he'll join us tonight at 5:00 on "fast money." >> and we'll do that wing-walking story tomorrow with a great debate around it. it's going to be good. we look forward to tomorrow. the dow is up 240. it's going to be a big final hour of trading. "closing bell" starts right now. welcome to the "closing bell" clchlt i'm sara eisen. >> and i'm bill griffeth. you don't have to wait till tomorrow to see that wing-walking story. we have it, too. if you want to know who this is, stick around. news that berkshire hathaway is buying precision parts. the biggest deal warren buffett has ever made helping market sentiment and the rebound in oil is helping the broader market as well. we'll discuss where investors should believe in this rally

today. and someone investors believe a lot. jeremy siegel calling for dow 20,000, sounding a cautious note despite the big rally. find out why. exclusive interview with him coming up. and can we get to his target? >> twitter, by the way, have you seen that? up 8.5% right now, popping on news of more insider buying. plus this partnership with the company announced this morning with the nfl. is this the comeback that the beaten-down stock has been waiting for? we have both sides of that -- we're bringing back an analyst we had on last week who was skeptical about twitter. >> shares hovering around the $30 a share mark. and shake shack will report its latest earnings report. it's the third time reporting since going public. the first two reports missed

wall street estimates. we'll bring you the numbers and tell you what it means for the restaurant space coming up. and this stock is up more than 200% since its ipo. >> and they only have 30 stories -- >> 71 around the world. 40 in the united states. still, not many. >> need to grow this company. let's get to the day's rally. and bob pisani is back and tracking the action so far here at the new york stock exchange. welcome back, robert. >> thank you very much. the rally is holding up. they're not selling off energy stocks in the middle of the day. we haven't seen that in a while. take a look at our screen. why the rally? the most simple explanation is an oversold condition for a while. every day, energy and industrial stocks down. finally reversed some of this. some of it is on hopes for more stimulus in china. they had very poor economic numbers over the weekend. bad news is good news. everybody's talking about more stimulus in china. take a look at the s&p 500.

we have been strong right at the open. and there's been no attempt throughout the day to take down any sector but particularly the global names. your materials, your industrials and some of your energy names. i want to show you something right here. come back to me. i'll show you some stocks that have been beaten up. chevron down 14% for the quarter. but etc. up almost 2.5%. no particular news out. the whole complex is up about 2.5%. they've all been so beaten up. another one, dupont, take a look right here. this is another one down 11%, 12%, 13%. no news but a terrible situation for the global materials group on weaker demand that they've been going nowhere throughout the day. another one, industrial name, united technologies, very quietly down 10% for the quarter. they've got a major problem. they're all over the world. the slowdown in china, slowdown in brazil dramatically affects them.

today they're rallying along with the rest of the market, the first time in a while this has happened. if you look at the oil and exploration and production etf, that's bouncing nicely today. semiconductors are bouncing and the metals are also bouncing today. the one thing i'm not seeing i would have liked to see is a little more volume, indicating more short covering. people saying, we may be into a bottom and long term coming off those bottoms. i don't particularly see that today. and that's why i'm reticent about saying we've hit a bottom in these names. but for the moment, we'll take it. >> you mentioned materials, best day since back in february. materials, industrials, energy, some of the most hated groups out there leading this rally today. i guess the question comes back to the sort of theme of your report there, is this a bounce or is this a rotation into some

of the most beaten-up names of the year? you could make the case there are fundamental reasons to why this sector, including industrials? >> anything in the aerospace area that metals like precision cast parts and allegheny technologies, they're doing well today. but the other ones, a big debate. investors got burned badly trying to buy oil stocks in february and march. everyone said, oh, we've never seen a 50% drop in oil. it's always rebounded six months later. now it's six months later, there's no rebound. vul as a result, a lot of people are badly burned. that's why we're not seeing a bigger volume today. people saying, didn't this happen before? we tried to buy this at the bottom? more of a wait-and-see right now. >> thank you very much, bob. meanwhile, warren buffett was on "squawk box" this morning talking about berkshire's deal with precision cast parts and weighed in with his thoughts on

where stocks are headed overall. >> stocks are going to be higher, perhaps a lot higher ten years from now and 20 years from now. i'm not smart enough to pick times to get out and get in. if you're in something that's going to be a lot higher over time. >> let's get reaction on our "closing bell" exchange. joining us, john manley, ben willis and sam stovall. it's nice to hear the optimism on stocks and to see buffett put his money from his mouth is with the biggest takeover ever for berkshire. >> i think so. to paraphrase st. paul, if warren buffett is with us, who can be against us? he's buying. very difficult to time these things. says to me that stocks are not outrageously expensive. he's been known to pass when things are expensive and it says there's a need to put money to work.

so specific to him but there's more generalities behind it. >> it seems warren buffett is always buying. long term, you should be thinking that way if you're an investor. but on this network, we go short term because it would be boring if every day we came on and said, well, stocks are going to be higher 10 or 20 years from now. i happen to agree with him. >> i could learn to live with it. >> ben willis, is this rally for real today? >> it's very real. we are in a way oversold condition -- i don't know how much i can add to this conversation. bob pisani nailed it. you had a major oversold condition in the broad market, a bounce coming in on multiple levels, not just because of the oversold. you had the china where the perversion of wall street, what's bad is good. it was so bad there's nothing else to look for than a stimulus package to reinvigorate the chinese economy. our own market is warren

buffett. i know he has a great spokesman for the american industrial complex. here's a guy who has told the american investor that they should be putting their money into an index fund yet he has created his gigantic wealth by buying individual companies, by doing his homework and finding those companies that are going to be in 10, 20 years extraordinarily profitable. i don't know why he doesn't want to teach that lesson to everybody else. i guess it would make the field too crowded. but watch what he does, not what he says. >> good point. sam stovall, watching the s&p right now, up 1.26%. if we could just look at an intraday chart, it's up 26 points. last week was a brutal week for stocks but all in all, the s&p lost 26 points. we're making it all back today. does that tell you something? >> it tells me that that volatility is certainly with us. that investors really aren't sure which way to go. last week we basically lost everything we gained in the month of july.

70% of the sub-industries in the s&p 500 were in negative territory. and i think what we have a new story to tell is that if you're an income-oriented investor, then put one hand over an eye, that eye that looks at stock prices and focus on the income stream. if you are a landlord, you're not going to price your condo every day. so don't price your stocks every day. but focus on the annual income stream. and in most cases, that line will be very attractive, something like a department store escalator. >> wow. i'm counting all the metaphors in that answer. sam, where do we stand on earnings as we make our way through the third quarter here? >> we're borrowing from peter to pay paul, another to put on the list. basically what's happened is we came into the second quarter thinking the s&p earnings would be down by about 4.25%.

yet the third quarter is expected to be off by 3.25%. fourth quarter up only 2%, et cetera. so the 12-month forward number is pretty much the same as to where it was at the beginning of the reporting cycle. so not much growth 12 months out. >> john manley, the commodity question, barron's put it on the cover. the gold miners having their best day in a long time. do you dare go in and buy some of these beaten-up stocks? >> it's not my favorite. there's some long-term attraction there because they are relatively cheap. but they're cheap for a lot of reasons. you could soo e the dollar weaken a little bit. may be a little bit toppy versus other currencies. but there's a lot to happen on the industrial side. in stock market america, before we get to the commodities. >> the dollar is pulling back a little bit today. euro over 1.10. had to get it in. >> who had ten minutes 35

seconds before sara mentioned the dollar. >> john mentioned it first. >> gentlemen, thank you all. >> thank you. we do have 50 minutes left in the trading session here on this rally monday. the dow up 242 points. that's not even the high of the session and it is the best performer of the three major averages right now. coming up, jeremy siegel sees a correction coming around the bend. find out why. that's unusual for him. he's usually very bullish. >> we'll talk about that. coming up next, though, twitter recouping much of its losses from last week. this new deal with the nfl could bring significantly more football highlights to your twitter feed than ever before. details on that. plus talk about what the deal is enough to put twitter on a positive trajectory finally, coming up.

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welcome back. it's rally day on wall street. a number of things but really the overriding issue, i guess, is we're coming off an oversold condition. >> you also have m&a continuing to heat up with berkshire hathaway and a $30 billion deal. >> china -- >> and breaking a seven-day losing streak for the dow. >> up 239 points, a gain of almost 1.4%. alibaba is also rising after the e-commerce giant took a 20% stake in chinese consumer electronics. alibaba will pay $4.5 billion.

twitter also up today, another bright spot, in an overall up session, reclaiming much of last week's losses, up 9%. tz a new deal out with the nfl to put more football highlights out. julia boorstin has the details on that. >> reporter: twitter shares are doing a total 180 after last week's declines. as you mentioned, soaring 9% on what is twitter's biggest, longest content deal yet. twitter partnering with nfl for a two-year deal to deliver about 100 nfl clips a week to twitter. that's more than twice the amount of content in nfl and twitter's previous deal. this content will be focused on in-game highlights as twitter works to show its power to drive conversation around live events and the nfl looks to make more money from its valuable content. twitter will sell ads for the nfl content and the partners will share the revenue.

this is a departure from previous deals where both partners sold ads. twitter's nfl deal is not exclusive. nfl has details with facebook and youtube to distribute content but it is a sign of twitter's ability to draw high-profile content and it comes as twitter's insiders bet on twitter's stock, which has been down over the past year. interim ceo jack dorsey tweeting this morning he's investing in twitter's future with his purchase of 32,000 shares. and on friday, a board member purchased 9,200 shares. but analysts point out these purchases are dwarfed by insider stock sales in recent months. hot stock to watch, guy. >> it is for sure. >> thanks, julia. let's bring in ed monday lee and max wolfe. >> max joining us here at the new york stock exchange. you were on the show on friday where you talked about twitter and after the republican presidential debate, we were talking about the terms of

the -- the fact that they missed out on a great marketing opportunity. baseball was a big part of that. we want to remind you what you said about twitter and what needs to be done there. listen to this. >> from a wall street perspective, they have to figure out a self-serve ad platform that allows them to cash in on the huge influence. i think we all agree they have that, a la last night. >> so now we've got this deal with the nfl. we brought you back. what do you think? is this the kind of deal you were looking for? >> this is great news. i have a lot of respect for the company. it's as though someone listened to me. i forgive them that weird mismanaged appearance for a moment. they were built to do this and built to do it better than their bigger, more expensive rivals. it's certainly getting a lot of buzz today and it popped up quite a bit. but i like this. i want to see 25 of these and i think we stop talking about how they can become facebook and how facebook can become more like twitter at that point. >> edmund, we're on constant watch for rumor or speculation

when it comes to the management or leadership of this country. you guys have done a lot of reporting on what's going to happen with the board and whose names are out there as front-runner. bring us up to speed on the latest. >> they still have a leader in place, jack dorsey, he's the interim ceo. we've been hearing that he's still on the ticket. he still wants to be considered for that job. what's complicated that is he already runs another company, square, which he also founded and they're about to ipo some time maybe this year. so you can't have it both ways. i've said it before. despite his pronouncements, i think people liked his forthrightness on the last earnings call and maybe probably what people needed to hear from leadership. they need to be clear about what they want. whoever is going to be running it can't be running two separate companies. he should say that outright, whether he wants one or the other instead of playing it both ways. >> jack dorsey is to busy he clearly doesn't have time to shave right now. a tragedy. ed, max would like to see 25 nfl deals.

what do you make of this nfl -- is this as good as it gets or can they do many more like this? >> i think they can do more deals like this whether it's with other sports franchises or big events like oscars, big live events that people tune in. twitter's basically become water cooler for a lot of people, as it's happening live, they want to sound off and it compounds where people will say one thing and other people will chime in, unlike facebook which has more of a long tail sort of discussion, over the week, two weeks or even a month, the conversation will just continue on and maybe an aggregate might even be higher. but for the spikes, the immediate mass spikes, you only see those things on twitter. and advertisers like that, reaching a whole lot of people at once. >> i watched your interview the other day, you said they wrote the first draft of history. but the question is, can they make the most of that from a monotire perspective.

there's money behind this deal, isn't there? >> yes. they have huge traction, huge engagement and they've gotten all the exhibitionists. they just need to load up on the voyeurs. can they come up with a revenue model as intensing as their communication model? so far. that's been hard. there's a buried lead here in the nfl story. part of what's exciting is the way they're monetizing this. new good partner, the nfl is a sterling brand. they can pick whoever they want. they picked twitter. i think this is the beginning of a very nice monetization run. >> i'm shocked there are no rumors floated about who could be the ceo? other than jack dorsey can't, he's too busy -- >> adam bain runs their ad business and we're talking about the ad business, which is what fuels his company. he's very competent. madison avenue likes him a lot

as well. his name is still on the list. but the board isn't indicated one way or another. they need to make a decision soon otherwise this 9% pop isn't staying around. >> wh who do you think -- >> i think it's dorsey's job to decide on. the only thing i think is if it's not him, we need to see an outsider with -- >> the question is, how do you value a company like this? >> there were always monthly average users and convincing wall street -- it was sort of the facebook model. do you have to look at it a completely different way? >> yes. i think this is fundamentally not facebook. facebook is where to go to hang out. it's your social life shared with advertisers. twitter is where you go to learn about the world and try to get people to learn about you.

it's playful without being ludicrous. if you want to share a picture of macaroni and cheese, that's facebook. if you want to talk about who's got the best mac and cheese, you put it on twitter. i think in the long term, twitter has a lot more to recover and make its own bones. facebook, the street loves, and the price tells you that. >> that's the best explanation differentiating between facebook and twitter. >> thank you both for joining us. nbc news group is a minority stakeholder in recode. we have a content sharing partnership with them on that deal. we are watching the markets. comeback monday across the board. most industry groups are higher, in rally mode. less than 40 minutes to go before the closing bell. 240-point gain on the dow. 1.3% higher for the s&p. that's the best day since may 8th. and the nasdaq also coming back.

1.18% at this hour. up next, when it comes to hedge funds, be careful who you invest with. our kate kelly tallies the winners and losers. and wharton professor jeremy siegel speaks with us exclusively. find out why he's got a short-term bearish message. 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.

holding onto gains near the

high of the session, the dow up. s&p 500 gaining 1.25% with the nasdaq up 1.15%. best day for the s&p and for the dow right now since early may. apple is also gaining ground in what is a comeback monday pretty much across the board after a barron's column suggested that investors should buy this stock. apple, somewhat disappointing on the iphones. barron's noted that investors typically get nervous during the lull periods between iphone models which we are in. >> and they sold, what, maybe ten apple watches, too. >> yeah people were underwhelmed by those. >> didn't hit their number. july was either great or terrible for hedge funds, depending on which one you're talking about. kate kelly has the tally for us. >> it's been a tremendous month for some hedge funds who are performing far above the

year-to-date average of 2.5% through july. citadel equities is one of those. though it's hard to know what's driving it. amazon and dollar general helped somewhat, pushing it up 3% for the month and 14% for the year. pershing square also doing great, gaining 7% in july and finishing the month up 10% overall. that may be part due to their new holding but also due to restaurant brands. other funds are having a rough time. david einhorn saw a reversal of 6% in july bringing his fund down 9% for the year overall. at least in part seems on some long choices. and astenbeck capital fell as well. so a mixed bag in the hedge fund face. >> seems like it was a story

that had a lot to do with m&a. and i wanted to point out that when it comes to the macro hedge funds, i've been watching the speculators' data for foreign exchange, it's interesting with the dollar at multi-year highs, and everyone saying it's the most crowded trade, it remains so. they're really staying bull niche this trade and the dollar continues to strengthen. i wonder how leveraged some of these big names are to that. >> i checked around with some people today. obviously there's a question as to whether we're topping out and especially with the possibility of a rate hike in september, how does that affect the picture? so just anecdotally speaking, i spoke to some macro traders i know in the hedge fund business and they still like it. one was a little moderate saying, we're expecting it to be a little sideways but see further strength. others say, we really like it especially when you compare it to the emerging market currencies. that may not be a hard comp but in general i'm hearing there's

still room to run. >> thank you very much. >> thanks, kate. time now for a cnbc news update. here's courtney reagan with that. >> good afternoon to you. here's what's happening at this hour. air traffic controllers' work schedules lead to chronic fatigue making them less alert. and that's according to a study the government has kept under wraps for four years. the "associated press" reports a draft it obtained also finds nearly two in ten controllers committed a significant error in the previous year. and donald trump may be holding onto his lead after last week's debate. in a flash reuters survey, trump's gop support remained unchanged at 24%. chick-fil-a has a new york city move-in date, planning to open its first free-standing location in the big apple. it will be the biggest in the united states. and two pairs of newborn panda twins today passing the

critical seven-day period in china. a total of 11 panda babies have been born there since the beginning of the year. ten of them are twins. that's our cnbc news update for this hour. let's get back to the "closing bell.." >> that's amazing. they're adorable. >> they look like hamsters. >> tiny little things. >> we'll just chopin das all afternoon. >> next time a guest doesn't show, we'll just show a panda video. >> that's cute. we're heading to the close, 30 minutes left in the trading session here. the dow holding steady here, the gain is up 234 points. s&p up 25. and the nasdaq up 57. >> big market day. and a good day to talk to university of pennsylvania wharton school professor jeremy siegel sounding off on a correction he thinks could be coming over the next six to seven weeks. find out if he's giving up his bull hornes for good or still

predicting dow 20,000. and later, phil lebeau tells us how much money tesla loses on every model "s" electrical sedan that it sells. is it really more than $4,000 per car? we'll find out coming up. it took joel silverman years to become a master dog trainer. but only a few commands to master depositing checks at chase atms. technology designed for you. so you can easily master the way you bank.

we're in the midst of the last half hour of trading. and i'm joined by stephen gilfoy gilfoyle. are you participating in this rally? >> i am. energy's been doing very well today. i'm watching the 2,102 level. if we don't hold onto that, we could be talking about like 29 to 4. >> a bull pac. oil, we're in a range now. little lower range here. you think we're going much higher? >> the level of support for oil is around $43, $44. which is why i like energy right here, not to mention the high dividend yields that go with it and the low p/e ratios. with oil, we have a chance to go

a little higher. but i wouldn't trust it for too long. i think i might get a chance to buy this energy sector lower than i already have. for right now, i like where i'm sitting. >> quickly, you buying the commodity or the stocks? >> the stocks. >> sarge, good to see you. thanks. investors may want to buckle their seat belts because jeremy siegel says we are due for a rough few weeks ahead in the market and he is warning of a possible correction. that's an about-face for a man known for his optimism usually on stocks. mr. siegel joins us now in an exclusive interview. good to see you again. >> happy to be here. >> let's just be clear. are you sticking to your dow 20,000 call in the long run and just warning that near term we're in for some bumps? >> exactly. i still think dow 20,000 is possible by the end of the year, certainly not a sure deal. but the next six or seven weeks, i think, are going to be very

rough and for the following reasons -- first of all, of course, the fed hike. everyone's waiting for the first time in eight years, nine years, what is going to happen then? and with the fed hike, what do we have? we have a stronger dollar. we have weaker commodities. and both of those are the reason why earnings in 2015 are basically going to be flat over 2014. and so that's why the guidance was not very good for the second quarter that we recently got from the firms. so that combined with the fact that the end of august and september have notoriously been weak months seasonally for the stock market, so i'm beginning to think, wow, this rally is a good one today. but it's very hard for me to see the stock market really working much higher in the next six,

seven weeks. that said, one knows in the short run, predictions are very, very hard to make. and i certainly think am bullish in the long run. i think after the fed moves -- and i do think they're going to move in september -- and the world doesn't end and people look around and say, we're still standing, that we could have a nice rally in the fourth quarter. >> so what you seem to be saying then, jeremy, is we're going to see rough waters leading up to the first time they raise rates. but afterwards, then you are still seeing this rally that's going to take us -- is it 20,000 by the end of this year? >> well, that's going to be pretty hard right now. but not impossible because i think what we can see is -- earnings would have been up 8%, 9%, 10% without oil going down on the dollar. if the dollar stabilizes, even at current levels and oil can find a platform -- we had

previous traders saying it might be near the low 40s. but if we can get to $60 on oil and stay there, those two sectors won't be a drag for 2016. and i can see 8% to 10% earnings growth and more in the stock market and you get near that 20,000 mark that i certainly do expect some time within the next year. and not impossible by the end of the year. >> we calculated that. that would be about 13.5% higher from here. jeremy, question to you about the meaning of correction. typically it means 10% off the highs. we have not seen that for the u.s. stock market since back in 2011. lately a correction has been 2%, 2.5% off the highs. what exactly are you talking about and is that a healthy thing, that the corrections or the pullbacks seem to be only a few percent off record highs? >> first of all, you're absolutely right. a correction is between a 10%

and a 20% decline from the previous peak. below 20%, then at this time gets into a bear market. from 5% to 10%, that's sort of called a pullback. we've morphed into those ranges in terms of describing the market. depending on whether you look at the dow or the s&p, 3% to 5% off the peak, if we get in correction territory -- by the way, we just missed it by a smidgen last october with the ebola scare. i think we got something like 9.9% on the s&p 500 as a decline. so i think that as you mentioned, 2011 we're already four years -- that's a long time for the market not to have experienced a 10% decline from the previous highs. now i'm not necessarily one to believe that we're always due for something when it doesn't happen. that's like, we've had red on the roulette wheel for the last

ten times, we're due for a black. i realize those probabilities. but one thinking that we might be forming a basis for a correction in the next five, six, seven weeks ahead of the fed action. again, nowhere near a sure thing and anyone who's a long-term investor out there and that includes me, i wouldn't try to play it by saying, i'm pulling it out now and get back in at 5%. that's much too much trading in the market. but just to be prepared and not to be scared. >> we heard the same thing from -- >> a strong pullback from the current levels. >> heard the same thing from warren buffett this morning. concerning the earnings question, plenty of money managers say, forget about the fed, forget about the greek drama, all the other headwinds that seem to create the volatility in this market. it comes down to earnings. that's the fundamental that this market moves on. but lately, the latest earnings

quarters have not been all that great. so you must see a pick-up in earnings down the road. what's going to cause that? >> well, certainly as you mentioned -- earnings and interest rates. both of those are very important. but on the earnings front ands that dominant. again, the bad year-to-year comparisons are due to oil and the dollar. don't forget, we were near $100 a barrel a year ago. and the euro was much closer to 1.30 than 1.10. and those two developments probably shaved $10, $15 off s&p earnings. that's why i mentioned earlier, we don't need to go back to $100 oil or the dollar being down to 1.30, 1.40 against the euro. all we need is some stability into 2016 to begin to see earnings rise again. but continuous strength of the

dollar, continual fall of oil prices, that will spell trouble for earnings, to be sure. >> quickly, jeremy, do you need to see apple rally to see the broader market rally? up 3.5% right now, such a big stock, such a sentiment barometer, does it have to participate for the market to go lau higher? >> it is. i don't follow individual stocks. apple's p/e ratio is 10/12. i think when yahoo! was selling at 600 times earnings and then i was very worried. so when we have tech at 10 or 12 times earnings, i don't see that as being a big threat to the market. >> good to see you, jeremy. thank you. >> thanks for having me. >> you bet. jeermy siegel of wharton there in pennsylvania -- i always feel self-conscious -- he's a college professor and i'm asking questions -- >> he's a college professor that picks round numbers on stocks. >> but i always expect him to

correct me on something. you're wrong about that, mr. griffeth. >> good explainer. . >> that's what my professors did to me in college. 17 minutes left in the trading session. dow up 233 points. we saw the rally this morning and it's stayed at these levels. >> importantly holding onto its hefty gains here. s&p up 1.2%. just ahead, would you want the ceo of a company that you own pulling a stunt like this? well, one high-flying industry titan did something just like this, raising all sorts of questions about corporate responsibility. we'll tell you who it was and what the fallout could be when we come back on "closing bell." >> that's not actual video, by the way. choose the right portfolio. monitor it. and automatically rebalance it. all without charging advisory fees, account service fees or commissions. that may be hard to compute. but i'm a computer. so trust me.

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just minutes away from shake shack's third earnings report since going public. >> the stock has soared since the ipo. but will the company keep up with analyst expectations and investor expectations which are pretty high this time around? here with what to expect, morgan brennan. >> let's get to the headline numbers to watch here. analysts are looking for earnings of three cents per share adjusted on revenue of $43 million. that's according to thompson reuters. the other key metric, comparable store sales growth.

looking for 8.5% increase on that front. during the last quarterly report in may, the fast casual burger king estimated to be in the low to single-digit percentages. and said it would open just ten domestic company owned restaurants and five international licensed one. this is their third earnings report since going public in late january. it beat thompson reuters expectations two times and the stock has soared to more than 225% from its ipo price of $21. and you can see right now, coming into earnings, down about 2% today. but we get those earnings right after the bell. back over to you. >> and once again, i'm behind the curve on something. >> the same shack sales. you did that well. >> you obviously did not read the perspective. it was very funny. >> thanks, morgan. >> love that. a little over ten minutes to

go before the closing bell and the dow still up nicely, up 226, off the highs. more than 200-point gain. s&p up 1.2% and the nasdaq up a little over a percent. while oil also saw a bit of a rise today, some market watchers are seeing buys in the oil's stocks. we'll talk about it next. ♪ no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack,

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joining us is j.j. canhan. you see oil stocks moving higher. >> it's amazing because our clients did this. they bought oil for two reasons. number one, they've been so beaten down, synthetically buying the yields. it's a great way to play two

things at the same time. and although the fed has talked about raising rates ad nauseam and you guys talk about it every day, overall they haven't done it yet. so people are still searching for yield. >> interestingly utilities are the only skeshector in the red t now. energy, also material and industrials in the lead today. those are other sectors that have been beaten up. are your clients looking for value there, too, or is this just a bounce? >> one of the other particularly popular stocks that was beaten up last month, apple. this is the number one held stock at ameritrade. and when you get a stock like apple beaten up, people will step in to buy it because it's very popular. they understand the product. i think one of the other stocks that was really interesting that was purchased heavily last month, netflix. why? at $700, netflix isn't affordable for the average retail trader. at $100, all of a sudden they can play it.

it becomes affordable for them and it's a product they understand just like apple. they have really good interactions with it. so they can buy stocks like that when they become sort of more available. i don't want to see it's an ipo. but if you think about how the stock splits work, they're similar to how ipos work because all of a sudden it's available more affordably to people. >> j.j., good to see you. >> thanks, bill. we're coming back with the closing countdown and have a lot to talk about in terms of earnings. also after the bell, coca-cola is in the spotlight over the fight over obesity. some experts say the soft drink giant is backing some misleading research. interestingly, coke is one of the only dow stocks in the red today. those details all coming up. you're watching cnbc, first in business worldwide. nough cash bk from bank of america to buy a new gym bag. before earning 1% cash back everywhere, every time

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billion. so we're going back to july as we get a one-month chart here. up 19% today. a 21% gain overall for that last month. this was one of the reasons that we saw -- bob will tell you the other reasons in a moment. earnings coming out tonight. we mentioned shake shack, the others coming out, kraft heinz announcing, rackspace and live nation as you see a mixed bag of stocks response ahead of those reports today. we've come back from this oversold condition here. >> and that's the main reason. you're down seven days in a row, gotten industrials beat up, energy beat up, materials beat up, a horrible quarter. eventually they're going to bounce. what they didn't do particularly was see really strong volume. if you would have, you would have say, guys are coming in and doing short covering. i didn't particularly see that. that kind of makes me think a lot of people feel that we not necessarily are at the bottom

right now. that's my only hesitation. but it's a nice day overall. great to see some of the beaten-up names -- united technologies down 10%. had the stuffing beaten out of it because of the slowdown in brazil and in china. i want to mention something about shake shack. we've been talking about marketing to millennials. antibiotic-free, it's better for you burger. they went public -- >> you sound like you believe in it. >> $70. all about the concept about this relationship you have with the company. i feel better eating shake shack burgers. the competitors are coming in the fall. smashburger is a big competitor out there. there's a uk sandwich that's ready to eat -- >> there's one across the street. >> that make sandwiches on order

for you. what a concept. they love this new market -- >> we'll see. thank you, gordon ramsey. see you later. stay tuned. here we go, a lot of earnings coming out. and who was the ceo doing the wing-walking over the weekend? we'll tell you coming up on the second hour of the "closing bell." welcome to the "closing bell." i'm sara eisen in for kelly evans. bill griffeth will rejoin us in just a moment. finishing up a strong session on wall street. the dow closing up 241 points, the first 200-point gain for the dow since back on july 13th. best day for the dow since back in early may. the s&p 500 up 1.3%. and erasing all of last week's losses. the nasdaq composite up 1.15%, bringing up the rear. now investors getting set for another dose of earnings.

morgan bren seasnan is all over shake shack results. l and courtney reagan is waiting for kraft heinz. joining us for the panel, cnbc contributor dan greenhouse and david seeberg as well. dan, the big debate is whether we saw a bounce from an oversold condition last week or if there was really investors stepping in and some of the beaten-up groups like materials and industrials with a new bullish position. >> i know that bob has been talking about that all day. and it was not just energy and materials. it was the semiconductors, some of the industrials like the capital goods names. so certainly the leadership today were those beaten-down sectors. whether that means something or not is an entirely separate story, especially in light of the berkshire news. but a lot of these areas have

been beaten down over the last one to three months. so some bounces not entirely unexpected. but is this the start of a resurgence higher or just a bounce? >> david, were you buying in on this rally or are you fading this rally? >> questi >> we saw a lot of short covering today. but light volume. people covering shorts. mostly hedge funds involved here. bottom picking names that have been beaten up all year -- since the beginning of the year. i look at some of the sectors that we saw, it's everything that underperformed. tremendous amount of covering. a lot of the names we've been sticking by didn't move that much to the upside. in some cases, they were down. so it confirms absolutely nothing. it's just a great day to get behind us and to move on to hopefully higher levels in the market. >> it did start with a nice rally overnight from china even

in the face of bad economic numbers on wholesale inflation and exports? >> china is a problem economically. there is concern the economy is slowing down to a greater degree than some of the headline numbers are suggesting and certainly i think at least for the optimism with respect to equities in the morning, a strong performance from china, one of the strongest we've seen in some time, bode well for u.s. equities and indeed that carried over. hard to disentangle what happened this morning in the u.s. from what happened in china. but carnage has been unleashed on that market over the last few months. >> morgan, how does shake shack look? >> we have a beat on both top and bottom lines. shake shack reporting nine cents were share adjusted. the street was looking for three cents on revenue of $48 million. analysts had expected $43 million revenue. so a beat there as well. here's the standout number, same shack sales, the company's

same-store sales coming in at 12.9%. the expectations had been for 8.5%. looks like the company's also raising its full-year revenue guidance. there are other numbers in here. we'll dig through the report and get you more headlines. shares of shake shack are up about 6% in after hours. back over to you. >> the stock is up 4.75% right now. david, you like shake shack? >> they have to grow into this valuation. execution is so important. i think they're comping 11 or 12 stores out of the 31 stores. those are mostly new york-based stores. the growth for this company is predicated on non-new york growth -- >> but people have been saying that since this ipo. they've been saying it only has under 100 stores and there's only so much room for growth. and then if you would have been listening to people like dan, you would have missed out on a 200% rally -- >> i totally agree with that

from that perspective. i love the high-octane names. but i can't get my arms around this. i remember what happened to the krispy kreme stock. it's a different model but the reality is you are putting a lot of emphasis on their growth opportunity and the execution of that growth opportunity. i just can't get my head around paying this multiple. >> for names like shake shack or anybody else in that elevated valuation level, isn't it fair to say that valuation is not helpful, that this isn't a name that the traditional metrics by which you would value stocks comes into play? not to say that fundamentals don't matter for shake shack just that expensive can become more expensive for a lot longer than a lot of people -- >> i start to develop a tic when i hear that kind of argument. that takes me back to the '90s when we said the valuations didn't matter anymore. >> he's 100% right. you look at netflix and say, i could make the argument why netflix is going to go higher. i could see the pathway to them

actually performing here and accelerating growth. i don't see the real -- the opportunity, outside of the new york base for shake shack, the way the market is sort of predicating it. so i'm just concerned. it's my personal opinion. i just don't think the stock warrants a buy here. >> 12%-plus same-store sales growth is exceptional for the restaurant industry in general. that's a robust rate of growth. >> and maybe it's more of a statement about the overall environment when it comes to growth and -- we have not seen revenue growth this earnings season that large. that's why these valuations that can be eye-popping continue to soar because they're just so few of them. you look at a company like under armour, the normal metrics valuations don't apply. >> shake shack is unrated so i'm neither endorsing or dissuading you from purchasing the name.

in a general sense, when you look at names like we're talking about now in addition to others, what you're seeing and what you've seen for some time now is that it appears as though investors are paying for growth where growth can be found. >> i think it's 400 times forward earnings. >> i just get nervous when you have to adjust the traditional metrics to suit your argument. that's when i get nervous. >> time-out. no one is saying fundamentals don't matter. over time, fundamentals win out -- >> there has to be a discipline at some point when a stock becomes beyond the traditional valuation that we call good value, you have to say to yourself, is it really worth -- >> that's perfectly fair. let's remember when for instance google went public in 2004 i think it was. all the same types of things we're talking about now were in place then. it was about $80 a share and it was valued in a different way.

no one is saying fundamentals don't matter. but for these types of companies, fundamentals are different, albeit maybe temporarily. >> clearly. we have another earnings alert. let's get to josh lipton out in san francisco. >> rackspace just reporting. so let's get you those numbers. rackspace reporting 20 cents on $489 million. the street was looking for 20 cents on $491 million. rackspace expects revenue to grow between 2% and 3.5%. also capital allocation news. board directors increasing the company's share buyback up to $1 billion, decision to the $200 million of repurchases already carried out. and they intend to complete 5$50 million of the new buyback within under a year. that stock had been down hard,

year to date down 30% heading into this print. but popping now in the after hours. that call starting at 4:30 eastern and we'll be on it. back to you. >> another earnings alert, this one from kraft heinz. the results are out, first time as a combination company. courtney reagan has the numbers. did they break i.t. down as a combination company? >> we have numbers for kraft and for heinz. i'll give you kraft's numbers for the second quarter. revenue of $4.52 billion. that's down 5% year over year. and then the second-quarter revenues for heinz, $2.62 billion. and that's down 4% year over year. we have an eps number for kraft at 92 cents. but not one for heinz. and, again, the company reporting still those two segments rather than together. the quote from the ceo basically just says they are going through the difficult and challenging process of integrating our two businesses. that's from the kraft heinz ceo.

that's what we have for right now. we have a lot of digging to do through these results and what it means for the company as one entity. >> this is just a mess. >> if they're admitting it, that's amazing. >> because the deal didn't close till early july. this is a major endeavor, combining these two food giants. and the stock hasn't risen this much as a result of this quarter. nobody was really looking at these numbers. this is a bet on 3g capital, an warren buffett, and on a bigger international player in the food space. they're not even holding a conference call today. that's going to be on friday as the 3g folks come in and start to execute on this. it's interesting with kraft heinz, they're breaking these down as two separate companies, that's going to be a much longer-term story if it does happen as buffett told becky quick this morning. >> i'm not weighing in on the

specifics of the company. but that whole concept of combining for efficiencies is a good one. i don't think if this particular combination is a good idea or some of the other combinations are good ideas. but in general, that's what you'd like to see in a slow-growth environment. companies coming together. increased efficiencies and drive bottom-line growth. >> what about top-line growth, dave? >> what they're doing is creating efficiencies through cost-cutting. the margins are going to reflect it. 3g came in and they're sharks. they're going to make sure this gets done right. i look at kraft and the combination of kraft -- cost-cutting is the most important thing for them right now and showing it from a margin perspective. if they can continue to do that, the stock's going to continue to work. >> why is it not driving top-line growth -- >> the 3g model. i think in general, they're going to come on friday and make

commentary and that's going to get the stock moving. until then, it will bounce around until people can get their arms around that. >> what would be the better thing to do? delay the earnings report until you can report something that is more coherent and understandable or do you just throw it out there and let people figure it out? >> i think the market hates to be confused. this throws confusion into the mix. i think the confusion aspect of it is unsettling to me. i wouldn't want to play this name until they came out on their call. >> it is a long-term story. the company expects to save 1$15 billion by 2017. this whole idea of consolidation, really brings us back to the first story of the day with the buffett biggest takeover ever by berkshire hathaway, is all of this fuel for a market rally? we're up to now $1.3 trillion in announced deals so far this year in the u.s. >> in the general sense, this is what a lot of people refer to as

the deequitization. ultimately there are fewer stocks and fewer shares floating around and ultimately that helps drive stock prices higher. >> for better or worse. >> usually for better. >> thank you, everybody. stick around and catch david coming up on "fast money." 5:00 p.m. all the latest headlines from the shake shack call as the stock moves higher in the after hours on the beat. >> and knowing them on "fast money," they might do a taste test as well. >> they do that, especially with burger results. >> they deliver in new york. much more on shake shack. their earnings, we'll talk more about that coming up. should you take a bite out of this stock following this beeff result? i'm just reading, dan. we have a shake shack bear to give us his take on that coming up. also, tesla reportedly losings $4,000 for every model

"s" it sells. could the loss be higher than that? phil lebeau's been digging into this and will break down the numbers later on "closing bell." you're watching cnbc, first in business worldwide. investing strategies. my technology can help you choose the right portfolio. monitor it. and automatically rebalance it. all without charging advisory fees, account service fees or commissions. that may be hard to compute. but i'm a computer. so trust me. it computes. say hello at intelligent.schwab.com

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we're showing the wires. got a little behind-the-scenes growing here. thanks, guys. shares of shake shack growing after quarterly numbers better than expected. we'll get reaction from d.r. barton from moneymorning.com. and on the phone is paul hickey from bespoke investment group as well. good to see you and hear from you. d.r., you have not been all that hot on shake shack. what do you make of this earnings report? >> you've got to give them props. they blew out the numbers. but i'm not hot on this space in general. the fast casual market is one of the most overbought markets out there. shake shack, give them props for hitting the ball out of the park. but they still have 7 of their 71 stores are manhattan-based stores. their number might be fairly

priced if they execute perfectly until 2020. other than that, i don't think you can get much appreciation from here although it will trade a lot. its short interest is somewhere in the 30% range right now. so you'll get a lot of volatility in it. but i just think tomorrow is a great selling day for this stock. >> well, it is up now almost 12% in the after hours. paul hickey, what's your reaction to the numbers and to the reaction? >> well, when you look at the numbers, same shack sales were much stronger than expected, earnings stronger, guidance is great. what's not to like about the stock? but as you were talking earlier in your discussion about how valuations per growth stock are always high, they are always high. it's hard to buy -- you'll never get a good growth stock at an attractive multiple. but right here -- with the multiples we're at now, it's a name we're sitting on the sidelines right now. we bought this stock after the ipo.

up to around current levels. we were looking for it to go into the low 40s and we just missed it at $48. but $48 to $78 in the process of about two weeks. it's prudent to stay on the sidelines. this is like the nitroglycerin of growth stocks here. >> i'm just looking at the market cap on this stock. with this 11% gain, it's above $900 million right now. when you consider there are 71 stores out there, do the math. what's the market breakdown per capita, per store on this thing? this is a hamburger stand we're talking about here. >> it's not quite a hamburger stand. >> you know what i'm talking about. >> i get what you're saying. d.r., you mentioned the fast casual space more generally. how do you view what's going on with burgers in comparison to what's going on with the pizza names? do you have sort of a feeling of one over the other? >> well, dominos still continues

to have great same sales store growth. i think burgers -- i can't say it's a passing fad. it's a long-term food. but having a, quote, healthy burger or a sustainably sourced burger appeals to a certain demographic for a certain period of time. but look at some of the other people doing good things like zoe's, going into the mediterranean space, everybody's looking for the next chipotle. and with this bump, there's about $5 million per store where chipotle is down much lower than that, about 2.4%. these guys are priced about 3% to 5% per store. they move out of these population centers, they cannot sustain these numbers. >> paul, what are we missing here? clearly you're hearing a bunch

of skeptics here. >> we're skeptics at this level. but the fast casual area, while there are a lot of entrances, consumer incomes are rising. they're not spending on goods aat retail. seeing dismal numbers there. the talk is spending more on experiences and going out to eat, social occasions. so i don't think the area is oversaturated at this stage. but we're skeptics at close to $80 a share. down in the 40s when options start trading and we see more supply, it wouldn't surprise me to see the stock with a sharp correction because it is a very volatile stock. two weeks ago, it was in the high 40s. >> what does it tell you about the restaurant space in general in term of valuations you're seeing on some of these fast casual -- and you could limit it further to burger chains. there are so many others that

have had such hot ipos. >> yeah. they have had some strong ipos in the sector and also some haven't done so well over the last year or so. so i think it is mixed. but shake shack has shown -- it's only been public a few quarters. but every quarter, they've put up good numbers. i think as long as they can continue to execute fundamentally, it's a good story except the valuation is, again, the concern we have here. >> we have more ipos coming in that sector, too. bob pisani was saying smashburger is coming up pretty soon. thanks, guys. d.r. barton, paul hickey. thank you both for joining us. we already know elon musk is a risk-taker certainly when it comes to new businesses. but he just took part in an extremely risky stunt that had many investors holding their breath. we'll tell you about it next. and planet fitness is the latest company to try to cash in on the fitness ipo frenzy. but should investors be concerned about a fitness fad?

that's coming up on the "closing bell."

we hear about the luxury auto market being red hot right now. so why is tesla losing $4,000 for every model "s" it sells? >> phil lebeau breaks down the if you remember for us. i guess you'll tell us just how accurate that is. >> it is accurate, especially when you look at the non-gap income, or loss, for the second for tesla. add up the numbers and this is

how you get to a loss of a little more than $4,000 per vehicle. when you look at the number of vehicles that were delivered in the second quarter, 11,532, you take into account the non-gap loss of $47.8 million -- and we won't get into the debate about gap versus non-gap -- comes out to a loss of about $4,144 per people. but look how the numbers have kaslated wildly over the second quarter over the last couple of years. $4,144 this year. last year, it was a little over $2,100. here's the chart that concerns investors with tesla. it's the free cash flow and how quickly tesla is burning through cash. elon musk said we've still got over $1.1 billion in cash and if we need to raise equity, we can do that although they haven't committed to that at this point. but it's that trend. the trajectory all the way down

to a free cash flow loss of $564 million last quarter. that's what worries people as you take a look at shares of tesla. people are going to be talking about this for some time. you have a companies that investing so much money in expanding production to bring on the model "s" on the giga factory. they're going to be burning through cash over the next couple of years. that's what worries people. but there's no other way to grow an automaker. you have to invest in the infrastructure. that's what's going on with tesla right now. >> which is why a lot of people expect them to go out and have to raise money through their capital markets, right? >> right. and elon musk did not definitively say no. he didn't say they were considering it. he said, if we have to, it may happen. but as of right now, they feel comfortable with their cash position. let's see if that changes in the third quarter as we start to see the model "x" come out. >> phil, stay with us. we want to bring in the panel for this one. that wing-walking stunt that

elon musk pulled over the weekend. if you're an investor, do you want to see your ceo, especially if the ceo is elon musk, such a big part of this company and the strategy and the investment, doing this? >> that's elon musk right there. how crazy is that? >> listen, shareholders have the right to sell the stock whenever they want. and if this is something that a shareholder doesn't want to see out of their ceo, then they have the option to go and sell it. far be it from me to say what he should or shouldn't be doing. >> last week on this very program, you said with a little practice you could ride the waves on a dirt bike. >> i don't think i said i needed practice. >> well, let's see that exchange between you and kelly evans. >> took me, it looks like he stuck my daughter's kickboard to his back wheel. looks like something i could do. >> did you just say that?

>> i could do it. >> it took two years. dan greenhaus has until the end of -- >> there's nothing i believe i can't do. >> well, you laid the gauntlet down. could you wing-walk? >> i believe i can. what's the big deal? strap your feet to the top of the plane. you stand there and enjoy the breeze. >> phil, you've covered this company and you've covered elon musk. is there a cause for concern here for investors? >> not in my opinion. this is part of the reason people like elon musk. this is part of the reason that people are attracted to what elon musk does. he takes risks. he looks at things differently. there are other ceos who probably have risky habits, hobbies or have taken different types of adventures that people might sit there and say, is that the best idea? it didn't bother me. when i heard about it, i thought, that's elon. and i think a lot of the -- >> i don't know. i thought, does this company

have a succession plan? >> look -- >> seriously, that's the first thing you thought? >> i think it's a valid concern for people to get worried -- >> if i'm on the board of tesla, i want to know what the insurance policy is on my ceo if this guy is out wing-walking on the weekends. >> what about a ceo who goes out hunting on weekends? >> people are buying because of elon musk -- >> what about ceos that race cars on the weekend? >> not every ceo is elon musk. >> but this is the point, you know what you're getting with elon musk if these types of things upset you, you shouldn't be a shareholder in his country. >> this looks more dangerous than the typical risky activity. we'll leave it there. >> eating at shake shack is probably more risky than that. >> we know you're the ultimate daredevil. >> funny you should mention that. phil lebeau, thank you very much.

let's get back to morgan brennan with more on the shake shack results and the stock moving up in the after hours. >> we have an earnings beat for shake shack after the bell today, revenue better than expected. same-store sales growth better than expected. revenue guidance better than expected. we just got another announcement from the company. the company is announcing that a secondary offering, 4 million shares will be offered. the company will not receive any of the proceeds from the sale. this is shareholders selling, underwriters are also getting a 30-day option to purchase an additional 600,000 shares. so in addition to that earnings report from shake shack after the bell, also getting this announcement that the company is beginning a secondary offering, 4 million shares. back over to you. >> and that stock is coming off the highs set a little while ago, up 11% at its peak. time now for a cnbc news update. courtney reagan doing double duty for us. >> here's what's happening at this hour.

colorado's governor declaring a state of emergency in connection to a toxic spill from an abandoned mine. the order releases $500,000 to help clean it all up. the epa says the sludge which turned a river orange may be three times larger than the original estimate. the spill was accidentally caused by an epa clean-up crew four days ago. prosecutors filing ten counts against 18-year-old tyrone harris. it happened during a protest observing the one-year anniversary of the fatal michael brown shooting. the counts include armed criminal action and first-degree assault on an officer. vermont senator bernie sanders picking up his first major labor endorsement. it's backing senator sanders on his record for expanding medicare and challenging wall street's role in the economy. and for the first time ever, nasa let astronauts today dine

on the produce they grew in orbit aboard the international space station. on the menu, freshly grown space lettu lettuce. previously anything grown aboard the space station had to be sent back to earth for safety analysis. i don't think they sent it back to the space station. imagine those shipping costs. that's your cnbc news update. >> at least they're getting healthier from the space ice cream to the space lettuce. >> presumably, yes. anything previously grown on the space station was simply called a science experiment. now it's good. thanks. warren buffett making a $37 billion bet on aerospace parts maker precision cast parts. could that deal help jump-start the underperforming industrial sector in the economy? we'll go bargain hunting on that story coming up. and speaking of healthy, coca-cola trying to shift the blame for obesity away from its products by funding scientists who say soda isn't the problem. we have the details on this coke controversy coming up.

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it was a rally day today. the dow jones industrial average finishing up almost 1.4% to 16,615, a gain of 241 points.

nasdaq back to 5,101. the s&p up to 2,104. that was a number that sarge was hoping if you're going to be bullish in this market you would get to. and we did. and crude oil rose as well. >> even though the s&p was down four to five days last week, we recouped all those losses in just today's session. morgan brennan here to round up all the after-hours action. >> let's start off with kraft heinz reporting as a combined company. kraft posting adjusted eps of 92 cents per share on revenue of $4.52 billion. heinz revenue, $6.62 billion. shares are down about 1.5% in after hours. shake shack's shock is soaring, up about 8.5% in after hours.

the burger chain also raising its full-year revenue guidance. the company also announced a 4 million share secondary offering. video game maker take two posting mixed results. earnings per share of 30 cents. revenue missed estimates. and current quarter guidance is way above estimates. full-year guidance for the company came in weak. and that's really what's sending shares of take two about 3% in after hours. and there's more. we have a news alert. what's the latest? >> this is the ceo coming out to shareholders today reiterating the company's reasons for rejecting that $30 billion bid saying the proposal wasn't close to where we should consider it for a basis for engaging saying the feedback from shareholders has agreed with them, saying we are not entranced or

intransigent. but our board made a correct decision not to engage based on it. we'll see if shire comes back with a higher bid. back to you. >> the negotiating has begun clearly. thanks, meg. warren buffett's berkshire hathaway is potentially making its biggest deal yet. the company looking to buy precision castparts, price tag over $37 billion. shares of the industrial company soared on that news today and on "squawk box" this morning, mr. buffett said he is looking at other smaller deals as well. >> we'll probably be buying a few small things in the next six months. we're in negotiations on a couple. but in terms of a deal of similar size, it pretty much takes us out. >> so we've asked two top stock pickers to size up the industrial sector for us, find out if there are more deals to be had.

eric marshall and kevin caron join us. kevin, clearly the industrials were standouts in today's session, beaten up lately on concerns about china. do you expect the buffett effect to have more than a one-day move higher? are there going to be more deals and another catalyst for this sector to go higher? >> i think there will be. you have to have a longer-term view, though. the things that are, no pun intended, buffeting the sector are all the things we're worried about. we're worried about china, what's happening with the stronger dollar, global growth overall, emerging markets. all of these things have caused industrials to lag behind the broader market over the last number of months. it is creating some values there. if you're patient and you're willing to sit through a few more months of sluggish numbers and sluggish results, you can find very good values here. >> what do you think, eric? warren buffett made it clear over the years he's not one to lose sleep over the headline risk that exists on a short-term

basis. he's looking long term. if you do that, do you find value in the industrial sector right now? >> at the hodges fund, we certainly are. when you look at the industrial, it's a very broad segment of the market. i think you have to look at everything on a case-by-case basis. we like some of the areas in building materials and construction, pockets of transportation, as well as many infrastructure companies that are more tied to the domestic economy than international markets. so we're finding opportunities. but you really have to look at it on a case-by-case, stock-by-stock basis. >> eric, sounded like you pretty much said the entire industrial sector. is there a part of it that you don't like, that you're not finding attractive opportunities? >> well, i think some of the areas where you have exposure to some of the multinationals, where you do have more exposure to deep cyclical commodities and

stuff like that. but we like things like eagle materials, which is a cement and gypsum wall manufacturer. we think it's very attractively valued. they just announced the 7.5 million share repurchase authorization this morning. so they obviously agree that their stock is attractive. but opportunities like that exist in the market. you just have to look hard to uncover them. >> kevin, the only pushback i would say is that some of the factors that have been weighing on these names have been a slowdown in china, which has been hard and somewhat volatile in the stock market, and the stronger u.s. dollar has hurt a lot of these names. neither of those two have really been resolved or seem to be correcting and going the other direction. how bumpy could it be as we wait to see these individual stock stories? some of these industrials are in correction mode. >> you can certainly have bumpiness as you go through this. but you'll be hard-pressed to

find a well-priced asset where everything is going swimmingly. if you look at companies like emerson electric, for example, for raytheon, these are both companies we own in portfolios here at stifel for portfolios that we manage. when you look at these kind of companies, you fine companies with lots of free cash flow, companies that when you look at where they're trading on normalized number -- normalized cash flow earnings, they're attractively priced. and in many cases, the balance sheets are very good. so you take an emerson, for example, their balance sheets are very good. they're refocusing on their core business. and raytheon has some very nice orders coming in on the margin. and some interesting new prospective businesses. these are two venerable names you could own but it will take a while. >> good to see you both, eric and kevin. thank you. >> thank you. staying fit is certainly hot with millennials, not just

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companies have been racing to go public to cash in on the huge demand we hear about for fitness products and services. >> what are the actual long-term prospects for these stocks? bob pisani has all the details.

are these good investments? >> it's tough to say. what caught my attention, last week, amplify, a popcorn company, went public. billion-dollar capitalization -- >> skinny pop. >> planet fitness did well. marketing stuff to millennials. i want to show you some things coming in the fall that are potential ipos marketing to millennia millennials. in the fitness category, fitbit did very well recently. another one is coming in the fall called jawbone. that one, same competition. millennials love tracking their health data. we also have the gym business getting crowded. planet fitness is only a few days old. but soul cycle is coming. this is an uber cycling firm, likely to go public in september. they have a cult following around the instructors. and this whole better for you category is exploding. so we talked about amplify, a popcorn company, chobani will

likely be an ipo. you think this is a yogurt company. they've been very successful. their idea, it's better for you yogurt. l and that's important when you're marketing to the millennials out there. that you have a brand name recognition. and that they're doing the right thing, they're socially engaged somehow. so there are other ones out there that are happening in the near future. that's just a couple of examples. >> i have to be honest, this is usually where i would chime in as the youngest person on the panel. but i'm upset because sara is meaningly younger than me. sara, tell me how the millennials view these. >> i have a lot of greek yogurt. and soul cycle reminds me a little bit of shake shack. it has a strong brand in the new york area. unclear whether this can translate into expansion around the country. but it's not just better for you and millennials as buzzwords. it's a good investment. that's the important thing here. >> here's the problem, you look

at an amplify, plenty of competitors out there who want to get into that space. that's the problem you'll have. >> bob, thank you. very interesting story. we have pretty big breaking news right now on google. jon fortt, tell us about this. >> reporter: this is pretty important. it's news on google. it is restructuring in a pretty dramatic way. bottom line is this, beginning in q4, google will report as a differently structured company. the ceo of the part of the company that will retain the name of google, overall the company is -- as an entity is calling itself alphabet, that's a new company they're creating that will include google along with a number of other different pieces. so examples colluinclude life sciences, calico. this release is on google's

site. it's written in a narrative format. no bullet points here. so it's going to take a while to go through and bring out the specific points. but important google properties like youtube will continue to run, it looks like, as they have. susan wojiskie, who's the ceo of youtube, will retain that title. but the main thing that investors are going to be focused out of this is sundar pachai who has been a chief operating officer of google at this point quickly rose through the ranks after running chrome, then running the android group and getting purview over google will become the ceo of the part of this bigger company that will be called google, including the internet companies within the group. but they have to go through this and of course talk to google to get clarification on many of the paints in here. a big restructuring for this company. it will be called alphabet and part of it called google will be

run by sundar patchai as ceo. of course larry page and sergey brin will continue to have oversight over the larger company. but a big restructuring for google. >> we all know, jon, that every time you turn around google is in a new venture, far-flung ventures, using all the cash that they've generated through the years here. now it sounds like they're trying to make some sense of this corporatewise so they can generate some synergies. >> it sounds that way. but some of the questions investors will have and i will have is google just did this split, splitting into goog and googl, which was largely seen as an attempt for larry page, sergey brin to retain voting control over google given some of the dilution from eric schmidt, cashing out some of his shares, some other things they've done. how does this affect the stock structure of google? how does this affect the funding

of some of those strategic imperatives? and some of those far afield projects they like to invest in? lots of questions investors are going to want to answer in this restructure. >> jon, real quick, we're going to do more of this after the break. is that what we're doing? all right. we're going to do more after the break. we have to get this break out of the way. jon fortt, stay there. we've got more of this restructuring. >> and we've got a google blog post. we'll bring you some quotes after the break as well. care of my heart. that's why i take meta. meta is clinically proven to help lower cholesterol. try meta today. and for a tasty heart healthy snack, try a meta health bar.

is. all right. we want to get more on this very big news on google, essentially creating a new corporate entity called alf xwet that will oversee all of the various far-flung businesses they've gotten themselves into, of which google will become one of those businesses but alphabet will be the new big name. karen swisher, our friend at re/code, is on the phone right now. help us make sense of this, kara. >> i can't right now. it's kind of nutty. it's fascinating. it's a new -- it's almost leek a berkshire hathaway type structure. where there's all these companies within a company and larry and sergei are both the company and sundar pichai, who's running great parts of google, runs what he was running before but now he gets to be he ceo of google, which is the stuff they already do, like search and

things like that. looks like they're moving -- from what i can tell, it will replace google. after that it will be google. and then google will be within google. the only thing i can think of is they separate their more far-flung and crazy stuff in a separate area so they can be judged differently. >> i was going to say they used the word accountable in the blog post, which is sort of what this is about. larry page also says our model is to have a strong ceo who runs each business with sergey and me in service to them as needed. really forming a conglomerate, kara. >> it kind of is right now. that's how they're sort of running it. sundar has been running those businesses. wojieski has been running youtube. google x. i'm not clear what the impetus is right now. they're sort of -- google search will presumably remain under sundar and the phone stuff and

the feteos aphotos and things l. and youtube seems to be within google but susan's running it. it's fascinating but i think they're probably trying to get people to focus on each section of the company. the most profitable part. and then their crazy stuff. >> kara, it's bob pisani. we've been trying to figure out here what keeps trading? it's clear that alphabet is the publicly traded company but in the press release they make it clear that the two old separate classes of stock, googl and goog will continue trading. that's what's got us confused. >> google will become a wholly owned subsidiary of alphabet. i guess goog p is stuff you know google to be, like search and things like nap and then alphabet -- they still control the company. that's the best thing. larry and sergey and the special class of shares. they can do stuff like this. >> they're calling it alphabet because of all the letters they can assign to this. >> they say here we like the

name alphabealphabet. it means alpha investment return above benchmark. which we strive for. how do you see this inflection? do you think it's about changing the culture and really getting focus on each individual business? >> i'm not so sure about that, sara, and the reason why is there's not that much structurally that seems to change here except that sundar pichai gets the title of google ceo. he was already seen as the heir apparent. one might wonder was he being recruit add way potentially to do something else? his name has come up in a number of searches including microsoft. but what's not part of google but is also under alphabet is things like, as kara mentioned, google x, also google ventures and google capital. other things like that. the life sciences. none of those things make any money. so the way that's different from berkshire hathaway, it's not like there's a number of revenue producing, profit producing businesses under al bette including google. there's pretty much google which

is the business, and there are other things that cost money. and that's the way it's been up to this point, guys. >> so okay. kara -- sara used that word accountable she saw in the blog there. do you think it's starting to impose a discipline on each of these far-flung business they've been trying to start up here? >> no. because they've been running them like this before. they just have given people like, this as jon was saying, maybe sundar had a job offer. i don't know. i guess it's keeping the executives excited aboutar this individual companies within a company. but it's still overseen by larry and sergey. sergey gets a job. that's nice. he didn't have a title before. i think it's sort of the same. just a different name, it seems like. giving these people individual control, very clear control over their businesses. which they kind of did before, the senior vice president. >> just gave them different titles there. kara, thanks. appreciate it.

jon, you too. you go and try to figure -- we're still clearly in the head-scratching phase p all of this announcement from google here. >> investors are buying it looks like in the after hours, with google shares up about 4 1/2%. melissa lee, i know you've got much more on this coming up here. >> yeah, we'll continue the head scratching and hopefully answer some questions about this. thanks, guys. "fast money" starts right now. live from the nasdaq marketsite overlooking new york city's times square, i'm melissa lee. your traders on the desk are tim seymour, david seaburg, karen finerman and pete najarian. today on "fast," bullion bounce. dennis gartman says the bottom is in for the precious metal. find out how he's playing it now. shack attacks the haters. the burger joint reporting its top and bottom line beats. one wall street insider says don't buy into the hype behind this special sauce just yet. but first to this breaking news on google, announcing plans for a new operating structure. cnbc's jon fortt's got all the detai details. jon? >> reporter: well, melissa, this is one we haven't seen before.