-year note, as of right now, total return for the year, a smidge above 6%. >> could i take 100% out of your wallet and buy that bond right now, would you do that? >> if you listened to me on january 1st your dollar would have already been there. >> i'm talking today, incremental dollar, my friend, you know what i mean. >> i'll tell you what, wouldn't surprise me at all to see a 30-year bond at some point trade 2.75 or a ten-year note trade 2.10 to 2.25. wouldn't be surprised at all. there's definitely room left on that trade. the equities, all three indices i don't think have been in positive territory but an hour all year. >> i'll turn the lights off here at the nyse when i leave here because we won't need anymore. >> there's some truth to that. >> rick, i know what you've said which is that, you know, if rates trade their bad news, just

heard from bill miller as to why this may not be the case. >> look, if you look at what was happening with the fed comments today, we are -- we had two fed presidents speak, plosser from the philly fed and dudley spoke and if dudley had spoken first the markets would have much less of a reaction because dudley was really talking very dovish. really taking our time. there's going to be a significant period between the end of taper and the beginning of rate-raising, and we're watching all the indicators very careful and he's much more in line where janet yellen is than plosser is, so i think some of the heightened activity around this today has sort of been kind of much ado about nothing. >> i definitely agree with that, but i think it tells you a lot more about the anxiety in the market, that it's really suggestible and kind of skittish in this way so we'll see with the minutes being released, seeing exactly how it decides to take the news, not exactly what the contents of the minutes are. i can spin this in a positive way. can you believe the s&p is 2% off its all-time high.

the russell 2000 is down close to 10% and you've had this kind of stealth correction. again, this churning digestion, that maybe has gone a long way to sort of moderating valuations and moderating growth expectations. that's what i call the immaculate rotation. maybe we're getting it. i just don't know how much weight you would want to put making that trade. >> internet stocks and biotech stocks, mike, have stabilized in the last couple of weeks. today they were weaker. now you want to watch that trend if it continues the next few days. >> mike, what do you think about, would you take kevin's bet for the next dollar that you've got into the long bond that has returned 13% to date? >> i don't think you get hurt very much by putting it there. i don't think it's racing to the upside. i think there's a lot of structural reasons why we're trading roughly in this zone. look, the yield in the ten-year has been in this kind of 2.45 up towards 3 range for months and months now so i think you're kind of betting on the momentum at this point. people were positioned wrong and i'm not prepared to say that all of a sudden that malpositioning

is over. >> i like the fact that there's fear and loathing and grown men weeping about equities. that makes me feel better about them. >> nobody is weeping. just anxious >> you like the dividend plays? >> absolutely. if i listen to this i'll be getting 4% on my div yield in the s&p in a few weeks. >> if the price of your stocks doesn't go down 20% the dividends will look pretty good. >> thank you, guys. everybody, have a good night. markets sharply lower after fed official comments, if you want to attribute it to that, those comments or something else? a look at what's heating up cnbc.com and we'll introduce you to the man who introduced the ubs flash drive for iphones and ipads. do the investors on "shark tank" want to take a bite out of this product? you won't believe what kevin o'leary has to say. ♪

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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. ♪ welcome back. concerns about the market are heating up the hot list. >> all about the market coverage today, kelly. we've already had at least 52,000 people pile into our market wrap, that's the closer we put up. if you add in all the repeat visit, all the people touching our general markets page and all that stuff, it's about a quarter million pages worth of traffic that were kicked to us today because of the market. heard what bob pisani was

talking about, the timing of the fed speakers, and i'll tell you this, after the feds folks spoke, got a spike about people piling into the website. >> this is interesting. >> all the argument back and forth about whether or not the fed had anything to do with the selloff, what's your read? >> my read is it's perception that's everything. might not be the cause but people sure piled into the website to find out what was going on after they spoke. >> fair enough. >> we saw a clear connection right there. number two, related to that this morning after peter bogvar was on "squawk" and calling for a correction, how many people is that saying there needs to be a correction, so, you know what, we made a list and people are loving our list. we are calling it the market correct roll call so we have it up there. readers are going on there. so many people have done it. >> this is kevin o'leary's point. >> love to hear that. >> double the list tomorrow morning, please. >> we'll be all over it. keep updating it for you, and

finally i did see wise man effect today, exclusive video of art cashin who weighs in on what the markets are doing. people are gobbling that one up, too. they seek out what the wise men are saying, might be for the roll call as well. >> by the way, art cashin's notes when they come out, calling the recession spans as we hit them or test them do have a predictive effect for what happens in the next leg of the market. in this one he says watch the nasdaq and gave a couple levels there. predictive bands again. >> all right. >> all the wise men coming back out. >> allen, thank you. >> take care, kelly. >> a sea of red arrows across wall street what. our panel lifts are watching tomorrow and what it means for your money but first i don't trust the cloud for your storage needs. one valley entrepreneur with an alternative. he's created a usb port that works in both your computer and apple tablet. creating a ton of buzz online.

we'll have the product when we come back. tigers, both of you. tigers? don't be modest. i see how you've been investing. setting long term goals. diversifying. dip! you got our attention. we did? of course. you're type e* well, i have been researching retirement strategies. well that's what type e*s do. welcome home. taking control of your retirement? e*trade gives you the tools and resources to get it right. are you type e*?

welcome back. this new kickstarter campaign hoping to produce what it says is the first ever usb flash drive for your apple products.

istick is the latest creation. the campaign has been live for about a week, and it's already generated over $560,000 in funding. with us now is daniel chin, founder and ceo which is the company behind the istick. welcome. >> hi. >> this looks like we have an actual prototype of the device which i understand doesn't work and doesn't carry some sort of crazy virus. i'll put it right here so everybody can see. there we are. this could be a game-changer, daniel, do you think? >> yeah, definitely. so istick is the world's first usb flash drive that works with computers and also has an integrated connector that works with iphone, ipads and any apple device. >> it does look like there is one that photo fast makes for about 200 bucks out there. i don't know if it's exactly the same or not, but how much is this device? >> the retail starts at $79 for 8 gigabyte and goes up to 299

for 128 gigabyte. >> my issue here is two-follow, the amount you're charging per gigabyte compared to ausb flash drive. you're charging upwards of $2 per gigabyte, whereas if i were to buy a flash drive on amazon, that admittedly doesn't plug in to my ios devices, it will cost me less than 50 cents. how do you justify that? >> then again, those run of the mill flash drives that you get on amazon you wouldn't be able to connect those to apple devices. what we have here is really unique and is not like we are making tons of money off this. there are proprietary technology, hardware and software, that allows us to do stuff that our competitors are not able to. >> so kevin, you see a lot of new products. $79. you can take the flash drive and plug it in for the first time to your apple iphone or ipad. >> i'm more concerned about the

apps that really eat memory. that would be photography and music. tell me how this device -- say i've got 10,000 full-resolution mp3 tunes. i want to stick them in my iphone. how do i do it with this device? >> you have mpp pchlp3s on your computer, take the connect part to your computer, load all the music in there. they only take up like five megabytes per song with 128 gigabytes, you are talking about tons and tons of music. connect the lining part to your iphone and can you stream music directly from the istick on your iphone. >> using iphones or another software app. >> another software. unfortunately -- >> yeah. you got to fix that. you want this to be smokin' hot, you got to fix that. it's got to work with itunes. you know that. >> the trouble is only apple has

access to the itunes library. no third party will be able to access -- >> get on your knees, pay them the 30%. you solve the problem. you come back. >> they won't even do it for 30%. that's also the issue. you can do itunes match for $25 a year. put your mp3s in the cloud. >> you can't get the high-resolution. my tunes are 11, not 7 in size. i would love you to solve this problem. i would buy many of these from you if you could solve that problem. you got to make it ubiquitous. it's got to be instantly using the apps that i'm already using. then you got something. >> we have -- >> sorry to turn this into a shark tank on you. >> i love shark tank, by the way. i love mr. wonderful. yeah, we have a fantastic app that has great music player. we also going to launch an xdk so we will try to be competitive with other third party music apps.

yeah. >> would you guys use this device? >> i would, sure. i understand kevin's points. maybe i wouldn't want to invest in the company but i think it is a great innovation and i think there have been a lot of ancillary businesses that have come up supporting apple ingenuity. i think it is a great trend. >> i see the utility and i think i probably would potentially use it. i just wonder in general this business of these peripherals, how fast they could become commoditized. that's what i wonder about. >> you're certainly playing against the rapidly dropping price of cloud storage. the more people understand it, the easier it is to use. on drop box, you can get for $10 a month, 100 gigabytes. that's a tough thing to compete with when you consider what broadband wireless connections are becoming more ubiquitous. >> daniel, is part of your point here to take people out of the cloud or not? or is this just about the utility of a flash drive? >> well, there are people who do not want to get on the cloud.

you need internet to work. let's say if you're on the plane where there's no internet, then you are out of luck. and there's also concerns about cloud providers being able to access your data. worries about nsa being able to look at data. so i thistick is definitely fasd more secure way to share your data with various devices. >> daniel, what do you need at this point for this product to go live? >> well, our funding goal is $100,000. we already hit the goal in three hours since launch. >> wow. >> yeah. >> kevin, would you invest? >> i want him to fix the dish want him to be transparent to the apps i'm so used to. i'm not in love with apple. >> isn't that a selling point for you? >> the key use for this is movies. i will give you that. >> fair enough. >> 128 gigs on the plane, you want to bring all the movies.

you could do that with this. hey, maybe just name the product after that and focus on that as opposed to all those other things that are easy to get on the cloud. >> jon is right. maybe the movie is the killer app for this. you don't care that the movie runs in itunes. could you just watch it in any app. why did you go kick starter? for the free marketing? >> partly -- well, we are very small company. we have no external funding. i own 100% of the can. kick starter is good way to raise capital without giving up revenue -- without giving up equity. >> mr. wonderful here might take a stake. >> back in two. announcer: where can an investor

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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." welcome back. so what's next in markets? we've had an up day, we've had ha down day. mike, what are you watching? >> the immediate reaction to the fed minutes. see if we still need dovish reassurance. >> you mean tomorrow? >> 2:00 p.m. >> europe. think there are storm clouds

brewing in the financial sector. deutsche did that raise. i'd be careful. >> peripheral debt. yields have creeped back up again. macro may re-assert it selves. >> i'm looking at bank loans. the optimism has come out. the fluff is out of the debt market. even though people don't see it yet. that's ground zero. >> looking for the valuation of tech to sales forces earnings. net appliance. hp also coming this week. big tech, enterprise tech also has some moves left. >> it's not just the retail space. we know enterprise tech has been part of the recipient of the rotation. will they continue to benefit here? guys, thank you. good to see all of you. i like the shark tank kind of mi minitheme we are developing. >> jon's going to join that firm and get 30% equity.

it is time for "fast money." melissa lee joins us with a preview of what's coming up. >> last week we saw the temper pan trump in full swing. today we have the man who's been prepping a short fun for a very long time. he'll tell us what he sees in the market and whether or not he is ready to short stocks right now. >> over to you guys. "fast money" starts right now. live from the nasdaq market sis in new york city times square, i'm melissa lee. dan nathan, steve grasso, guy adami. weak corporate earnings weighing on the broader market. home depot is up today but the company missed earnings expectation sparking new fears about the lagging housing market. dan nathan, you are a bear but does this feed into your thesis here? >> i'm not a bear. i'm just skeptical here. for anybody to look at what went on today in the xrt, the retail etf, this has been hni