>> okay. >> what it really is. >> they spook us by inaction. we've got to leave it there, the show's over. thank you very much. >> thank you, brian. >> melissa's out there, thank you. >> that does it for us. thanks for watching. >> i think "closing bell" starts now. there you go. >> welcome to the "closing bell." what a day it's been in markets, everybody. kelly evans a the the new york stock exchange. >> i don't even have a quarter in my pocket. i'm bill griffith. we were trying to decide. joking on twitter, do we lead with the decline in oil or the fed minutes today? they've had big impact. both of them, on the markets today. the dow was down 229 points, then charged back after the fed minutes came back out. and now we're lower again, down 165 points at this hour. you did have those leaked fomc minutes in the 1:00 p.m. eastern

time hour. came out 20 minutes earlier than anticipated. it showed no clear sign of whether the fed would hike rates in september. we have steve liesman standing by to break down that data for us coming up. >> you know, i was going to say, these are two sides of the same coin in a way. speaking of breaking down, take a look at oil, it's down more than 4% today, it's trading below $41 a barrel. we're watching to see if it punches through that $40 mark. look how close it is right now. $40.62. and the september wti contract, down almost 5% on the session. again, we're looking at lows since march of 2009. we've got a top commodities trader to discuss whether a floor is in sight. and, of course, all of this feeds into what will the fed do? what is inflation going to do in this country? >> always interrelated. that's for sure. meantime, $1 trillion, that's how much money has come out of emerging markets over the last 13 months. we're going to discuss whether

you should be following that herd or maybe take a risk in the developing markets. that's a lot of money. a lot of zeros. >> it's a lot of zeros. and 11 years ago today, speaking of a lot of zeros, google went public, the stock p up -- well, we should say 1,500% since then. we've got a stock brawl now on whether google is still a buy after an epic run like that. >> we're also going to look at other stocks that came public the same year in 2004. and as good a performance as google put in, there's at least one other stock that has done better that came out that same year. >> it's kind of like wine, i suppose, you know, if you get -- >> how is it like wine? >> you know, people talk about years for wines or a whiskey or something. >> yes. >> does it work that way for whiskey? >> no, the longer you go, the better it is. >> it was a good year, good crop. >> it was a good crop. >> details on today's crude oil.

jackie deangeles. >> we did see a more than 4% slip. let met be clear. we are watching september wti trading right now. it closed at $41. but october is seeing more volume. wither going to see futures expiration in september tomorrow after the close. october closing at $41.27. but no matter how you slice it. we saw fresh, 6 1/2-year lows now. and that is significant when it comes to oil prices. traders telling me, when you test these lows, test them the one day and the next couple of days is when we break down through them. we saw a bearish report showing an inventory build of 2.6 million barrels. the concern here is that we're going to continue to see these inventory builds, especially as we head into the fall and u.s. demand starts to drop off. i will say that there are two caveats here. i want to hedge a little bit. possible things that could take us higher. we did see a weaker dollar after the minutes came out. if we see a dollar go lower, that could add a little support

for crude prices. and also, watching tropical storm danny. maybe 2 or 3 days out of the gulf coast potentially and people are looking at it, possibly to turn to hurricane status. so that is something to keep an eye on. not an imminent threat at this point, but, of course, that could send prices higher, as well. >> the related story we're following. let's put it back on the screen. down 5.5% today. and in the cpi, the consumer price index this morning, looks like with a 25% drop in gasoline prices, if it ever materializes, headline inflation will be a negative territory again. jackie, what does it look like is going to happen with prices at the pump here? >> well, looks like, if you look at the gasoline contract, i will say this, we saw a very steep decline today. most traders telling me, we're probably oversold. but probably what's going to happen that balance of demand i said is going to come off as we head into the fall season. we're going to see refineries start to switch to their cheaper winter blend of gasoline. you are going to see prices at the pump come down. and you're going to see them come down dramatically. we've been talking about

refinery disturbances in the midwest. those are starting to work themselves out. and refineries in other places are starting to come back online. there's a little bit less concern about those issues at this point. but, you know, to answer your question simply, prices at the pump are going to go down. >> yes. >> hear that? thank you, jackie. >> thanks, jackie. see you later. so steve liesman has been combing through the fed minutes, which were released earlier than expected by another news organization. inadvertently. tell us about what you read in those minutes today. >> i want to talk about what i read but also what the market read. it's a controversial and confusing set of minutes for the july meeting, coming out in which the markets saw them as dovish. indicating less of a chance of a first rate hike. but some observers see them as neutral or slightly hawkish. he goes on to say that they do lean.govish. and gich given what's happened,

they lean more dovish. most judge the conditions for a rate hike had not been achieved. but they were approaching. some say the conditions for a hike had either been met or will be met shortly. it was a prompt start to a normalization was seen conveying confidence in the economy. some said the inflation data was not progressing. they did revise the inflation outlook. some participants saw a downward risk, commodity prices and the dollar. but most saw the energy and dollar effects as temporary. now, also discussion about spillover from china. quote, raising some concerns, the chinese market, however, was seen having little impact on chinese growth. the big issue was this, a material chinese economic slowdown as posing risk for the u.s. outlook. here's some of the commentary we got over at pantheon, they said providing the august labor data aren't disastrous and markets are not in disarray at the time of the meeting.

we expect the fed to move. and at bmo, we lean toward a september move, but with little conviction. i think there's a lot of that today. maybe little conviction on one side. the stock market go back to where it was. but the two-year, it's held on to the gains there, the yield's falling fast. you know, to me, 70's been a barometer for where indicating that the two-year note thought there would be a rate hike in september. that's fallen down now to 65. so those gains in the bond market or those decline in yields, guys, seem to have held on. >> steve, real quick, is goldman looking for a december hike? >> i did not get a post fomc commentary note from goldman yet. >> yeah. >> but if you want, kelly, i can e-mail that to you and you can get that on television. >> we love it, thank you, steve. >> thank you, steve. >> and, an important job on wall street that still thinks, you know, now bill dudley came from goldman, et cetera.

the drop was incredible today. >> the drop in the yield curve was steeper. let's talk about it in our closing bell exchange. and rick santelli in chicago. jack, i'm going to start with you, you posted an op-ed piece on our website at cnbc.com where essentially you're saying janet yellen needs to take a victory lap. what do you mean? >> yep. and, you know, look, i think the time has come. and, you know what, i want rick to brace himself. okay. it's about time we thank the fed for what they have done. they have actually led us off of the edge of the cliff. we've seen them come out time and time again, telling us what they are doing is right. and guess what, they've been absolutely right. we didn't see any hyper inflation. a federal reserve of a good grasp of what was going on.

they can start to lift off. and they don't have to go big. they p don't have to go a quarter point. they can go ten basis points, if they want. >> we've been watching your response as jack was talking. what would your headline by on cnbc.com if you wrote one? >> is that the only honesty in a marketplace is when traders are presented with a condition they need to deal with in realtime they didn't expect. okay. like the flash crash on october 15th. gave you boat loads of information. told you where the ten-year note would settle at year end. those 50 minutes made a big difference. what did traders do? they bought euros, pounds, swiss francs. they bought fed funds. does that sound like a bunch of investors who think the fed's going to raise rates? >> that sounds like -- >> you can talk about victory laps. i'm not talking about victory laps, i'm talking about the market.

you can say that may be true, but the policies deliver us 3.5% growth. they gave us the new normal and a big balance sheet to boot. >> no, let me get a headline in here. >> no, you're not going to get 4% growth unless you've got congress and the federal reserve working together. >> you guys, no, no, no, no. here's the headline. >> hang on, hang on, keith, go ahead, what's your headline? >> here's the headline. yellen still hasn't got a clue what to do. traders are making decisions with real money, not academic models. the middle class remains trapped, under pressure for wages. housing market is a wreck. there's still opportunity out there but to argue the fed has

been successful when fed missed the recovery and still missing the boat with regard to rates. there's no way she deserves a victory lap. >> when you talk about housing, how can you say it's in complete disarray? you've got housing coming back, it's as strong as it's been in years. you're talking about -- >> come on, we've got cash -- and loans. >> you're talking about a jobs market that's come a long way, and you're talking about a two-horse wagon being pulled by one horse. and that is the fed. when you have a -- >> it's half a horse. >> when you have a lack of pro-growth policies coming of d.c., out of our legislators, you only have one course of action, and that is the fact they have done a magnificent job. and that's why she should take that victory lap and raise the rates by 10 basis points, start that liftoff. >> love you, jack, but no time. >> they're the enablers. okay.

everything he said about congress is true, okay. exactly. and if you give your kid everything you want you're the enabler of their bad behavior. >> they are the vanguard of the system, rick, and they have a mandate -- >> hang on, guys. >> last word to keith. ha go ahead, keith. >> the fed is the poster child for mismanagement. there's going to be you know what to pay, it's not going to be pretty. i hope it's not tomorrow. >> we've been hearing that for years, keith. >> i know, but you know, with made plenty of money in the interim. >> we've got to go. thanks, guys. as always, to hear more from jack, log on to cnbc. to read his piece entitled chair yellen, please take your victory lap. i still would love to hear what rick's headline would be. >> there's still opportunity. the dow is down 150 points at this moment. actually, that's not even near the lows of the session. we're down more than 220 points.

a lot of that's swirling around the moves in the oil price. and let me tell you what, keep an eye on oil, we're about to maybe today, maybe soon break that $40 a barrel mark. and you can imagine we'll have plenty of headlines following on that. people trying to find investments for. much more ahead on market swings and if you should be buying these dips. why he thinks we're heading for a correction this fall. >> yeah, it is only summertime but a momentous market going on right now. google shares surging more than 1,500% since going public 11 years ago in 2004. two top google watchers will make the bull and the bear case for the search giants next 11 years when we come back. it'll be fun coming up. more and more, data is visual. in fact, the number of mris has increased by ten percent a year. and a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement.

because it's so challenging, a research project is teaching ibm watson to see. in the future, it could help clinicians spot key patterns quickly and precisely. ibm watson is working to make healthcare smarter every day. ♪ ♪

if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. but hurry, offers end august 31st. share your summer moments in your mercedes-benz with us.

[female announcer] if the most is the staying awake part, day sleep train has your ticket to a better night's sleep. because when brands compete, you save during mattress price wars. save up to $400 on beautyrest and posturepedic. get interest-free financing until 2018 on tempur-pedic. plus, helpful advice from the sleep experts. don't miss mattress price wars at sleep train. ♪ sleep train ♪ your ticket to a better night's sleep ♪ . volatility returns today as the markets try to make sense of sharply lower oil prices because of a build, a surprising build in oil stocks and as always, trying to make sense of the fed and the latest release of their minutes. there is our favorite sector indicator there, kelly. >> and today's a perfect example why. if you're trying to figure out, what is this market doing? utilities the only sector in the

green right now. and what do they love? a low-rate environment. the fed might not have been explicit they're not going to go in september, but you add in the conditions we've seen and the open door, which they might have left in those minutes, and this is the outcome you're getting. >> energy, the worst performer of financials right in the middle of going one way or the other. let's check in with bob pisani. >> let's do it. closer look at the tech stocks coming off today's lows, bob. >> yeah, and very mixed quarter for techs. i'd show you the longer term. techs are as confused as everybody else. look at the big tech etfs. important thing here, we were down on the day, semiconductors weak again. and we rallied on what was perceived to be dovish fomc statement and then we come all the way, essentially back down to where we've heard before the fomc minutes were leaked here. but overall, very mixed quarter here. so, for example here, one sector

having a tough time has been semiconductor stocks. ever since june, semiconductors have had a very, very difficult time. look at the sxd, that's what you want to look at, the big etf for semiconductors. cell phone sales, computer sales. look at that decline in the semiconductor etf. it's broader than that. social media stocks are not generally that pegged to china with a few exceptions. and they've had a very mixed quarter. google had great numbers. facebook had great numbers, social media, those two big names in the third quarter have done well. but put up the board, you'll see here some of the names and that overall here. so linked in and yahoo and twitter have all been down in this quarter. groupon's been down. bottom line is, it's been a mixed quarter overall. and these stocks generally don't have exposure to china. finally, traditional tech, same story here, mixed situation, cgate and microsoft are on the

upside. cisco, intel and i bm all on th downside. >> thank you very much. i just read this. 11 years ago today is when google came public. >> i can believe it. >> it's 11 years. wow, stock priced at $85 a share. it rose 18% on its first day, was the fourth largest ipo of the year, wasn't the biggest one, and i remember it well, everybody said, oh, it's overpriced, overvalued and i remember distinctly cramer pounding the table saying this stock is going places. get into this thing as soon as you can. now, over the last 11 years as you see there on the split adjusted basis, google's stock is up more than 1,500%. >> should investors hold on to this stock for another 11 years? let's brawl it out. max wolf here from manhattan venture partners. max, you're our bowl. why is google a good investment for the next decade? >> because this company is big, has a lot of cash, knows how to

manage, knows its brand, everyone knows this brand. they touch everything in the universe and they still have a lot of what the best start-ups have. they have the established and the start-up, great energy, great brand, lots of talent. hard to bet against these guys. >> ross, i'm confused. you're a long timeshare holder of google, and we have you down as the bear. what's going on here? >> i'm the bear if i watch another one of these robots runnirun ing through the woods, i'm going to kill myself. they're surfing in venice, playing with their dogs, enjoying being the next microsoft. and they've got their eye off the ball. the ball is search, it's mobile and social media, and they're getting wiped off the iphones right now and they're becoming completely irrelevant in social media. and 80% of search is on mobile devices. so many issues to deal with and they're out surfing today.

>> i've got a huge tax problem if i do that. i think there's upside right now maybe short-term, but you're saying the next 11 years and the future is facebook. facebook is google 11 years ago. you need to make the rotation into the future not the past. >> a good tax adviser is what you need. >> i don't need a good tax adviser, i have to pay 30%. if i sell it, is it going to go down 30%, i don't think so. the idea they're creating this company to put under one umbrella the many far flung things that larry and sergei have gotten into in the last 11 years, they've lost focus on what they're all about. >> god forbid we look back and our biggest complaint is we like something we wouldn't sell. but the thing we have a big tax liability because we've done so well.

that being said, the future of search. >> and that's the sort of curse you would only do to your closest loved one. but that notwithstanding, right? the truth is, i think that the new organization makes sense because they're going to be a little more of a conglomerate. i think that makes sense because of the brand, the cash on the book, who they are and the distribution. but i also think that the future's not as social. i think mobile's huge, i think health care's huge, i think financial attacking the banks is huge. and i don't see a future for those things without google front and center. in part because they're still the operating system on 75% of the mobile smartphones in the world and youtube is about to get monetized. i think what they're going to do in health care is huge. i think the internet of things is huge. i think the driverless car is huge. and you know they all have in common, alphabet, alphabet, alphabet. >> all right. >> and losing money, losing money, losing money. money losing businesses. >> today, some of them lose money. youtube is close to break-even.

i think health care is close to 20% of gdp. >> makes sense period. >> a lot of money made in health care. >> look, we're friends. i can say this. i think it's a little disingenuous of you to say you're not selling because you have a tax problem. in your heart of hearts, you think this stock's going some place, don't you? come on. >> what i think is that google on the short-term has a monopoly on search. and we spend a lot of money on google, still, and it's just like microsoft with their operating system revenue. so i like the core business. i love youtube, i would be focused 100% on youtube right now and monetizing that in a much more effective manner. the problem i have is when executives who don't have any criticism because of an unfair share of voting class situation. so nobody can criticize them, really. they can do whatever they want. they're all going to be in burning man next week doing what they want to do while i'm working. and they need to focus on their

business. and i hope they come up with more spaceships and whatever else they're working on. i like when management is focused. that's why i like apple, that's why i like facebook right now, and i've got to think about the next ten years. having a big gain. i had a big gain in whole foods and i finally dumped it because i paid the taxes and i was like, they are so off track and at some point, google's not there. google still has a little bit of time. >> ross is in a stream of consciousness mood right now. listen, before we let you go. we mentioned earlier as strong a performance as this stock has had in the 11 years it's been publicly traded, up 1,500%, it's not the best performer. we're giving it away now. i was going to ask you guys if you had any idea who performed better than google at that time. i don't know if you've got a monitor in front of you. >> apple has, actually, according to -- >> the stocks that came public in 2004. that year. i forgot to mention that part. >> max, who do you think is

tops? >> well, i wouldn't really actually know it. but i think that there are very few things you could have bought instead of those shares and held that you would still be excited about now, which is what we're talking about. >> well, the answer is -- of the stocks that came public in 2004, salesforce.com is the best performer, up 2,500%. >> great company, too. >> yeah, great company, as well. >> you own that one, ross? >> sales force i don't own but mostly because of the valuation, but i love the company. >> you would have had a bigger tax problem? >> yes, that's for sure. >> lots of tax problems. they're very happy about that. >> thanks, guys, appreciate very much. max wolf and ross gerber. companies generally speaking that have outperformed google do include apple as ross was saying. netflix price line obviously, regeneron, amazon, as well, gilead, a couple of biotech names in there and gncr. our thanks for that. >> yes, the historic edition of

"closing bell" continues now as we continue to look back 11 years. the dow is down 134 points right now with 35 minutes left in the trading session. but, hey, anything can happen in 35 minutes. >> yes, it can. and coming up, a wall street veteran saying watch out for a correction. this fall, that's a 10% drop, we haven't seen one in several years. find out how low he thinks the s&p could go. the challenges of keeping everyone working together can quickly become the only thing you think about. that's where at&t can help. at&t has the tools and the network you need, to make working as one easier than ever. virtually anywhere. leaving you free to focus on what matters most.

that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, they could save you in out-of-pocket medical costs. call today to request a free decision guide. with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients. plus, there are no networks, and virtually no referrals needed. join the millions who have already enrolled

in the only medicare supplement insurance plans endorsed by aarp... and provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. with all the good years ahead, look for the experience and commitment to go the distance with you. call now to request your free decision guide. ♪ welcome back. speaking of corrections and bear

markets, the top 25 energy etfs are all in bear market territory, that means they're down more than 20% from their highs. the oil price we know is well below those levels. here's a quick look at the four worst performers of that bumplg. again, down more than 20% from the 512-week highs. they include first trust, power shares, s&p energy index. spider index, as well, there's a canadian energy one. and all of those getting hit hard, down between 3% and 4% as oil is back in the lowest levels since 2009, potentially going to plummet that $40 mark. >> and that's on the september contract expiring tomorrow. the october contract is still around $41 and change. so we're watching two different prices there. let's bring in james of optionsellers.com who thinks crude could hit $30 a barrel before year end. why?

i guess it's mainly about supply and demand at this point, right? >> it certainly is, bill. looking at these numbers, these energy companies. i like to say -- this could be an odd time for energy prices to stop falling. the end of august is the unofficial end of driving season. we're going into a season that many talk about. the smallest amount of demand in the united states happens from september through november, and at that exact same time, saudi arabia is picking quite a fight flooding the market with the largest production in exports that we've ever seen. >> you know, so i wonder if this being the case, you know, $30 a barrel would've sounded like a crazy target back in january. now, it seems like, you know, go ahead and stick your neck out. how much further could we go? why just 30? why stop at 30 and not go lower? >> at $30, we're going to see a lot of production problems and financing problems here in the united states.

when financing came around and needed to be rolled over this spring, we had a nice rally up to near 60. a lot of the banks jumped in and got into the oil business. as we approach 36 and then 34 this fall, we're going to start seeing some major problems in that industry. and the key right now is saudi arabia pushing the market down, basically picking a fight with drillers in the united states. if iran comes on, that's what brings us down to $30. $36, $34 is a good support level. >> and we're at an interesting point right now. typically, you're right, when prices would go lower, you would see producers cutting back on production. but that's the opposite is happening right now in part, sometimes those producers. they've started borrowing money right now to make up the difference, right? >> that's exactly right. some producers right now are drilling and producing oil because they need to.

to get some energy producers out of the market. we see october and november as an interesting time frame. deep into the 30s. and i think at that point, we're going to see some demand destruction, should i say production disruption and at that time, we're going to have probably some energy companies bailing here in the united states and possibly november, december nice low in the market. >> we only have two refineries left in this country. >> at some point, it should. we won't hold our breaths, but this is where push comes to shove. thank you so much, really appreciate it, james, for joining us here this afternoon. we are discussing on twitter oil prices being so low, joking, you know, here's what we love, one viewer, oracle of wall street writing oil prices are so low, that if jed clampet found oil

today, he wouldn't be able to move to beverly hills. >> keep them coming, everybody. >> the best viewers out there. >> time now for a cnbc news update. let's get out to sue herrera. >> and here's what's happening at this hour. a michigan prosecutor has declined to charge an immigration and customs enforcement agent in the fatal shooting of terrence kellam. that shooting occurred in april. the prosecutor saying the investigation shows that i.c.e. officer mitchell quinn acted in self-defense. new research by nasa shows vast areas of california's central valley are sinking faster than previous thought as massive amounts of ground water are pumped during the historic drought. the sinking land has seen costly damage to canals that deliver water throughout california. regal entertainment group, which owns hundreds of movie theaters across the u.s. will now search bags and backpacks as customers enter the building. the move comes in light of

recently violence in movie theaters in louisiana and tennessee. mexican authorities torching more than 75 tons of elicit drugs in the border city of tijuana. they say the drugs had a market value of more than $120 million. mexico's attorney general was joined by military officials for that burning. you're up to date. that's the news update at this hour, guys. back to you, cnn hour. >> all right. thanks, sue. >> different story than we're used to seeing when there's a fire on screen. they're burning the drugs. that was incredible. wow. >> isn't that dangerous? >> depends on the drug, yeah. some are highly flammable and you don't want to do that. >> yeah. 25 minutes to go into the close. i wonder how far away people were. the dow is down 129 points. still trying to make sense of what were mixed set of minutes from the federal reserve here. the s&p down 13, nasdaq 28. >> typically, two different responses to those minutes today. up next, a top trader will

tell us what he's watching the final and most important half hour of the trading day of what has been a crazy day. he's even bringing charts with him and going to draw pretty pictures of the charts when we come back. and the incredible rush of the mercedes-benz you've always wanted. but you better get here fast... yay, daddy's here! here you go, honey. thank you. ...because a good thing like this phew! won't last forever. see your authorized dealer for an incredible offer on the exhilarating c300 sport sedan. but hurry, offers end august 31st. share your summer moments in your mercedes-benz with us. thankshow may i help you?s list. i heard i could call angie's list if i needed work done around my house at a fair price. you heard right, just tell us what you need done

and we'll find a top rated provider to take care of it. so i could get a faulty light switch fixed? yup! or have a guy refinish my floors? absolutely! or send someone out to groom my pookie? pookie's what you call your? my dog. yes, we can do that. real help from real people. come see what the new angie's list can do for you. bring us your aching and sleep deprived. bring us those who want to feel well rested. aleve pm. the only one to combine a sleep aid... plus the 12 hour pain relieving strength of aleve. be a morning person again, with aleve pm.

welcome back, everyone is trying to figure out what's moving the market. steve grasso with a look, sir, at some levels that might be responsible. >> exactly. so if they pull up these technicals in just a second, i'll show you. the biggest level we're watching as floor traders, traders, being a part of wall street is the 200-day moving average. if you look back here -- >> that's the purple -- >> exactly. the whole ebola scare back in october of last year. >> okay. >> so if you bounce this across. there's a couple events that happen right here. we only close below the 200-day moving average. one of those days. now, if you see this break here, not a long time ago last week. you wound up testing that level of 2050 in the s&p cash. so all eyes on that 200-day moving average, currently 2078. >> sitting a couple of points. close to right on that level. >> do we need to see this blue

line? this 50 -- oh -- >> you need -- >> the silver line. >> so you have the 50, the 100 and the 200. what is important to hear is this rolling over of that shorter term moving average. and it's collapsing on that longer term moving average. so currently the 50-day moving average is below the 100. that's a negative sign bearish for the overall market. you want to see this market stay above here. >> okay. >> i don't think it's going to do it for much longer. i don't think that's sustainable. s&p cash. >> watch it, we will. thank you very much. bill? >> all right, thank you all. now, we are also watching heavy volume overseas, especially in the emerging markets. the financial times highlighting the huge amount of outflows from the emerging markets. $1 trillion leaving that group over the past 13 months. that's almost double the outflows we saw during the financial crisis. so let's follow that money.

joining us now is chief investment strategist whose new book is called my side of the street. that's a lot of money. a lot of outflows. >> it's a lot of money. >> what did you make of it? >> that's why i think a lot of this talk about china, perhaps being a reserve currency in the, i guess, in the figurative sense and also the literal sense, a lot of that was misplaced. i think it's hard enough to have the yuan be a reserve currency within china itself. you're seeing a lot of locals that have amassed a certain amount of wealth want to be in harder, quote unquote, harder currencies. i would imagine, bill, that would continue. it seems like a rational approach. >> it is a rational approach if you developed some wealth. and i think more is probably going to come out. >> here's the interesting question. people are starting to look at the drops in currencies, the deteriorating fundamentals, the high level of dollar denominated

debt. and are we setting ourselves up for a financial crisis in this part of the world? >> i don't know if it'll be as deep as the one you saw in '97. a lot of the countries have stronger reserves, higher reserves. by the same tone, though, there are things that are eerily similar about it. and you've also had, i guess, a lot of financial innovation, which has allowed a lot of people to invest in these markets that wouldn't have invested it through etfs that wouldn't have done so in the past. >> are you joining the flight from the emerging markets? >> i'm swimming upstream. i would, there's a strong negative correlation between the dollar and emerging market equities. from here, i think the fed, while the fed is going to probably proceed very slowly, we think they're very likely to tighten. some point before the end of the year. that's a tightening of financial conditions. and that's going to hurt, in my

view, a high beta trade. so i'm not only somewhat nervous about the emerging markets, frankly, i'm a little bit nervous from a short-term perspective on the u.s. market. >> real quick. if the fed delays the decision until december or the first part of next year and we have a nice rally as a result, does that just buy time? or does that mean there's a reason why investors should then get back involved? >> kelly, my own view, my own inclination is to think you want to be cautious until the fed tightens. i think you have a lot of uncertainty surrounding what the fed is going to do. you don't have clear cut signals that the u.s. economy is strengthening. and it's i think, market's going to have a hard time digesting a lot of moving parts in the interim. >> we'll leave it there. >> thank you very much. >> sweaty palms right now. good luck with the book. >> thank you, sir. >> my side of the street. >> all right. we're looking at about 18 minutes to go into the close dow down 133. after the fed minutes, and

interestingly enough, as we were talking about, the fed minutes come out, the dollar goes lower, does nothing to give commodities a bid. oil down significantly again, today. >> you know, the permanent wealth loss created during the great recession in 2008 did change consumer habits. courtney reagan standing by with details on the new necessities. you'll find this very interesting and a change in consumer habits. coming up. you're watching cnbc first in business worldwide. hi my name's josh. kelly. my name is raph. steve. my name is anne. tom. brian. krystal. and i am definitely not a robot. i'm one of the real live attorneys you can talk to through legalzoom. whether it's for your business or your personal life, don't let unanswered legal questions hold you up. because we're here. we're here, we're here, and we've got your back. legalzoom. legal help is here.

no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop, and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school. gear up for great.

welcome back. the great recession. may finally be over. but the effects and impact are still being felt today. >> sure are. so nowhere is that more evident than in the attitude and psychey of the american consumer. studying very interesting data about changing consumer habits. she joins us now with some of that story. >> it makes sense. we've talked about it before. there's just something about watching retirement accounts plummet. and american institutions go bust. it's evident in spending and saving patterns even if consumers don't realize how they've changed over recent years. we are saving more as you can see here, the savings rate has increased. and we're buying less discretionary stuff. making memories, things that can't be ripped away over night.

and if we take a look at the categories, we're not spending on clothes, like we were a decade ago. it's evident in the numbers. but consumers are favoring big ticket and experimental spending on categories like home improvement, autos and travel. all of those outpacing retail sales when it comes to a percentage basis, of course. and we've added new necessities to our monthly expenses. government data shows that spending on cell phone service and internet access have increased more over the last decade than the decrease in spending on land lines, recreational activities has grown, too. membership clubs and sports centers. in that category, only movie theater spending has fallen. that kind of explains our shift to streaming. 40% of american households subscribe to a video streaming service these new necessities take up our time, too.

leaving less available to hanging out at the mall. but mastercard says that consumers are adjusted budgets to new necessities as an expense. and the data doesn't support it's taking dollar share from other areas like clothing. kelly? >> listen, it's great to emphasize that. if people get in trouble. they're spending on a vacation instead of a couch, it's still going to be a reckoning moment at some point. >> and clothes are overrated. clothes are important. >> definitely don't spend $4,000. we're looking at a changing market. if we stay here, we're going out with declines. the dow's down 120, the nasdaq 27. >> so today's selloff and the market comeback and the ensuing fallback, certainly shook up what was supposed to be a slow summer day.

the senior portfolio manager at the funds, we may have to get used to days like this because we are a due for a modest correction. he'll make the case when we come back after this. innovating. t td amere 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 all the confidence you need. td ameritrade. you got this.

tsummer event is here. now get the unmistakable thrill and the incredible rush of the mercedes-benz you've always wanted. but you better get here fast... yay, daddy's here! here you go, honey. thank you. ...because a good thing like this phew! won't last forever. see your authorized dealer for an incredible offer on the exhilarating c300 sport sedan. but hurry, offers end august 31st. share your summer moments in your mercedes-benz with us.

okay.

about eight minutes left in the trading session. joining us with his view. we were just talking about among other things, currency debasement in this market. >> he's in our building. who runs our gold fund is really the expert within our firm. gold does have a place in portfolios, some people consider it insurance. insurance for the kind of debacle he was talking about. but it is a currency in its own that's valuable and portable. if you meet somebody from argentina, thailand, russia, who has watched their own currency evaporate overnight but gold held its value, they are the strongest believers in gold. >> you know you can spend a lot of u.s. dollars. >> that's correct. >> to some extent, you can go there and wink and nod and say you can pay in dollars instead of our currency, too. >> for somebody in this country who hears the gloom and doom talk and still thinks how do i

invest, what are your top picks for people who want to keep it here and do the right, the safe thing. >> we do manage u.s. equities. we have $2 billion in gold. so we are compelled, really, while interest rates are at such low levels to be invested in u.s. equities. and in that area, we're looking at consumer items. we moved away from some health care items and moving into stocks like mcdonald's selling hamburgers. we're looking at solar equipment manufacturers, railroads. things that are very basic, tangible businesses. our selling at low valuation. because, once again, our clients are pension funds, people who want to keep their money over a long period of time. we have to be de-risking the portfolio almost on a daily basis, still in the equity market. >> people talking about dividends, again. is that a factor in what you buy? >> it's not a determining factor, but clearly, if we can provide yield for our clients

who are searching for that in every other area, it's a plus. not every stock has a yield, though. it's not a determining factor. >> just because you mentioned mcdonald's. earlier one of the names in the green, actually, and they've been through a rough patch. are there any related investments you make? or is it because they were beaten down? >> they've had a ten-year run. i don't know if you remember the movie "super size me," that was in 2004. two young women decided they were going to sue them and had an avalanche of bad news. in an environment where five guys, shake shack and americans haven't stopped eating hamburgers and probably all know a group of vagans doing their yoga. there's a huge turn around story there in the menu, management, real estate. >> are you an egg mcmuffin at night kind of guy? >> no, i've been trying to go the other way. >> thank you so much for joining

us. >> somebody making the rare case for mcdonald's these days. see you later. we'll come back. we have the closing countdown for this wednesday. >> after the bell, we'll look at which oil companies could be takeover targets after the big plunge in crude. you're watching cnbc first in business worldwide.

so you're a small business expert from at&t? yeah, give me a problem and i've got the solution. well, we have 30 years of customer records. our cloud can keep them safe and accessible anywhere. my drivers don't have time to fill out forms. tablets. keep it all digital. we're looking to double our deliveries. our fleet apps will find the fastest route. oh, and your boysenberry apple scones smell about done. ahh, you're good. i like to bake. add new business services with at&t and get up to $500 in total savings. all right.

2 1/2 minutes before the close, bob pisani and i have been both standing here patiently for the segment to start, haven't we, bob. some volatility today, two things, oil, pushing it lower, and then we have the minutes of the fed coming out, and here was the response. you know, we were down about 230 points at the low of the day for the dow jones industrial average. comes back, briefly turned positive. and then fell back again. down 135 right now. what were the other markets doing over that same period of time? the ten-year yield. saw a move, as well, we saw a steeping of the yield curve in part because the short-term yields were going lower. but we also saw the same thing for the ten-year. it's down to 212 at this point down 7 basis points, and the dollar softened a bit, as well. the dollar index now down .65% for the day at 9641.

that's what the fed minutes did. oil, what did it do today? it continued lower. and inventories when they were expecting a decline. and when that inventory report came out, it was down sharply and finishing. right now down $2.05 at $40.57 on that contract. >> a one-two punch day for the markets. and this is without the fed minutes being released early. we were weak on china concerns early on. and then 10:30, another icing on the cake. the xle, it was another capitulation day. this is the energy etf. a lot of people keep trying to buy it. it was another heartbreaker. this is an intraday. and right here, volumes picked up dramatically here. we had a huge volume day. this has happened six or seven times this year. all of a sudden, they try to buy it, it doesn't work, a few weeks later, they sell it dramatically. i'll bet you xle will be up tomorrow and stabilized for the

next two weeks, and then they'll try to buy them, again. it's a heartbreaker, like groundhog day but commodities every day. >> thanks, bob. see you later. down 155 on the day. stay tuned. much more on the fed minutes, what to make of them and the decline in the price of oil on the second hour of "closing bell." see you tomorrow, kel. thank you, bill, welcome to the "closing bell," everybody, i'm kelly evans, and it's red arrows across the board on wall street. the dow going out with a decline of 159 points, that's nearly 1%. it is the worst performer of the major three today, and the oil names, chevron, exxon, have a lot to do with that. oil prices clobbered again today. the s&p down 17, the nasdaq down 40, and here's a look at the dow heat map. the 30 components, there is a lot of red. there are just three names maybe marked, as well. maybe only two as things settle

out. mcdonald's, we heard from a guest why he likes it there. home depot doing well. the housing cycle, the earnings continue to be supportive. as mentioned, look at the bottom right of your screen, exxon down 1.7, caterpillar 1.8, and chevron, down 2.5% on the day. now joining today's panel, we have cnbc contributor carol roth with kayla tausche. and "fast money" trader guy adami and michael block. welcome to you guys, as well. guy, let me start with you here. was it the minutes? we're going to look back on as truly significant? at one point, they wiped out the dow's entire decline. the market turned positive. then we moved right back down again. >> you know, it's an interesting day, kelly. last year, two years on a day like today on a steep decline, a recovery would've followed through the upside. didn't happen today. we basically gave that entire recovery back, which was interesting. you go through the minutes. and i think what the fed is

basically telling you, guess what, folks, the economy's not that strong, and we are concerned about things that are going on in markets around the world. that's my take from it. and you just look, again, and i know i'm beating a dead horse here, but bond yields continue to go lower, ten-years with a downside in terms of yield, upside in terms of -- the continued weakness in crude oil. it's telling you something. i'm sure carol's on my side in this one. the iwm through the 121 level on the dow. and you have what could be a interest -- >> you know that i'm on your side. i guess the question is, this really isn't surprising. why do you think the market is having any sort of reaction? i don't think either of us thought the fed is going to raise in september, possibly not this year at all. even when they do, it's likely to be at a glacial pace. doesn't the market know this already? >> market knows it already. and we've talked about this before.

they definitely can control the front end of the curve, but they can't control the back end of the curve. and that is what's scaring me. to me, that's been telling you and people want to look past it. they want to point to other factors. they want to talk about the move in crude oil being a positive somehow for our economy. guess what, you live in chicago, where's your tax break in terms of gas prices, it's not there. gas has gone up 50 cents over the last couple of weeks. just a lot of bad things happening right now. >> and that's why we're all going to put our money in iceland. let's do our hedge, make sure we're not exposed to currency and we'll take advantage of the 6 plus percent interest rates. >> michael block, come and save us, tell a rational investor what they're supposed to do. we're hearing so much gloom and doom all last hour. people talking about the asian financial crisis, a 10% correction looming for this market market, you know, where's the opportunity to be made? >> i titled my note, i titled

it, don, janet is talking to you. i now realized i had that backwards. janet, they're talking to you. we care because emerging markets are on the ropes here. and you know, it's good to hear that guy and carol were never in the september liftoff camp. i wasn't either. but i think a lot of other people were. and that's been washed away today. these minutes were very dovish. the fed is concerned about this volatility. and they're not going to do anything to upset the apple cart even if the data shows them they should. the data shows they should have raised rates a year ago when the unemployment rate got below 6.5%. what this tells me is, look, you know, the boat's going to steady here. you know, there needs to be some kind of flushout. august is proving to be a tough month here. i've tried looking at the energy stocks, that didn't work and you have to manage risk. there's going to be a time when everything settles out.

go ahead. >> we've been hyper focused on this issue for as long as we have been. if you read the headlines about today's minutes, there's a real ambivalence about how strong the economy is. on one camp, a lot of headlines that say the economy is recoveri recovering. we are close to lift off. but then in the other camp, a lot of headlines that say we're not there yet. we're not close. there's still a ways to go for the labor market. how do you square that? >> i would argue this doesn't fit neatly into a box. i think you point out what the issue is. you cherry pick the data, you can fit in any data you want. never mind that, they're great, let's raise rates. but if you look at inflation, the manufacturing data, it's not good. people ask me how is u.s. growth? they say, well, it's fine. it is slower and when everyone talks about inflation going up, let's face it, it's not coming back. >> let's bring in someone else we can talk to growth about. steve liesman on more when the

fed may raise rates and ho strohow strong the economy is. >> i'm always amused when people talk about with such certainty about what they think is going to happen. to me, i thought these minutes lean slightly hawkish, actually. when the federal reserve says the time for raising rates is approaching, i kind of stand up and say, you know what, at least keeping the option open to raise in september. they're not saying it for sure. i thought the commentary on the economy was generally upbeat. >> steve -- >> and it's improved since then. >> here's the thing, though. you know, and i take guy's point about the markets. if you look at the reaction to the minutes, the two-year w do,heeneawado,he doarasdo soitrhe mke dsn lie the fhere gng do is,r i ds - i t wl a tha wlak ecom cditionwoe. >>f uet pturef er els on the pel because ey can ppa their es forhat i abooay thr them at me. when i go to analyze what i

think the fed said, i don't look at the market reaction. doo bk terwds and i say, well, , why did the rketacke tha way? dfrankly, i'm still a little bit puzzled by thereacon. it's interesting, the stock market prey mh mad aound trip from where it was before th mutesameout. thtwo-year note did not. and u'reightthat a vy go snal of where the market thinks the fed willbe. and the ia tha i d fall from 79 to 66oes indate dovishness there. buthen see contionere approaching. when they say ty we m o uld ortlbe met. to me, that say younow at september's on the table. >> oh, lo, youot your six box. it is big day. >> i don't not care about the mark, bunot when i do my analys analys. >>uy, you get in here and explain what you think is going on. >> the only things ipeak wh certainty about are my love of the new york nkees, the fac thated zeppelin's the greatest band of all tim andyump

sh. outside of that, i speak with no certainty in terms of anything. and i don't know what the fed is gog to do beuse they have no idea what they're going to do. i think they're licking their finger and putting it up in the air. all i look at is the reaction to the markets f. the economy was as great ashe stock market would suggest until recently, then ten-year rates should be closer to 4% than 2%. that's all i look at. maybe there's some disconnect. trust me, i don't speak certainty about anything. >> i look at the behavioral patterns of entities like the fed, which i consider a political entity, and i know some people would probably disagree with me on that. but it seems to me they always tend to be behind the curve. i think they are going to lay it out and be so clear they are about to raise it before they ever raise it so they can point backwards and say, see, we told you so. i think the fact there's any

level of ambiguity, plus all events that have happened since then. for me, not a crystal ball but a good indication. >> michael block, what about you? >> with all due respect, steve, thinking about you, this is not the world we learned about in the textbooks. you know, when you do your economic analysis. what it comes down to, what's the fed going to do? it does come down to what's going on in the market. the fed is watching the market. they're watching the market. >> to an extent. >> we hear about data dependence because that's what -- >> let's be clear about what you're saying. the fed watches the markets because it wants to bring the market along with it where it thinks policy should go. the market doesn't have a veto, per se, over it, if you have a temper -- taper tantrum like you have back in june of that year maybe or may, maybe it gives the fed, stops the fed. and dudley has said he'll watch the market. but that to the fed becomes a communications challenge. >> steve, i would say, it's not a veto, they have a strong vote.

i'm a big believer in reflexivity. the markets affect the fundamentals. go ez in a vicious or virtues you cycle. that's what's going on here. when the fed sees china, it's there in the minutes, it's worrisome, tells them maybe we need to stand still. >> let's be clear -- >> let's be clear with what the minutes said about china. they said a more severe economic downturn in china could affect the u.s. are we at the point where there is a severe economic downturn in china? they're saying the stock market was pretty much noise is what they said. >> well -- >> we're watching that. >> well, it was interesting, guys, let's go back to some of the data. this is data dependent. the consumer price index came in a little weak. and there were people saying especially with the drop in gasoline prices, we are still waiting for. it could turn negative in october. inflation expectations, they're moving lower, i mean, it's getting more complicated for the fed. >> especially from an inflation perspective, which the fed has

been so focused on. i can trust that, kelly, with some of the retailers reporting. consumers are using some of this gas savings, so to speak. and actually, spending it at stores. look at t.j. maxx, up 6%, american eagle up 11%. target, blockbuster numbers. raising guidance for the current quarter. >> yeah. >> i think you're seeing a totally different picture from what retail has reported or at least the standouts in retail have reported. >> but enough, enough uncertainty in the numbers and enough data conflicting that it would be prudent for us to think about it for a little while longer and make sure it's not a blip on the radar. it's a long-term -- >> real quick guy, make it actionable for us. what are the guys. what do you do here? >> it continues to be mastercard and visa.

that's the way to play it. they have no credit risk. it's a transaction-based company. no still work. mcdonald's we talked about this, two weeks ago, we said something odd is going on in terms of the price action. and i continue to think that the refiners work. they were down tosoro and valero. there's action for you. >> i love it. michael block, a quick last word to you. >> yeah, with me still in the lower for longer camp, i've lite the reits here. you want to start playing it through the shopping malls, get the retail element in there, as well. i think that's an interesting trade. it's one i've been on. it's still working and it's going to work. >> thank you so much for joining us. trying to make everybody, all six of us, thank you so much. be sure to stick around and catch guy adami coming up at 5:00 p.m. one big oil stock that may have finally found a floor. can't wait to hear that. much more on the market's roller coaster ride here and which s&p stocks are in correction

territory. that's straight ahead. and oil prices hitting a 6 1/2 year low. look at that 4051. will that spark a flurry of deals? you're watching cnbc, first in business worldwide. ♪ no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop, and durable new stellar notebooks, so you're walking the halls with varsity level swagger.

that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school. gear up for great.

we start here with an earnings alert on net app. let's get out to dominic. >> the data software and services technology and software company is reporting earnings coming out here. the shares are up about 7% on 609,000 shares worth of volume. they report earnings per share of 29 cents. that beats the average analyst estimate of 29 cents. earnings coming in slightly. revenues coming in slightly better1.34 billion. looking for $1.32 billion. they did also comment their non-gaap or adjusted growth margins better than analysts were looking for. also, they'll see current quarter revenues above analyst expectations as well as current quarter eps, as well. that's why those shares were up about 7.5%. 650,000 shares of volume. we should also point out for context, the year-to-date losses on the stock were 28%.

so perhaps a more favorable set-up for a bit of a pop given the results and the recent stock slide so far in 2015, kelly. back over to you guys. >> thank you, dom. stocks are giving investors whiplash today after a post fed minute's rebound. here's a look at how we finish with mcdonald's and home depot in the green. >> slow august day, i don't think so. let's look at the s&p 500. it was a one-two punch. we were weak at the outset over in europe on concerns about china, what was going on. i put up the s&p 500, and then we had the 10:30 crude inventories came. and the market fell apart. we hit the lows after europe closed. and don't tell me it was a low volume day. we had heavy volume today. look at the two biggest etfs out there. the spider and the russell 2000, very heavy volume. i know they were down. a lot of volume going through there. commodities, the big concern. not here, it's one of the biggest commodity firms in the world.

very disappointing first half results. cash flow down 30% year-over-year. you can see that stock was down about 9%. and that led some of the concerns people had over commodities in china. the energy etf, broke everybody's heart again at 10:30. the levels came out and fell apart. new lows there, and everybody just sold huge volumes again today. this happened, put up the xle year-to-date. six or seven times people have tried to pick the bottom in this year. and they have failed each time they have capitulated, sold off and then try to buy them back week, two weeks, one month later. and we hit new lows, it's groundhog every day. groundhog day every day. every day i put these new lows up. a good day on interest rate sensitive stocks. the fed did matter for a brief

period when yields moved down in the middle of the interest rate curve. and that moved up some of the interest rate sensitive groups. the bottom line on the fed, kelly, for all of this early and maybe it was dovish and maybe it wasn't. it doesn't matter. the s&p moved 14, upside right after that report was released and went essentially down 14 handles. we were back to where we were prior to the fed minutes. >> and you must be getting quite familiar with the codes and keys for a lot of the names we're seeing on the screen. and feels like we're not done yet in commodities. >> not yet. >> for more on today's markets, especially the drop in crude oil, dennis gartman with the panel. afternoon to you, dennis. what happens now? >> well, it's been a bear market, hasn't it? and it's going to continue to be a bear market. the problem that wti has at this point, we have a number of refineries simply shut down for

maintenance but also for problems. and crude oil, coming out of canada, canadian west or west canadian select as it's called is trading at about $23 a barrel. if you have the capability of buying canadian crude oil and have a place to store it, if you can find storage facilities, you're going to buy canadian that wcs canadian crude oil and sell wti futures to hedge it because it's a huge spread. that continues to weigh upon the crude market. it continues to get wider. you've heard me say this forever on my comments that i pay attention to the term structure, it continues to wide. they continue to widen their premiums to the nearbys. this problem's not going to end and, here, write this down, it'll end when it ends. it'll end one day in panic liquidation. it'll end when you've had an announcement of five or six bankruptcies, when mergers and acquisitions step in and take

over. it'll end when the hedgers are asked by the banks. you're the only ones that have been solvent. can you take these other companies off my hands? >> kayla? >> that's quite a doomsday scenario, dennis, you're painting even as we have the bear market in oil and commodity names. we're seeing the major averages off 2% and 4.5% from the recent highs. i'm wondering when you think we will see that restructuring or bankruptcies. we saw the news about samson over the weekend. that was a huge deal. just a few years ago. that was supposed to be the future of how oil and gas deals are done. of course, $7 billion deal. i'm wondering when you think we see more of those, when you think they actually start to spill over to the broader equity markets. >> i think you're going to see them soon, kayla. i think the banks in the oil patch are looking around right now for people who can take some of these bad investments off their hands. one has to ask one's self, what

wither they thinking? did they not hedge any other production estimates coming out of sampson? the only way the company could've gone into the dinger as badly as it did into the demise is they must not have hedged. and the only people who are going to survive this are the people who use the wti and brent crude oil futures to hedge, they're still around, they will be the ones to whom the banks will go to and say can you take the samsons, the others off my hands. it's astonishing to watch kkr and glenn core who should've known better absolutely doing the worst of all possible trades. >> when you look to m & a which most think is going to be an important part of this market going forward, who do you think will come out the winner? do you have a couple of names you think will be the leaders in terms of doing the consolidation and good places, perhaps, to put your money and make that m&a bet on? >> well, carol, i wish i had that ability to do.

i really don't. i think it'll be surprisingly smaller groups out in west texas whose names nobody really is quite familiar with who have been sitting around biding their time. i don't think it's going to be the chevrons. i doubt it's going to be large names. i think names that few of us are aware of. privately held companies who did a good job of hedging forward commitments and are liquid at this point. to be honest, i bet it's unknown names that will step to the fore rather than well known names. >> well, we'll keep our eyes out and ears open, dennis, and thanks so much for joining us. a guy who has been through a cycle or two. don't go anywhere, we've got much more on this wild day on wall street, including a look at the big s&p 500 names now in correction territory. plus the energy names, we're just talking about this that could emerge as takeout targets after oil's big drop. stay tuned. e students drop out. e students drop out. but how can you spot who's at risk? the one who lives far from campus? the one who works the night shift?

the one with new responsibilities? one thing can't tell you, but the right combination can. universities are using ibm analytics to understand pressures in and out of the classroom- some expect to cut dropout rates by twenty-five percent. ibm analytics is working to make education smarter every day. approaching medicare eligibility? you may think you can put off checking out your medicare options until you're sixty-five, but now is a good time to get the ball rolling. keep in mind, medicare only covers about eighty percent of part b medical costs. the rest is up to you. that's where aarp medicare supplement insurance plans insured by unitedhealthcare insurance company come in. like all standardized medicare supplement insurance plans, they could help pay some of what medicare doesn't, saving you in out-of-pocket medical costs.

you've learned that taking informed steps along the way really makes a difference later. that's what it means to go long™. call now and request this free [decision guide]. it's full of information on medicare and the range of aarp medicare supplement plans to choose from based on your needs and budget. all plans like these let you choose any doctor or hospital that accepts medicare patients, and there are no network restrictions. unitedhealthcare insurance company has over thirty years experience and the commitment to roll along with you, keeping you on course. so call now and discover how an aarp medicare supplement plan could go long™ for you. these are the only medicare supplement insurance plans endorsed by aarp, an organization serving the needs of people 50 and over for generations. plus, nine out of ten plan members surveyed say they would recommend their plan to a friend.

remember, medicare doesn't cover everything. the rest is up to you. call now, request your free [decision guide] and start gathering the information you need to help you keep rolling with confidence. go long™. ♪ welcome back. stocks actually stage a huge comeback today. remember, the federal reserve minutes hit. they hit early. the dow down about 150 points, then it went green. briefly after that as we headed into the close there. and just about two hours time. gave it all up again. and then some. s&p 500 companies sank into territory on that one today. >> well, we obviously know there's certain weakness in the market from certain members. only about 2.5% away from record highs. we have had a decent pullback on volatility. but it's not like the total

index is in correction territory. however, if you take a look at the index members, out of the 500 stocks, 252 of them, about half are down 10% or more below their recent highs over the past 52 weeks. so in correction territory, 120 of those are actually down 20% or more below those recent highs. bear market territory and 19 stocks in the s&p 500 have lost three half of their value over the course of their past 52-week highs to this point. among some of the notables in those 19 of them, it's a broad swath of them. down by about 56% over the course of the past year, and then you take a look at another part of the market that had been hot before, keurig, green mountain shares also down big, down by almost about 60%, and the single worst performing stock as measured from its recent 52-week high until now is on the metals and mining side.

freeport mcmoran over 3%. among the worst performers, those are some of the individual examples, but oil and gas, the energy sector as a whole, 85% of stocks in that particular sector, kelly, are now, again, in correction territory or worse. so, again, that sector overall getting hit, perhaps, harder than many others. >> dom, thank you, that's the discussion we were just having. how many people have come up to you or others and said, is it time for me to be playing around with the energy names? what do you think? >> it's interesting. i interact with more of the mainstream investor and people looking long-term. and the question that i keep getting asked over and over again, should i be buying oil? should i be investing in energy names? and it's a difficult question. you called it a falling knife. but it's also a question if you have a long-term perspective, what do you think oil's going to be 10 or 15 years from now. i think it's a difficult time to make that call. >> i've had a little bit of a different spin on that, which is

consumers who are in the texas, oklahoma and denver, colorado, area ask when it will be easier for them to get a mortgage. mortgage standards have been harder for people who are employed at these companies that are cutting back. the banks don't want to be leveraged to some of these companies cutting capex and potentially see some of these jobs. >> and this was the first time in the united states ' history that we've ever had this issue before. before, if the price of oil was falling, it would probably be a good thing for everyone. now it's been a boon to our economy over the last, you know, five, six, seven years. this is the first time we're seeing the effects on both sides. >> and as you said, makes it a little bit harder to play it this time around. time for a cnbc news update. let's get back out to sue. >> here's what's happening at this hour. and unfortunately, we start with grim news. 81-year-old al assad was beheaded. the brutal killing stunning syria's archaeological

community, and it underscores the fears there that the extremists will destroy or loot the 2000-year-old city. a grandson of nelson mandela has been arrested for allegedly raping a 15-year-old girl. ambuso mandela will appear in court on friday for a bail hearing. the incident allegedly took place in a restaurant in a suburb of that city. russian president vladimir putin and dmitry medvedev visiting memorials to two conflicts in crimea. they laid flowers at monuments at the crimean war and world war ii. putin met with officials and commanders. on a lighter note, the canadian couple here had the surprise of their lives when they found, that guy, a black bear in their backyard swimming pool. the region has been in a record-breaking heat wave. the bear after he had a little dip in the cooler water made his way to the hot tub. which, right there you can see

is attached to the pool. so there you go. not your average bear, kel. >> he's adorable. >> he is cute, right? i don't know if i want him in my backyard, but he is cute. >> a small smile for that one. thank you so much. >> sure. oil prices falling to a 6 1/2-year low. our next guest says the energy industry better brace itself because there is going to be a huge wave of consolidation. his top takeover targets straight ahead. and why are military veterans up in arms over something former fed chair ben bernanke just said. retired four-star general joins us later on the "closing bell."

welcome back. here's a look at how we finished the day on wall street. the dow down 162 points, nearly 1%. we had a lot to digest. the fed minutes pushed markets positive briefly when they came out. we were down about 220 points at the lows of the session. tracking oil. the nasdaq down 40, the s&p down 17 today. an earnings alert now. the numbers coming in. what do they say? >> hi there, kelly. reporting its second quarter

earnings per share, 68 cents, that is in line with what analysts have been looking for as well as the high-end of the company's given range. we already knew the revenue and same-store sales when the company released it. to review 2.77 billion for the second quarter on same-store sales increase of 4%. and when it comes to guidance, l brands giving light third quarter guidance of 40 to 45 cents. that's below what the street is looking for. although the company is raising its full-year guidance to $3.58 to $3.73 a share from the previous range, it is still below what analysts had been looking for. we understand shares under slight pressure bouncing back just a bit, but light in the afterhours. collapsing to the lowest level since march of 2009 today. that's leading to a major economic problem for our neighbor to the north. deidra with more on this oil problem. hi.

>> hey, that's right. the canadian energy industry has been ravaged by the global kmod i th kmodties route. but it has hit record lows versus the u.s. dollar. an investment has taken a hit. all of this ahead of a federal election this fall. now, some areas of the country, like alberta, which is the heart of the oil industry in canada are feeling the slowdown a lot more acutely. but a recent national survey shows that most canadians believe the country is entering a recession. we found a similar sentiment when we hit the streets. have a listen. >> it's showing all the signs of a recession. >> like we're probably headed that way if we're not already in a little bit of a recession. >> we're on the verge of a recession. and it's right on that borderline. >> now, the bank of canada has cut interest rates twice this year highlighting how badly the oil price collapse is hurting the economy. now on top of that, kelly, you have china slowdown, which not

only hurts demand for commodities, but could put the brakes on canada's red hot real estate market. all in all, a perfect storm for the canadian economy. and we will see on september 1st if officially we have entered a recession. back over to you. >> all right, deidra, thank you so much for now. will a continued collapse in oil prices lead to consolidation, at least, throughout the energy industry? joining us now is kyle cooper from iaf advisers. what do you expect to happen here? >> well, certainly this price level is going to cause a major adjustment toward the end of the year regarding credit lines and other kinds of things. although companies have done a tremendous job of cutting costs, the price levels are hurting. you take a look at some of the mid-size companies, and they're probably looking three different ways, actually. looking down below into the microcaps where some of these guys are really stressed. and look at possibly acquiring things. possibly looking across the aisle at some of their counterparts and saying, hey,

we've already done a good job of cutting cost, but could we cut more by combining and possibly looking overhead. and is one of the big boys going to come in? good assets and strong operational teams. maybe a real big boy is looking down to acquire some of these companies at what are pretty distressed prices. >> yeah, i was talking to dennis gartman in a previous segment. and he thought maybe it wasn't the bigger names that would be the winners in this potentially coming m&a palooza. but some maybe privately held companies that have a lot of liquidity. seemed like liquidity was the key take away there. are there any unusual names, nonusual suspects you think may be winners in the m&a game? >> yeah, i don't look across those smaller outside companies, but i think dennis is exactly right. this is a long time. and he's very acute. i think that's very true. i think liquidity is going to rein supreme here in the coming

months. if you have good balance sheets, strong assets and low debt, you're going to be in a great position across the aisle, look up, look down, look all around for the possibility of acquiringing a sets on the cheap. >> you mind naming some names of who you think is likely to be a takeover target here? >> i think those mid range ones. devon, range, eog. they've got strong operational performance over the last few quarters and last years, they could look sideways, up and down as an acquiring target or as one to be acquired. >> there is still one big deal out in the distance. there's some expectation that there could maybe be a higher anti-trust hurdle than maybe earlier expected. i'm wondering how much antitrust will be a consideration in these deals. yes, they'll want to be opportunistic in consolidating some of these costs. but then after the fact, the authorities might want to take a look later on. >> yeah, but in the -- it's

much, much different. for instance, the top, i just did a recent survey of companies. and top 32 companies represent about 40% of natural gas production. only a little over 50% of u.s. oil production. so the market is so fragmented that even the big boys have a relatively small share of the u.s. market, and so, personally, i don't see that on the production side. now, halliburton baker hughes are much different situation as they will control a much larger percentage of the service side of the industry. and that could be a concern. but in the enps, the production is so spread out about across so many companies, i really think that's not going to be a major anti-trust issue. >> all right, kyle, thank you so much. do you have any stakes or partnerships? >> say that again, please. >> do you have a stake in any of these companies you mentioned as takeout targets? >> no. i do not. >> all right. always want to make sure we're fully disclosing here.

>> absolutely. >> appreciate it. it's kyle cooper. >> absolutely. >> appreciate it. much more on this session on wall street still to come. plus, former fed chair ben bernanke questioning whether being in the military really can pay off in the private sector. >> your skills and wages are probably not going to be quite as high on average as the private sector person. >> retired four-star general barry mccaffrey couldn't disagree with more. he weighs in when we come back.

ben bernanke causing a stir while speaking at a panel earlier this week. though, the panel was focused on the defense economy, the comment that raised eyebrows is when he said enlisting in the military won't necessarily help you in the real world. >> the evidence appears to be, though, that there really is not an advantage. i mean, if you are -- if you go into the military at age 18 versus identical person who stays in the private sector and takes the private sector job, ten years later, if you leave the military, your skills and wages are probably not going to be quite as high on average. >> wow. joining us with his reaction is barry mccaffrey. i imagine you disagree. >> well, kelly, i thought it was a disappointing performance by this, you know, brilliant economist. see, i think his facts are

wrong. when you look at 77% of our veterans are honorably discharged, the unemployment rates are exactly the same. vets and nonvets. during their lifetime, according to 2012 data, the veterans earn considerably more than the nonveteran counterpart. women earning even more than men. more than half of the civilian population. i think he's got his facts wrong. you wonder, what's his purpose to persuade america's moms and dads. don't let your boys and girls come defend us. 60,000 killed and wounded in iraq and afghanistan. not a good day for the doctor. >> i think he was calling out the u.s. army, general, for using misleading advertising. have an unemployment rate above 7%, which a couple of percentage

points higher than the national average. is it true that for the post 9/11 cohort, the success is somewhat worse, relative to the general population? >> obviously they encounter greater periods of unemployment than they do years later. so, again, i think his facts are wrong. we're recruiting the enlisted soldiers out of the top 20% american youths. we're competing with college-bound kids, no felony arrest records. meet all the filters. end up in harvard business schools, young captains, sergeants going to work in industry.

>> 1 out of 10 small business is owned by somebody in the military generating more than a trillion in revenue which goes to show other ways, too, of illustrating the success. i wondered, though, you brought up the point about who the young people are. recently in the "wall street journal," benjamin, a first lieutenant in the marines said, you know, why should there be a retirement for these guys and women to have a college degree in the first place before they enlist? why does there seem to be a little bit of soul searching right now about the training eded to go into our armed forces and then the quality of the people coming out? >> well, i read his op-ed, it was a great piece of work. it's very provocative and interesting. but at the end of the day, we know if our young troops or high school graduates, if our officers are college graduates, we're going to get a better product. and some of it may not be the educational content so much as an indication of their commitment to carrying out a course of action.

that's what we want in the armed forces, bright young dedicated women and men. and i might add now, kelly, we've got to remind ourselves, 14% of the armed forces are women with over 1,000 killed and wounded in combat. and that's what we've put in uniform. >> thank you, general, for joining us. this afternoon. saying bernanke's flat out wrong here. appreciate it. >> it's the race to rebuild our nation's infrastructure of the airline edition. >> if a plane disappears, how quickly does the airline know it? i'm phil lebeau with a look of the new technology that's letting airlines know within minutes if a flight goes off of the flight path. that story coming up. but utilities can now predict where the power will go out, within a few city blocks. working with ibm, they're combining micro weather forecasts

with detailed data from local sensors. to predict where outages are likely to occur. and send crews exactly where they're needed, when they're needed. ibm analytics from the internet of things is making energy smarter every day.

the headlines were chilling. from an airasia flight losing contact over the java sea to malaysia air flight 370 losing contact somewhere over the indian ocean. these tragedies have many wondering how in this age of technology we can lose contact and not be able to track a plane's exact location. phil lebeau joins us now from the tarmac at denver international airport with a solution that's about to come to

market, phil, and could ensure this will never happen again. >> kelly, a lot of this technology already exists. it's taken one company at a center in baltimore to put it all together. every day more than 93,000 commercial flights are taking off and landing around the world. the vast majority are tracked almost constantly by ground-based radar. but what happens over large stretches of oceans or when flights cross the polar region? at rockwell collins in annapo s annapolis, maryland a new system called multilink ensures planes can always be monitored. >> any aircraft that's flying anywhere in the world, if it deviates from its course the system's going to report that to the airline back office. >> reporter: here's how multilink works. depending on the flight and its location, separate radar and satellite systems are sending and receiving signals from that plane. but those systems don't always communicate with each other.

multilink takes all of those signals to track where a particular plane is flying, and if it is on its designated flight path. if it's not, multilink alerts an airline that something has changed. >> a very important attribute of this system that we have is an aircraft monitoring function. so in the event that aircraft were to go off course, off its intended path, we could immediately alert the airline that that's occurred and they can contact the aircraft to try and understand what's happened. >> reporter: right now nine airlines are testing out the multilink system. it will probably go operational and be offered to airlines around the world sometimes later this year. kelly, it's a very cool operation that we checked out in annapolis. what they're doing at rockwell collins, solving i problem a lot of people probably didn't expect ever to arise in the airline industry, but it's a real one and they're addressing it. >> oh, sure. especially with flights increasingly over a lot of these wide oceans. phil, thank you. carol, you fly all the time. what do you think? >> first of all, i'm a bit

shocked that this doesn't exist already. to think that we have planes that are losing contact at different points is staggering to me, thinking about all the other achievements we've made in other arenas. the second thing that pops to mind, and maybe phil can answer this question, is how much is this going to cost us, whether it's through tax dollars or some charge on my ticket because i know the airlines are not going to absorb this. >> well, the airlines will subscribe ultimately to this service. it's one of those things, it's hard to say how much will this ultimately cost you as a flyer. it's like all technology. it's all part of the package of what's happening as airlines increase the sophistication of the technology and those planes. there's no dollar figure you can put on this, but certainly almost anybody in the airline industry will tell you this is technology that needs to be implemented. >> kayla would it make you feel better for your next cross-oceanic trip coming up? >> perhaps. perhaps. i did just get back from china last week. i don't know. it is stunning that this

technology was not broadly in place before. but then again, it does take a need to fill a need. >> exactly. >> and the fact that we're having this conversation is a good one. >> moving in the right direction. >> and we have so many infrastructure problems. certainly it's probably at the very top of the list. but when it comes to airports and our infrastructure in general there are so many problems that need to be solved. >> one at a time. baby steps. thank you, phil. great stuff all day from phil lebeau in denver. will we see more turmoil in the market tomorrow and what should investors expect from another big batch of earnings including hewlett-packard, salesforce.com? we'll get those right here on "closing bell." stay tuned. we're back in a moment. visibility into your business, it can quickly become the only thing you think about. that's where at&t can help. at&t's innovative solutions connect machines and people... to keep your internet of things in-sync, in real-time.

leaving you free to focus on what matters most.

market seeing some big swings today. what should investors look out for? tomorrow let's ask the panel here. we have earnings. we have the fed minutes we're still digesting. obviously we're going to be watching crude. carol, what are you watching? >> i think not just tomorrow but in the coming days and weeks one of the things i'm watching that guy and michael sort avenue lewded to at the top of the show is the momentum names versus some of the higher dividend yield, more boring kinds of stocks that investors have not really loved as much. it seems a lot of air has come out of the momentum names and given the macro economic

backdrop i think if you're going to be in the market and again, guy and michael alluded to this as well, you may want to be looking at some of these names that are more steady state that are the high dividend payouts as a place to be in. >> kayla? >> i think there's going to be some more digestion of the minutes, a little more handing kapg of when that hike comes. carol didn't think it was ever going to happen in september. rbs is saying those expectations fell to 36%. december had been at 100%. and now that is down as well. >> we've got a couple of sxhourz we've got to watch china too because we know one of these days it's going to be something else that jumps in the frying pan. for now we'll leave it right there, though. thank you very much. does it for us here on "closing bell." of course tomorrow we're also going to git those earnings. we have hewlett-packard, salesforce.com. so the signals from corporate america will be closely watched and we'll bring that all to you right here on the show tomorrow. "fast money" is coming up in just a few seconds now. let's get out to melissa lee and the gang. >> i don't know if i can tell

you, kelly. i don't want to break any embarringembar embargo embargoes. >> i can draw this out for 15 seconds. >> the chairman of microsoft is going to be here. he'll tell bus the company he's personally investing in because he thinks it's going to be the next big thing in silicon valley. >> with that kind of tease -- there we go. straight over to you guys. >> thank you, kelly. "fast money" starts right now. live from the nasdaq marketsite overlooking new york city's times square i'm melissa lee. our traders on the desk bricems seymour, brian kelly, karen finerman and guy adami. another rough day for big oil stocks as crude makes a new multiyear low. one big oil name in the dow may have found a bottom and we'll tell you what it is. but first to the story of the night, will they or won't they? confusion about when the fed will raise rates leading to an extremely volatile session for both stocks and bonds. the dow down 229 points at its low, then reversing only to end the day low wrer while the ten-year yield hit session lows right