are watching this for more opportunity. >> locally moved the stock up during the program. pete, what about you? >> with all the bank stress tests, talking about bk wants a shake up out there. take some off, hold on to the name. >> okay. good stuff. thanks to all of you. have a great rest of the day, and power starts now. halftime is over, and "power lunch" and second half the trading day start right now. >> hi issue everybody, mandy and, i'm tyler, rally time on wall street, the bulls are moving. look at the dow. right now, the dow, well that cow is up 185 points at 17,820. mandy? >> look at the other indexes, nasdaq moving higher, up 27 points, s&p 500 up by 18 and the russell 2,000 small caps up by a gain of 1 %. there's a look at the action in the btfs, the diamond of the dow leading today.

>> let's look at shares of lumd ber liquidators, up 12.5% today, up more than $4, picking themselves up. stock up big after a bigger drop brought on by a "60 minutes" report questioning tox itty in the adhesives in the country's product. the founder completed a conference call a short time ago. details coming up and, of course, we look forward to the appearance tomorrow with scott on "halftime report." >> absolutely. straight to the trading action, and bob is on the floor of the new york stock exchange. despite retail sales or maybe because of them because of the implications? >> a little bit, yes. this was a surprise on the open. let me show you the s&p 500 right now because the pre-market trading did not indicate the kind of very strong open that we had, so all the sudden the s&p 500 put up the intraday on the

s&p, literally, 15 minute the rally today happened. see that? unusual there. let me tell you why i think it happened today. we were all surprised by it. number one, we did see, and i think this is the most important thing, the dollar stopped going up here. put up the full screen. a modest reversal in the dollar and knee-jerk reaction is to go out and buy the u.s. and sell europe. that's the important thing. you get the weak retail sales, and everybody realized we've froze our butts off in february. nobody went out. they gave a pass on that. third stock, dramatically oversold in the last few days we have to balance that. widely cited report this morning from isi that hedge funds are under exposed to the market and heavily shorted. there's short covering as well. this makes sense when you see there's not a lot of action in the preopen, and then boom as the market opened there's a lot of things going on. dollar index is the most important. look at this. this is a rocket ship, up 10 % this year 5% in a month.

extraordinary moves. the foreign currency market it's the biggest market in the world, and everybody's been called by surprise. we asked friends about this, when this goes this far this fast reversion to the mean and that's what i think will happen in the next few days. the dollar index is more than three standard deviations from a 50-day moving average, not to get technical, but it's so rare almost never happens. since 1986 only been in the range, this far way from the 50-day moving average 0.3 percent trading days. how weird is that? that's happening today. there's reversion to the mean so i think this is the main thing moving the markets right now. also, we got financials leading. remember, the street has been very underweighed financials recently passing the stress test, raising the dif tend and there's regional to the upside. back to you. >> thank you very much. the euro picked up a few cents

versus the dollar today after hitting a 12-year low yesterday. we are live in london with a look at three big sector opportunities in europe that derives from the weak euro. >> that's right, tyler. we focus on the negative impact of the stronger dollar but the other side of the story is a weaker euro, a big win for companies exporting overseas. there are three sectors, one, autos autos, moody's writes bmw and mercedes benz could benefit from prolonged weakness as the companies export to the u.s. retaining some of the production base in europe. second, the steel companies. analysts say a weaker euro could improve dynamics for steal in europe. one name to watch, tourism, another beneficiary as a weaker euro stronger dollar makes the euro trip to paris cheaper for foreigners. wells fargo analyst telling me that hotels with a stronger

european preens like marriott and hilton could benefit from an increase in travel which i can tell you many brits have been taking advantage of. i've been on my own trip zins moving to london. stepping back though, weaker euro is a factor expected to provide a boost to earnings and that's been one of the catalysts behind the rally in european stocks, and analysts say if the euro falls to parody with the dollar, there may be more room to run for european equities. that's something to watch in 2015. tyler? >> thank you very much seema, breaking news in the bond mark. 30-year bonds up. rick santelli tracking the action at the cme. what's demand like? do you have a agreed? >> well let's see. i'll give a hint. woof! it was a dog auction here. i'm surprised because of the demand for high quality financial assets especially high quality credit sovereigns,

but nonetheless, 13 billion reopened, 30, 29 year 11 month security. the auction yield? 2.681, trading 2.66 in the one issue market higher yield, lower price, that's where the rub was. definitely a lot of tailing going on there. the weakest bid to come here since november of 2013 2.18. then you move to directs, and 11.6 weakest since upof 2014 so there really is not a lot to say what's good with the auction other than it's the last auction in the threes and tens moves briskly. back to you. >> keep the dog analogies going. it was a rough auction. thank you, rick santelli. another big story this hour lumber liquidators, the flooring retail retailer, and the stock took a dive 40% since the controversial

"60 minutes" report on the topic, but it is up by over 10% today. the company holding a conference call to address claims today. scott cohen has been monitoring the call, and you are reporting on the impact of the home builders, but, scott, what have we heard? >> we're also not getting reaction, mandy. we just heard from the hedge fund manager and short seller who brought the story to "60 minutes," called the conference call part of the company's campaign of distractions and deception in what will mislead customers, investors, and regulators, but if the goal was to stanch the bleeding in the stock, it appears that mission was accomplished for now. as you've seen the call was underway at 10:00 eastern time and the stock took off, and remains up double digits in percentage terms, but there's more at stake than just today's stock price, and ceo rob lynch said that was the reason for

today's conference call. >> caller: our goal today is to reassure our customers and investors that we are indeed the company you can put your faith in. that you can continue to trust lumber liquidators to deliver a safe product itto our customers. >> to accomplish that goal the company's taking aim at the test method used by "60 minutes" even though the test labs followed the standard operating procedure laid out by the state of california, which regulated fer meld hide emissions. he pointed out the procedure is different than the ones required in the regulations and claims the procedures "60 minutes" used is notoriously inaccurate, and lynch insists they go above and beyond what the regulations require. nonetheless, the company admitted it's taken a financial hit from the story. net sales down more than 7% since the march 1st broadcast, a story the company says is the product of a campaign by short

sellers like whitney, and if trends hold, the company says that sales for the month of march could be down at much as 19 %, but the company is working hard now to reverse those trends. this morning's call part of the coordinated campaign by the company to turn things around. mandy? >> scott cohn thank you for that covering this from many angles. indeed diana, give us the home builders's side of the story. >> well we've been digging into how far the allegations bleed out to the home builders and who is using a lumber liquidators product. drhorton do not buy from lumber and only use lamb gnat flooring in a small percentage of the homes and the manufacturers they purchase assured in writing they are compliant with the environmental laws. we got the same thing from pulte, and lennar use some lamb gnats from china, but bought through mohawk and shaw and they

were assured in writing they meet the requirements. then we spoke to mohawk saying in a statement that all engineered hardwood and lamb nant flooring meet standards for emissions. armstrong is a big player and they say all requirements are met. now, while about half of all lamb nants in the u.s. come from china, a small percentage is used in renovations, do it yourself finishing off a basement, and it's only 10% of the business. it's the kind of thing you find in commercial buildings, again, it is a small part of the lumber liquidators. to read full statements, they are posted online at cnbc.com. back to you. >> diana, thank you very much. the chairman and founder sits on "fast half" tomorrow at noon

scott has a look ahead. we have done interviews like this where you have a ceo in the middle of a business problem. he says his tests show that his flooring meet the standard of california, and cbs says they do not. how do you get them -- what do you expect to do tomorrow? >> you have to get beyond into the minutia of one test versus the other and figure out if, in fact, as alleged, there is a higher level of formaldehyde in this gentleman's product relative to competitors and other products, and if so why? by virtue of any test that is used we have not heard publicly from mr. sullivan since included in the taped "60 minutes" piece. he was a general contractor who started this company only in 1993. it's a young business. he started it by buying access pieces of wood from companies,

reselling, and then it grows into a big business known as lumber liquidators. you can imagine over the last couple weeks what happened is incredibly personal to him. >> yes. >> i want to ask him about what kind of damage he thinks has been done to the brand and whether it's irreversible. >> that's really the question here. i believe diana said it was the flooring is a small part of the revenue, correct? relatively small. but the damage to the company is far beyond just that product. >> sure. >> because the name has been dragged through the mud whether appropriately or not. >> look come out with a megaphone and say our product is safe our product is safe. "60 minutes" told what appears to be a different story and alleged serious issue that is got a lot of viewership. >> you bet. >> reversing that tide and whatever opinion continues to surround the company, not just the stock. the stock's still down what

30% or so since the day after the "60 minute" piece aired. in one respect, yes, it's a stock story, but it's a company story. it's a brand equity story. it is a total brand story for a guy who founded this company, again, only back in 1993, and now he's sort of fighting for its collective life right? >> that's right. it does not overstate it at all to say it's a company in the fight of its life. since march 1st this stock has been moving up and down and mostly down and he'll be here tomorrow with you on friday the 13th. let that not be an oman for him, i suspect. >> he was not on the call today. just makes it all the more interesting we'll speak with mr. sullivan tomorrow. we'll ask about why he was not on the call. >> yep. >> and what sort of message he has for investors, and to home buyers and the public whether they have his product in the home or not. >> everybody's talking about the company and story for a couple weeks. scot we'll see it tomorrow. next hour the man who conducted one of the tests on lumber's

products getting his reaction to the conference call. that is coming up. meantime dom? >> watching share inging the charter communications spiking up on a bloomberg report that the company is in talks to acquire brighthouse networks, a privately held provider of cable services for 2.5 million cable subscribers, sixth largest provider in the country commenting, quote, we have no agreement with anyone regarding any future plans. still, this operation here could be valued at as much as $12 million based on some estimates, so charter shares react to the news. back to you. >> they are. thank you very much for that. the dow is currently up by 200 points wiped out the year today losses as well as the s&p, but straight ahead, why the world's second largest auto maker cannot get ahead in the united states. phil lebeau what's going on? >> reporter: mandy, we're

talking about this and we came over with optimism from volkswagen volkswagen. the question is when will they debt it in order in the united states, the second largest auto mark in the world. their thoughts on where the u.s. for vw when "power lunch" returns. hello. i am technology that is changing investing forever. i am a fully automated investment advisory service. i can help you choose the right portfolio. monitor it. and even rebalance it.

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summit materials up 13 %, the cement maker made 22.2 shares, 18 bucks a piece, and summit itself sold all the shares in the offering, and those shares are higher a smaller cap company sill a big ipo today for the market. back to you. >> dom, thank you very much. voke volkswagen cannot get traction in the united states. why? the answers lie with phil lebeau in berlin. phil? >> reporter: hi, tyler, we came here for volkswagen's annual meeting outlining success over the last year which was substantial, and where they take the company in the next year likely to being the largest auto maker in the world. look at the growth in volkswagen volkswagen's annual global sales under the ceo going back to 2007. this is remarkable when you consider how big this company has become in terms of global sales going from just over 6 million vehicles in --

>> all right obviously, we lost phil's audio there telling the story of the remarkable sale surge from 6.2 million to 10 million at volkswagen. we'll be right back to connect again with phil lebeau in berlin berlin. stay with us. in new york state, we're reinventing how we do business so businesses can reinvent the world. from pharmaceuticals to 3d prototyping, biotech to clean energy. whether your business is moving, expanding or just getting started... only new york offers you zero taxes for 10 years with startup ny business incubators that partner companies with universities, and venture capital funding for high growth industries. see how new york can grow your business and create jobs. visit ny.gov/business

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at ally bank no branches equals great rates. it's a fact. kind of like mute buttons equal danger. ...that sound good? not being on this phone call sounds good. it's not muted. was that you jason? it was geoffrey! it was jason. it could've been brenda. welcome back to power lunch, we have news for "star wars"

fans annual shareholder meeting going on the ceo announcing details of the timing and names of upcoming "star wars" films, saying the first would be on characters and events outside the traditional "star wars" saga. the first title is "rogue 1," skeds yuled for december 2016 and the "star wars" episode 8 is in theaters 20 17. between now and 2017 three films, and the next one is december 18th of this year. that's the next star wars and announced that that the trailer for that film that film in december has been viewed more than 150 million times, so clearly, a lot of excitement for the upcoming star wars films, and a tidbit about the parks revealed in the annual shareholder meeting, revealing that more than 10 million guests have used that high-tech my

magic plus wristband. a lot of success there. back to you. >> julia, thank you. well we told you before about the man behind one of the biggest ponzi schemes in california's history. here's andrea day with a i mean -- crime and punishment update. >> this scheme baht him 20 years behind bars but what about millions lost by hundreds of victims? listen to this. >> he does not have any any remorse. he's a sociopath. >> talking about this guy. prosecutors say he single handedly pulled off one of the largest frauds in the history of california. >> he stole over $230 million from nearly 200 victims. >> he says he told investors that his latex glove businesses were booming and promised 22% of the action. assistant u.s. attorney eastern district of california mike beckweth. >> they were registered

businesses, but what he sold was a lie. >> that lie was that he had government contracts worth hundreds of millions to sell gloves to veterans hospitals. >> he had, at most, roughly $25,000 worth of government contracts. >> u.s. attorney ben wagner. >> he stored inventory, the gloves ready for shipment. >> he gave them financial statements, but they were all fake. >> it was old-fashioned table top make it up cut and paes. >> the phoney paperwork was not just for investors, but he sent it into the irs. >> he would over pay income taxes. >> why would anyone want to over pay the irs millions of dollars? >> showed the tax returns to the victims, look look look at all the income i had, i paid all these taxes. >> and it worked. hundreds of investors jumped in. >> he relentless aggressive targeted whoever he thought was

vulnerable. >> after 12 years, it would come crashing down. >> he was getting more and more desperate, trying to get bigger an bigger investors in to cover all of the people that he owed. >> that's what he said one investor tipped off authorities. >> it's amazing that an enterprise that was this lucrative that ran for this long and was this fraudulent was really all in the hands of one man. >> he was recently ordered by a federal judge to pay back nearly $109 million in restitution. only time will tell just how much of that the victims actually see. now, according to the attorney prosecutors have exaggerated the amount of the fraud by tens of millions of dollars. back to you. >> andrea day, thank you. big news four names in the by yo tech sector up 15% in the last month. who are they? how to play it plus, more on today's big move. the boards here dow up 200

points at 17,829 now wiped out all the year to date losses. the s&p is in a similar situation. the nasdaq is moving by 30 points right now. know e that the nasdaq remained positive for the year through the latest sell offs. the dollar is down today. stocks are moving higher. we're continuing to follow this here on "power lunch" and much more in two minute's time. now is a good time to get the ball rolling. medicare only covers about 80% of part b medical costs. the rest is up to you. that's where aarp medicare supplement insurance plans insured by unitedhealthcare insurance company, come in. like all standardized medicare supplement insurance plans they could help save you in out-of-pocket medical costs. taking informed steps really makes a difference later. that's what it means to go long™. call now and request this free decision guide and explore the range of aarp medicare supplement plans. all plans like these let you choose

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hello, everyone this is your cnbc news update this hour. financial services announced that commerce bank will pay it $ $.45 penalty for violates u.s. sanctions against iran and sudan. william flynn granted parole 25 years after he gun down the husband of his instructor and lover, pamela smart. the 41-year-old was paroled on his birthday. smart, convicted of being an accomplice to the murder is severing a life sentence without parole. a bus carrying 16 members of the indiana bowling team and coaching staff crashed this morning in southern indiana, 20

are injured, and it's not exactly clear at this time what caused the accident. household net worth rose by $1.5 trillion in the fourth quarter to a record 83 trillion that's according to the fed. the gains were driven by a surging real estate market and for more on that, go to cnbc.com. coming up, african-american le-- aaron levie on at 3:00 p.m. eastern. back to you. thank you, sue, gold is closing now and breaking its eight session slide as the dollar retreats from the 12 year high. gold up slightly, 1.50 for one troy ounce. silver copper, palladium, and platinum all moving higher. ty? >> thank you very much. the bond market rick santelli is tracking the action at the cme. >> hi,ty ler. tyty tyler.

the last did not go well. you see that in the marketplace. look at intraday. the two-day chart, definitely notice that the high side yields that were bucking up two and three quarters opening up to december 1st, you see this is 2.75 last year key tops above that, and this is exactly where traders expect the market to have issues and, endeed it does. now, comparison value charts are interesting. look at this one. one month chart, you have two lines, the euro versus the dollar, and the s&p 500. any questions? weak retail sales, but the euro versus dollar, stock market up, and the dollar, a 20 year chart, boy, look at the right side even the dollar index deserves a one daybreak. that's the move i don't think ends on a one-daybreak. back to you. >> thank you very much, rick santelli santelli. move from what's happening in bonds and currencies over to what's happening in the stock market. the dow, the nasdaq and s&p

giving us a rally today, gain of 185 for the dow, off the highs, but nonetheless, a gain by the dow and nasdaq today would mean they both indexes avoid their first three day losing streak in nearly two monthings. let's get back to today's trading action bob is on the floor of the new york stock exchange and bertha is following the moves. what's changed? >> not a lot. rick is right. we have a 30 yield auction disappointment and bonds moving up. the story of the day, s&p 500, all action occurred in 20 minutes, a surprise to a lot of people. i agree with rick, dollar reversal reversal stocks are oversold as well. this reporting retail sales surprised everyone but everyone looked at the internet sales. they are up month over month and year over year nice gain and everybody say, oh everybody stayed home and shopped on the internet. if march sales are disappointing, then we have a

problem. right now, there's a patch. you see the retail stocks today. they are all to the upside very few down here. you got best buy, home depot, target, everyone moving up now. retailers held up all year. look at the xrt, retail stocks exchange traded fund. we're at a new high. we're just shy of the xrt. as you can see, no dramatic drop so far, just moving sighways a bit. finally, the best story of the day, active management lags. dow jones indexes putting out a fascinating report looking at large cap fund managers among others how they performed against the s&p 500. last year 86% of large cap managers under performed, and in the last five years, 88% undereveryoneunder underperformed. ten neryears, 8 2. spider is index to the s&p 500. another strong indication

indexing for the average person and you know as well as i do there are some fund managers who out perform consistency, but they are exceedingly rare. you find one, stick with them, but otherwise indexesing works. >> so important for us and those listening as well, bob, that i believe ty has an interview on that topic in a couple minute's time. out to the nasdaq and what is happening in your patch? >> well the indexes here not performing as well. particularly, the composite and the biggest etf that a lot of people follow. the qqqs, that's the nasdaq 100 etf. it's the small caps today that are doing well. the problem in big cap land it's intel saying its sales will be well below expectations. the problem they say is weak pcs and cite the dollar, but really it's the weak pcs carrying over to the rest of tech in particular. it's intel partner, microsoft

today is weak. microsoft and intel together are wiping out the gains that we're seeing from apple being up. chips are weak as a result of intel's warnings today. as bob noted today, it's the consumer stocks today that are doing well, which you would think is counter intuitive after the disappointing february number on retail sales. children's place actually on a down beat look, but its earnings in line and company says it's going to close stores, raising the dividends responding to an activist investment push. tyler? >> thank you very much. stocks rallying after two days of losses where the market basically erased gains for the year certainly with respect to the dow. is the surge in volatileity good for active managers as bob reported? a note from s&p shows 86% of large cap fund managers under performed their bench mark. the s&p 500 over a one year period, and similar numbers in

excess of four, five, and ten years. joining us is the equity strategist at wells fargo, and curt kus tard. ladies and gentlemen, welcome. i'll get to the views of the market now and where we are in the bull market but, gina and kurt, i want both your thoughts on where active management fits in the portfolios of individual investors. gina, should index funds be your core holding? >> you know i think it depends on the structure of the market. clearly, it's been a difficult market for active management in five years. there's structural reasons for that. look how the market traded the difference tweempb the top performing and bond performing sector defined as dispersion has been at historic lows. as a matter of fact, averaged lowest level for five years in the last 40. there's been limited opportunities for active managers to add to performance.

i think that will change as we go forward, what we usually have seen is dispersion rises when the fed starts to increase interest rates. it creates more opportunity for adding value in a managed portfolio, and so i think that will change as we go forward, but a lot depends on the fed. remember, we've been in an abnormal environment for the last six years. maybe the last ten. >> gina says the current environment is going to be at least marginally more favorable to active managers to exploit opportunities they see. look back to the ten year numbers there, the under performance, in excess of 80%, you would have to say -- i remember at those times, saying well active managers said well wait until we're in down markets. that's where the active managers show their stuff. those numbers do not show that at all. >> yeah i know. i think the environment we're in is unusual, and i think she's

right from that perspective. look at the sample period highlighted. over half has been in post crisis mode where the world is dominated by macroevents and monetary policies and reactions to that. that said information dispersal, the internet efficiency of getting information made large cap market place more competitive, and it gets harder and harder to find good managers in the marketplace. >> gina broad thoughts about the market from where we are now. how do you think that u.s. stocks will react in the face of what we expect is going to be a tightening fed? >> yeah. i think it's going to be choppy in the short run. i mean, clearly, when the employment number came out last friday and chances for fed funds increase in june went up fairly dramatically, that impacted the equity market to the downside. as we continue to price in prospects for tighter interest rates in the second half of the

year the market will be choppy however, i think that's going to continue to be a buying opportunity so investors should continue to aloelocate more to equities. once we're over the first rate hike, we'll start to see earnings revisions turn into positive territory. estimates are too low into the second half of the year and they are not reflecting what are fairly solid economic signals we're getting. >> let me bring kurt in for a final thought. she says it's a time for opportunity, maybe to add to your equity positions. we had a gust on yesterday saying in light of what he sees in the market it's the time to underweight equities and move if you're a 60% equity holding, take it down to 50 or 45%. where are you on that? >> well i think it all depends on your risk profile. i mean i agree with gina that the market place is likely to be choppy going forward. the fed does a poor job discerning the difference

between rates and whether they are trying to slow the economy. if you're risk averse investor this is the time to take risk off the table. that said, you know over the long haul we expect equities deliver positive return. >> folk thank you very much. appreciate the answers. >> thank you. >> go to powerlunch .cnbc.com to see what they think of apples and interest rates, the two hot topics right now, and that's powerlunch.cnbc.com. a private equity investor with a $31 billion portfolio of global companies that have cross border and cross currency businesses, so naturally, what happens with the dollar, the euro euro, or any rate action by central banks? that impacts his investments. welcome to "power lunch," mark great to see you there. you have a large portfolio, and they all are cross border cross currency businesses. to what degree are they finding

pronounced foreign exchange moves disruptive? >> so i think they are highly disruptive to actually plan a business. this instance has different dynamics. part of the question is where are your revenues and where are your costs? we have businesses that have costs in dollars, and if you're cost -- your costs are in dollars or exploiting to europe or japan, for instance, your products are becoming a lot less competitive, and i think you're going to see that ripple through the economy, particularly for large market caps because 45% of the sales of the largest companies come from overseas. >> so, mark how are they handling that challenge? are there any particular companies in your portfolio which spoke out to you and said this is going to be difficult for us? >> yes. i think you have one of two choices, right? if your costs are in a currency

that's held up your choice is to raise prices, speaking to whether or not what the elasticity of demand is for the product. as i raise my prices how much will demand go away? also, your competitors. what currencies are their costs if they go up with you? the other choice is to say you don't think this is going to be the circumstances for a long period of time, and you're going to take your margins down in order to hold your share. each company will react to this in a different way. we're just a few months into it and it's a hard choice. >> it is a hard choice mark. i just want to finish on the topic of bubbles because i was reading some of your commentary and you mentioned you believe there are some lurking bubbles, but you don't go into specifics. where exactly? >> so what we're looking for are dislocations. the markets have been driven over the last ten years by the

flees of capital, so with a quantitative easing program where there's a lot of liquidity in the markets, real interest rates near zero, the money's god to go somewhere, and it's going into the stock market into real estate, and the fact is it drives values up dramatically. sitting here where we sit today, we know the fed has to tighten, and when they do that multiples come down. so as ininvestor, you're in a precarious place. you're sitting here saying if i buy a company, and i think i'm going to sell it three to four years from now, it's likely that multiples will be lowered, and and it's hard tor a good rate of return. >> just to pin you down mark -- >> what you're looking for -- >> to pin you down, stock market and real estate are lurking bubbles? already bubbles? >> well i think they are very highly priced. i don't think the word i used was bubbles. i think as interest rates go up there's going to be a

correction. i don't expect that over the next 12 to 18 months because we don't think the fed will start to tight p all that much. we think its flexibility is highly limited by what's going on in the currency markets and if we start to ratchet u.s. interest rates up the dollar increases more and you're going to see pain in terms of the slow down in the u.s. economy from exports. >> okay. so bottom line, don't imagine a scenario of an aggressive fed. let's hope not. mark, thank you for joining us in chicago. back to you. apache a shale oil producer reported a loss slashed spending stock down 36% in six months. that's a difficult situation for a new ceo to step into. that person apache ceo, john chrisman, is live in the second hour of "power". come back.

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world's rich snatched up $5 p billion in art with american and chinese buyers leading the charge. the work sold at auction including this triple elvis silk screen for 80 million last year. very nice. looks good on your wall, ty. >> i like that elvis. time for power house, world's famous space needle seattle. report mcdonald of lakein company with us. check out the states, median sale price is $420,000, inventory just 7,000 properties listed on the market and they last an average of 42 days about six weeks. first listing, bob, 1756 northwest 57th street, unit 7 $300,000, and this is the part of the week where i grown. taxes of $2,000. that's a year. two bedrooms, two and a half

baths. >> it's beautiful. built in 1986. it's a two story copndo with a walk score of 97. there's a rooftop deck there and other spaces for entertaining, summer barbecues and views all over the city from the roof deck in the cop doe. a great buy. >> what is a walk score? >> walk score means how close is to routes restaurants, caves, bars, things like that how walkable. >> 8022 ninth avenue seattle. it is listed at $675,000 taxes, 4800 for four bedrooms 2400 square feet. where is this? why do we like it? >> well it's in the whittier heights part, a quiet street, a 19 29 tudor with a blend of modern and old world charm. updated kitchen, stainless steel appliances, lovely, refinished

hardwood floors, trim on the win does, and many decks and large yard for entertaining. it's a good blend. it's in the right part of the city and it's a classic seattle. beautiful. >> nice sort of old style fixtures with the subway tile in the kitchen. power house of the week 3225 west 56th street 1.5 million, taxes there is 7700 a year. don't say i'm angry. i'm not, five bedrooms three and a half bathrooms, 4500 square feet. that's a lovely house. >> it is. it's a bargain. four master suites with in-southeast bathrooms, built in 1947 and in 2014, they did a studs down remodel, down to the studs and rebuilt the home. there's high dronic heat in the flooring of the house. that's how it's heated. there's box beam ceilings views over the seattle skyline, and

over downtown ballard, and the seattle market now is unbelievable, it's the market to be in. it's an excellent opportunity in the sunset hill part. >> i love the views from that kitchen and great room robert thank you very much. robert mcdonald with us showing us what's for sale in seattle. i know you think we've had a tough winter, but a town in italy got more snow than boston had in january and february combined. in one day. that's coming up. ♪ at mfs, we believe in the power of active management. every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. which leads to better decisions for our clients. it's a uniquely collaborative approach you won't find anywhere else. put our global active management expertise to work for you. mfs. there is no expertise without collaboration.

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purchase any new verizon wireless smartphone or tablet from comcast. visit comcast.com/wireless to learn more. no birdies or eagles on this golf course. what about gators? look at the size of that guy in crawing around the pipes golf club in florida, sunning himself, surprising golfers, a photo of the reptile have gone viral, and some people are questioning -- including yours truly, whether it's real. residents in the area say, yes, the gators there are that big. he's just out for a day on the golf course. >> he looks like a cast member from jurrasic park. he would make some nice boots. first, relearned while lumber

liquidators is in hot water, top builders confirmed with hus they do not buy products from the company and their floor products meet all requirements. next we find the new york department of financial services ordered bank to pay 1 preponderate 45 billion fine. they are required to determine nate all employees who engaged in said violations. and, finally, proof that the arts bubble of not even close to popping in 2014. in fact; last year the dealers saw a 7% jump from the year prior to 53 billion in sales. if you missed the big stories in the last hour go to powerlunch.cbnc.com for all kinds of stuff. >> absolutely. dow jones indicates that 86% of big cap fund managers trailed behind the benchmark s&p 500 last year. where do you stand? that's the question. here's what you said. i avoid active managers 34%.

i manage my own index fund, 44 %. i'm not sure what that he means, whether that just means you invest or create one, and i trust my manager, 22%. mandy? >> only 22%? big news for star wars fans details on the future of the series when the new movies are out and more. that's in two minute's time. 40% of the streetlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors that were just totally pitch black. those things had to change. we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen.

at the time that the bankruptcy filing was done, the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. people can see better when they're out doing their tasks, young people are moving back in town the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back. opportunities aren't always obvious. sometimes they just drop 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.

the next hour why a historical milestone may be negative for apple stock. the strongest sector stock market and the surprise city benefitting from it and a small cap stock that one analyst says could rise 50% and become thee new force in tv ratings, but i have to say, mandy, i'm incredibly disappointed with you. >> why? >> when they showed the gator, you should have been in australia, we call that a pet. >> funny you said that i said i don't think i've seen a gator or crock that big even in australia. even in australia. >> just for the folks back home and paul hogan, say that's not a gator. this is a gator thp.

you call that a gator? okay. we look forward to it. thank you, brian. let's get back to l.a. now where we are getting new information on the star wars series and highly anticipated sequel from the disney shareholders meeting. >> just announced they are working on "frozen 2," no details on the sequel other than olaf is in it. we have to take this as no surprise that disney's looking to expand the franchise after setting a new record as the biggest animated film of all time. another big franchise at disney's annual shareholder meeting right now is star wars. the ceo kicked off the meeting with news about three upcoming star wars film saying the teaser trailer for episode 7 opening december 18th viewed 150 million times. he gave a release date for episode 8, may 26th, 20 17.

e hi nounse announced the first spinoff for december 16th, 2016, the first stand alone film explaining the characters beyond the saga. that starts filming this summer. back over to you. >> just when i thought we put elsa to bed, all the million kids running around. >> money to be made. >> more coming. >> it's just the beginning. >> oh, no. >> that's all for the first hour of "power" handing it over to brian for hour number two. about a 1% gain for the s&p and dow. >> not a bad day. thank you very much. it is 2:00 on wall street. 1:00 in texas. i'm brian sullivan and melissa lee is at the nasdaq. welcome to the second hour. dow is up nicely. we are seeing over 200 point gain for the dow, disney and goldman sachs the stars. gold little changed, but, folks oil is at a new low of 47 a

barrel. let's start there. we lead with a big guest. the new ceo of apache we are joined live with him in houston. kate? >> hey, brian, thank you so much. a pleasure to be here in houston with john, not even 60 days into the job. thank you for sitting with us. not only your first interview as ceo, but first television interview live ever right? >> that is correct. thank you for coming. >> thank you for being herement let's get down to it. we have another weak day for crude with both brent and ti trading $37 range on the ti side. you and your predecessor talk about how drilling especially in the basin here in texas, where you are a huge operator is economic at $50. can you talk us through that? it seems hard to believe. >> well i mean, actually kate, it's a function of not that we

don't have economic inventory, but it's cash flow. cash flow is reduced significantly from late last year when oil prices were at a hundred dollars to where it is today, but we have a lot of economic wells and moved quickly to adjust cost structure. >> talk to us about that. within the s&p, you have the most dramatic cap x cuts i believe 60% drop year over year 66% in north america, yet production is going to be flat. talk us through aggressive spending cut, but also why would production remain flat and not down because this seems to be an issue industry wide continued rise in production. >> well, i mean, we've been able to, first of all, we do not have a lot of leases we have to keep rigs running to keep. we don't have a lot of long term contracts, and the best hedge was to reduce activity and our cost structure, which we've gone to work on aggressively. so that's the reason being. when you look at our portfolio, we got a lot of conventional assets and in the flows that helps decline rate so it's less

than some of the you know some of the pure unconventional players. >> you said on the first earnings call as ceo february 12 the goal was to get from 91 rigs the recent peak last fall to 27 by the end of the february. how did you do on that? did you encounter problems on the way? >> not at all. we're ahead of schedule. we'll be in the 17 range here in the next couple days. >> so from 91 to 17 in a matter of four months. >> that's correct. >> is it difficult to lay off rigs to that degree and ramp up rigs in a short period of time? >> we knew coming into the fall update in november november 20th for investors, and we knew at that point i was going to go from 90 into the 60 range. obviously, we had price drop after thanksgiving, and at that point, went to work aggressively and have been able to adjust quickly. >> what about your outlook going forward? i mean do you have a view where we will be in a quarter or two or by the end of the year?

we heard variance of opinions trader antihall is bullish, thinking we're bottoming out, tillerson took a measured view suggesting maybe we're in the relatively low price, $50 environment for a while, and they are preparing for that. where do you fall in all that? >> well i mean, number one, everyone agrees there's going to be a recovery. i've been less focused on what's the shape of the recovery whether it's me you, or elongated you, get the cost structure down market to where we are today, and then we're in a position to ramp up at the time of the recovery. >> so you're not worried about the price points now just want cost structure piece correct? >> correct. that's what i can control right now. >> a ma crow policy question. you came from washington where you were with about a dozen of your peers talking to lawmakers in d.c. lifting the ban on crude oil exports. how likely is that to happen, and how productive were the conversations yesterday? >> well, in terms of likely to happen, i don't ever want to

handicap politics, but in terms of the discussions were good. i think they recognized the issues and see the benefits, actually to america, to the consumers, and so forth, and soing you know when you look at the differential now, there's $9 between brent and wti. that plays to our strength because half of the crude oil is priced off of brent so we benefit, and that shows the benefits of the portfolio, but there is a discount, and lifting the ban puts american crude more on a level playing field with, you know global crude. >> okay. brian sullivan has a question. brian? >> thank you very much, kate john, thank you for coming on the program. a quick question. you said to kate you expect a recovery but why? as we've shown the viewers the average dollar adjusted price of oil over the last 25 years is $48. right now, we're not down. we're actually on the 25-year average. why are you so confident that oil prices are going to recover?

>> well i mean, i think when you look at just you know, overall supply and demand we have an overhang right now, but you know once demand growth returns, and it will in the future, you know we will be able to grow supply and be in a good environment. >> because supply goes down or demand is up? there's no sign of the latter. >> brian, we're having trouble with audio. can you re-ask? >> because you think supply is going to go down or demand is going to go up or some combination of both? >> i think right now you got an overhang on the supply which is going to put more short term pressure on the u.s. and storage, but long term demand will, you know resume the mo rat growth rate we've seen. >> john i think we have to wrap up in a second but let me ask a final question. your naming of ceo on january 20th was a surprise to the

industry and market. long time ceo stepping down on the day you ascended. why the surprise announcement rather than a better telegraphed ceo transition? >> well i mean, i think it's something the board and steve had been planning an contemplating for quite some time. it was one of the things that was kept under wraps, but i think it was the appropriate time. we have taken the steps with our lng under contract and with the focusing the ship back to north america that it was a good point, you know for steve to turn the switch and hand reigns over. >> well, we have enjoined talking to you. thank you so much thank you for having us in houston. brian, back to you. >> all right, thank you very much. great, see you back here safely melissa? a big mover here shares of box are down 14% here following the pop on the ipo date back in january. what went wrong, josh? >> well melissa, there was a lot of confusion about what

exactly this street of looking for when it came to box's earnings. in fact it was the very first thing ceo aaron levie announced on last night's call. >> a number of news reports and quoted consensus mid gap etfs relied on an incorrect share count. >> he says the actual consensus estimatefuls a loss of 1.99. in this case box's results were better than expected. bottom line, when i talked to analysts that cover box, they say the stock selloff today has nothing to do with that q 4 number, but it was the guidance they say, that is sending investors running for cover. companies forecasting revenue growth of about 30% for fiscal year 2016 and that is a big slow down from the 74% growth rate that the company enjoyed in its last fiscal year. he says the growth rate is slowing because box is just a bigger, more mature company.

he urges investors to concentrate on other metrics as well like the performance, and the contracts, box is down today, but up 25 % since the ipo, and the company is moving past online storage. it has to compete with giants like microsoft and google and concentrating on offering products tailored for specific industries such as health care. when i asked whether box is back to growing at the 50% clip, he had a note of optimism saying there's a lot of tail winds in the business. back to you. >> thank you so much. with us now is cnbc contributor, herb greenberg. this is interesting because this is a case of the ceo saying you know what? take a look at these things forget about the fact that our revenue forecast is going to be severely lower than our growth rate the previous year. look at these metrics, clients signed, and look at this estimate.

>> no. you take a look at what the company report was. don't go over here when you should be looking over there. in this case, you know my partner, don and i at specific square research, we went through this thing. we put out a report monday with a warning here and this came out yesterday with disappointment. i'll tell you the exact same things we showed as concerns are continued as concerns, only worse. look at things like billings, deferred revenues other aspects, saying look ag the cash, cash is 5 little better than it was. no, it's not better because of operations but because you sold more stock in the ipo than people expected. take a look at what this business is. i have to tell you something. when we decided to look at the company, you know we screen for a lot of companies. this one was off the baseline to my partner who has seen so many of these that we felt compelled to put it out. even now he's said you know ten minutes ago, said i found another statistic here one i don't want to use on air until

we talk to the company, but something that we have no idea how they are going to get to the numbers they are trying to get the street to. >> all right. we should note the box ceo is coming up on "closing bell" at 3:30 p.m. eastern time. that will be interesting. >> yeah. herb changing gears, apple is part of the 4% club meaning it makes up more than 4% of the s&p 500. we have a pro-story on powerlunch.cnbc.com saying it could be a negative because others in the club could not keep that level for very long. ge made it the longest, but just for 15 months. what do you think of that? is there something to it because everybody already owns the stock? >> 15 minutes, and i thought maybe 15 minutes. i think, look i'm not going to be pinned here on whether somebody -- a producer asked if it will be the first trillion dollar company.

if any company will do it apple will do it but you do read where there's only so far you can go. what's apple have left in it to really drive the moe moan tum? unless the market itself has yet another big, you know just explosive gain where the momentum is just behind all the name, and apple is still one of those names. the of course obviously, is higher than it was, but the fact i'm here saying well you know it could is what i've been wrong on apple in the past is probably a sign of something that i don't want to concede to but i think that -- i think it's hit that point where it's just -- it's just, you know the watch -- i don't think anyone think the watch will do it. that would be the surprise. if after the next holiday season, we find out the watch was the biggest, you know seller, not just of the season, but perhaps one of the hottest products out there, which many people don't believe that to be the case. >> you successfully dodged our questions, herb greenberg, congratulations

congratulations. >> thank you very much. >> you did not allow yourself get boxed in. don't roll your eyes at me. i can see the screen. >> i did, sorry. >> check out the story, herb see you later. setting the table for the rest of power lunch today, intel is slammed, why? a plan who says lumber liquidators seems to be confused. that's probably the best thing he'll say in a small cap stock that one analyst says could go up 50%, and take over the tv ratings business. we're back with that name coming up.

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intel lowered its revenue forecast the reason? slumping pc sales. let's get to the research analyst, doug, great to have you with us. >> great to be here. >> intel has been an underperformer, down 15 %, today it comes out and sort of confesses. is now the time to get in the stock now that everything is out on the table, and for those looking for beta this would be the answer given underperformance? >> there's no doubt that the stock is looking more attractive dou off the high. the stock topped out at $37, and now trading at $31, people want to kick the tires. what keeps people away from jumping too quickly is we really don't have an update how the company views full year yet. we have to wait for a month.

>> what can intel do at this point? in your most recent note after the quarter, you say that in your view the company is unwisely changing or spending aggressively in mobile initiatives. people want to spend on mobile because of the growth area, but you say they are chasing it in. >> yeah. the mobile market is interesting for intel because it puts a tarnish on the business and their inability to get into that market. the truth is though it's just not really a powerful profit market for the company or will be at any time in the future as far as i can tell. what i'd like to see them continue to spend is on the server side pushing general purpose computer functionality into the data center supporting the internet of things. it's all in the connectivity all the data all the wearables that we have, all create data. they have to go into data centers. that's where the company's best opportunity is. >> doug leaving it there. thank you for the time. appreciate it. >> thanks for having me.

>> brian? >> all right, melissa, thank you. financials feeling 5 lot of love today, the stress test proving not stressful, but are the banks worth your hard money, america? stock picks ahead. plus -- >> i get paid for this. ♪ ♪ what it takes to be a food stylist coming up on "power lunch."

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leading today's rally after acing latest round of stress tests, morgan stanley, citi up nicely today. in fact, every single bank in the s&p financial sector is higher other than one of the bank of america. let us bring in our banking analyst, and senior research a.m.ist, evercore isi. two names you like are discover and capital one financial. both names are down a little not much but down year to date. why do you like them? why haven't they participated more in the recent rally? >> i think, well the reason we like them is you know with low unemployment and generally low charge offs in the credit card space, we like the prospects of capital one and discover. they are both 15% discount to

the current fair value, and if you believe that the consumers coming back with low unemployment finally getting wage growth here the consumer's going to spend again, and we think that's going to be through use of their cards. now, is it going to be to the extent they did before the crisis? obviously not, but definitely i think that capital one and discover participate in that rally. >> all right. maybe time will tell. glen, also now to you. morgan stanley is up 5.3% right now. i know you like the big asset managers like jpmorgan and citi. do you like morgan stanley also and if people don't own it now with the kind of run it's had today and recently, is it too late to buy it? >> well like is an interesting question. i like the company a lot. they are doing good things. i do not recommend the stock right now. i think it can get in the high 30s, but take a pause. that's a valuation comment. they changed the business mix to the liking of both investors and

the regulators and they got treated very very well on this exam on terms of what they can allow to capital. that's why the big jump up today. >> yeah. now, make the bold case quickly on jpm and citi. >> sure. both cheap stocks. both in the grand scheme of things have okay and getting better capital return. jp morgan runs a phenomenal set of businesses. they make it in the range of 22 billion and above a year. that's going to be rising and that's low nine multiple on those numbers, and, by the way, only four companies in the united states, i think, make more money than jpmorgan to give you the size of the franchise and the profitability in a time when there's no interest rates and no real loan growth. i do think that's on the upswing. rates move up. there's a beneficiary, and they are growing. >> okay. glen, thank you. last question dan, bank of america, i mentioned the only one down today in the financial sector, let's forget about one

day. do you believe bank of america will raise its dividends sooner than later? >> it -- obviously, they have to pass the approval for -- with the fed, so i think they will be able to raise their dividend later this year and i, you know clearly, they have been through this process before and they, obviously, know what to do to get their deficiencies rectified, so, yes i think they'll raise dividends later. >> a pleasure guys thank you very much. appreciate it. >> thank you. >> overall market update dow at session highs, up 211 points every company in the dow, multinational, a lot of dollar exposure, and the dow is up the most of any major index. that dollar exposure clearly crushes the dow today. it is thursday. that means it is the day before friday. it also means it is time for our fun recuring series featuring

people with very cool jobs. today? it's all about food. ♪ ♪ >> i'm nir adar, and i'm paid to be a food artist. i was made this tower 48 inches tall from real ice scream 168 scoops. for the idea i was asked to address the idea in the united states, could be big mac between two pieces of glass and stepped on it. i basically created a kaleidoscope piece of art. it's deliciously disgusting using burgers, hot dogs pizza, et cetera et cetera these are perfect shape, make a whole series of it. using oils eggs forks, put it in front of the camera without any digital retouching. it's fun to do.

the eggs was, obviously, the most challenging. the show invited me to make this, and my idea was to make 40 foot long wall with cake, icing, and 1500 spoons protruding, each with a strawberry. the idea was person pay the money, eat the strawberry dip it in a chocolate at the bottom of the wall and leaving a void signifying a passage of a person while celebrating a moment of joy. it was amazing. i'm the luckiest person in the world. e get paid every day to do what i really love to do. >> he does get paid for that but no word if the pay is just peanuts. he styles food for tv commercials, magazine and art shows. to find out how much food is needed for one perfect shot or a wall full of icing, go to powerlunch.cnbc.com. dom has a market flash.

>> from food to toys fun and games, mattel stock is up 5% moving up steadily all session long, snapping the six day losing streak. the stock has been rising to this point, 5% now. the stock at multiyear low, prior to today, a six day losing streak perhaps helping matters upside 10% of the shares are sold short, so short covering, brian, very much a possible factor for the move higher. back to you. >> thank you very much. liquid lumber lumber liquid dayers moving back. where was the big move we expected in gas prices? more "power" after this break.

♪ at mfs, we believe in the power of active management. every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. which leads to better decisions for our clients. it's a uniquely collaborative approach you won't find anywhere else. put our global active management expertise to work for you. mfs. there is no expertise without collaboration. ♪ grind virtually any kind of food waste into an unending source of electrical power for a city? when emerson takes up the challenge it's never been done before simply becomes consider it solved. emerson.

hello, everybody, i'm sue herera. military officials confirm now they have located the site where a helicopter crashed during a training mission off the florida coast tuesday night. seven marines and four army soldiers killed. the mission transferring into recovery and accident investigation. coke koeca-cola chief executive earned 22.2 million in 2014 a 23% rise from the year before. they limited executive pay after being criticized by investors, including warren buffet. according to automotive news gm is cutting power train warranty for the 2016 model because the offer was not a strong enough selling point. the five year 100,000 mile coverage is reduced to five years, and 60,000 miles.

actor and comedian will ferrell is at the spring training home, attempting to play in five spring training games in connection with major league's baseball project to raise cancer awareness and funds. the equipment used to be auctioned off for cancer research. he's a nice guy. that's the cnbc news update at this hour. back to you. >> playing for the world series favorites this year the los angeles angels of anaheim. thank you very much. a build in inventory crude hits a one month low. let's get the closing number. >> good afternoon, that's right, crude settled moments ago, look to be about $47, but down a dollar on the day. what traders are talking about right now, and provided some short term support to the market this morning is the conflict in iraq, a little worried about the oil fields there, and they definitely are monitoring the situation, but you're right, the

supply numbers definitely pushed oil down today. i want to highlight what the eia said about crude stocks overall, 8 million barrels over the level we were a year ago, rough 90% over the five year average, staggering numbers. you asked the ceo of apache about the supply-demand balance. we are oversupplied. unless the demand equation side of things changes, we're going to continue to stay that way, and it's going to take time to work through this. also, short term weakness on the dollar, general consensus is that we're probably going to go higher but because we rose so far so fast you may catch a little break here. so that added pressure to the crude trade as well. back to you. >> jackie quickly, looks like we are going to end on the lows of the day, correct? that's not a good thing. >> absolutely, you're right, that is not a good thing, and traders said to me they are willing to reverse their opinion about this bottom situation, bottom fishing, if we did close under $48. we did it today. closer to 37 47, so that is very

significant significant. >> thank you very much. litately, you heard whether the stronger dollar hurts or helps stocks, and by debate i mean me and larry kudlow and everyone else. germany. check out the dax, their version of the dow, up 23 % in three months like byron's victory yesterday in the champions league. soccer reference. up 20% at the same time and weaker euro is helping the index. by the way, the dollar is down versus the euro and the dow, though, is up highs of the day for the big multinational corporations. what are the cfos saying about this and how other currency moves impact their business? let's bring in sarah eisen to tell us why the muttswhy the multinationals are slammed today or not. >> exactly, brian. the question now is how will the super strong dollar impact corporate earnings?

investors are worried about it as evidenced in the stocks over the last few day, and for good reason because here at cnbc, we polled the cfo councils on how they are dealing with this historic surge. everyone we asked is feeling it. 70% of them say it's negative. actually 23% say, in fact it's positive. likely those that are domestic and don't have to worry about overseas sales like homebuilders or tobacco companies or others that are u.s. focused. we asked them when policymakers should intervene. check it out. some say it's on congress, the fed, but actually most of the cfos say neither should be involved. we asked predictions for parody. cfos expect it but very few expect it in the next few weeks in march, but that the euro hits one to one with the dollar in the second quarter. some are saying the third quarter. and some say it won't happen in 2015 at all. we should note here that they are proving with missed earnings

and hedges companies are not exactly the best forecasters of currency moves skoo when it comes to the list of headaches now, we took a poll of the cfos. it is all over the map. it is the dollar. it is the eurozone. they cited weakening demand psycher attacks, emerging markets as the major reasons. only a few said kurp sis were at the top of the list of worries right now. again, brian, this time a dollar strength is different than some of the other periods that the cfos lived through because of the speed and size of the move. it's predicting to be a lot more painful for them. >> all right. sara, thank you very much. >> you're welcome. >> what about the impact of the dollar strength on the retailers because they operate all over the world, it hits them in different ways we are here to explain. courtney? >> that's right. on the manufacturing side american retailers, source good overseas could see lower corpss but a lot of those con tracks are in dollars, so the retailers do not save money.

plus, retailers can still take a hit when selling the goods in markets with weaker currencies. on the sales side it's more expensive for foreign tourists to buy merchandise in the u.s. impacting higher end retailers more leading to recent cautions. coach executives, the stronger dollar on international tourist trends impact sales and costs, but not enough to alter annual guidance. ralph lauren executives noted sales are lower, especially those from russia specifically and the middle east due to the stronger dollar and elevated political tensions. neiman marcus said business is not dependent on international sumpls, there's slow down of bra brazilian shoppers not enough for an impact. ugg maker said the biggest drag in the recent quarter was the dropoff in foreign tourism in new york las vegas, san francisco, and hawaii. associate bank svp and

investment officer says the u.s. consumer earning and buying in dollars is a significant tail wind helping to offset the drop into spending. brian? >> thank you very much. retail sales were disappointing february falling 6%. that was worse than expected but weren't lower gas prices supposed to help retailers be all that and a bag of chips? here with us cnbc retailer i understand the story on currency conversion conversion, but we're in net importer. if i'm a maker of clothes making my stuff overseas particularly in asia isn't there also a benefit to a stronger dollar? >> there is. you have purchasing power, however, unfortunately, a lot of these companies not only have big tourism exposure in the united states so thaez chinese and russians that are big spenders are not coming here but going to europe. a lot of the u.s. retailers have some exposure in europe but not enough to make up for the drain of that tourism.

>> okay. if i make a hundred million shirts a year okay? i get to save, now, 30 cents per shirt. that's a giant savings. we're going to say that the cost of goods of sells overseas mitigates that? seems like that would overweigh the sales because you're -- 100% of the shirts made overseas to 10% of the sales hurt by the dollar. >> depends how exposed you are and dpepds what you are selling. yes, for the apparel guys it will be a benefit, but for a lot of luxury guys it won't be a benefit for tiffany. they'll get a tourism hit. they talked about it. we heard ralph lauren talk about it, a slew of companies talked about it. depends who you are. >> interesting. one of the trends pointed out this morning is aeropostal went down, and now it's back in a big way. many of the teen retailers are doing well lately. why? >> i rephrase that. i say that less bad is the new

good. so and if -- >> blue and black is the new white and gold. >> less bad is the new good in the teen space. you've seen aeropostale come back, but down 40 % in a year. they brought back the former ceo from 2010 was that was a different era. different issues. it's fast fashion kicking the booty of teen retailers, and they have to learn how to shorten lead times, keep up, and reinvent themselves and cost cutting is just not going to be sustainable to get these stores moving in the right direction. >> luxury ones as well. appreciate that. on deck lumber liquidators, the company defending itself and products. we're going to speak with one of the testers whose lab was used in the "60 minute" piece that tanked the stock. plus you think you had a bad winter? look what 8 feet of snowfall in less than a day can do to a

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president of the hardwood plywood and veneer association, trade group of north american companies like mohawk and anderson, and he tested samples for cbs, and, kip, before we get into the meat of why you are here i want to also make our viewers know that you do testing for mostly u.s. manufacturered products. i can guarantee youlumber says in response they are outside of america made goods. is that accurate? >> that's a totally false -- >> it's not a statement, i'm heading off what i expect to be their response. >> no i know but you can't sling mud at somebody that's been in the testing business in formaldehyde since 1982. the test methods now in place incorporated into the california resources board regulation, they were developed here in a

consortium with other testing laboratories. we're actually certified by the u.s. department of housing and urban development to certify products to their formaldehyde standards, and since inception of the rule on formaldehyde, we are a designated third party certificate agency for california to enforce their rules. >> okay. so bottom line is you do not have ax to grind against lumber liquidators. >> absolutely not. >> we got that out of the way. get to the meat. you were interviewed question president 60 minutes," did not make the time piece. what were the results of your studies? >> well first of all, i think the "60 minutes" to their credit, they took a lot of samples. they got a lot of material and both material made for lumber liquidators in u.s. manufacturing facilities. they split the samples, not just our lab but another labs

involved in testing as well. there's two things to be the take away from the tests. number one, the u.s. manufacturered products passed. the stuff taken out of the the big boxes, the home depot and lowe's, it passed. everything that was made in china with the exception of one sample, they all failed and some. them significantly and miserably, and our results were not unique. it was common amongst all the testing laboratories. >> so we got the ceo of lumber liquidators saying their products are safe their products are compliant, and, in fact the ceo, on cnbc tomorrow as a matter of fact on "fast mun halftime report," there's the tease, no relation to tom sullivan, but i have to clear it up, there's confusion. on one hand 60 minutes' report and then lumber liquidators and investers and homeowners who have their products wonder what's the conclusion? what is? >> well i -- i think the conclusion is we're mixing

apples and oranges. the california area resources board standard and epa standard based on carb numbers is a product emissions standard for components of these products, wood panels that go into fabricated products. lumber liquidators and lobbyists have been absolutely adamant in wanting fabricators like themselves to be exempt from the regulatory requirements of the other board manufacturers like my members who make hardwood plywood, and other associations that represent the particle board in the mdm manufacturers, the regulated products. they wanted basically was outside the regulatory regime where they did not have to test. all they had to say was scout's honor, this is a certified product. well, the scout's honor system i think, to cbs's credit said that system is not working. >> kip, is the bottom line that there's a difference between

passing certification and being safe? is that what you're saying? some samples could pass carb standards but not safe to have in your home? >> right. that's outside of my -- i mean, i'm not a doctor. i'm not, you know all i know is the regulation and where i think lumber liquidators has a real issue is their boxes were stamped that they were carb compliant compliant, carb 2. well, regulations are clear, the underlying panels have to meet the standard. i think the most probably damning interview in the whole piece was the chinese supplier to them who basically said this box is compliant, this one is not. they are stamp carb 2, this do you want? expensive one or the cheap one? i heard this morning that basically that supplier has not changed his ways that basically you can get the same deal from them because it's a wild west in china.

it's all about whatever you want. >> u.s. manufacturers of hard words, and veneer et cetera do you expect because you said you got nothing against lumber liquidators, but do you expect based on your clientele and groups in your trade association that lumber liquidators could make the decision to make all manufacturing back to the united states? >> that would be great. i mean, we've had, in my membership, we had six mills closed permanently because of unfair competition from chinese producers. in fact, for flooring -- >> kip, let's get right to it then. your organization promotes the interest of the north american hardwood manufacturers, and now you're saying china is the wild west. i'm curious, in terms of your industry, to give us better perspective, has it been the case that manufacturing has largely moved to china, and so therefore, it's in the industry's best interest to promote manufacturing here in

the united states possibly by saying manufacturing in china is unsafe? >> well i'm not getting into the safety issue. i'm going to say if there's a regulatory standard and they do not comply with it and in the course of the last eight years, they have gone from 5% market share to 50% market share in flooring, hardwood, and plywood with no -- >> you're losing out because you say they are not living up to the regulatory standards? >> well, they are not living up to the standard because they come in cheaper, and they gained market share because they are cheaper. there's an antidumping duty against flooring that addresses i believe lumber liquidators has made a filing with the s.e.c. that they have exposure for rec troe retroactive exposure. >> the ceo is going to be on cnbc tomorrow. he's probably going to say that the products are safe.

if he says our products are safe and comply yaptiant, do you think he's lying? >> i think what he needs to say is my products complied with the card rule because they were stamped that they were complying with the card rule and the issue is that they are not. you have issues with how accurate the labeling is. these are imports covered by the lacy act both with regard to the label, if it's card 2, that become as lacy act and it's also known for illegal fiber and lumber liquidators -- >> i'm not familiar with the lacy act. many of our viewers melissa probably is. can you tell me what that is? i do not know. >> it's a federal statute that's been around for 100 years that designates certain things can never be imported to the united states. it started with things like elephant ivory. about six years ago they added

illegally logged wood. and lumber liquidators has notified the s.e.c. in a filing to their shareholders that they are under a potential criminal investigation for having bought illegal wood from china into the united states. >> lumber liquidators did have their offices raided in september of 2013. >> yeah. this is sort of a separate issue. >> no. it was by immigrations and customs. i think if i hear you correctly, the point you're trying to make is, that investigation or at least that sort of office search whatever you want to call it may have indicated that there is some concern that lumber liquidators could be importing wood or using wood which may then violate -- could be put on the same level as african ivory. >> exactly. so you've got federal statutes in place. we have laws in place. the reason that american manufacturers comply with the

law, one, we're a country full of lawyers and we're also here and we've got to comply with the law. i think the way the fabricator exemption was set up they were apparently supplying the raw material supply on wood it's sort of catch me if you can. >> it sounds like you have an ax to grind with lumber liquidators. i'm curious if you have these same sorts of complaints with other retailers of flooring and we should note that for lumber liquidators, about 14% of their flooring was from china, actually, in the latest period. >> and 50% of the flooring coming in from the united states is from china. just like 50% of the hardwood plywood. they've gained market share based on price point and you have the department of commerce making two findings both with regard to hardwood plywood, that these products are being dumped into the united states. >> are there other retailers with which you have this big of a bone to pick?

>> well, "60 minutes" came to us and they basically said would you do this? that's why we're talking about lumber liquidators. we have filed a case involving a lot more companies and manufacturers in china than the one we're talking about here. >> thank you for the time and detailed interview. we do appreciate that. >> thank you. appreciate it. >> and we'll be right back. hey, girl. is it crazy that your soccer trophy is talking to you right now? it kinda is. it's as crazy as you not rolling over your old 401k. cue the horns... just harness the confidence it took you to win me and call td ameritrade's rollover consultants. they'll help with the hassle by guiding you through the whole process step by step.

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lumber liquidator shares up 10% based on the interview, lumber liquidators, this is one of the battleground stocks of which we have not seen the likes since herbalife. >> again, we're looking forward to the interview with tom sullivan tomorrow on the halftime report. meanwhile, an interview tonight at 5:00. >> melissa, thank you. we look forward to that. get your "power lunch" to go on cnbc.com. "closing bell" starts now. welcome to the "closing bell." i'm kelly evans. >> i'm bill griffeth. we have a rally. we are setting highs for the days right now.

the dow jones industrial and the volatility is back in a big way. up 238 points. now, we had strong bank stocks today because of the stress test last night but weak retail sales this morning. that didn't matter apparently. and intel talking about how companies are not replacing their pcs at a very fast rate anymore. intel is down 4.6%. that's inside the