on the other side, we heard what u.s. auto sales are doing. the u.s. alone could capture the biggest share of their growth. so i really don't think it's a big issue right now. >> sure. kim, jerry, thanks so much. brian, i'll see you tonight at 5:00 on "fast." netflix down today. >> have a good day. we'll look forward to it. thank you. "closing bell" starts right now. >> welcome to the "closing bell," i'm kelly evans at the new york stock exchange. >> good afternoon. >> a big rally today, but it's fading here a little bit as we enter the final hour of trade. all the averages still up more than 1%. the dow up nearly 200 points. but at the highs of the session, it was closer to 228. and remember, the dow has still not recovered from the 470-point drop yesterday. we'll see whether the gains can hold. also ahead on the show, transports moving higher, as well, with american airlines. one of the standouts in the sector. we'll debate whether it's too late to get in on the stock.

that's coming up. >> and vladimir putin landing in china this week. former undersecretary of state will be here to discuss what the relationship means back here at home. and let's get right to it at the closing exchange today. alan valdez, and our own rick santelli, welcome to all of you. we're seeing, alan, a little bit of momentum coming out of this market. what needs to happen here for people to feel confidence these gains can persist. >> well, i still think we have to wait for the feds and later on in the month here to make a decision one way or another. otherwise i think you'll see this volatility down. up 200 today. off of good news. but tomorrow, well could have negative news and it goes right back down. >> what are you telling clients? >> we're telling clients that if they have a good financial plan. they have a place to take cash from. don't need to sell the equities and can make it through this volatility, relative lip unscathed. the worst thing to do is to change to become more

conservative during a market dip. wait and become more conservative, that's your nature. after things have already recovered. >> i'm sorry, i guess it depends how long you think this is going to go on for. implicit in what you're saying, we're kind of through it. >> well, i mean, the question is what your time horizon. if it is six months, you probably shouldn't have money in equities anyways if you're planning for retirement. if your time horizon between 5 and 15 years, it's hard to find a period where the market hasn't recovered. the market has never not recovered, right? every time there's been a correction whether it was 2001, we're going all the way back 100 years, the market comes back. if your horizon is long-term enough and you have a place to get cash from in the short-term, where you don't have to sell stocks at a loss, you're in good shape. there's some great things to be doing with this volatility. for instance, we've been harvesting client accounts. banking losses so that when we generate gains, we're able to offset those gains. >> i hear you, take your point.

i want to remind everybody -- quote, cash or better yet, near cash such as one or two near corporate bonds are my best idea of appropriate risks and reward investments. he's talking about how there might not be the return of your money enough to pay for college for health care, for retirement. he says, this is the global conundrum that we face. has he got it all wrong? >> yeah, i think he does. and he's a smart man, but inciting fear in people who can't afford to be fearful. so the reality is that either you're positive about the next, you know, the next ten years and you think that the fundamentals of growth, productivity, globalization, basically, people, you know, the animal spirits of capitalism still intact. or you believe we're going into a period of decline that really only a few countries in the world have seen. so the soviet union after the revolution in 1917. venezuela in 1950. and i don't believe this country or the world is going into a period of decline. >> yes.

and we should point out, of course, that bill gross is a fixed income guy. so fixed income thrives on a more pessimistic view. hey, rick, come in, join us from chicago here. how are things looking for you? >> well, listen, i have to address that last comment. with regard to animal spirits and capitalism, i don't know if that was jim or allen. but listen, and i don't mean to be political here, but it's been a long time since a socialist candidate has been running the numbers of bernie sanders. so i don't know. i think that we actually have to dig down deeper in your comment to be quite honest with you. there's aspects that shouldn't be tied to the fact that some of the issues out of pimco. the guy's had a long career. but i agree with the basic premise. we've had central bankers wall papering for seven years now. and maybe if we allowed it to heal correctly, we could've moved on. so deal and heal. but seven years later, i don't

know that anybody, including our guests would've thought we'd still be having the same conversations. and i'll be quite frank. i think four to five years from now, there's a good chance we're going to be talking about many of the same topics that we are right now. as far as interest rates, while we are on, we are getting close to 3% on a 30-year and 220 on a 10-year. curve's steepening a bit today. i continue to think in a three-week period with historic volatility to the downside in stocks, i'm amazed at lack of response. in the form of lower rates in the credit markets and i think that's very important and i totally agree with both guests you're not going to be able to handicap what's going on until we get, you know, two weeks from tomorrow with regard to the fed. >> so -- rick, you and i hold, we hold similar views, ask similar questions on the network. i guess the fundamental decision that people have to make is whether or not they will continue to successfully paper over the termites as you put it.

and it is conceivable that the system is so fragile they just keep doing what they're doing. and they just buy more assets if they need to. in which case, being long of equities is probably a pretty good place to be. >> can i respond to that? >> you go first. >> let me say one thing. when we have all of the biggest economies in the world. all holding hands in thelma and louise kind of -- if it doesn't work out, what economy's going to take over? india, south korea? i don't think so. >> yeah, let's look at the curve steepening. the curve steepening is in the back of better second quarter gdp numbers. i think what's happening is people are anticipating faster economic growth, especially in the u.s., over the next 3 to 5 years. that's resulting in higher future expected interest rates and probably a higher inflation expectations, as well.

i think there is an expectation that we're seeing a bit of a return to normalcy, and i think if the fed does raise his rates here in september, that will be another sign that we're returning to a period where we can sustain normal interest rates and positive accelerating growth. and i think that will be a positive the for the economy. >> i don't think so. isn't it just boon yields just moving up? we're at 80 basis points in boons. i'd be willing to wager if you see 1% in boons, you're going to see 240 in tens. >> rick brought up a good point. these problems have been worse for five years. they'll be with us another five years. >> one of the biggest pension funds out there. just reporting in the last hour or two. might move as a risk mitigation strate strategy. >> that's a big number. >> and if people are doing it. why shouldn't anybody -- is it because they have accesses to investments? in hindsight is that going to

look foolish, too? >> that could backfire. >> i think at the end of the day. this is the only place you're going to get growth. >> the stock market. >> yes, the stock market. >> we'll let you get back to it. thank you. >> rick, jim, as well. >> another story we're following is oil, lower, higher, settled higher after a steep decline in yesterday's session. >> it originally moved lower, of course after data this morning showed u.s. crude inventories rose more than expected. joining us for more now is alan from bull's eye options. how would you -- where are you now on the direction of oil after so much volatility over the last five sessions? >> well, volatility's opportunity, but if you look at the oil market, it's disconnected from reality here recently. we had extreme bouts. it was such an oversold and overloaded market to the short side, a bounce was inevitable. it did go straight up to $50

from 37 in a period of a week, which is unfounded 20% move in a very short period of time. but now it's come back half of that. found support at 43. so it's really a measure of halves here. if you look at the bigger move from $65 down to $37. it did bounce to that. that was the old breakdown area. if you look at january, march and july. 50 is what's needed to overcome. it's interesting to see this market action. and then fail and then bounce higher. that may be a positive sign if we can maintain above 40. >> okay, talking 40, talking 50, alan, but meanwhile one of the guys thinks it could be in the range for the next couple of years. how does a prediction like that square with you and what you're seeing in these markets?

>> you can lean on that $33 if you remember the 2008, you know, post crisis low. in crude oil. that in% annualage terms is far away but not that far in dollar terms. something to keep an eye on as far as a support level. but i think, we've been talking exhaustedly about the growth slowdown. it's not that we're not growing globally. it's the rate of growth has slowed down. we've been talking about this that's why we are where we are. i think we could see potential here based on the technical action in the crude oil market. it's interesting it's disconnected from the dollar. . it's really trying to change things out again. i would compare this to where the euro currency was about 3 to 6 months ago. nobody wanted to be long the euro. >> because the saudi king is

going to be meeting obama friday at the white house, a lot of people are going to be talking about the saudis at the end of the week. where are you now on the idea that maybe they will capitulate, they will go to opec and say, okay, we cut supply finally, provided we can get something out of the russians. where are you on that story that clearly moved the market? >> i don't think there is much of a power as they used to be. it's about the united states, and we saw this week that the united states was producing about 1 million less barrels than we thought we were. so, yes, we have a lot of supply, but, you know, i'm optimistic, and i think this is a bump in the road as far as the stock market goes. i think the economy is getting better. and i think low oil prices will cause greater demand. and this should be helpful in the long-term. >> good to see you, alan, have a great evening. thank you. >> thank you. >> with about 50 minutes to go into the close here, the dow holding on to a gain of about 188 points. it's been a much tighter trading

range today. the high's about 223, but again, we've drifted a little bit off that. we'll keep an eye on that for you. >> in the meantime, american airlines rising for a third consecutive session. is it too late now to buy the stock? we'll get a bull/bear case ahead. >> and vladimir putin spending time in china this week. we'll discuss whether it could be an issue for the united states with former undersecretary of state coming up.

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welcome back. as the markets attempt to rally after yesterday's steep declines, let's take a look at the sectors of the s&p 500. where we are seeing much more green on the screens today. tech is leading the way, up 1.5%. apple is the best performer today on the dow jones industrial average. we're also seeing strong participation from industrials, from consumer discretionary, even health care. those rate-sensitive utilities, simon, are the worst today. >> and financials is a telltale, as well. after yesterday's declines. in the meantime, a tale of two auto markets. sales are down in china, but clearly rising here in the united states. mary thompson takes a closer

look now at industry suppliers best positioned for essentially two-way action. >> well, as was all know, last month was a blockbuster month. they rose to their highest seasonally adjusted annual rate in ten years. in china, though, it's been a different story. sales in the world's largest car market dropping 6.6% in july. china's slowing growth a cause for concern among investors. but in an analyst note, jpmorgan points out that the average supplier gets only 12% of the sales from china and 41% from the u.s. among those with greater exposure to the u.s. markets, the maker of drive trains, canada's magna international and maker of chassises and interiors, and gen therm which makes heat seaters for the industry. in a research note last month, the u.s. has become the best region in the world for production. to serve a growing domestic and export market.

all of this pointing to steady demand. to help build their cars and trucks. back to you. >> mary, the key thing about this, though, nobody really expected this a few years back that china would be falling, the u.s. would be rallying so sharply. >> it was -- it's what's been interesting to note, kelly is that the peak of chinese sales was basically the recent bottom of u.s. sales. and certainly, it is quite a surprise to see the decline we've seen in china sales, but more importantly, here in the u.s., what we're expecting is continued growth. steady growth, maybe not spectacular, there continues to be a strong replacement cycle that is helping to drive this in large part. something a little bit unexpected as you pointed out. but certainly a benefit for some of these u.s.-focused suppliers. >> yeah, actually, a lot of people starting to talk about a boon in this space. for more on that and what we're calling mcdealerships, check out

cnbc.com/thespark. another big story, shares of american airlines climbing this week. right now, the stock is trading substantially higher, up 4% on the session? >> it is, yep. is there still time to get in on the action? it was one of the rare green spots yesterday. joining us today is jim coridor. welcome to you both. american has done well. we've had a number of people saying they like it here on the network lately. you still think it has room to run? >> sure, it's been strong lately. look at it, year-to-date, it's down 35% off a 52-week high. and if we look in terms of valuations, it's trading under seven times forward earnings, ebitda below four times. and by our estimates, it's trading at a 40% valuation discount to the peers. we think it's a strong buy here. >> john, you're not so sure, why? >> no, american airlines has been quite range bound since early may, it's been trading

between 39 and $44. and you look in that same time period. crude sold off significantly in the beginning of july, moving from the low 50s to low 40s. at the same time, aal failed to break out of that range. so, you know, at this time, there's -- there's a very weak correlation between the price of crude and this particular airline stock. so i don't see any reason for it to reverse the sideways to bearish trend we're currently seeing. >> hey, jim, what about all of the discussion about overcapacity, which plagued the sector earlier in the year? >> certainly an issue. but that was a problem in q-2, as well. and they put up a record profit number of $1.9 billion. oil prices were higher than they are now. we expect q-3 numbers to be good. what are they doing with the earnings? buy back stock, pay down debt and repair the balance sheet. and that's making it a hospitable spot.

>> if it not oil prices that america's most sensitive to, what is it? >> five weeks ago you saw it sell off 7% on earnings. with oil much higher. so, you know, i think tepid demand. i just don't see this stock reversing in the near term. i don't see any catalyst to move us higher. >> what about the other airlines within the sector that you might cover? you might have looked at. >> a lead analyst in in the area, upgrading not just american but delta. how are you breaking down the competitors? >> yeah, we have buys and strong buys across the entire space. we think that oil prices are the much more prevalent catalyst for the group rather than price pressure. and we think that the stocks are going to see some improvement on capacity reductions in the fall. and we welcome anything that draws more attention to the space and these stocks are performing well in terms of

financial operations, but obviously not so much in terms of share price performance. >> and real quick, john, would you avoid the whole space or are there any you like? >> no, i would avoid the space in general. i think the correlation between oil is less than it used to be. today, we used two-track order flow and seen big money use this as a selling opportunity in aal. >> two starkly different views from you, gentlemen. that's jim corridor. thank you so much this afternoon. >> take care. >> 39 minutes to trade. we're still holding firm, 168 points on the dow this wednesday. the obama administration has been quiet on china's recent market turmoil. former undersecretary of state joins us next. also ahead on the show, gold core's ceo will join us to discuss why he thinks we could see more mergers and acquisitions in the mining industry and precious metals in particular.

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apple rising for the first time this week. no particular headlines moving the stock today. but, of course, the context is that since say china devalued the currency about three weeks ago, apple stock where we're going with china and the market turmoil is still down over 7%. >> china's economic woes are

impacting u.s. markets lately. the white house has been quiet during all of this. should the u.s. be more vocal and involved? joining us now in an interview with his take is bob hormatz. a pleasure to have you. welcome. >> great to be with you. what more if any more you think -- between obama and the leader, how does this set the stage for that? >> well, i think the u.s. is correct in not voicing its opinion on what is after all a largely internal issue in china. and that is how china deals with the the e coastline in growth. the chinese will -- does not welcome probably -- it might have been a reasonable conversation about, you know,

financial market liberalization, opening up, you know, former human rights abuses or ongoing ones, et cetera. suddenly, now, a lot of this behavior seems to be much more negative. the chinese have hauled in however many people at this point, made journalists go on air to apologize for contributing to the downturn. reports about how they're looking to figure out some of the involvement they might have had and contributed to the market declines. there were reports about now ahead of this military strength. the chinese have ships in the sea by alaska that tomorrow we might see the carrier killer missil missiles. all of this is a troubling backdrop for discussions between these two countries. >> well, i think the president will clearly say a number of things about the very subjects that you've raised in private. probably won't say them in public, the first visit as a

state visitor that xi jing ping will pay to the united states. i think in private, the president clearly will make a number of points. there are a number of things that can come out of this summit, however. one of which is to have a much more regular dialogue between chinese and american high-level officials on a whole set of issues. because what happens in china clearly has an impact on u.s. and the rest of the world. of course, what happens in the u.s. has an impact on china. but there will be issues that need to be discussed. the united states will want to have a better idea of what china's planning to do internally. i think there'll be issues that relate to the exchange rate, jack lew has already spoken about that. we need to have a stable transition in china. the chinese want a stable transition. the u.s. will be certainly interested in the plans that

president xi jing ping has in doing that. specifically, shifting to an investment-led growth economy to one that is more consumer or services led. all of these things are going to be important. they need to have a dialogue and figure out how to deal together in the group of 20, which they did in 2008. because this is a worldwide problem and needs to be addressed with other countries, as well. >> just talking more short-term. are you able to give us color on the importance of the military parade on thursday in china? and i think beijing, for which so many issues apparently had to be cleared. and the suggestion that once they got past that, they could be much more with the stock market. buys up the stock and cuts the losses, if not, pushes it positive. and there's a concern, or at least an observation that may not happen after the parade. what do you think? >> well, it's hard to speculate. the parade, as you know, is to

celebrate a very strongly nationalistic occasion. and therefore, i think there will be a period of time afterwards when things will quiet down a little bit in beijing. but i do think the chinese understand that they need to restore some measure of confidence internally in the stock market. and very particularly in the economy. i think they're going to be doing a lot more on infrastructure. i think they'll be doing a number of things that will try to avoid a deterioration in deployment. the key thing to remember, the stock market is really, for a relatively small number of people. it's still up over what it was. the key for china will be to sustain the rate of growth of employment. that's where the social and the economic issues are at their heart. and it's difficult to do when you're making the kind of transition that the chinese government is now making. >> you know, we've mentioned that the u.s. is not going to be attending, obviously, this parade, these commemorations in china tomorrow.

but putin is. what does that tell you, bob? >> well, that tells you a fair amount. and that is that the russians can't do very much to improve their economic ties or their political ties with western europe because of their actions in ukraine. they're falling back on strengthening their economic ties and their political ties with china. that's really their only major ally. the chinese for their part see russia as an opportunity to supply more energy and as a market for chinese products. so the two get along, it's sort of a marriage of convenience. but we shouldn't exaggerate it. the chinese are much more dependent on western markets than they are on russia. and even one of the big russian pipelines to bring energy into northern china, which was announced several months ago with a lot of fanfare. that's been postponed. they'll work together and prior to xi jing ping coming here, he wants to demonstrate he has an ally in moscow. but he will be demonstrating

when he comes here the importance of the relationship with the united states. there's still a lot of issues. but the two of them realize that the chinese economy and the american economy are very interdependent. and they're going to have to work together to deal with a current set of issues and they're going to have to work together to deal with global issues. they did it in 2008, they need to do it, again, in their common interests. even if they don't get along or they have disagreements on certain geopolitical issues on the economic side, a substantial measure of cooperation is in the common interest. they won't be lectured by us on what to do internally just as we won't be by them. but they'll understand -- >> right. >> they'll understand they need some measure of cooperation with us. >> good to have your perspective on all of this. >> let's get a news update now with sue herera. >> a suicide bomber and subsequent car bomb killing at least 20 at a mosque in yemen's

capital. the bomber blew himself up inside the mosque during the evening car to prayers. the car bomb exploded outside the entrance. israeli prime minister benjamin netanyahu will continue to lobby u.s. lawmakers to vote against the iran nuclear agreement. this comes despite the 34 senators who support the deal. that support will enable president obama to veto and sustain any congressional disapproval. in a stunning comeback, rebecca brooks will return to her old job of running rupert murdoch's british newspapers. this to breathe new life into the group. brooks was cleared last year of orchestrating a criminal campaign that damaged the british establishment. nestle is changing the way it makes its kitkat bars. pledging to only use sustain bli sourced cocoa. that means kitkats will be

without child laborers. break me off a piece of that kitkat bar. >> another great british export, by the way. >> absolutely. one of the favorites here in the newsroom, simon. >> apart from myself, obviously. >> no, you're one of the most famous and well-liked british exports. >> thank you. >> you're numero uno. you've got to wonder if kitkat's doing it, are others going to have to follow? and how much -- >> they're not easing child labor -- >> and how much of that supply currently exists? >> nothing's sacred, is it? >> 30 minutes to go in the session. the markets are holding up pretty well, given they were coming down a little bit. but the dow below 200-point gain. the s&p higher by 1.2%. the nasdaq up 1.7% on the session or 77 points. next on the program, a top trader will tell us what he's watching as we roll through

these crucial final minutes of the trading day. and gold corp. ceo explaining why we may see a spike across the mining space. stay with us. ♪ isn't it beautiful when things just come together? build a beautiful website with squarespace.

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24 minutes to trade, and up 205 points on the dow jones industrial average. with us from princeton securities. a different day today? >> much different. emotionally for lack of a better term, in my gut as a trader. yesterday, i was willing to give up my long-term belief. today i've got to see a little bit better commitment. there's commitment to buying stocks, not just for a trade, but for investing. that's part in parcel of the exploratio exploration. so, i think, united states is being viewed, again, as a place where you should be investing. >> and china, of course, is now closed for several sessions. it's a bit of a god send in many senses. >> it is. and again, i continue to pound the table on the idea that the market is trading on the economics of china, not the stock market of china. >> yes. >> and that is what needs to be priced into a marketplace. and as we get more and more real life examples out of china,

what's exactly happening, it'll give us the stability to continue to move on in price justifiably, which, again, goes to my theory if you're investing in stocks, not markets, you should be investing in the u.s. centric stocks, like the russell 2000. >> and we'll talk about that later in the program. thank you, ben willis from princeton. >> gold back up after the market turmoil. but still down for the year. could this create a positive environment for more deals across the space? that's what gold corp. president is saying. tough times for gold. welcome to you. >> well, thank you very much for having me on. >> and tell us a little bit about the dynamic between gold prices and making a business out of mining the material itself. the prices have been stable. the uz that create conditions for consolidation? >> yeah, it's been an interesting period. the price has traded within a pretty tight range.

i think people are starting to get used to this price range. and it starts to create as it always will. in terms of have and have nots. lowering prices, maintaining margins and those that are struggling a little bit more. that's the kind of environment that generally leads to some level of consolidation. >> and i assume you guys think you're one of the haves. does that mean you'll have a go at some of your smaller competitors? >> well, you know, we've been pretty active on the m&a front over the last several years. and really are just now completing the construction of projects that we built along the way. we've got a lot to chew on right now. but we're doing quite well. our costs are coming down, our production's going up. we are through our big capital spend. so, absolutely. we'll have a look at what's out

there. and if there's things that can add long-term value for our shareholders, we've always been willing to go out and do deals. >> as we take a quick look at the gold price, i believe it's still in about the 1200 an ounce range. what is your break even. what does the price need to be for you guys to be profitable? >> last quarter we reported costs at about $840 an ounce. so we had strong cash margins at this point. that doesn't include tax and interest. you bring that up and you're somewhere in the 900s. so we still have, we're generating free cash flow, we did last quarter. and we expect to for the year. even at these lower prices. but -- >> yeah. >> it's probably worth saying that i think that the gold price has hung in very well during all this volatility. >> yeah. >> and it has been acting, again, as the kind of safe haven we're used to seeing. >> you mentioned the cash. that does help explain the dividend of about 1.7%. i see on the stock.

just the other day, yesterday maybe, conocophillips announced layoffs. it's keeping its dividend, it's going to continue to fund that. if the choice, you know, if you had to make the choice, do you pick the dividend? or do you pick layoffs? >> well, we reduced our dividend this year. layoffs are part of our overall cost containment issues that we deal with at all of our sites. and we've been pretty good at not staffing up too much so that we have to lay people off. we found other ways to create value and reduce costs, and it's been effective for us. >> thank you, charles, for joining us this afternoon. we'll be watching. the ceo of goldcorp. >> 19 minutes to trade down here on the floor. we're up 211 points on the dow. the outgoing sec commissioner is not leaving the regulatory commission quietly. he'll sound off later in the

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we have spent time recently talking about the market on closed orders. they're orders to buy or sell stocks at the closing price. >> some market watchers wonder if there is any way these orders can indicate how the markets finish up the session. bob pisani is with two guests who are trying to get answers. bob, take it away. >> and the important thing is, is it predictive of anything. these markets on close orders. come on in here from alpha moda. you'd been working for a while to develop analytics and apply it to all of this information on the market on close orders. what are you doing here -- >> we've been looking at it for several years now and found it partially predictive. >> i want to show here a little situation they have set up here. this is the actual market on closed imbalances they're seeing here.

you have a buy-in balance, $570 million. $766 million to sell. the difference is imbalance of about $19 million. what does this tell you? >> it's telling me there's a fight between the bull and the bears. the net imbalance itself is pretty neutral. >> it's pretty neutral. >> when would this number get big? and when would you get concerned? what's a large number? at that point, the predictability. >> and we saw that several times. >> we did. >> last week we saw it. when the market was down. >> you had been applying it to the twitterverse. there are hundreds of millions of comments every day on the stock market. what are you doing there and finding?

>> almost 400 million tweets. if you remember watson from "jeopardy," watson is doing a whole lot more now analyzing tweets to predict the sentiment of the market. >> you have analyzed. watson today has analyzed 381 million tweets. of that, watson believes 250 million are positive. 129 million negative. there's a net positive here, 67%. now, what does this tell us? is this indicative of anything? >> it's simple. what it's telling me is despite all the volatility over the last ten days, sentiment is strong. >> it's strong? >> that's what it's telling me? >> people are trying to buy into the close. retail individuals who are commenting? >> it could be anybody. it's the twittersphere. >> bottom line is positive for the close for the last couple of days indicating retail people are buying. it's not a science, it's still an art. thank you very much. >> thanks very much. i'm going to be watching this.

playing around with this, guys in the next few weeks to see how predictive all this is. >> thank you and thank you to your guest. 12 minutes to go into the close. let's see, where did they put the markets? there they are. dow's up 222 points. we are close to session highs, 1.4%. s&p similar gains. nasdaq with a strong day. now up 85 points. >> coming up, why small caps could be a better bet from the large cap stocks. you're watching cnbc first in business worldwide. an making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade.

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welcome back. there's a look at the dow 30. in fact, pretty much green across the board. home depot doing well. two names in the red as we speak. coke just barely. chevron down by .1%. >> take a look at the russell 2000 small cap index. since the volatility began on august 21st. small caps are only down 3% compared to the s&p 500, which is down 5%. i'd love to know what the

year-to-date chart on that looks like, guys. if you can tell us where we were coming from there. david pell joins us to explain why small caps look so attractive. you'd have to be living in a cardboard box in the garden not to realize that, surely. >> right. well, you know, over the long history of the stock market, small caps outperform large caps. because they're the next big companies. the next googles, the next pfizers. and we've had a period where large caps have outperformed due to qe. forced everybody's informsing into yields. and because of the global slowdown, we're experiencing, they're more isolated and protected because the domestic economy in the u.s. is pretty good. >> thank you very much for the full-year chart. my suspicion was that the russell 2000 had corrected in advance of its happening. and they were coming from a lower base. that's not true. thank you very much for that.

that's the bigger picture. they're isolated from a dollar effect. they don't export to china. that's why in theory they should do well. >> the u.s. consumer has more purchasing power with oil and gasoline, lower. >> you're going to go down that blind alley. >> hey, you know. >> in theory they should do, though. in practice, they're not. they're spending it presumably on higher rents and health care. it's not showing up in consumer spending as we'd hope, has it? >> part of it has. part of it is in savings and investment. and when you look at cpi, this has been a crazy number. but the headline cpi is down. there's no indication it's going to be up 2%. it's going to be up 0 to 1. as long as this is the case, consumers with wages that having grown a lot will still feel a little better than they were

before because all the prices are down. >> it is all relative. david, thank you. still a fan of small caps. appreciate it. >> up next on the program, we're coming right back with the closing countdown. >> then after the bell, unicorns ma i be in trouble. a top silicon valley investor weighs in on how market volatility is impacting start-ups. keep it here, we're back in two. ♪ ♪ 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. in the us, three in ten college students drop out. but how can you spot who's at risk? the one who lives far from campus?

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wow. this is getting impressive. 263 points on the dow as we rally into the close. this is a chart of where we are through the corrections. since more or less the beginning of august. we're down 7.5% on the s&p. this feels like the first normal day that we've had for a considerable amount of time. let's bring in bob pisani. and by that, i mean, no huge rally in either direction. just a sustained, normal day. >> right, we opened on the up side and stayed on the up side. and you're right about the volume. this is almost a normal volume day. on the floor, they're doing 750 million shares, on a typical day on the floor, they'll do about 700 million shares. we'll end up slightly higher than that. but compared to the volatility we had, you're right, this is a fairly normal day. the intraday volatility also fairly small. it moved in a narrow range.

it's elevated, but below 30 right now. sounds a little more normal. i think the problem is giving the volatility, we're going to need a lot of days like this for traders to feel we're going back to normal. we're not there yet. >> so these waves of volatility could hit us again. just because you've got one day, it's okay. >> and very importantly, we didn't see waves of sell orders. we just did an explainer about that. with people who watch this very carefully. we didn't see big waves. even though we had a down day yesterday, there was concern we might have today. i think it's important that the beige book numbers came out. and the way i read the beige book somewhat bullish on the u.s. economy. i was surprised, there was a lot of emphasis on how things were notably improving. and i think it's clearly implied a september rate hike was not off the table. and i think the jobs report on friday can be very critical right now. that a really strong number, i mean, over 220 is the consensus, 280, 290, a really strong number, i think will tilt it in favor of it.

a really weak number might pull it off. i think friday's number is very, very important. >> in the meantime, there was a note that stood out for me. who was suggesting on the movement of one of the nonvoting fomc, potentially they could hike in or gain enough support to hike in september, provided they could hold a communications strategy. but says this is it for a long time. >> this is the one and done. >> that might be the trade off. >> the problem is, how can she communicate that we are essentially ready to sit and watch the market's reaction? >> because if they bring all the dots down and go, look, look at the dots. that's our considered view. then they would potentially be able to convince the market. i don't know whether that's true, or not. >> i think there's going to be a real problem. i think she'll have -- i think that's one argument where it's unlikely to do that. and she wants a unanimity. it's a very touchy thing. jobs report now becomes very, very important. on friday.

>> thank you very much for that. bob pisani, closing up 277 points from the dow. "closing bell" continues now on cnbc with kelly evans. >> thank you, simon. welcome to the "closing bell," everybody, i'm kelly evans and a gain turned into a rally, a sharp rally in the final moments a the the bell. the dow going out, with a gain of 1.8%, 294 points with just about the s&p adding 35 points. the nasdaq having a 2.5% gain today. pretty impressive. and we showed you earlier, there were very few names on the dow, if any, that actually ended up in the red. the 10-year yield we're showing you, an interesting one.

the sector that was weak was utilities, interest rates creeping higher, that ten-year note. 2.19%. and finally, a look at the euro. it's hanging in there at about $1.12. but it has been moving higher over the last couple of months. trying to find the trend in the u.s. dollar will be a key one for markets here. we have the european central bank meeting tomorrow and, perhaps, here in markets today in stock markets just a sigh of relief that china's equity markets will be closed for the next couple of days as it focuses attention on the world war ii commemorations that are going to take place. we've got full coverage of this market comeback for you and bertha coombs up at the nasdaq. >> take a look at the s&p. started up and stayed up, facebook out at 2:00, we saw oil rally in the middle of the day. that was a big factor. tech, industrials, broad rally. 2-1 advancing to declining stocks, everything up 2%. oil billed the crude inventories

and early on, that was negative. and we went positive in oil and stocks like exxon mobil. and that was a major factor in the rally. there's exxon for you. note the vix here below 30, narrow trading range. we're going to need days like this to get below 20 before any traders are convinced this volatility has suddenly stopped. we're moving in that direction, but not there yet. kelly? >> bob, that's a point, bear is that. and that nasdaq, it turned into one of the stronger sessions up 2.5%. >> it did turn into one of the stronger sessions, and we've also seen the nasdaq here looks like to me go positive year-to-date. a big reason why is apple. apple today, although not on as much volume as we have seen over these last volatile days. today, really closing up strongly and helping to lead this move up up quite a bit of point impact to the upside. and you take a look at the stocks that have been leading up until the last few sessions when

we started seeing this big selloff. the so-called fang stocks. facebook, amazon, netflix and google. all of them also moving up sharply today. still in correction territory. but netflix, sitting out that party today. still very close near bear market levels and today, hitting a low just above $100. a six-week low there, we'll see if netflix can move out of that negative momentum. but for now, with so many stories about so many competitors, whether apple might want to get into original content or now hulu with a new commercial-free streaming services that seems to have that sentiment on netflix continuing to be negative. back to you. >> even as they're launching in japan, so true. thank you. our bertha coombs. joining us now is carol roth and our own kayla tausche. and "fast money" trader steve grasso joins us from off the floor. that was a sharp run-up right into the close. are you hearing anything about it? >> well, i think you guys

touched on it. you know, a lot of the different things. the underbought names are probably being bought or cove d covered. because whenever you see the market spike higher, what do people do? start to short cover. china closed the next two days. without them, where's the lid on the market. >> the strongest sector today was tech. is that significant? >> i don't know, you see apple above 110. a lot of people using this as an excuse to buy a name. they might think could go higher. that's why you're seeing apple up 3%, it's the main driver of the nasdaq. you and i were talking about this before the show. and you said people might actually take the next couple of days with an expectation of stability out of china. actually to sell apple, sell some of the stronger names we haven't had an opportunity to sell. >> that's the way to look at this marketplace. do you sell these bounces? or do you buy into this rally? and i don't think anyone, you can't tell me that any viewer out there feels confident that things have changed. considerably in the last couple of days. i don't think they're buying to get long, they're buying to

cover. i think next week due for another round of selling. >> we have known seen the tenth triple move for the dow in 11 sessions. we're talking about the first time we've seen, actually, 10 out of 11 triple digit moves since june 2013. what's significant about that, another period during that taper tantrum, a lot of the investors trying to figure out which directions things were going to go. >> i think the answer to steve's question is are people buying or selling? and the answer is, yes. it's one of the most loved, most hated names. and i feel the same way about the market. the market in many cases, buying opportunity in many cases, a selling opportunity. and i think there are too many questions that remain unanswered between oil, between the strong dollar, you know, the effect of china on q-3 earnings when we finish out this quarter. i just think there are too many questions unanswered. i don't see this volatility is going to stop any time before we get out of this quarter. >> couple of interesting things to digest today, as well. we know that the level of

bullishness among the community dropped to the lowest since march of 2009. if you're looking for a clear, contrarian signal, steve, this would be one. >> but what we didn't bring up, though, was the fed. with all of this dialogue, we haven't brought up the fed. the fed, back is so against the wall at this point, i don't think they can raise rates. the spread between -- i've said it on "fast money." i've said it on your show. the spread between the ten-year and the fed funds rate is so collapsed that historically, there's 350 basis points of slack between the two. we don't have nearly that right now. why is that important? inverted yield curve. it's recession. they have the ability to push us into one. >> well, that's certainly, listen, the tightening of monetary policy is something that's been going on the question is, can the economy handle it. interest rates looking to move up a little bit. some of the financials we're participating. you have to take it into

context. >> i honestly don't think it matters. i certainly don't think the fed in moving rates is enjoying to affect the economy at all. it's the market perception and with the market perception ends up having the effect on the economy when consumers see the market reacting and then they pull back on the spending. and i think it's kind of like, you said, their backs are against the wall. not because the actual rate hike wouldn't move the economy, but all of these sort of side shows that are going on around it that end up having the effect. >> i don't know, you had mortgage applications, up 11%. calling that the first conclusive evidence that the consumer or the main street investor, the main street participant in this market is actually viewing the brief dip in rates as a good thing. pretty positive across the board, upticks in retail. >> and wage pressure. >> wage pressures, as well. >> i think the problem, though, is when you look at it on the united states basis, everyone sits there and says the fed has to get to a more normalized state. when you look at it, the

environment of the global economy, which the fed is doing, maybe they shouldn't, but they are doing, then you say, how can they raise rates because they're worried about the contagion. >> let me pivot. it's kind of related to all of this. bill gross' latest piece basically says he thinks cash and near cash investments are the best to be. there wasn't the kind of return on investment. this is pretty scary stuff, steve. >> it is scary. we were also dialoguing about this, as well. when you look at what is your protection plan, where are you going to get the yield from? i've spoken about utilities. but it doesn't matter. every stock is going to go down if china moves lower or the overall market moves lower. you're talking about performance in a relative basis. >> and also the everyday consumer and the person who is in that 401(k). and i think a lot of times when we look at these averages, it doesn't really tell the story on what's going on on main street. if we were to look at medians, it would probably be very different story than averages because there are a lot of consumers who are at the higher

or upper levels doing a lot better than the ones in the middle. >> is the stock market broken? i can't read a letter from someone like gross and think to myself, if he's right, that has to defy the entire history of the stock market performance. >> but, kelly, it's completely decoupled from what's going on with the economy. and the fed is entirely to blame for that. all of the quantitative easing we've had. all the artificially depressed interest rates. it has given these companies a pass, it has juiced up their valuations. it has not helped the average americans' wage. it has not made companies invest in capital and hiring and in the future. and that is where we're getting, i think the schizophrenia from is because the market is not reflective of what's going on in the u.s. economy on a broad basis. >> some of that gap might have closed here a little bit. the one thing you're starting to see is coming out of the woodworks here, the buy calls on some of the names people are saying are overvalued. the market itself, not overvalued as much as it has been. listen, we're about to come into earnings season. >> right. >> if there's anything to be said for what we're living

through right now, maybe it's blowing some of the froth out of the market. >> absolutely. and i think there was an opportunity and will probably be several opportunities to deploy capital on a selective basis. we've talked about things in the past, like a disney. >> if we start to see, to your point, if we start to see earnings come in or be crimped by this. that's not in this market right now. that's another 10% to the downside. right now, it's china fears. it's fed fears. there's a bunch of fears. the one fear that's not in there are u.s. company earnings. >> the one thing we will get before we actually get earnings season is conference season. there's a slew of conferences in the two weeks after labor day where executives are not yet in quiet periods. that serves as priming the market for what we should expect. how the global volatility is affecting companies across every single sector. >> we have a pair of earnings alerts. dominic, what can you tell us? >> start off with planet fitness

shares its first ever earnings report as a public company. the shares up by 2.5% in the afterhours. light volume, about 9,700 shares worth of traded. this after the company reports earnings per share of 13 cents. that beats the average analyst estimate of 12 cents a share. revenues slightly better, $79 million. analysts on average looking for $77 million. and again, interesting, trying to find comparables here. but first ever as a reported company. shares reacting positively. remember, a stock that traded, or at least went public at $16 a share. it's trading above that price right now. also five below, the discount off price retail chain, those shares are down big, about 10% on 212 shares worth of volume. this after the company reported a 13 cent per share earnings number. that matched analyst estimates. revenues coming in slightly light. $182 million on average. analysts were looking for $185 million.

also, comp store sales, a bit of a disappointment here. those comp store sales up 3%. analysts were looking up 4.5%. they also forecasted for a current quarter earnings and sales that were below some analyst estimates. so, again, the stock move here, pretty sharp to the downside. again, the last check here, five below down about 10% on 220,000 shares, kelly, worth of volume. back over to you guys. >> before we let you go, any read through on back to school season here? >> i don't know if there's any read through other than the fact that these swings are huge at this point. there's tremendous volatility in the market. if you don't have the stomach for them. you can't play these names ahead of earnings. take some money off the table. i think volatility is the key. and if you don't really want to be there playing it, you've got to get out. >> we'll let you get out. thanks for joining us. appreciate it. catch more of grasso and the rest of the crew on "fast money" at 5:00 today. now he's going to tell us what he thinks is going to happen to oil. don't miss that. with stocks off all-time

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welcome back. the recent market selloff has certainly pushed up stock dividend yields, but probably for the wrong reason. going to break down stocks, now yielding more than a ten-year treasury. >> well, what we're going to do is try to alleviate some of those risks here by looking at other factors, as well. what we did was take the s&p 500 and take a look at which stocks here are within about 10%, trading at or near within 10% of their recent 52-week highs. those stocks that have held up relatively well given the current market meleay may melee become high. 100 stocks around here fit the bill there. within 10% of the 52-week highs. if you take the stocks and look for which ones trading below an 18 price to earnings ratio, that's about where the current

s&p 500 is. these are the ones trading below that average level here, 17 companies, so 17, only five stocks trade with a dividend yield greater than 2.18%. we chose that because that's about where ten-year treasury notes are yielding right now. these stocks will pay you more than ten-year treasury notes yet are holding up well. these are the five names that came out of our screen here. holding steady in this turmoil. you've got cincinnati corporation yielding 3%. north of 3% yield, swem. as well. lockheed martin, yielding more than the ten-year treasury note. and then a couple of other insurance names. progressive, probably one you know about, a lot of popular advertising. elsewhere in the markets here. and xl corporation, xl group here. all of these stocks carry yields that are bigger than the ten-year treasury note. and are within at least within

about 10% of their current or just mostly current 52-week highs. so, again, if you're looking for stocks, some traders, some investors are trying to find factors to put on their shopping list. and combining them. this one combines the value side with the dividend yield side. back over to you. >> thank you, dominic. while the yields may be high. the stocks may not be great investments. kevin o'leary is a big fan of dividend stocks, we know that. but eric is not so convinced. eric, let me begin with you because we've heard a lot of cases for dividend names here. why would you stay away? >> well, i think there are a lot of reasons. i think it says fundamentally you've got bad management. you put it into acquisitions, put it into organic growth. you certainly don't pay it out. and there's another argument that says it's safer, safer in a market. but principal goes down when the stocks go down.

it's not necessarily safer. yo uh can get wiped out. >> kevin? >> okay. so that's an interesting point of view. and that would've led you right into yahoo at $240 a share. lots of acquisitions, never any capital paid back to shareholders. i would clarify it as idiot management and not any one specific one. but that is a good example of why dividend's discipline management teams force them to focus on the only thing that matters in investing, which is free cash flow. so by providing some of it back to shareholders who de-mystify and derisk the investment. >> i think he's totally wrong here. and the reason he's wrong, is that a good leader, a smart leader, the right leader, the right choice can make it grow. it can make it grow organically. it can make it grow through acquisition. suggesting one case where perhaps the leader wasn't that good. there are many cases where they are. and that's where kevin isn't getting it. >> well, i look at it this way. and we can agree on one thing.

over the last 40 years across all sectors over a multiple decade period. if you say i'm a long-term investor and don't want to guess anymore which side of the fence to be on, you would go to dividends. if you only owned the s&p 500, you'd have 22% less volatility than you'd received by owning the entire market. >> the corporate finance banker side of me says absolutely hate dividends. i like where your buying back your stock if you think it's being undervalued. in today's market, i think that dividend plays make a lot of sense. i think the energy names can get -- >> dicey. >> dicey here, especially. since we don't know if they'll be able to sustain the dividends. if you have a nice basket of dividend stocks, i think it makes sense to add that as part

of the portfolio strategy. >> well, i just want to launch off of a point that carol just made. in this type of market, there's a lot of risk associated in the market. companies that operate the most efficiently. but is there something wrong with the headline picture when you see a company like conocophillips saying we're going to raise our dividend and then layoff 10% of the global workforce. >> the best way to look at dividends is not every company is worth of owning. if their business model is falling apart, you don't want to own that. you don't want to own anything that's accruing sales. i argue that there's tests on the balance sheet such as use of assets. turnover assets, productivity, free cash flow, reduction of leverage, that's what i look at. dividend paying stocks and in the market, i can find 142 of them. and that's why i created ousa. >> should it be doing better in this environment then? >> it has done exactly what i

wanted it to for me. 20% less volatility with a dividend yield 50% higher than the s&p. i'm happy putting my trust money into that. dividends are the only way, kelly, thank goodness you've met me. >> thank you for being here. sorry we lost eric there. but you see the contours of this debate. we'll leave it there. kevin o'leary this afternoon. up next, jack lew weighing in on the state of the market and the dmi. plus, can intel's new chip help save pcs? that's later on the "closing bell."

welcome back. today some of the dow's biggest gainers. including apple up 4.3%, microsoft adding 6.7%. we talked about those mortgage application numbers. and general electric, too, having a pretty nice session. time now for a cnbc news update. >> here's what's happening at this hour, the pentagon is keeping an eye on five chinese ships operating in the bering sea off the coast of alaska. it's the first time the military has seen the kind of activity in the area. the ships do not appear to be threatening. republican presidential candidate scott walker campaigning in dallas. creted customers at a soda fountain and sipped a shake when it was offered up. later, he repeated a vow he

will, quote, wreak havoc, end quote, if he's elected president. it will be the chair the pope sits in to deliver his mass on september 25th. a building in london has been named the worst building of the year. hmm. among other flaws, its windows create a beam of sunlight strong enough to melt a car bumper. fancy that. that's your cnbc news update this hour. i don't know, doesn't look all that bad to me. >> was that the -- the beams would be so strong, they would melt the interior of vehicles. >> i'm not sure, kel if it is, but design magazine certainly seems to think it is because, you know, that doesn't look that bad. maybe it's the curvature. >> maybe we should go back to concrete and avoid this. >> there we go. >> thank you. >> stocks staging a comeback

today. but what does jack lew think of this volatility? steve liesman with the hiblgts. steve? >> understands pre-amps and amps. our steve leaseman joins us now with details from -- okay, back to steve after a quick break. get more guitar info from him. thanks for watching. back in two.

welcome back, a strong session for markets today. the dow closed higher by 200 points, or a 1.8% gain. similar gain for the s&p 500. look at the nasdaq up 2.5%. and crude made a comeback. it was weak earlier in the session, but finished higher, almost 2%, as well. now with all this market volatility has you panicked, next guest says, it's more beneficial to be taking a longer term view. joining me now is dan gallagher. welcome back to post-9:00. >> always great to be here.

>> markets, look, this is the way they work, they fluctuate. people get scared when they see the fluctuations, but it is the greatness of american capital markets. >> does it remind people we have freer markets in china? >> it should, yeah. and markets are still running. >> all the same, especially here, the new york stock exchange has this rule 48 that is meant to ensure more orderly open or quicker open? looks like big price gaps. >> a lot of people different asking. some are market participants asking whether this is really a good idea. what's your point of view? >> well, look, everybody's talking their book on this issue. >> we have to take a dispassionate review of this rule. we need to look at the data from last week. one of the big upsides here for the markets for the sec as the expert capital markets regulator is we're going to have tons of data. data about the etfs, the performance of rule 48. and look, rule 48 went into

place in 2007 at the time you were shifting from specialist into electronic trading here on the floor. it made sense in 2007. does it make sense today? we'll have to look at that. >> one common theme that's been emerging is the absence in the banks of all of this. >> the journal called the banks just glorified order takers. are they not doing their job? are they not making the market? are they not providing electricitity? why are they not in this? >> the banks in particular have been disincentivized. there's actually a penalty. there's capital charges, the volcker rule. fancy that, too, the volcker rule went into effect in july. >> keeps them from putting their own bets on. are they not stepping in. why are people talking about a lack of liquidity? >> what is putting in your own money and an agency order for a client? that's what this 700-page rule was supposed to define and

nobody knows. if you get it wrong, you'll be in trouble. >> we started out talking to investors in the short-term view versus the long-term view. how do you balance having healthy shareholder activism that keeps management teams on their toes and doing the right things for shareholders with the activists who may be really looking very short-term and may be hurting the longer term investor? >> it's a really good question. actually one the sec shouldn't be thinking about, quite frankly. we are, we've been inserted by congress, we administer shareholder proposal rules, 13-d, all of those things long-term versus short-term investing.

we need to make sure there's a fair playing ground for the investors, managers of the board. the thresholds, the requethresh haven't been updated. when they're being abused by special interests who don't care anything about wealth creation for the larger corporations. >> i know you have your hands full right now. but given what happened with etfs last week. 1200 couldn't price. to get those prices out. reignited a whole debate, which, you know, a lot of big names have been having over whether the instruments can end up proving dangerous or mystifying to investors. are you guys looking into this? >> we are looking into it. i think i'm a big proponent of etfprovided a lot of optionalty. those who want to vilify them, i disagree with that. but that said, we need to, again, study the data. going to prove hugely beneficial

for policy making. >> what are you looking for? what would indicate there's a real problem? >> we have a discreet issue in the application of the limit up, limit down. do we need to differentiate etfs from common stock when we look at circuit breakers. do they operate so differently they shouldn't be lumped in under the same rule. i think that's something that the regulators should be doing anyway. and certainly, in response to last week, we have to do that. >> finally, let me circle back to rule 48 at the stock exchange. a competitor -- >> yes. >> of the nyse, an electronic platform. the company's chief executive said that the process, the rule 48 process they invoke down here is, quote, broken, that major changes need to be made. and nobody on the planet operates that way and no one should operate that way saying he sees very limited value in the use of humans on the trading floor. >> yeah. look. this is to be expected. this is fun to watch from the outside, right? it's like pepsi and coke

battling it out. >> regulatory concern? >> it's just what i said about 48. put in place at the time they were changing the market structure here. and one of the big problems, we put in a rule that went into effect in 2007 that mandated high-frequency trading. and we never went back to study the market quality and never decided, were these decisions appropriate? does rule 48 that was associated with this market structure apply? does it make sense as something we should work with to change. >> back down to steve liesman who just sat down to treasury secretary jack lew. what can you tell us? >> a wide range of discussion, i want to bring you one piece of sound from the treasury secretary where he talks pretty tough about china -- >> there's an economic and political reality to things like

exchange rates. and they need to understand that they signal their intentions in the way they announce them. and they have to be clear that they're continuing to move in a positive direction. we're going to hold them accountable. >> that's interesting where they talk about being held accountable to the way they signal there was a lot of criticism about how china had signaled and talked to the markets through the currency devaluation. tomorrow at 6:00 a.m., we'll have a full of the interview, during "squawk box" tomorrow morning, kelly. >> yeah. 100,000 more reasons to tune in with that little tease there. et it seemed to indicate, talked about wage growth, wage markets. most things seemed on track. does this mean september's on the table for the fed?

>> i think it is definitely on the table. you know, they talk about modest growth, moderate growth, as they've been talking about. but there was a lot of emphasis on wages and the issue of tight labor markets. look, i think the operative idea is the one given by stan fisher to me in jackson, oh, if you wait too long, you know, it's too late. and the idea the fed has to look. and it's not the decisive piece of data out there. >> are you convinced yet? >> i want to go back to what steve said about china. i am really flabbergasted that we keep getting this wording about how we're going to crack down on china versus how we could potentially partner with china. they are very, very important to us. obviously, we've seen the decoupling effect of our economies. they're also our biggest lender. so i -- the sort of adversarial stance against china is

something that doesn't make a lot of sense to me. >> i guess i'd respond -- i don't think it's adversarial as it might seem. i think the united states wants china to succeed, but perhaps in the right way. what it's done with the markets the last several weeks. they spent some $400 billion is my understanding. to go a given way he wants it to go. i think there's an idea of. the united states wanting china to appreciate the role it has in the world. that everybody's paying attention and they're going to be the second largest economy, you know, maybe starting to act like the second largest economy. >> all right, steve, thank you, for now, anyway. that's our steve liesman. there's much more to come throughout the day tomorrow, from his interview, jack lew, are those popular target date

funds holding up in this market? can intel's new line of chips help reverse this line of pc sales? you're watching cnbc, first in business worldwide.

a new news alert. >> a developing story we've been following is in anticipation of the shareholder vote of bank of america later this month over an amendment to a bylaw that would allow brian moynihan who is ceo

to also hold the chairman title, we are just obtaining the opinion of proxy advisory firm glass lewis recommending shareholders vote against the proposal to amend the bylaws to combine these rules. i know that's a lot of jargon. but the board amended these bylaws a year ago, and we know that hell hath no fury like a shareholder whose vote was taken away. even though it's recommending they vote against this. that's not a referendum on a leadership of brian moynihan or of the lead independent director. this was a bylaw that shareholders put in place in 2009 to keep the jobs separate. and it'll out last either of them. they want to keep that in place or the rights of the shareholders in place, acknowledging that b of a is different in 2009, it has made a lot of positive steps. that this is one specific company whose specific shareholder base has a right to keep this bylaw in place. >> carol? >> yeah, and i'll disclose i do

have a client relationship with bank of america. but i think in general, there is this key man risk. we've seen it in a lot of different companies. when you have too much power concentrated in one potential executive that something happens to them. not necessarily because of a leadership issue. that does really create a major issue in a company with the size of bank of america, i can understand why a shareholder wouldn't want that process to be lightly taken. and i think that's probably one of the key reasons. >> yes, the bank has made progress, they have to resubmit this year on miscalculations by the end of september. and the stock has lacked peers. they want to see more. >> they're also trading at below book value, though, too. >> yeah, as you mentioned. that vote is when? >> september 22nd. >> thank you. now, intel overhauling a key line of chips they hope

survives. josh lipton, can they do it? >> well, if you're a pc bull, then much of your optimism is based on what intel just announced. intel's new chip, it's thinner than ever, triple the battery life, better than the average computer. good news for gamers, and it's capable of starting in half a second. an added bonus, you can log in just by looking at a sky lake powered pc, if they have intel's 3d camera installed. there will be pcs equipped with skylake for as low as $500. the pc market under real pressure. the shipments dropped 12% in q-2 according to idc. but patrick moorehead does think this new processor, along with microsoft's new operating system will give the pc market a boost. users haven't upgraded their pcs for years, he says, and want to

take advantage of all the new bells and whistles. the first indications of whether it is right to come with q-4 earnings reports from companies like hp and lenovo. >> thank you. if you've avoided the temptation of checking your 401(k) lately, it may be the right move. why coming up. but first, though, market volatility possibly hurting unicorns -- not those unicorns, it's the big start-ups. that story's next. here at the td ameritrade trader group, they work all the time. sup jj? working hard? working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of the other competitors do in desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivative pricing model, honey? for all the confidence you need. td ameritrade. you got this. when you're not confident your company's data is secure,

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let's begin here with a market flash and a deal between two generic drug makers. mary thompson, what's happening? >> hey there, kelly, take a look at shares of lynette company. it's soaring on the news it's going to be buying kremmers, a unit of the biopharmaceuticals company ucb, it makes generic pharmaceuticals. lynette says this will be accretive to the earnings in 2016 in the mid to high single digits and by 20% to 25% in 2017. the deal is expected to close in the fourth quarter. of course, pending the proper approvals. but, again, lynette company

soaring in the afternoon hours on news of that acquisition, kelly. back to you. >> mary, thank you. stocks finishing higher today as the markets continue to be awash in volatility. the up and down impact in silicon valley where start-up v investments could now be at risk. joining us is managing director with men lowe ventures. this really has people's attention out there. how worried are they? >> i think they're worried. it's only when the tide goes out that you know who's swimming naked and who's got sharks on. and right now people are worried that some people are swimming naked. >> who might those people be? >> i think it's mostly the late stage -- if you look at right now at the late stage growth market there are a lot of companies sitting with unicorn status but a lot of them are gross margin negative and spending way too much money and i think when the tide goes out and money evaporates, which it looks like it's going to be, those folks are in trouble. >> are you talking about uber, venky? >> i think, you know, menlo's invested in uber.

i'm very comfortable with our position in uber. that company's going to be fine. >> venky, a lot of people are talking about this nick bilton piece in "vanity fair." i'm not sure if you've had a chance to read it but he goes through all the potential signs, har byngers of this bubble popping. he looks at corporate real estate, residential real estate, compensation, perks. if there's any one of those that is the most glaring signal of a bubble, which is it? what's most alarming to you? >> i think the most alarming is when companies sign ten-year-plus leases for multimillions of dollars because they're locking in real estate at probably the wrong time and for too long of a period. and that to me is the biggest indicator of danger. the other danger i look for is on my commute. every time i drive to san francisco and back i look to see how bad the commute is. when the commute gets worse, you know it's going to get bad. >> so 1 to 10, how bad is it

right now? >> it's really a tale of two cities. this is important to understand. i think in the early stage of venture capital, which is where we play, we think it's a fantastic time to invest -- >> no, i meant your commute. >> oh, my commute. my commute is probably 7 1/2. >> okay. so we're getting there. >> venky, it's carol roth. in terms of the unicorns, and i hate to almost use that term anymore now that there's like 100 plus of them running around there. but don't they have sort of a strategic weapon in that they have the backing of folks like yourself, like menlo ventures, like andrews & horowitz. doesn't that in some way anoint them as winners and create some level of a moat around them because you've created a group of very smart people that said that you were worth this much money and have given them really a ton of capital to be able to operate. >> what's complicated is there are clearly some companies that i think are worth the status and clearly will be very successful.

the challenge is what about the rest who may not be quite worth the status. and the difference between two is i think people talk about growth rates but you also need to have a path to profitability. i think the really successful unicorns have highly defensible technology, have network effects and a clear path to profitability whenever they need to. the danger signs are unicorns building a lot of money who are gross margin negative and high burn rates are not dependent on future financing. and what happens is -- go ahead. sorry. >> i was going to say do you want to give any of those unicorns names? >> you know, a gentleman doesn't name names. and i'm not going to name names either. but i'll tell you that if you are broadly in categories which are, you know, dependent upon you being gross margin negative, so services, a lot of services, like we've -- other labor services which are highly people dependent and they're spending a lot of money on marketing, those are the ones i'd worry about. >> thank you, venky. really appreciate your insights this hour. venky ganesan there on bubble signs in silicon valley.

could your target date retirement fund be off target after this recent market sell-off? answers when "the closing bell" comes right back. the gillette mach 3 turbo

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these recent market swingds have a ton of investors

wondering whether popular target dated funds in the 401(k) are mittsing the mark. senior personal finance correspondent sharon epperson has taken a look. what did you find? >> target date funds are extremely popular. 83% of employers now offer a target date fund and assets in these funds reached $700 billion last year. that's according to morningstar. much of a target date fund's performance, kelly, is determined by the fund's glide path. and that's the formula that a target date fund uses to determine its mix of assets. all target date funds get more conservative over time, shifting out of stocks and buying more bonds as they approach the target date. but some financial advisers caution that these funds are very limit. >> the target date only takes one factor into consideration, in the allocation, and that's your time horizon. and what i find is more often than not investors' individual proclivity to take risk, their willingness to take risk, is really the bigger factor at play. >> now, these popular funds have had a mixed record during the stock market's recent wild

swings. take a look at two target date funds designed for investors who retired this year. recently fund families with larger allocations in fixed income investments like the wells fargo advantage dow jones target date fund for 2015 fared better than those focused more on stocks like the fidelity freedom 2015 fund. but over the past five years the fidelity freedom 2015 fund and funds with that target date that have larger stock allocations have outperformed their peers overall during the bull market. still advisers generally agree that funds can be a good tool for retirement savers who have neither the expertise nor the inclination to actively manage their own retirement account. kelly? >> you know the tricky thing, sharon, it's just that those of us, myself included, who are in these funds, you probably need 20 or 30 years of data to figure out whether that was all a good idea. >> it's probably true. but what a lot of advisers say is for many people who do have 20 to 30 years, getting started in a target date fund makes a

lot of sense because many people don't have any idea where to begin. once you've been in the market for a while, once you've amassed a certain amount in terms of your retirement portfolio, then it's really better to see if you can perhaps have some actively managed funds in there or some passive funds as well but have a better mix and not just stick with one target date fund. >> sharon, it's carol roth. are those returns adjusted for fees? because i know one of the biggest issues for a lot of people who are investing through their 401(k) is the amount of fees that they may have to pay over the life of the fund. >> that's certainly true. and this is not -- this stat is not adjusted for fees. but you have to keep in mind, carol, that also a lot of the 401(k) plans do have matching contributions and that might more than make up for what you are paying in fees to get that free money. so instead of saying i'm not going to be in this because i don't want to pay the fees, it's again better than nothing. not perfect certainly but better than nothing. >> such an important topic. sharon, thank you for joining us. >> sure. >> with the details. our sharon epperson. and thanks to the panel.

guys, really appreciate it. carol and kayla today. that does it for us on "closing bell." "fast money" begins in moments. melissa lee, what are you guys targeting? >> there was a notable stock that sat out today's rally, kelly, and that would be the n in fang. netflix. finished the day lower by a third of a percent but it had been down as much as 4. we'll get the trade behind that outlier today. >> defanged. over to you guys. >> "fast money" starts right now. live from the nasdaq marketsite overlooking times square i'm melissa pleep your traders on the decemberric tim seymour, steve grasso, brian kelly and dan nathan. tonight on "fast" netflix's rough week. the stock has dropped more than 10% since monday as the competition among the streaming heavyweights heats up. but is the real challenger now coming from hulu? we've got a special report. plus the man who called the collapse in gold is back again, and this time he's gotten an even bigger prediction for oil. we'll tell you where he sees the volatile crude trading heading next. but first to the rally we saw today stocks closing sharply higher recovering from the worst start to september in 13 years. the nasdaq officially out of co