hi and welcome to the "closing bell," everybody. i'm kelly evans here at the new york stock exchange. >> i'm bill griffeth. boy, this has turned out to be a big day for markets. let's just show you right now how we stand with the major averages. the dow down almost a full percent right now. a decline of 164 points. the s&p is down 16 almost 17 points. nasdaq down .81%. the yield on the 10-year has actually come back a bit. it was up in the 32.36 2.37

range. it is back down to 2.3% right now. >> everybody's talking about the sell-off in bonds that's pushing yields higher. this comes as the imf today said the fed should wait until 2016 to raise rates. we'll break it all down coming up. >> that came from christine lagarde earlier today who we know is very close to janet yellen these days so you know that she's got janet yellen's ear. will be interesting to see what janet yellen's response is to that. oil also taking center stage today. and a hit ahead of tomorrow's opec meeting. does this decline of 2.7% on the close mean that they are betting that opec will not cut production tomorrow. that seems to be the consensus but you never know with opec and their meetings in vienna. we'll talk about that in a little bit. and we'll talk about the impact the oil drop could have on some of the shale producers here in the united states as well.

who are scrambling to lower their cost of production. they're using very innovative technology to do it. >> everybody's wondering who do you talk to on the u.s. shale side. you need a representative there almost as those names are now commensurate with the move in oil. netflix holding strong on a down day. one analyst says a move by the department of justice could help the stock. he'll join us to explain. let's start with the big move in the market today and our "closing bell" exchange. joining us this thursday, hertherherth er heather hughes. rick santelli in chicago. brian, we're all focusing on this sharp rise in long rates lately, what do you make of it and are we destined to go much higher here do you think? >> first things first. a year ago we were at 2.60 on the 10-year. this is a surprise on a percentage basis but it is not that much of a move really. what's causing it?

the germans had inflation. thank goodness we're not bund traders. their 10-year went from 7 to 88. they lost ten times what we did. so big move in europe but incrementally not that big of a move. i don't think it is much of a concern for us but it is because there is some inflation. mario draghi said yesterday i don't care i'm going to keep printing euro so that's something new that we're all going to have to deal with a rise in rates because we haven't seen it in a long time. >> the question for everybody here is to what extent we should expect this move to keep going. it is maybe not quite as big relatively as the german but one but it's caught a lot of attention. >> i think it's big. i disagree. mr. b. i think it is big because we are seeing a recalibration take effect. the recalibration is from all-time historic lows in terms of what the fed is trying to do what the ecb's trying to do.

that recalibration isn't about counting basis points. it is something bigger. because if it wasn't so intense, the fed would have much less reluctance to raise interest rates. and as far as all the dynamics of what's pushing rates up i think a combination of things. i think tomorrow's unemployment report is a big issue. traders are paring back a little bit. there's been a lot of moves. we have a weekend coming up. i think the main issue is no moves goes on forever. we've basically gone from a 2.12 settlement yesterday even at the low yields of the session to 2.31. that's a big move. let's see where it looks plond morning. i think we'll have a lot better gauge of continuity of the move when we get through tomorrow. >> i want to know are we looking at short-term -- we are looking at short-term rates but should we be concerned about long-term rates. are they telling us something different than short-term rates are telling us in the markets right now. we're not listening to the fed anymore as june and july is off the table. we are to some extent but as a

prior guest alluded to u.s. data is looking a little bit better. the inflation in europe is looking a little bit better. so should our long term rates be predicting something different that we should be focusing on more than the short-term is telling us. >> show that 30-year. what do you see? >> i think short-term rates are like a tiger in a cage. cage of course is the control over central banks more direct on the short end. i think the long end is a tiger without a cage. so yes i think the curb steepening -- rather dramatic curve steepening as of late is rather significant. it is the market getting ahead of the fed and if the fed stalls anymore i think that you could easily see tests of the 2. 60s in a 10-year, and maybe 3.40 to 3.50 in a 30-year. >> brian, what was the response on the trading floor when word got out with christine lagarde's comment that the fed should wait until next year to start raising

rates? >> we caught a bid when that news came out. christine lagarde can't get the greeks to listen to what she says so we had a bid and then we lost it after a little while because they told her they're not paying her. she is close to yellen but janet yellen has been very clear, she's raising rates. so june july might seem soon. i think we're going to get it in the fall. i don't think it the treasury curve is predictive of anything. it is a policy tool. i'm not sure the market reflects inflation or market sentiment. >> is the fed buying a 30-year or am i missing something? >> well actually they stopped buy pentagon 30-years. they've got a giant portfolio of 30 years. >> that's my point. >> they are re-investing principle and interest out of a $4 trillion portfolio. will they ever sell them? i don't know about that but you're right they can most approximately affect the short end of the curve and the market will do the rest of the tightening for them.

zblm meanwhile, heather, financial stocks have been breaking out of their slump for obvious reasons. are you guys -- do you guys like the financials at this point? >> exactly, bill. as i mentioned, last week i pointed out that the financials should do better in a rising rate environment which we've seen over the past few days. so it is no surprise that the regional banks are outperforming on a day like today even though we had the imf comments saying that we should hold rates out to 2016. as brian just alluded to yellen may be more believable. she's prepared the markets to some extent saying listen we're going to raise rates at some point, we're going to raise rates at some point, and that does farewell for financials regardless of the action today over the short term. that steepening yield curve means that the profitantabilitybilityprofitability, net interest margins on financials it should increase, especially the regional base in particular. >> rick, i chuckled to read the other day in the journal, an op sed basically saying janet yellen is not that great at calling the stock market. because if you look -- basically

saying -- it's kind of this idea to what extent as we are looking here with the market at near all-time highs but moving around today -- >> name a fed chair who has been able to call the stock market. >> exactly! exactly. i'm just wondzerring -- >> name. >> name anyone that's been able to call interest rates at all. >> right. right. there's a void out there for sure. >> but the difference is that the average investor or blogger doesn't have $4 trillion that really isn't theirs. that's the difference. and the connect the dots make the dots important is inaccurate as they are. >> we got to go. thanks, folks. heather, brian, great to see you. rick, see you later. thanks. meanwhile, mergers, here we go again. two stocks that are bucking today's trend. we got dish network and t-mobile on news of a potential merger between these companies. that said both of those stocks higher today. >> will the big question on everyone's mind is how about two

big personalities like t-mobile's ceo john ledger and the dish ceo charlie ergan be able to work things out. both were on cnbc talking to david faber about one another. >> what's irving going to do with all that spectrum? is. >> biggest question of all. he has a great portfolio. you got to like watching him in the auctions though. right? he's sort of like was the patriots. right? he didn't make the rules. you made the rules. he just played them extremely well. he's got a great portfolio. he's got to do something with it. >> there is a love affair going on between you and john legere. you happy toseem to be happy to say nice things about him. >> i think we like what he's doing. he's built a brand not only of t-mobile, he's -- they're taking on the big guys. they're attacking the big points to the consumer. contract. rollover data. international roaming. that's striking a chord. that's a pretty impress riff turnaround. >> i don't know david.

not since sean penn married madonna do you have such divergent personalities. is this marriage doomed right from are the start. what do you think? >> i don't think it is doomed at all to be extent that they are both very large personalities but they do respect one another. there is certainly some strategic logic in terms of a deal, bill. when you think about that huge spectrum position that ergan and dish have amassed and what t-mobile would be able to do not to mention the importance of mobile video. their over-the-top platform at dish called sling tv that they're rolling out. the idea of fixed wireless broadband. bringing people broadband in their homes wirelessly. not to mention to all of their mobile devices being a broadband product. we're not there yet but we could get there. when two years ago they talked about buying sprint they had huge synergy numbers out there. but a lot of that works. what i've reported though is that this is still a long way --

a lot of things to get through before you could actually say there will be a deal. yes, dish would be the buyer here. but the mix of cash and stock, unclear. price, they haven't really gotten to the key negotiations. deutsche telekom would become a large shareholder in this combination. it wants minority share protections. they haven't talked about it. the fcc is on them about saying we're not sure of those discounts you got in that last spectrum auction were valid. at least we're going to take a look at it. there's weeks to go here. there have been talks that have gone on and gone nowhere and gone on and gone nowhere for years, frankly. this does seem to have more momentum, but it is certainly far from a sure thing. >> david, is this what regulators wanted whether they prevented are t-mobile and sprint from tying up but now we see potential deals between t-mobile and this company and at&t and what it is doing with direct tv? >> that's a great point.

they certainly wanted four not three. t-mobile went -- well they actually never reached an agreement because they were told sprint and t-mobile we're not going to let it happen so they never even got to the point of being able to announce a deal. t-mobile tried with at&t. walked away from a richer around spectrum and money as a result of that deal being rejected. but yes, this conceivably would be pro competitive. you'd still have four wireless carriers. you'd have them doing a lot of other things. the marriage of video and wireless. we are seeing that to a certain extent with at&t and directv. however, direct does not have that key product which is broadband. that becomes such an important component overall to the extent you can bring that wirelessly or not. >> thank you, david. we'll have more detail on that. love seeing the way those two guys talk about one another. >> those will be fun board meetings. >> for sure. little more than 45 minutes to go in the session. we are seeing pressure across the board. the dow is off 168 today.

the s&p down 17. the nasdaq which yesterday tried for a record close, today down 40 points. we're just getting started. netflix have won praise for original programming but could the company soon start producing movies for the big screen? one wall street analyst thinks so and he'll join us to make the case for that coming up. billionaire twitter investor chris isn't advocating the company be acquired. >> google side there is an instant fit. this is the thing that google has never had. they've never understood social they've never understood those personal interactions. this bolts right in cleanly. >> well now could google really come calling for twitter? we'll discuss that coming up on the krp. krp. "closing bell" "closing bell"..

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welcome back with the dow down 171 and the s&p down 17 we want to show you all 500 components of the s&p 500 index in one big map there. it's tough to find the green. it's only that top layer there, kelly. the top row basically. the rest of it is red today. >> let's take a look at some of the big movers in this market.

slars shares of diagnostics company bioreference skyrocketing after being acquired. opco made the deal because its stock nearly doubled this year. as you've heard, currencies, companies' stock in some cases are the new currencies. easy come easy go for wendy's. just a day after the fast food chain got a pop from a 1.4 billion mr. buyback, the stock slumping getting downgraded to neutral by web bush. down 2%. the firm trimming its price tath to $12 from $13 citing valueation concerns. smucker's is down almost 4% today largely due to weak sales of folgers coffee and build to some higher commodity prices. as the country's biggest movie theaters take fire over antitrust issues at least one company that might stand to benefit from the investigations would be netflix. that according to tony wible.

give us your reasoning on how this presents an opportunity for net application. >> netflix is always looking for content. the way it goes about licensing it. the problem is content is not there and so i think they're trying to go directly to producers like they are with the "crouching tiger" film that's getting ready to come out. the problem is they can't get those -- there is a natural conflict of interest for theaters to have movies that are also on netflix. i think theaters are going to be a little bit more mindful now of what they end up negotiating with netflix. honestly, netflix has done a great job of taking the -- a lot of what we talked about consolidation in the tv tv industry, ad pressure a lot of it has its roots in netflix.

>> so tony to make sure i'm following this if the doj is cracking down on chains for blocking some forms of content, you think that they may be more willing to carry netflix movies in the future? >> i think the claim that netflix may make is that it would be an anticompetitive move to not allow their films into the theaters. there's not a direct correlation with what the department of justice is looking at. frankly, there may be nothing wrong. the practices of there of windowing and exclusivity. but certainly netflix and amazon are both producing films that they would like to get into theaters, but they have been rebuffed across the board by all the theater circuits. >> tony producing movies for theaters is such a crapshoot. netflix has a good thing going. are they taking too much risk thinking that they could make movies to put them in the theaters right now?

>> it's risk/reward. great question, by the way. but netflix makes decisions based on data. they have so much data not just in the u.s. but all over the world. the other thing is what they would be doing. it isn't too dissimilar to what you see with paramount and j.j. abrams and bad robot. you go places where you know you'll get some winners and some losers, but i think you go with the best talent you got a really good shot on goal. it may be the only way to get some of that great content given the exclusive rights that are tied up with hbo and others. >> tony we got to go. but i'm wondering does this mean potentially many others in over-the-top broadband internet space could similarly look to theater chains as a lever for distribution. >> i think netflix is the one i'd focus on for right now. i'm sure whatever netflix does if they end up being successful i'm sure there will be others that will emulate it.

>> tony wible, calling in from janny capital markets. >> we're heading to the close with 40 minutes left in the trading session here. we're heading lower again. the dow down 187 points. more than 1%. in fact it is the big laggard of the day. the s&p is down less than 1%. so is the in dz. nasdaq. opec strategy is in focus. the surprising results of a brand-new cnbc oil survey coming up. but first, an out-of-this-world interview coming up. three top mem berls of nasabers of nasa, including a top astronaut, will discuss what the international space station is doing 250 miles above our heads and we'll talk more importantly about the role private sector will play in space exploration coming up.

welcome back. keeping an eye on markets here we do have a 1% sell-off for the dow giving up 186 points today. below 17,900. >> for a time it was below its 50-day moving average. the dow and the s&p. >> the transports chart looking pretty rough lately as well. s&p down 19. nasdaq giving up 45. the nasdaq 100, similar to the s&p earlier, it pretty much --

what is that? a 4-1 ratio of decliners outpacing advancers. ebay a couple of bright spots. netflix there as well which we were just discussing but a lot of red across the board. >> look what's moving higher. this is just this week in terms of lumber. it is up 2.9% today. but it is up 4% for this week. it has been cascading lower until about early may when it started moving higher. is this the proxy for the housing market? is it anticipating that housing is going to start to mount a comeback of some sort something to keep an eye on at least for now, for that big move in lumber lumber. there is a lot going on in the world of outer space today. the 50th anniversary of the first spacewalk. house just approved $18.5 billion for new exploration and here at the new york stock exchange three of nasa's best are are ining the closing bell. >> joining me director 69 international space station. wow. you are the director of the international space station. i love that. phil mccallister, director of commercial flight development.

and we have astronaut joe ocavo with us here as well. i'm a big space nut. when you become an astronaut, they don't let you wear a coat and tie anymore. >> we do. we get a little bit more casual. you can sleep in it and you can interview in it. multi-functional. >> how are things at at space station? we heard about that payload that had to go up there. got the kelly brothers doing that twin thing. there a he ais a lot for you guys going on. >> we have the twin study going on. we have two astronauts scott kelly and the russian cosmonaut up there for one whole year. doing a lot of our research trying to get humans into outer space. get ready for the mars missions. we're also doing a lot off development in the commercial world. trying to get commercial industry to utilize the space station. >> phil talk about that for a moment. down here we focus a lot on elon musk and spacex and some of these new disruptive

technologies. what kind of impact is that having or do you need to rely on the more traditional funding and innovation sources? >> that's an excellent point. now that we've reached a point in human spaceflight where it is getting to be relatively mature we are now shifting some responsibility over to the private sector with companies like spacex and boeing and others to take on the routine missions of taking our astronauts up and down to the international space station. it's been a really great thing for nasa and for industry because this partnership we sort of take the best of both to get our astronauts back up to space. >> the question has always been asked why do we keep doing this. it is always the science. we get back to once upon a time the astronauts who went up there were pilots. now they're scientists. you're a scientist first before you are an astronaut. >> yes. >> tell us about the science that you conduct when you go et into space. you spend about six months in 2012 up in space. >> we spent about six months up there. we're part-time lab technicians. the rest of the time we're

maintaining the space station. in a six-month period you may work on half-a-dozen scientific experiments. half are trying to get you to mars -- the other half are trying to improve life here on earth. >> how much is the relationship the united states has are -- -- affecting the cooperation on the international space station? >> our cooperation with russia day to day is excellent. to do all the utilization and research has just been an excellent relationship. very reliable partner. >> what about some of the new efforts we are seeing by china and others? are those cooperative or do you tend to read about them in the newspaper? >> the thing about human spaceflight, it is really good to see many countries, including klein, to be interested in going into space with humans. it's better for humanity to be able to do that. >> gentlemen, you're going to now go ring the closing bell with some reps from boeing and spacex as well. we'll let you get up to the

podium there. thank the gentlemen from nasa joining us today. sue herera has a cnbc update. >> this is what's happening this hour. thousands of protesters gathering in munich to demonstrate against the upcoming g-7 summit. they say they are worried about the widening gap between the rich and the poor in the world. israeli prime minister netanyahu netanyahu denouncing french telecom giant orange for saying it would cut business ties with the jewish state. yesterday orange's ceo said he would end his company's relationship with israel "tomorrow" if he could but was bound by a contract. he cited his company's sensitivity to arab countries. a burn hazard has prompted the recall of more than 7 thun,000thun700,000 of lamp overheating. no injuries though. three people are charged with disturbing the peace.

they cheered when a family member walked out to get her diploma. the superintendent says they wanted people to wait until all the names were called before they cheered. and it was stated on as you saw, the graduation policy. that's the cnbc news update at this hour. not a pretty situation there. >> that last half-hour, that critical time of day here at the new york stock exchange when anything can happen. these are the last 30 minutes we'll see before we get the jobs number tomorrow morning. we have an opec meeting coming up. you have the imf today saying the fed should wait until next year to raise interest rates. a lot of cross currents for you guys to try to trade on. >> a lot of noise in the last couple months. it's coming on fast and furious here in the last week or so. we're just wading through the chaff to get to the wheat, so to speak. >> that's what they do in chicago in the pits there.

but last time you were with me i think you were saying you buy dips at this point. >> i would. the way the market is structured right now. we still like the behavior and posture of the market. nothing that's happened today has told us that real destruction has happened which is going to clang the trend. so the long term, interneed yacht intermediate term and even short term are still in effect. >> we've had a spectacular move the last week or so. >> i can't preskriktdict the future. but if you look at charts and seep the way price action is working, even happening today, all the things are still intact. it will take a week or two to play out but i'm still buying here. >> quickly, hitting session lows right now, down almost 200 points on the dow. what's the market telling us ahead of this jobs report? are they expecting a strong number that means the fed has to raise rates or what? >> i think rates are off table for june. i've been getting a lot of calls around the street today and everybody expects that. i think the jobs report tomorrow will be a bit of a yawn until we

get up above 300. i doubt everybody has called it right and started selling at the top so i would expect the market to rebound a little bit tomorrow. >> see what happens. thanks keith bliss. now just to fix my little space pin here getting ready for the close there in 30 minutes. u.s. shale companies keep pumping out crude despite lower prices. do they risk getting squeezed out of the market if prices head even lower? we'll talk about that next. viagra raked in $1.7 billion for pfizer last year. now regulators reviewing the drug called viagra for women. could this be the next blockbuster drug? that's coming up on the "closing bell."

selling continues into the close there. pv everybody, say hi to jason. down to 194 on the industrial average. that's close to the session low. s&p down 20. the nasdaq down almost a full percent, a 40-point drop there. oil also continued lower ahead of this opec meeting tomorrow. i guess the feeling is that they're not going to cut production, but a 2.5% decline for both wti and brent.

opec leaders holding their semi-annual meeting tomorrow. >> in anticipation of the meeting tomorrow most of the street is not expecting to hear anything new from opec tomorrow. nothing regarding a production cut or a change in policy. having said that cnbc conducted an exclusive survey with some of our top analysts traders, strategists to take the pulse of the energy industry ahead of this meeting. what's interesting is about 50% of respondents said that they believe supply and demand is what's driving the oil price movement right now. so it is a very critical piece of this. opec is kind of ignoring it. what's also interesting is there was an even split among our respondents about what's going to happen here in the united states regarding production. we had 30% saying they think production will continue to rise. 30% said they think we're going to flat line. 30% said that they think it will fall. what does that tell us? that tells us that nobody really

knows what is going to happen. but here's what we do know bill and kelly. we do know that saudi arabia is producing at record levels. we do know the u.s. is over 9 1/2 million barrels a day and stead ily steadily over the last few weeks continuing to increase its production. opec tried to squeeze the shale producers around it is not working. so they may continue to dig their heels in further and tolerate this low price environment. but at the same time, the u.s. producers aren't backing down either. our respondents did say, however, they do think opec will be the one to have to make the cut next year. back to you. >> we'll see about that. thank you so much. there was that counterintuitive move we saw in the airlines as well. they're also lower today. you they have their own issues right now with the demand and with capacity. >> listen the fact that southwest website has been down for a couple of days on its low fare sale that tells you quite a lot about potential price war that could be looming. >> $49.

brought the people in. crashed the website. let's bring in john killdoff. they going to cut production or hold steady? >> they'll keep steady, hold the pedal to metal. >> same thing. not do anything. >> why not? >> because they're still seeking market share out there. and actually it is not the shale producers who are getting squeezed out but it is more the high-cost canadian oil sands, where the north sea deepwater drilling or even offshore africa and brazil. that's where we are seeing a lot of projects go by the wayside. >> john greg ip had this great piece, saying shale oil companies have more in common with the technology startups in silicon valley than the big, often state-controlled integrated oil companies that

dominate global oil markets. they are smaller, more nimble take more risk and are more tied to the ebb and flow of the capital markets. not necessarily the price of oil. this is an untold story, isn't it. >> of course it is in vogue to be a technology company today. i'm a technology company, bill i'm not a person. but seriously, the other thing that's all true what greg wrote. the other thing that's true is that there is a voracious appetite by private equity to get into this space at what they are feeling are low levels. billions are on the sidelines literally. that's why when you see some of these companies who got into some trouble with their capital base, their borrowing base, they were able to tap private equity to keep themselves afloat. that's what free capital looks like. it's a wonderful thing. >> going to the point that greg and others made the oil industry, shale innovation, has allowed oil production in this country to become just in time like other manufacturing

processes have been over decades. do you think that is the case or are we going to look back at some point when the price of oil goes low enough and say none of this mattered? >> i think it does matter a lot. i think that as prices rise a little bit higher you'll see these shale producers to be able to complete their wells, bring more rigs back very quickly. i think they've done a very good job about squeezing costs out of their supply chain as well as increasing their efficiencyefficiency. they are he a drilling more oils per rig and they're digging them faster. >> we'll see what happens tomorrow. >> meanwhile, we know people in this country are going to keep drilling. 20 minutes until the close leer. the dow is down 180 points. good for exactly a 1% decline. nasdaq's down 44. the s&p, broad market giving up 19 today. we'll see if stocks can make a comeback into the close. when we come back though walmart executives have been presenting their strategy to the media all day ahead of the retail giant's key shareholder

meeting coming up tomorrow. find out if it will be enough to lift walmart's stock out of the red for this year. and after the bell viagra for women. the food and drug administration has been debating it. we'll tell you whether it could be hitting the market. we're back in two.

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welcome back. here's a look at markets. dow off 181 points this hour. as you can see there, from the components of the blue chip index, only goldman sachs is in the green at the moment. >> isn't that interesting. we mentioned earlier financials are doing well because of the rise in long rates. jpmorgan throw and some others are lower today. >> jpmorgan did have a nice session yesterday perhaps as part of it. let's hone in on walmart which is also down about 1% today. >> top executives from walmart have been sharing their strategy with the media all day ahead of the retail giant's annual shareholder meeting coming up tomorrow. >> courtney reagan covering the action for us live from arkansas. hey, court. >> hi there, kelly and bill. i am here in very steamy arkansas. actually in the room behind me walmart u.s. ceo is speaking to the international media about the retailer strategy initiatives. inevitably those new wage changes. in addition to the wage

increases that went into effect in april walmart is also increasing the wages for its store department managers. depending on what department you are in and beginning next month, there will be two new wage ranges. one of them will be from $13 an hour to $24.70. or 10$10.90 to $21.71 an hour. that's a difference of $1 to $3 an hour. walmart talked a little bit about that $50 per year unlimited free shipping test that it is doing where you will get items in three days or less. it is going to be called shipping pass. that's something new that we've just recently found out about the actual name itself. it is still in the test phase. it's invitation only. when asked if same-day shipping was something that walmart was really focused on walmart.com's ceo basically said right now our consumers are more concerned with a strong order online pick-up in-store experience than same-day delivery but of course

it is something they are looking at. when asked how walmart.com plans to continue to compete with rivals like amazon neil ash be said jet has generated an awful lot of press for no revenue. he laughed and says he knows the founder and has said as much to his face as well. he says when it comes to acquisitions, he also said walmart is always looking at new things that it could possibly inquire, whether that is entire start-up companies technologies or even just recruiting the best people it can possibly work for walmart.com. there's still a lot more to go. of course the big day is tomorrow. back to you. >> it's not just a jobs report then to watch for, courtney. lots of moving pieces. >> it is a three-ring circus tomorrow. 15 minutes to go here into the close. we'll see if the markets can make any rebound. sitting near lows of the session. 182-point decline on the dow today. talking drones and the government taking a huge step to better integrate them into international airspace.

billionaire twitter investor making the bull case yesterday on the "closing bell." >> i don't see the stock going anyone lower than it is today. this company has too much potential for advertising. microsoft, facebook google would all want to own this company. >> nowhere to go but up hey? well, it is down today. could it be a takeover target? that's the broader question out there. the pros weigh in when we come back. 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-

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coming back just a bit as we head toward the close. here again is a look at the s&p 500, heating up all 500 components. when we last visited this 30 minutes ago, at least the second row went half-way green. but we're losing that now, too. >> now it is pretty much 9-1. no contest with ten minutes to go in the session. >> joining us now, amy wu from rbc capital markets. the markets have been stuck in this range and we keep saying it is waiting for something. >> correct. >> tomorrow we get a jobs report. we get an opec meeting. we have walmart meeting with shareholders. all these things going on at the same time. could tomorrow be a day when we see a move in the market do you think? >> i hope so. >> are the options set up for that? >> you know what i'll tell you

is a month ago we saw a lot of energy downside being bought. a lot off energy puts bought. few days ago that all turned bullish. so i don't know what that means for opec but a lot of people are obviously positioning longer data for more bullish setup so hopefully we get something. i think people though are generalry consensus not expecting a production cut. >> larry, would you be bullish on oil? >> well i'd have to listen to our oil team. >> let me rephrase then. assume oil is going to move higher ultimately on global demand, call it. do you positive signs out there for the global economy or are you more in the imf camp saying better not be too hasty with any rate hikes. >> for supply you have a lot of oil out there. comments are a little late to the game. market's been kind of telling us the u.s. is not meeting expectations for quite some

time. >> you do have fed officials itching to raise rates at least that first time. all fed officials that have been speaking lately seem to suggest we got to get ready for something here. >> the fed definitely wants to put some bullets in the chamber. they want to raise rates just so that down the road if there is a problem they can cut rates again. the big thing to watch though the street's expectation is around when they reverse the mortgage-backed security re-investment. that's continuing now. that's like $40 billion a month. $50 billion a month. the street thinks that's six months after the first rate hike. could be quite a bit farther than that. that's essentially like two rate hikes. i'd watch that as well. >> meantime amy, everyone's betting on more volatility. seeing a little bit of it today but it hasn't been a huge trade that's worked this year. you expect that to change? >> yeah. one thing people are doing -- look. everyone knows there will be more volatility when we finally

do get that hike. no one is willing to say is this going to be september or jan of 2016. what they are doing is selling nearer term volatility because we are heading into the summer it is going to be quiet, it is going to be slow. but they are funding later data volatility. >> somebody said today on twitter bond traders are buying volatility. stock traders are buying complacency right now. >> i have to say there is so much differential right now between bond volatility the ec and the markets. to me that is an opportunity. to me there is still an asset class here that needs to be bought. >> does it come back to the u.s. collar here? have we talked enough to about the accentuation that perhaps is causing? >> the german bund in april was 1.60. this week it hit 1.27. what happened was in january the street thought this is going to be the great divergence. u.s. is going to pull away from the world economically. it's been becoming the great convergence.

in the first quarter the u.s. is negative gdp. europe's coming in right around 1% potentially but the inflation number this week in europe shocked the market. that brings into question the length of the qe. right now they have a $30 billion qe program in europe. i think in april the street thought it might have been bigger, you might have a qe2. now people are saying that qe program may be cut back in a year. >> people were shocked but i bet mario draghi slept a little best better after yesterday. we're back with the closing countdown with the dow down 182. >> gap gearing down to post same-store sales. we'll have instant reaction from our pros. a green spot in an otherwise sea of red. you are watching cnbc, first in business worldwide.

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plus five years wear and tear coverage. make the most of summer... with volvo. okay. just inside three minutes here quick recap of some of the markets that had the biggest moves today. that would include the dow. briefly. ever briefly positive on the open this morning. then the move lower. and it was really this afternoon where we saw it stabilize here with this decline of about 175 been 19 190, we're down 176. the 10-year, this breathless

move higher in terms of yield didn't happen today. came back a little bit. we're down five basis points to 3 3 2.31. but we'll see what happens tomorrow with that jobs number that comes out at 8:30 eastern time. this will be the one to watch after the jobs report comes out. oil, the other one. everybody's pretty much figured out that maybe opec is not going to cut production so prices were coming lower today. again, like the dow, wta was higher on the open this morning but it is down 2.5% right now. what is going higher. volatility. not a lot today but it has been on the move lately. we're up 1 1/2 points at 1,521. bertha coombs, that's one of the big stories, this increase in volatility. but it is within a trading range. >> it is within a trading range. if you had a volatility index for bonds it would look a whole lot different. mario draghi said expect some volatility.

we did not think he was channeled bette davis, fasten your seatbelts, this is going to be a very very turbulent ride like we saw this morning. it's been a very crowded trade. people wondering what are people going to start getting out of bonds so they have moved out quickly. a lot of folks are saying tomorrow is going to be -- it was sort of a super friday. right? because we had opec we have the jobs numbers and we have the greek deadline. greek deadline surprise surprise, being pushed now to the end of the month. >> that's one they'll drop-kick through the weekend there. >> but now more intrigue on this jobs number. we want it to be good but it is back in that goldilocks range. >> a trader just said if it is below 200, that's a mover. above 300, that's a mover. anything in between, ho-hum. >> but we're 12 days away from the fed making its decision. no one expects a rate move in june. but christine lagarde and the

imf certainly raised the volume today. >> thanks bertha. see you later. going out off the lows of the session. down 170 on the dow but it could all change on a dime when we get that jobs number tomorrow morning at 8:30 a.m. we'll have it live on "squawk box" right here on cnbc and right now, a discussion coming up on the second hour of the "closing bell" with kelly evans. see you tomorrow, folks. thank you, bill. welcome to the "closing bell," everybody. i'm kelly evans. what a session it's been. looks like red across wall street. the dow going out with pretty significant decline, 164 points. staying above that 17,911 level for what it's worth. nasdaq down 40 points or .8% at 5,059. some of the moves in the bond market as well we have today's panel joining me now. michael santolli from yahoo!

finance, our very own steve least man. "fast money" trader jon najarian. let me begin with you sir, what do you think was driving stocks lower today? >> well concerns about what's going to be going on not just with greece but that was a small part of it today. much larger still reaction to that spike up in yields yesterday that draghi really was the primary catalyst behind. at least in my mind. one of the primary catalysts to drive those rates up like that. and then i think tomorrow's jobs report, bill accurately said that the traders are saying, boy, if it is a lot above 200 or a lot below, it is going to be a big deal. that's morals what obviously a lot of the bets that were being placed today were on that it is going to be a big deal rather than an in-line report. 200 doesn't seem like it is in the cards. >> that adp -- 200 is exactly what that estimate told us so people looking for a move one way or the other. the most recent one we had was a

break to the downside on jobs. do you think more disappointment is ahead or are there stronger trends out there? >> i thinkly lyactually think everyone is braced for a big strong number. you have actually have an upward bias on jobs friday for a while now but most of the gains happened before the trading day. today was a very blase, down reset. u.s. stock market just withstands everything and smothers is volatility and stays still. we're exactly where we were december 30th last year. breaking news on gap. morgan brennan has details. >> that's right. so gap is out with their same-store sales for may. down 1% year over year. that's a little bit better than the negative 2% analysts had expected. when you break it down across gap's three brands gap down 6%. banana republic down 5%.

the bright spot in this once again is old navy which is up 6% in terms of same-store sales. checking shares of gap in the after hours, up a little over 1%. >> morgan thank you. a positive move there. steve leisman, there's retail we could talk about but i want to get back to what's happening again. this is the evening before the jobs report. an interesting moment from the imf earlier today suggesting the u.s. should wait to raise rates. markets didn't seem too encouraged by that. did they just ignore this one entirely? >> there is a little contradiction going on. one of the things you talk about, you know this from fed policy and your coverage, signal value. think about what was said yesterday, the very downbeat view on the economy. not a sparkling beige book the other day. then you have is the imf saying conditions in the united states are not going to be such sufficient to raise rates until the middle of 2016.

that takes off the boil this idea of a rebound. so part of what could be -- >> why is the imf weighing in at all? >> they do this more and more now. in a post financial crisis world they feel like they have this important role to play. for better or worse. i'm sure people argue about it. in terms of weighing in on fiscal and monetary policy of all countries around the world. >> i can understand those countries beholden to imf loan programs for example, but this country, really? you think people pay any attention in terms of market participants? >> no. i think it mostly reflects what we already know. they like to weigh in. they have to send this gesture of vigilance. they also like to make sounds about financial risk taking and whether that's getting to be excessive and maybe this should be a regulatory or central bank response to that. i don't think that was a real mover -- >> can i just interrupt? i think you make a really important point. the place that may be hurt least by a u.s. increase in rates may be the united states. what the imf is clearly concerned about is the effect --

united states -- stan fisher got up and said we're not the world's central bank. guess what? we are the world's central bank. everybody keys off of us and all the emerging markets -- i think the imf wants more time for those countries to get ready for a rate hike in the united states. >> dr. j, do you think there's risk in the markets that we aren't fully appreciating as people start to price in the interest rate hike? >> well that's where i think yellen did a tremendous job. i've been saying that the moves in the volatility of the tlt and any of the etfs that track bond movement have been dropping not increasing as they were of course in october and earlier this year. the moves have been much smaller, kelly. so that tells me that yellen has done a great job preparing the markets which means that people have been getting protection, swaps, whatever they have to do they've been doing it. and now, though with us at the high end, when we got to 2

hadn't 42 22.42 this morning people came out and comments from the i in. f imf helped with that. i think we're thinking about it but i can't say positively we've completely priced in all of the bad that could be. because we don't know what we do know. right now what we do know vienna tomorrow. our jobs reports tomorrow. those are our two primary drivers into the weekend. >> well put. the ubs chairman was sounding the alarm on market liquidity. he was talking to our sara eisen had joins us now. >> a series of heavy hitters worried about liquidity problems in the bond market. he used to lead the bundes bank tell being us earlier the sharp sell-off in bonds globally has a lot to do with central bank policy but could be exacerbated by liquidity shortages and it could get a lot worse. >> i am concerned about

liquidity in the market in particular under stress situations. once i do understand that repricing and volatility is part of getting back to normal liquidity in the market seems to be still a concern i have and it's not widely shared but i think it will increasingly become an issue. >> it is increasingly becoming widely shared. the fear here is a crunch thanks to a number of changes after the financial crisis like the extreme central bank intervention leading investors rushing into bonds. coupled with new regulations for banks requiring them to hold safer assets. all of that has sapped some of the necessary liquidity market making banks are holding in terms of bond inventory. so the fear is if there is a sudden extreme rush for the exits, you could see huge moves, price dislocations, even the potential for frozen markets. that is actually the words of larry fink the head of blackrock, earlier this morning at the same conference the institute of international be finance or iif here in new york. it could ultimately be a threat to the financial system and to

the economy. weber said regulators need to take another look at this. with the bond market heating up in the last few days around the world, really those liquidity fears are top of mind. >> sara thank you so much. let's talk about the financial system from a participant himself, kevin cummings joins us ceo of investors bank. >> good to be here. >> when you hear axle weber and other weighing in about frozen markets, what does that make you think about? >> the interest rate risk is one of our biggest esgest risks of a regional back. but having a flat yield curve is dangerous to our net interest income. >> what does it do to you guys exactly? if that doesn't move even if the fed raises rates, the curve might even get flatter. >> exactly. and that will cause some pain. on the other side the uncertainty, we've budgeted for the last two years on rate increase in the third and fourth quarter and we think it is going to happen in the third quarter. >> there is a lot of talk with regard to a potential rate

increase about the capital market's response. not a lot about what the real borrower response might be for the provision of credit and demand for credit. it seems like that wouldn't be a big deal. would it? for clients like yours who need credit and might actually have a business use for it? >> we saw a spike in mortgage applications when the 10-year went down to the 1.90 range. and the home purchases are increasing in our markets here so you're seeing the economy getting a little bit stronger and the activity and lending activity has been stronger. if the economy gets stronger that will push the lending and i think interest rates will be neutral in that 25 50 basis point range. >> talk about a well-timed and poorly-timed rate like. if the fed hikes rates and the short end moves up but the long end doesn't, what happens to lending in the united states? and then if it hikes rates and the long end moves up more than the short end, what happens to lending in that situation? >> as the yield curve steepens lending will increase.

if it flattens lending will slow down. >> so a badly timed rate hike is worse for the economy than doing nothing at all. >> exactly. >> by the way, whether we talk about who you are making loans to, i thought your comment about housing was interesting, that we are seeing some signs of life. what about demand for corporations small, also maybe dealing with on the regional level and larger. >> larger corporations are strong. they've improved their balance sheets. we lend in the middle market and we are seeing a lot of activity. that $50 million to $100100$100 million sales company revenue. those small businesses that survived 2009 to 2001 their ref flew's growing now. it is not cost control. it is revenue growth. >> we were told lately one of the problems is wells fargo just doesn't see new businesses forming if the way they used to. do you see that same thing, that the demand for new capital is not there? >> in this new york region it is great. things are better here in the

new york region than across the country. our franchise spans into pennsylvania, south jersey some of those areas have double-digit unemployment. cumberland county, casinos. so in the northeast here, it is very strong. >> we'll leave it on an upbeat note. thanks so much for being here. dr. j, quick last word to you. what bets are you placing ahead of the jobs report? >> last week we were pretty aggressively getting into short in the crude oil markets knowing that -- at least strongly suspecting that we would see opec still leave the spigot wide open. that is of course saudi arabia the biggest member. i still think that's the case. i'm still betting on $50 before $70 for crude oil per barrel. tlaeps the that's the bet i have. >> so it's opec more than the jobs report. >> for me. >> thanks jon. catch more of jon najarian on

"fast money" at 5:00. a bombshell prediction ready to send shockwaves through u.s. markets. he'll explain that at 5:00. greece is the last word at least for the plashths. the markets, the european union and the imf. the country has decided it will bundle its debt payments together and pay back creditors by the end of the month. what this means for markets here and abroad right after the break. the faa putting drones in the sky to monitor military airspace. i'll talk about this latest move. you are watching cnbc first in business worldwide. here at td ameritrade, they love innovating. and apparently, they also love stickers. what's up with these things, victor? we decided to give ourselves stickers for each feature we release. we read about 10,000 suggestions a week to create features that as traders we'd want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. who reads all those? he does. for

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welcome back. it was a pretty broad based sell-off today that led to the dow closing down 170 points. as things settled down nike and mcdonald's joined goldman to the upside albeit very slightly. meantime, it was a temp session for boeing verizon and dupont. we looked at a number of names. in oil, exxon outperforming. greece putting appreciate slurpressure on the markets as tomorrow is the first deadline for debt repayments. doesn't look like creditors will see money until the end of the

month. >> if they get it at the end of the month, kelly. hi. the imf informed us today that greece has told them they're not going to pay them tomorrow. there are four imf payments due in june and greece has taken the option, which they are allowed to do of bundling all of their payments into the last day of the month. this is permitted, but don't get fooled. there is very much seen as a move by greece as an act of trying to gain leverage and saying to their creditors, look you're not going to get any money until we all reach a deal here's where we the greeks can get more money. nobody wants to reach a deal more than greece's creditors at this point. just today both sides had their copies of their competing reform plans leaked to the press. this is the one put forth by the greeks, this is the one put forth by the creditors. they are still pretty far apart on a number of key issues. we're going to get a sense of what the greek prime minister is going to do tomorrow. he is going to make a speech in front of parliament. estimated right now 6:00 p.m.

athens time roughly 11:00 a.m. new york time. we'll get a sense of his tonality. he'll have met with his party members to see what kind of position he wants to take. most people think the real deadline for coming to some kind of deal is a week from tomorrow because that's how much time you need for all of the mechanics. you get a deal a week from today. then all the other parliaments in europe will need to approve it. then you can give greece the money. then they can pay -- not the imf that everybody's concerned about, it is the ecb that are due in july. >> how is it received in greece this kind of unusual step that germany and the creditors took to present greece with a plan saying, hey, here why don't you try this? >> the creditors tried very hard not to make it look like an ultimatum. when you read through it there is a lot of caveats in the program saying you can figure out how to get to this solution on your own. you can take whatever measures. but we need you to achieve x, y and z. it was pretty much seen as an

ultimatum throw by the greeks. the biggest concern when you talk to people there are about pensions. are there going to be more cuts to pensions. that seems to be the greatest sticking point and which would be a real loss of credibility to alexis cepr ochlt uchltous. >> is angela merkel taking more of an activist role in getting this worked out. >> we thought this friday was going to be a sort of hard deadline. it does seem to be when payments are going to be made and you're talking about the schedule and not wanting to go past it seems like we're pretty close to that moment. >> well, it is a very simple economic calculation. they've decided that no solution is better than a solution or the whole thing dissolving. so it has to be -- >> no rate hike is better than a badly timed one. >> it has to be that this endless stringing along is seen

as a better outcome, even though it doesn't feel like an outcome. and mike santoli's frustration or anxiety with the lack of one, who is emblematic of all investors out there who are tired of dealing with greece. and with this little small tiny nothing of -- i don't mean nothing of a nation. it is a wonderful country. it gave us democracy. but in the grand scheme of things, what is it michelle? wisconsin we are talking about here? >> it is 11 million people. >> for all parties involved it must be better to string this out than to either come up with a solution or to break greece off from the euro. >> yeah. the way the europeans are constantly thinking about it is okay. there's this -- all these concerns about the cost of them leaving. however, what's the cost of them staying? could it potentially be higher? you know? in terms of moral issues in terms of having to pay forever. and not knowing when it's ever going to end, if they're ever going to be able to get back on their feet. >> meantime, of course there are concerns about who might be next

if this sets a precedent. maybe not next time around but in the next crisis or recession. a lot at stake in this one, michelle. we know we have to watch for those payments. maybe in the next week and a maf.maf half. maybe june 30th. or strung out to some other day. >> it keeps michelle employed. it keeps her frequent flyer miles to greece. i would like some of those miles but it's all good for michelle. >> we'll send it back out to morgan brennan for an earnings alert. first is diamond foods. mixed results. it was an earnings beat 23 cents per share versus 15 cents estimates. revenue did miss. $186 million versus $195 million. the company raised earnings guidance for the year. a different story for payment system verifone. 2 cent beat. 44 cents a share versus 42 cent

estimates. revenue just about in line $490 million versus $489 million but verifone came in light. shares of that company are down 1 % in after hours. up next groundbreaking drug that may turn out to be the talk in board rooms and bedrooms. why know that blue pill viagra has changed the lives of men. now a female version may see approval. how big may that impact be on big pharma. you used to sleep like a champ. then boom...

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we've got some breaking news on that drug that's being referred to as female viagra. >> after two prior rejections by the fda this drug getting a positive recommendation from an fda visz advisory committee just now voting 18-6 that the risk/benefit profile of this drug supports its recommendation for approval with some post marketing safety surveillance efforts in place. this is just an advisory committee to the fda. it is not the fda itself. it still has to go to a vote. the fda often takes into consideration what they say. they don't always vote the way that they recommend. this drug is made by a private company called sprout farm pharmaceuticals pharmaceuticals. they bought it from a german company that was actually developing it for depression. then they had this result that it affected sexual function but

it got rejected twice by the fda because the fda was concerned about a lack of real tremendous efficacy and about side effects. there was a lot of discussion today about the drug's interaction with alcohol causing low blood pressure. the drug isn't taken like vieagra viagra. this one you take chronically, every day. if you get this low blood pressure effect when you take it with alcohol a lot of people drink and it is a drug you're taking for a long period of time so there are a lot of concerns. >> it's important i think to home in on this point that it's been tough to develop this drug. is there a real demand for it out there? why has nobody been able to get this right yet given how lucrative viagra lass been on the female side. >> viagra and cialis are each about a $2 million a year drug. proponents say this is a huge problem for women as well. it is called hypoactive sexual

desire disorder. that's the technical definition. 1 in 10 women have this and dozens of women testified at the advisory committee meeting today saying that they need a drug like this. it really became when it got rejected twice, a lot of people were saying the fda is sexist and they're not considering women here. the fda knocked that down and said of course we aren't sexist that has nothing to do with it. and that there are significant side effects to be considered. >> there was a sense as you had a lot of those activists people saying there is a double standard here somehow, is there any way to engage whether that had any impact at all? obviously people testified voicing that type of opinion but the idea being that the fda didn't view it as much a physical problem? >> well it is a different problem. this drug works in the brain. on neurotransmitters. you are talking about a much more complicated thing than blood flow which is what's going on with drugs for male sexual dysfunction. it is hard to tell what happened in development with this drug or why more drugs haven't been

focused on this area. it is probably because things that work in the brain are much much more complicated. >> meg, is this a broader problem in that there are men in power whether it comes to drug approval, beyond just the issue of sexual drugs. for broader drugs for women. and they do not take into account the special needs of women when it comes to those decisions. >> that's an interesting question. the commissioner at the fda has been a woman. so there are women at the top of this. but in clinical trials we have seen that some data exclude women. they're tested more than men. there are issues in developing drugs. however, i don't know if it is necessarily a men at the top. >> viagra and cialis have been so popular. beyond i'm sure what at the time they really thought the need was going to be. is it possible that the same thing will turn out to be the case on the female side as well? >> yeah. there is a lot of discussion among that today, this drug could be used off label. not just specifically as it is prescribed. when you go to your doctor and

they say you have to be very careful how you drink with this drug, if you use it in a different way than is being prescribed, you could run into some safety issues. >> what is the time frame for this potentially coming to market. >> the trial will have a date by which the fda will decide. we could know pretty soon. >> we managed a straight face throughout all that. >> i had like ten jokes i was going to tell. >> thank you. >> we're going to send it out to morgan brennan, move right along for a quick earnings alert. >> one more for you. zoe's kitchen a beat on both the top and bottom line. 4 cents per share versus the 1 cent loss that analysts had been expecting. revenue $63 million $62 million that analysts had been expecting. comparable restaurant sales, up 7.7% for the quarter. that was also better than expected. checking shares of zoe's kitchen

in after hours, up more than 3.5% almost 4%. time for a cnbc news update with sue herera. >> here's what's happening at this hour. mourners lining the delaware senate chamber to pay tribute to former delaware attorney general beau biden. the eldest son of vice president joe biden. he died at the age of 46 saturday after a long battle with brain cancer. he leaves behind his wife holly and two children. italian authorities seizing two tons of hashish from a turkish ship in the straits of sicily. they boarded the ship without incident arrested ten turkish soldiers. california environmental groups have sued state and federal water managers claiming their drought management plan is pushing some species of fish to the brink of extinction. the lawsuit is the latest salvo in the battle over water as the state enters its fourth year of

a devastating drought. triple crown hopeful american pharaoh working out at belmont park as he prepares for saturday's big race. the horse and its owners are hoping to become the first triple crown winner in 37 years. he will start from the fifth post position. which is a good one apparently for him. we wish him luck. >> beautiful horse. yeah. i hope he pulls it off. >> it would be great. >> thanks a lot, sue. drones have both the skies and u.s. government buzzing. the faa set to name an advisor over regulation of the unmanned aircrafts. up next we'll talk to an faa administrator about how they'll handle the influx of drone use requests and keep our skies safe. also listen up twitter users. a floor declared in the stock yesterday right here on "closing bell." so far he's wrong. the stock closed slightly lower. coming up we'll hear from a street analyst who agrees and says the stock is well positioned. "closing bell" will be right

back.

welcome back. let's take a quick look at how the market did wrap up today. a sea of red across the dow, s&p and nasdaq. we were down 170 points on the dow, almost 1%.

only a few bright spots there. the u.s. 10-year, this might be related, 2.31% is the level now but we were up to 2.42%. that was before the imf came down maybe talked down the prospect of the fed raising rates this year. crude meantime making some moves to the downside again. that big opec meeting tomorrow had speculation perhaps they won't be cutting back on production. prices declining there, closing down at almost 3%. meantime the federal aviation administration announcing it's appointing a new senior advisor specifically for drones because of the increasing number of inquiries it is receiving. we've talked numerous times about companies like domino's gopro and amazon all working to integrate drones into their every day processes. the fda says drone increase are becoming crushing. now for a first on cnbc faa administrator, michael huerta. what more are we going to see from the faa to regulate drones?

>> we've been focused on the last three years how to safely integrate them into our national airspace system. there are a lot of things going on. couple of years ago we posted a room map, identified test sites and we've granted approval to use unmanned aircraft for commercial purposes. but there is a lot of work associated with approving these, analyzing them making sure they're safe. but at the same time, there is a lot of work that we have to do to coordinate with the international organizations, our government colleagues, reaching out to industry to understand where the potential is taking us. so we decided that what we really needed to do was elevate the profile of this organization within the faa, bring more resources to it so we can give it attention it deserves. >> i've been out at a couple of drone conventions for lack of a better word and seen firsthand just how much innovation and really home-grown tinkering and adaptability is happening across this space. the question hanging over everybody is can i do this? is the faa going to relax? in some ways you guys already

have and are. but what message would you like to send to that person who's at home or that company right now trying to develop its next generation systems? are the skies open for drones in this country? >> well first of all, for personal use as long as you are operating at relatively low altitudes, you are stay something away from airports you're doing recreational activities, there are really very few limits on what you can do. for commercial operations we've been doing a lot to make it possible. we have granted close to 500 authorizations for companies to use them for a wide variety of activities for aerial photography, for site surveys, inspections, and many instances these are areas that it would be unsafe for a manned aircraft to do this work. >> exactly. >> and while we're doing this we're learning a lot. we're learning what we need to consider, how these aircraft interact with other aircraft. because the overriding thing that we need to be sensitive to is we've got an incredibly safe aviation system. we don't want to do anything

that es going tois going to get in the way of safety. >> a report in "the guardian" today saying nasa and verizon could be monitoring kroens from inging drones from their cell towers. they are a tricky thing to monitor. >> i think there is a lot of potential but you've raised what is one of the big questions that's out there. currently aircraft when they operate in controlled airspace need to carry a transrespondspan transponder so they can identify themselves to other aircraft and so air traffic controllers have the ability to see him. we are in a rule making process right now where we are being loo being at some of these questions, how do we want to treat these, to what standard do they need to be certified, qualifications of the operator and how do they interact with other aircraft. i think that for very small unmanned aircraft it is our sense that they should operate with a much lighter regulatory touch. but as you are dealing with

larger aircraft where you have the potential to come into conflict with other aircraft we need to make sure that everything that we're doing is ensuring safe operation. >> sure. and i think that point about drones and planes being able to talk to each other is an important one. kind of a related point, it has to do with the automation we've seen in aviation which is now coming to the motor vehicle industry. you guys put out in 2013 a better basically saying that you needed pilots and wanted them to interact more with the aircraft. there was a worry about skills deprivation, a skills that pilots wouldn't have the attention needed to recover the aircraft from an undesired state. what do we do though, michael? how much more can be done in order to keep a pilot engaged with an aircraft that's increasingly driving itself making sure for example he spots a drone that might be flying out of the sky. >> just in the last year we have put out new rules relating to pilot training. and the purpose of doing that was to really ensure that pilots are being being trained in more real world situations.

it's really intended to directly address this issue of piloting skills. i think that clearly automation is a very very good thing. it's gotten us to incredible levels of safety. there are a lot of redundancies that are built into the system. but at the same time the human element is extremely important and so the relationship between those two is something that we think about a lot. but training is a big, big part of it for doing a lot with our air carrier partners and with our pilot organizations to ensure that those skills continue to be sharp. >> we got to go be with michael. but just to be clear, so does the faa ultimately want to know where every drone in the sky is? is that possible and desirable for your organization? >> i don't think that it will be possible for us to know where every drone is in the system when you're thinking of these very small drones that many of which are used for recreational purposes. but what it is important is where unmanned aircraft might be operating in congested airspace

where they have the potential to interact with other aircraft that the operator knows the rules of the sky, that they are operating in a way that other pilots are able to see what they are doing and react accordingly. there is a lot of research going in to this area. but i think at the end of the day everyone's got to co-exist in what's becoming an increasingly congested sky. >> we'll leave it right there. michael, thank you for joining us. michael michael huerta. >> i know planes can talk to planes and planes should be able to issue to drones. the idea of what kind ever standard to hold the drones to and whether or not you end up hurting that business because you require too much in the way of regulation is a legitimate one. bup planes but planes talk to planes better than humans talk to planes. that's something i know the faa is aware of. >> i wonder if there is a broad principle that governs the faa's decisions.

in other words there a public interest standard where you just want to maximize the airspace as long as it is safe. >> that's also a huge safety issue. >> of course. >> not just the planes but terrorism. >> hope the best minds are being put to it. now. the fifa scandal showing no signs of dying down. eamon javers, what's happening now? >> the fifa scandal so far has been all about the off-pitch action inside fee that and inifa and global soccer. but today a new development here that moves the controversy a little bit closer to the action on the field. what happened today was the head of the irish soccer association, john delaney, said on an irish radio interview that the irish soccer association was paid money by fifa in order to not protest a very controversial call in world cup qualifying. here's what john delaney said in the rte radio interview. host asked him, but what was the agreement? delaney said well it was a payment to the association. the host presses him and says but why was the payment? delaney says to not proceed

with the legal case. delaney making it very clear here that the irish accepted money in order to not proceed with a legal case surrounding 2009 qualifying world cup qualifying match. ireland versus france. here's the video that's now going to be the subject of this global socker is controversy. this is the global superstar of france in blue. hand balling the ball then laying off for a goal in the late depths of overtime here in this crucial world time qualifying match. referee did not see that call did not realize it was a handball. made the incorrect call. but the irish are saying here after this incident which henri later admitted with a is a handball and that is illegal in soccer, as we all know the irish are saying that henri -- rather fifa paid the irish association in order to not pursue any kind of claims about that case. france went through. the irish were eliminated. that's going to be a very controversial thing here in global soccer. >> eamon, thank you very much.

the latest as that scandal grows. $50. that's what the city of san francisco is giving to every child who enrolls in kindergarten to jump-start their college savings. later we'll talk to the man behind the plan to get families saving for higher education. a twitter investor making waves yesterday on "closing bell." suggesting a potential deal with google. we'll talk about the future of twitter when we return. here's to breaking more glass ceilings in golf and everywhere else. proudly introducing the kpmg women's pga championship.

twitter shares lower today after investor quick saka joined us on "closing bell" suggesting the company didn't need to remain independent necessarily. >> if the company is just working on the stuff that i'm talking about, it is much better for us to be an independent company because there is so much more value to be unlocked. if they're not be with google should buy this thing. facebook should buy it. microsoft should make a bid. but if this stuff is actually lapping and the company is listening to these types of recommendations, then there will be undoubtedly be hundreds of millions of userers seeing more ads, buying the stuff and increasing value of the shares. >> joining us a twitter analyst from manhattan venture partners chris wolf. and michael kurtzman -- let me get there right for you. >> it's mitchell. >> thank you so much.

i'll begin with you because of that flubbed intro. is chris sacca right about twitter? what do you think the potential is for the company? how many changes need to be made? >> well i think his very long blog piece that he did, then the interview on your air was very thoughtful and very helpful. i'd be surprised if any of that was new to twitter executives or product management, either from chris or from themselves. so i think the more interesting news here was his comment about whether the company should be sold if they don't do these things. that struck me as a bit strong. >> max do you think there is as much potential, a natural fit for twitter on the part of google as chris suggested? >> thanks for having me. no, i don't. i think when people are frustrated in soil convalueilicon valley they talk about buying amazon or google. why can't they do a few things and get a 40% or 50% equity premium. i get the frustration. i also think twitter is worth a lot more than price reflects

right now but i don't think it is all that likely. they got the search results deal with google which i do like. >> mitchell mike santoli here. you do mention that none of these suggestions are likely to come as a complete surprise to people inside twitter but is there a sense that executives are moving fast enough that they're actually developing the product in these directions with enough urgency or momentum to satisfy both potential users and investors? >> well that's hard to know what's being considered internally. i think as was just mentioned, getting into the google search results and the deal with google was very significant and maybe in some ways almost more significant than any of the individual product ideas that we've heard. i thought that was a big step. >> steve? >> i guess the one question i have is is twitter a kind of whiz whizzy wig thing? is what you see what you get? when you think about facebook it is a multi-conventional

environment where people can do a budge of stuff. i'm not sure there is a stuff inside of scope of what the thing twitter is. the capacity to get more dimensional and create a bigger environment for people to do more in. >> i mean it is a good question. i think twitter has to throw off the yoke of being compared to facebook. twitter will always have the attention, is it a product or a company. it is a little more serious, and it is a little more limited but it is an 800,000 pictures of baked potatoes and macaroni and cheese and it is really important for the first draft of history and also for tv so there is real value there. but i think it has to decide what it is and i think to steve's good point it has to decide what it isn't and stop flirting with what it isn't and just be better at what it is. >> we'll leave it there, gentleman. really appreciate it. san francisco meantime helping families make the first

step in paying for their chiltdd's higher education. a new program kindzergarten to college enrolls every enrolling every kindergarten student with a $50.

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well the city of san francisco is hoping to encourage more students to pursue higher education by launching an initiative called kindergarten to college. it's enrolling all incoming kindergarten students into his or her own college savings account. joining us to talk about it is jose cisneros. welcome. >> thank you. it's good to be here. >> tell us about the plan. $50 is not much but it can grow in time. >> $50 isn't going to pay for kblij our college but our idea was to set the stage for saving it puts an

initial deposit and then provides incentives to save and, boy, have they been saving. >> what kind of account is this? >> it's an account -- it's not a 529 or tax-advantaged account right now it's an incubator account with our banking partner, citibank. it's a custodial account with sub cultures for each of the 4,500 kindergarten yenkindergartenners each your. >> there's a lot that shows when you make a retirement job automatic when you get a job, once you do have people enrolled, what is the pattern in terms of how much they save, what they save what percentage

of the people add to the account? >> that's an excellent point. our idea was to make sure this was automatic and universal. every child gets an account and we put a deposit to make it real. we offer a one-to-one match up to the first hundred dollars they put in the account and then we offer another $100 incentive for six consecutive months of steady savings in the account to encourage a habit of ongoing savings each month. so far to date we've opened over 18,000 accounts and almost 14%, 2,500 families have saved over $1 million for their children's education. >> how important is it for you to try and narrow the gap with this program? how much of a realtime pressing

concern is this gap for you? >> well, it's huge here in san francisco. we have an incredible gulf in our income gap. research results out of university of the kansas show as child that grows up with a college savings account in his or her name is three time more likely to go to college and more likely to complete college than a child without an account. we want to bring that kind of success to every child in san francisco. >> that's jose cisneros.

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welcome back. here's something that will wrap up the kind of session we had today. there were no lookups on cnbc.com for the ten-year treasury note as there was for apple and as we know almost nothing ever dethrones apple. >> the government making ipads? >> that's one option. but it's the moves in interest rates. >> being here tomorrow with a job number that was 250 versus a job number that was 150, andion ion

don't know what this market wants. does it want stronger economic data? >> i don't know what it wants. >> really appreciate it. that does it for us on "closing bell." "fast money" starts right now with melissa lee and the gang. >> thank you. i'm melissa lee. our traders on the desk of tim seymour -- one of our analysts says a global recession is not far away. twitter, a tough analyst is downgrading the stock. the man behind that call and why he's sounding the alarm on that call. the dow sliding triple digits volatility