four-day weekend. thanks for watching "street signs," everybody. >> "closing bell" is next. have a great day. see you tomorrow. hello, and welcome to the "closing bell." i'm kelly evans down here at the new york stock exchange, where it's been a wild day on wall street. the dow off as much as 125 points. we're down 37 at the moment. >> volatility is definitely back. i'm bill griffeth. also here at the big board. stocks staging a late-day comeback after geopolitical turmoil sparked that steep sell-off earlier in this session because of the situation in gaza remains deadly and unsettled. we'll hear about that in just a moment. and international posturing about the downing of malaysia air flight 17 in ukraine has gotten trickier. china now inserting itself and telling the west not to blame russia so quickly. but we should point out, you probably have heard that they have made some inroads in all of that and inspectors are now being allowed into that area and they are starting to move the remains of the victims off to

the netherlands. >> yeah, we're watching that story today. also today on the fourth anniversary of the controversial dodd/frank financial regulation, the two authors of the bill are here exclusive. the law by many measures still incomplete in many areas. we will get the reaction of chris dodd and barney frank to where the bill stands today, the impact that it's had and a lot more. >> looking forward to that very mu much. also, netflix bucking the trend today, trading higher by about 1% ahead of earnings that are due out about an hour from now. netflix kicking off an avalanche of major earnings from some of the biggest and most influential companies on wall street. we will have the numbers, we will have the analysis, the market response, all of that that only "closing bell" can do, so don't go anywhere. >> yeah, we're really getting into the thick of earnings this week. after hours today. it picks up tomorrow morning. a lot to watch for. here's where we stand on the markets right now heading toward the close on this monday after such a difficult end last week with so many geopolitical events swirling about. the dow jones industrial average

off 38 points or about 0.25%. the nasdaq is off only about 4 points this hour. in fact, it's less than 0.1%, as you can see there. and the s&p, for its part, down about three points to 1,974. bill? well, geopolitics fears remain a big backdrop for the markets in the united states. secretary of state john kerry, the u.n. secretary, ban ki-moon, is trying to negotiate a gaza cease-fire with israel right now, as a matter of fact. >> if you're wondering, again, why we're seeing the ten-year yield here so low today, ayman mohaddin is joining us now, on the ground in gaza with developments. ayman? >> reporter: as it has every night for the last several nights, sound of the shelling intensifies. this is obviously part of israel's ground invasion of the gaza ship. the sounds of the shelling have been consistent, probably one every few minutes for the better part of the afternoon. at the hospital, chaotic scenes, emotional scenes, hospital

workers struggling to cope with the rising number of victims. today alone, more than 50 palestinians killed, and that in itself followed the deadliest day since this conflict began yesterday in which more than 75 palestinians were killed in a single attack in a single neighborhood, actually, in one day. that is in the eastern part of the gaza strip. for its part, the israeli military today says in the first four days of this ground invasion, it has lost 25 soldiers, 25 israeli soldiers have been killed in fighting with hamas fighters inside the gaza strip as a result of that ground invasion. it gives you a sense of how intense that fighting is getting in some of these areas where the soldiers are now inside the territory. meanwhile, the humanitarian situation continues to worsen by the hour. right now, the u.n. says about 85,000 palestinians have been displaced from their homes. they are taking refuge at u.n. schools that have been turned into shelters. about 61 of those schools now trying to cope with this 85,000 number. you can get a sense of how cramped and how crowded they

are. officials really under pressure to try to provide them with food, basic hygiene products and other necessities, and it gives you also a scope of the humanitarian catastrophe that health officials here say they are struggling to deal with. now, you mentioned secretary of state john kerry. he arrived in the region to try and jump-start a peace deal, or rather, a cease-fire between the two sides, but there is a wide gap in the starting points of these two sides. israel says it wants a complete cessation of rockets and any attacks on its soldiers and civilians. hamas says it will not stop fighting until an israeli-imposed blockade and siege is completely lifted off of the territory here. bill, karen, back to you guys. >> all right, nbc's ayman mohyeldin in gaza. thank you. let's talk about the markets right now. our closing bell exchange." doug gordon from russell investments, ron wiener from rdm financial group, anthony chan from chase and ken aeny polkari from o'neil securities.

everybody here. kenny poe kari, another one of those days, a big sell-off on the open, comeback through the afternoon. what's going on today? >> right, because ultimately, i think once again, long-term investors understand that the short-term geopolitical influences are just that. they'll create this short-term aberration in the market, long-term investors will take advantage of that temporary dislocation, and then the market will once again stabilize. you saw it happen last week. you saw it happen again today with the market down 125 early on in the day. then as word came out that they're working on this cease-fire, you see the market steadily makes its way back, because in the end, it's going to be about earnings, it's going to be about the macro data, it's going to be about the recovering economies really around the world. >> katie, are you surprised by the resilience in the s&p here? >> not really. the momentum behind the market is very, very strong, and i don't really know why so many people are trying to fight this trend. the s&p 500 is within points of all-time highs, and that momentum still is behind the market from a long-term perspective. we're obviously seeing a fickle

market that reflects a son consolidation phase. additional stroilt of course is characteristic of earnings season and is nothing to be concerned about. in fact, we're seeing some breakouts on the chart. so, we have to be aware going into earnings where resistance levels are, and that way, we can identify breakouts going forward and know where to position from a technical standpoint. >> ron wiener, you've been using the same strategy essentially for the last three years, buying multinationals. it's worked to this point. what would change that? i mean, what would get you to rethink that strategy and go somewhere else for growth? >> first off, i'm still positive. we haven't had a 10% correction in almost three years, i think. >> is that good or bad, though? >> you know what, it's good. you can't fight the fed, right? everybody says that. well, you can't fight every fed, every fed around the world -- europe, japan. how do you fight that? and in bonds, the ten-year's this low, i wouldn't buy that. so, there's almost nowhere else to go, but it's okay. long-term, same strategy. 750 million new middle class

families on the planet by 2040. they're buying toothpaste, cars, iphones. so, it's all good. but russia would be the only thing, you know, that would worry me about multinationals. they're 7% of the big seven largest economy. you know, the gas. if there was a hiccup, it would be because of some restrictions, and i would buy on the dips. >> you know, ron, i take your point, but at the same time, we're seeing what almost seems to be a reverse globalization process happening worldwide while, even though there may be more middle class households -- and doug gordon, i'd love your perspective on this one as well -- you know, a lot of impact that we might have had from those people coming into the world economy is being mitigated by the fact that we almost seem to be seeing a bulk nization around regions because of the various risks and policies, whether it's whether scotland leaves the united kingdom, whether it's, you know, the effect that russia, ukraine unrest has across europe or what's happening in this country. i mean, can you talk us through some of the near-term risks to

that otherwise rosy world view? >> yeah, i think it's a case where we've seen some validation of macroeconomic data this far, but let's be candid, forecasting macroeconomics in financial markets is hard. forecasting geopolitics when vladimir putin is involved in them is even more difficult. that said, i think that we might have a geopolitical events dominate to a certain extent this week as we look for other data out of the cpi number to see what the inflation picture looks like. also, we'll get durable goods. but i think it's a case where it's going to be a little bit of an unequal impact. certainly, europe's got more concerns about what we're seeing in ukraine, where the united states, we anticipate will be more resilient. that does present opportunities, however, in a well-diversified, multiasset portfolio, where we can take advantage. placements between regional equity selections. >> anthony chan, we have chris dodd and barney frank on today. we're commemorating the fourth anniversary of dodd/frank. i know who you were for and i know that won't influence what you say, but in your view,

dodd/frank, has that helped the economy, has it hindered it, has it held back the financial system in this country as they try and implement all of the regulations that are involved in what we call dodd/frank? >> i think there's no question that it introduces challenges, but i think over time, the economy certainly adjusts to the challenges. and when these challenges come, sometimes there's good things and sometimes there are bad things. and the reality is, is that the economy is still expanding. we've had an economic expansion since 2009 and we're not turning back. that's the reason why kenny tells us that the long-term investor keeps coming back. and why do they keep coming back, despite all these geopolitical risks? because as long as the markets continue to hear the "d" word, a diplomatic solution is at least in the cards, and countries are going to cooperate, no matter how big the obstacles, whether it be dodd/frank, geopolitical risk. as long as people are willing to sit down and at least work together, even though it's not going to be an easy task, we make progress and the markets continue to make progress, and

that means continue to move higher. >> anthony, what's the bigger risk to the outlook from your point of view, a turn of events between russia and the ukraine or in that part of the world or what's happening in israel right now? >> kelly, there's clearly the risk that, somehow, the diplomatic solution option falls apart, that somehow, countries stop believing that the diplomatic solution is the option, and they feel that they have on to escalate to things we don't want to talk about. when that happens, the market is going to get nervous. and that's one of the reasons why i think you're having volatility, because the market is going through these stages where there is some doubt whether a diplomatic solution is going to be the outcome or whether they're going to escalate it. i think at the end, a diplomatic solution will be the outcome, but until that happens, the market will be uncertain and you'll continue to have volatility and the market will face uncertainty. >> well, then a point art cashin was making earlier was, well, we just showed the ten-year treasury yield. it's below 2.5%, and it hit its lows of the day as president obama was walking to the podium on some anticipation he might announce further sanctions against russia.

that didn't happen and we've seen the market and the yields bounce back a little bit here in response. ron wiener, is that then the thing to watch here, as to whether the u.s. or other countries put additional pressure on russia? >> first off, i think the bubble's the bonds, it's not the stocks. i would sell into this kind of rally with bonds. i'd be very careful of bonds. it may take a year or so before that turns out to be a bad investment, but this is way too low. this is not normal. secondly, i think that the russian event, not the israel israeli/palestinian conflict has the financial issues to it. it's the russian thing. they've been battling, how many wars have we had with israel and the arab countries? that's going to go on, but that's not going to move ibm's earnings, it's not going to move ge's earnings to any extent, but the russia thing can. the sanctions, they cut off gas to europe. europe's the biggest economy in the world. so, that would be the thing, but

again, buy on the dips. that's going it get solid some day. our job is to buy low, not, you know, not sell now because we're nervous. it's the opposite. so, we should be talking opportunistic. >> what are you guys watching on the floor? it's pretty obvious what you guys should be watching. are you? and would you personally be buying the dips? i know you've been skeptical in the past. >> no, yes, i think you have to, right? because i think we've seen over the last couple weeks, every time we test lower, between 1960 and 1945 there seems to be a lot of interest there, natural buy side. the market says lower, it finds support there, rallies back. it tests lower again, finds support and rallies back. so, i agree, i think you have to be on the dips taking advantage of it. but it's very interesting, the point ron makes is, yes, russia has more of a financial implication, but i think the israel/gaza thing has much more of an emotional reaction from investors and from people around the world. if that one spins out of control, i think that's where you get the emotional selling, which then i think creates the big, longer-term opportunity. >> that's a good point. before we go, katie, last point.

you mentioned a couple of areas that looked poised to break out. what were those areas you were referring to? >> some emerging markets look poised to break out. look at brazil, for example. but here domestically some stocks are breaking out on back of earnings. but i would highlight that uncertainty can actually be a good thing for the broader market, for the s&p 500 and there really are two things that could restore near-term confidence and lead the save back up to new highs, and that would be financial seconder out-performance and also just rotation back into these sectors that have underperformed for so long, including small caps as a whole. >> that's a good point. >> all right. thank you all. appreciate your thoughts today. when has there ever been a time when we were certain about anything? >> i know. >> there's always uncertainty, right? >> investors should embrace it if they're looking fortunate. by the way, small caps remain a point of controversy. >> yes, they are. just ask janet yellen. down 44 points right now. that doesn't tell the whole story, though. the dow was down 125 this morning. we've come back from that low. we have about 47 minutes left today. as we mentioned, it's the fourth

anniversary of dodd/frank, the act out of congress aimed at fixing the flaws leading up to the 2008 financial crisis. but is it getting the job done? the architects of that law, former senator chris dodd, former congressman barney frank, will speak with us exclusively coming up this hour. also ahead, netflix out after the bell with results. that's all less than an hour from now. we'll bring you those numbers the second they hit the table, break them down. we have a full team of analysts standing by for coverage. and next, six flags entertainment tumbling on the back of declining attendance figures in the latest earnings report. the ceo of the company sheds light on what's happening with his company and if it's a canary in the coal mine for our entire economy. that's coming up on the "closing bell." stay tuned. ♪

♪ ♪ [ male announcer ] if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. but hurry, offers end july 31st. share your summer moments in your mercedes-benz with us.

slight down day on wall street. the dow down 40 points.

we were down 125 on the open. it was another one of those days where the selling mostly was in the morning, come back in the afternoon. right now the s&p is down three, so is the nasdaq. >> dominic chu back at headquarters keeping an eye on the big movers for us today. >> hey, kelly, bill. let's start with toys. hasbro, fun and games, right? it's moving lower after the toy maker reported second quarter sales that missed forecasts as sales of its games and preschool products fell for a second straight quarter. you can see that the stock's off session lows but still down 2.5%. in a programming note, president and ceo of hasbro, brian goldner, will be on "fast money" live beginning at 5:00 p.m. eastern right here on cnbc. you won't want to miss that particular interview. herbalife falling after bill ackman told cnbc he's delivering a presentation tomorrow that's going to show that the company is, yes, a massive fraud. herbalife, you can see taking a huge dip, down 12% at session lows. also, yum! brands and mcdonald's are losing ground after a shanghai television station

reported a supplier sold them expired beef and chicken in china. both those shares down by north of 1.5% to 3.5%. and we're going to end with six flags falling as the company's quarterly sales came in shy of expectations, this on an 8% decline in park attendance, the company blaming bad weather that's extended school years, and thus hurt theme park sales. you can see six flags down off session lows, still down 5%. back to you guys. >> dom, thank you. so, what is behind the drop in attendance at six flags' parks? >> exclusively, jim reid anderson, six flags chairman and ceo. good to see you again, sir. welcome back. >> it's great to be back. >> your stock was down 7% at its low today. obviously, some of that the expectations about revenue that were not met. expectations have very subjective. what's not subjective is this 8% decline in attendance in that quarter. what was that about? how do you assess what happened in your second quarter? >> so, bill, let me start by saying that we've had four record years in a row, and this second quarter that we just reported is, indeed, an all-time

high on all fronts. if you look at the revenue, the record, profitability of record, eps beating expectations. so, we've had an incredible run. now, i think that expectations around attendance were higher and we were disappointed with attendance, but i think that the key reason and the number one driver was the fact that the spring break was impact ed by schools that extended, in essence, the school year, both of the spring break period but also in june, really because of the awful winter that we had across the united states. >> so, that being said, and this obviously an issue. a lot of consumer companies have struggled with. some have said, take home depot, for example. they said, usually if we have a bad first quarter because of weather, we get a sort of bathtub, a spillover effect into the second quarter. do you think that your business for the year may have suffered because of this, that other competitors, maybe people went to a different park and maybe

they'll keep going to that park, for example? what do you think the lasting implication will be from that period? >> i should be clear. we don't really have any direct competitors in most of our markets. there are a couple of markets that we do. there is no direct alternative. people can do other things, they can go to movies. my assessment was that what we saw was the direct effect of the really bad winter and schools needing to extend. as an example, st. louis added 14 days towards the end of the season in june. the new jersey area, four to five days. we're talking about a long period of time that students were not out. 60% of our attendance tends to come in the second half of the year, july, august are our biggest months. so, we're very encouraged, looking forward to the third quarter, because we've got several factors that are working in our favor, and the single biggest being that we've got all-time record-high season pass

and membership purchases. so, 9% higher than prior years. >> do you think your customers fundament lal in good shape, then? because there's some question about that across the economy. >> absolutely, kelly. we think our customers are in good shape, and i'll tell you why. two things. first, value perception. we measure value perception across about a million guests. our value perception and guest satisfaction score's an all-time high. if you look at our inpark spending, it's trending at an all-time high. and i think the third element is our active base of members and season pass-holders. it's 9% above where it was a year ago. i believe we had what you might call the perfect storm, first and second quarter dramatically impacted. but even with an 8% drop in attendance, we registered record revenue, record eps and record ebitda. >> so, extrapolate that out. what are you saying about the economy here? at a time when unemployment is still pretty high, you know, the housing market's still lagging, the jobs market's still lagging,

but yet, you seem to be suggesting that the economy's doing well here. >> i'm not suggesting the economy's doing well, but i don't think it's doing badly. and i think that the reason that we are successful and we will continue to be successful in this economy is that we offer a value offering. it's a tremendous outing for families, a day out at a reasonable price. and i think we have the ability to lever that for the future. and that in itself will drive success long term for six flags. we've also added a new international leg to our overall pillar, and that's going to drive growth for us in the near and long term. >> mr. reid-anderson, good to see you. thank you for joining us today, sir. >> great to see you. thank you very much. >> appreciate it. >> thank you very much. vertigo keeps me off of roller coasters. i'll bet you're a big roller coaster person. >> i was too scared until i was -- in fact, to his point, we went out for our senior high school trip and i saw the 4 and 5-year-olds getting on the roller coaster and i thought, if

they are getting on, i can get on. >> you were shamed into it. >> that's probably the last time i've been, though. >> down 37 points right now, well off the lows of the day here, and we have about 35 minutes left in the trading session. time flies. the controversial dodd/frank act making its fourth anniversary and it has yet to be fully implemented. former senator chris dodd and former congressman barney frank tell us what they say is working and what isn't working with the law bearing their names. that's just ahead. and then after the bell tonight, we've got netflix out with results. less than an hour from now. apple out after tomorrow's close. we'll tell you the numbers. watch for the debate, if apple is a buy at these levels right now. that should be very interesting coming up. stay tuned. uncer ] there's a gap out there. 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. ♪ let's close the gap between people and care. in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.

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

welcome back. so, here's a look across not only the dow and the nasdaq, which we've mentioned before, but also the russell, which as you can see is underperforming on the session. that's the one off 0.4%. the one that remains controversial, where people are split between looking fortunate in these sell-offs and thinking it's still too overvalued, and bill, you mentioned janet yellen wading into that debate recently. >> what's not been underperforming is netflix. that stock is higher, results out less than an hour from now. julia boorstin has the numbers to keep an eye on. >> the big focus is on subscriber numbers. if netflix continues to overdeliver, it will top 50 million streaming subscribers total. now, subscriber additions will indicate the roi of netflix's investment in content.

we'll also see the impact of its may price increase for new subscribers, which is expected to lower churn. investors are looking for earnings to more than double to $1.16 per share, while revenue is expected to rise by 25% to about $1.3 billion. on the earnings call, q&a today, we'll also be looking for updates in netflix's planned european expansion. kelly? >> thank you. so, yeah, about 30 minutes to go here. it's a huge earnings week, by the way. netflix in just a few moments, and tomorrow after the bell, apple earnings. >> for more on whether you should be adding apple to your portfolio, larry is back with us and keen on the market trader james roe melli. good to see you both. larry, yes or no on apple? >> yes. i think apple will continue to drive. i think you have to get into apple. the whole idea is samsung basically blinked, so it's time for apple to take over. there's a few things that just happened with apple very quietly. they've been out there, but people haven't truly realized

it, the buy on beats is huge, bill. it's about content. they're now getting into content play. the enterprise play was big with ibm. now all of a sudden, the tablets will go ahead, take over the android tablets because of the enterprise, so that was big stuff. now, it's also coming out is the payment system. so, you've got content, e-commerce and advertising, which will be huge, which will continue to grow and take them to the next level. >> bud james potentially priced in, and why can't apple seem to make a break above $100 here? >> right. i don't necessarily disagree with what larry said there. i think the long-term picture for apple is pretty bright. we're going to see some growth from this ibm deal. however, if we look at how the stock trades on earnings, i cannot justify getting long apple ahead of earnings. generally speaking, they report solid earnings. however, the stock never seems to catch a bid on earnings day. over the past eight quarters, the stock has sold off six out of eight times with an average downside move of around 5%. now, this is probably because

expectations get a little too hot in apple ahead of earnings, and we're seeing a lot of call buy in the options market with pretty aggressive price targets through the end of the year. so, i think that same dynamic may be setting up here again. with that said, buying ahead of the earnings catalyst tomorrow after the bell is extremely risky, and i think that the stock can test as low as $90 on earnings day. >> would you buy that dip if it does that? >> i would buy the dip. i would buy ahead of time. i think what's going to happen now is it's not going to look back. i think this thing's going to continue to drive. they're going to take market share out of android, which we'll see. all the upside's in china mobile, which won't be that much, because not the subsidies on the phone. but this will continue to drive. i think it finally stabilized after what we call financial engineering, which is nuts, because money is money, guys. >> well, it's not nuts if you're -- look, and this is a broader point, but as share prices have doubled from their lows, companies continue, in fact, they're picking up their purchases, so that suggests that either their valuation doesn't matter or that they just have

nothing better to do with that cash? apple's a different story. it's borrowing to do a lot of this. >> if you look at the valuation of 15 times, it's insanely low. why is it low? >> that's always been the case with apple. >> the reason why is because apple's about the new new product. the whole idea is to get into every product overall, content and everything else. and i think they finally made the smart move here, which has been quietly not been talked about that much. >> quickly, james, you talk about the possibility -- you wouldn't buy it before the earnings, what about after when you get that sell-off? would you buy a dip of some kind on apple? >> right. so, the market-makers in the options market are implying a move of around $4, which would put us right at that $90 level. that's a big-time support level. if i see it hold that level, that $90 level, i think it could be a good buy because we do have the new phone coming out this year and i'm seeing a lot of institutional money getting long through the end of this year and through the first quarter of next year. >> all right. we talked expectations, we have a number to keep an eye on there, too. thank you very much. we'll have the apple number for you tomorrow.

meantime, 30 minutes left in the trading session here, the dow holding steady down 34 points. and coming up next, former senator chris dodd and former congressman barney frank, they are together. they're going to talk about the controversial financial law they put in place after the financial crisis. find out if they think it's working four years later and what, if anything, needs to be changed, when we come back. so we're all set?

yyyup. with xfinity internet your family can use all their devices at once. works anywhere in the house. even in the garage.

max what's going on? we're doing a tech startup. we're going public! [cheering] the fastest in-home wifi for your entire family. only from xfinity. for your entire family. could help your business didavoid hours of delaynd test caused by slow internet from the phone company? that's enough time to record a memo. idea for sales giveaway. return a call. sign a contract. pick a tie. take a break with mr. duck. practice up for the business trip. fly to florida. win an award. close a deal. hire an intern. and still have time to spare.

check your speed. see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business. built for business. another day of volatility on wall street today, another one of those days where a lot of the selling was on the open this morning. the dow was down 125 points at its low. then we saw it come back into the afternoon session. the industrial average down 38 points right now. and today marks the four-year anniversary of the signing of the wall street reform and consumer protection act that we all know affectionately as dodd/frank. that law was designed to provide stronger regulation of wall street, the banking system, to regulate private equity firms all in the wake of the 2008 financial crisis. >> house republicans marked the anniversary with a 100-page report outlining the law's failures. democrats say it's an important tool in efforts to regulate wall street. joining us now in a cnbc

exclusive are the law's authors, barney frank, former representative from massachusetts and a cnbc contributor, and christopher dodd, former senator from connecticut, now chairman and ceo of the motion picture association of america. welcome to both of you. >> welcome back. >> thank you. >> thanks for being here together. this is an important day in the history of this legislation. i just want to quote one characterization of it here for you and get you to respond. as one investor put it to me, oiwd characterize it as a hasty, ill-conceived and ill-executed piece of legislation that has been extraordinarily costly in dollar terms while adding enormous complexity to the financial system with very little positive benefit. and chairman dodd, i would like to hear your response. >> well, that's a rather remarkable statement to make. just to remind people, because we do have short memories in all of this, we had some $12 trillion of national wealth was lost, much of it never to be recovered, millions of jobs

gone, 5 million homes foreclosed. two of our largest investment banks failed. one was merged. two became banks. commercial banks were merged. billions of dollars had to be used to bail them out. you had the largest insurance company was nationalized. the two largest credit unions were in receivership. the carnage of the collapse of six years ago, we're still paying a price for dearly, so -- >> but senator what was the point of the legislation at that time? >> the point was to bring stability to it, to modernize your regulatory system so that you could have a 21st-century system, get us out of the shadow banking system, try and provide additional capital requirements, leverage, some liquidity that was needed terribly as a result of that as well, finding oversight for a lot of the activities that were occurring, deal with derivatives in transparency, have a consumer protection bureau that would give consumers of financial services a chance to have grievances addressed. those are all part of the bill that are making significant, i think, contributions to the process. >> chairman frank, much is made

of the fact that a lot of the bill still hasn't been implemented, some hasn't even been introduced in congress yet. have you frustrated or are you not surprised? what do you make of the progress so far? >> i am not sure what you mean when you say it hasn't been introduced in congress. i mean, the bill has been -- >> well, of 398 total required rule-makings, 96 have yet to be proposed. >> i understand, but that's not in congress. that's all -- there's nothing left to be done in congress. first of all, i would say that some -- i was struck by that statement, because it had no specifics. many of the important rules have already not been only proposed but are being followed. for example, the kind of terrible mortgage loans, the abuse of mortgage loans that hurt consumers that hurt financial institutions, that hurt the economy, we outlawed them and they haven't been made since then. i mean, there's some very real accomplishmented. the consumer bureau has recovered a large amount of money for people. derivatives are much more now market-oriented. what some people claim were

intrusive regulation, we're simply insisting this be done in the market. i had a very good conversation with a ceo of a company who does a lot of derivatives to protect their ability to concentrate on their model without volatility being intruding. and he said it's a great bill, because for the people who use derivatives -- >> what about the financial crisis in terms of -- >> oh, aig -- may i tell you? >> you're talking about corporate america being pleased now about their hedging is totally different from what was at issue with the financial crisis and the way that the system stands today. >> no. may i respond? in fact, i think you're wrong. one of the biggest problems that we had, the precipitating event was aig, which was a derivatives problem, because derivatives were being done outside of a market in these one-off, untransparent situation. aig, which was selling credit default swaps to people to try and help the derivative market work had a large amount of

money, talking about over $150 billion it couldn't pay off. so, i disagree with you that the opacity and the consequent lack of responsibility financially for derivatives wasn't a contributing factor. the derivatives very much were a contributing factor, as of course, were the subprime mortgage abuses. >> you talk about that, but i assume you saw the article in "the new york times" over the weekend about auto loans, subprime auto loans and the apparent abuses going on there. does that trouble you or does it just point -- >> oh, trouble me? it troubled me at the time. it was a "times" article, it was a long article. a lot of people didn't get to the end. it noted that amendment was pushed by all of the republicans, and regrettably, some of the democrats that exempted auto loans through the consumer bureau. the way senator dodd and i presented in the bill, with elizabeth warren, those loans that were criticized in "the new york times" would have been regulated by the cfpb. unfortunately, every single republican and a minority, enough of the minority democrats got together to give that an

exemption. so, i regret that, but i regretted it at the time, but i take it as, frankly, a tribute to the cfpb. the fact is, what the article said was, isn't it too bad that these were exempted, because the krfg fpb has prevented those kinds of abuses elsewhere in the economy. >> but yet, senator dodd, they're finding ways to work around dodd/frank in that regard, right? >> well, there will always be that. we didn't pass the ten commandments. we talked about a bill here and giving regulators an opportunity to modernize the architecture of our financial services industry. hopefully, to have our ideas here also be harmonized internationally, where you have uniform standards around the world in financial services. so, there will always be, bill, people seeking opportunities to come up with new ways to get around things. barney and i never envisioned we had written the last and final chapter here of financial reform, but we tried to deal with the problems as they existed and look forward. the financial services oversight board, for instance, designed.

they have now met 32 times this year to get realtime data in the department of treasury, to have a whistleblower provisions, which have been hugely advantageous to the s.e.c. and others, all designed to try and minimize crises. there will be another crisis. i promise you that. the question is, will we be able to minimize it at the time and not become as large as the one we went through. >> exactly to that point, senator, was one of the problems, as both of you saw it at the time, too big to fail? and if so, does that problem not exist exactly today as it did then? and does this legislation do anything to -- >> all i can tell you, kelly, is that in the first amendment we adopted on the floor of the united states senate that richard shelby and i authored, shelby was the principal author, passed by 90 votes to end too big to fail. now, it hasn't been tested yet, but we believe based on the effort made with mark warner, bob corker and others that worked on that provision together, a democrat and republican, that we believe that we've addressed that issue. now, we hope we don't have to test it, but the idea of

repealing the entire law -- >> what about the size of these institutions? >> i'm sorry. >> can i address that? i'd like to address that question. >> go ahead. >> first of all, we specifically repealed the section of the federal reserve law under which ben bernanke was able to advance $85 billion to aig. they can no longer do that to an institution that is insolvent. secondly, we made it a crime, a federal crime for a secretary of the treasury to advance any funds to pay the debts of any financial institution of that size until it's been put into receivership and is on the way to being dissolved. so, yeah, there's still big banks and we have to pay attention, but they would not be propped up indefinitely with federal funds. >> by the way, before we let you go, do you two ever talk? i mean, do you guys get together and rail about the lack of progress in getting the whole bill together or what? i mean, are you frustrated by it? >> we don't see each other often enough, but when we do, we have a good time getting together. >> chairman frank? >> we did have one instance when we thought one of the agencies

wasn't going to be doing the right job. we wrote a letter, and frankly, it had a very powerful effect. sometimes when we're together, we complain about the media. >> is there something you -- yeah. welcome to our world. is there something you would do different, you've rethought now, chairman frank? >> well, both of us, if it would have been possible politically to merge the securities and exchange commission and the commodities, futures trading commission, i clearly would have done that, but american politics, the split, the cultural split, farmers and financial is too great. the other one, the one thing that's bothering me about the implementation is i think the regulators are not being tough enough in insisting on risk retention for anybody who sec e securitizes mortgage, and effort in to get 60 votes in the senate, which chris was so valued in doing, we had to open a little loophole there that allows more loans to be securitized without risk retention than i think is healthy. >> i would -- two or three things, kelly.

one is, i wish we had had funding, direct funding for the s.e.c., for instance, and the cftc, not leave those up to appropriations. bankruptcy laws need to be addressed so you can deal more in large-scale bankruptcies. and i was an advocate of a single prudential regulate yorks rather than have this alphabet soup we have out there today. but there was little or no support for that. >> that has gotten -- >> i think we have a sense of what the next big piece of financial legislation might look like, but for now, thank you, gentlemen, both. >> thank you both. >> thank you very much. >> happy anniversary, by the way. 15 minutes -- see, they're still talking. still talking. 15 minutes left in the trading session. >> they're complaining about the media. >> the dow's down 45 points right now as we head toward the close. >> yes. we're keeping an eye on the ten-year interest rate, too. bb&t with an earnings miss, making an $88 million reserve adjustment to prepare for a government audit of its federal housing loan origination process. you can see the regional banks down in sympathy with them

today. >> the company's ceo will be speaking with us exclusively about that. we'll get his reaction to the dodd/frank financial reform on this fourth anniversary and what he made of our interview with frank and dodd. that will be coming up. ♪ during the cadillac summer's best event, lease this all new 2014 cts for around $459 a month or purchase with 0% apr and make this the summer of style.

e financial noise financial noise financial noise financial noise

welcome back. the dow losing steam here as we enter the last about 11 minutes of the trading session today. it's off 45 points, again, well off the lows of the session, but still, the s&p is now down about 0.2% as well. >> courtney reagan is in times square covering the action at the nasdaq market site. how's the view look there? >> you know, bill, we actually saw the nasdaq 100 briefly move into positive territory after trending upward following president obama's comments, but then we moved again back into negative territory. right now it looks like we'll close the day with some minimal losses down here at the nasdaq. monster beverage, though, actually falling a little bit more than just a little bit because of some comments out of morgan stanley, getting a downgrade to the stock, saying that it believes u.s. sales have begun to slow. but if you take a look at shares of gopro, continuing to move higher again today. at least six analysts initiating coverage for the equivalent of a hold, two saying buy.

raymond james, travis mccourt says the name gopro almost synonymous with action cameras, but anything can happen with these kind of hardware companies. so, perhaps a little bit of concern looking in the long run for the name gopro. and there is some trouble in toyland today. hasbro reporting some disappointing revenue there, also pulling down shares of mattel. the ceo of hasbro will join the "fast money" team after the clo "closing bell," so stay tuned in for that interview. for now, back to you. >> we will. >> courtney, thank you. ten minutes to go here. as mentioned, we're watching a down that's off about 50 points. earlier we broke through the 17,000 mark. we're back above it since then. no party hats, though. >> no party hats right here. we have a look at netflix, though, shares ahead of the video streaming giant's earnings due out right after the close, in a few minutes. we will bring you the numbers, break them down with our full team of reporters and analysts and look at the market response as well, so keep it right here. but what if you could see more of what you wanted to know?

with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running.

welcome back. seven minutes left in the trading session here. the dow down 43. if you're just joining us, you saw a big sell-off on the open this morning. industrial average was down 125 points, but we have come back on

all these major averages into the afternoon's session. joining me right now, mark spellman from alpine funds. and obviously, earnings is a big story, even though we're watching geopolitical concerns right now. do you like this market at these levels here? >> not particularly. i think it's amazing how resilient the market is, considering the valuation level. you see these geopolitical events going on. the market is clearly more interested in gdp, employment, industrial production. >> and fed policy. >> and fed policy. we in the alpine foundation fund, we have a little more cash than we've had in some time, and believe it or not, we still own some treasuries. >> there are those who feel that there's a bubble going on in the treasury market right now. >> yeah. >> >> the ten-year is -- >> the list not to own treasuries is a mile long, but there are two major thinks that i think are keeping yields where they're at. treasuries are still effective. the spread is 135 points, the

bund is 113. secondly, let's go back to last thursday. a big geopolitical event happens, u.s. dollar's up, gold's up. treasuries was the safe haven. they went up. with the where we are on a geopolitical basis, i'm very comfortable owning some right now. >> so, you're investing for safety or growth right now? >> both, but if something is going to happen, i am not going to stand there and get run over. i think treasuries and some cash is a very logical thing to be in. if the market was at 14 times earnings like it was two years ago, this conversation might be a little bit different. at 17 times, i'm a little nervous here. very interesting. >> you're a contrarian. we haven't heard that argument much and i'm glad you made that one. good to see you, mark. >> thank. we'll come back with the closing countdown here with the dow down 45 points. after the bell, two big ones, netflix and chipotle reporting earnings. we'll have the numbers, which could set the tone for tomorrow's market. you're watching cnbc, first in business worldwide. acrifice

and thank you for your bravery. thank you colonel. thank you daddy. military families are uniquely thankful for many things, the legacy of usaa auto insurance can be one of them. if you're a current or former military member or their family, get an auto insurance quote and see why 92% of our members plan to stay for life. frothere's no reasonn average 17 we can't manufacture in shuthe united states. here at timbuk2, we make more than 70,000 custom bags a year, right here in san francisco. we knew we needed to grow internationally, we also knew that it was much more complicated to deal with. i can't imagine having executed what we've executed without having citi side by side with us.

their global expertise was critical to our international expansion into asia, into europe and into canada. so today, a customer can walk into our store in singapore, will design a custom bag and that customer will have that american made bag within a few days in singapore. citi has helped us expand our manufacturing facility; the company has doubled in size since 2007. if it can be done here in san francisco, it can be done anywhere in america. [ bell ringing, applause ]

five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. all right, dow finishing down about 47 points after having been down 125. with about 90 seconds until the earnings from netflix. that's the thing to look ahead to right now. the expectation is for $1.16. whispernumber.com says it could be about $1.15, and they point out that netflix tends to beat

their numbers about 70% of the time. that stock is up 1.75% ahead of that. chi poet lee also out, looking for a profit of $3.08 on $990 million. that stock is down 0.5%, and it's that netflix number everybody's watching. >> and 15 million. >> bob pisani. >> 15 million subscribers, maybe for netflix. that's going to be the big thing. the market's come off the lows when it appeared the president would not announce new sanctions. eu foreign ministers are going to be meeting tomorrow and nobody's expecting them to announce new sanctions as well. once again, as long as they can give minimal cooperation from the russian separatists, there appear to be no sanctions. i find this frankly amaze 'but that's how the market is taking it. i don't think you'll see much happening, unless there is blockading going on at the crash site that's truly obstructionist. i don't think there's going to be any big sanctions. that's what the market seems to be telling me. i find that amazing, but that's

the way it is. >> so that means we can focus on earnings and there are plenty. half of the dow components report this week and netflix is coming up in just a few minutes. that could set the tone for tomorrow. stay tuned now for the second hour of the "closing bell" with kelly evans and company. i'll see you tomorrow. >> thank you, bill. welcome to the "closing bell," everybody. i'm kelly evans and here's how we're finishing up the session on this monday as we head into the thick of earnings season here. the dow's off about 46 points. again, that's about a third of the losses we saw at the lows of the session. meanwhile, the nasdaq losing about seven points today. it's the out-performer. the s&p off 4 1/2, and those small caps got hit hard. let's talk about all of that with our "closing bell" panel today. joining me now, ylon moy from the "washington post," chris wayland from cole bond rating agency, our own sara eisen, and to recap markets, "fast money" trader guy adami. good to seon. >> what's up, kell? >> guy it was a tough end to the week. the news gets certainly not any

better out of the middle east and out of russia and the ukraine, so why are markets taking it in stride? >> markets have -- you know this, kelly. you've been doing this a long time. the markets have shrugged off every piece of bad news, geopolitical and otherwise for the last 4 1/2, 5 years and this is more of the same. nothing's been escalated, cooler heads seem to be prevailing. you know there will be more fireworks at some point, but in the meantime, market wants to continue to go higher. the one thing i wouldn't push back at is the fact that interest rates continue to want to go lower. at some point, the disconnect between lower rates and the higher market has to come to fruition, and we will see how it ends. but right now -- >> yes, but -- >> -- everything's going up. >> you're saying that, guy, for completely the wrong reason. you've been in the deflation camp, which has been completely wrong. >> hold on a second. it's not completely wrong. getting inflation for the wrong reasons in the wrong places, and i think you may actually agree with some of that. we're not getting inflation where they want it to be. >> right. >> you explain to me why

globally, why are german rates south of 1.5%? it makes no sense. the only explanation, given the fact that the markets have rallied as much as they have, is that deflation really is rearing its ugly head. >> okay, hold your fire, everybody. netflix is out with its quarterly results. julia boorstin's going to break down the numbers for us here. julia? >> yes, kelly, netflix earnings per share coming in at $1.15. that is one cent lighter than expected, but revenue a hair heavier than expected at $1.43 billion, higher than analysts for. but the key subscriber number, netflix total screening subscribers topping 50 million for the first time, 50.05 million total subscribers with the addition, net addition of 1.69 million. the company's saying in its letter to shareholders that orange is the new black, help drive streaming additions, particularly in the united states. and the company's saying it's investing further in expansion, particularly overseas, noting that both germany and france

will launch in september. i'm going to continue to dig through this letter and we'll get back to you with more. >> all right, julia. thank you so much. let's bring in brad lemensdorf for his opinion. netflix coming to germany and france in september, and if i heard julie right, 50.055 million subscribers, so they crossed that threshold. shares up, looks like about 2% after hours. what's your take? >> our take is that netflix, again, when you look at their business model, when you really look at what they have, 50% of their business is in the dvd business, which is a dying business. it's going away. they're using this cash flow to try to get this international growth going. their subs are up. that's great, but they're not converting any of this revenue to free cash flow. so, amazon's coming out with their prime service. i think i just saw a commercial for it today. there are going to be a lot of

competitors. and we just do not think that their content is that great. >> so, you're sellers of netflix here and this earnings release doesn't change your view? >> no, we're short the stock. and no, this does not change our view. >> and so this is interesting as well, because a company like netflix can be very dangerous to short. what makes you so sure that now is the time to be short this name? >> well, we actually -- this is the second time we've shorted this stock. we shorted it before carl icahn got involved and had ridden it from $140 down to $70. when karl started peeling off his position, we started moving in. it's one of our weakest rated stocks in our universe that we look at. >> all right, great. hold that thought for a moment. we want to now bring in mike olson from piper jaffray. mike, i don't know if you just heard brad's remarks or want to weigh in with your view on the shares here in light of what netflix just announced. again, they beat slightly on revenue, $1.34 billion. they announced they crossed the 50 million subscriber threshold. they're coming to germany and

france in september, but brad is concerned that they're not generating the free cash flow they need to be generating at this point. >> yeah, i understand those concerns. you know, i think in general, right now investors are just focused on specifically sub growth. and so, if they continue to drive the sub ads, that's going to be what drives the stock. i think longer term, this is going to turn into a story that's more about, you know, cash flow and valuation and things of that nature. but right now it's just all about momentum around sub ads. right now you've got domestic that's doing well, international. they're rolling out a few more countries. that could cap the profitability in the near term as they roll out to additional countries, but i think as long as the sub growth is there, the stock can continue to work in that environment. >> what's your price target on the shares. >> $434. so, we have a neutral. we'll have to see how things change or don't change after we pore through the numbers and redo our model but at this point, that's where we're at. >> speaking of the numbers,

let's get back out to julia boorstin, who's looking through this report. what else can you tell us? >> well, kelly, on the topic of international expansion, the company notes that it expects to add a total of 3.69 million new streaming subscribers in the third quarter, and the majority of that is going to come from overseas. 2.36 million subscribers expected from those international markets, especially as it launches throughout europe in september, where the company says it will reach over 60 million broadband households. now, the company notes here that its contribution lost of $15 million from international really shows that they are nearing break-even in international, but as they continue to expand in europe, those expenses will continue to mount. another key thing here about raising prices in may. they say that it really didn't impact things at all, it didn't hurt their -- it really didn't impact the addition of new members, but it also didn't impact a lot of things because most people were really locked in in those grandfathered

prices. kelly, back over to you. >> okay, great. now, brad, hearing that, i'd just like to hear a little bit more on the quarter and the specific concerns you have about their cash flow generation here. >> well, when you sit and you look at a model -- so, we're short sellers. one of the great things we like to look for is the way companies are pulling for their revenue or their product. and what we're concerned about is that netflix is paying more for content than any other company on the planet. for instance, if i gave you a front row venue of a concert that you didn't like, you still may go because they're front row tickets. netflix is putting a lot of carrots out there and they're getting a lot of viewers, but they're not converting this to any significant type of cash flow. so, they're constantly going to have to feed the giant to keep this kind of growth up, and i don't think that they can. >> and there's another thing out there, michael.

i'd like your take on this. a lot of talk about the valuation of netflix. given what we're seeing from rupert murdoch trying to buy time warner and the whole idea that hbo is really the crown jewel there. the valuation, according to analysts, based on the $85 per share cash and stock offer would be $20 billion. that looks like netflix is overvalued. can you really compare the two like that? >> you know, i think right now it's tough to compare the two like that just because netflix is growing so much faster. you know, i think over time, we may see a situation where, you know, there's a very specific comparison to be made with hbo. right now at 60 times 2015 eps, it does feel like you can make the argument that it's overvalued, but given the growth that it continues to have, it's hard to say. >> okay. we're going to have more on netflix. everybody stays just after we take a break and have a few more earnings to digest. before we do that, dom chu's standing by taking a look, by the way, at how chipotle,

another big company to report after the bell, has done in its earnings. dom, what can you tell us? >> how about an 8% move to the up side in the after-hours session? cmg shares are on the rise, up, we'll call it near after-market session highs. again, 7 1/2 to 8%, after the company reported earnings per share of $3.50, handily beating the wall street expectation for $3.08 a share. reven revenue's also coming in better, $1.05 billion. wall street had been expecting on average about $990 million. now, interestingly enough, chipotle, white housech had a high-profile price increase they passed along to customers also said that comparable restaurant sales growth was up 17.3% during the quarter. it was driven primarily by increased traffic, and to a lesser extent, an increase in average check or how much an average customer spends at the restaurant. it includes the benefit of nationwide menu price increases. they opened 45 new stores, and

they said that food costs were about 34.6% of overall sales. that's about 150 basis points, 1.5% higher than the same time last year, driven by increased prices for, among other things, beef, avocados and dairy, and it was partially offset by the menu price increases. so, again, investors seem to like what they see right now. shares are up 8%. again, chipotle beats on the top, beats on the bottom line and says they had 17%-plus growth in comparable store sales. kelly, back to you guys. >> wow, the burritos keep selling. this company has a market cap roughly of about $20 billion, chris. >> well, look, the difference between these two businesses is chipotle has pricing power. they've had to make up for costs. obviously, inflation is not zero, is it? >> you don't think netflix has pricing power? >> i think media's still a question mark. you know, they're an old media company that's trying to become a new media company. they're creating content. but as a couple of the other dive

guests pointed out, they don't really have the ability to convert them. i give them $6, $7 a month? i get two dvds a month. once in a while i turn on the thing on the dvr so i can stream -- >> and while you'll pay what, $10? >> whatever it is. >> the chipotle thing is interesting because it was their first price hike in three years, so there was a question as to whether customers would pay it. >> chipotle's a quality product. >> absolutely. >> that's 17% same-store sales, way better than the 10% the market was looking for. >> i'll take cmg any day. >> and the industry is show iin the same sales growth. >> and when you look at inflation and whether consumers can accept the higher prices, they are. more consumers coming to their stores. >> they like the burritos. >> we'll let guy have the final word on inflation. when we come back, we'll also have more on netflix's earnings in a moment. also, importantly, texas instruments is about to report its latest results. we'll get you those numbers as they hit the tape.

and regional bank bb&t under pressure today, announcing it's being investigated over underwriting standards for government-backed mortgages. ceo kelly king is here exclusively to discuss all of it. plus, is russian president vladimir putin risking crippling economic sanctions over last week's downing of a malaysia air jet allegedly by russian-backed ukrainian separatists? and if so, does he even care? that's coming up later on the "closing bell." you're watching cnbc, first in business worldwide. in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.

♪he cadillac summer collection is here. ♪ during the cadillac summer's best event, lease this 2014 ats for around $299 a month and make this the summer of style. ♪

welcome back. so, a couple of big earnings reports just hit. netflix shares are up about 1.5% after-hours trading around the $458 mark. julia boorstin digging into those results and joins us with some more details. what jumps out at you here, julia? >> well, kelly, one interesting thing here is that reed hastings is continuing to oppose the s.e.c.'s proposal on net neutrality and the time warner/comcast deal, saying the doj/fcc to block the merger of comcast, time warner cable that

the combined entity be prevented for charging for interconnection. obviously, they would be one of those companies that would be charged. kelly? >> that's exactly right. brad is still with us. brad, is that a part of the reason why you're short netflix here? >> i'm certainly problems that they're going through that's certainly not part of our short thesis. >> interesting. so, because this is always highlighted as a key risk for them. is it just too far out at this point for it to be material for them right now? >> it's somewhat unknown, and we're really looking at the earnings quality of the company. and we just -- the dvd business is, like i said, 50% of the company right now, and it's a race to zero, so -- >> but chris still watches dvds, right, chris? >> well, and they haven't transitioned the old content to streaming. that's the interesting thing. if they were going to spend money, maybe that's the way you do it. i don't know. >> they are saving some money. they're cutting down costs by reducing saturday delivery, i

think was the latest. sort of a quiet move by netflix. what i think is interesting about netflix as a consumer and subscriber is the content continues to blow me away, including -- >> do you watch "orange is the new black"? >> the second season -- i know this isn't exactly a non consensus view, but it is the best show on television. >> ylon, do you watch it? >> i am not a netflix subscriber. i tried it once and my internet stalled out, which is a good segue into net neutrality. how big of an issue is it overseas as they try to include more customers from those locations rather than focusing just on the u.s.? >> good point. micha michael, your thoughts? >> i think as we look at international expansion, it is more challenging. there's a bunch of things that are difficult to kind of get your arms around. first would just be the content licensing. you have to go through an entirely new content licensing format. you have to license different kinds of content, so it's not always the same u.s. content. so, it's a country-by-country

kind of battle that happens. we saw the same thing happen with digital music back when itunes was going international. so, there's those things and there's also just issues of lower credit card usage, so payment issues, technology, infrastructure. so, they're kind of getting the low-hanging fruit right now with the continental europe countries that they're getting over the next few months. after that, it could get a little bit more challenging as they have to kind of go into eastern europe, asia pac. >> i have to go to guy adami now. >> i'm sure brad will do well with this at some point. a lot of people have shot against netflix. i don't think it's about the quality of earnings. i don't think that's ever been the case. i think reed hastings has taken one misstep in his tenure, the stock got punished. since then, he's done everything right. subscriber and international growth is tremendous. i think the market is going to give him the benefit of the doubt that at some point, he'll be able to further monetize this growth. that's to me what it comes down to. >> brad, you want to respond? >> no, of course, that's why

it's hitting 52-week highs now. they need to come out and shake the core, and the reality is it will be coming over the next year. >> well, look, tough stock to short. i mean, guy is right. apparently, the crowd thinks this one is a winner, but i wish my banks had multiples like this. >> yeah. >> what is it, like 117 times 2014 earnings. >> yes. >> i'd also like to mention another thing. if you look through our portfolio, which is on advisorshares.com website every morning, you'll find that our beta and our portfolio is moving up quite a bit, and one of the reasons is because our view on u.s. equities is becoming more and more bearish. so, we're looking for opportunities to get higher beta in the book. >> all right, we'll leave it there for now, everybody, as we watch netflix shares moving. chipotle also popping after hours. we're waiting for texas instruments. guy adami will be on "fast money" at 5:00 p.m., and they're

talking 3d-printed my little ponies with the ceo of hasbro. so, don't miss that. now, chris just alluded to this, regional bank bb&t one of the worst performers on the s&p 500 today. the firm announcing it's being audited under underwriting standards for government-backed mortgages. up next, ceo kelly king tells us exclusively about the investigation and how much it could end up costing the bank. and is there value in this market even at dow 17,000? coming up, the head of a $13 billion value investment firm tells us where he's finding bargains in this market. ♪ ♪ developers are all about speeds and feeds. it's all about latency. 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 make gamers happy, you can make anybody happy. speed is made with the ibm cloud. the ibm cloud is the cloud for business.

welcome back. bb&t corps's second quarter earnings coming in slightly short of expectations this morning and the company's shares down about 4% today, making it one of the worst performing stocks in the s&p 500. in fact, regional banks broadly taking a hit on that. so, let's get a closer look at the quarter and what's going on in this important business. joining me now in an exclusive interview with bb&t's ceo, kelly king. kelly, it's great to see you again. >> thanks. >> i do want to start with this news about fha and the extent to which the feds may be looking into your underwriting standards. can you explain what kind of risk there is in this business now and whether, to echo jamie dimon's comments, it makes sense for you to be in it? >> yeah, so, what's happened with us is that we did late in the second quarter receive a request for an audit survey,

which is a way for them to just do a very quick cursory look at your portfolio. it may or may not lead to an actual audit, and audit may or may not actually lead to any charges. so, we're very early in this process. it will probably take a year and a half or more to conclude. but we did think to be prudent and conservative that we should take a reserve, which is what we did today. so, we have not been fined, we have not been found guilty of anything. we don't even know for sure if we'll have an audit. but this has been going on, kelly, as you know, for the last couple of years. it started at the top, it was the second tier, now they're getting to the third tier, and it's just kind of our turn. so, what's really going on here is that the supervisor of the fha program, in my judgment, is really looking back at an industry well accepted standard of underwriting these loans, which is to primarily help first-time buyers get into houses with a different set of

lenses. it's a different set of lenses. we did what everybody did, and it was very acceptable. everybody was audited and it was a very acceptable. and so people won't be confused about what really happened, this is not egregious about underwriting. so, for example, if someone took out a loan ten years ago, and maybe they got a $5,000 gift from their parents, well, technically, you're supposed to get a gift letter from the parents. let's say we didn't get the gift letter. the loan handles perfectly well for ten years, but the person loses their job, and now they're in default. well, the fact that we didn't get a gift letter from a $5,000 gift from their parents ten years ago had nothing to do with him losing his job and not being able to make the loan payments. >> understood. kelly, are you saying, then, that you're confident that your underwriting standards are not the issue here? >> yeah, i do not think our underwriting standards are the issue. i think the issue is that we're looking back at an industry practice through different lenses, and we have raised the

bar. we've raised the standard. and you know, under that standard, you know, if you now apply it, you know, you could say it was technically wrong, but what we would do, and it's what everybody was doing, and you know, it's hard to know whether or not they'll ever find any of our loans wrong. they may come in and audit us and find no problems. i don't know. that's to be determine edetermi it's all a lookback -- >> but as you say, it could take a year or more to look back and find out what the result will be. but because this is so important to the housing market and by extension to the u.s. economy, does this mean, as you and potentially others, you know, banks big and small pull back because they're concerned about this audit or further investigation into their past loans, does this mean that the segment of the home-buying population, typically lower income, a lot of first-time buyers, who need this backing in order to get a loan approved are going to find it much more difficult going forward to buy a home from here? >> i believe this really does

raise the question and put in jeopardy how banks like ours and others are going to respond to this, what i consider to be unfair scrutiny with regard to us historically trying to do the right thing, to try to follow, you know, the established practices and try to help people get loans. you know, i mean, if the rules are going to change, and all of a sudden, what happened ten years ago are going to now find you guilty and put you in a bad light, all of us will have to question whether or not we will continue to make those kinds of loans. i mean, is a federal guarantee really a federal guarantee or not? and if it's not a federal guarantee, then maybe you just don't want to make those kinds of loans. >> sure. and along this line, even as we're focused on the housing piece of this, there's a lot of attention on what's happening, for example, with auto loans and whether this very same process is going to play out again in another type of industry. how are you guys doing in the auto business? do you make subprime auto loans today? are there other examples where

your loans to consumers could potentially come under pressure, come under scrutiny in the future? >> well, you're right. we do make a lot of our auto loans, our prime loans, subprime loans, and you know, thankfully, ours are doing extremely well. but there are activities now coming from the cfpb requiring the banks to put a great deal of scrutiny on the auto dealers in terms of whether or not the auto dealers are, you know, allegedly discriminating with regard to price to certain classes of borrowers. of course, as you know, the auto dealers were omitted from dodd/frank, so they're attempting to go through the banks to tighten down on the dealers. certainly no one wants any discrimination, and certainly, as far as i know, no one that we deal with is discriminated in any shape, form or fashion. if we thought they did, we

wouldn't do business with them. the fact is, the more you tighten all these rules, the more difficult you make it on auto dealers, the more difficult you make it on banks to try to make loans. and the sad thing, kelly, about all this to me is through qm, through the hud process, through auto focus, you know, i'm sure everybody's trying do the right thing, but what we're really doing is putting enormous downward pressure on the lowest income people that need help the most. and it's just a shame. i'm afraid we're squeezing people out of the banking system, back out into the shadow banking system, and it's not healthy for the economy, it's not healthy for those people. >> kelly, we're going to leave it there for now, but really appreciate you talking us through what are potentially another set, another round, it seems, of investigations coming down the pike here into housing and into mortgage rates. kelly king, ceo of bb&t bank this afternoon. appreciate your time. >> thank you. coming up, president obama saying russian president vladimir putin is responsible for insuring the investigation into the downing of malaysia air

flight 17 is open to international parties, but will putin listen and will more sanctions be devastating to russia's economy and the billionaires who support putin in robert frank will tell us what he's hearing, next. and are increasingly popular obstacle races just a fad or is this the beginning of a major sport? we've got a spartan race course, there it is. it's set up right outside cnbc headquarters. by the way, one of our producers is going to try to conquer that course later on the "closing bell." don't just visit san francisco. (water dripping and pipes clanging) visit tripadvisor san francisco. (soothing sound of a shower) with millions of reviews, tripadvisor makes any destination better.

here at fidelity, we give you the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and e-trade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. call or click to open your fidelity account today.

that's why i always choose the fastest intern.r slow. the fastest printer. the fastest lunch. turkey club. the fastest pencil sharpener. the fastest elevator. the fastest speed dial. the fastest office plant.

so why wouldn't i choose the fastest wifi? i would. switch to comcast business internet and get the fastest wifi included. comcast business. built for business. welcome back. president obama has demanded investigators and families be allowed immediate access to the crash site of the downed malaysian airlines jet and that russia use its influence in the region to help. nbc's kiir simmons is in ukraine with the latest on this developing story. >> reporter: kelly, good afternoon. there were clashes at the local train station here in donetsk today, even while the president was calling for the region around the crash site to be a demilitarized zone. at the train station near the crash site where the bodies of the victims of flight mh-17 were being held in refrigerated cars, that train finally left today to go to a place where forensic

examiners can begin the gruesome task of identifying the dead. those forensic examiners are dutch. they arrived here just today, a full four days after the crash happened. they also visited the site of the crash and say they where satisfied with what had happened there, with the bodies being taken away from that site under the circumstances. there continue to be clashes and battles in various parts of this region, and that raises questions about how safe it will be for the investigators to work. kelly? >> all right. thanks for that report, kiir. these escalating tensions are escalating new fears with russian billionaires, that putin's handling of the crisis could have a crippling impact on their business. cnbc's robert frank is following this story for us, and he joins us now along with the rest of the panel. but robert, first of all, so, the sentiment, as i understand it, among the billionaires, as least as it's being reported, is

pretty negative. i guess they're pretty concerned. and can you just explain to us how important that is for what happens next with russia here? >> well, the idea here is by members of the government of britain and the u.s. is to really hit the putin money machine, and by that, you include the oligarchs. now, there are some oligarchs currently under sanction, people like tymoshenko, the oil trader, but this would expand the group and deepen it to include travel restrictions, capital restrictions. and so, the oligarchs are terrified right now of what it means to their companies. >> and robert, as i understand it, though, they're reluctant to speak about this. you know, it's a bit of a weird story, isn't it? >> well, they are reluctant to speak about it, and that points to the nature of these sanctions being, you know, whether they're going to work or not. so, you've got essentially the russian billionaires are going to be hit hard and the putin economy will be hit hard. the question is whether those oligarchs will then pressure putin to reverse policy in

ukraine. so far, the people who have made so much money from putin, they're not going to suddenly turn around and oppose him because they know, i mean, he's a former kgb guy. we have seen what happens to billionaires who turn on vladimir putin. they end up in siberia or they end up dead in london. so, none of these guys are going to end up opposing him, but they also know that he's really sacrificing the russian economy and all of their fortunes on the altar of political gain in the ukraine and to show his might around the world. >> let's get the panel in here. ylon? >> robert, i have a question for you, which is, how much of their money is actually still in russia? i mean, isn't this something that they were sort of bracing for and could predict might happen? >> that's a great question. in fact, a lot of it has already moved out of russia in anticipation of this. just in the first half of this year, we saw $75 billion leave russia. now, that's more than the entire year last year, which was around $62 billion. so, $75 billion has already left the country this year, and a lot of the oligarchs and rich people i've talked to say, look, we've been preparing for something like this for years, because

what putin giveth, he also can taketh away. >> chris? >> well, you know, the interesting thing is russia's wealth is based on exports, and their wealth is also measured largely in foreign currency. their own economy's not big enough to accommodate it. so, if you have effective sanctions, you can hurt them very badly. there's nowhere you can really hide. there aren't that many economies where you can park tens of billions of dollars. that's the key thing. >> yeah, but what these guys are really worried about is their income. so what you're seeing now is a big change where the russian rich used to just buy play toys and yachts and penthouses in manhattan. now they're buying companies because their economic future is no longer in russia, because if that economy crashes, they've got to find income somewhere else. >> yeah, and i think it's interesting also, if you watch public opinion, obviously different than the billionaires, because gallup came out with a poll on friday showing that putin's popularity was rising fast, and that was actually the impact of the u.s. sanctions, because they weren't sectorial or economically damaging sanctions at this point.

it's only sort of raising the patriotism and the nationalism. so, it will be interesting to see how public opinion shapes around putin as these sanctions continue to ramp up, if they do so. >> robert, thank you -- >> it's so clear now that putin is more motivated by power than money, and that's what really worries the billionaires and a lot of the people who are in the russian economy. >> that's a point, and there's more on cnbc.com you can read about it. thank you for joining us. let's send it to dominic chu with an important earnings alert. >> texas instruments is moving a bit lower in after hours, this despite beating street estimates with its second-quarter results. its third-quarter guidance was slightly above wall street expectations. you can see shares in a rather volatile after-hours trade, now down marginally by about 0.5%. texas instruments, like you said, kelly, is important because it's one of the biggest makers of analog computer chips. they're the ones that don't noo go into cellular, but go into just about everything else from guided missiles to washing machines, so a good bellwether for parts of the economy. back to you guys.

>> and you have to wonder how the nasdaq may grapple with a decline in texas instruments. maybe other players as well in sympathy tomorrow. up next, value investors david barse is going to join the panel and has advice for retail investors looking for credit strategies and portfolio diversification. and it's becoming more popular than marathons and half marathons. it's obstacle racing. big business. so big, it's heading for prime time tv. we'll look at the hurdles this one-time fad has overcome. at every ford dealership, you'll find the works! it's a complete checkup of the services your vehicle needs. so prepare your car for any road trip by taking it to an expert ford technician. because no matter your destination good maintenance helps you save at the pump. get our multi-point inspection with a synthetic blend oil change, tire rotation, brake inspection and more for $29.95 or less. get a complete vehicle checkup only at your ford dealer.

welcome back. we begin here with a look at chipotle after reporting earnings and comp store sales up 17%. some price increases as well as they faced ingredient price increases. chipotle shares are moving higher, in the range of about $643 right here. i think that's what, about 7%, 8%? in any case, we'll watch that closely. texas instruments, netflix also moving this hour. geopolitical tensions have been weighing down markets today. my next guest says those aren't changing his long-term investment strategy. david barse is ceo of third avenue management. he runs five value-oriented strategies, including a real estate value fund. welcome. it's great to have you here. by the way, we've already been discussing real estate today. >> so, we can start there, but the market really isn't something we pay too much attention to on a daily basis, because you'll drive yourself crazy, but in individual stocks we still find wonderful values out there, and we'll keep doing that in every different market

environment. >> can you give us some examples, especially at a time when jantet yellen has weighed into this debate? and i've said there are areas, smaller companies in the biotech, social media sector that could be overvalued. >> yeah, and those are generally sectors that we don't focus that much on because mostly we're price-conscious about what we do, and the valuations there are always inflated. but in the case of real estate, you can find great, deep value companies, even in today's market, notwithstanding what janet yellen is saying or not saying. weyerhaeuser is one that we own. it's actually our largest position at the firm right now. and it's a fabulous value, even at today's market price. and it's obviously gone up as the market's risen over the last year, but we still think it's cheap as a discount to the net asset value of the company. >> i want to bring in the panel here. chris? >> david, are you looking at residenceat at all or just commercial? >> this is our way of playing residential. as you know, housing starts are starting to get back, like, not close to where they were historically. you know, at 1.5, 1.6 million.

they're at 1 million. so, we're still way below what a historical long-term average, and we're not just picking a point in time, and weyerhaeuser's a great way to play that because they're a timber company. they just spun off their home-building division. so, we still like the company here, think it's trading at a pretty decent discount. >> what about financials? i'm thinking about kelly king of bb&t who we just spoke with, who's saying, look, a lot of this regulation is having the effect of maybe not only squeezing people out of the housing market, but out of the financial banking system, and to chris's point earlier, they have been undervalued you could say for years. >> that's one way to look at it. you have to get inside the balance sheets. we like to know what's in a balance sheet before we invest in it. very hard for some financials to figure that out, so we gravitate towards the ones where we can decipher what's in the balance sheet. >> exactly. >> bank of new york is our one big financial play we have right now. >> aren't you worried that the problem that low-income consumers are having, buying a home that first-time home buyers are having entering the market,

how much is that going to limit the growth of the housing sector overall? >> people have to be qualified to borrow money. we saw what happened when unqualified people were borrowing money, so that will filter its way through the system, and i think that the system has properly regulated will make homes available to people who are in need of borrowing money and they'll get their loans. >> so, the greater regulation isn't necessarily hurting housing? >> no, it's hurting the way in which businesses do things that might not otherwise be prudent, but we're pretty comfortable with that regulatory environment for that purpose, right? in the case of bank of new york, it's overextended itself into other aspects of their business, namely, custodian and asset management. so, we're not so sure that that necessarily belongs inside that company as it stands right now with the new regulations. >> wow. >> beyond real estate, you're in credit, too. >> we are. >> where are we in that cycle? >> we don't like new-issue high yield or leverage loans. we think that's a tough trade right now with the current levels that it's at, but we

don't participate in that market. we participate in what we think is stressed or potentially on its perceived way of going non performing. we like to do our own fundamental research on a company. and when a company trips, just like our value stocks that we own in our portfolio, we tend to buy things which are unpopular for others. credit can be invested in the same way. something goes wrong with the company, the bonds trade off pretty steeply in a very short period of time. that's the opportunity for us to come in, when others are running away. >> last question, that's exactly what i was going to ask. in the retail space, with a lot of ceo turnover, a lot of companies telling off, at least on the equities side, sharply, questions about their future, the future of bricks-and-mortar generally. are you seeing opportunity in that space? >> we're, you know, retail's a real tough business for value investors. we like to look at the real estate that the retailers might own as a way of participating in that kind of investment or on the credit side, for instance, in companies like jcpenney,

which are interesting right now and will be for the foreseeable future. but as a creditor, not as an equity security -- >> well, it's probably worth more than the improvement in that case. >> if you had to guess, just before i let you go, where we are in this cycle, if you want to put it in innings, however you want to put it, how much further do we have to go, potentially? >> oh, we're long-term buy-and-hold value investors, so we think forever. >> good answer. >> you have the luxury of not caring. i love that. >> thanks for having me. so, will tomorrow be the day? apple's earnings coming out after the close and the shares already up 26% since last year's report. analysts don't expect too much more of an improvement, but maybe, just maybe we'll get a hint about the new iphone coming later this year. an earnings preview is next. also tomorrow, the ceo of td ameritrade is going to join us after his bank's earnings are released to get a pulse of the consumer. you're driving along,

having a perfectly nice day, when out of nowhere a pick-up truck slams into your brand new car. one second it wasn't there and the next second... boom! you've had your first accident. now you have to make your first claim. so you talk to your insurance company and... boom! you're blindsided for a second time. they won't give you enough money to replace your brand new car. don't those people know you're already shaken up? liberty mutual's new car replacement will pay for the entire value of your car plus depreciation.

call and for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch to liberty mutual insurance and you could save up to $423 dollars. call liberty mutual for a free quote today at see car insurance in a whole new light. liberty mutual insurance.

some big pofrs this afternoon. let's recap. let's look at tomorrow when the deluge continues.

dom. >> kelly, let's start off with ary cap. netflix is moving higher in the after hours. at least it was, up 1% after second quarter earn e earnings more than doubled. the stock is trading you can see about a percent in the after hours. also, schip ought he is soaring in the after hours after raisely beating wall street estimates in the second quarter. same store staels sales were up a whopping 17% plus due to increased traffic as they raised prices and customers came in and paid, they are up 9.5% on the trade. texas instruments beating wall street still, third quarter values was slightly above wall street expectations, texas instruments you see there, down about a half a percent. of course, those were the big three this afternoon. the earnings parade continues tomorrow morning. we got six dow components out with their results. that's just before the opening bell. you got the likes of coca-cola, dupont, pittsburgh donald's,

united technologies and verizon reporting. comcast, the parent company of nbc universal and cnbc reporting its footballs, after the bell, you got two heavy weights, apple and microsoft arc big day overall, especially for the tech side of things after the bell tomorrow, it will be a big week for earnings overall. we will be paying close attention to all those reports starting tomorrow morning, kelly, over to you. >> dom, will you be able to sleep? >> i will not be able to sleep. this earnings season has me all kind of insome fiia. >> thank you for a tireless effort covering all this. domny chu for now, for people following along from home with events outside of u.s. earnings, i think there is something they can read online what is happening. >>. >> i put out euro piece, we all talk about this all the time. the euro refuses to weaken they're throwing easy.policies,

there is problems with the banking system if portugal. yet the euro remains strong. i look at y. some answers online. >> we'll be right back, cnbc headquarters, in the meantime, there is a bit of composition going on outside, morgan brennan, what's going on? >> reporter: well, we have two pars the paints behind us getting ready to kick offer the tour effort races in the u.s., this is a demo of the spartan race, the participants, which are going to break. when we come back and they've finished the course, we will break down how this has become such a big business and with that, guys, go! financial noise

. welcome back. do you have what it takes to be a spartan? nearly three people are crossed over finish lines. do we want to get out to our own morgan brennan who has an pence look at this growing space. >> thanks, kelly, optical course racing is actually the fastest growing space in the u.s. right

now. 3 million participants since 2010 huge growth. to put this another way, five times for participated if one of these races than a marathon last year. spartan is one of the biggest. competitors include a warrior dash spartan, for example, has reebok as a title sponsor him our sister network nbc sports will begin broadcasting its race starting tomorrow. industry has an important governing body to even become an olympicic sport and spartan race founder tells me it's all fostering cottage industries, jim specializing in a course train, even shoes designed specifically to scale obstacles like the ones behind me, kelly. >> i got to say, it looks like silvano is beating brad behind you. >> reporter: she does seem to be moving around the course. way to go with the ladies.

i have done a few now, my muscles are acheing. i can see why folks are jumping into this. it feels good you can get across these obstacles. >> someone has to represent in the closing bell. i signed up for a tough one. exfrom, i found out they sort of electrocute you at the end. they're expensive. >> actually i was involved back if 2008 and before then, the marine corps actually put together an obstacle course they used in a training course. >> do you buy or sell, cress? >> i buy. i go fetching. >> i don't know if you the woman on "american then ja warrior". >> what is "american jen ja warrior"? >> reporter: they run up walls,

she bested all of the guys. >> i'm going surfing next weekend. >> that's not easy, either. morgan can you tell us behind you who, flask, is winning this round? >> reporter: i have to say it looks like alana. i have to say, she's jogging, picking up the weights. they're both doing really well. they're burning the calories, i guess making those muscles. >> morgan have you done won of these races? >>. no i work out. this is my first time doing anything like this. someone mentioned be every the fact how intensive this is. one of the issues facing this industry given the fact that it sort of exploded over the last couple years, that's industries and seeing critics calling for more safety regulations, this is all moving forward. >> they kind of exercise things

in waves? i used to do step aerobics. >> it still exists. >> thanks morgan for working her muscles all day. way to go silvano and brad. nbc sports will present six spartan races this season. it's time for favourite.right now. i think it's over to melissa lee. . >> life on the nasdaq markets site, fork city, time's square, i'm melissa lee, this is favourite money. shares are moving higher, netflix says it now has more than 50 million subscribers. we'll have the latest from the ceo reed hastings coming out. a blowout, chipotle shares surging. i couldn't resist that, surging as the restaurant comp sales are greater than expected our traders tonight, it's not