we've seen an ongoing recovery from the depths of the financial crisis. that means the consumer is getting back onboard. this is all going to be good for spending. top line sales growth. i like this market. >> we'll leave it there. thank you both for your time. >> see you at 5:00. "closing bell" starts right now. welcome to the "closing bell." i'm coaly evans at the new york stock exchange. a relief rally on wall street is taking place. china's central bank cut interrates overnight. made other measures to support the economy and markets. today's gains have been fading throughout the day. the dow up 442 points as a session high. now up a little more than 300. the s&p 500, broad index there up about 1.8% adding 33. the nasdaq still having its best day of the year despite what we've seen. it is higher by 116 points at

session highs it was up 163. of course, plenty of attention on crude oil rising after that china rate cut. bob, a different pood today? >> yes. we have a rally, but not an enthusiastic rally. it was 5-1 at the open. we should have gone better. the volume is only moderate. it drifted lower. the buyers are not enthusiastic. i'm not seeing people go after stocks beaten up. s&p 500 has been sideways except for a dip in the middle of the day. up roughly 300. a few sector-specific movements. home builders have been weak.

toll had a report where earnings missed expectations. growth is slower than expected. elsewhere it's the enthusiasm or lack thereof i'm interested. freeport-mcmoran is now down. we should have been doing better. some big multiindustry companies. textron, united technology. 3m. down right now. we should have seen this up on bigger volume if you had enthusiastic bounce back. we're fine. we've got a bounce back. i don't see a lot of buyers coming after the market right now. if that continues, the trend can be slowly drift slower. i'm sounding cranky, but really,

we should have done better today. >> you're not the only one. bob pisani on the floor. >> bob isn't too enthusiastic about this rebound, are you? >> no. i agree with him. you don't have that real excitement. yes, the market's up. it's apathetic. as we move into the afternoon, it feels like it's going to fachltd i'm not going to say it's going to close negative. it will fade from here. after yesterday there was a ton of damage done to the market, internals and all that. the market has to take a couple of days, weeks as it churns like this to build a new base just to start to feel comfortable again and find its own equalibrium based on the new risk around the world. >> i wonder when people look for

signs that the worst has past, you can look to interest rates, energy, high yield market. are we seeing confirmation across the board or no? >> you're seeing most of those things line up okay. it looks like a mean reversion bounce. maybe people are tentative to see how the cash market in china responds to the easing move this morning which didn't have a chance. we want to see if this is real. >> rick, what do you think the signals are out of chicago today? >> that there is something going on different between the treasury market and equity market. just consider friday's yield close in 10s was 2.04. 30-year bond was 2.71. 30-year bond closed up. we get half back today and we are up 13 basis points on 10s

and 30s. that interesting considering the road to normalization, the process and the notion goldman's topic in a piece i wrote overnight were repricing risk. we have to reprice its partner in crime that everybody wants to be in denial of. that is reward. >> china almost need a mario draghi moment like in 2012. they need confidence in the markets. the problem the way they've done it, these have been scatter shot. they've been coming up with new measures every day. i'm glad they pulled back from supporting the market directly. that was doomed to fail from the start. the reaction in the u.s. is spillover and contagion from

international concerns. we'll watch closely what the chinese government does. >> let's get the latest on the situation in china from our senior correspondent in beijing. yunis yoon. all eyes on the market when they open in a couple of hours there. >> that's right. the trading day will begin in a couple of hours. it's unclear where the markets are going to go. central bank here did cut interest rates. they lowered the amount of cash banks need to keep on hand. that should release new liquidity to the economy. the markets here are not as senttive to central bank rate policy. will the government come in with its unorthodox, untraditional

method such as vilifying short sellers or pump more money into the market? instead, what has been interesting that people have been watching is the fact that despite the fact we haven't seen dramatic falls the past couple of days, the government hasn't come in with some of the more unorthodox methods. that's been raising questions here as to whether or not the government will stick with more traditional methods to try to boost confidence such as cutting interest rates or if they are going to throw in the towel and allow the market to find its own bottom. >> thank you so much. early morning there. going back to what you just said, china needs its mario draghi moment. what is the difference between the ecb chief saying we'll do whatever it takes a couple of years ago and that seeming to solve things and what china has or has not done today. >> europe has done some of the things china has done. they've engaged in individual policy measures. they engaged in ecb starting this year.

the key in 2012 he reassured the markets. he had this press conference, his bumble bee moment. we have not seen that out of china. it's great they are cutting rates. that will help in the short run. we haven't seen this feed into better growth. the notion that china should stabilize, i think the next few months that could happen. the idea it could bounce back to the growth rates they've seen over the last ten years is very unlikely. >> that is a very interesting call for a mario draghi moment. markets are considered developed markets. they operate under different rules set. they are liquid and bigger. the chinese market is a controlled market run by a communist country. there is no mario draghi to create that moment for them. that's part of the issue. the news continues to be

questionable at best whether the macro data is what they say or is the chinese market telling us the macro data is that much worse than what they are telling us. >> we heard from corporate america throughout the day today and the last couple of days. those doing business in china say we aren't seeing demand fall off a cliff. is there some disconnect or are they not necessarily able to see the future? i think you have to stop looking at the wildness of the shanghai composite as representative of what is going on in the economy. that is flat year-to-date. maybe the economy itself has slowed down. i think one thing i'm struggling with the market struggling with, you mentioned this morning, the u.s. market looked like it would decouple from the chinese market which it did at the open. what even would be the mechanism of contagion? what are we worried about even in a bad case scenario? >> i think i don't like the term decoupling. there are linkages to trade

maybe minimal. there are linkages to commodities which are taking it on the chin right now. ultimately, what we are seeing in the market is spillover. 2011, 2012 the euro zone crisis created spillover. we saw big drawdowns in the u.s. market. what happened after that? we focused back on u.s. economic growth which is great at the time. earnings growth at the time and saw markets bounce back. i don't think we are out of the woods yet but u.s. economic growth will win over again. >> what china did with commodities for the last three years is minimal? this is the down side of that minimal and i don't think it's minimal. if the best case of the greatest moment in europe as mario draghi will say doing whatever it takes to make debt look different than priced, i would like to run away from that. >> what do you think about china here saying they point the finger at fed talking about the latest round of turmoil?

>> both central banks pointing fingers at each other is awfully rich. americans are acting more like i would have suspected. china is acting like an emerging market that is far from as much horsepower as their economy is. now it's going to get dicey. you can see we can have master leaders in a party running an economy that efficiently. it's impossible. >> certainly getting dicey. thank you. appreciate it. good to see you this afternoon. 50 minutes to go in a session that could be the nasdaq's best of the year. would feel better if it didn't come after the string of losses we've just seen. nasdaq 102. >> up next, we'll focus on apple, amazon and netflix. dominic chu telling us which one is leading the rebounds since the depth of the recent market swoon. >> later current head of tiaa cref, roger ferguson will join us.

welcome back a snapback session for the markets. the dow up 238 points. it has moved down. we were up 300 top of the hour. we'll keep a close eye on it. s&p up 26. nasdaq 100. check out qqq. that having a session up 2.6% today. yesterday's sell-off, what a difference a day makes. apple has a market cap of about $616 billion. up 4.5% today. if you look at quick math, if you go back to yesterday's intraday low, $92 a share, that means that from that time it was

about a $525 billion company. we got back about 92 billion worth of market cap for apple. amazon shading up about 3.5%. market cap about $224 billion. at the $451 per share intraday lose yesterday, it was worth about $210 billion. we've gotten back about $14 billion in market value for these particular shares overall. netflix, single best performer in the s&p 500, $104, $105 close to a share up by about 8%. near its best levels today. it's got about $44 billion in market value. during the lows intraday yesterday, it was around $85.50. we got back about $8 billion approximately in market value for netflix. those shares are among some of the ones investors and traders have been buying on the weakness yesterday. we'll see if that trend

continues. for netflix, it still remains the single beth performer on a year-to-date basis. >> we'll ask whether they are a good buy here. should you own apple, amazon and netflix? welcome to both of you. what's interesting is, ross, your favorite name of the three is apple. apple is the one you wouldn't buy. i'm going to start with you, chris. why wouldn't you buy apple here? >> this is just one of those old-time stories, an overrun stock that's run its course. it's not the innovator it was 15 years ago. back in the day then you had analysts that didn't like apple because they were pushing the envelope. it was down 40%, 50% range. now you've got around 80% of analysts like the stock. it's at points where you have to ask the question, what's next? we think it is one of those old. go ahead. >> fair enough. i was going to ask ross to answer that question. why do you like apple?

what's next? >> apple music. apple tv. ipad pro. more macs. apple watch. there are so many things. apple pay. they've got so many things happening that are cool. they're just at the beginning of these life cycles. so i'm bullish on apple. it's a valuation thing. when i can buy something at 12 times earnings with a 2% dividend and earnings growth 35%, find me a better stock. i did buy netflix yesterday. it was great. i finally got into netflix under $100. i wanted to own the stock for a while. i bought a little bit yesterday. >> chris, i wonder. you mentioned netflix is one you would be buying or had been buying here. i get a kick out of the pop it's getting today. you have a market that is at 10-month lows at a level it got to 15 months ago. netflix got down 20% to a level of the reached five or six weeks ago. why is this a bargain? >> this stock is up 100% or 98%

year-to-date. it's one of those situations. you can't put a valuation and say it's a value when it comes down to $90. this is a true growth story. apple is a little more turning into one of those dividend plays. it is simply looking at netflix and what they are doing in the markets they are expanding into. there is a great fundamental story. i see some innovation there. wait until netflix figures out how to do a bit of advertising on their platform and things will break open. i look at that -- >> why would netflix put advertising on their platform? >> when you start pushing the envelope, when they get done with the organic growth and getting the subscribers in the door, which will take a long time, they are going to ask what's next like everybody else does. i wouldn't put it past them to sneak advertising into that mold. you deal with some advertising. the a la carte is here to stay. >> what is the argument for amazon here?

if you would be a buyer? >> i'm not a buyer of amazon here. i would say the same argument for buying netflix. these are the future blue chips or current blue chips of the future. alt r amazon, apple and netflix should be in everybody's portfolio. amazon web services is doing so well. it's a good stock to own. they are growth stocks. i think netflix has a brighter future than amazon is a monster in their business. the truth is, i still think apple is the best buy of all of them when you look at the up side potential and the safety, margin of safety you have in this stock is very big. we know sales are good because tim cook just told me. >> finally, implicit to what you're saying about netflix and the others is that this correction is not necessarily going to engender a change of

lead eership in this market? >> no. i don't think so. >> let me point on the institutional. when you look at apple, 2,400 different institutions own that. when you look at netflix, it's about 600. amazon is 1,200. that equals buying potential in terms of growth. when the companies continue to grow. that's why i think there is a difference between the stocks here. apple is not the growth stock it was 15 years ago. amazon and netflix truly are. >> thanks so much. walking through one of the most widely-followed sectors here, amazon and apple. 40 minutes to go into the close. dow down -- dow is still up, up 151 points. that is the lows of the session. it's half the gains we saw 20 minutes ago. could be a long 40 minutes. s&p s up 16, nasdaq 75. up next, we'll look at new signs the housing market is picking

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pales against the sharp declines we've seen in prior sessions. we've seen markets giving up significant ground for the year. the dow now lower by almost 10% on the year. s&p 500 almost 7%. nasdaq no longer on pace for the best day of the year. up 73 points. here is a look at the sectors. you can see where most of the buying is happening. that is consumer discretionary, technology and energy on this rebound in crude which is being closely watched here. it's up less than $1 on wti prices. that as earlier could take some of the heat out of this session. utilities, weakest performer, but they held up earlier in the market. down 1.6%. boast buy with its best intraday in two years. same-store sales more than tripled analyst estimates thanks

for demands for big screen tvs and major appliances. dsw sliding after quarterly sales missed estimates. the shoe retailer did say profit margins are expanding and remains confident in the outlook. still down 10%. >> new data pointing out the health of the housing manjt diana olick walks through it. >> mixed signals. we saw a nice bump-up in july sales of newly built homes up nearly 26% from a year ago. new home sales are way up year-to-date compared to a year ago. while we did see a nice move higher in starts last night, we are still building at well below h historical homes. builders say they have pricing power. toll brothers ceo echoed that on the earning call today. average sales price soared to

the highest price ever. builders shying from entry level product as first time buyer demand isn't there existing home prices moved up by 5% in june from a year ago. they flattened out. we are heading into this lower season for housing, but demand appears to have weakened early this year. red fin reporting a drop in buyer demand in july. high prices turning consumers away. it's not all about interest rates either. rate moves have very little affect on buyer demand. all about credit availability and prices. neither one of those are easing up. >> is it a good time to be buying the home builder? susan mclarry is home building

analyst. scott, which parts of the real estate market makes sense here? >> the impact china has own the u.s. market. china is trying to export its deflation. if you add that to what's happening in the energy markets, in terms of the europeans printing money, all that portends to further decline in the ten-year treasury. what is happening out of china reenforces the cycle in place. >> does it reenforce rates will stay low? >> long end stays low and elongates the cycle for commercial real estate. >> susan, would you agree with that? >> we expect any move in rates is going to be very modest and moderate. we don't expect anything that is too severe. if anything, something we consistently heard from the home builders is there is a lack of urgency among buyers because rates haven't moved the last year. if we do get a slight uptick

that could get a few bench sitters off and get them motivated to make the buying decision. >> without focusing on today's action, the home builder stocks are backing off in a strong market. are they already priced in the idea supply demand balance favors the home builders right now? >> we are not seeing a lot of activity going on in terms of broader fundamentals. things quieted down for now and the stock seems to reflect that. >> what is the biggest risk for people heavily invested in real estate in higher rates on the back of a better economy? we heard we shouldn't worry about that, or lower rates on the back of a weaker one? >> the bigger risk is a weaker economy. if you look at the spread between property yields and underlying treasury yields, there is a lot of cushion for the fed to move. bigger down side risk is if we face a deflationary outcome. the markets price for growth, priced for high levels of rent.

>> we'll leave it there. thank you both. the dow does still have a triple digit gain but only slightly. it's up about 110 points with just about half hour to go in the session. time for a cnbc news update. hi, sue herera. >> here is what's happening at this hour. patty murray says she will support the iran nuclear deal reached between the six world powers and tehran. at least 29 democrats publically stated their support. only five short of the 34 needed to sustain. any presidential veto of congressional disapproval. >> a former analyst with jpmorgan and two long-time friends have been charged with insider trading scheme from which they are alleged to have made more than $600,000 in illegal profits. the three have been charged with securities fraud. >> isis releasing images that allegedly show militants blowing up a 2,000-year-old temple in

palmyra. the images appeared on social media, but nbc cannot independently verify the authenticity of those photos and videos. it's every parent's nightmare a 12-year-old boy accidentally damaged a 350-year-old painting by an italian master at an exhibition in taiwan over the weekend. the boy tripped, caught his balance by pushing against the canvas painting and created a hole the size of a fist. the painting is worth more than $1 million. oh, my goodness. hopefully insurance covers the repairs. the poor kid, the poor parents. >> it's nice getting an upclose look at some of these masterpieces. >> absolutely. that's what happens. see you in an hour. >> sounds good, our sue herera. dow holding on to a gain of 111 points.

s&p here up about 10 and nasdaq up 63. >> up next, find out what a top trader is watching in that final and most critical half hour of the trading session. art cashin indicated about 90% of sell side demand is to the down side. >> our main street investors buying these market drops. we'll speak with two of them.

welcome back. the dow is now only up about 70 points. remember at the highs of the session we were up 442. this after china cut rates the fifth time since november. other moves to help shore up its economy and stock markets. the guys on the floor top of the hour just in discussion saying they didn't feel there was conviction behind that move which had been cut in half. with less than 30 minutes to go, we'll see if this market can hold on to these gains. they are ranked from the left side of your screen which is the strongest to the right side of your screen which is the worst performer in utilities. green chips indicate how many names are holding on to positive territory. less than half hour to go. let's check in on what's happening on the floor with

matthew cheslock what happened to this rally? >> i think we have stock for sale. it's a pretty good number. not a surprise to see a sell-off. we saw the sell side accelerate yesterday. no one wants to hold a position overnight. no one knows what's going to go on after hours here. >> if we close at these levels, 76 points we are looking at. how significant is that? is it still, hey, we closed positive or is it the magnitude of it that matters substantially? >> i think it's the magnitude more. we needed a bigger rebound to have any conviction. just the fact we are closing positive isn't going to mean much. we'll probably test the lows we saw yesterday. the economic data that comes out over the next couple of days doesn't matter. it doesn't take into account what we saw out of china and some of the other data we saw earlier this week. you'll have to overlook that and take a hard look at this market and what it does. i would like to see it test the

lows we saw yesterday. >> is it notable that crude oil is holding on to its gain here? less than $1 now but higher on the session. is it decoupling from stocks here? >> i think that was such a crowded trade. people may start to take profits here at this level here. they broke $40, held below $40. maybe you take profits in here and that's why you're seeing stabilization. maybe a point for someone to take some gains. >> we'll let you get back to it. over to bob pisani. >> i've been in a cranky mood all day. we started out 5-1 advancing to declining stocks. up more than 300 points. as the day goes on 4-1 advancing to declining. now it's 2-1 advancing to declining. we are barely positive. volume is heavier than normal but almost what it was yesterday. the selling pressure has been exhausted. there is no buying enthusiasm. you can see here on slightest

pressure the market just kind of droops down towards the lows. we should have seen bigger bounce is in the global material names, the global industrial names. freeport-mcmoran is half the price it was a few weeks ago. it should have bounced today. it just stretched lower, down 3% earlier. dupont. look at that. the chart looks like death there. this was $20 a few weeks ago. we should have put up dupont. dupont has been in a slow death spiral, too. it should have bounced on any reasonable technical value. it's sitting at the lows of the day right now other big international names. general electric should have had a bounce. it's been doing nothing all day. this is what i'm talking about. ingersoll-rand. these guys work all over the world. they are part of the global growth, global slowdown story. slowly drifting lower in the middle of the day.

what is the market telling us? the market is telling us that even though we have had 10% declines in some of these names in the last week or so, it's still not completely convinced that the global slowdown growth story is over or that we're through it. >> that's for sure. how are main street investors reacting? susan, let me start with you. how nervous are you by what we've seen in markets and what are you as an investor doing here? >> i'm not so nervous because i invest for the long term. i look for value. the things i'm excited about tend to be in the united states and look for consumer discretionary spending and

technology. and the innovators. i am seeing good value there still. >> s&p 500 turned negative. as much as it rallied today was back in october 2008. >> those are the kinds of environments the only precedent in terms of the violent day-to-day moves. it shows you we had this volatility storm rush through and institutional players are reducing risk and not sure where to make their bets next. >> what about you? how are you playing these markets? >> actually, i use this as an opportunity to kind of tweak my portfolio a little bit. basically, i'm hanging on to the stocks i currently have in my portfolio, but i did take the opportunity to cash out of a stock that i thought was fully valued. i took that money and put it into biogen. i thought biogen has good long-term prospects.

that's how yeah this correction of the market. >> that's great to know. i was going to ask what's the biggest mistake people make is when it comes to markets like this? >> lots of smart people make stupid mistakes with their money. we call them cognitive bias. >> i wonder what the effect is of not being able to act on what you see as an opportunity or would have seen as an opportunity a few months ago. when we were at the highs, small investors felt they missed any number of very high stocks. now they're back. they don't have to go to the full trade. >> we call that the hindsight buyers.

that's a mistake people make that could lead them to become depressed or anxious or panic. >> that's why i'm always in the market and have a portfolio i'm looking at. i don't sell a stock just if i think the stock still has good long-term prospects. i'm also paying attention and making sure that i know where the stock is in terms of what i think its full potential is. once it starts getting close to that full potential, i look to start selling it. >> susan, we've begin up a 400-point rally. kamie likes biogen. are you here and what specifically do you like? >> i specifically still like eli lilly in the medical field. i still like ge and apple and google. i actually am waiting to reinvest in those. i'm also thinking about

investing in impact investment funds i've been hearing about which are for companies that do social good as well as the bottom line. >> a big factor for a lot of people. thank you for joining us with a look at what to make of these markets. about 15 minutes. let's point out why the dow is now positive, we saw both the dow and s&p turn briefly negative, giving up gains like we've seen of nearly 3% of the highs and not closing higher significantly hasn't been seen in quite some time. more on this afternoon's disappearing rally. we'll go live to the nasdaq with an update next. college students drop out. but how can you spot who's at risk? the one who lives far from campus? the one who works the night shift? the one with new responsibilities? one thing can't tell you, but the right combination can. universities are using ibm analytics to understand pressures in and out of the classroom- some expect to cut dropout rates by twenty-five percent.

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a 500-point swing in the markets today. the gain completely evaporated. the dow is now down 76 points. there was a lot of sell side indication on the close. crude oil giving up a little of its gains here. nasdaq managing to stay slightly positive. tech stocks still leading today. let's go to courtney reagan at the nasdaq market site. >> tech stocks led the way down. they are leading the way higher

today. still hanging on to at least moderate gains here at the nasdaq. i look over and we are only higher by about 15 points with minutes to go until the closing bell sounds. s&p discretionary names as well as technology names switching places throughout the session for the leaders. actually discretionary taking a leg higher. we've got some of those names that trade here. netflix made up some significant ground today. it still has a ways to go because it's down about 16% for the week. starbucks higher by more than 3%. telling employees to be mindful of what consumers might be going through. it was a rough day in the markets. biotech names pretty strong. both the s&p sub index as well as biotech names. chinese movers are in focus because of the chinese influence we had so much integrated into our markets have been higher.

jd.com higher by almost 50%. we'll watch the action as it happens as we fade into the close. we'll see. only up about nine points on the nasdaq. >> thank you. want everybody to know the sell side pressure is picking up. art cashin indicating maybe $3 billion to go on the sell side to the close. dow is now down triple digits. down 101 points. s&p down 13, nasdaq positive by 10. up next, jeremy hill gives us his take. well, sir. after some serious consideration i'd like to put in my 15-year notice. you're quitting!? technically retiring, sir. with a little help from my state farm agent, i plan to retire in 15 years. wow! you're totally blindsiding me here. who's gonna manage your accounts? this is a devastating blow i was not prepared for. well, i'm gonna finish packing my things. 15 years will really sneak up on you. jennifer with do your exit interview and adam made you a cake. red velvet. oh, thank you. i made this. take charge of your retirement.

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the dow jones industrial average down 121 points. the biggest reversal since october 2008 given we were up 441 in today's peak. jeremy hill, what do you make of this reversal? >> i certainly think we entered a new regime of at least medium term volatility and lower range. that's pretty obvious. maybe we harken back to what warren buffett said which is if history was a guide to investing, than librarians would be the richest people in the room. i'm not certain that goes longer

term because we have big catalysts coming up. that fed meeting, the oil patch. there is a lot in the future that we have to think about more than just what's happened over the last couple of days. >> it does seem like the market is reacting to itself. it had such a violent move. moved faster than any fundamentals did. sentiment seems fragile here. the question is what's going to put in any kind of a believable floor for the time being? >> we thought we had a believable floor this morning, right? things are very contemporaneous now. i think probably the biggest push positive we could have right now is the fed in september, comes out and says no rate hike. until we get to that point, i think stocks are going to be very vulnerable to a lot of different wishy-washy facts and data and sentiment. >> the one sector holding in there is consumer discretionary.

best buy up 13%. netflix up 5%, michael kors up 4%. are you buying those names? what are you nibbling at here? >> no. that is not something we would purchase. we looked around at higher dividend players. some of the telecom players, verizon. you could purchase 10%, 5% cheaper today than a few days ago. that is a company not going away. it doesn't have a lot of foreign exposure and a big dividend and we consider safe. on the flip side, a little bit of higher beta trade, if you will, we have purchase puts on volatility because we think a three standard deviation move on the vix is probably not sustainable longer term. >> what maturity of those puts? are you betting on it going away tomorrow? >> no let's say october. that is something we think is sane. >> jeremy, thanks for joining us.

jeremy hill. about six minutes to go in this session. potentially another historic one shaping up as the dow is now down 60 points. if we close negative, the reason that's significant is we haven't seen a negative close after a sharp gain like we had this morning since october 2008. y shd years of citi history matter to you? well, because it tells us something powerful about progress: that whether times are good or bad, innovators with great ideas will continue to drive the world forward. as log as they have someone to believe in them. for more than two centuries we've helped progress makers turn their ideas into reality. and the next great idea could be yours. every auto insurance policy has a number.

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welcome back. bob pisani on the floor of the new york stock exchange. art cashin joining me. we were 5-1 advancing to declining stocks at the open. up as much as 400 points in the dow. that was just after the european close. things fell apart in the last hour. here we are down 16. no, 111 on the s&p 500. talking about the dow. what do we attribute this last droop in the last hour? >> the final hour because the market on closes were 95% sell side and $3.5 billion on balance to sell. you couldn't find a buyer with a flashlight. >> a normal day.

300 to 500 million would be typical buy side imbalance. 3.5 billion is a large number. we've been talking about this all morning and our slightly cranky moods. there wasn't much buying enthusiasm. there wasn't a lot of selling interest. dried up for a good part of the day, but there was no buying enthusiasm. >> as great as the rally looked, we never got back to yesterday's 1:00 intraday highs. we had that big negative and we never got back to that. that kind of told me this thing doesn't really have the guts to go all the way. unfortunately, that's how it turned out. >> 5-1 advancing to declining. now it's basically on the flat side at this point. maybe slightly negative. what is the market telling us right now? >> the market is telling us it doesn't feel very secure. the fact that you had an oversold bounce doesn't mean you converted everything. you and i have been discussing all day the fact this was not going to be a one-day process.

there are going to be multidays and very choppy. maybe last a week or two. we'll see what happens overnight in china. >> we did see some of the beaten-up internet names here. they did okay. i think most disappointing of all is the global multinational companies. your textron, general electric, freeport. they never had much energy to begin with, yet had the stuffing knocked out of them. some were half the price as two months ago. would you expect an oversold bounce. >> that tells you this global situation is not truly resolved. there is still some worry there otherwise they would have bounced. >> what are we looking forward tonight? we have the people's bank of china cutting reserve requirements. they made several other cuts to make it easier for banks to lend money. is it reasonable to expect some kind of bounce in china? >> you can hope for it. clearly, if you get selling in

shanghai, you can't allow that selling to go to hong kong. that saves us today. >> hong kong small moves over there today. there is the closing bell with the dow jones industrial average down 215 points. kelly evans is next with the "closing bell." >> another historic session for stock markets here. welcome to "closing bell." i'm kelly evans. dow jones going out with a decline over 200 points. 205. s&p giving up 25 at the bell there. the nasdaq which was positive for most of the day dropping 17. what's so significant about the dow closing lower here is we have not seen a session which it was up nearly 3% like we saw this morning, a gain of 441 points. then reversed like this since october of 2008. a volatile final hour of trading turning this rally into a decline on wall street. let's get back to the floor where bob pisani is tracking the

action. >> this was a disappointing close. we had enormous amount of sell orders come in. nearly 3.5 billion sell imbalances. on a normal day you get about 300 to 500 million on the buy to sell side. a lot came in. just take a look at the s&p 500. we started positive. i mention $5-1 advance to declining stocks. dow was up more than 400 points. you see the real problem occurred in the middle of the day. we had flutter around 1:30 to the down side. at 3:00, as a lot of buy and sell imbalances became more crystal clear, the markets moved to the down side. here is the markets in the last hour. late day fade. the breadth, 5-1 advancing to declining. by the end of the day we were negative. volume turned heavy in the last half hour or so. i think the key point about today, no buying enthusiasm, not a lot of selling for most of the

day. no real buying enthusiasm. that was the real disappointment. look at key names here. apple sort of good on the open. you can see led the charge to the down side in the last hour. barely ending in positive territory. banks also had a decent day. they turned south in the last hour. bank of america, for example, actually was positive all throughout the day. had very nice advances. then drooped in the last hour. ended the day to the down side. the real disappointments, the big multinational names that had a terrible time in the last month like honeywell, 3m, all were up 1% or so, mottedest gai freeport-mcmoran cut in half and couldn't manage any gains. a disappointment today. >> closed down almost 5%. let's head out to courtney reagan at the nasdaq.

just couldn't hold on to its gains. >> thought we were going to do it. nasdaq lost it here. it was the leader most of the day so techs led our way back up after leading the way back down. about 1:30 p.m. some folks said this is margin calls. then it began to accelerate in the last hour. especially the last half hour. i counted about five stocks negative with 20, 25 minutes to go. then it was half to more than half. advancers slightly outpacing decliners. i haven't had a chance to look at it. chips were strong during the session. posting their best situation since about may. now some of the names in that chip group are among the biggest losers. texas instrument down 3%. sandisk down 3.2%. it cut everything across the board when we saw that deceleration towards the close.

not everything is negative. i do want to point out some of the winners like netflix but only gaining about 5%. jd.com up more than 5% on the day. we just couldn't do it there at the end. >> thank you. let's bring in today's panel. we have michael santoli from yahoo finance with kayla tausche and "fast money" trader system seymour. how significant is this reversal? >> it was a dangerous day if you think about the way we started out. we were so oversold at yesterday's close, s&p was almost five standard deviations below the 50 day moving average. this is all we got when china threw good policy at us. disturbing, not surprising. we probably can grind higher the next couple of days. everybody knows what month of the calendar we're in and what months we are going into. we are in a place where september looks nasty.

>> the fact the s&p 500 closed exactly at yesterday's low. a lot of old traders say you have to retest whatever low you put in there. doesn't have to happen the next day. it just did happen this time we went back there. maybe now we are in for a series of days when people look at any morning move with suspicion. yesterday morning you had the big upset reversal. today profited by fading the bounce. >> the afternoon a flip side of the morning. >> september is historically the worst month for stocks. sentiment like we've seen after coming back so far from where we dropped yesterday. couldn't hold on to those gains. when you have that sentiment and volume before people are back from vacation, before everybody is back at their desks. if that's what it's setting us up for after labor day into that fed meeting, that is going to be a remarkable shift.

>> let's get another voice of kevin o'leary. after having gotten into the etf business, what are you doing? buying more, changing your outlook on rates going higher? >> i'm fascinated by this data. i can get 2% on a ten-year. that's risk-free if i'm willing to take duration risks or tip toe through the tulips and find stocks paying 4% or 5% yield. their free cash flow will drop dramatically as a result of a recession or some reason they are going to miss all their numbers, or there is something wrong with the bond market not pricing in economic upside. we are in a very strange place. what i'm doing is tip toeing through the s&p. i'm buying the -- i'm picking up the tulips. i don't want to buy the 10-year 2%. i would rather get 4.7% any

sector i want. i think this is getting interesting. >> not a lot of people made money investing in tulips. >> touche. >> i agree the dividend yield are impressive. earnings yield s&p is impressive than buying treasuries. look at what happened yesterday. 10% intraday down moves. let's call yesterday morning a freak show. maybe it was some aberration we don't want to believe can happen again. these high dividend stocks were getting thrown around. therefore, you have to be picking stocks and playing for the long term. i'm sure that is something you do well. for investors that are looking at the market over the next couple of months, they could be trading in dividend stocks and find themselves under water where the dividend doesn't come close to getting back to whole. >> let's be fair. yesterday during the thousand-point melt-off you had 20% volatility if your basket was dividend yield if you went

to those tuliped with dividends, you saved 20% on the downside. that's what i love with dividend cushions. you'll never get me off the mark. particularly after yesterday. >> let me ask how we retested yesterday's lows and talking about cushions. is that a positive sign fundamentally? did we need to retest those lows to set up a true bounce? >> last october we didn't retest that low. that was a true v. you don't always have to do it. the other concern, not really a concern, but note the fact we closed at the low tick. not as if it was a test saying hey is there demand at that low from yesterday? that's the idea to make sure the buyers emerge again. >> great point. >> we should look at the bond market, too. tim, if we are seeing the u.s. 10-year yielding 2.08%, that is off the highs of today, and the bond market isn't retracing as much as we've seen in the stock

market, so does seem like the bond market is telling us there is strength in the economy. >> if you ask me, right. this is about a growth scare, not a credit scare. china has major policy questions ahead of it. i don't think this is china imploding. this is global growth. what is 10-year telling us? there is very little inflation. obviously, the fed is fighting deflationary forces. rates are going higher. i think the fed might be in a position where they can look at the action over the last couple of days and say it's probably in our best interest to continue the path we are going down. whatever that path was, i'm not sure it changed. >> let's talk more with bob pisani from the floor. what are you hearing? >> the biggest concern here is the fact we couldn't hold any gain. we should have had some bounce. by any way you look at the stock market, oversold indicators like relative strength, put/call ratio, the vix itself.

any sentiment indicator, we were dramatically oversold on the market. we should have had a bounce. the s&p 500 down 3% two days in a row is an extremely rare occurrence. that happened friday and monday. it only happened eight times in 30 years. i did a whole report on this almost every time. the next day, today, we've seen a 2% bounce in the s&p 500. instead we saw 1.3% decline at the close in the s&p 500. we are breaking all sorts of rules here and we are in sort of a strange, unchartered territory. >> let's show what's happening with the 10-year yield. this has been on quite a trip the last couple of sessions. got down as low as nearly 1.9% yesterday. then it popped back higher today, as high as 2.14%. 2.08% is the level now. people are looking for reasons behind the disappearing rally. the dollar is higher on the

session. interest rates did move higher. did that contribute. >> i feel like i said earlier, there was a meaner version moves. the stuff that got knocked down, came back more. one thing we can't decipher is the effect of just positioning unwinds going on right now. that doesn't worry me but when you do have this volatility shock we saw, everyone's models are retreat to the sidelines. wherever you were heavily positioned in terms of big money. that's why it seems like these signals are conflicting to me. the fact this happens the end of august, people coming back trying to figure out what positions to put on, how much does a move like today change their minds? >> i like to point out this is the 2011 analog. we held out because we thought the end of september, while there was a big rally going on, didn't change what we were going

to be looking at in september. i think we could have days where we have these plus three down three s&p days. exactly what we had at the end of august. nothing changed today. there's every reason why this market should have been able to bounce a little bit. this is all we get owe china policy was your friend. watch the dollar. that is a big key here. >> we've got to leave it there more with our panel coming up. catch tim seymour on "fast money" at 5:00. they'll ask thomas lee why he thinks markets will still bounce. still to come, a closer look which names killed the rally today and why. hear how one big institutional investor has been dealing with the market ups and downs. roger ferguson. technology empowers us to achieve more. it pushes us to go further.

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for a lot of traders and investors, they noticed it. it started almost on the dot at 3:00 p.m. indicating perhaps programmatic selling or accelerated selling because of what was happening timingwise with the overall market. utility stocks stand out as the single worst performing sector for the s&p 500. telecom stocks, material stocks, industrials all down around that 1% area. pepco down 15% after a washington, d.c. regulatory commission rejected its proposed acquisition by exelon. an interesting observation coming to what's happening overall with market volumes. we use at least possible bellwether, the s&p 500 spdr that tracks the s&p. it traded about 313 million shares today. a lot of those coming in just the last hour of trading on average over the last three months. it trades a little over 121 million. a massive spike in volume on

what was an update for the most part then a huge spike in volume going down. an interesting move and some of the culprits behind the moves today, we'll be talking a lot about this trying to dissect what's happening throughout the course of this hour into "fast money." >> thank you. let's bring in our panel talk about this with our courtney reagan. >> it was interesting to watch what happened there i saw 30 minutes into the close only five names on the nasdaq 100 were negative. then it was half. it seemed to get worse and worse. we saw chip names leading the session earlier having their best day since may. that turned around with big names like texas instruments and sand disk moving lower. some high fliers stayed high flying relative to the rest of

the market, talking about netflix, amazon and starbucks. netflix ended the day higher. still has a lot of ground to make up there. that's a high flier we've been watching. worked throughout the session. really cutting those gains pretty strongly right towards the end. it was an amazing move. we saw some of the sell-off begin around 1:30. then it just fell off a cliff in the last 10, 20 minutes perhaps just as i was coming up here getting ready to see what was going on. we had been leading the way on the nasdaq. thought we would hold on to the green. we couldn't do it. >> let me mention names here. the worst performer was merck down 5%. apple looks like it managed to stay in the green along with disney. apple is interesting because this was leading the way down getting the hardest hit the last couple of trading sessions. is it significant it's holding in there trying to fight back?

>> it might be significant. a lot of the horses came in to defend this thing. you had an upgrade today. it didn't manage to get a whole lot of momentum to it. it's at a $40 discount to where it peaked. it was due to hold ground. >> what about the banks? goldman leading the way. a sharp reversal by the close. >> interesting in the quarterly regulatory filings, goldman is the only bank that doesn't break out its china exposure by country. when you go through them and see what each of these companies is listing as its trading assets, loans outstanding, citigroup $20 billion in exposure. even given that, we did see five upgrades to bank of america alone. that was primarily on valuations saying it's gotten too far below book value. interesting jpmorgan, this is the balance sheet, this is captain whose business model will actually be able to resist

global volatility also succumbed to the fallout today. >> we should note ken owe learly decided to launch four new etfs through his o-shares. a rough ride. a lot of people trying to figure out whether they are helping or hurting market liquidity. tell us about what you are launching now. >> i have taken the same rule we used for the united states and said i want companies 20% less volatile, test on their balance sheets to sustain their dividend and design etfs that don't get heavy market cap weightings. took the same rules, applied them to asia and europe. i believe it's the first time anything like this has been done. >> what is your exposure to china then? >> my plan, because i do a weighting january 31.

asia, japan, australia, hong kong and other markets that stays away from funky shares in shanghai but gets exposure to growth. i want the same thing for europe. right now, europe is really interesting. you've got six and seven pes on massive market cap companies that sell globally. this is part of the meltdown in china that pulled down european stocks, too. i created these etfs for myself. i'm not telling people what to buy. these are third generation etfs that don't let themselves get concentrated. that is my biggest fear. i don't want to own five companies that represent 50%. i keep it at a 5% weighting max. >> thank you for joining us. congratulations. >> thank you. volatile stock market and concerns about global growth are putting the fed on a spot with potential interest rate hike. former fed vice chair roger

ferguson ceo of tiaa-cref.

>> how are institutional investors making sense of it all? in a cnbc exclusive, i am joined by former federal reserve vice chair roger ferguson president and ceo of tiaa-cref.

>> a pleasure to be here. >> you've studied markets as deeply as anybody. >> i see two or three forces at work here over the last couple of weeks. there's concerns about global market, global growth. we saw the market pull itself together a little bit what we are seeing more recently is a combination of the fact the u.s. economy is still growing reasonably well. earnings look strong. that throws into question, is the fed likely to move? then we also have still the question of are external weaknesses going to spill over? >> people drawing comparisons to the late '90s asia financial crisis. today china pointed the finger back at the u.s. saying because market's listening to the fed and thinking about a rate hike all this is happening. are they right? >> there is a little bit of everything going on. the asian crisis was driven by fixed exchange rate, countries

that had not put aside enough in the way of reserves getting swept up in a down draft. we see something different from the emerging world. currencies are flexible. we've seen currencies reflect the weakness of those economies. china has become a bigger story. is the fed part of the story here? always to some degree. there is no question when the fed is talking about in a public sense the possibility of raising rates, sure. that might have an impact on some equity buyers. >> is this, as an independent observer point of view, the right time for the fed to raise interest rates? >> i like the way you describe me as an independent observer and you introduced me as former fed vice chairman. the answer is the fed is confronting a number of different forces that will play into their decision making. labor markets have been strengthening for some time. maybe we are almost at full employment or the slack there has been reduced.

secondly, inflation has been relatively low, but the fed models suggested that might pick up. then the third obviously has to do with this volatility in markets. when they get to their meeting in a couple of weeks, those are the three forces they are going to be considering. >> if it came down to today and today's conditions, jeff gundlach said if you were on mars, you would say the fed should never consider now. >> financial conditions will probably tighten a little bit. dollar is stronger. inflationary pressures therefore are likely to weaken. we know the fed is thinking about it. let's not try to make it a call on today's conditions. see how the incoming data drivers, where does the fed end up in september the next couple of meetings. markets will be very interested. those are the conditions, those are the questions i think on everyone's minds. >> you have to put money to work every day. tell us about what happens after

we see a sharp decline like this. does it mean to hit your balance targets you put more money into stocks? how does that work? >> the reality is our portfolio managers each have a list of the equities that they might be interested in. they may look at these prices and say that looks like a really good time to start to buy more. but we are very much interested in fundamental points of view. we also clearly encourage and take a long-term perspective so we don't get overly excited about the ups and downs. final thing to recognize about us is we are broadly diversified. it's equities, fixed income alternatives. we think that is part of the model for creating long-term sustainable benefits. those shares will vary over time depending how we think the outlook may look and whether there are values there. >> people might be surprised to know you are one of the biggest owners of almond trees on the planet and one of the biggest operateors of commercial real estate. there are a variety of

alternatives here. a big emphasis on real estate which till lately has been talk about a bubble building there on the commercial side. are you comfortable still with your exposure to a variety of alternatives in this environment? >> we are comfortable with the exposure of variety of alternatives we recognize each one has a different cycle. commercial real estate market has been strong the last four, five years. we see continued strength for a number of reasons. labor markets are improving. secondly, we see vacancy rates are coming down. s increasing. while cap rates look strong, we still think for the right properties in the right locations, there's some upside potential. >> finally on china to bring this all back to the original question on everybody's minds heading into this evening, they cut rates, made other adjustments but nothing shoring up investor confidence globally. do you think they need a bigger bang move to help stabilize things for everybody?

>> my impression is they are very good at working through and managing their economies. i would expect them to focus in on these elements of stimulus. they need to drive more stimulus through that economy to get through the short-term outcomes. they've got a long-term strategy of trying to move into more of a consumer-oriented society. maybe away from exports so much. they have to do that as part of their long-term strategy. over time i think, though tricky from day to day, they'll be ultimately successful. >> roger, thank you for your perspective on a day like this. >> my pleasure. >> roger ferguson, president and ceo of tiaa-cref. >> great conversation there. here is what's happening at this hour. california's state auditors reports major gaps are leaving many state agencies vulnerable to a security breach. that would leave sensitive data

such as social security numbers, health records and income tax information subject to hacking. >> republican presidential candidate jeb bush holding a town hall in colorado. he sharply criticized planned parenthood saying it should not get federal funding and took the opportunity to point out the differences between his style of politics and donald trump's. >> ohio's first black congressman was laid to rest today. a funeral for lewis stokes was held at the baptist church in cleveland. vice president joe biden among those in attendance. stokes served 15 consecutive terms in the house before retiring. >> don't set your watch by big ben. the clock at britain's parliament has recently been slow by as much as 6 seconds. mechanics corrected the clock to within two seconds of the right time but looks perhaps the beautiful 156 yield clock may be showing its age a little bit. can't blame him. that's the cnbc news update this

hour. she looks good or he for 156 years old. >> how long before it's just an apple watch face? >> i hope never. >> thank you, sue. tremendous drop in oil is a case of good times and bad ones. good times for consumers starting to see gas below $2 a gallon. sad for oil-based economies in the u.s. and middle east. that story is next. >> now china cut interest rates again is qe-4 on the way here in the u.s.? the prospects for more stimulus are coming up.

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welcome back. down 204 points on the dow. we were up 441 on session highs. we have not witnessed reversals like this since october 2008. nasdaq stayed positive till the close. s&p down 1.4% giving up 125. crude oil rallying, but prices below $40 a barrel. good news for consumers but tough for those who live and work in the permian base sin.

>> oil production here is near record levels, about 2 million barrels per day. they're not drilling as many new rigs. we've seen the rig count fall by 55% since last fall. still there is one company that is drilling new wells. that is privately-held elevation resources which put the rig behind me up in june. the ceo says at $40 a barrel the company still makes some money, but not enough to justify more new wells at $7 million per well. >> this rig was put back to work when oil was $60 a barrel back in june. with $40 a barrel, we have to reassess whether we can justify running this drilling rig to drill new wells. >> so there is a lag effect from when prices collapsed to production cutbacks here in west texas. that's about six months. pruitt expects production to slow through the rest of the

year. with u.s. output likely to fall by about a million barrels per day in early 2016. the whole area is feeling the impact of this situation. by some estimates one of these rigs can generate up to 1,000 direct and indirect jobs. there are lots filled with these inactive rigs right now. local metros like midland, texas, are also feeling the effects. unemployment rate there begin to tick up. the key thing to watch with this oil down turn is not just how low prices go, but how long they stay low. >> thank you so much. wti crude below $40 a barrel. 12 states in the southeast seeing $2 a balance at their local gas stations. that includes alabama, georgia and texas. while consumers may be happy to see that, my next guest says countries can't sustain themselves at these levels. what is the real cost of low

oil? john, there's a lot of countries affected here. who is hit hardest? >> the u.s. certainly is. we've seen u.s. drilling activity is off now by over 50%. to put context on that, when you look at the range of different basins in the united states, and the u.s. competes well on the cost curve. you see permian basin $60 a barrel to break even where others are closer to $70. what is interesting about that, that range of cost and supply, that is break-own cost/supply is probably about $10 a barrel better than most every other region in the world outside the opec gulf states. when you place those figures in the context of less than $40 wti and low $40 brent prices, you can see the disconnect in terms of break-even economics and where oil prices presently are.

>> can i ask about u.s. states? obviously, we think about the fact oil prices are now or gasoline prices for consumers in texas are low, but what about the state's economy and others doing this drilling? >> that is a nice question. it is traunched by state's economic activity. texas has been a very strong economy in terms of employment growth. what we are seeing our indications of moderation in that. when you move to states like north dakota and wyoming which are disproportionately energy related, you are seeing more acute pressure applied. in oklahoma, for instance, and new mexico secondarily, you are seeing some degree of subsiding. regional implications. when you look at the gas market and think about the east and pennsylvania and west virginia, these are areas we've seen a slowdown in activity. there are some implications there, too. it's regionalized to those states. >> if there's any positive from

the price of oil, it's that graphic we are looking at right now, states with oil or gas at the pump below $2 a barrel. we often talk about this as this tax refund for the consumer. the consumer doesn't feel great when there is a 10% decline in the stock market. how do these two forces work against each other? >> thank you. that is a great question in this context. i think when we look at the global landscape what do we have? we have generally a low interest rate environment across the globe. of course as mentioned earlier, china made some adjustments as of the last 24 hours. then you also look at the global commodity picture and most particularly the energy commodity picture. this holistically as far as the world is concerned, these are constructive things. these are helpful things broadly speaking in terms of economic activity. indeed, if china is experiencing some degree of acute economic weakness right now, given the fact they're a net consumer of

energy, coal, oil, gas, this will be helpful in minimizing the potential for a chinese hard landing. >> john, thank you. john gerdes from klr group. at 7:00 eastern, a cnbc special report, "markets in turmoil." we are monitoring the asian markets as they are trading and getting you ready for the next day here. market watchers starting to think the once unthinkable. fed chair janet yellen may have to change her course on rate hikes. some believe it's time for quantitative easing. how real a possibility this is next. >> still ahead, china is preparing to gear up. what's next for china? ♪ approaching medicare eligibility?

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. >> it would have been possible if demand dpram somewhere else. but today with the vix at 40, you have a different argument. today the only argument you have is, well, it's uncomfortable to be at zero. >> that was larry summers discussing rates here in the u.s. this morning on "squawk box."

ray dalio predicted the fed's next move would be to ease and not tighten. is the u.s. looking at qe-4? jeff cox wrote about this on cnbc.com and larry mcdonald. >> what are people saying? >> it's certainly a possibility. why is it a possibility? the fed unlike china has no options. china took three moves overnight to try to stem their slowdown. if something happens in the u.s., the fed doesn't have any other options except another round of qe. the market had been abuzz with this story, this published report last week how the fed had run out, did not have options to address a possible crisis. i wrote that story in 2012 about the fact they had the opportunity to begin to

normalize gradually. they chose not to do it. now they are in a position where are we in a crisis? maybe, maybe not. it's a tough case either way. if there is, if there is some way they need to allay the market fears, they don't have the tools now. >> do you think the fed holds off on raising here? >> the most important thing for people at home watching us right now is qe-4 doesn't have to happen. it may never happen. if it goes from 0% priced in to 40% priced in, there is a big, big market trade there. the big trade there in oil, big trade there in oil and commodities, for example. i think if you look at the landscape, the academics, the u.s. economists a year ago today, 80% of u.s. economists thought we would hike in march to june. if you look at the fed, they're typically academics.listen to p

that risk capital like mr. dalio or the fed fund futures, they are telling a very different story than the academic community. >> why do we have to necessarily jump right to the point of potential qe-4? aren't there other links in this chain if the fed wanted to back away? they could give softer forward guidance and say we have no plans this year. all those things move in that direction if the fed wanted to do that. >> it goes to another thing i reported on last week. a report, very interesting report from a high-ranking fed member. the vice chairman of the st. louis fed that said there is no evidence that qe or forward guidance had done anything to help out the economy. qe specifically had not created inflation that the fed had looked for. forward guidance had done nothing more according to this report than to confuse the market. what larry said is a great example. economists were betting on a march rate hike.

it looks ridiculous. almost ridiculous as some of the calls we saw today for a september rate hike that is not going to happen. if the market hates uncertainty, then the fed is going to end up being public enemy number one unless it figures out a much more definitive plan of attack. >> larry, quick last question on this. the other option is china perhaps does something and calls for them to do more, certainly growing. what would it take at this point for them to move in a big enough way it quells global markets? >> they've been consistently throwing $100 billion punches at a $5 trillion problem, so to speak. the one bazooka is a stimulus like 2009 that would go back to infrastructure. the problem is they have incredible amount of debt that's in their system. since lehman, there's close to $50 trillion new debt in the world. a lot of that is in emerging markets. they've been going back and forth behind the scenes.

they may have to pull that bazooka out to stem this problem. >> thank you. check out cnbc.com for jeff's piece and cnbc.com/the spark. up next, we go live to beijing for what the day may hold and if chinese is at economic crossroads. you are watching cnbc, first in business worldwide. it took serena williams years to master the two handed backhand. but only one shot to master the chase mobile app. technology designed for you. so you can easily master the way you bank. you totalled your brand new car. nobody's hurt,but there will still be pain.

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the recent crisis in the chinese economy and stock market hasn't sparked any votes in kochx from any circles. with the day set to begin in china let's head out to beijing and check in with eunice yun to find out what's in store today. >> thanks so much, kelly. monitoring social media you really get a sense that whatever the chinese government does is not going to be enough to really convince investors to have faith in the stock market. so the chinese central bank cut interest rates. this is the fifth time since november. and they also lowered the amount of money, the amount of cash that banks are required to have on hand by 50 basis points. that's going to put more liquidity in the overall economy. however, the online comments this morning have been quite

skeptical about the effectiveness of these measures. some of the comments have been talking about how the markets are probably going to pop immediately but then collapse. there's another investor who said that these measures are not fundamentally going to stabilize the stock market. you really see these comments are reflecting a general despondency here among retail investors. there has been a serious loss of confidence in the government's ability to handle and manage the stock market. and kelly, there's -- i know you love anecdotes. i just want to tell you one quick one. actually, because the housing market is picking up, my landlord is going to sell her apartment, and there's been a lot of foot traffic in our house. and the reason people are giving me for why they want to buy an apartment is because they say they don't want to invest in stocks anymore, they want to invest in a safe haven investment which is traditionally seen as property. >> so much in there, eunice, for everybody to think through. thank you so much this morning.

our eunice yoon in beijing. it's going to be a long day over there. let's bring in julianne tet, managing editor of the "financial times," and brian reynolds, new albion partners chief market strategist. you just heard from eunice. sounds like there's not a lot of faith in the stock market. people are even turning back to real estate. >> here's the great irony. one of the reasons why so many ordinary mom and mom investors in china have rushed into the stock market in the last year, borrowing heavily to buy stocks, is because they were losing faith in real estate. and you have to have a lot of pity right now for the ordinary chinese investor because where do they put their money when they can't actually believe in anything right now? >> what do you make of the policy response as well? does what we're seeing in the market reflect the depths of the severity of china's economy or -- you know, should they react more or less to it? >> here's the issue. i think one of the reasons@u.s. market is so volatile right now is that for the ordinary u.s. investor it's as hard to make sense of what's going on in the

chinese economy and political world today as it was to actually understand, say, subprime cdos back in 2007. it's another big area of mystery wrapped up in a conundrum inside an enigma. and if you look at what's happening right now, i mean, there are rumors circulating around beijing which we've just reported on the "financial times," that prime minister lee may be under pressure right now. there's questions about who's actually driving policy. i mean, this is a government that's just spent $400 billion propping up stock markets and currencies, apparently to no effect. so the unpredictability of the chinese situation is really what's worrying global markets. >> and on that note, brian, what do you think investors are demanding here as this -- especially looking at this sell-off today in the market. it looked like a relief rally on some of these policy moves in china, and that's totally evaporated. >> this is similar to october, where we had a panicky drop for the end of qe-3 and we had a bottoming process that took a few weeks. it's different because this is

because of china as opposed to the end of qe-3, but it's the same process. remember, we've had the bursting of a commodity bubble. i've been on with you for almost three years talking about the bursting of the commodity bubble and that impacts china greatly. so china's been easing policy since november. and i've written they're going to have to continue to ease for the next few years because of the bursting of commodity bubble. and that unnerves u.s. investors from time to time. but don't forget the biggest factor in the u.s. stock market has been our pensions putting money into credit. that generates buybacks. the buybacks take a pause during these panics but then they come roaring back and typically the stock market comes back a few months after these panics. >> we're out of time here. thank you so much. obviously much more to read from the "financial times" as we follow this too. brian reynolds, thank you, sir. coming right up we have final thoughts on this volatile market day. stay tuned.

welcome back. let's wrap up today on wall street with our panel now and "fast money's" melissa lee, who joins us here. mike, what's your take on what we've just witnessed? >> the market's really kind of surrendered the benefit of the doubt here. and i do think we're going to see if we get any kind of rally in china based on this morning's news. >> kayla?

>> first i'm going to be watching the special at 7:00 tonight. but then i think jackson hole kicking off tomorrow will be very important. if in fact the fed and this discussion around the rate hike is so important. what the chatter is out there. >> melissa, what about you? >> yeah, the damage today was worse, kelly, than i would say even the past three days. the reversals intraday in terms of some of the big sectors like xlv, xlf as well as some of the big stocks like apple and microsoft were stunning. so we'll see what the technical damage is with the technical analysts on "fast." >> straight over to you guys. >> thanks, kelly. cnbc's breaking coverage of the historic sell-off continues. i'm melissa lee. and if you're just joining us the last half hour of trading was chaotic. the dow cratering into the close, down 200 points at one point it was up as many as 400 points. that is the biggest refrlts since the financial crisis. the s&p 500 closing at the dead lows of the session, down 1%. at its highs it was up as much as 3%. the nasdaq giving up all its gains. it finished flat. does a close like this signal even more pain d