after the bell reports, we have amgen, yum, chipotle as well as yahoo!. >> live from houston and the nasdaq, "closing bell" starts right now. hi, everybody. welcome to the "closing bell." i'm kelly evans on a busy day, bill, here at the new york stock exchange. >> i'm bill griffith back here at cnbc headquarters. we'll be seeing you later on "nightly business report" on pbs. what a day, we have earnings galore, a nasty takeover offer from mylan labs from a competitor of theirs. that will be juicy to follow. now this strange story, this arrest going back to the flash crash of 2010 may of 2010. things don't add up for me on

that one. we'll talk about that a little bit later. >> we've been sitting back pouring back through the documents, the s.e.c. findings of what happened, now this criminal complaint singling one individual. the more information we get, the more impossible it is to believe he could have caused this. we have a ton of earnings on tap. you just saw some of the biggies. all of that will get into full swing next hour. also the outlook for oil prices an exclusive with bp's ceo bob dudley coming up in a little while, also we'll see how the industry has changed in the five years since bp's tragic oil spill. the dow, the major indexes have been under pressure today. a lot of that for the dow has been travelers. concerns about their earnings power. 71 points lower, back below 18,000 for a decline of 0.4%. the s&p just barely in negative

territory, actually down about 1 point, just sitting below the 2100 level. look at the nasdaq though it is up 0.5% bill. so much focus today on the biotech, the pharma part of that index, in particular, as deal making continues to heat up and adds a fire under some of these. >> that's for sure. >> susan fulton cnbc contributor michael farr is back with us jeff cox from cnbc.com and our own rick santelli joining us as well. susan, what do you make of the earnings? low expectations the higher dollar, the bad weather, blah, blah, blah. how do you think the numbers have been coming in so far? >> i think number one we have to remember that the 9% drop or rise in the value of the dollar has happened in the past quarter. so that's not fully being impacted at this point. i think you'll see it impacted stock prices the big

internationals impacted next quarter. it is interesting that the dow, which is a much more large cap international play is more -- is doing more poorly than the s&p and the nasdaq. they just don't have as much dollar exposure i don't think. >> i want to bring up an area of the market we'll watching closely here as well. even as we move through earnings season these superlow bond yields. we were talking this morning about bill gross's remarks. he came on "power lunch" explaining himself more fully. what did you think of his remarks? >> well listen mr. gross is a sharp guy. he has a history of going back to '71 to prove it. his argument is a good one. where i separate from mr. g. is that because of the deposit rate is negative 20 basis points and he's doing the math, if that's one your one side of the trade, the other side is more unlimited, where rates can go to

the up side. the problem i have after post-crisis, central bank management minus 20 point basis point deposit rate. so i think in this particular example, we can learn a lot. because if you make strategy based on iran clad promises and information from central bankers, you may have an issue in the future when they change their minds. and there's a lot of talk also kelly, about the new culprit that isn't waddell and reed anymore. i think bethany in the last segment had it right. it took them five years to find a scapegoat. everything i read so far and all the reports and dimes to me, it sounds like the methodology many flash traders and high frequency traders use. sometimes it's just a very fragmented market and a statistical lineup where everything works out to find a vacuum and i think that's more

of the truth than what we're reading right now. >> i'm with you on that. something just doesn't feel right. we'll talk about that in just a moment here. hang on to that thought for just a moment first, jeff cox, clearly volatility has picked up in this market the last several months here yet the vix is getting crushed. you wrote about that today. what's going on here? >> it depends on how you define volatility. if you look at the s&p 500 chart, you see squiggley lines, 200 points there, 100 points here, how does it all come out in the wash? we're fairly flat just up a couple percent on the s&p 500. what it's meant for the vix has been a 30% decline for the vix year to date. so investors are not out there buying protection. i think what a lot of people are doing is waiting for the smoke to clear. when you look at -- you know there's so many cross-currents in the market with consumer confidence as high retail sales

are bad. some of the messages we've been getting the outlooks from earnings have been good. but the economic numbers overall still kind of look bad. what you're seeing is a lot of people sitting on their hand. the latest sentiment survey showing that neutral sentiment above 45% for the first time in consecutive weeks since the late 1980s i believe it is. there's a lot of complacency out there. >> bob pisani was highlighting this earlier. revenue growth broadly speaking hasn't been that great. where is your focus? >> that's the point. that can't stay that way forever, right? you have to see a top line expansion. it hasn't been expanding and fewer than half of the companies that have reported so far have shown -- have actually beaten their top line revenue estimates. they're still beating on the bottom line which means we're still doing this financial engineering of earnings and income statements. we're still taking out costs.

i think we're running into headwinds. you look at the oil companies with lower price of oil will have more trouble earning. you look at the banks that can no longer take from reserves and add to earnings. you look at the multinationals now, facing the dollar headwind. i think something of an earnings recession, a lower, slower growth rate in those earnings is probably to be expected. but as an investor i have to see that top line earnings growth the revenue growth has to be there. >> yes, ceos would agree with you on that one. that's for sure michael. >> yes. >> let's get to this other story of the day. you heard word came from the department of justice that a trader has been arrested in connection with that may 2010 flash crash. >> let's start here with sending it out to sue herrera for the latest details. you're right. the more you read in this indictment, the more curious it gets i guess. here's what we know, the department of justice is charging high frequency trader

of the uk with manipulating the stock market and contributing to the may 2010 flash crash. according to fbi special agent his trading was done out of his home in the uk. using a technique called dynamic layering. which we'll explain in more detail momentarily. in the hours leading up to the flash crash, the dynamic layering technique was particularly intense. in a federal criminal complaint, he is charged with one count of wire fraud, ten counts of commodities fraud, ten counts of commodity manipulation and one count of spoofing which is now illegal after dodd frank was put in place. the doj alleges that surrow used an automated program for algorithm to manipulate the market for the e-mini futures in the s&p 500 contracts. he did that by using that dynamic layering scheme. he could place multiple simultaneous very large volume sell orders at different prices.

it created the appearance of substantial supply in the market. he also allegedly modified those orders so frequently that they appeared in price to be close to where the market was actually trading. then he allegedly canceled the orders without executing them. in fact when you look at these numbers, they're staggering. he replaced or modified his orders more than 19,000 times before ultimately cancelling them. his aggregate number of orders was equivalent to the side book. he modified more than 20 million lots, the rest of the market combined modified fewer than 19 million lots. he's also being charged with commodities manipulation by the cftc in a civil filing on the cftc conference call guys authorities say he profited by some $40 million. and it's worth noting he's been spoofing since 2010 and he also did it after the flash crash. very interesting numbers. amazing numbers.

>> it did continue after that flash crash. >> yes. >> thank you very much for now, sue herrera. joining us now along with our panel is mark lacrespi. >> it does appear to be consistent with what happened in the flash crash. i this think it pointed to a mutual fund as being the person responsible. this is eye opening if not eye popping. some the things that scare me the cme and the defendant's security broker knew about this as early as 2009. they knew he was spoofing and, quote, stuffing this. there were e-mail chains back

and forth. where are the regulators. >> william has been warning us about this for three books? >> the morning of the flash crash. he told his broker he called them back and told them to kiss his "a" dash dash. >> i have in front of me the s.e.c. report. they have a whole chapter on what caused the flash crash. it was an automated execution, automated execution of a large sell order in the e-mini s&p futures and they've laid it at the feet of a mutual fund which later was identified as waddell and reed. case closed. now all of a sudden we're finding out it was intentional manipulation by someone they admit, regulators admit was a huge player in this market. how did they overlook this huge player in the market five years ago when they were putting this report together mark lopresti? >> bill griffith i can't explain that to you.

the inconsistencies are absolutely glaring. he was the fifth largest player in the e-minis. >> wow. >> he's not a big player himself. we need to emphasize that. >> he was sitting in his flat in london in his pajamas when he was doing this. this really reveals, this is what scares me -- >> you said something intriguing rick santelli you said the regulators need a scapegoat. why did they need a scapegoat in they already had waddell and reed. >> we need to make the markets honest. if the markets aren't honest we can't defend on anything. >> one at a time. go ahead, rick. >> if the goal is to make sure there aren't any more flash crashes, i have a flash for all the regulators listening. the fix is simple. you just charge for cancels. case closed. problem solved. listen -- >> no i don't think so. >> to be the fifth biggest is not a crime. >> no i don't think so. >> they all do the same thing,

put in boat loads of orders and cancel boat loads offard order ss of orders. >> susan, they outlawed spoofing where you place an order and pull it at the last second. what rick is saying to pull it you should be charged for that pull at the same time. that would eliminate some of this that goes on this manipulation that goes on. why don't you think that would work? >> i don't think we have the regulatory strength to pull it. >> you don't need it. >> but this whole thing is -- >> i know everybody hates regulation. i know everybody hates regulation but regulation -- bad guys only stop when they get caught. >> michael farr jump in here. >> high frequency trading, if you read how quickly they can issue orders and get in front of other orders the whole purpose for this whole high frequency stuff is market manipulation. >> the chilling thing is, this is one guy.

>> so you can benefit from the market orders. >> 400 days worth of trades. 400 days worth of trades and found that he was doing this 63% of the time and they were watching him for four years before anybody stepped in and said, hey, maybe we should do something about this. >> how long did they watch madoff? how long did they watch madoff? >> i want to see him get an apology out of this as well. they dragged his name through the mud. >> sue you bring up an interesting comparison to bernie madoff and frank kasey was screen screaming at the doors before anybody would listen. the cme knew this guy was engaging in suspicious inquiries. who was involved in the complaint, i would be curious to know who that is. >> i don't think he's a scapegoat. >> i don't think it's a scapegoat either. >> who wrote the cancel if closed program as well?

there's a lot of detail about this program he put together. >> modified the software. >> pretty amazing. this was one guy that was able to come up with this scheme and they couldn't get near him. >> what's your one-line takeaway. >> the markets remain remarkably vulnerable to this activity. >> even after dodd frank. >> even after dodd frank. it's not a fix. >> especially after dodd frank. >> that's right, rick. >> really appreciate it. >> amen. >> a lot more questions than answers right now. hopefully there's more to come. >> 45 minutes to go into the close here. keeping an eye on markets, the dow is down about 80 points this hour, the s&p down by a couple. the nasdaq trying to stay positive having a good job of doing so. it is up 0.5% bill. differentiation for sure. >> busy lineup of heavy hitters heading your way over the next couple hours. ken fisher will be here to tout money-making strategies to defy wall street's herd mentality. also coming up the head of td ameritrade the largest

online brokerage in the u.s., giving us his take on online investors and if they're jumping back into the market. plus, bp's ceo bob dudley sits down one day after the oil spill. the worst offshore environmental disaster to hit the u.s. you don't want to miss that interview with mr. dudley all coming up here on "closing bell." stay tuned. go! it's chaos out there. but the m-class sees in your blind spot... pulls you back into your lane... even brakes all by itself. it's almost like it couldn't crash... even if it tried. the 2015 m-class. see your authorized dealer for exceptional offers through mercedes-benz financial services.

mixed day. we're heading lower on the industrial average, down 81 points right now. s&p is down a point and the nasdaq is going the other direction, up almost half a percent or 23 points at 5,017. marry thompson is keeping an eye on the big movers. >> let's start off with shake shack. nicholas has downgraded the stock with a buy to a hold with a price target of $55, citing valuation. the restaurant announcinge inging it's going to open its first california location in l.a. next year. down 6.25%. fort net shares are in the green, that's after the network security company beat on

earnings and revenue. fortnet gained more than 8,000 customers this quarter, stock gained over 9% today. under armour the athleticwear maker is upping its full-year outlook. td ameritrade reporting a surprise decline in revenue in the first quarter as market volatility slowed client activity. shares down 3%. kelly, back to you. >> let's pick up right there. thank you, mary and talk more about td ameritrade and how their retail investor bill is doing. >> lots to talk about with our guest. first on cnbc interview with fred tomczyk, ceo of td ameritrade. welcome back. >> good to be here. >> trading by individual investors because of the volatility ironically banks did better in the first quarter because of the volatility and trading that went on. how do you reconcile that? >> us and charles schwab will

work more around the equity markets. a lot of the big brokers and big money banks were basically working around the fixed income, the currency and commodities market. certainly in the commodities market, our future trades were up 30%, 40% year-over-year. the equity markets slowed down in the month of march. >> i'm still thinking about this discussion we were just having about the manipulation of these futures contracts. it's now being tied back to this trader in the uk. what conclusions had you guys drawn about what happened during the flash crash prior to this report? and what are you thinking today in light of it? >> you know i haven't really caught up with it too much. i read it about the accusations of layering spoofing. i think when we look back at the flash crash, there was some unusual movement. we had always heard it was like a trade out of kansas city. to hear it's coming out of the uk, here we are, three or four years later is a bit of a surprise to me.

>> but do you know blame individual investors who stay away from the market fearing manipulation when you now have regulators acknowledging for the first time that the flash crash may have been the result of intentional manipulation by these traders? >> you know there was certainly a pullback when the flash crash happened and some fear no question. having said that i think that's been dismissed at this point. however, this will bring it back up and we're bringing up the whole topic of high frequency trading again. the retail investors today, they're fully invested right now. >> that said you had decline in trading activity during the quarter. also battered again by low interest rates. do you think one of those pieces will come roaring back any time soon? >> we did guide the street to the lower half of our guidance range. really it was about interest rates when we had set up the guidance basically, fed funds were supposed to move in the month of june certainly doesn't

look like it's going to happen in our fiscal year. the yield curve has flattened. it's basically 75 basis points lower for seven-year swap rates from when we started the year. there's no question that impacts us quite a bit. i continue to say basically when the fed starts to move around raising interest rates, the market is going to get volatile. i think we have to expect that. >> are you on your knee ss praying they start in june? >> our organization focuses on what it can control. >> higher rates would benefit you to some extent. >> at this point i accept interest rates for what they are and where we are. we just continue to gather lots of assets and get new accounts continue to grow our business. i mean in the first six months of this year we gathered $35 billion of net new money. >> last question, fred yesterday we were talking about how millennials are in a

financial position. they're not that invested relative to other generations. what are you doing to continue to grow those assets especially among the younger generation? >> i think it's all about where you advertise and promote to that generation. we all learned lessons. we need to start to leverage these emerging technologies like social media, mobility and big data analytics and the way we interact with clients. we all have to get better at that. >> could you give us one example of something new that seems to be working? >> we're working through managed account offerings where you start to leverage into it through social media and we get scientific as to how we target people. >> hash tags. >> i don't know about that. basically they're starting to listen to people that invest like that. >> that's interesting. thank you, fred. thanks for being here covering a bunch of different topics in the news today. fred tomczyk of td ameritrade.

the dow continues lower we're down 76 points. the technology biotech, tech knowledge, pharmaceuticals are leading thes that dang higher up 24 points right now. >> here's why. up next teva offering $40 billion to buy mylan. it would create the world's biggest generic drugmaker. mylan popping 9%. teva could be in for a nasty battle. the pros will talk it out. >> mylan has a deal to buy perrigo. where does that go? after the bell, amgen yahoo! chipotle and yum brands. those results the second they hit the tape. that's coming up on "closing bell."

welcome back. there's a look at some of the earnings that we are waiting for after the bell including names like amgen. a possible shake-up in the generic drug industry. teva offering $40 billion to buy mylan. there's a look at shares of both companies. mylan especially higher on the news. >> not close to the offering price, though, we'll talk about that. the deal faces some serious head winds. meg terrell joins us to fill us in. meg? >> probably the biggest head wind is that mylan doesn't want to be acquired. the company came out

preemptively saying there could be cultural clashes and antitrust issues. as you mentioned earlier, it has a bid on the table for perrigo. we were seeing a pacman thing going on. teva is offered $82 a share, a 38% premium to where mylan was trading before it put that perrigo offer on the table. bernstein saying that might not be enough. mylan may be prompted to come to the table if teva got up closer to $90 a share. all i'm hearing right now is this is bound to be a long and protected battle. we don't know how it will turn out. it will take a while to see a resolution here guys. >> meg, thank you so much. with the latest on where that deal stands. bill? >> let's bring in barbara ryan to join megan, kelly and me. why don't you think the price has gone to $82? it's at 74 on mylan right now. especially if somebody thinks

they should go to 90 to get mylan's attention? >> i think meg you know, spelled it out pretty well in terms of the pacman strategy that's going on here. >> we're going back to the '80s here. >> we're going back to the '80s. we talked about this a little bit before a week ago. i think there are a couple of things one is that if mylan is successful in engaging perrigo, that's a situation the market would find compelling. there's that. which would then throw a wrinkle in teva's ability to acquire mylan. additionally, i think there are legitimate concerns around antitrust. that's another significant thing. and as meg said you know as we already witnessed with the

valiant allergen/actavis. i want to make one point which speaks to the consolidation we've seen in this space. the 2011 the market cap of actavis was $7 billion. today it is $120 billion. >> wow. >> perrigo was 6.4 billion. today it is 28.3 billion. mylan 10 going to 37 today. and teva lags well behind going only from 47.5 billion to 63 billion. >> wow. >> what accounts for this frenzy as we've seen in these companies getting bid up with market caps increasing? is it that their earnings power has increased? is it the affordable care act? is it simply that they're getting bigger, their prospects for the future are getting brighter. >> a lost the activity was driven by tax consideration. both mylan and perrigo are

companies that have essentially inverted. moving overseas to get that lower tax rate. in generics specifically this industry is all about scale. i was just talking with someone, you need to get bigger or you could possibly be bought yourself. we're seeing this frenzy absolutely continue. one issue this raises especially among generic drugmakers antitrust and regulators may start to look at generic drug prices are starting to rise. we're starting to see the problematic area of shortages in generic drugs when all these companies are combining with each other. those are issues that are getting more attention from regulators. it will be intreving to see if those come to light here with these deals. >> so barbara, before we go whose court is the ball in right now? who has to make the next move? is it mylan, is it perrigo to answer mylan and their bid at this point? or where do we go from here? >> i think it's really the combination of mylan and perrigo. and whether this is enough to

get those two visibly engaged. thus far, perrigo has really been silenced in the whole combination. so i think that you know mylan needs to probably you know engage perrigo and that would be the next thing that i would look at. as meg mentioned at the outset, i think mylan has been very pro-active about communicating that they want to remain independent and that they think the perrigo deal makes the most sense for shareholders. perhaps they will need to put more pressure on perrigo to come to that conclusion. >> right. >> by upping their bid. >> and perrigo shares down about 2% on the day. we'll leave it there. thank you both meg tirrell and barbara ryan from claremont partners. time now for a "cnbc news update" with sue herrera. here's what's happening at this hour hillary clinton campaigning in new hampshire says she wants to be being in

the middle class to mean something again. they will not begin efforts to rebuild the country based on a security council resolution. you're looking at video of the air strikes that hit the capital earlier today. a strong storm system lashing australia's coast has left dozens of residents stranding and swirling floodwaters. it may have led to the deaths of three people. the storm has been pounding sydney since yesterday. it's dumped more than a foot of rain in some areas. bobbi brown's attorney is clarifying comments by singer that his daughter is awake. the 21-year-old has been in a coma since january. the attorney is saying whale she has opened her eyes the quality of her life will not be known for some years to come. and that is your "cnbc news update" for this hour. kelly, back to you. >> thank you for now, sue.

we have 25 minutes to go into the close, bill. this market is under pressure the dow down almost 100 points against pressure from travelers. we just heard, of course from fred tomczyk about the low-rate environment hurting them a bit at td ameritrade. the nasdaq on the back of some of the big deals we spoke about in health care space, still up 19 points on the day. >> losing ground this hour is flying by isn't it? coming up billionaire guru ken fisher. he says be a contrarian but not the way you think. up next it's been five years since the catastrophic bp oil spill in the golf. bp ceo bob dudley sits down with our brian sullivan. they'll talk cleanup, compensating victims and the collapse in crude oil prices as well as much more. stay tuned. 's massaging gel insoles. when they're in my shoes my feet and legs feel less tired.

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stillness of green... [♪] [♪] and in the restless depths of human hearts... [♪] the voice of the wild within. [♪] oil executives gathering in houston for the industry's biggest conference of the year. brian sullivan is joined by bob dudley the ceo of bp, bill. >> we should also note it's been five years since the deep

water horizon oil spill. >> this is a cnbc exclusive, ceo of bp, bob dudley. five years yesterday, from the deep water horizon spill. how has bp changed? do you feel like you've won back the public confidence and trust. >> we keep working on it every day. yesterday was the fifth anniversary, the company has completely transformed, how we're structured we're focused on safety. the standards we brought in. a huge commitment to the gulf. >> you've come in and made a number of sweeping changes. how many have been directly related to that? >> we changed the structure of our whole global organization in terms of the way we run our upstream business we put safety standards all around the globe. we work with governments all over the world to bring the learnings from it. the u.s. government just came out with new drilling standards in the gulf. it's more or less changed inside of bp. i'm proud of how everybody in the company have worked to push

through the changes. >> some have said those changes make the gulf a little less efficient, a little less profitable. can the gulf still be profitable with the new regulations? >> it has to be. this is what the industry needs to do around the world. these are changes that -- like every industry you go through an industrial accident, it changes everything the whole industry responds. that's what's happening. $100 oil to $50 oil, it has to remain profitable. i'm sure the industry will respond very fast. >> the tend to have a bullish view, you're interesting. i've heard some of the comments you've made recently. you've essentially told people prepare for a $50, $60 a barrel oil level. >> several years is absolutely a possibility. the u.s. is increasing oil production. the rigs have come down from 1,600 to 750 yet oil production keeps going up. if there's a deal signed in

iran, that will change the balance of supplies around the world. chinese growth certainly there is coming down. i do think the industry needs to prepare for lower for longer. >> is $100 barrel oil off the table for the next couple years. >> barring a change politically, i think it is off the table for quite a while. back in the day when the oil was $10 a barrel oil was profitable. all the cost structures and taxations have to change. we'll do it. >> if iran comes back online to the u.s. obviously iran pumps oil now, if you get capital investment, return their oil to the united states what would that mean for our prices here? >> iranian oil would go out in the world markets if that's a big if -- >> it adds barrels to the market theoretically. >> it adds it globally. it could affect global prices by having more supply out there. >> we look at russia as well. you've done business in russia for a long time.

obviously everything that's going on in and around russia you have to be politically sensitive about this question. is russia a good place to do business? can you make money? why be there. >> we celebrated a 25th anniversary of working with russia, yes, ups and downs, difficult place. we certainly do everything within sanctions and laws to operate there. it's a big long-term investment by bp. it's a long-term industry largest oil and gas producer today on the planet. for a company like bp it should be there. we'll do it carefully. i think it will be a good investment. >> the talk, potential deals. will the big guys gobble up the smaller players? there are reports that bp could be a target. have you been approached to be bought? >> absolutely not. don't want to encourage anything like that at all. i think there's always at these times when prices change there's lots of speculations about changing. there's been one big deal two or three big deals. i don't feel that right now unless oil were down lower for a

lot longer. >> bp as far as you know no one's approached you about buying your company? they may talk about it but they haven't come to you. >> i more than know. no. >> have you had conversations about buying other companies. >> we have not. we always study portfolios all over. some of the companies cushioned during this period of time. if prices are lower, particularly in north america there will be stress out there. >> if oil prices do resume their slide, would you then look to be perhaps more hunter than you are right now? would you look to do deals? >> i think we have a portfolio we just really like. we've right sized it die invested over $30 billion in the last three years. we like the projects we've got. i think we have to make what we're doing work. people are moving fast inside the company. i'm happy with where they are. >> bob dudley ceo of bp cnbc exclusive. neither predator nor prey. back to you.

>> we're not for sale. i wouldn't want to encourage talk like that either he says. >> nothing like that at all. >> i love that. >> a lot of speculation with these big moves in oil prices. good stuff there with the ceo, bob dudley and brian sullivan. heading to the close, 17 minutes left in the trading session with the dow down 86 points. it's been a mixed day, the s&p is down two. a lot of earnings coming out at the top of the hour don't we? >> we certainly do bill. earnings season shifting to higher geara higher gear after the bell. names to watch, when we come back. when a moment spontaneously turns romantic why pause to take a pill? and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment

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welcome back. there's a look at markets today. a giant wave of earnings are expected to hit wall street right after the bell. >> yes, they are mary thompson runs through the names and numbers. >> it will be a busy after-hours session. all eyes are on yahoo!. year to date shares are down over 11%. when it reports tonight, analysts are expecting revenue to fall 3% to just over a billion dollars with earnings of 18 cents a share. this following the big news last quarter that the company will

spin off its stake in alibaba. chipotle looks to spin off positive results. rising food costs may impact traffic. the company is expected to post earnings of $3.66 a share, revenue of just over $1.1 billion. the stock ahead of those results. biotech yamamgen reporting after the close. they are expecting $91 billion in revenue and $2.10 a share in earnings. the stock up over 5% year to date, up over 1.5% today. yum brands china, we're watching this because china remains in the spotlight for the parent company of taco bell pizza hut and kfc. it's fighting to recover from the latest food scandal in what it its biggest market, that being china. they hope to see 70 cents a share with revenue of $2.6 billion. shares down fractionally ahead of those results. >> you'll have your hands full

next hour, aren't you? >> 12 minutes, it all starts. you'll have to stick around please. "nightly business report," you know, come on we'll need your help. >> anything i can do to help. >> 12 minutes to go to the close. the dow is having a difficult session, down almost 100 points. the nasdaq is staying positive. that has a lo to do with the deal making we're seeing. mylan pharmaceuticals up another almost 10% today on the bid by teva. art cashin just walking by indicating there's 500 million to sell on the close. >> interesting with be they did the same thing yesterday. ken fisher, best-selling author, tech watcher, walterize isaackson is coming up. and how drones can be used in disaster relief efforts. all that could tom on "closing bell."

a mixed day as we head toward the close here. joining us right now is ken fisher founder and ceo of fisher investments. his new book is called "beat the crowd" how you can outvest the herd by thinking differently.

kenneth, always good to see you, my friend. thank you for joining us. >> always good to see you. >> contrary investing is simply you go where the crowd didn't. you're talking about something different with this book are you? >> yes, what's gone on in the last few decades is the noise signal from all of technology whether it's the internet so many different channels it's really funneled sentiment and now you've got the crowd and you've always got the anti-crowd which you could kind of think of as the snark crowd. everything thinks this is going to happen, so they think the reverse is going to happen. you have to go where there's no crowd. you have to be able to use sentiment to see the crowd, see the anti-crowd and game them both at the same time. >> i love you said it's the snark crowd. it's a cultural phenomenon that we see all the time and everywhere. i like your point, that those people may be as much of the collective wisdom or that approach as the ones they think they're snarking on. >> snark is priced.

the market is a discounter, a pricer. it also prices the anti-the snark. >> there's a lot of confusion the market now on the -- what's influencing this market, earnings prioritizing, the fed, earnings, the strength of the dollar, the oil price. there's a whole lot of moving cross currents going on right now, ken. >> fundamentally, i know this sounds stupid and simple but it's a bull market where the economy is not that different than the goldilocks economy of the early 1990s on a global basis. part faster part slower. if you look for example at the leading economic index, it's high-end rising and continues moving up in a world where people have continued to be skeptical. skeptical is okay because skeptical is just questioning but with that has also been a

high content of snark. and fundamentally things have been better than people thought going back to the days five six years ago, when bill gross is first talking about the new normal. >> right. >> the reality is markets are expectations versus reality. it's a bull market and the bull market keeps going along because the world does a little better than people fear. >> we'll leave it on a goldilocks point we haven't heard in a little while. i'll hand it over to you for that closing countdown. >> back with ken fisher in a moment. here with the countdown and the earning are coming right after that. stay tuned. back. but who's got your back when you need legal help? we do. we're legalzoom, and over the last 10 years, we've helped millions of people protect their families and run their businesses. we have the right people on-hand to answer your questions backed by a trusted network of attorneys. so visit us today for legal help you can count on. legalzoom. legal help is here.

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welcome back. we're inside two minutes to the bell. back with ken fisher of fisher have manies whose new book is called "beat the crowds." there's a lot of confusion about when the fed will raise rates and what the market will do when the fed does get around to make the normalization process. what do you think the market will do to that. >> whatever everyone is worrying about in high abundance, you don't have to worry about. people never get this right. the fact is markets are discounter of information and everybody has priced that. secondarily, there's a long history in american and nonamerican markets of central banks making initial rate hikes. in my book "beat the crowd" we list that history and there's nothing definitive that comes

after that whether you look at three months, six months one month. a year three years, it's not predictive, that everyone is fixated on something that historically is demonstrable. at the same time people preprice. it's a marvelous feature. >> you're the classic, you look at individual stocks. you'll play the bottoms up game anyway no matter what's going on here. >> that's not true bill. >> there you are being a contrarian again. >> i think about macro all the time. i want to talk about things that everybody else doesn't think about. everybody thinks this a lot of other people think the opposite. they're both priced into the market already. that's what markets do for a living. people have a hard time getting that simple function. >> that is. well, the book i look forward to reading it. "beat the crowd: how you can outvest the herd by dhiing differently." ken fisher. thank you. >> good to be with you, always.

>> we are heading toward very important earnings coming up from yahoo! from yum brands and from some other major companies. chipotle too. stay tuned. the second hour of "closing bell" coming your way right now. see you tomorrow, kel. thank you, bill. welcome to "closing bell," everybody. buckle up i'm kelly evans. we have a ton of earnings on tap. let's begin with the markets, how we're finishing up the session. the s&p down by about 3, roughly flat. buffeted in fact by the decline we saw in the blue chips and look at that nasdaq up 1 points. some deal making activity, especially with mylan helping to contribute to its outperformance there. if we focus on the s&p, 2097 ever so slightly lower, that's the tone of markets today. let's bring in today's panel.

joining me at post nine is walter isaackson from the aspen institute, kayla tausche and dan greenhouse. welcome one and all. steve grasso is also joining us as soon as he is finished up trading. let me begin with you guys dan. what's the message from today? >> listen i think the market appears stuck at 2100. i know that's something that art cashin has talked about on the floor. everybody sees the 2100 ceiling going back a couple of months. i was someone who thought not the employment report but earnings season would be a driver if you will of stocks to break out of this range at least one way or the other. thus far with nearly 100 companies having reported this morning, that has not been the case. i find that shocking because narratives are starting to emerge. >> is that because the top line the revenue growth isn't there, kayla? >> you're seeing revenue declining. that was exacted because of

where we saw gdp come in a lot of the data in the first quarter. i don't think anyone expected the first quarter to be a belowout by any stretch of the imagination for any sector. it is interesting when you look at the tech sector. some of the breakouts, amazon yahoo! was positive for much of the day until about the last hour of trade. facebook also was having a stellar day. these are names that traders are saying they're buying because they don't necessarily want to not have more of them in their portfolio. there is a 50% chance it could be a positive surprise. >> are those the names, walter where the growth and excitement still is? facebook to me feels like a mature company. >> that's one thing about this earnings season especially when it comes to revenues. they weren't horrible but they weren't great you don't have great movement. owe only in the banking sector did you have nice earnings reports. people did go back at least today to technology and about three minutes we'll find out about yahoo! and a few others. it will be interesting to watch the rest of the earnings season.

the market will not move until we know what the earnings are like in the first quarter. >> if it's not an earnings catalyst could it be the economic data if that's what the fed and everybody else is waiting on for a breakout surprise one way or the other? >> i am a firm believe the ultimate path is determined by earnings. that's why i was so focus on this and every other earnings season. there's no denying the fact from a broader perspective, people were looking at the economic data, it's not good. people are wondering where can stocks go. >> let's see where chipotle is going. it's now out with quarterly results. bertha coombs has those numbers. we have a mixed report from chipotle. it beats hanley at 3.88 per share. the street was looking for something in the range of 3.60. however, on the top line a little bit shy at $1.09 billion. street had been looking at 1.11 billion. also when it comes to same-store sales, comps, up 10.4%, the

expectation was better than 11.5%. the company says it's proud of what it did. said the food costs were in line with expectations at 33.9% of revenues. of course we're waiting to hear what they have to say about the pork the sustainably raised pork, they said they were going to take a $2 million charge this quarter for that. whether they've been able to source more to bring that back on more of their menus and also one of the things we'll be watching on the conference call is what they have to say about the bird flu outbreak in the midwest, whether that is going to be impacting their sourcing as well. another thing i'll be watching for on the conference call kelly, is health care costs. the company said last quarter they had about 1,000 people take up their insurance, about 10,000 are eligible. we'll see if that is increasing. back to you. >> chipotle shares under pressure, down 6% after hours.

amgen also with its quarterly results, lids pivot there with meg tirrell. there's also news there and news on perrigo's board rejecting that unsolicited bid by mylan. let's begin with amgen. >> a big bead on the top and bottom line revenue coming in at 5.03 billion versus estimate of 4.91 billion. company also raising its guidance, just narrowing the bottom end of it for revenue to 20.9 billion to 21.3 billion for 2015. that's up from a lower end of the guidance from 20.8 billion but raying the epps guidance to 9.35 to 9.36 up from 9.05 to 9.40. they did see unfavorable impacts from foreign exchange. amgen isn't as impacted by this as some of the multinational

pharmaceutical companies like j & j. getting growth from various drugs. now on the call a lot of people going to be listening for competition coming from biosimilars to some of amgen's products. also its plans for launching some of those itself. those are generic versions of buy logic drugs. also on the upcoming advances of new drugs for cardiovascular disease. >> meg, thank you so much. amgen are higher after hours. let's bring in our mary thompson here with a related story. it least in the health care space, mary. the board at perrigo rejecting this bid. tell us more. >> that's correct. it's a unanimous rejection of the bid. earlier as reuters reported this was expected to happen but in a statement, the company said that mylan's $205 a share proposal to acquire it undervalues perrigo and it would also impede future growth. as expected perrigo, again, declining to accept mylan's

takeover bid. this leaves mylan as a target of teva pharmaceuticals which offered over $40 billion to acquire mylan. so, again, perrigo, its board unanimously rejecting mylan's takeover bid. back to you, kelly. >> mary thompson thank you. we've heard from chipotle amgen. yahoo! is out with its quarterly results as well. we've been waiting on this in particular. joshua lipton. >> yahoo! reporting. let's get you those numbers. yahoo! reporting 15 cents on 1.04 billion. remember, the street was looking for 18 cents on 1.06 billion. so that is a miss on the bottom and the top just looking quickly through the release, search revenue, 32.4 million, a drop of 3%. the conference call starting in just about an hour. we'll be on it and bring you headlines as they cross. guys, back to you. >> thanks josh.

yahoo! shares, immediate afterhours reaction to that news. let's get reaction from jackson along with nicholas carlson from business insider and our panel. welcome to you both. eric, i begin with you. you've been pushing yahoo! saying that marissa meyer needs to be transformative or get out of the way of this company. are these results disappointing? >> they've definitely disappointing, kelly. it was about six months that yahoo! had its first earnings call after starboard came forward and put a lot of tough questions to marissa mayer. in that october conference call she tried to answer her critics and map out how the turnaround was going, just according to all her plans. and there were a bunch of blog posts written about her afterwards saying marissa to starboard, back off, i got this. it's been six months now. and these results obviously are very underwhelming.

i think investors are wanting to know when do we actually start to see a marissa premium built into these shares rather than a marissa discount? >> nick, do you believe there is a discount because of the reflection in the shares and is it possible under the hood this turnaround, the strategy looks better than the top and bottom line numbers? >> you look at this quarter. it's another quarter and another year of no revenue growth for this company. they have a ways to go. i think her big plan is to go after google i think it will come out in the next year or so. you saw that with the deal with bing. they'll put their own ads on there and internally they're working on their own search engine. >> that's a big roll of the dice. reading your book which is good, the question is what is yahoo! what does it do? what is this product? and if she's going to decide she will be the other search engine

besides google that's a big bet. it can't be done with activist investors saying cut costs, cut costs that's a big investment, right? >> i think that's right. i think you're looking forward for the next year. you know these activists aren't necessarily going away. it might not be just smith and starboard but it probably could be. they didn't do a slate this year. they didn't get the yahoo! japan spinout. they think there's real estate, cost cuts to be had. >> can you cost cut your way to success if you're yahoo!? >> you know you probably -- >> go ahead, eric. >> guys you know these activists investors didn't hire henry decastro. these activist investors didn't decide to just turn their back on premium and display ads. and just let that business fritter away to nothing over the last two years. and instead focusing on native ads, which is still a future, two years probably away.

so i think it's not the activist investors' fault here. this is all at the feet of marissa mayer. she's the one that decided to increase costs by 500 million over the last couple of years. she really needs to start to answer tough questions. nick? >> you know what i don't see mayer doing, i'm going after this big thing and it's going to take years to get there. kru can buy or sell the stock if you want to. this isn't the stock for you if you want it to be here by now. it's going to take another five years. sorry. tough luck. >> we have one more earnings report to get into. i want to bring steve grasso into this conversation. >> hi. >> can you hear me? >> we'll get him ready in just a second. >> i can hear you. >> hello, sir. we've had chipotle amgen and yahoo! which we were just discussing. a big miss here.

>> yahoo! has been like alibaba. can they attack search take on google when they and bing are basically half the search volume or half the search percentage as google is? google has its own problems. can't get out of its own way with antitrust matters. i don't see yahoo! making a great attempt attacking anything. cmg, nine years, the stock is up 1,500%. that's running out of gas a little bit. i wouldn't see where the bang for your buck is there. people have always pointed out valuation. that's really catching up to that story as well. >> we should mention shares off the lows. they were initially down 6%. now off only about 3%. let's have a quick look at amgen and yahoo! as well as we continue to look through the numbers. the calls could push the shares

in a different direction than the initial reaction. amgen up 2.5%. meanwhile looking at yahoo! which on this apparent top lynn and bottom line miss is off about 1.7%. nicholas? >> right. i mean we're talking about whether or not yahoo! can do this with all this activist pressure. there was an idea that yahoo! should become a smaller company, it should not compete in search. i heard it's going to cost the company $500 million a year to try to get back into search. it's a big bet. you don't hear her saying it's going to cost this much and this is what we want to do. >> maybe the secret is to be more transparent. >> what would you do in the broadest sense to create the next new search engine? >> people talk about -- i can talk a little bit where yahoo! is going. i still need to nail down a couple more sources on this. but what i think, they think google owns public search. you look for things. private search is where yahoo!

knows about you because you're a yahoo! e-mail user you use its apps. it can give you an assist and the through the day. i'll be nailing that down and publishing a story about that. >> i love the way you framed that public versus private search. very telling. let's wrap this up withium brands -- yum brands quarterly result. >> we heard that a lot, earnings per share adjusted coming in at 80 cents. the street was expecting 72. quite a nice beat there. the revenues were at 2.62 billion. the street was expecting 2.64 billion. really the story here china not as bad as expected. same-store sales were down 12%. you know they've still been recovering from supplier issues and concerns. that turnaround is apparently happening better than expected. taco bell is their number one brand here in the u.s. and same-store sales there again beat expectations. up 6%. a will the of that due to

breakfast. we've talked a lot about breakfast. what greg creigh the ceo is saying, they will deliver at least 10% with a strong second half in china, division restaurant margins in china were a healthy 19%, outside of china, kfc and taco bell firing on all cylinders. pizza hut was flat. pizza hut still trying to catch fire again with consumers. we'll have to hear about more on the call is again in the u.s. this bird flu situation will affect kfc. lots of talk about strong international growth. taco bell returning to japan for the first time in years. that's it for now. >> i'm hungry. thanks a lot. jane wells this afternoon for us. yum brands up 4% on that report. we thank our yahoo! guests for being with us this afternoon. steve grasso as well. sorry about the hiccups, steve. >> of course. >> for coming up on "fast money" at 5:00.

. up next here much more on this barrage of earnings hitting wall street after the bell. later, a professor from the respected university of chicago saying we never fixed the real cause of the financial crisis and it's now worse than ever. that's coming up. you're watching cnbc, first in business worldwide. but utilities can now predict where the power will go out, within a few city blocks. working with ibm they're combining micro weather forecasts with detailed data from local sensors. to predict where outages are likely to occur. and send crews exactly where they're needed, when they're needed. ibm analytics from the internet of things is making energy smarter every day.

the earnings parade in full march today. joining us now to recap it all, jack moore director of research for jim cramer's charitable trust at the street. welcome to you. >> thank you. >> what's most telling to you here. >> yum brands and chipotle are the most interesting. forp for chipotle, the expectations couldn't be higher. >> same-store sales in the u.s. were only 10.4%. >> we're getting excited by yum brands evening down only 11% or 12% in china versus 15%. everybody was thinking they'd be down 15%. for yum, the expectations could

not have been lower. it was such a low hurdle. it was an interesting trade into it. for chipotle, it's such an interesting stock. everyone wants to own it but it's tough to buy for these exact reasons. >> it's interesting because this brings in the dichotomy of companies that are basically domestic and international ones that have had a bigger strug with the the strong dollar. chipotle seeing a little bit of a decline relative to expectations. >> let's not forget chipotle is one of those stocks that's a high-growth name high-beta name, so to speak. when you have in a market such as we have the margin for error so to speak is very low and when your report disappoints, even if it's a good report only 10% comps or revenue growth there's room for the stock to trade lower. >> last quarter when it fell sharply it's because it only had same-store sales growth of 16.1% when the expectation was for

16.5. this is a big decline from even last quarter. the expectations are so high for this company. >> the only one i liked was the food cost line. the tough part is now you have -- their price increases from last year that were pretty material. the price increases this quarter were 6.3%. next quarter that will come down to 5.4%. they give you that data. the quarter after that unless they actually decide to increase price, it's going to be zero percent. it will all have to come from traffic. that's what makes it tough on the back half of the year. >> it's an interesting challenge for the strauntszrestaurants based more generally. you want to talk about yahoo!? >> something about yum brands and chipotle connects. it's a major transformation you're having in the fast casual industry. i think chipotle will come in with this new pizza product

that's an artisinal pizza. you can build it on a tablet when you come in. you're even seeing taco bell and things using a lot more technology which allows people to customize more. i think what will drive this business is who gets technology in the most user friendly way. >> even more up your alley is the process of restaurants moving toward tablet ordering systems. i believe olive garden. >> that's what i men the. even the pizzas they're doing, the newen brad of chipotle type pizza. >> didn't sheetz doing this. >> i never used a tablet to order. >> one thing that's confused me for years, when you go to europe they bring a credit card swipe machine to your table and swipe your card right there. >> they were confused by the fact that we in america would

ever give our card to the waiter to disappear with it and bring it back to the table. >> why would i give my card to a random person to disappear into the back write my credit card number down. >> if i'm going to a chipotle why i don't on my phone figure out exactly what i want hit it it pays for it and i pick it up and don't have to deal with anything. >> very quickly, here in manhattan, i have noticed there's a restaurant kobiyaki. you can go to the website, place your order, tell them the time you want to pick it up and show up. i don't have to call anybody or talk to anybody. it's an extension of the seamless web. the technology in the restaurant business is fabulous. >> would all of this fit into an argument and buying and sticking with a chipotle or not? >> for technology, chipotle isn't necessarily ahead of it. yum brands is a stinker. it's number one in social media

and the impressions there. across 33 brands. jim and i owe panera. we love that for the panera 2.0. you'll see the tablets being set up there. chipotle will be a tough one to own. any sell-off the momentum behind this name is incredible. when the wind comes out of the sails is the most interesting time to buy. >> part of the runup in chipotle was traders hoping for a stock split. it's gotten extremely expensive at this point. is that something that could be waiting in the withins? >> yes, it cowl beuld be waiting in the wings. they had low comp guidance that they had previously set. everyone on wall street said they were bluffing. it's beginning to i way higher. well, they kept that in their guidance. that's the double whammy. >> jack moore with jim cramer's charitable trust at the street getting through the earnings reports with us.

did the foreclosure crisis spark the financial meltdown in '08. my next guest says he doesn't think so. he said the real problem began well before that housing collapse. later, there's been an arrest made in the flash crash of 2010. bart chilton will join us with his take. "closing bell" is back in two.

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netflix. we're talking about house of debt which should be garnering almost as much attention. it's a book co-authored by amir sufi which larry summers called quote, the most important economic book of the year. it's great to have you here. >> great to be here. >> what's interesting is not just the way you looked at the financial crisis but the warnings you sound for today. what single data point is it that tells us there's still a problem out there? >> if you look at where the strength and consumption is coming from in this country, a lot of it is driven by auto sales. look at the auto sales market which you see is an explosion of subprime auto debt. that's a much smaller market. in some sense it's a warning sign that something is still wrong. the only way we can get higher spending higher consumption is by channeling credit to lower credit score individuals. at some point, that game has to end and then you know if auto sales falter who knows what will happen to overall household

spending. >> it is a question about how the financial system works. if you think today about fico trying to extend credit to lower quality borrowers, even some of the moves that fha has made raising guarantee fees and that sort of thing, there's not much willingness to change some of the practices that got us into trouble in the sense that it may be different this time. >> the worry is, is there any way we can generate sustainable consumption spending without channeling credit through the subprime auto market we have a lot of people saying credit is too tight. at the end of the day, household income growth is pretty weak. so i think that's fundamentally the problem we face in the u.s. >> it sounds -- i don't want to put words in your mouth. you're embracing the secular stagnation the idea absent credit bubbles the underlying

rate is flat or in recession. would you subscribe to that idea? >> the evidence is overwhelming. if you look from 2002 to 2007 we had a tremendous boom in economic activity driven by housing, yet we never got above 3% growth. if you think about construction people spending against their homes, it's quite incredible how much economic activity housing generated. >> there's a big post up in project syndicate making the case that he's totally disagreeing with larry summers. >> op-eds in the journal today. >> for the viewers watching at home, this is one of the most important debates. >> is there a new normal or is there not. >> that's correct. >> the interest rates are the barometer we look at. interest rates worldwide are very low. they continue to be low. i don't think that's central banks alone. central banks are helping that

process. fundamentally, it seems like people are scared, want to save. that seems to be the problem we're in right now. >> subprime auto loans, you talked about that. is that because they're not regulated the way the other loans have been regulated since the crisis? >> i don't know. i think the bigger reason in my view, if you think about the debt capacity of the american consumer, homes, a lot of them aren't own a lot of them are levered. cars are a collateralizable asset. you can lend against cars. the financial system has seen that as a new vehicle that has debt capacity. i can lever up a home a house or a car. that's what's happening. >> it is less prone to disaster having your car repossessed. >> much smaller. >> i was reading hank paulson's book "dealing with china," it's a wonderful book about how china is growing. then you get to the end and he's talking about debt be consumer debt municipal debt government debt, how they're going to hit the same crisis we are. what do you think? >> we have overwhelming evidence from history at this point that

every single time you see a big boom in household debt nonfinancial corporate debt it leads to bad things. china is going right down the road. we know historically that's led to disaster. who knows if there will be disaster but history certainly points at it if you look at the evidence. >> thank you for being here. his book comes out in paperback in just a couple of weeks. professor of finance. there it is "house of debt." time now for a "cnbc news update" with sue herrera. >> more on the massive migrant crisis taking place across the mediterranean sea. video of a wooden boat packed with migrants sinking. up to 900 migrants are feared lost off a boat sunk off the coast of libya over the weekend. a smoking ban in new orleans goes into effect tonight at midnight. people will no longer be permitted to smoke in bars and gambling halls and in other public places in the big easy. until recently the ban was

considered unthinkable in a city that loves to party. president obama welcoming nascar's number one driver to the white house. sprint cup champion kevin harvick accompanied by team owner tony stewart and crew chief rodney childress, being praised by the president for his humanitarian work. finishing last in the boston marathon michael melemed approached at 4:30 this morning. the 39-year-old venezuelan has muscular dystrophy. that certainly did not stop him from finishing the 26-mile race. boston mayor martin walsh presented him with a medal to honor his accomplishments. what a great story. that is your cnbc news update at this hour. so inspiring, kelly. >> absolutely. sue, thank you. sue herrera back at headquarters. remember that flash crash of 2010? a culprit has finally been named and he's been arrested in the united kingdom. we'll discuss what legal precedence this sets how it can impact futures trading with

former commissioner ballot chilton, next. and a major ice cream recall. and a bird flu outbreak has many americans asking is their food safe to eat? that's coming up on the "closing bell." why combine performance with a conscience? why innovate for a future without accidents? why do any of it? why do all of it? because if it matters to you it's everything to us. the xc60 crossover. from volvo. lease the well equiped volvo xc60 today. visit your local volvo showroom for details.

welcome back. here's a walk down memory lane. remember this day? it was the flash crash that happened about five years ago when the dow plummeted, nearly a thousand points in just minutes. now a trader accused of being behind it has been charged with illegally manipulating the stock market. he was arrested earlier today in the united kingdom. joining us now for his reaction on the phone is bart chilton, former commissioner of the cftc and bob pisani jones us here along with the panel. bart, was this a surprise to you? were you aware of this individual? >> i can't really talk about the things that i've done at the agency, kelly, but it's something in general i think is not surprising to a lot of people that somebody would be named. and it wouldn't surprise me if we don't see things in the future that are related to this. and while this person was certainly part of the causes of the flash crash, i don't think that he was actually the sole culprit, not the person or the

trader to blame. >> bart what i don't understand is reading the summary, again, the report the market event findings from what happened that day, it basically identifies 2:32 p.m., a large fundamental trader, a mutual fund complex that initiated a sell program, et cetera, et cetera. you know this complaint by the doj seems to be telling a different story. they read inconsistently to me. were there details that you are aware of that were left out of this market findings report before we learned of the specific events today? >> no. the report kelly, that the cftc and the s.e.c. put out was report at the time in the summer of 2010. what we had was what we put out. what that report said that's critical, i think still remains so today, is that there was one fundamental trader that sold 75,000 contracts valued at $4.1

billion in just a few minutes. they did so really with reckless abandon. the prices were going down. without that single trade, none of these other contributing factors, like mr. sarao who we're talking about today, the flash crash wouldn't have happened. you had to have that fundamental trader's trade. >> i'll bring in bop in just a moment. this is an important point, you're making. you're saying if it weren't for this mutual fund complex, which waddell and reed was believed to be identify as that complex, if it within to are that happening as explained in this report the behavior by this particular individual could not have contributed to the kind of flash crash we saw? >> i don't think the flash crash -- that's correct. i don't think the flash crash would have occurred without that fundamental trader. it has been widely reported the name that you suggested. i'm not going to confirm that because i'm not allowed to do so. >> understood. >> it's been widely reported.

without that all these contributing factors, including mr. sarao, who was arrested today, he certainly added to it he was part of the cause. without the fundamental trader the flash crash wouldn't have happened. >> bob pisani? >> i think the important thing here is that the allegations against this fellow sarao, clearly indicates he was engaging in spoofing activities. the important thing was he wasn't an active seller like the mutual fund complex you were mentioning was. he was engaging in spoofing tactics. >> right. >> they seem to be alleging that he was one of the causal factors in creating a buy and sell imbalance there and then the mutual fund player came in with a bad algorithm essentially and started selling the market down. so can we conclude that there is no one cause of the flash crash, that there were multiple potential causes bart number one and number two, do you think the mark set more stable since then? there's been a number of changes in market structure since then including limit up limit down. do you think a flash crash is

less likely now? >> well those are great questions, bob. one, you're right. i don't think it could have happened without all of this sort of amalgam of things. before the flash crash, people don't remember that the dow went down about 300 points in just a couple hours. and this fellow mr. sarao, was part of that because of his spoofing. he was amazingly putting out 2,000 lot orders to sell and then at the same time buying them but actually cancelling the sells before they were executed. it was pretty amazing. >> right. >> then the second answer yes, we're safer than they were. we've still seen mini flash crashes in the last few years. i think it shows regulators and exchanges alike need to be on the ball monitoring what's happening, particularly with these whole fragmented markets we have with dark pulls and the electronic trading. it merits further review. >> quick last question, dan. >> i would say very quickly,

leaving aside the fact that we should be debating whether or not one guy can crash the market leaving aside the fact this guy was manipulating the market, i would remind our viewers that there was just a flash crash on october 15th in the treasury market. that remains unsolved a la 2010 mystery. there's a lot of uncertainty in markets right now. >> we don't have time to talk about market structure but we are a lot more stable, i think. they have limit up limit down more solid circuit breakers in the market. i think it helped stabilize it. >> bart chilton, thank you, sir. >> than you. >> appreciate it call in as well. millions of turkeys and chickens have been destroyed because of the bird flu. one of the nation's largest ice creammakers is recalling all of its products over fears of listeria. is anything safe to eat anymore? we'll talk about that next. and what are high-end wine

sales saying about the economy? a winmaker joins us coming up on the "closing bell."

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if you are what you eat, what you eat could be making you sick. blue bell recalling its products over listeria concerns. this happening at the same time fears over avian flu put a bullseye on the poultry industry. i turn to the panel for their thoughts on an issue that's been circulating in media for about a

decade now. but is this the moment in which people are just food quality first, does it affect the biggest foodmakers further than we've already seen it? walter, what's your take here? >> first of all, i think we should make sure viewers understand poultry is fine, eggs are fine. this will be dpefevastating to some poultrymakers. it may hurt earnings. but it is safe to eat. also bioterrorism is something we'll hear more of in the future. these things spread. i think we have to guarantee the safety of the food supply. that is fundamental to our confidence. >> just as we would for water or power. dan, any concerns about the food we're eating day in day out. >> i think there should be a standardized policy for handling recalls. i'm thinking specifically about

the blue bell ice cream recall because originally it was limited to some chocolate chip cookie dough ice cream and now the company expanded it to all of its products because of the listeria concerns. you think, why would you err on the side of being conservative. >> we know why. it's costly. there should be a required disclosure as soon as something like this is the case shouldn't there, dan? >> listen i think big poultry, the food industry in the country is obviously incredibly important and powerful. i'm not surprised that -- >> wait i'm asking our resident vegan here. >> i'll take the admittedly obnoxiously sounding did. >> that means fish. >> i won't eat farm fish. what goes on is more or less disgusting. that's a personal preference. generally speaking the sk of companies like chipotle speaks to what walter mentioned.

the growing awareness of how we treat animals and the damage we do to them, by extension to us is gaining favor. it's clear at this point people will pay a bit more for the belief or reality that their food is treated better and better for them. >> it's coming home to roost. earnings-palooza after the bell. also tomorrow on "closing bell," bill oesterle an his list co-founder will join me. don't miss that. back in two. it took tennis legend serena williams, fencing champion tim morehouse and the rockettes years to master their craft. but only moments to master paying bills at chase.com. depositing checks at the atm and transferring funds on the mobile app. technology designed for you. so you can easily master the way you bank.

welcome back. we've got more on yahoo!'s earnings. josh lipton is back with the details.

hi, josh. >> yahoo! now gives us q2 guidance. yahoo! specifically saying for q2 revenue, 1.01 to 1.05 billion. the street was at 1.04 billion so that is mostly below estimates. suggested ebida. that call starts in ten minutes. we'll look for more color about that. we'll bring you headlines as soon as they come. back to you. >> thank you, josh. shares still down 2% after that report. california facing one of the most severe droughts on record with water at record low levels how is california wine country faring? we're going to talk just after the break. "closing bell" is back in two. thank you mom, for protecting my future. thank you for being my hero and my dad. military families are thankful for many things. the legacy of usaa auto insurance could be one of them.

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for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. why pause the moment? ask your doctor about cialis for daily use. for a free 30-tablet trial go to cialis.com over 20 million kids everyday in our country lack access to healthy food. for the first time american kids are slated to live a shorter life span than their parents. it's a problem that we can turn around and change. revolution foods is a company we started to provide access to healthy affordable, kid-inspired chef-crafted food. we looked at what are the aspects of food that will help set up kids for success? making sure foods are made with high quality ingredients and prepared fresh everyday. our collaboration with citi has helped us really accelerate the expansion of our business in terms of how many communities we can serve. working with citi has also helped to fuel our innovation process and the speed at which we can bring

new products into the grocery stores. we are employing 1,000 people across 27 urban areas and today, serve over 1 million meals a week. until every kid has built those life-long eating habits, we'll keep working. welcome back. we move outside for wine content. if you love wine you're probably familiar with california's sonoma valley. it's probably the number one market for wine in the world. ted seghesio joins us here outside with the panel.

finally we've gotten through the winter, ted. it's a pleasure to have you join us out here. let's begin with the topic, the drought in california. how much water do you need to sustain your business? what happens if this situation doesn't improve? . >> governor brown mandated 20% water decrease use. two weeks ago. that being said in sonoma county where we produce it either doesn't rain or epic rains. in 2012 we had 20 inches of rain in four days. you might have seen pictures on stations, a gentleman kayaking in the safeway parking lot. it was that deep. then we had six inches in one day another time. a bit of flooding. >> this drought does seem to be a historic one.

how has it affected your business? >> been going on for four years now. but we've had enough rainfall this year to where the streams are still running, the reservoirs are full but the rest is suffering. the way the rain patterns have gone the pineapple express from hawaii dumped a lot of wine on our counties. we're looking good relative to the rest of california. >> you brought with us here the 2012 home ranch zinfandel. >> yes. >> what is it that makes this a hot product? zinfandel seems like the type of wine people don't talk about as a hot product anymore. maybe i don't know much about the wine market. >> zinfandel has a had ift. in the gold rush a lot of the settlers snuck a couple grapevines in their back pocket as insurance policies. that was the beginning of our industry. zinfandel has always been at the

forefront. >> feel free to pour a panel a glass here while they chime in. >> i've got a question. how do you keep a family business for three, four five generations? >> that is a great question. that's a great challenge. you just need to have a unified family all sharing the same goals. easier said than done. when i came on board to make the wine in 1979 i was having to do business with my great uncle who grew up in the depression. and essentially he wasn't going to spend any money. so we had to arm wrestle him to get the family to spend some money to allow us to compete in the wine market. >> back then the california wine country did not have the regard it has today. it was all about france back then. size up the markets for us between the domestic wine market and france and italy and how you guys are competing. >> well california has a

benefit of planting a lot of we were a i believe to learn from their techniques in the vineyards. so that's helped a lot of us in california. but zinfandel is kind of unique. it has no european ancestry unless you consider croatia part of europe. that's where zinfandel originated. it went through italy but mutated on the way and ended up in the east coast nurseries in the 1830s and made its way out with the gold rush. >> before we go a question? door you just want to try the wine? >> certainly i want to try the wine. with respect to china and their impact on the high end wine market, does that affect you at all? if it does in what way? >> china's market affects us in many ways. they are able to produce the most inexpensive and highest quality glass -- this is chinese

glass right here. so they provide us a wonderful product in glass. and they're also one of the largest markets for wine consumption in recent history. so they are -- >> is there any slowing for that? bob pisani is upset they've driven up the cost of his favorite wines. >> that's going to happen. there's a lot of competition in wine country and again a lot of folks just want to have a piece of the land and they're willing to overpay for a piece of the land in that valley. that makes it more difficult for us to coexist. >> thank you so much. and my thanks to the panel. and cheers everybody, to this afternoon just being outside and ending the california drought. and "fast money" beginning right now. >> live from the nasdaq market site this is "fast money." i'm melissa lee. big miss for yahoo!. the stock is getting hit. chipotle coming in light. stock down 4%.

and another strong for amgen on the top and bottom lines. let's kick it off here with yahoo!. the video conference call getting underway right now. guidance coming in light just moments ago. also the area in which the ceo has invested heavily, mobile that was also disappointing. >> at 14% of revenue, we thought these