headquarters in california, 11:00 a.m. on wall street, "squawk alley" is live. cup ♪ ♪ good tuesday morning. joining us jon fortt, kayla tausche, we're all back together like a family here at post nine. kayla, of course, the apple event yesterday in san francisco, jon in barcelona at the mobile world congress. a lot to talk about in tech but markets are the story of the morning. dow down 218, lost gains for 2015 on the dow and nasdaq, on the s&p and the nasdaq's worst day, lowest level since january 27th. joining us is jeff clinetop. good morning to you.

>> good to be here. >> a lot of people sort of parsing words here. is this a true sell-off on some of the fed worries and the dollar and so forth or more of a technical pullback? >> i think this is volatility, carl. a dip into negative territory on a year to date basis for the major indices, another first time this year we will see that. volatility is coming back. rate hikes this year, we have wide moves in commodity prices. the dollar political issues with greece and others this year. we will see this volatility. get used to it. >> any reason? i mean, buying a 90% down day has paid off. it's paid off for the better course of a year. is this time any different? >> no, i don't think any any different. we could see a bit more downside here before we bottom but i think we end the year higher. we at schwab believe thises which will be a year of gains for stocks. insulate yourself from volatility. buy the dips. i would increasingly look to asia as a res pit for some of this. you're seeing a stronger dollar pay off there, the trade data

looks good, more stimulus coming into play. that may be an area in your portfolio that may actually benefit from some of the turmoil we're seeing elsewhere. >> it's easy and it's tempting to look at a market and a tape like today and say, i need to make some changes in my portfolio. maybe i should be selling, maybe i should be invested in the dollar, but would you advise viewers and investors at home to just stay put and that days like today, are going to become more normal and you have to wait them out? >> that's well said. exactly. this is why you have an asset allocation, why we diversify and global exposure, even though all markets around the world are down today, some are more than others and certainly what we've seen this year is increasingly differences between the different regional markets. why you have that long-term asset allocation, when you want to make sure you're rebalanced back to. you're right, this is why you have that and this type of volatility what is you want to ride out. >> jeff, it's been a particularly bad year, rough

year, for some of the riskier stocks, gopro, down 38% so far this year, zulily down 50%. are there opportunities in stocks like those or some of these more volatile names would you stay away from them when you're looking at what the market is doing on a day like this. >> technology is a sector we like. valuations are a concern, equals volatility this year. we've seen that show up in many different places. so you do want to be cautious when you're paying up for some of these stocks, but still, the technology sector, one less exposed to the swings in commodity prices and i would say less generally priced sensitive and less of a risk of dollar increases, pricing out those products. i do think it's an area you want to take a look at but be cautious about the high flyers. >> s&p looked at the last 16 times or so that the fed has initiated a hike cycle. of those, 13 were pullback, four

corrections, three bear markets. >> i do think we'll see volatility associated with the fed hiking but if you look out six months, look out a year later generally markets are higher because the fed is usually hiking because the economy can take it. you know, one thing that's interesting, carl, is that every central bank that's hiked rates since the great recession, norway and the eurozone and australia and many others, did once home prices had returned to their prior fapeak. we're about 13% to the prior peak. parts of the economy not ready for hikes. that's why the volatility may persist this year. >> do you believe as some do that the fed will have to look past the bullish macro data here in the states and essentially become a global fed and -- with an eye overseas as well? >> that's a great point. we're not an isolated economy and three of the last four years, we've seen in the second quarter a dip in global economic activity. if that were to occur again certainly that would be something that would weigh heavily on the fed's decision.

>> we will learn more about that through the course of the year. good to see you. >> thanks for having me. >> joining us from schwab. >> switch gears and talk about apple which in a little over an hour from now, will hold its an shual shareholder meeting that comes one day after the company revealing a ton of new information on the apple watch. as well as a new mac book. josh lipton will be inside that meeting today and he joins us from cupertino with more. hey, josh. >> well, kayla, apple dominated the headlines yesterday with news about its watch. today, as ceo tim cook addresses shareholders at the company's annual meeting he is sure to highlight the launch of that new product. now, among the key takeaways we learned about the watch, battery life, 18 hours, the three models will range from $349 to $17,000. users can send texts, they can send e-mails, they can answer calls. the analyst at rbc say in their

opinion the watch lived up to expectations. they did think the battery life and the number of applications were a bit disappointing, but they still think apple will sell 20 million units in the first year. remember, apple watch will be available on april 24th. in less than an hour, cook will address shareholders. he'll answer questions. there will be a vote on six items of business, including the election of seven directors that's cook, al gore, bob iger, among others. this shareholder meeting will kick off at noon eastern. i'm told it's going to last about one hour. i'm going to be inside that meeting and bringing you headlines as they develop. carl, back to you. >> all right. josh, thank you very much. josh lipton. for more on apple's unveils including the much behind and long awaited apple watch let's bring in 9to5mac mark gurman who joins us on the phone. good to talk to you again. >> good to speak to you as well. >> any surprises as far as you were concerned? >> i don't think anything was

too surprising. the research given all the health hires and university partnerships they've been developing over the last six to 12 months. i thought the mac book was very impressive. i guess a little bit surprising is that they didn't have much more in store for the apple watch than was already known based on the website, marketing materials and the initial unveiling in september. >> yeah. is that a dynamic that stems from developer enthusiasm, health regulators, in washington? what do you think accounts for that? >> i think the research kit just goes back to apple wanting to offer comprehensive health and fitness solutions. they started with health kit and health app on the iphone in the past year and in september they're coming out with a watch in apple, and i think that this research kit is like a third leg of the stool for these initiatives. it shows they have the consumer side, the fitness side and then they have the whole research

back inside, which in the future, four or five years from now, it's all going to integrate together and they will be including their own consumer applications and hardware based on the research they're getting from the new research kit framework. >> this is a bit of a victory lap for you, mark. you nailed the mac book announcement. you had renderings of what that would look like long before everybody else. of course you had details on the apple watch as well. on the mac book in particular, i'm curious, apple's charging more for a laptop with a slower processor, fewer ports but a sharper display and, of course, the thinness. do you think this new plaque book will be the -- mac book will be the flagship design direction of lapp tops for apple going forward the next couple years. >> this is the direction they were going. they weren't ready to completely discontinue the thin light mac book era with that low price in favor of this mac book but two, three, four years from now you will see all the mac books start looking like this because they really wanted to keep that $899 price point but they probably

just couldn't hit it with this new technology because of all the research and development that goes into making the loxic boards and custom components integrated. >> speaking of price points, $69 for apple tv in a three month period of exclues stivety with the hbo stand alone service. what smoke signals do you get from apple about the future of apple tv and where it could continue innovating there? >> right. i think the $69 price point is that $30 drop is a big deal because it indicates they're trying to make room for something. trying to sell a lot of these apple tvs, trying to really use this as a marketing tool to really allow for customer discovery of these living room solutions. so i think it's a big deal in terms of getting the apple tv out there. it's going to [ inaudible ] a lot of sales at this price point. closer to the google chrome cast and set top boxes on the market, this is a big deal there. bigger is the hbo exclusivity deal because it represents apple

tv and these cable networks and the show providers have the technology to do a subscription service without the cable box and i think hbo is just the first of many and i think the overall solution that apple has in the works is just a bunch of different programs and apps that are on a not pay per view subscription but a weekly or monthly or yearly plans. i think this is a taste of what's to come, as cook hinted on stage yesterday. >> mark, you know the estimates on watch sales on unit sales for the year is a all over the map. the street has no idea. i know that's not your job. but do you think the promise of some of the health stuff, that truly monitors things in your blood, glucose levels and alcohol, when is that coming and how easy do you think it's going to be to get there? >> well in terms of estimates i think they're going to sell a bunch of the $349, $399 sport models because of the fitness aspect but in terms of the sensors, glucose, sweat, alcohol that you mentioned, apple has a

massive team under jeff williams who announced research kit yesterday, who is specifically just working on health-related senors. it's a 10, 20-person team. they're clearly working on the future of the sensors and they have been the last two, three years. i think the first version of the apple watch is really, really just a taste of the road map that's to come. they have a four, five, ten-year sensor road map and working towards those goals. >> going back to the tv for a moment, it does look like apple is laying the groundwork for something bigger. you mentioned a subscription service. do you think it's that versus a television? is a tv idea dead in the water at this point? could it be both? >> in terms of like a physical large tv screen type of set. >> yes. >> i don't think that that's currently in the works or currently the plan. i think the plan is to make a ground-breaking new set top box that changes the model of how people get tv. i think more of the service is back in model is where they're

headed instead of screen-based hardware. i think the next version of the apple tv will in terms of appearance will look really a lot like the current one. probably thinner, has a larger, more tactile remote control, but in terms of screen-based set i don't think that's happening in the near future. >> most important question, mark, are you going to get the watch? >> i think the stainless steel black on black is very cool. i hope so. >> okay. . april 24th we'll see how quickly that rolls around. thanks, mark. >> thank you so much. >> mark gurman of 9to5mac. when we come back still watching these markets. dow is down about 198 points. triple digits since the open. a lot more on some of the biggest movers in a moment. wikipedia, versus the u.s. government. why the website says the nsa is straining the backbone of democracy and did the cia try to break the security of the iphone and ipad. a closer look at those

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take a look at the map, awful lot of red today. obviously not a good session. the s&p down about 0.9 to 2060. let's switch gears for a moment. according to glenn greenwald's the intercept the cia has been conducting efforts to break the security of multiple apple products. eamon javers is live in

washington with more. eamon? >> john, we were where to start this morning. a lot of edward snowden fallout percolating in the media, starting with the piece in the intercept, glenn greenwald's publication. what they're saying is that based on documents they have, that cnbc has been unable to confirm, they say that the cia and the national security apparatus of the united states has spent years trying to crack into apple devices including ipads and iphones and that based on documents they've got out of a gathering called the jamboree in northern virginia, they say, the cia and other intelligence officers discussed among themselves ways to crack into those apple devices. that's going to get a lot of attention today, especially with all the apple news this week. i talked to a senior administration official about this today. let me give you their statement. it's kind of interesting. senior administration officials saying while we will not comment on the authenticity of these documents or the accuracy of these claims, the united states

government firmly supports the development and robust adoption of strong encryption. senior administration official going on to say, the president has called for a broad public conversation on these issues. now, that statement from that senior administration official is interesting because it's a little bit different from what the head of the fbi has been saying publicly. he's weary about encryption and where this goes from here. also, guys, another big story today we should talk about the head of wikipedia writing an op-ed in "the new york times" saying they are filing suit against the nsa and the department of justice alleging that wikipedia users rights were infringed upon by nsa spying. also a statement here now on that from a white house official. this from sean turner, the deputy press secretary of the white house saying, we will not comment op any specific matter before the court but we've been very clear about what constitutes a valid target of electronic surveillance. the act of inknock kwusly updating or reading an on-line

article would not cause someone to be subjected to electronic surveillance. a lot to chew over and the questions about the surveillance state and the nsa today. >> eamon, what i'm seeing about the greenwald intercept report seems to suggest the u.s. government was working on creating a version of x code that's apple's developer tools for software, not just for ios, for the iphone and ipad but os 10. is it clear at this point, maybe i'm asking too far in advance, information still coming in, were they trying to distribute a version of the tools that would allow them to eavesdrop on any program that was created with those not standard tools? >> yeah. it's not clear at all in the reporting we have on this is from the intercept but it seems clear that developer source code which apple puts out for people to develop apps with and other things, would be a vector by which u.s. intelligence and u.s. government hackers might try to find a way in to the apple

operating system and then from there, be able to manipulate somebody's iphone to listen to them, to watch what they're saying, what they're doing. what the u.s. government will tell you about this, though, is that all of this has to be subject to a fisa court approval and search warrant if it's a u.s. person and criminal matter. what the u.s. government will say about this is, look, yes, the spies do spy, but there are constraints and controls upon that. that's been the flashpoint of this snowed dean bait going back -- debate going back two years whether or not the controls are enough to sort of satisfy americans who are worried about their civil liberties. >> eamon javers in washington, thank you so much for that. we are getting breaking news and we will gee to sue herera at hq. >> thank you very much. we want to show you these dramatic pictures, the basic story here is that a tanker truck has overturned, spilling bio fuel on interstate 95. they've closed the southbound

lanes and pacically what this means is -- basically what this means in prince george county between baltimore and washington, d.c., where the spill occurred. it is creating complete havoc with traffic right now. they're going to have to clean it up. they will try to move the tanker at some point. as you can see it's flipped over, bio fuel leak. the southbound lanes are closed and probably the northbound lanes, there's going to be a lot of rubber necking, people trying to take a look and see what happened with that. but right now, it's a tanker truck, overturned as you can see, bio fuel spilling and they have closed the southbound lanes of interstate 95 just north of the beltway between baltimore and washington, d.c. so kayla, we're going to monitor that and bring you new developments. back to you. >> we appreciate it. thank so much, sue herera at headquarters. >> still keeping an eye on the markets. right now they're climbing off the lows but still the dow is down triple digits, down 19.

the s&p and nasdaq down 13rs as well. a lot about the apple watch but the company's exclusive deal is also worth watching. that being an exclusive deal with hbo. we'll tell you what it means for both of those stocks when "squawk alley" comes back. barbara just bought a bike. she wrote a tweet about it. you can't learn much from that. but take data from millions of tweets, combine that with your company's supply chain and sales data. apply ibm analytics and expertise, and all of a sudden, you can learn which bikes to build, what to make them from, where to sell them. because barbara and the world just told you how to build a better bike. there's a new way to work and it's made with ibm.

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let's stick with the markets this hour. stocks in the red since the open. the dow and s&p erasing their gains for the year and both of those averages dropping below their 50-day moving average which is important from a technical basis. basis poin bob is on the floor. >> most of the damage really was done in the first 15 minutes of trading. essentially we've been sideways since then. we're just off of the lows. take a look at the s&p 500. three to one, declining to advancing stocks. however i would note much more

volume is going to stocks on the downside than on the upside. this is a technical indicator we watch here which is called the trend or arms indicator and it's very elevated today. it's an interesting -- i think one of the reason that's happening high beta names, nasdaq, cyber security names, new tech names, are getting a little more action than usual and i think that's driving some of the volume we've seen here. i mentioned cyber security names like fireeye or netflix, groupon, twitter, the usual names are getting real play here. banks are down today because you get this old knee-jerk reaction when rates go down, bad for banks. it's an old story but we're seeing that play out today. i would note banks have been good this year. the kbe, the banks, etf, it's held up pretty well this year. you'll notice that nice rally that began in february. this is a basket of all the big banks. the reason that happened because yields on the 10-year have been

mostly up since february, put up the 10-year yield and there's a nice parallel there between net kb and 10-year yields because people see longer term rates rising perhaps steepening of the yield curve and instinctively started buying banks. the pattern playing out. overall it's been crummy start to march. remember, we were at historic highs at the end of february. take a look at the major indices for the month of march and it is interesting that utilities are the worst performer that we've seen here and, of course, those are concerns ha you're getting on the rate situation. the s&p down 2%. right now the curve here, the s&p mid-cap and russell 2,000 down 2%. nasdaq, because tech has been a slightly better outperformer doing a little better. carl, no tt a great start to th month. >> bob pisani. >> normally we have the european close, but because of the

daylight saving time they will close at 12:30 eastern not 11:30. catch simon hobbs with the close in the next hour and then back here on "squawk alley" in a couple of weeks. john? >> always a little confusing. let's talk hollywood. we talked a lot about apple's watch at the top of the hour, but its exclusive deal with hbo a big deal for both companies. julia boorstin is in l.a. to break it all down for us. >> that's absolutely right. hbo now a $15 app that's available without paying for a tv bundle will be available exclusively through apple tv for three months and designed to be a win/win for hbo and apple. hbo targeting the 10 million broadband only households and 70 million cable customers who don't have hbo, gets to market to apple's massive customer base and to tap into its customer service systems. by selling directly hbo gets a bigger cut of revenue than when selling through a tv provider. apple will take a cut from the monthly fees on average it takes about 30% from the apps

itselves. apple should also benefit from hbo's promotional push. this could help it sell more apple tvs which apple just slashed the price on by 30 bucks to $69. time warner moved higher on the news yesterday. apple closing lower. both companies are trading down today with this morning's sell-off. time warner's first direct to consumer offering is a key test not just for time warner but for the entire cable industry. the question is whether it will create incremental new frv internet only customers or cannibalize the cable bundle. morgan stanley prizes hbo's launch and says it won't hurt time warner, says he's watching whether other channels will follow suit which could drive cord cutting. when apple's exclusive expires in three months expect other streaming services like amazon and row cu to start selling hbo now but the exclusive does not cover cable providers and time warner is in talks with all of them. verizon and at&t to time warner

cable and cox talking about selling this hbo now service likely bundled with broadband. carl, we'll have to see if that happens. >> the reinvention of television. thank you very much. julia boorstin out in l.a. let's send it over to courtney reagan for a market flash. >> check in on target shares. according to an sec filing the retailer began notifying employees, 1700 of them, they will be losing their jobs as a part of that transformation plan announced march 3rd. as we previously reported target plans to eliminate several thousand positions over the next two years, concentrated at the minneapolis headquarters. target says it will incur $100 million in free tax costs as a reflection of the cuts it will be reflected in the first quarter earnings. target's goal is to make the operations more efficient removing layers of complexity the stock eased off the lows of the day. >> courtney, thank you very much. when we come back, ugly out there. a lot of major averages down 1%. some of today's biggest movers in a moment.

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good morning. i'm sue herera. here's your news update at this hour. nbc news has learned hundreds of worker i.d. badges are missing from atlanta's airport. the airport says the missing tags are a source of concern but they do not pose a significant security threat.

atlanta, though, is one of the nation's busiest airports and employs more than 60,000 workers. twitter has opened an office in hong kong. its first in the greater china region. twitter services, however, are blocked on mainland china. despite the band, many chinese companies use twitter to reach a global audience. aeg giving up plans to build a football stadium in los angeles. the company says it's no longer in discussions with the nfl or nfl team and will focus on other downtown development projects. prescription drug spending is up more than 13% from last year. according to express scripts, the biggest annual increase in over a decade. the company says new and expensive treatments for diabetes and cancer and hepatitis c fueled that jump. that's your cnbc news update this hour. back to "squawk alley." thanks for joining us this morning on "squawk alley." got our eyes on the markets, obviously. a sell-off, technical

correction, whatever you want to call it, it's red across the board. bertha coombs is there live to tell us what's moving and in which direction. >> hi, carl. we start off the morning with just two nasdaq 100 components in positive territory. now we've got about 10 or so. we have certainly come off of the lows. apple has come off of the lows after falling to the lowest level since february 11th, below $125 a share. apple right now is really the biggest draft down, responsible for about ten points of decline op the nasdaq 100 on the morning following its apple watch debut and ahead of its investor presentation today. among the big nasdaq gainers, laggards today, wynn, the continued concern about weakness in macau, weighing on the gaming stock. comcast, dish, some of the other media names today, they were

under pressure with the new deal announced with apple, change in landscape there. qualcomm and inindividual ya have been the two that have outperformed. qualcomm, of course, raising its dividend, also announcing a $15 billion buyback. this is increasingly a big part of tech names that pay dividends. so does nvidia on a b of a upgrade reaching a new high one of the few we continue to see fewer new highs these days when you get the washout days. also bucking the trend today, it's interesting the diet drugmakers, rbc out with a note, vivus said it's challenge by teva and others for a generic version of its diet drug. rbc doesn't believe they will see anything hitting the market for 18 months. they reaffirmed their rating on vee vus but said vivus should get a partner to market the drugs better.

all of its peers are looking fatter while the rest of the market is thinner. guys? >> yeah. health care, the best performing sector of the year, up 4%, year to date. bertha coombs at the nasdaq. meanwhile the dow down triple digits right now, just hanging out about a point below its 50-day moving average. s&p is negative by about a percent as well. jim is pnc asset management chief investment officer. jim, much of the decline today is being attributed to the strengthening dollar, further slide in oil. i'm wondering if you think today's trade is something we should get useded to as experts continue to say we will see the dollar strengthen toward parody with the euro. >> i think it is, sara, and i think that this volatility we went into the year thinking it would increase over the past two years, january, was certainly the case there, less so in february, but i think volatility this will be a year where we see sort of three yards and a cloud

of dust. it's going to be a grind it out year for u.s. equities. >> but at least in so far as this month's trade, jim, it's been good for m&a to have a little bit of a correction in prices. $80 billion in announced m&a in the first nine days of march. i'm just wondering if you think that you think we could see m&a continue overseas as some of the currencies start rebalancing. >> well, i think we will. certainly as you point out, the m&a trend continues in the u.s. and i think those valuations and companies looking for values to expand their business, so overseas, europe will be a good place for that, so m&a trend is here and it's here to stay for a while. >> but earnings, jim, when we think about next quarter's earnings, currency, currency volatility, was the main driver of weakness in fourth quarter earnings and i'm wondering if you think that companies have figured out how to hedge, how to

readjust their businesses so we won't see that outsized effect next quarter, if you think that's something we need to get used to as well? >> well, no doubt that that's the open question to what is the strength of the dollar going to mean for u.s. earnings and we're in that gap as we wait to see first quarter earnings come through. i do think that companies will be a little better positioned for it, hedged against it, but it will have an impact. we would look for domestically oriented companies in this environment but i do think that analysts have been tripping over each other to decrease their earnings estimates and will probably see some positive surprises, not only maybe not in the first quarter but as we balance out through the year as to what earnings will be, not quite as dire as consensus might suggest today. >> jim, the headline on the bottom of our screen says financials lead to sell-off, but there's an expectation that with possibly higher dividend payout

ratios, possibly the rate rise, could benefit them more than expected, what sector do you buy? do you buy the financials, health care? what do you buy? >> we would look again to those at least in the u.s., those more domestically oriented. consumer discress nary a positive, health care, as you point out and information technology would be the first places we would look. financials have had a pretty good run. we'll get the -- we still have the stress tests. last week we get the results of the c card tests. that will make that landscape clearer going forward. financials are certainly a place where you'll have some opportunities when you get these sell-offs. >> meanwhile, the nasdaq has been called, jim, the growth index as we watched the index hit 5,000 last week, albeit briefly. is that the only place you think we'll see growth or that could broadly return to the dow and s&p? >> certainly will return to the dow and s&p.

the u.s. economy is on strong footing. we see the improvement in employment. we'll continue to see a pick-up in wages. so at the moment, we're in this place where maybe good news for the economy might be bad news for the markets as the prospects for the fed increase in rates but a strong u.s. economy will give growth opportunities here as well and it won't be just in information technology. >> here we thought good news could be good news. finally. we'll have to wait for that. appreciate your time this morning. >> you bet. good to be with you. >> jim dunnigan from pnc. >> we'll keep an eye on the market stocks off very close to session lows. dow down 206 points. rick santelli, what are you watching today? >> you know, what i'm watching maybe doesn't sum up as much as what i'm feeling. and many traders on this floor are having the same feeling, kind of a queasy feeling. why is it exactly? where did it come from? how can we make it go away? all after the break. [ male announcer ] at northrop grumman,

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and military missions. we're constantly innovating to advance the front line in the cyber battle, wherever it takes us. that's the value of performance. northrop grumman. coming up, an activist speaks out to cnbc. mer ka da's mick gir is here with a campaign and will tell us what it's like to work with bill ackman. will the iwatch be a hit or a flop? former apple ceo john sculley will weigh in. tracking today's sell-off, of course, as well. all straight ahead on the half. we'll see you in about 15. >> all right. we'll be there. thanks, scott. meanwhile, iconic tech blog is closing down after 8 years as

one of the industry's most prominent tech blogs. several staffers tweeted about the blog shutting down and the founder wrote on monday, quote, gigaom is winding down assets now controlled by the company's lenders. not how you want the story of a company you founded to end. i got to know om a little bit when i started at business 2 0i po magazine in 2006 after he left. we take the voice of tech blogs for granted. the snashg, the authoritative voice about complicated topics. this is one of the guys that made that happen. >> is this a victim due to the fact there are a lot of tech blogs or something different? >> the business model of tech blogs has relied lately on conferences more than putting advertising around the context. ohm said there will be a time for postmortems later. it's not clear what led to the blog's demise. it's a very important enterprise that he started and a tragic end to it. thank him for doing it. >> somebody texted him for a

comment he wrote back, not now, dude. hopefulfully hear the story later on. rick santelli has the santelli exchange. hey, rick. >> hi, carl. thank you. this morning on "squawk box" a good discussion and i think many trading groups all around the water coolers are having very similar discussions but one point that may have been misinterpreted. let's roll the tape with michele caruso cabrera. >> normalization will be bumpy but i question whether the bumpiness is what's going to halt the normalization. >> now, that really is the issue. michele really nailed it. the idea that like the t.a.r.p. vote when things don't go well, the bureaucrats tend to take a step back and especially when it's the market having the hissy fit. however, even though i am of the frame of mind that michele may be right, if i was king for a day, i would tighten. i would raise rates.

even by a token amount for the following reasons. okay. because i think qe has created some very, very queasy ownership and you must add in, it isn't that only, it's 0 interest rate policy. what do i mean by queasy ownership. that was the point of the program. okay. if central banks buy up good financial assets and a lot of available liquidity, things aren't as good will get purchased and that would help the system find growth. i'm certainly not sure it turned out that way. we could debate that. one thing we can't debate now that the european banks are involved, japanese, chinese are going through issues there is a queasy feeling in the market. a lot of ownership in areas that wouldn't have been investors' first choices. as to raise rates there's going to be a lot of debate about that and i think that the timing couldn't have been worse. we are going, you know, against the current of other central banks and not that that's a bad thing but think about the first

failed t.a.r.p. vote the market reaction and what happens next. we have conditioned our leaders and especially the fed or the may temper tantrum take the markets and be a bit afraid of their activity. when going through withdraws it isn't easy now that we're going through a withdraw about normalization, i think it would be a huge mistake not to have some type of a token tightening. because for rates to go up here by the central bank in my opinion, ultimately and not necessarily the first move or the second move, forget those, look at the bigger picture, it would make growth go up, prices go up, it would make malinvestment go down, but maybe the most important issue is, it will give the central bank what it's really there for, to regain crisis and economic management. you can't have in this insane negative interest rate environment. back to you. snoor all right. rick santelli, thanks so much. rick in chicago. coming up more on the markets as stocks continue to slide. the dow and s&p giving up their

gains for the year. the dow close to session lows, down 231. and will the apple watch change wearables like the iphone changed the smartphone? a look at apple's big move for the watch industry. coming up next. if you're running a business, legalzoom has your back. over the last 10 years we've helped one million business owners get started. visit legalzoom today for the legal help you need to start and run your business. legalzoom. legal help is here. dentist appointment when my teeth are ready? ♪ can it tell the doctor how long you have to wear this thing? ♪ can it tell the flight attendant to please not wake me this time? ♪ the answer is yes, it can. so, the question your customers are really asking is, can your business deliver? i'm all about "free" travel, babe. that's what i do.

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purchase any new verizon wireless smartphone or tablet from comcast. visit comcast.com/wireless to learn more. welcome back. apple makie ing splash with yesterday's watch reveal. what impact could it have on the watch industry? could it do the same for wearables the iphone did for

smart phones. let's bring in brian who spent the last four years studying the watch industry. the big question here is, can this product cause a culture shift? there are a lot of risks these days that don't have a watch on them like they used to. >> this is the big question. right now we're sort of wondering is this category actually fully formed and real and what we know from studies, only about a quarter of teens are even wearing watches today and so this category generally has been unproven but when apple enters a category like this they prove it very clear and this is a war for real estate, you know, risk real estate. >> how much are teens spending on watches the quarter that have them? i bet it's nowhere near 350 bucks? >> it's a totally different market. you see the teen market in many of these is the infusion of the fashion brands that have happened in the last four or five years, but this is a very different market for not only what apple is targeting but the traditional swiss watch market.

>> bloomberg has a piece they talk to the coinventor of the swatch, who says he sees an ice age coming for the swiss watch industry. think that's overstating it? >> i think it might be. in my opinion these are not competitors. these are complements. going back to the '90s, really the swiss watch industry has completely shifted towards one of luxury, fashion, but it's also about infusing art and -- it's about craftsmanship and beauty into the watches. that's a very different value proposition than purely a tech proposition that comes from what we saw yesterday with the apple watch launch. >> ryan, with that craftsmanship often comes a collectible that can be passed down for generations. i got an e-mail from a viewer yesterday where he said i can't pass this down to my kids, can sni how do you justify spending in some cases $10,000 an up for a collectible when technology is going to change. it's inevitable? >> these are on very, very different innovation cycles.

if you think about it, yesterday we have the introduction of the apple watch. apple is thinking about its second generation, yet many of the high-end swiss watch producers, they're thinking about passing down your watch to your grandchildren but great grandchildren producing time pieces they believe are timeless. it's completely different. >> i guess people are already passing their iphones down to their kids, though. the issue is they're passing them down after a couple of years instead of a couple of decades. have there been other periods in history that you might have studied where watches fell out of fashion or at least time pieces in the way they had been imagined before and got reinvented? >> here's where it gets interesting. this is not the first time that the swiss watch industry has been presented with a technological shock. if you go back to the late '60s they invented the first quartz battery powered watches we know, but quite frankly, the japanese were able to make them much more cheaply, but they weren't very pretty so here you have in 1983,

the response which was a battery powered quartz watch the swatch watch that created new generation of watch makers. the swiss understood at this point if you could introduce people to the idea of wearing a watch, you would eventually graduate them up through multiple brands. many of those early collectors that were collecting swatches today they're wearing omegas, ubos, all the other types of watches and that's why i believe the apple watch is a good thing for the swiss watch industry. reintroducing the idea of having something on your wrist. >> and it's also maybe why apple has the addition that goes for 10,000 to $17,000 so that when people graduate up, maybe they graduate up to an apple watch. >> well, you know, this is an interesting thing because the fact is, is that if you're spending $10,000 on an apple watch, that's a very select consumer because the technology

itself is going to be rendered obsolete six months to a year, we know that. i think it's a unique consumer buying that. they're interested in being sort of a tech know, an early adopter you could say. not always the same person looking to produce a piece of art or craft that we would see in the traditional high-end watch industry. >> if this is a case study at hbs and you are the swiss watch industry how do you respond to apple's move? >> i think what you do is you embrace it because the fact is that having apple in this game, it provides new attention to the idea of wearing a watch. it's exciting. the swiss are competing on a totally different level in terms of luxury and craft. the fact is, is that this introduces watches back into the popular rhetoric. that's a good thing for everyone involved. particularly the swiss and quite frankly, apple's going to do well here, i believe. >> all right. ryan, with that important historical perspective on the watch industry and the apple watch, thanks so much for joining us.

>> you're welcome. >> as you can see, the market is down 243 on the dow, almost more than a percent on the s&p. we are about at session lows. we've talk about that in just a moment. ♪ [epic music] introducing aleve pm... the pm pain reliever. that dares to work all the way until... [birds chirping] the am. new aleve pm. it's the first to combine a safe sleep aid plus the 12 hour strength of aleve. for pain relief that can last all the way until morning. new aleve pm, for a better am.

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take a look at markets. this morning there's braodbased selling all across the major indices, dow down 243. urban outfitters only name that's up double digits, a nice gain, 10%, the comps a price to the upside, 6% going positive for the first time. if not for that we wouldn't have a strong upward story to tell today. >> retail names, 8.5% gain for the year so far. a lot of positive earnings reports from that space. of course that's outpacing what had been a positive year for the s&p that turned negative today. i just got a note from a trader about micron which is in focus today, watching $26 level from a technical perspective. micron had a stunning rise over the last two years but does appear to be retracing a little bit today. >> not just micron, other names, sea gate is down more than 3.5%, down more than 6.5% for the week.

also sandisk is down. so quite a few names. memory down 20% for the week and down another more than 4% today. >> qualcomm today in the red, despite the different hikes and buyback. back to headquarters, scott wapner and the half. all right. thanks so much. welcome to the halftime show. meet our starting lineup, stephen weiss the managing partner of short hills capital. josh brown the ceo of ritholtz wealth management and jon and pete najarian co-founders of optionmonster, kenny is on the floor of the new york stock exchange. our game plan today, it looks like this. an activist speaks for the first time on cnbc, mercado's mick mcguire is here live with a new campaign and so much more. the apple aftermath, ceo john sculley on the watch, the stock and whether a trillion dollar market cap is in the cards. we're also live