>> pretty terrifying. >> yeah. estimating the bear to weigh around 500 pounds. now it's a quick market check. >> we are up by a lot. dow up 1.1%. the nasdaq higher by 1%. nice end to the week here for the bulls. see you tonight on "fast." thanks for watching. >> take care. well, not many bears to be found here today. welcome to "the closing bell." i'm kelly evans at the new york stock exchange where after an ugly day in the market yesterday, the dow jones industrial average today a strong gain up 183 points as mentioned and following three big stories on a very busy friday. >> let' review the stories. i mean, we have the stunning departure of bill gross from pimco. he's jumping to janus. more details are emerging about that story. it appears that despite the

press releases today this did not end ammic bring. we have more details on what happened here today. >> yes. also yahoo! getting active. shares surged today as investor taking a big position in the stock. there it is up. we will have the latest on who's behind this and how ceo is reacting. >> also, of course, these markets, i mean, volatility is back in a big way this week with the dow bouncing back after one of the worst days of the year yesterday. the dow enjoying its best day in seven months or something i saw. >> 181 points. undoing some of the damage of yesterday and we shouldn't forget the week it's been. triple-digit moves in both directions. maybe it's that time of yore. >> we got the s&p up 17 points. we are at 1983 at this hour. nasdaq doing very well up 44 points. but again, i mean, we have had 100-point swings for the dow every day this week.

multi-percentage moves for all the major averages. three of them down. two of them up. look at the russell. up right now at 1118. let's talk about it. in our exchange, he said, joe durant with us today and ken mahoney, kevin caron, monica madai and our own rick san tell lo joining us, as well. joe, what do you make of the volatility this week? what's going on and what are you doing about it here? >> i think a couple of things. what you are seeing is the market is reflecting the self correction happening for about six weeks now. the russell has been down almost 10%. many stocks down 20% or more. the indexes have done very, very well. all that we have seen this week is market reflecting that and a concern about the end of easy money. the beginning of higher interest

ratds. it ee's causing the dollar to g higher in anticipation and especially relative to the euro and the stock market is reflecting that. more volatile, especially for company that is have less flexibility with their financial structure and that's why the small caps have been lagging. >> will you buy the small caps here, joe? do you think they have had the move? >> no, i don't think so. because even at these valuations where relative to the s&p at quite extreme levels even with the decline we have had. no. >> ken, you're calling for an uptick in volatility anyway. wh what does this mean for you? >> we are calling far choppy market with upward bias. we are looking for headwinds and a stealth correction going on and the major averages holding on to the year highs and yet underneath it seen deter ration and seen the small cap taking it on the chin. for us fundamentals and europe concerns us.

we see the economies over there continue to slow down and the policymakers further and further behind the curve and russia is a wild card and continuing to be consistent. we recently sold the r.i.p. and preparing to buy the next dip in the market. >> buying the next dip. kevin, we have now had both joe and ken talking about a stealth correction. i guess people out there think is this going the morph into an event to pull a major index down 10%? >> yeah. i wouldn't be surprised to see a bit more of a correction only because we have had such a good run of it. data has been incredibly good relating to the economy. 4.6% print on third quarter gdp. second half of 3%. that's all the good news. the question is, the elephant in the room is interest rates. interest rates at low levels. you have had a moon shot in equity prices for the last several years. multiples are about 10% above where they ought to be and reflecting improvements in economy and the real question is

what does the fed do next? time to start to normalize interest rates? currency markets are picking up on it. all of this is part and parcel of an adjustment to an economy that's getting better and maybe choppiness and not expected and it's healthy for a market with some pricing discipline. >> i noted showing the european market there is that the dax, germany, the weakest market in the european majors. fellow the 200-day moving ampbl and fell as the others bounced a the this juncture. monica, what are you doing with your clients' money right now seeing the volatility pick up here? >> look. you know, we are mostly in alternatives. we're doing a lot in real estate, we're in specific plays so this -- >> because you're -- is that a specific strategy right now or is that where you see the better opportunity? >> i think investing in what you know should be everyone's specific strategy and so we're

focusing on real estate in texas where you are seeing a lot of employment strength and a lot of people moving down here but, again, you know, one of your guests mentioned the high point is a higher gdp that we saw for second quarter and i would argue as a metric of economic vitality, you should look into the details of driving gdp. you have a new definition of corporate profits. and you're actually seeing more spending for obama care that's required and same token personal spending an consumption is 20% below expectations so that key metric of what calls for a strong, healthy economy is wages and we see very depressed wages. so, i mean, i think if you're a hard pressed to say that we have a strong, healthy, vibe rantd consumer. >> so now as we see the 10-year interest rate creeping up, is that because, rick santelli, the u.s. growth outlook looks

better, a bill gross effect in the market here at all do you think? >> or is it that the stock market is only down 150 on the dow and sits and the s&p's only down 15? many wouldn't have guessed that yesterday. you know, remember our conversation yesterday. i think the bond market divined something in a very excellent fashion. i think the lack of any major buying pushing 10-year rates dramatically under 250, the type of dynamics in the first weeks of 2014 when the equities couldn't get legs together didn't see it. i think we will have more of the same and i think, yes, there was some knee jerk reaction of everything is speculated and mr. gross, outflows that we need to deal with, they had lots of futures positions, very liquid. i don't know that that's an issue for the markets, but, you know, generalized weak cincinnati the new fundamental to pay attention to whether it's china and europe and slow moving events. don't see they're going to

toetdly destabilize equities and i don't think you see a major moon shots on interest rates but learn a lesson of yesterday that if the equities kind of still maintain very close to contract high pricing structure i also doubt if we're going to get significant tests of 2 1/4, as well. >> joe, are you more inclined to want to buy the dips that we're seeing right now or sell the strength that we have been seeing lately, as well, in this volatility? >> so, i think neither. i think what you want to do is look at your personal portfolio. we manage the clients' entire net worth and within the portfolio tilt it the direction you should be. we think you want to be in larger cap names. instead of dividend payers gorks to growers. you have to figure out in advance because the market acts in advance what should you be doing in a higher interest rate environment? before interest rates go up, those stocks are the ones that

will be already have gone up so, again, shifting from just dividends to dividend growers, focusing on larger cap than smaller gap and emerging markets and forward leaning. europe will get a lot of money pumped into it and you have to expect high volatility. >> go ahead. >> one thing that we are looking at is a hybrid strategy. everybody has a philosophy to handle the markets but buy and hold and active, if it's stocks, etfs you like, buy and hold that. be more act wif the quarter, 30-year portfolio and be able to buy the dips and sell the rips. not day trading but kind of combination of buy and hold and be active when you see the dips and be able to sell the rips and a better performance in these choppy markets. >> kevin, i feel like it's two different things here sometimes. joe and others on the one hand talking about positioning for a higher rate environment and rick

saying look for generalized slowing growth and monica pointing out that the economy weaker than it appears so, kevin, is that -- what do you do with those conflicting stoirls? seems as though investors making two decisions that point in different directions here. >> i think it's a couple of different things. bond portfolio, we like the idea of laddering it. cash in portfolio. if valuations don't make sense and ultimately if you look out three to five years you get a very different sense as to relative to what happened this week. and as a matter of fact, as far as the correction of volatility is concerned, it is really nothing. s&p at 2,000. equity values, u.s. equities valued at something like 23 trillion so we didn't move all that much this week. just stick to the knitting. focus on cash rich companies growing reasonable price. >> kelly, one thing. be looking at correlation getting decoupled again.

europe is in a different place and the banks act differently than the u.s. in the future. >> since you mentioned that, joe, we are asking the viewers later which section they would rather buy of the world. u.s. or europe. show of hands here. how many would buy europe right now? anyone? okay, joe. go ahead. >> i just think you want to go where the market isn't. they have easy money for a very long time with lower rates than the u.s. in a year from now and recovery, they're 18 months behind us. would you have bought the u.s. 18 to 24 months ago? yes. do they have less, more risk? yes. the market reflected it. you don't want to go where all the money has been made so you want to be concentrating in the u.s. and should be looking at europe now. >> fair point. >> very good. thank you all. nice the see you. thank you for joining us. appreciate it. we'll pick back up on the theme of the u.s. versus europe and especially talking about

strong dollar. that's all coming up. yeah, the economy's surging by 4.6%. that's the last revision for this second quarter. fastest rate of three years so is it full steam ahead for the economy and could this force the fed's hand to raise rates sooner rather than later in that's within the big question all along. and this mention, are you better off investing in the u.s. amid the economic jolt or europe? is that the better play as the economy teeters? we've got both sides of that debate. and we do want you to weigh in. a chance to vote on this is coming up. plus, as you have heard, bill gross, shocking story going around wall street today. he leaves pimco. the bond giant that he founded in 1971. he heads to janus capital. coming up, we'll discuss when's behind the shake-up and whether it's a major problem for pimco still to come. when change is in the air you see things in a whole new way.

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welcome back. a strong day here. nike surging double digits after a strong earnings beat yesterday. after hours.

adding about 63 to the dow up 186 today. but again, the other indexes up to the tune of 1%. >> also helping word out that the u.s. economy expanded by 4.6%, the fastest growth rate in about 3 years. good news or is it? that is if you worry about the fed raising interest rates. sooner rather than later. >> we have more on what it means now. joining us, chris thornburgh, chris lowe and very own steve liesman. welcome, everybody. a great group, steve, by the way, no surprise to you. you were saying it would be a strong number and heard the concerns monica raised last segment saying perhap it's obamacare related. trends aren't as strong as they appear. >> i want to explain why it's no surprise. we have the rapid update. survey of ten forecasters who have a tracking survey every time data comes in, put it in gdp and they tell us how that

changes the forecast. we upgraded of 4.2 to 4.6 september 11th so that was quite a bit before this number came out and in pretty much with the expectation and want to follow it go to cnbc.com/rapidupdate and following it up. you have one quarter that's a negative 2.1. another is 4.6. how do you break the tie? with the third quarter and the third quarter's coming in 3% plus. good consumer spending, good capital spending. there's the forecast of the tracking for the third quarter with a range. you can see who's where. goldman is right there at 3.3 and not the sort of radical economists. these guys are the center of the street here. bar class at 2.8. there's still data to come. overall the tie's broken by somewhat above trend growth in the third quert. >> do you win anything for nailing the number? >> if you want a coffee cup with

my signature on it, send me an e-mail, bill, i'll send it to you. chris, is this the kind of growth rate? we're told by the fed to be watching job growth and inflation expectations. what does this number mean to them in terms of fed policy? >> again, a lot of the second quarter simply a bounce from the big negative of the first quarter. ultimately, first half of the year was kind of weak largely because of the external account but i echo what was just said. we have a monthly model, as well. tracking 3.3 to 3.4 and candidly all indications are to continue. consumer credit is doing great. the banks are lending. nonresidential construction is up. housing market is rebounding. business spending is doing well. you look at -- >> chris, can i just -- chris, i want to interrupt real quick. this housing is a big absence in all of this. do you think -- i mean, if housing is on board, don't we have all cylinders firing here? >> absolutely. and that's sort of a point.

i know we went through a mini down spell because the investors went away. but now you are seeing the numbers. mortgage credit starting to expand again. the housing market. we saw that good new housing sales number. inventory's still low. my guess is by the end of the year single family permits start to trend up again and next year is a very good year for the builders. >> chris lowe, i don't mind cold water on this. i wonder if it takes a form of as trying to talk about inflation expectations. explain what's going on here and why the market is worries of inflation when everything should be pointing towards more momentum if the economy is improving. >> that's right. look at inflation expectations. five-year forward five-year inflation rates, the break even rate is fallen by almost half a percent in the last few months. >> wow. >> what it reflects is strength of the dollar not just against

the euro but all major currencies. we are up about 5.5% which, by the way, is almost exactly how much commodity prices are down. so already we're seeing the deflationary impact of the lower dollar. i think if the dollar keeps moving like this for a couple of months we're looking at an inflation rate falling to somewhere between 1.5 and 1.75. >> what do you think about that, steve? what if we do see the dollar continue higher, deflationary implications it has, pressure it puts on commodities and what that means to the fed watching inflation so carefully? >> i don't think the dollar within a certain band matters a whole lot. what matters is change in adjustment. you have guys doing trade and a certain price and the dollar is 5.5% greater in value and that changes the calculus at the margin for some business people to take adjustment. losers and winners out of that. i don't think it's a big enough

move to disrupt or even gives the fed a little bit of breathing time with this much impact of the dollar on inflation. >> that's it. this is why it's so important. the very moment that everybody's talking about the fed behind the curve, in fact, if we're to believe and i understand it can move around and the market saying that the bias is dovish side of things. >> that's right. >> let me respobd real quick. it doesn't matter, kelly, you know this, how we get to the real growth number. the inflation adjusted number. we can get there with nominal growth at 3% and, you know, inflation at 1%. really the real number that matters and so if we get there with low inflation, as long as you have that economic activity, 3%, 2.5%, still a good number. >> look. what bill dudley said this week from the new york fed is that if the dollar continues to appreciate like this, i agree, the movement we have had so far is fine but if it continues, the fed should move later because it

will affect gdp growth and it will affect inflation. it's going to limit exports and so on and the reason the dollar's moving, of course, is that the u.s. is going towards tighter policy while the rest of the world is going toward easier policy. i don't think this dollar move is done. >> all right. before we let you guys go, steve, bill gross news today with leaving pimco, the stunning story moving to janus. somebody asking me this morning how much of his lack of performance the last couple of years had to do with this. what do you say to that one? >> well, i've listened to bill over a long period of time. i think he's an extremely smart person. i have sort of raised my right eyebrow as far as it could go with the calls on the federal reserve and not understood what he said and seems to me it was long in a lot of important occasions and manages $2

trillion worth of money but in terms of underperformance, i wonder if it's getting bad advice or had the federal reserve wrong. i guess the phrase that sticks in my mind is tim robbins of "shawshank redemption" calling the warden on tuesday. remember that? that's what bill gross and the fed made me think of. >> wow. and "shawshank redemption" debuted 20 years ago this week. as you well know. >> my favorite movie. >> thank you. >> more on the bill gross story coming up, as well. >> what he might be up to with the new fund. he is, of course, weighed in often on whether the very issue of inflation expectation. janus with a big pop on it today, as well, along with the rest of the market rallying. >> heading toward the close, the dow off the highs and up 174. it's the fifth straight triple digit move for the dow this week. first time we have seen that since june of last year.

coming up, a take on the strong economic growth number and what it means for the fed and the market when mark zandi joins us. alibaba shares down more than the overall market this week. is that expected to be after the huge ipo run of a week ago today or a sign of things to come. we'll talk alibaba and starts trading options on monday. that will be interesting. >> buckle up. >> that and more coming up on closing bell. work with equity experts who work with regional experts that's when expertise happens. mfs. because there is no expertise without collaboration.

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here we go again. it's triple digit move for the dow this time to the upside. a gain of more than 1%. as a matter of fact, as you see the dow is the lead dog today. up more than 1%. followed closely behind by the nasdaq up almost 1% right now. >> yeah. yesterday was hurt by apple's underperformance. today, bertha coombs keeping an eye on the big movers at the nasdaq. >> a grout bounce back today in terms of big caps. biggest gainer of micron. we stock up on new mobile phones. a yahoo! with the suggestion, memo to meyer. blackberry on the back of the earnings outlook, as well. and among the big gainers today is apple. that's helping. apple, in fact, as it moves higher here, back above $100 is

closing out the week just about even after a roller coaster ride here over the last few days. and that's what's certainly helped the performance of the nasdaq 100 but for the week we continue to see the big caps down by 1%. it's the small caps where the pain continues. despite some relatively good performance today, we are seeing the russell 2000 down for the week, down for the month and still down as we're looking to end the quarter next week, as well. but bio teches are the surprise in this roller coaster week. eking out a bit of a begin and best performers at the nasdaq and both have drug trials and drugs in development that investors are very, very interested in right now. and they've really bid them up this week. take a look at it. this is a stock that jim cramer touted back to you. >> 20% move today. bertha, thank you very much. we have a half an hour until the close and the dow holding the gains up 170 points.

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he's going the u.s. way. he thinks it will continue to outperform. john, make the case here. >> bill, what we'd have to say if you look at the u.s., we have a run for five and a half years. we are well into an economic

expansion beyond the recovery process. europe is still in its process of recovery. very accommodate president of the ecb. plus germany's merkel very much an ally of his. we think there's plenty of opportunity. those markets underperformed versus our market for the last few years. and the dividend yields of the stock 600 around 3.6% versus s&p 500. >> talking about the way we were about the u.s. three or four years ago. >> that's the idea. >> why stick with the u.s. now, robert luna? >> well, i think because the main argument really that everyone's coming up with for europe is to be like the europe and based off of hope right now. i think if you look at japan, the same thing is said there. they'll take interest rates and bounce back and 25 years of underperformance there. the idea with the u.s. is we hit a 4.6% gdp number. most important part about that right now i think is business

spending. business spending up over 11% right now. so the businesses are what's going to create jobs and as jobs come back into the economy, unemployment rate goes down at 6.2% right now. europe over 11% unemployment. the clear place to be right now is in the u.s. valuations are reasonable and as money managers are underperforming, going into the fourth quarter especially the last thing to do is try to pick a bottom in europe needing to catch up on performance. >> are you suggesting that we're going to see a prolonged period in europe the way we saw in japan? >> you know, i don't think it's going to be as long but looking at europe it's a different place than the u.s. so to have a comparison and i think it's a little bit naive to think it's playing out like the u.s. is, there's a very different labor force. >> well, i would -- >> going on in europe. there's entitlement issues. >> bob, we are not going to take that naive business lightly and

saying considering the world class multinationals of europe, the fact that the average price of the euro versus the dollar has been around a buck 19, a buck 20, actually, a buck 22, buck 23 since inception in 1999 and the recovery process with europe a chief trading partner of the u.s., we have got to think these world class corporations plus a distinctively more aggressive ecb over the last five and a half years than abe-nomics coming online recently, we have to think that europe is ready to engage the process of recovery. >> you know, the problem is that again looking at the workforce, look at italy. they slipped back into recession over there. looking to play mugs nationals, you are looking for a play outside of europe and the problem and to my point, the domestic economy in europe is struggling. overlaying the financial etf of

the europe versus u.s., the same thing is said of the retailers. those sections are leading indicators. >> they're just getting the quantitative easing in october and what we have to expect is give them little bit of a chance here plus european multinationals, that's what we're investing in. we want to participate in the global economic recovery happening with the u.s. in the lead and in the process we think europe side led up to the u.s. following us through. >> the problem with the mugs nationals they're not cheap. >> but those multinationals -- >> bob, the multinational vs a good opportunity to see the earnings grow significantly. i'm thinking of diamler, nestles. >> you're basically trying to get global growth at a cheaper price than u.s. gives you exposure. >> very much so. >> the viewer vote right now, just about to close the poll.

74% would go with the u.s. do you take comfort of that? will you play contrarian here? >> bill, i have to play contrarian. i have for five and a half years with the u.s. and worked pretty good. >> robert? >> guys, let's not forget russia. germany, the leading engine of europe's economy right is a big trading partner with russia. 30% of those export gos to russia and sanctions increasing that's a huge headwind. dependent on russia right now for the energy. >> the problem is -- >> i'm not saying europe can't be a play a year from now but right now you want to be in the u.s. >> i think you invest for a year ahead, two years ahead. we don't invest for tomorrow. >> all right. good discussion, guys. that was instructive. thank you both. >> thank you. >> thank you. >> thank you for joining us today. >> 76% of the viewers continue to think the u.s. is a better investment. >> dow up 170 heading toward the close with 20 minutes left in the trading day. bond king bob gross spicing

up the friday with the morning announcement he is jumping ship from pimco to janus. what does that mean for the future of pimco and for the rest of the bond market? leg mason's ceo joins us next exclusively. alibaba shares gaining back some ground after losing some altitude in its first week of training. what did the first week of trades say about that stock? that's later. stay tuned. i'm angela, and i quit smoking with chantix. people who know me, to this day they say,

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whenwork with equity experts who work with regional experts that's when expertise happens. mfs. because there is no expertise without collaboration.

we woke up to the bombshell in the bond world. pimco founder bill gross leaving the firm he founded years ago to join janus capital. >> our sharon epperson joins us to talk about individual investors. >> kelly and bill, there's excitement and nervousness in the bond market today with bill gross's departure of pimco. he ran pimco total return fund and the world's largest bond fund, also the largest mutual fund in the 401(k) marketplace with nearly $222 billion in assets under management. more than half of all large 401(k) plans hold pimco total return and clearly many participants and individual investors need to pay close attention to what happens next. for many, pimco total return as a fixed income return for balance in the retirement portfolio and need probably did

not change. several financial advisers today said they were concerned that gross's departure creates emotionally charged decisions and it's the time to reassess. you may buy into the fund because of the manager but remember there are many professionals involved in the daily management of pimco's funds and also many securities underlying investments that make up the funds so follow what the fund research firm morningstar has done and put pimco total return and other funds under review. waiting for information, financial advisers say find out more about other bond offerings, consider their expenses and volatility and returns and also take this time to reassess your own individual investment goals. bill? >> always good advice. sharon, thank you. >> sure. let's get exclusive reaction with leg mason ceo joe sullivan. >> thank you. >> it's interesting. you know, your shares, shares of

some other rivals are up today. i think to the tune of 5% as the market thinks through where some of the funds might go if they do leave pimco. are you seeing inflows today into the fixed income flows? >> we don't have the reports on flows into funds yet but i can tell you for sure certainly at western asset and a brandy wine global what we are seeing is a lot of activity, a lot of discussions both on the institutional side with client service teams, a lot more discussions, a lot more conversations as well as in the field with our wholesalers and sales teams talking with advisers and activity, for sure. >> does a move like this to have the largest manager, the man to call mr. bond move from one place to another like that, does it go beyond water cooler gossip and chat and does it have an impact in the bond market, do you think? >> well, certainly, it does go beyond water cooler chat, for sure. i think your earlier report

mentioned that it's while not time to panic, it's certainly a time to reassess. investors be they institutional investors and the consultants who advise them, individual investors and the financial adviser who is work with them, they don't like noise that's not investment related around their managers. they like stability. i was talking to some of the folks here on the floor trading floor at western. let's continue to be boring. you know? let's not create any issues for our investors. distractions for investors. but it is. i mean, there's clearly it is a time to reassess and to think about, you know, how it might impact. it will impact the bond markets in the short run for sure. there's going to be -- we have seen it today. some of the -- i assume hedge funds and traders like that are front running what they expect to be potential flows or outflows in what are considered pimco's core strategy and seeing some of that. again, i wouldn't advise

panicking but reassessing is certainly appropriate, absolutely. >> and you have brought up a point, joe, of stability and investors. something leg mason struggled and assets declined, people were searched about the underperformance then. can you comment from your position to win people back or grow a business that does have an issue like this? how difficult is it? how much of a legacy issue does it become? >> well look. we certainly don't want to confuse some of the challenges that we had leg mason. and obviously, we have come back and done a good job and i think are on the rebound but don't confuse those issues with the stability and the performance at our affiliates. so western, for example, has 123 different investment professionals across 7 countries globally. these professionals have in excess of 20 years average experience. we're led, our cio is ken leach

at western asset and been with western asset for 25 years so you see we have the stability. the performance of the products is exceptional. our core product has beaten b barclays aggregate and outperformed pimco for the 1, 3, 5-year period. >> i did see that, yes. just a final question, too, as this all shakes out. of course, it comes when the industry has seen a ton of start-ups coming from the etf world and competition and pressure on fees. so again, bill gross goes to janus, an unconstrained bond fund probably going to hoover in money as people say i'm willing to take a bet, anyway for a little while. what kind of competitive pressure does it put on the industry and on the fee structure, do you think? >> look. one of the key things is that you have to be able -- you have to have the infrastructure in place to be able to take in

significant inflows. i think the fund that he's going to manage is currently 15 million in size. i'm not saying he won't get some assets as a result. i don't think it's a foregone conclusion of a strong flow of assets to janus to follow bill. meantime, they have a lot to set up in terms of infrastructure. western, for example, and other firms, have but western's one of the few that's large enough to be able to take in the size and the -- what you need are the depth and breadth of investment capabilities globally. that's not necessarily in place today at janus. >> who's the new bond king? >> well, you know, i've got two bond kings here between ken leach and kevin hoffman and we feel good about the capabilities. honestly we don't have coronations here around kings. ours is a team approach and we think that serves us pretty

well. >> you want to be boring. don't worry about this. >> we're boring. hopefully continued outperformance and boring. we like that. >> joe sullivan, ceo of leg mason, thank you for joining us. >> thank you. >> a close friend in high school became a cpa and said his clients early on didn't want the accountants wearing elaborate jewelry and worn none. you want to be boring in many cases coming to money management. that's for sure. not been a boring week lately. 7 out of 9 sessions triple-digit moves. today the dow up about 160 with 11 moneys to go. >> art cashin signaled to me flat to the close. no bias up or down heading to the closing bell. u.s. economy firing on most cylinders. moody's chief economist says he sees the good times rolling along. he states his case coming up here. a simple question:people

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nike on the session, also the russell 2000 in the green and notably still under performing. >> kate rogers here for the day's big movers for us. kate? >> let's start off with nike and by far the biggest gainer in the dow today and accounting for about 60 points of the dow's gain and surging after the big earnings beat last night and blackberry gaining after posting stronger than expected earnings this morning. the smartphone company's stock up around 4% and shares of yahoo! spiking this afternoon after activist investor sent a letter saying the company undervalued. and suggesting a merger with aol to unlock value and the shares up over 3%. back to you. >> and it's -- kate, thanks very much. my understanding that at no time did starboard value tell

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from td ameritrade. i mean, how do you devibe this week? incredible volatility's back. the dow up almost a percent right now. just coming off the highs with a gain of 165 points. nasdaq now the leader up 1%. the s&p up .85% today and the russell up. we pointed out 100-point moves for the dow every day this week and kelly remembering we have had triple-digit moves for the dow 7 out of last 9 days. volatility is back. here's this week. three down days. two up days. overall for the week, down about 1%. david joins us here along with

greg sarian from hightower. what do you make of the volatility? is this the kind of action you normally see at a top of the market or bottom of the market? >> investors have been spoiled. last two years, low rates, slow growth and important that investor embrace the volatility. it's an important time to make sure your portfolio is in balance. >> it is like getting a cold or the flu. this is actually healthy. it builds up the immune system. negative side, slow growth in china hurt the market this week. japan is still limping along. europe is slow. okay? those three things, bill, and geopolitics, four things. you could add valuations that are high. over here on the positive side. four things that start with "m." manufacturing. monetary stimulus. mansions. that's home prices. okay?

and motor vehicle sales and retail sales surprised to the upside so the market's trying to figure out which way to go and the coming week the jobs numbers a week from today. kay shiller home prices enyou will see personal income and personal consumption for august and the coming week, we're going to put down more cards on the table and see the way the market wants to lift or stay the same. >> were you buying on did down days or selling on the up days? >> you know, i think it's important to make sure that you're protecting on the downside and investors made a lot of money the last couple of years. it's important to protect on the downside. >> those in the market? >> those in the market. those underweight equities, use the dips. this week is important, weps what the ecb is doing counter the fed. stopping qe. ecb is going to be starting a qe process and going to add the stronger dollar which is a whole other currency change to affect the markets, as well. >> listen to greg. the name means protector.

own europe and own japan, bill. they basically lagged behind. own europe and japan. >> thank you both for joining us. appreciate it very much as we wrap up a very volatile week. see if it continues next week on monday. have a great weekend. meantime much more coming up on the second hour of ix4d"the clo bell" with kelly evanevans. have a good weekend. thank you, bill. welcome to "the closing bell," everybody. i'm kelly evans. here's a look at we finish the big bounce back day on wall wl and the end of a pretty volatile week here with the dow going out 7th out of 9 sessions up 165 points. just about 1% and it was up almost 200 points and a little bit fading there into the close. the nasdaq up 1%. s&p adding 16ment back to 1982. russell even joining the fun today up 0.8% or about 9 points so a busy and volatile week on wall street.

morgan brenen in joining me. when's going on? >> well, an update and down week for stocks. worst week in eight. all of the major indexes for the u.s. posting losses for the week. the dow jones industrial average down about 1%. s&p 500 down about 1.3%. nasdaq composite down 1.5% for the week and the russell 2000, of course, biggest loser for the week, down 2.5% although still a bit better than what we saw earlier in the week after we had that so-called death cross hit on monday. now, all the sectors in the red for the day. industrials, energy, utilities, consumer december yiiscretionar furthest. focusing in on the specific movers auto, retailers, car max down about 11% this week after disappointing margins and comp sets thanks to stalled sales because of lighter lending conditions. lithia motors and group 1 and

penske auto. different for footwear. thank nike for that after strong earnings beat across the board up about 9% for the week. also deckers outdoors and foot locker with modest)c week up each up. high-yield funds. those are all finishing mixed today but all down more than 1% for the week. hyld down about 2% for the week on worries of rising interest rates and tight inventory. kelly, sending it back over to you. >> all right. thank you. an important reminder that despite the action today, it was a pretty negative week for these major averages. let's talk about it. kevin o'leary, john stalavali and tim seymour and kayla and,

sir, since you're watching this tick by tick, what's most significant to you about the price action here today? >> the untold story is the fact that brazil ramped, you know, the market there. >> brazil? >> brazil up a lot today. that actually brought our energy sector up and helped us kind of turn around so i think that was kind of an untold story today about brazil as the election -- >> didn't mcdonald talk about this on our air a couple of days ago and bullish. >> might have been. i might have been tuned without larry. possibility. >> a read through of the emerging markets looking to -- look. tim seymour, i know this is -- you're all over this stuff. are we seeing green chutes or no? >> i don't think so from brazil. it is an economy that clearly has significant structural reform and the election result is priced in. emerging asia will continue to outperform but look at emerging over two weeks it is a story of

an inversed correlation to the dollar. dollar closed at 11th straight week higher and putting pressure on all markets, especially the emerging. currencies is where it's taking place. buying emerging with two feet here? no. i think it's not oversold enough. i think you can see emerging trend lower. even though on valuation and in terms of fundamentals in a world where the fed is raising rates in '15 or '16 emerging is not as exposed as they used to be and the highest, this kind of a move successive moves in the dollar not since brett and woods. this is momentous, historic and will continue. >> wow. i'm getting chills, kevin. >> yes. >> and this is one we heard as well saying the second inning of what could be a 9, 10-inning move here. game changer. >> maybe. but, you know, i look at this and say if anything really out of the market concerned as the

euro started to dive that europe was going into a recession, that was the kind of fear with the s&p now close to half of its sales in international markets including germany, france, italy, the big economies, maybe we'll see a crimp in earnings. but all through this volatility in the last couple of weeks there's been no change, top down or bottoms up guys on changing the s&p. so the only thing that's happened here is concern as compressed pes a bit and back at the farm earnings are spectacular. all i say is, okay, get used to volatility. stay on the course until you hear somebody say, huh oh. something in the world has changed what i'm going do do in free cash flow after cap x? >> kayla? >> there's a growing coarse of people saying i want the money in large cap domestic equities because even if as john said if you see brazil with a big rise intraday, even if there is some green chutes over in asia better than expected, it's just -- it takes too strong a stomach at

this point and the russell losing 3% this week alone, 5 prgs in the last month, when you see high yield and even though $600 million of net inflows this week, seeing high yield having some risk off the table just feels like there's a divergence in the market and if there is resilience it's here in the u.s. >> greg, but let me -- hang on a second. if you can back out for us to the 30,000-foot view and why this volatility now in the market? >> i think that it's dawning on investor that is the clock is ticking on when the fed starts to take the punchbowl away. they have told us that quantitative easing, bond buying, will be done next month and then the stopwatch begins on when they start to raise interest rates and as it starts to dawn on people that the seven years of interest rates stuck at zero with no volatility, no uncertainty where rates were going, that goes away. it is not about whether earnings are strong or growth is strong

but the uncertainty about how those two things impact the fed. you're adding volatility. we have been basically spoiled with how low volatility has been. if you pull the camera back and look at vix over five or six years, this week is still nothing, an overall calm market and you will have to get used to the idea that in the next six to nine months the fed will be in play. interest rate uncertainty will be higher feeding into the uncertainty in the bond market and if you have good fundamen l fundamentals like strong earnings, that uncertainty starts to take away some of the bullishness. >> john, what do you think people do? should this change aloe case change investment ideas altogether? >> part of the volatility, we are at war, right, in the middle east again. oil spiked 20, $50 early '90s. now because of the renaissance and the middle of the country, we haven't had that.

so obviously you buy dollars with war. buy u.s. large cap stocks. i think that if we look -- you know, sunday night is really when we kind of sold off a little bit and we were at a 20/20 high and then we didn't drop bombs until the next day and take it into consideration, as well, because the volatility spiked. we are at war. things are going on. we don't know how many boots we have to put on the ground. russia going into the winter. talking about cutting off gas to europe. do you want to invest in the dax and russia at the border? >> tim, weigh in on this, if you would. greg is kind of pointing toward a scenario of the worry of a stronger economy to speed up scare. john is talking about the opposite, almost a little bit of global flight to safety on the back of more. >> right, right. let's try to drive down the middle of the fairway on this. look to next week with adp on wednesday and nonfarm payroll on friday. it shows an expansion of the job

market and get to 2.5% to 3%. growth for 2014 and which means more volatility, the dollar is going to strengthen. policies around the world to allow the fed to push through. no one else is close to lick i canty out of the markets not even the chinese. looking for growth around the world, probably going to get some of that selectively in southeast asia and the u.s. market is going to continue to be a place for people to invest. i think energy stocks which have significantly underperformed the s&p over six months are the place to look, not because oil prices are lower but the valuations with interesting. >> brazil energy, bpr. the big number next week is pce. if that's a negative number -- >> so true. >> bernanke speaks sunday in chicago. the five-year forward is going down. >> right. inflation expectation. >> whoever is saying that the fed is tightening -- >> that was greg. greg, you want to answer that before you go. >> no. it's a great point. i want to add that --

>> i try to, greg. >> next week, that's right. i only wish i made it sooner. i have to give you credit for it. yeah. we could have 1.4% pc inflation on monday pushes back against the notion of earlier fed tightening and prepared for the possibility of a disappointment on friday. by the way, on the global tension story, the real story is what's happening in china. the reason of oil coming down instead of going up, in spite of the bombing campaign in the middle east is because china is slowing down so much so that, too, is a negative. but the point i was trying to make here, kelly, with unt that we can have a unidirectional bet of things better or worse, it's the certainty. the skew of possibilities expanded on economy and on interest rates and that volatility, that uncertainty, alone starts to erode investor sentiment. >> so right. seeing it already. by the way, greg, knowing what would qualify as a disappointment on the payroll count on friday? what's the level? >> 150,000 is the whisper. >> sounds about right.

>> not a high bar to beat. >> no. >> meanwhile -- >> we should be up 100,000. the global, you know what's the beneficiary of this? not gold. dividend paying large cap stocks back to daddy. >> i thought "shark tank" tonight. >> that's huge. even that without dividends, and without royalties, no shark. >> we'll leave it right there. greg, thank you. tim, appreciate it. catch tim coming up at 5:00 talking to eric yak son of ironfire capital of starboard turning up the pressure of yahoo! to merge with aol. a possible merger he called months ago. you won't want to miss that. nantucket, well-known for the sailing and seafood, today, though, all about stocks and selloffs. larry summer, larry sternwick and robert diamond making some waves at the nantucket project conference. up next, what they said about this stock market. and the financial world has been

digesting the news that the bond king pimco's bill gross has left the room. he's left the company he co-founded anyway. in fact, going to a different room. coming up, jane wells looks at the intrigue surrounding this story and didn't end well between pimco and gross. we'll be back.

welcome back. andrew ross sorkin talking at a conference in nantucket and asked them about the selloff yesterday and where the stocks might be headed for the rest of the year before anyone knew we would have a snapback today and here's what they had to say. >> there's no question that assets are more fully priced than they were 18 months ago. yes, price earnings ratios are a little high by some measures but that's what you expect when real interest rates were low. >> i think it's more reasonably priced than that. i think a lot of the key factors in terms of they're still inexpensive money and oil prices are reasonable level. i think gold's at a reasonable level. i don't see a big crash coming. >> i've been talking more months and we get nervous on the way down when the tree shakes.

healthy for the market to shake and get loose hands out of stocks and create conviction but i do think we have been -- we are up here on the top of the lake and the lake's getting f z fissures and cracking. >> we wonder if today's big move higher to change minds and see what the next guests think. joining me now with the panel, brian reynolds and kenny pulcari. good to have you both with us. >> hey, kelly. >> the point barry made about liquidity, especially in the pimco funds today, by the way, seeing big gap moves on bill gross leaving. what does it say about the risks in the market? >> well, it's bullish. remember 2007, everybody was 50 times market. all the dealers, her lil lynch, bear staerns, aig, off 50 times margin.

dealers never used the balance sheets to cushion the bottom. they had to sell when they were cut. so that means that we're having the biggest credit boom ever without the dealers participating because dodd-frank won't let them rebuild the balance sheets and next crisis they won't contribute to the next crisis. they won't be part of the problem but right now we're having short-term issues and seeing the selloffs over the last five years because people are so scared of global events and the fed and now we have pimco with bill gross leaving. that's going to cause short-term tush blens. four or five months from now it won't be a big deal. the money going from one fund group to another and people don't play nice and don't like to make markets and having redemptions they won't give you good bids and could be a little turbulence here. stocks failed in the 1985 era and i think there's turbulence for a few weeks and the credit boom is intact because the nation's pensions bringing in more money to make 7.5% and a

bigger credit boom to lead to my buybacks and more mergers and acquisitions. >> there's an extent to which the pension funds are underfunded and driving this. kenny, you know, you heard it from brian there. a couple of levels on the s&p to watch. does today's action do enough to keep the bears at bay here do you think? >> i think it does. i thought 1975 more the level to watch, right, supported on the way down. resistance on the way up. closed at the 1980 level and there was not a lot of volume on the way up today, there was more. more yesterday on the way down. we see that but that just goes to thor ie nervousness. yesterday's action fed by once you broke the technical levels, 1975, it kicks in broken a technical level and, boom, start to sell it and the buyers know it and pull back. there was no panic in yesterday's selling. nobody should sense that the market down 250 that there was this panicked selling. it was actually very methodical.

the bounceback today up and through resistance i think is healthy. >> brian, what about the investors who might have some of those holdings in pimco, retail or institutional and are looking elsewhere? i mean, so you laid out some of the risks here. what feels like the right thing, something to do now? >> well, most -- a lot of pimco funds held on behalf of clients and move in a herd and we saw some of the exchange traded pimco funds with heavy volume on down days and tells you the investors are getting out right away and reallocate the money and some were at prem yums and if you're in bonds. i don't think they're a great investment but some people feel they have to be there, look for a closed down bond fund at traded at a discount.

cef connect, i don't have a relationship with them, you can search for bond funds at a discount. search for with or without leverage and make a better decision. >> we are doing that, looking at the names. panel, thoughts here? >> i want to go back to what david farver today. gross goes or we all go. if he's a mad genius, controversial manager, some indication that could be the case, putting him in janus doesn't this happen all over again? >> right. >> isn't that the risk? >> right. >> kenny? >> i would agree, absolutely. and i'm not necessarily so sure that you're going to see all that money leave pimco and follow bill gross. i know everyone's talking about that today but i would -- agree with kevin. i'm not sure that you're not going to have a same situation appear at janus, the divisiveness of pimco.

>> that being said it sounds like a decision akin to a friend taking him in, of course. >> like the nfl. >> bill gross did a relationship with the ceo of janus and the fund is relatively small. >> i agree with you. i think that's the case. certainly not going to be the fund at pimco by any stretch and i think that's really it. it was like he provided a shelter for bill gross. >> guys, we'll leave it there for now. >> two big things to keep in mind. >> last word. >> it's a short-term thing and the money won't leave the system. this is really net-net over multi-month period. not a big deal for the financial markets. >> correct. >> you heard it here first. thank you both. have a great weekend, everybody. and a big move for the u.s. economy today, a big move for the stock market s. that a

coincidence? we'll talk to the chief economist for moody's and where the economy and market is heading. mark zandi is coming up. yes, bill gross jumping from pimco to janus funds. it's more intrigue than a pa ras coup and jane wells will break it down next. "hello. you can go ahead and put your bag right here."

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♪ music plays traveling can feel like one big mystery. you're never quite sure what is coming your way. but when you've got an entire company who knows that the fewest cancellations and the most on-time flights are nothing if we can't get your things there, too. it's no wonder more people choose delta than any other airline. welcome back. house of pimco could be a prime time soap opera. first the departure surprisingly as ceo and then addition of four

co-chief investment officers and then the return of an economist with the biggest bombshell today. founder bill gross leaving the firm. for more on the pimco problems, we go out to our jane wells in california. 2f5w >> you can't">- kelly, even in hollywood. pimco in newport beach. bill gross turned $200 into 10 grand at a table at vegas and today he decided to fold them at the company he created. >> legendary portfolio manager bill gross leaving pimco. >> reporter: a year ago who would have guessed but trouble began in january. >> resigning effective mid-march. >> reporter: the two men had a very public break-up. >> there's no clash of personalities here. we got along real well. >> drama at pimco back in the headlines tonight. >> reporter: investors didn't like it. >> pimco, you know, had a rough patch. >> reporter: former portfolio manager rehired as chief economist. >> did they beg you to come

back? >> i would not use the word beg at all. >> reporter: this summer, parent company continued to express support. >> is bill gross past the sell by date? >> bill is working hard on the recovery. >> reporter: just a week ago, bill gross weighed in on our own air about the fed. >> what would i do? considerable period of time, let's stop and evaluate the evidence. >> reporter: behind the scenes, aimportantly a resolt. the s.e.c. with with an invest into a pimco etf and then the shocker. bill gross would leave the company he created. >> this is stunning. >> and it was. pimco co-ceo hodge said in a statement the company is grateful for all that gross has done but they had, quote, fundamental differences how to take pimco forward. gross said it was time for him to focus on, quote, the purr aspects of portfolio management at a smaller firm. kelly? >> all right, jane.

he is not leaving the spotlight and leaving pimco. appreciate it. for more on what's really happening with bill gross and pimco, joining me now is dan freed from the street.com and contributor ron insana with the rest of the panel. dan, what happened here? >> well, i mean, bill gross is clearly just totally lost his mind. right? i mean, the guy couldn't get along with mohammed who's one of the easiest guys to get along with in the world. he's an egomaniac. 70 years old and now going to go work for a firm in denver that manages 20 billion in bonds. this is -- >> i can tell you're his first investor here s. there personal animosity? >> no. it's a public meltdown. he's doing, you know, poems to his dead cat. he's, you know, questioning the man in the mirror. he himself admits we've got a 30-year bull run in bonds that is over and now, you know, he doesn't know if he's the one

that is responsible for the great performance or if it's just that he picked the right market at the right time over the past 30 years. >> ron, maybe he is just being honest. >> listen. i mean, i know a lot of billionaire hedge fund managers that ask the same question. were we in the right place at the right time. they have a skill set that is conducive to delivery above average returns. i don't think bill is crazy or nuts. i think, listen, these things happen. founders oftentimes are forced out of the companies. bill at this for a long time. i have known him over two decades. he is one of the best bond investors in the history of the business but as even bill says, running a bond fund and a $2 trillion company are wildly different and although see and bill lasted longer than most any founder around and there are times you sell your company and you come to that point where you have a big disagreement with the folks you sold to. >> ron, but would you disagree with the dan describing him

personally? >> yeah. i have known bill for 25 years, and while we haven't spoken recently, yes. he is quirky in his writing and writes poems about his cats. writing these, you know, financial reports to your investors you have to do something to get their attention. >> is that what i need for performance? writing poems to dead cats? >> that's not the point at all. hardly. i mean, in terms of keeping the readers engaged is one thing. running the bond fund, the largest in the world, something that bill did away from investors and said hardest at work sitting silently in front of the screen and two different -- multiple parts of this job. i really don't think bill is crazy. maybe, look, people as they move on in their careers can get more difficult to work with. i know plenty of individuals in the investment world who are extremely difficult to work with but also quite successful. that's not unique. >> wait a minute. we are talking about bond investors here.

bond investors are conservative people. >> where did you get that idea? >> they manage portfolios for insurance companies. i mean, why take a risk on somebody like bill gross when you can put your money somewhere else? >> john? >> we have to remember the parent company is a german company and talk about conservative, you know, they're very conservative. they probably had it up to here with what they were hearing from the home base and said it's time to pull the plug. they also open themselves up to lawsuits if they have portfolio managers saying this guy is abrasive, belittling and not just mohammed now. you have five other pms saying we're going to quit so you have workplace problems and -- >> just a second. if i can. let's disabuse someone of the notion a bond fund is a boring, conservative investment. >> i don't think we said -- >> global -- >> the problem is that he sold -- not like he had a hedge fund and making interns go out. it's not like that. this is a -- >> i want to go on the record

about bonds. they're very, very sexy. >> especially making money. >> through the comparison of this morning and interested of the thoughts on this. larry ellie son's exit. a founder of his own company and he answered to himself and his board but a very seamless exit last week. a company that he had described as idiosyncratic and yet you put the building blocks in place for a seamless secession and something that didn't go according to plan. >> we have to go. in a word, ron, real quick? >> hell hath no fury like a bond king scorned. >> ceo ubris. >> thank you for being here. i suspect this didn't is last we'll be discussing this. still ahead, a week since alibaba went public. the giant stock up today following a rough patch. come monday, another big test.

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so the economy is growing. stocks are rallying and next guest isn't surprised. joining me now is mark zandi, the chief economist at moody's analytics. great to have you here and see you again. i just wonder in light of the fact of a really bad first quarter for the u.s. economy, really good second quarter, do you think we can count on sustained, strong growth from here now finally? >> yeah. i do. you know? i think the economy's been growing -- was growing about 2% per annum through most of the recovery. but growth jumped closer to 3% and i think that's the underlying rate of growth. so about 3%. i think that can be sustained, yes. >> so where does that leave us if we have growth that's finally sustain bring as you say moving in the right direction and

inflation is not really there. what do we do? how important is it if we don't get the inflation numbers moving up? >> well, that's -- i mean, i think it is interest. that allows for a lot of strong growth, a lot more jobs, lower unemployment. and so, if everything kind of hangs together and we stick to script, we should be back to full employment by the end of 2016 so two, two and a half years from now so, you know, with low inflation that gives us a lot of room, the federal reserve a lot of room to maneuver here. >> should it proceed as though things are proceeding according to plan and let the economy stand on its own or respond to the fact that it does have that mandate to get inflation up to what it has said is the goal of about 2%? >> well, i think everything is sticking to script, kelly. i think this is the growth rates to see. and i don't think they're going to change a thing. i think they're going to start

raising interest rates, short-term interest raits by mid next year and june and that is the script laid out to us. looks good for them. >> what about the u.s. dollar? we have been talking a lot on the program about that and the impact in's having on everything from lower oil prices to maybe u.s. investors looking overseas for real estate options. how much of an impact is that going to have here if this is the historic move laid out? >> well, you know, i think it's great news. as you point out it keeps oil prices commodity prices low and that's a boost to our economy. most of the dollar strength is against the euro on a, you know, a broad trade weighted basis against all currencies. the dollar's, you know, strong but it's well within the range that prevailed since you have to go back to the recession an we haven't seen a really big move on a broad traded weight basis and against the euro and europe

looking cheap and getting cheaper for american investors because the european economy obviously going in a different direction than our economy. >> is there anything you're worried about? >> you know, you know, it's clear that the fed's got a lot of work to do here and whether they can pull -- you know, my baseline world view is that they can interest rates to rise consistently with the improvement in the job market but that's easier said than done so, you know, that's the biggest risk in the near term, whether the fed can pull it off gracefully. they have the will, the tools to do it. they have to execute but in my mind that's the biggest threat. >> all right. mark zandi, your perspective this afternoon, much appreciated on a strong update for the markets. >> thank you. >> thank you. up next, alibaba's one-week anniversary of being a publicly traded company. eked out gains today closing at about 90 and change s. that a

bullish side for baba long term compared with other ipos in the early days? we'll discuss, stick around. in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

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starts at 6:30 a.m. - on the (vo) rush hounose.und here but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour. (announcer) at scottrade, we share your passion for trading. that's why we've built powerful technology to alert you to your next opportunity. because at scottrade, our passion is to power yours. investors gearing up to get in on the alibaba action, stock options go live for trading on monday. finishing the first full week of trading just under where it started on monday. 90.46 is where it closed today. for more on if this is a good sign for the company, let's

bring in andrew romans with brian hamilton. good to have you both here. so, andrew, what does this one tell you so far? early examples of facebook and twitter. is alibaba pointing towards more gains ahead? >> we believe it is. i mean, if you look at the small selloff, that's a small element if a broader decision making equation which is driving the value of alibaba. if you compare it to real estate, investors are interested in location, location, location. in my business of venture capital, we are looking at management, management, management market. the size of the e-commerce market in china just recently this year overtaken the size of the e-commerce market in the united states. so that's big. so we think that a company with that kind of dominant position in a market that big is going to have a good growth stock and not entered the u.s. market yet so

we a lot of room for growth. >> brian, has it won you over? >> really interesting. good points by andrew. i agree with everything except for one thing. i think it was terrific for the vc guys. great for the finance guys. but right now, where it's priced today, kelly, i'm worried about it. >> right. >> they went from -- bums me out. went from $60 to $90 overnight so i'm a little built worried of a bull market, rich valuations on the company long run. >> brian, you didn't believe their numbers in the first place with regard to some of the profit margin figures and saying you thought this was a sham. >> well -- >> let me jump in. >> not a sham. time-out, time-out. not a sham. look. they have a u.s. audit firm. my issue was not on the financials. it was on the governance and specifically today, i mean, this is where we sit. we've got good sales growth. i agree with andrew. we have a 44% net profit margin.

check. that's terrific. but you have a very, very high value in a bubble market. there's no doubt about it. great for the vc guys. great for the finance guys. but for the consuming public, i'm a little bit worried about where they stand today. >> both of you a question. >> hang on. bringing in kevin o'leary. >> cash flow positive or not, i couldn't wait until the option market finally there to hedge up my risk as an insider locked up. isn't that exactly when's going to happen next week? if i'm locked up far year on this thing trading at 35 times, i'm going to sell myself into a collar for sure. >> andrew? >> take a look at facebook. if you guys don't like the valuation of facebook, then you probably don't like the valuation of alibaba. if you look at the financial metrics like pe ratios, price to forward earnings, it's eerily similar to facebook. if you look at what happened

with facebook with its drop in price after the ipo, part of it was that the market didn't like the position on mobile. alibaba is a mobile first company. they've got 87% market share on mobile at home in china. and i think the market's going to reward them for that. >> yeah. >> but remember, andrew, wait a minute. we are way later in a bull market. all these babies look terrific in a baby market and cute but we're a lot further along in the market and as you mentioned, facebook went down so if you look at the relative values of these companies now compared to companies in the past, they're very high. and people just need to know this. >> not to mention, guys, this is not a good week for data around china either. you have the finance minister ruling out stimulus after $81pl week and the chinese economy could get softer going forward and alibaba being a play on china whether you believe it's a bull market here, they're going

to be susceptible to swings in the cycle. >> they have swings, too. >> they're not available to be an index because the way they're in the cayman and a second problem is facebook went down and now a market cap of 202 billion less than alibaba. so alibaba's 221 billion. facebook is 202 billion. is facebook -- i mean, is alibaba going to double to $108 a share and -- >> it takes -- >> the problem is -- >> we have to go. we have to -- we got to go. leave it there. >> $32 billion. what would you rather -- bet on to double? i think i take -- yeah. wrap. okay. >> andrew, thank you. appreciate it, brian, too. we'll try to pick it up as soon as we have more time. payoff to our million dollar homes competition with the college towns of reporters. we have jane wells and mary thompson facing off in the

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our reporters visited their college hometowns to find million dollar homes and you determined which home is the best bang for your buck. you do that going right now to cnbc.com/vote to cast your pick. the winner moves on. the loser winner moves on. the loser gets eliminated. the locations are not revealed until after we get a look. far from college dorm living, this grand custom home sits on 3 acheers of beautifully landscaped property. a circle driveway with a fountain, a three-car garage with a large deck. this home has it all. behind the massive double doors, almost 9,000 square feet of living space, complete about built-in book case and other high-end finishing. this gourmet kitchen, a granite countertop and lavish breakfast nook. seven bedrooms and two half baths. a massive on suite with a double vanity and a tub with a sky

light. the lower level has ample room for a reunion with your college friends, a wood-burning fire place, separate door and sliding doors. this can be yours for $999,900. this 90--year-old renovated spanish style home sits on a fifth of an acre where you have to fight on through traffic. it is just a short walk from some of the hippest shops in town. less than five miles from the most astonishing downtown renaissance ever. the house is just over 1,800 square feet and retains much of the original 1923 flavor. a quick student body right puts you in a kitchen with modern appliances though none made of us it can. four bedrooms, two paths. the house is big enough for a family. the garage is turned into a guest house, plenty of parking from tailgating six miles from the greatest university in the history of the world. for those that feel like a rebel without a cause, the view of the

most iconic observatory. for $995,000, this is your conquest. >> so it is mansion versus casa. it is up to you to select the winner. cnbc/.com. mary thompson went to notre dame so that home is in indiana. first, where do you think jane's home is? >> i know. i want to bow out of this one. the hawaiian shirt in the red color should be a hint as well as the conquest. >> any guesses, kevin, john? >> i'm thinking california. now, i'm thinking hawaii as a result of that shirt. >> what about the griffith observatory. >> she didn't say that. >> you gave it away. >> dolly, the location is? >> los angeles. >> she threw you off on purpose. that.

>> that was sneaky of you. >> the voting has the mansion at about 60% of the cost. >> who needs 9,000 square feet. >> i was thinking the same. i want to hear it from dolly. which one, please? >> i have to tell you, the people that were voting are not putting their money in it. there is no return. they don't care. they love the pictures. that's what they are voting on, heart and emotion. never do that in real estate. no emotion. >> you don't like that 9,000 square feet. >> you don't want to be in indiana? >> hard to get to. >> a lot of floods in indiana. >> good luck in the restaurant. we are going to go there. >> you are not renting that house to college kids. jane wells' house is petite, fabulous, walking distance to everything. it is cheap, has very low carry. >> empty nesters, all kinds of people could share it. have a family vacation. it is a fabulous house.

proof in the pudding, it sold above ask this week. that says it all. >> more insider for me. >> do you know how much above? >> i don't, no. i this i they ank they are wait to close. >> keeping with the theme de sure, we ha jur, mary thompson back in college. there she is. >> look at how koot. she is so beautiful. >> look at those banks. >> we have one of our jane wells. >> she is not a blonde. oh, my god. >> was she dating charles manson then. >> mr. wonderful. >> you are not going to get a restaurant reservation anywhere in california. >> which would you yobuy? >> the casa, for sure. >> dolly is swinging the vote

again. >> the voting is closed. the casa, 51%. >> egone, you ddolly, thank you. good to see you as always. really appreciate it. just how far with a college graduate go to land a lucrative internship at a start-up. one 19-year-old took her application to an e-commerce firm to new heights. we'll explain when we come right back. when change is in the air you see things in a whole new way. it's in this spirit that ing u.s. is becoming a new kind of company. one that helps you think differently about what's ahead, and what's possible when you get things organized. ing u.s. is now voya. changing the way you think of retirement.

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it's a tough job market out there. so tough this 19-year-old girl decided to film herself jumping out of a plane to show just how much she wants to work at australian start-up ahphatise. talk about taking things to new heights. that can't be cheap to do. >> the parachute didn't open. >> what is it with you? i am feeling frisky. >> this is just too much. >> it tells me she is smart. he sh is getting so much media from it.

somebody will hire her, if not the original firm. >> i wonder how much like that costs? >> a couple hundred dollars to jump out of a plane. >> i once tried that. i got up there. they opened the door and i would not go up out of the plane. it is not natural to jump out of a plane. >> it is not natural. >> i didn't do it. i said, i'm not doing it. i will pay you a fortune to leave me in this airplane. >> were you going tandem? >> it scared the you know what out of me when i saw the ground. >> that cob a big problem if people decide to at the last minute. >> i don't care. if you are a control freak and you go tandem, it is a problem. >> every once in a while, bad things happen. i don't want to be part of that statistic. >> a guy i went to college with broke his leg doing that. risk averse kevin o'leary. >> bonds are sexy. >> thank you all for being here. a lot on tap for next week. we are going to toss things over to ""fast money"" coming up

with melissa lee. hey, there, kelly. a lot of people talked about pym pimco and a lot said it was the bond market. what is the impact of bill groves leaving on the actual bond market and rates? we are going to tackle that question. >> huge question, important question. straight over to you guys. >> "fast money" starts right now after the nasdaq market. i'm melissa lee. our traders tonight are tim see more, brian kelly, pete najarian and guy nadalma. ending the day up 167 points after yesterday's violent selloff. the s&p seeing the best day since early august. the nasdaq soaring back with over a 1% gain. keep in mind, all three major averages logged their worst five-day performance in over eight weeks. pete, should we be setting up for more volatility ahead? >> i think we are going to see some swings. the volatility index, the fact that it got as high as it