could propel it even higher? the answer tonight at 5:00 on "fast." >> biotech still doing very well. we look forward to that at 5:00 p.m. eastern. folks, thank you for watching closing bell -- >> closing bell's next. yes, thanks everybody for watching "closing bell." i'm kelly evans here at the new york stock exchange. >> i'm bill griffeth. welcome to the most important hour of the trading day. we say that all the time. it is not just because we think it because it is our show. there's a new study out. you're going to find this very interesting. you'll find out why many on wall street say the last 30 minutes of tradesing ingtrading are indeed so critical to the trading day. goproup 7% as the company reveals its plan to get into virt oolual reality and drones. we have someone who says this rally won't last.

>> that drone that kara swisher's showing you. does it have seven tamcameras or something on it? >> it is fascinating. any anybody familiar with the drone industry knows about those cameras. it could really take off. a new report says jpmorgan could lay off 5,000 people by next year. is this a broader issue for the financial sector? many parts of financials have suffered the last couple of years. is there normore layoff to come? going to the front lines, we have the ceos of three major banks all here exclusive on "closing bell." we begin with the markets. an hour to go to the close, the dow is down about 40 points right about the middle of the trading range today. giving up .2%. caterpillar interestingly the big weigher there, down 2% on the session today. the s&p weaker by 2 1/2 points.

the nasdaq which yesterday closed at a record high today giving up a little bit of that. down about nine just below 5,100. >> one featured market we're following closely today, natural gas sinking like a stone around 10:30 when inventory reports came out showing a bigger build than anticipated. but it is not just this weekend. you can see today alone, natural gas is down 4.5%. just in the last month or six weeks. that commodity is down sharply. wouldn't it be nice if that was gasoline prices that were coming down that much? >> you never know. we have seen it happen before bill. it wasn't that long ago. >> the good old days. on our "closing bell" exchange this thursday heather hughes from sun america funds, rob more gone and our own rick santelli. heather hughes where are you seeing opportunity right now? clearly volatility is back in this market just this week. does it present an opportunity for you folks or what are you doing right now? >> yeah you're right. it definitely could.

i mean i know the banks are getting hammered with excess regulations, fines and so forth. but if as we do see a rising rate environment, even if rates are rising very slowly that will fair better for it the banks going forward as of course it would increase their profitability profitability. moab is looking at banks right now for the potential for upside in all the scrutiny they're under and constant news headlines regarding fifa dodd-frank, et cetera. but as rates rise they've underperformed the markets last year so as markets rates rise they may outperform other sectors and indices. >> we already saw that on rbc's results. that's a harbinger for a lot of the big u.s. banks here as well. rob, what about the point about rates rising? what happens if there a he no rate hike until next year or what happens if we see a 25 or

50 basis point increase and that's it? >> well i would tend to think that even if we push off the rate hike until next year we're still going to be baking in the expectations of that. i think it is going to continue to cause the dollar to nudge up and building a little bit on what heather said, that's kind of my big theme right now. investing more in small caps versus large cap multi-nationals that get hit with the rising dollar. really underweighting a number of the u.s. investors investing overseas. but i do like stocks in general and my favorite sectors are cyclical sector. couple cyclical sectors, technology and consumer discretionary. even if the rate hike has pushed off, i think we will continue to see this gradual nudging up and rates in the market. >> a weaker dollar would also help the banks, of course. and we haven't seen that trend play out just yet. but eventually we had the cpi data last week and inflation

looks like we might get an uptick here in the u.s. but again, it is all relative so on a global scale, our dollar's very strong on a relative basis. >> rick do you see that stream continuing soon from the dollar or do we have to wait for lift-off from the federal reserve first? >> i think there was a period when the lift-off was believed, and that was the underpinnings and reason why the dollar was improving. but i think what we're seeing of late -- and i draw exhibit a, the dollar/yen -- i think it is now more about other economies and other currencies being a bit more proactive. yesterday, we were talking about why so much drama with the federal reserve. i offered the notion it is from within. so you have one person saying next year one person saying watch the data janet yellen not talking about real-time data and basically still promising we're really serious about this. so the drama does continue. but i think we're in idly mode. everything i'm seeing in the market place, you can explain it any way you want certainly

seems though nobody's anticipating anything aggressive in the foreseeable future. and interest ratsz, my rates, my opinion, reflecting that. the dollar/yen in china is the rates buyers are paying most attention to. >> rick what happens if they raise rates only once or only twice and we're only talking about 0.5% at the end of the day? >> i think the idea of normalization is going to be bumpy. we all know that. but i do think you've hit on a very important point. that this is just a little bump for a variety of reasons and i don't really think it is going to make that much difference. i think seven years after the crisis. the real issue is if we're where we should be at 1.5%. would we be lowering? i would think the answer is no. so there is a lot to reconcile here. >> no. when else in history have we raised rates just one time though? usually when they start, i know the consensus is as you said

kelly, 25 basis points increase maybe throw out a trial balloon and maybe see what happens with the markets. maybe they're watching the markets, maybe we shouldn't be. and is that -- do you really think that they would then if the armageddon situation plays out and the markets drop dramatically would they then pull back again? you think of qe4 or would they just stop at one rate hike? nowhere else in history have we ever raised rates just one time. >> that's a great point heather. that's what makes it so interesting. if conditions only really warrant doing it a little bit or a couple of times, the impact that would have relative to the stair step we're used to in the past. >> i think rick hass the point there. we're in idling mode right now, everybody just waiting for that first shoe to drop or to rise as the case may be. but we'll see what happens when in fact it does happen. thank you all. see you three later. meanwhile, we've talked a lot about the rally in the chinese stock market lately. china's stock market opens in

about six hours after getting crushed last flight. . shanghai index was down more than 6%. to put that in perspective, a 6% move on the dow would be about 1,000 points. big, big number last night in shanghai. >> guys 6.5% certainly gets your attention but the context is key here. the market the chinese stock market, up 43%. so far this year. and up 140% over the last 12 months. that plunge overnight came on the back of a seven-day winning streak. few factors being discussed as the trigger for what we saw. number one brokers tightening margin trading it requirements. the central bank continuing to drain liquidity. and there's also talk in the markets of a state investment fund selling shares in big banks. but the real question here is is china in a bubble meaning has the market run so far ahead of itself and ahead of reality, which is actually a slowing,

growing inging chinese economy -- slower growing chinese economy. bubble or not, last time chinese stocks plummeted like this they bounced right back. same goes for the china etf. in fact a number cruncher found that over the last decade every time the chinese etf dropped more than 3% in a day, investors would be richly rewarded over the next 90 and 120 days talking returns of as much as 30% if they stayed patient. so guys the lesson may be here to buy the dip if you follow history. obviously if it is in a bubble it can't go on like that forever. >> your results may vary too, by the way. >> individual results. thanks, sara. the chinese market has been quite volatile lately. something "fast money" brought up with dennis gartman just last week. >> i would not buy klein herechina here. not with the shanghai up from

2,000 to 4,000 in the course of six months. but i think this is kind of a circumstance that will send people to the sidelines, let prices go lower from here let prices go down 10%, 15%, 20% on the shanghai index. tlen illthen i'll be interested. >> is dennis buying now? dennis, is this enough to get you involved? >> not yet. but certainly it has my interest. my interest is obvious piqued on this sort of correction. i think you've got another 3% 4%, 5% on the most to the downside. the trend is clearly from the lower left to the upper right. i think president xi has really done a great job with the economy over there. he's making sure that this economy changes from one that's export driven to one that's consumer driven. i think they're doing all of the right things. the only problem that i have is their military adventureism that's taking place in the south china sea which is also i think one of the reasons why i had a correction overnight. but giver prices another 3% 4%

5% to the downside, take me closer to the upward sloping trend line and i'll be a buyer. i think things are changing in china for the better not the worse. but it still has to go down just a tad more. >> we had a bull and a bear on china the other day. the bull, whether he was in denial or not, said you can't fight the fed in china. the chinese government in this particular case. as long as they are still doing things to try and foster growth there and move chinese shares higher, why would you want to sell this market? >> you wouldn't, bill. you would not want to sell the market. i'm sorry. a lot of smart people have tried to sell the market. everybody wants to call it a bubble. i think this is just a change in the psychology after having a bit of a bull market move this is a very healthy correction. i don't think you want to sell it at all. i think the chinese officials are doing all of the right things. some of my good friends will take me to task for this. very sophisticated people will say that that is naive. but i think really changes are

taking place. i think president xi really is doing all the right things of attacking corruption as he should be doing, and the monetary authorities are still going to be expansionary they're still going to push reserves into the system. the trend is from the lower left to the upper right. don't fight the fed. don't fight the people's bank of china. >> if it keeps going, dennis we'll have you back. dennis gartman, for now thanks very much. appreciate it. >> thanks. 45 minutes to go until the close. the dow is down about 41 points. s&p giving up 2 1/2. the nasdaq is down about ten. we've seen unusually heavy volume in the final hour of trade lately. the pros will explain why it is. it turns out it is so crucial to pay's tension to the last hour of trade. that's coming up. also the ceos of wells fargo, royal bank of canada and td bank are all speaking with us exclusively. lots of territory to cover.

the crazy markets. the housing recovery. or lack thereof and jpmorgan's potential layoffs. digital wallets. something royal bank of canada is very much into. here come the gopro drones. the ceo nick woodman talking about the action cameramaker's pipeline. we have the cool cool latest developments on that coming up. and find out if gopro is a stock you need to own. it is popping today, up 7% but still well below those 52. week highs and it is heavily shorted. a stock brawl after the break. .

verizon say neversettle. t-mobile agrees. never settle for verizon's overpriced gimmicks. try the un-carrier risk-free for 14 days you'll love it, or we'll pay for you to go back.

female announcer: through sunday it's posturepedic vs. beautyrest with up to $400 off. serta icomfort and tempur-pedic go head-to-head with three years interest-free financing. mattress price wars ends sunday at sleep train. ♪ your ticket to a better night's sleep ♪

welcome back. the ceos of twitter and gopro headlining the conference in california. >> josh? >> bill today the talk was about the ceo of twitter. he was on stage with kara swisher. we know he's been the subject of criticism, even speculation about whether he'll stay on the job. swisher asked him very bluptly lyly

lylybluptly. >> you'll be there at the end of the year? >> i have to focus on my job and what i have ahead of me. i don't worry about am i going to be working here on this date or that date. i focus on my job. >> you feel you're in sync with the board? >> well i don't feel like i'm in with my board. i know i'm in sync with my board. the bord and i communicate very regularly. one of the things i probably do is overcommunicate with them and we're thoroughly in sync. >> now besides costolo, the biggest news had to come from the gopro ceo mick whitnick whitman. he introduced two products. one is the gopro drone. a red hot market. analysts think that drone could generate nearly half a billion dollars in revenue. also introducing this new six-camera spherical array. allowing users to shoot footage for virtual reality. it could set stage for new

partnerships between gopro and all those tech titans involved in virtual reality, from facebook to google. gopro not yet announcing the price of those two products. guys, back to you. >> you wonder how long dick costolo will keep answering that question. are you going to be there at the ends of the month. are you going to be there at the end of the year. i guess josh couldn't want to answer that question either. >> i'm sorry, bill. i didn't know that was directed at me. she certainly pressed him on that point. it caught up with him a couple times but he stuck to his guns and said listen he believes in the strategy they've laid out. he believes in order to get wall street on word they're going to come around to that recognizing the breadth of that platform right now focusing on that strategy and focused on remaining very much in sync with this board. >> josh lipton there in california, thanks. only marissa myer has to answer

that question more often at this point. should investors be getting on board with gopro, and now their drones? >> love this story. joining us brian hamilton from stage works. he's bullish. jason rodman who's bearish. welcome to you both. do you think the drone business will be as big for gopro as nick whitman is saying? >> i don't know to be honest. this company compared to when it went public they were three times trailing sales then. they're five times trailing sales now. they've got products. they've got cash flow. they're buying new things. they're selling internationally. i still like the company. >> jason, why don't you like it? >> well listen. let me count the ways. i guess i could start with first of all, gopro is not a bad company, clearly. but to keep this short and to the point, there is a company out of china called dji

innovations. here's an interest region gaktfact. gopro has a $7 million market cap. there are -- gopro is a baby in the drone world. a baby. dji innovations, $10 billion private valuation. they sell a fanphantom 3 quad copter which is one-third of the price of gopro's. gopro is a great company. however, i still believe they are a baby in this new space, that dji is going to crush them. >> is this a zero sum game? >> well no of course not. of course not. i think the overall trend in sales over the next several years in these drones is clearly going to be higher. however, that's not even necessarily good for go pro because right now the major factor in go pro's growth has been their high margins. i think as the competition gets more stiff, their margins are going to have to come down. it is just not good for gopro. >> jason, staying on this theme about them getting into the drone space. bill's point is an important

one. we're in a nascent stage here. this is probably going to grow quite a bit and goprotechnology, the cameras, are always involved in the dji drones. if they're just going to get more involved in it, isn't that ultimately going to be better for their sales outlook than if they just stuck to the cameras? >> better for the sales outlook? probably. however, an interesting counterpoint is that the most recent phantom 3 from dji comes with its own camera. so i think dji is extraordinarily competitive. the ceo is crazy competitive. and he's known for squashing prices and squashing competition. so again, dji's dangerous. >> jason, i guess that's my point. at some level, if gopro is at any risk of dji, the biggest player in the space elbowing their technology out of it all together, aren't they making exactly the right move by trying to punch back and try to get in by developing their own drone

in this case? >> i don't really see that. i think they're devoteing too many resources to a space in which they're not too proficient. >> brian you had some audio problems. i guess you're back. >> i'm back. jason, jason, jason. look. it might be true -- let's say that what you say is correct, that they don't make it in that market. i give the guy credit for going out and trying new things. this is the problem with the ipo market. we keep getting distracted. this company grew 54% so far this year over last year. they're profitable. they have cash flow. take some chances. if you bomb in the drone plashth, i don't wantn the drone market, i don't want to say so what but tech companies need to try different things and while they're doing it they're still generating cash. so many companies are out there in this realm that are not making money. let's go for those easy targets. this is definitely not one of them in my mind.

>> the last word is that that's a very weak argument. in my humble opinion, the stock does not deserve to be up 7% on trying new things and taking chances. >> no. they should be on cash. on cash -- >> brian, since the ipo, this has been an incredibly volatile stock. it's been both a big winner and a big loser. so market can't decide which way it wants to go on this one. >> yeah. so we have to look at what's actually happened in the company. bill, you are exactly right. but remember the stock has doubled since its ipo debut. again, the company is doing what it needs to do. let's go after easier targets. they are growing revenue. they are going international. that's a really big and very important point. i give them credit for taking advances. they've got to do that. >> let'sthanks for joining us today.

heading to the close with, we got 37 minutes left in the trading session. the dow down 47 points. transports have been a big part of this day as well. been testing support and a lot of triggers on the floor here have been watching the dow transportation average for some guidance today as well. >> transports year to date are down 9% while the nasdaq is up about the same amount 7.5%. so again, watching closely for any signs of a broader market breakdown. today though only giving up a little bit of ground. the largest ever chip deal in the space announced this morning. but broadcom the takeover target is now selling off. two wall street pros weigh in coming up. also ahead, our trio of ceos from north america's leading banks. the heads of wells fargo, royal bank of canada and td bank will be here exclusively. find out which of these ceos is trying to get their branches to look more like an apple store. that will be interesting. coming up.

automotive innovation starts... right here. with a control pad that can read your handwriting, a wide-screen multimedia center, and a head-up display for enhanced driver focus. all inside a redesigned cabin of unrivaled style and comfort. the 2015 c-class. at the very touchpoint of performance and innovation.

by the time police arrive on a crime scene they could have little to go on. a vague description. a single piece of evidence. a partial plate number. with an app from ibm officers can now access over a billion police documents to find hidden connections and identify potential suspects. ibm analytics helps one hundred thousand officers work smarter every day.

welcome back. there is a look at that benchmark philly semiconductor index. >> officially known as the sophlx. >> the biggest chip deal ever announced was just this morning. talking about the broadcom deal now lower after yesterday's huge rally. is this now a sign after that

three-year run up entirely of a top for chip stocks? >> let's talk about it. christopher roland. lou basney is with us as well. do you see a top in semis at this point? >> no. i think the rate of consol consolidation will throw and there will be a strong backdrop of contoll days of year to come. we don't see classic signs after semiconductor top like large inventory builds double ordering people building safety stock. no. we're really in that perfect temperature for semis right now. things aren't too hot, and they're not too cold. >> it does seem like these deals are motivated by a desperate search for growth when pcs aren't selling like they used to. >> i'd love to be controversial and disagree with chris, they are searching for growth with you some underlying growth

trends are going to persist. mobile communications are just eating the world, not just from smartphones and fab bletstablets, not just the device side, but providing that infrastructure for it. on top of that we get to layer on all these new growth opportunities that are really an extension of mobile or leverage mobile technologies. i'm talking about the internet of things. drones even. the connected car. you have apple coming out saying that's the ultimate mobile device. these are really ripe opportunities for these chip companies to go in to. i do think, though in this world you're going to see more consolidation because the device manufacturers want system solutions. they don't want multiple parts. think that's a key driver. one of the other big things that's going to drive consolidation i think is trying to get rid of and slough off that reputation of being really cyclical. you're see something evago merge with broadcom to get into more of the wi-fi space. you're going to see other companies doing the same thing to smooth out the lumpiness in those revenues and cycles

tradition traditionally associated with semis. >> well, he gave you a lot there. what do you see there? are these mergers strategic or defensive? what's motivating them right now? >> yeah. so semiconductor stocks are cyclical and we can't forget that. we didn't see some of the classic signs of a top like large inventory builds and over ordering. as far as the cycle's concerned, i think we're okay. what we're seeing right now is top line growth that's anemic for these guys. so they're going out and they're looking at ways to drive from the bottom line. a lot of these deals aren't strategic. they're purely for financial reasons. but semi-conductors can be a scale game in many cases and that's what we're seeing here we're seeing guys scale up. >> where specifically do you think this swas withpace can continue to grow? >> we're moving from a phase

where they were only looking at sub-scale companies. $1 billion, 2 billion mr.$2 billion $3 billion companies. now what we're seeing with the potential intel-altera tie-up we're seeing these deals are getting bigger and bigger and bigger. so a guy like t.i. could be next. they could buy a abi, microchip, a maxim. our favorite takeover candidate,. >> i think there will be bigger deals but i would still look at a company like maycom. a pure play leader in high-performance semi-condumbers across the entire spectrum trading at about a $2 billion market cap. >> thanks all, for joining us today. it has been a hot market. sharon epperson has a cnbc

market update. >> we're looking at what's happening this hour starting with former president bill clinton who made an impassioned appeal at the united nations for modern health care in the ebola stricken areas of africa. he urged ear mashing of 15% of their aid money over the coming years to build health systems in the region. prosecutors have charged a plan with arson for allegedly starting a massive fire that destroyed an unfinished apartment building and damaged nearby office towers in downtown los angeles last december. the defendant remains in bond on more than $1 million in bail. a fast driving taxi can soon hit the roads. it can charge in just 15 minutes. it runs on lithium batteries that can be actively cooled. incredible footage of a church being hit by lightning in maine last night. the st. gerald mt. caramel

church had some shingles knocked off in addition to some electrical damage. it is the second time the church has been hit by lightning. that's the cnbc news update for this hour. >> somebody doesn't like the sermons being delivered there. >> that's what i was thinking! >> thank you, theron sharon. 30 minutes to the close. the dow is down about 50 points. the nasdaq we're watching because it is giving up ten after closing at a record high yesterday. the s&p down about three. speaking of the last 30 minutes, check out this headline from the "wall street journal." traders piling in to the close. is this simply for procrastination or is something else going on? we'll talk about a very interesting study that has to do with the busiest times of the day in the trading day. plus the man behind the fall of lehman brothers. former ceo dick fold making a rare public speech today. we'll bring you those highlights and get reaction from wells fargo ceo john stumpf coming up.

[container door opening] ♪ what makes it an suv is what you can get into it. ♪ [container door closing] what makes it an nx is what you can get out of it. ♪ introducing the first-ever lexus nx turbo and hybrid. once you go beyond utility there's no going back. so these next few minutes are going to be crucial to the trading day. a new "wall street journal" article arguing the last half-hour of the trading session is the most important one. >> didn't we know that already? it took a credit suisse report. tle did a study that says there

has been increasing number of trades occurring in this last half-hour of trading. largely due to the rising use of index funds, algorithms, computer models that prefer to trade at the close of day and it has trades between 3:30 and 4:00 p.m. that have increased nearly 5% since 2007. with more than 1 in 6 trades in s&p stocks taking place in these final 30 minutes. >> let's give you more now from two traders who have been on this floor for some time. guys, welcome. peter, how much activity -- how much more concentrated is this activity now than what you've experienced in the past? >> actually i think that the numbers probably don't really truly reflect the close. i think that if you look at volumes right before the close and after the close, think it is a lot more than what that report says. i think it could almost border on 20% of the trading volume of the day is done in that last minute. so i do think that -- it becomes

very, very important. i mean our firm has built a whole business around it and a lot of other firms have as well. so it is typical of new york stock exchange brokers, they will re-invent themselves as the market dictates. >> do you agree, and does this present an opportunity for individuals out there watching? >> it is an opportunity for very sophisticated individuals. this is not a children's game. this is a self-fulfilling prophecy of a style of trading that goes back my 30 years in the business. this was a model that was used by the traders inside mutual funds who were gauged on their cost of trade versus the closing sale. so all day long you would be working the volume weighted average price, trying to beat it on behalf of that mutual fund. at the end of the day that mutual fund trader needed to be done and you'd slam the stock and all of a sudden their average price looks spectacular against the closing price. that again, as that continues into the etf and indexing

trading where it is all marked to the close. there is not a stock etf that's hedged during the day. that's why the close is so important. >> okay. >> wait a minute. the vwop. the volume weighted average price. if you have 100,000 shares customer says sell 100,000 shares and try to beat the vwop chances are the first half-an-hour of trading you're going to do 15% of your order or 15,000 shares. until 11:30 until the close of europe, another 15,000. 30%. you're going to save 25% -- this is the way credit suisse and most other algorithms are based from round numbers. 25% of that order will be saved, be executed in the last five minutes of trading. that only leaves 45,000 shares for that 3 1/2-hour segment or 4-hour segment. >> peter, what's been lost in this move to the close? >> i'm sorry? >> what's been lost? >> well i think that the ability of a broker to -- some of the skills that brokers have

almost an innate ability to read markets, that's going further and further away. it changes the rhythm of the day. the thing is there are people that try to game that close. try to judge. we -- at 3:40 we have the imbalances imbalances change at 3:55, they re-up. and people will trade against that. then they try to game that particular close. it doesn't always work. >> it's a great deal of risk capital. you will see that in play a very big way tomorrow. you'll have a reweighting of the russell 2,000. that's all being traded against already. as we speak. and an expiration. you'll see it live and in person tomorrow. great insights. thanks, guys. we'll let you go beat the vwops while you can. i love learning stuff like that. we have a developing story on questionable economic data from the government. steve leisman joins us now with those details. hi, steve. >> hi kelly.

critical government reports on the nation's productivity growth appear to have the same seasonal problems that cnbc uncovered in the gdp data. looking again over a 30-year period cnbc found first quarter productivity running nearly a full percentage point below the average for the economy. productivity is a measure of output per hour or efficiency in the economy and it is a critical data series looked at by policy plashgs policymakers to judge economic health. >> the most important factor determining living standards is productivity growth. over time sustained increases in productivity are necessary to support rising incomes. here the recent data have been disappointing. >> yet there could be some statistical noise in the data. first quarter productivity averaging 1.1% over the past 30 years compares to overall productivity growth of 2%. over the past six years, the efficiency if the had country in

the first quarter has been nothing short of abysmal. shrinking 1.2%. here are the five biggest productivity declines since 1985. 4 of the 5 are in the first quarter. minus 4.7% that is the record in the 30-year period there. moving on here cnbc in april uncovered a 30-year problem in the nation's gdp showing that the first quarter was far weaker than the other quarters. the bureau of economic analysis put together gdp. they have since acknowledged problems and pledged to revise some of the data with the july 30th release of second quarter gdp. given cnbc's research on gdp, findings on productivity are not that surprising because productivity relies on the gdp data. it provides the output part of the output per hour contemplation. john glazer supervisor of productivity at the bls told cnbc today anything in the bea data will be in the productivity data. the bls will have to revise the data when the bea does. the gdp story remains unclear,

should productivity growth be higher or just redistributed from other quarters? glazer from the bls said the best way for markets and investors and policymakers to read their productivity data is over long time spans. use at least four quarters. when looked at that way, productivity has still definitely been weak. >> steve, perhaps this will give people more to think about before jumping to any conclusions about the first quarter. >> i think that's right. >> we'll call it the leisman anomaly at some point. that he uncovered that. >> 3:43 here. 17 minutes until the close. the dow is down about 50 points on the session. caterpillar in particular is kind ever weighing on things there. this after china had a really tough overnight session. here the s&p 500 only giving up 3 1/2 points on the broad index. the nasdaq down about 11. >> we've been looking forward to th. the head of rbc will be here to talk up his bank's record earnings. we'll talk about what the rbc bank of the future will look like. they're into some very high-tech

stuf john stumpf is coming up. over 20 million kids everydain 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.

royal bank of canada better known as rbc, reporting another strong quarter of earnings. profits were up 14%. now the bank is tackling new innovations with what are called digital wallets and retail branches that in some cases look like apple stores. >> that's right. joining us right now in an exclusive interview, rbc's ceo, be dave mckay. thanks for joining us. let's begin with some of the trends you saw that might have a lot to bear on how u.s. banks are fairing as well in their trading businesses. some strong trading revenues for you guys. where in particular are you seeing areas in this market whether it's from deal making activity, or whatnot, about performance. >> we certainly had a record quarter that we're very happy with. we had outstanding performance, as you've references in our capital markets operation. we really saw broad based strength across all our capital markets divisions, particularly

our dcm and ecm businesses and origination businesses. our trading businesses had broad-based strength. thick. particularly in u.s. and emerging -- in europe and good m and a activity. so very strong results across our capital markets business. really in the u.s. and now more emerging in europe as we start to see some european strength. the second driver of our success this quarter is really our core canadian retail business. strong growth but a very benign credit environment in canada. despite the oil price shocks to the canadian economy, it is not manifesting itself in credit loss right now. >> kelly and i want to talk about your futuristic branches and the role technology is playing. the digital wallet and so forth, not only for your banking enterprise but for banking in general. where are we going with this? >> well you look at particularly on the digital wallet side and the payments business you're really seeing trends driven by the convergence of the physical payment world

with the e-commerce digital payment world and it is converging around things like in app payments and the battleground and really the test for customer centricity and customer relevance and trying to link that to your digital wallet and create a holistic customer experience of the future. we are investing a lot of money at rbc and all banks need to pay attention to that digital payment space and how it links to the overall wallet. >> very impressive and a lot of people are doing it. how safe is it though? are we playing with fire given the security breaches that we keep hearing about, not only in your industry but elsewhere? >> that's a great question. we've taken a very measured approach in rolling out the new technology. in fact we patented a proprietary technology called secure cloud that stores the minimal amount of data on the phone and in a secure private cloud environment. that patented technole gi will form our foundation of the solution to the market we'll unveil later this year. security is paramount to the confidence in the payment system

and therefore we have to take a person measured approach to rolling this out. >> comments from jpmorgan today indicates we'll see fewer employees at their branches around the bank generally over the next few years. what is theank branch of the future for you guys look like? >> there are a number of headwinds facing retail branches in general but they are still the foundation to the customer experience and the manifestation of your brand in the environment. they're still relevant to the customer but they have to change and evolve their role in the future. but headwinds we're facing is customer choice and let foot fall in a branch reducing revenue streams, low demand for credit products. all that are driving revenue and cost challenges to the bank so you have to reposition your branch for the future. reduce the food print. you have to move it from a transaction centric to a sales and advice centric. that was really the journey that we started almost six years ago at rbc. and we hired a firm who had never built a branch before.

we asked them with a clean slate start with the customer and build their retail store that will create an heengaging experience. that's the product of our jour in nen n -- journey over the last six years. >> dave, thank you so much for being here. dave mckay, ceo of rbc. nine minutes left in the trading session here. not much movement in the markets in the last few minutes. so far, the dow down 41 points. you heard traders saying though probably a lot of volatility tomorrow with the rebalancing coming in some of the major ind disease -- indices. the ceo of wells fargo will discuss what the biggest mortgage lender sees for the housing market. back in two.

welcome back. the dow transports tumbling back into correction territory today. >> yesterday we had a respite for the transports which actually finished higher. but with today's decline up 78 points, that means it is in correction territory. 10% below its recent high of 9 3

9310.33. the 10% line is 8379. as we sit it is 8,366. the pullback in the airlines and ral railroads and concerns about capacity and energy impacting that sector. today, delta is under pressure. ual pretty much flat. alaska airlines, among the airlines that's been one of the better performers. off of their 52-week highs, about six members of the dow transports that's down less than 10% from those levels. so again today with the sell-off, we see the transports fall back into correction territory. back to you. >> mary thanks very much. we'll come back with the closing countdown and see how we close things out. >> stay tuned, you're cnbc, first in business worldwide.

in the us, three in ten college students drop out. but how can you spot who's at risk? the one who lives far from campus? the one who works the night shift? the one with new responsibilities? one thing can't tell you, but the right combination can. universities are using ibm analytics to understand pressures in and out of the classroom- some expect to cut dropout rates by twenty-five percent. ibm analytics is working to make education smarter every day. there's a more enjoyable way to get your fiber. try phillips' fiber good gummies plus energy support. it's a new fiber supplement that helps support regularity and includes b vitamins to help convert food to energy. mmmmm, these are good! nice work, phillips! the tasty side of fiber, from phillips'. (announcer) you run a business. could be any kind of business. and every day, you've got important decisions to make. like hiring. where are you gonna find those essential people you need? with ziprecruiter, it's simple.

we post your job to over a hundred job boards with just a single click. so you can reach millions of qualified candidates. then we'll give you the tools to help you manage, screen and rank your applicants. all so you can find the right one. try ziprecruiter for free today. here at td ameritrade, they're always working. yup, we're constantly making thinkorswim better. like a custom screener on your desktop, that updates to all your devices. and you can share it with one click. wow. how do you find the time to do all this? easy. we combined every birthday and holiday into one celebration. (different holidays being shouted) back to work, guys! i love this times of year. for all the confidence you need. td ameritrade. you got this.

inside the two-minute mark. the market we're going to watch very carefully tonight. the shanghai market down 6.5% last night. that set the tone for our market opening this morning. how will it do? bounce back? continue the sell-off tonight? we'll find out in a few hours. meantime, our market one thing that's been a hallmark of the dow, this trading range we've been in since march 2nd when it hit that all-time high. we just kind of meandered sideways idling. we've been in this trading range

for a while. what's going to pull us out? >> really it is kind of stalemate so far. . on the bearish side you've had two consecutive quarters without earnings growth. we're looking at flat gdp in the first half the of the year. >> you sound like you expect you to break to the downside. >> baes the bearwhat's going to break us out of the range here we're thinking it is going to be changes in that expectations. we are starting to see signs in the market where utilities are starting to leave, long duration treasuries starting to leave. the last few weeks we're indicating a more defensive position is warranted. we've been aggressively positioned for the last few months. we're very close to switching here. >> ben bernanke said yesterday when they do start raising rates it will be a good sign for the economy. but will it be for the markets? >> the stock market and the economy are two different things. >> just get the first one out of the way.

charlie, thanks very much. we're going out with minor minus signs so far for the dow jones industrial average and other major averages. the ceos of td bank and wells fargo coming up on the second hour of "the closing bell" with kelly evans. see you tomorrow. [ closing bell ] thank you, bill. welcome to the "closing bell." i'm kelly evans. the dow closed down about 36 points. the s&p giving up 2 1/2. nasdaq down 8 off that record high close we saw yesterday. let's bring in today's panel. we have more earnings on tap. michael santoli. "fast money" trader steve grasso will join us off the floor in a moment. jim lowell. michael, record high for the

nasdaq yesterday. today we are talking a little bit about the chip names and whether they might be at the top here. how do you read the trend line? >> i think you have to look very closely at today's action to anything that changes the story of just a stalled market. yes, you'd like to see semi-conductors build off that merger news. but really not telling you much because from day to day there's really not a lot of a thread being pulled through. >> seems like we've been in a holding pattern for most of the year. i hate to spoil all of the excitement over here. but it is interesting because we're seeing m and a on track for its best year in tech since 2000 and announced m and a this month is supposed to be the best on record. it is incredible to see all of these companies doing deals, trying to consolidate, trying to build scale in a market where profits are hard to come by growth is slowing. and it just seems like that's the activity that we should be talking about. >> steve grasso hello.

we were just talking today in particular about how much trading activity is happening in the last 30 minutes of the session. most of it is happening just in the last minute as all of these flows are calculated. what about today? what's moving the needle for a markets? >> i'm sure you guys already kicked off the show if you look at the market early on the day, it was the housing data. just couple minutes before the housing data the market fell off a cliff. was it greece? was it a headline? or was it housing data. was the housing data thinking that the rates would be pulled forward. and it spooked the market. i think it is a combination of probably greece japan, china, take your pick. but the most related event that happened was the housing dayta that was going to be announced. >> jim lowell do you agree with that? >> i think the prospects are probably still pretty good. we've seen a reasonably good go in terms of the spring bounce for the housing market. if prices were a little bit lower, if inventory was built up

a little bit better i think we'd get a better bounce than we are a currently seeing. the market is still up 3 1/2% so far this year. overseas the market is up 12% in u.s. dollar terms. it's hardly been a stagnating market despite the fact that right about now it feels like we are in that stair step pattern. i think either a step back or a step forward is the day that dictates. >> it has implications for monetary policy and for how well the stock market does or looks or appeals to investors around the world. >> not a big move today, therefore we get not a big move in equities. yes, that has been the big headwind. on one side you have the macro stuff which is basically drown grading growth. then you have the financial engineering piece which is still available. and you still have the markets wide open for business on that front. i think that's why this market is where drama goes to die. you have all this dramatic stuff happening around the edges and

it kind cancels itself out in the middle. >> does it drive you in a vested interest in the euro to collapse? these greece headlines, it seems sort of contrived to me at this point. you want it just bad enough -- right? the goldilocks. draghi has the goldilocks scenario. >> greece's exit doesn't have to mean the end of the euro. >> they're walking a fine line. i think they have a vested interest. if greece does exit the euro will spike higher. >> we saw what mario draghi did when the euro started to rebound in europe relative to the u.s. he started talking about front loading their bond buying program. jim lowell how much will we be able to see the dollar's strength persist against the euro for example and how much might policymakers on that side of the pond have to do? >> maybe the dollar guess to

parity against the euro. the accelerated race of dollar versus euro in particular probably slows off its first quarter pace which was absolutely horrid. the greece exiting wouldn't be the real trauma but we did see anti-austerity elections in spain. if it's only greece that's going to be a wrinkle. maybe exactly the kind of catalyst for the pullback of 10% that we're long overdo for which will be a buying opportunity. but if we see more members inside of the zone politically moved more and more towards anti-austerity platforms that could definitely be something that upsets the apple park. >> just thinking back to what's happening in the oil and natural gas space. obviously there are multiple contributors to that but could it bode well for people thinking maybe we'll continue to get relief at the gas pump or no? >> it obviously would. we've really been a little bit

of two minds about the oil price. we want to see it strengthen because we don't want to think of anything breaking in there and compromising the health of the u.s. economy. but on the other hand we kind of got used to this idea if we get a little bit of the tax break. stocks have done well energy stocks in recent weeks. >> the dow hitting its lowest points since 2009. banks are saying we don't want to lend to someone that could potentially be over leveraged if their job is at risk. that's a ripple effect that i think a lot of people didn't expect out of that. >> especially because those marginal dollars in a way mattered more to this economy. you had the oil and gas kind of gold rush the boom. and if that has helping us to move forward and we lose that really going to feel it. >> you're sort of perplexed as to what you're really hoping

for. specifically to energy companies, all these e and p companies got ahead of themselves and started to re-factor in $85 a barrel oil. that's why you see underlying issues aren't doing that well. oil here at around 60 probably longer term probably moves lower from here. >> jim, what are your favorite ways to play this market broadly speaking? >> we continue to like europe and japan especially in the small mid cap space and japanese markets. we understand the stimulus safety nets of both of those economies are providing for their marketplaces will have to pay the piper some time down the road. we think the bend in that road is likely years away. so while others probably fear stagnation in europe and japan, we continue to think that behind a good manager like at fidelity international growth, we'll overturn good interesting stones good valuations over the next year or two. >> in the u.s. just homing in on transports this he really underperformed, does that worry you at all about prospects for

u.s. equities? >> that does not worry me but we're not overweight transports nor energy. we're definitely overweight health care where we really like the broad spectrum of sectors in health care. whether it is medical equipment and systems. even some biotech if we can just get a nice healthy swoon in biotechs. we'd find them attractive. >> a healthy swoon. let's get out to the gamestop earnings with kate rogers. >> we're looking at the beat on the top and bottom lines for the first quarter for video game retailer gamestop. reporting epf of 68 cents versus estimates of 59 cents a share. revenues came in at $2.06 billion. that's compared to estimates of $2.01 billion. they're also giving very strong guidance for the second quarter. in the after hours the stock is up by nearly 9%. >> noptt too shabby. what do you guys make of this gain? 9% move after hours. >> they put the nails in this

coffin so many times before. this is one that has a high shortage risk. lots of guys are forced to cover off of print like that. they've been able to sort of look at the used game market. we see walmart try to imitate what they've done with the used game market but they still seem to hold those -- maybe the margins better than anyone else can at this point. i don't think it is a screaming buy going forward but it is definitely a short covering scramble when you see a print like this. i like to play on the hand-held here, trade stocks all day long. if that calls me a gamer. >> thank you, everybody. we'll leave it there for now. stick around and catch more of steve grasso on "fast money" at 5:00. is a major auto deal in the works for gm? they'll have the latest on that story. our thanks to jim lowell as well. it's been nearly seven years since lehman brothers collapsed under the weight of the subprime mortgage crisis. former ceo dick fold is getting back in the real estate business. would you give him money?

"shark tank's" kevin o'leary is here next. you know he has a lot to say about fold and his adventure. then we'll take the pulse of the mortgage market. john stumpf will be here. he runs the nation's largest mortgage originator. you are watching cnbc, first in business worldwide. it can quickly become the only thing you think about. that's where at&t can help. with innovative solutions that connect machines and people... to keep your internet of things in-sync, in real-time. leaving you free to focus on what matters most.

female announcer: through sunday it's posturepedic vs. beautyrest with up to $400 off. serta icomfort and tempur-pedic go head-to-head with three years interest-free financing. mattress price wars ends sunday at sleep train. ♪ your ticket to a better night's sleep ♪

former lehman brothers ceo dick fold has rarely been seen. >> at the microcap conference dick fold did speak today. really speaking publicly for the first time in nearly seven years with the exception of some congressional testimony shortly after the financial crisis. fuld declined to talk in too much details about his personal failings about the lehman brothers bankruptcy or what exactly went wrong. he did give almost what was like a macro economics lesson in the environment from 2007 and 2008 giving his sense of really la went wrong and what led to that fateful bankruptcy filing in september of '08. he talked about lower credit standards, fed tightening

consumers being overextended and banks like lehman brothers being over leveraged and what happened as a result of all that. the rest he said is history leaving us hanging a little bit. but he did talk generally about some things he wished he had done differently or missed. he talked about the "violence" in the market in that firdthird quarter of '08. how the contagion spread from one asset class to another. he talked about also being confused or uninformed about exactly where he stood when it came to the government and some of the options that they had. obviously he wishes that it had gone differently, kelly. he said he still thinks about lehman brothers every single day but he still has moved on and at this point he's advising small companies on m and a and other strategic issues. >> kate, thank you. we'll get more reaction from "shark tank's" kevin o'leary. he was very disappointed not by what fuld had to say but rather kevin, by what he didn't say. explain. >> here's my feeling. of all the men in the world that would have a unique perspective

of what happened to the fixed income market in that period -- at that time like many other investors, i was stunned at how much capital was lost and i will that sense of panic. he was at the epicenter of it. . ive he a always felt -- by the way, i think he is a great man. he created something unique in the world. if you trade bonds, credits, floating rate loans, any form of fixed income all roads led to him. lehman was the internet the core of it all. everything traded through there one way or another. and anybody in that period knows this. what i wanted from him was actually some recommendations from his own individual perspective of what we could have learned from that that we don't do again. he's the only person to give that advice to both the government and the institutions that we now live with because if you really go through it all, having lived through the lehman collapse, the bear stearns collapse, the trauma lack of liquidity in the fixed income market, dick knows things and has recommendations he's not talking about. and i think he has the

credibility, he should have given that to us. i'm disappointed. >> i mean in a way, he did say no one thing caused the crisis to kevin's question. do you feel as though he should have addressed it more specifically kayla? >> not necessarily. what i took away from it kwas a little bit of remorse. he did know what he needed to address to sort of get the elephant out of the room. i really paid attention when he said liquidity is important. of course liquidity was the biggest issue for lehman in its final days. it is juxtaposed this week at the conference every single ceo on the record saying our institutions have never been safer than they are today and we have so much capital backing us up. it really sheds a contrast against where lehman was then -- and even where some of those institutions were then and how safe they actually are today if measured by nothing else other than liquidity. >> one of the quotes from fuld today, we don't put up capital -- a lot of merchant banking, his new business. he says we don't put up capital

because i lost a fair amount of that. >> i don't know how much credibility he has with the rest of the world. we kind of know the details. too much leverage in a period of no liquidity means they were kind of the sacrificial lamb for the entire system to finally have a break point where we had this bailout process and everything else. >> would you say he screwed up? >> look. he screwed up to the degree that he actually had more leverage and was slightly worse market position. there was no accident in terms of the sequence of firms that were under the most pressure when it went down. now bear stearns, they found a home for it. we didn't really know the rules of the road. you can give them that. >> kevin, i'd love to know now, given what dick fuld is doing in some of his businesses and getting into real estate would you give money to the guy now? >> yaees, i would. he was a genius at what he did. you got to remember the peak and growth and power lehman had in the fixed income market. >> we know how that story ended. >> i understand that. but why does -- why is it right

that one firm is given life and another isn't? why aren't they all let to go to the lehman extreme, let them all collapse and be built up from the protein that's left. why is it that lehman wasn't given the handout from the government and others were? there was no question goldman sachs should have faced liquidity crisis if it wasn't going to get bailed out. something still stinks about it. >> i'm surprised you used the "genius" term. why if you are singling him out why you are as a paradigm of that era. >> i'm just saying he was dealt with unfairly. i would have loved to have heard from him today three things that either he would have done differently or we should have done differently. because, kelly, i remind you now, world is more concentrated than it ever has been. we haven't really fixed anything yet. we've given a lot of guarantees and delevered banks. but there's fewer of them. there's more systemic risk in the fixed income market. it is hard to get liquidity in

the fixed income. >> after lehman failed and after aig was on the ropes, we still had congress vote down the t.a.r.p. bailout once. especially you needed to have that point of pain to actually lyly cat cat cat catatlyze. >> by picking winners and losers, we end up in a more precarious position by some metrics. we're more concentrated and there's less liquidity in fixed income than ever before. that's the beef i had and dick did not address that today. i wish he had. >> thanks so much kevin. appreciate your thoughts this hour. that's kevin o'leary of "shark tank." jamie dimon saying banks should only do buybacks under certain circumstances.

we'll be right back. later, the ceo of td bank tells us why he just purchased nordstrom's credit card portfolio for more than $2 billion and what that deal says about the health of the u.s. consumer consumer. back in two. 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.

at a time when people are doing most of their banking on their mobile devices these days the traditional retail branch isn't questioned. jpmorgan ceo jamie dimon saying branch head count will come down an average of something like one person over the next two years,

or 5,000 people mostly by attrition. a big move. will other banks see the same future? joining me now in a "closing bell" exclusive, td bank's ceo is here. >> our branch network's pretty stable. 6,200 branches. we like them because our customers like them. they might use them less not as often per month. but it is important part of the eco system ecosystem. if we don't have branches, we frankly don't have customers who are happy and we want them to be able to have delivery where they want it and how they want to use it. >> are we going to see more or fewer wells fargo branches over time? >> i think over time you'll probably see a similar amount. probably incrementally more but not in a big way. we think a lot about how do customers want to access us. and if they want to do it more through online, that's terrific.

if they want to use the bramplnch, that's also terrific but the branch is important to the overall system. >> important for mortgages. how are people accessing mortgages these days? if i want a mortgage from wells fargo, how do i get one? or how does wells fargo get me? >> we do business with realtors with builders. we have our branch or our store network who refer customers. but it is interesting going back to your first question about branches. most customers, even millennials, open their first account, no matter how they do it with a location or branch that was within two miles of where they grew up. it means more than just doing transaction business. 75% of them do it once every six months. it is a reminder of where their money is. it reminds them that there's security, that the company's invested in the community. so it has a lot of other attributes besides just doing business there. >> what about buying a house? we continue to get housing data a little bit mixed.

you're the biggest mortgage shop in the country. what kind of trends are you seeing? >> i would say i'm cautiously optimistic about this business. we just got numbers out today on eist exing home sales. fundamentals are starting to line up now. household formation is highest in ten years. the gscs are doing some reforming. rates are still very good. unemployment is down to 5.5%. that's on the good side. on the not-so-good side from housing, most of these households are going into rental units. we need . >> you think we should try to push those rent yours into housing? we saw some of the push policies last time around. >> i don't think we should ever do that. home ownership is down from eight years ago, i think it is

probably too low. as these new households move into rentals over time some of them will want to own a home. a survey recently the love afay irwith affair with owning a home is unabated. >> it may be a cost issue for first-time buyers. what about move-up buyers? where is the traditional demand we typically see from this group gone? >> first with respect to renters, and become buyers rental rates are actually going up. rental availability is coming down. it is actually a fairly tight market. at some point in time when people feel comfortable with their job and about the cost of financing and what the cost of the house is they will buy. not everybody, but as far as move-up buyers some of the challenge is when you move up you give up sometimes a lower rate than what you had in your new house. >> even the rates are still so low today? >> well they are low today but most people who have refinanced have done it a number of times and they have the all-time record low rate. >> they are clinking to that property.

>> sometimes that's true. sometimes unlike back when i got my first mortgage in 1976 it was 8.5%. two years later it was 11.5%. i thought those were barring rns. so if you're under 40 years old, you think 3% or 4% is normal. it is not. >> there was a point in the "wall street journal" today about how business loans are set to surpass mortgage loans being the bulk of what banks are doing. is that true in your business and why is this happening? >> small business lending is an important part of what we do. we're up over 20% year over year and small business is really the engine that drives a lot of the growth in jobs in the country. one of the challenges about small business is that if you look at the age of small businesses, for 25 years we've had fewer small business starts on an annual basis. >> for 25 years this has been happening? >> yes. so if you look at the average age of all businesses those less than two years old, in other words your new businesses have become a smaller and smaller percentage. that's worrisome for the economy

because that's where a lot of the growth is and that's where a lot of the jobs are. >> even today as the economy's showing signs of recovery the new business formation isn't there? >> it's less than it has been in the past. as a percentage of all -- this is a ratio. obviously we have more business in america but as a percentage it is smaller. but as far as businesses go they are -- they're doing better, their confidence is much higher. but the trend is worrisome. that's true for most first world economies across the globe. >> so it is not just the u.s. for people who would say it is a regulatory issue or a cost issue. >> it's happening in other places as well. there's no u.n. namty typossibility maybe it is online. it is hard to start a retail shop today because you can get a

lot of things other places. >> we do know one area where there's tons of growth. that's construction. you travel all over the country. what are you seeing out there? >> i see cranes. i see a crane convention every city i come into. actually what you're seeing is the private side of infrastructure spend is happening. it tends to lead the public side of infrastructure spend. so what's happening? the urban core residential development. i was in minneapolis last week. i gave the commencement speech for the carlson school there. i had left that community 25 or 30 years ago to go to other places with our company. and i get back once in a while. i had not thought about housing. there is a whole housing community there now. people are moving into the urban core. >> you guys do a lot of business in commercial real estate. >> we're the largest on the planet. >> are you going to look to add to that to grow that? >> it is a wonderful business. in fact we added a little bit with when we bought a portfolio

along with blackstone from ge. that was an important thing. but we like that business. we understand it well. we've been in it a long time. but you're seeing it not only in residential housing or multi-family housing, you are seeing it in things like office building. industrial. it is really happening in lots of places. >> when we talk about whether to invest in certain parts of the business or use the capital elsewhere we had some comments again from janie dimeon saying people who participate in these buy back programs are misplaced. it should really be investment, investment investment. others say listen if my shares are trading below book value, then i better spend a dollar there. what's your philosophy about buybacks? >> i think about dividends and buybacks as a return for capital shareholders. both are important. dividends speak to confidence of the company in your earnings stream. i think buybacks speak to excess

liquidity or capital allocation. we try to blend both of those. i think both of them matter and i wouldn't be anti-buyback if i think i can buy back shares at something less than the intrinsic value of the company. i don't necessarily look at book value. >> but you guys will continue to do that? >> it is part of our way we turn capital to shareholders. >> what is the biggest risk that you guys are thinking about? is it liquidity risk? is it the first interest rate hike? is it the strength of the u.s. dollar? is it something else entirely? from it is probably something else entirely. first of all, capital, liquidity, we're at the numbers, and more so than we need to be with our internal buffers. i think about cyber security a lot. because when you think about some of the breaches that have happened around the country, should you think of those cumulative not in an ebbpisodic, not, oh we got through that one. it is all connected. whether it happens a the a

retailer federal government, white house or whatever the case is, it is cumulative in its risk. so i think about that a lot. i also think about the payments business a lot. about the change -- >> a lot of new technology on that front. >> especially us being headquartered in san francisco with all that's happening in that area. there's a lot of change going on. and sometimes the first movers are thinking about things in more of a social way and we need to think about that we're putting people's capital and their money at risk. so we're trying to understand how we can provide products and services and be relevant and yet be safe. >> a lot of different things for you guys to consider. before i let you go though should we think of wells fargo as an entity that's going to continue to grow bigger to be number one in this business in that business and everywhere that you are or should we think about it as with some of your rivals and other financial institutions as a machine that's getting smaller, leaner and more efficient? >> we think we're already fairly

lean and efficient, though there is more work to do. our efficiency ratio, we're almost in a class by itself in terms of long institutions and efficiency. but i don't ever think about being number one in anything. i want to be most relevant to our customers. if that makes us bigger, that's terrific. you don't get better by being bigger. it's the other way around. >> even if it means doubling down on those branches. >> well, i don't foeknow if we're going to double down. we surely like them. they're integral to our distribution. >> fascinating point. thank you so much for being here this afternoon. john stumpf ceo of wells fargo. time now for a cnbc news update with slarn ep erharon epperson. at this hour president obama visiting the national hurricane center in miami talking about the importance of being prepared for natural disasters and climate change. he mentioned the flooding in texas saying his thoughts and prayers are with the communities that are have been devastated. embattled fifa president

spoke at the opening of the conference in europe. he said the corruption scandal surrounding the world's soccer body has brought shame and humiliation and demands change. he says they have a long road ahead rebuilding trust. google kicking off its annual developers conference where it officially introduced android m. the next version of its mobile operating system. among the updates, new ways to gather information and a longer battery life. and some extraordinary pictures of a place in the universe some 1,500 light years away. the european southern observatory in chile captured the most detailed images to date giving us a glimpse into the destiny of the sun. and that's the cnbc news update for this hour. back to you, kelly. >> i always like when it ends on a cosmic note slarn.haron. first tesla gave away its electric car patents for free. now ford following in its steps. for a price though. phil lebeau has that story when we come back. later find out how you can help save for your child's

college education without risking your own retirement.

female announcer: sleep train challenged its manufacturers to offer even lower prices. but the mattress price wars ends sunday. now it's posturepedic vs. beautyrest with big savings of up to $400 off. serta icomfort and tempur-pedic go head-to-head with three years interest-free financing. plus, free same day delivery set-up

and removal of your old set. when brands compete, you save! mattress price wars ends sunday at sleep train. ♪ your ticket to a better night's sleep ♪ if you want to succeed in business, mistakes are a luxury you can't afford. that's why i recommend fast reliable comcast business internet. they know what businesses need. and there's a no-mistake guarantee. if you don't like it, you have thirty days to call and get your money back. with comcast business internet you literally can't mook a mistick. i meant to say that. switch today and get the no mistake guarantee. comcast business. built for business. welcome back. we're getting a ton of after hours earnings news. kate rogers wrapping it up for us. >> luckily for these companies, all good news.

gamestop, a beat on the top and bottom line. revenues coming in at 2.06 billion mr. that's versus estimates of $27.01 billion. they're also giving strong guidance for the second quarter of the year. the stock up over 6% now. deckers outdoor, the footwear company, reporting epfs of 4 cents a share. forecasts were to break even. revenues coming in at $341 million. a beat on that as well versus estimates of $321 million. very weak outlook for the first quarter but strong outlook and guidance for the full year. that stock up over 4%. finally, splunk the software company, epf was for a loss of 1 cent -- is what they reported. they were expecting a loss of 3 cents. revenues coming in $126 million. that's versus estimates of $118 million. they're also raising their full year outlook and giving strong guidance for the second quarter of the year. though splunk is getting hit after hours, it is down over 3%. back over to you.

>> kate thanks for rounding that up for us. ford meantime joining tesla and opening up its electric vehicle patents. unlike tesla, ford wants to be paid. phil lebeau how much? >> they're not telling us what the price will be for access to these patents. what's interesting here is we could perhaps be getting to see a move within the auto industry for more automakers to follow the lead of elon musk and allow others to have access to their patents when it comes to electric vehicles. in ford's case it is going to be offering these patents up to outsiders to have an access for a price. more than 400 patents were filed by ford last year. more than 600 in total and another 1,000 patent pending. goal here -- spur ev development. when you look at shares of tesla over the last year we are saying, didn't elon musk announce doing the same thing, only giving them away a year ago? you're right, he did. a year ago he said hey, anybody who wants to have access to our

patents, have at it. the goal spurring development for electric vehicles. you need to give a jolt to the market that is not developing as quickly as everyone throughout it would. in 2014 123,000 electric vehicles were sold in the u.s. that's less than 1% of total vehicle sales in the u.s. and this year sales are up just 2.2%. kelly, it will be interesting to see what comes of this if anything. i do think that we will likely see other automakers now follow the lead of tesla and of ford and say, okay let's make this open architecture as much as possible. >> mike are you surprised that ford is pursuing this and that they're pushing ev technology? >> i don't think surprise. i think it is a matter of trying to find a return on a lot of investment that's gone on without an obvious payoff. the government is kind of mandating this research. they're kind of forcing the industry to at least look for clean energy very efficient ways of doing business. is it like the google android strategy? i don't know put it out in the

world and hopefully somebody has a probablye use for it. >> the developers conferences going on this week you think how they've basically put themselves out there and say, hey, developers you take the platform we've built and you run with it. i just fell like this is the you a thoughyou a thoughmaker's response. >> how much of this is just building out a traditional charging platform as opposed to -- i understand the more technology, the more cars the more likely you are to get that but at some point don't we need that first? >> you do. but i think mike hits on the key point here. this is such a capital intensive business to begin with now you add in the cost of developing electric vehicles? i think ford and other automakers are going to eventually say we need everybody to put in the effort here. we can't get their by ourselves. td bank reporting better

than expected earnings. up next the ceo joins us to tell us why a looming interest rate hike will likely boost the bank's bottom line. also families struggling to save for both retirement an college education. which one should you prioritize? we've got the answer coming up on the "closing bell."

qo:é@d8j8j8j

welcome back. td bank reporting earnings earlier today beating on both earnings and revenue, finishing the day in it the red about 1%.

let's bring in the ceo of the td bank group. welcome. good to see you again. >> great to be here kelly. thanks for having me. >> we just heard from your colleague dave mckay over at rbc that they're not seeing too much of a crimp yet from the drop in oil and gas activity in canada. what are you guys seeing in the business? >> we haven't seen any material drop in business. but inevitably canada is a net exporter of energy. i think at some point there will be some impact but today we haven't seen any material impact in our business or in any of our numbers. >> all right. you're putting money to work elsewhere meantime buying up that portfolio with nordstrom. that because you are more bullish on prospects of the u.s. consumer here? >> that's a terrific traffic transaction for us. nordstrom is a high-quality brand, high-quality retailer. it is great, great that we were able to strike a deal here. it is a space we are very very high on. our partnership deals in the u.s., we continue to expand on

that. and we feel very comfortable with it. the -- all the metrics that you would want in a credit card portfolio, you have them here. so very happy with this transaction. >> and does that say anything about your plans for the kinds of expansion you might want to do in the u.s.? in other words something like this on the sort of wholesale level as opposed to purely through branches? >> we are actually a full service player here. td securities is a large business for us in new york which does a lot of wholesale banking. as you know. we also have an interest in td ameritrade and of course td bank dchlt bank bank bank, america's most convenient bank. we are not just focused in one area but without a doubt we have an asset that's very attractive to us. credit cards are something we've been working on a while and great to see that we made good progress. >> i'm wondering though what you see coming down the pike for margins. if there's one metric that banks and investors are really focused on especially as we await what

the federal reserve does is margins. you actually said you expect margins to decline. but i'm wondering what your outlook is and how any changes across the yield curve will affect you. >> well without a doubt, general rate environment is not friendly from a margin perspective. this quarter for our u.s. business we did see a debt. we feel relatively stable for the rest of the year. yes, it would be great if there was a rate move sooner rather than later. but we keep on working at it. our whole core strategy is of organic growth. without a doubt there's keen competition but there's still good business to be had. yes, margins is a problem but we are offsetting that for the most part through higher volumes. >> to circle back to the point mike was making as well and to comments from jamie dimon, should we expect to see you guys closing branches consolidating, perhaps even staffing them with fewer workers? or no? in the years ahead. >> without a doubt, part of the

retail banking business is to optimize your distribution. so we have been consolidating some of our stores in the u.s. in fact this quarter we announced that we would do that as well. but at the same time where it makes sense in the markets where we are keenly focused, we are opening new ones. in new york we've got more than 125 stores now. this year we'll open 21 other stores in our markets as well. so ours is a monthly channeled strategy, but that does not mean we are not focused on looking at new formats, smaller stores more self-serve stores. it is part of our program, but stores and branches continue to be a core part of our offering. >> i'll take note of your use of the word "stores." that is telling. kind of what we were hearing earlier from david mckay. >> hopefully you've been to one of our stores and know it is not just a bank branch. >> you're correct, i have.

the record stands corrected. thank you so much. >> thanks, kelly. >> ceo of td bank this hour. think a little while lie can't hurt? think again. up next we'll hear from an economist that says it is the little lies that have the biggest impact. also why airline stocks are still getting crushed even as oil prices slide this week. the back in 2:00.

we live in a pick and choose world. choose choose choose. but at bedtime? ...why settle for this? enter sleep number... don't miss the memorial day special edition mattress with sleepiq technology. sleepiq tells you how well you slept and what adjustments you can make. you like the bed soft. he's more hardcore. so your sleep goes from good to great to wow! now we can all choose amazing sleep, only at a sleep number store. save $500 on the memorial day special edition mattress with sleepiq. ends sunday! know better sleep with sleep number.

a fascinating new cnbc documentary exposes the liars and cheaters. so what is dishonesty's real life toll. dan arielli says little lies cost us a lot. >> yes, there's some big cheaters out there, but they are very rare. and because of that the overall economic impact is relatively low. on the other hand we have a ton of real cheaters and because there are so many of us the economic impact of small cheating is actually incredibly, incredibly high. >> it's an important point from any point of view.

for more on liars big and small, tune in to cnbc tonight at 10:00 p.m. eastern. tune in for "dishonesty." is it possible to save for your kids' college education without jeopardizing your retirement? a closer look at the savings catch 22 when we come right back. a tool that uses social media to help with research. 10,000 suggestions. who reads all those? he does. for all the confidence you need. td ameritrade. you got this.

welcome back. financial advisers recommend prioritizing retirement savings over paying for your kids' college education, but is it possible to do both without jeopardizing both. sharon takes a look for us. hi, sharon. >> kelly, it can be tough to juggle saving for college and saving for retirement at the same time. many parents don't think they'll be able to save enough to cover either one. there's some pretty startling statistics here. more than half of parents surveyed by t. row price say they would rather dip into their retirement savings than take out student loans. it's understandable the parents are concerned about the long term debt. sally mae says parents plan to use their retirement fund and nearly 1/3 of the parents in the t. row price study are actually

doing that they're using their 401 ks to save for the child's college. some are using a 529. only 28% said they don't know what a 529 is. without sufficient retirement savings, most parents know they'll have to retire later. they're okay. more than half said they were willing to delay retirement in order to pay for college. but we know, kelly, the problem is they're likely jeopardizing their own financial security in the future. >> sharon, i want to get some reaction from the panel here. mike, can you do it all? is that the equivalent of doing it all? >> most parents can't do it all. most say they can't do much of either one. the standard advice here is to prioritize your retirement savings. there are other options. there's more time to catch up if a student has to take on more debt relative to a parent that might not have time to refill the retirement. >> you can borrow for your education but you can't borrow for your retirement. i agree with mike. >> sharon?

>> the way to do that is to definitely fund the 401 k. is first. get the free money from the company match, pay down your debt build up an emergency fund and think about the college savings. open the 529 plan. get the tax advantage in your state if you can get them. that's a great place to save. you can do it. you have to divide that pie, even if it's a small pie, into a couple of different parts. >> mike i'm sure there are plenty of people who think they're doing the right thing avoiding their kids taking out debt especially with it in the headlines every single day. being a parent is a bit heroic. this fits into that idea. >> it's a completely natural response. most people are willing to do a i lot, but the retirement account specifically especially a tax advantage one where you have penalties for withdrawing, that shouldn't be the first resort. you have perverse incentives. they try to plug some of those gaps. it's a very confusing process.

>> this is another reason why we have to do something about the cost of college education. >> which is going in one direction. >> sharon, what would you recommend people do in this case? >> think about if you do have to take out a student loan be realistic about the federal loan rates and where they are. if you have the credit card debt at 13% and a parents' plus loan is 7% you're doing better to borrow that way. consider the fact that as kayla mentioned, of course you can not borrow for your retirement. you can borrow they can work they can work hard probably just like you did to get through college. the hope is you don't have to pay for it all. >> work so you can pay for your kids' college. thank you, though. it's a really important point. sharon epper son. "mad money", cramer has an exclusive interview with the ceo of southwest airline. he's firing back to american about capacity. hear what he has to say at 6:00 p.m. eastern.

thank you for being here. really appreciate it. that does it for us on closing bell. "fast money" coming up. melissa lee, what's up. >> they might have a new drug to be the best catalyst. >> straight over to you. >> "fast money" starts right now. i'm melissa lee. traders are dan nathan brian kelly, karen finer man and steven bros so he. tonight on fast, go pro revealed their new product. we'll hear from the ceo. plus google and show me are making moves into google's core business. we'll ask the top analysts who might be on the fence there. first, the developing story on general motors. morgan stanley has some comments having some investors wondering if a mega auto deal is in the works. phil lebeau has the story.